Greg and Sophie,
I hope you are both well. I am writing on behalf of our client, Pinnacle Venture Fund II LP ("Pinnacle"), in connection with its lead investment in the Series A Preferred Stock financing of Quillen Technologies, Inc. (the "Company"). Calderwood & Harkness LLP is pleased to circulate initial drafts of the definitive transaction documents for your and the Company's review. These drafts have been prepared on the basis of the counter-term-sheet agreed upon by the parties, and we believe they are faithful to the commercial terms reflected therein.
Attached to this email please find the following documents:
1. **Series A Preferred Stock Purchase Agreement (Draft)** — Provides for the sale and issuance of 4,500,000 shares of Series A Preferred Stock at a per-share price of $5.00, for aggregate new-money consideration of $22,500,000, together with the conversion of the Company's outstanding convertible promissory notes (aggregate principal and accrued interest of approximately $1,702,500) into 851,250 shares of Series A Preferred Stock at the $2.00 per share cap-derived conversion price. The investors under the SPA are Pinnacle Venture Fund II LP ($14,000,000 / 2,800,000 shares), Blackthorn Growth Fund III LP ($6,000,000 / 1,200,000 shares), and Stonebridge Ventures LLC ($2,500,000 / 500,000 shares). The SPA includes customary representations and warranties of the Company and the Investors, conditions to closing, and indemnification provisions. A Schedule of Investors and placeholder Disclosure Schedule shells are attached as exhibits. We would ask that the Company prepare and circulate completed Disclosure Schedules at its earliest convenience so that we may review in parallel with the negotiation of the transaction documents.
2. **Amended and Restated Certificate of Incorporation (Draft)** — To be filed with the Delaware Secretary of State upon closing. The Charter authorizes the Series A Preferred Stock and sets forth its rights, preferences, and privileges, including: (a) a 1x non-participating liquidation preference; (b) 8% non-cumulative dividends; (c) broad-based weighted-average anti-dilution protection; (d) optional and automatic conversion rights; and (e) protective provisions, including a requirement that the consent of the holders of a majority of the outstanding Series A Preferred Stock be obtained prior to (i) the incurrence of indebtedness exceeding $500,000 or (ii) any acquisition, merger, or liquidation event. The Charter also reflects the expansion of the option pool under the Company's 2023 Equity Incentive Plan from 2,000,000 to 3,000,000 shares, with the resulting dilution borne by pre-Series A stockholders in accordance with the term sheet.
3. **Investors' Rights Agreement (Draft)** — Covers the following principal provisions: (a) information rights, including delivery of monthly unaudited financial statements within 30 days of month-end, annual audited financial statements within 120 days of fiscal year-end, and an annual budget delivered by December 15 of each year; (b) registration rights, including demand registration rights (exercisable after the earlier of five years from closing or an IPO), S-3 registration rights, and piggyback registration rights; (c) pro rata participation rights / right of first offer on future financing rounds for all holders of Series A Preferred Stock; and (d) reimbursement of investor counsel legal fees by the Company in an amount not to exceed $75,000. Parties to the IRA include the Company, Pinnacle, Blackthorn, Stonebridge, and the holders of Series Seed Preferred Stock (Harborview Angel Syndicate LLC and Ridgepoint Seed Partners LP).
4. **Right of First Refusal and Co-Sale Agreement (Draft)** — Based on the standard NVCA form. Provides the Company and then the Investors with a right of first refusal on any proposed transfer of shares by the founders (Dr. Amara Osei and Julian Voss) and other key holders identified therein. Includes co-sale / tag-along rights for the Investors on permitted transfers. Delaware governing law.
5. **Voting Agreement (Draft)** — Establishes a board of directors composed of five (5) members: two (2) directors elected by the holders of Common Stock (founder designees), two (2) directors elected by the holders of Series A Preferred Stock (one Pinnacle designee — initially Christine Aldridge — and one Blackthorn designee — initially Diana Hershfield), and one (1) independent director mutually agreed upon by the holders of Common Stock and Preferred Stock. The Agreement also includes drag-along provisions requiring the approval of holders of a majority of the outstanding Common Stock and a majority of the outstanding Preferred Stock, voting together.
6. **Management Rights Letter — Pinnacle Venture Fund II LP** — ERISA / VCOC management rights letter granting Pinnacle contractual management rights sufficient to qualify the investment as a "venture capital operating company" investment under DOL Regulation § 2510.3-101(d).
7. **Management Rights Letter — Blackthorn Growth Fund III LP** — Same form as the Pinnacle management rights letter, adapted for Blackthorn.
8. **Indemnification Agreement — Pinnacle Board Designee (Form)** — Form of indemnification agreement between the Company and Christine Aldridge, as Pinnacle's designee to the Board, providing for indemnification and advancement of expenses to the fullest extent permitted under Delaware law.
9. **Side Letter — Pinnacle VC (Enhanced Information & Inspection Rights)** — Provides Pinnacle with enhanced quarterly financial reporting within 45 days of quarter-end, quarterly KPI dashboards (including ARR, churn, and customer count metrics), and enhanced inspection rights permitting on-site visits upon reasonable notice, in each case supplementing the standard information rights set forth in the IRA.
10. **Schedule of Investors** — Excel schedule listing all Series A purchasers, share allocations, per-share purchase price, and aggregate purchase price, as well as convertible note conversion allocations for Harborview Angel Syndicate LLC, Caldwell Family Office LLC, and Dr. Lawrence Hu.
