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PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT COMMUNICATION ATTORNEY WORK PRODUCT

CALDERWOOD & HARKNESS LLP 200 Park Avenue, 42nd Floor New York, New York 10166

Matter No. 1018-00008 June 11, 2024

MEMORANDUM

TO: Oliver Mackenzie, Partner, Mergers & Acquisitions Harrison Wexford, Partner, Mergers & Acquisitions

FROM: Megan Chu, Associate, Mergers & Acquisitions Derek Okonkwo, Associate, Mergers & Acquisitions

RE: Veridian Biosciences, Inc. — Analysis of Stockholder Written Consent Process Under DGCL § 228 in Connection with the Stock Purchase Agreement Dated June 10, 2024

CLIENT: Penterra Pharmaceuticals Corp.

This memorandum is a privileged and confidential attorney-client communication and constitutes attorney work product. It is prepared solely for the use of the attorneys and client identified above in connection with their representation of Penterra Pharmaceuticals Corp. in connection with the proposed acquisition of Veridian Biosciences, Inc. This memorandum should not be disclosed to any third party without the prior written consent of Calderwood & Harkness LLP.

I. Executive Summary

The purpose of this memorandum is to analyze the stockholder written consent process for the approval of the Stock Purchase Agreement, dated as of June 10, 2024 (the "SPA"), by and among Penterra Pharmaceuticals Corp. ("Penterra" or "Buyer"), the stockholders of Veridian Biosciences, Inc. ("Veridian" or the "Company"), a Delaware corporation, and David Ng, solely in his capacity as Stockholder Representative (the "Stockholder Representative"). Specifically, this memorandum addresses the legal requirements applicable to obtaining stockholder approval of the SPA and the related transactions by written consent in lieu of a meeting, pursuant to Section 228 of the Delaware General Corporation Law (the "DGCL"), and confirms whether those requirements have been satisfied.

The SPA requires, as a condition precedent to closing, that stockholders of Veridian holding a sufficient number of shares to approve the transaction deliver written consents in lieu of holding a stockholder meeting, in accordance with Section 228 of the DGCL and the applicable provisions of Veridian's Amended and Restated Certificate of Incorporation (the "Certificate of Incorporation") and Amended and Restated Bylaws (the "Bylaws"). This process was undertaken in lieu of convening a special meeting of stockholders, which is permissible under Delaware law for private companies whose governing documents do not restrict or prohibit action by written consent.

Based on our review of Veridian's Certificate of Incorporation (as amended through the Fifth Amended and Restated Certificate of Incorporation filed in connection with the Series D Preferred Stock financing), Bylaws, capitalization records maintained by the Company, the Fourth Amended and Restated Investors' Rights Agreement dated as of March 15, 2022 (the "Investors' Rights Agreement"), the form of Stockholder Written Consent and Joinder Agreement prepared in connection with the SPA, and correspondence with Veridian's outside counsel, Zalcourt Archer & Cole LLP, we conclude that the requisite stockholder approval can be, and was, obtained by written consent in lieu of a meeting.

As of June 14, 2024, holders representing more than ninety percent (90%) of Veridian's outstanding capital stock, on a fully diluted, as-converted basis, delivered executed written consents and joinder agreements approving the transaction, the SPA, and the related ancillary agreements. The consenting stockholders include, among others:

• Crestline Ventures, LP — 28.3% of outstanding capital stock (on a fully diluted, as-converted basis);

• Boreal Health Partners Fund III, LP — 19.7% of outstanding capital stock;

• Apex Growth Equity Fund II, LP — 14.1% of outstanding capital stock;

• Dr. Julian Marek (CEO and Co-Founder) — 8.4% of outstanding capital stock; and

• Dr. Priya Chandrasekaran (CSO and Co-Founder) — 6.2% of outstanding capital stock.

Based on the foregoing, we have concluded that the written consent process has been completed in compliance with DGCL § 228, the Certificate of Incorporation, the Bylaws, and the Investors' Rights Agreement. The stockholder approval condition to closing set forth in Section 7.1 of the SPA has been satisfied. The balance of this memorandum sets forth the background, legal framework, detailed analysis, and recommendations supporting this conclusion.

II. Background

A. The Transaction

On June 10, 2024, Penterra Pharmaceuticals Corp. ("Penterra"), a Delaware corporation whose shares