In addition to the foregoing, I have attached the following ancillary closing document forms for your review and negotiation:
11. **Form of Legal Opinion of Company Counsel** (Fenwick, Torres & Keane LLP) 12. **Form of Secretary's Certificate** 13. **Form of Officer's Compliance Certificate** 14. **Form of Bring-Down Certificate** 15. **Form of Written Consent of the Board of Directors of Quillen Technologies** (Pre-Closing) 16. **Form of Written Consent of Stockholders of Quillen Technologies**
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**Key Drafting Notes for Company Counsel's Attention**
I wanted to flag a few points in particular for your review:
- **Liquidation Preference.** The SPA and the Charter reflect a 1x non-participating liquidation preference, consistent with the agreed term sheet position. As you know, this was a key negotiation point during the term sheet process, and the definitive documents are drafted to be consistent with Pinnacle's counter-term-sheet position as accepted by the Company.
- **Protective Provisions — Scope.** The protective provisions in the Charter include consent rights for the holders of a majority of the Series A Preferred Stock with respect to (a) the incurrence of any indebtedness exceeding $500,000 and (b) any acquisition, merger, or liquidation event. We would appreciate Ostrander Solutions's confirmation that the Company is aligned on the scope of these consent rights as drafted.
- **Founder Vesting.** The ROFR/Co-Sale Agreement and the SPA contemplate that the existing founder shares held by Dr. Osei and Mr. Voss will be subject to a four-year vesting schedule with a one-year cliff, with a 25% vesting credit for time already served. Based on the Company's July 2023 incorporation date, we have calculated approximately 8.75 months of vesting credit (reflecting approximately 35 months of service through the anticipated closing). We would ask the Company to confirm this credit calculation and to advise whether any amendments to existing founder employment agreements will be required to implement the vesting terms.
- **Option Pool Expansion.** The Charter authorizes an increase in the option pool from 2,000,000 to 3,000,000 shares under the Company's 2023 Equity Incentive Plan, resulting in approximately 1,800,000 unissued options post-closing. Dilution from the expansion is borne by pre-Series A stockholders per the term sheet. Stockholder consent for this expansion will be required, and a form of written consent is included with the closing documents.
- **Disclosure Schedules.** As noted above, the SPA includes placeholder disclosure schedule shells. We would ask that the Company and Ostrander Solutions prepare and circulate completed disclosure schedules as promptly as practicable so that Calderwood & Harkness can review. The schedules cover, among other things, intellectual property, material contracts, litigation, employee matters, tax, and regulatory matters.
- **Legal Opinion.** The form of legal opinion is attached for Ostrander Solutions's review and comment. Coverage is standard and includes due organization and good standing, authorization and valid issuance of the Series A Preferred Stock, absence of conflicts, absence of required governmental consents (other than the filing of the Amended and Restated Certificate of Incorporation with the Delaware Secretary of State), and enforceability.
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**Timeline**
I want to underscore the importance of maintaining momentum on this transaction. As you are aware:
- The parties are targeting a **signing and closing date of June 15, 2026**. - The **extended maturity date of the Company's outstanding convertible promissory notes is June 30, 2026**. It is critical that the financing close in advance of this date to avoid potential acceleration or maturity-related issues with respect to the notes. - The **exclusivity period under the term sheet expires on June 2, 2026**. While the parties intend to proceed to closing after the expiration of exclusivity, our goal is to have substantially all documents negotiated and in execution form before that date.
Accordingly, **we respectfully request that Ostrander Solutions and the Company provide comments on all documents by May 26, 2026** — ten (10) business days from today — to allow sufficient time for negotiation, resolution of open points, and preparation for closing.
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**Next Steps**
We would be happy to schedule a call during the week of May 18 to walk through the documents and address any preliminary questions your team may have. Please let us know your availability and we will coordinate.
I should also note that Whitfield & Pryor LLP, acting as counsel to Blackthorn Growth Fund III LP (Diana Hershfield's firm), will be reviewing these documents separately and may have additional comments. We are providing copies to Blackthorn's counsel concurrently, or will do so shortly if they have not yet received them by the time of this email.
Thank you, Greg and Sophie, for your attention to the foregoing and for your continued cooperation as we work toward closing. Please do not hesitate to reach out to me by phone or email if you have any questions in the interim.
Best regards,
**Rachel Bernstein** Partner Calderwood & Harkness LLP 555 Mission Street, Suite 3100 San Francisco, CA 94105 T: (415) 555-7820 E: rbernstein@calderwoodharkness.com
Matter No. 1002-00002
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**Attachments (16):** 1. Quillen Technologies — Series A Preferred Stock Purchase Agreement (Draft).docx 2. Quillen Technologies — Amended and Restated Certificate of Incorporation (Draft).docx 3. Quillen Technologies — Investors' Rights Agreement (Draft).docx 4. Quillen Technologies — Right of First Refusal and Co-Sale Agreement (Draft).docx 5. Quillen Technologies — Voting Agreement (Draft).docx 6. Management Rights Letter — Pinnacle Venture Fund II LP.docx 7. Management Rights Letter — Blackthorn Growth Fund III LP.docx 8. Indemnification Agreement — Pinnacle Board Designee (Form).docx 9. Side Letter — Pinnacle VC (Enhanced Information & Inspection Rights).docx 10. Schedule of Investors.xlsx 11. Form of Legal Opinion of Company Counsel.docx 12. Form of Secretary's Certificate.docx 13. Form of Officer's Compliance Certificate.docx 14. Form of Bring-Down Certificate.docx 15. Form of Written Consent of the Board of Directors (Pre-Closing).docx 16. Form of Written Consent of Stockholders.docx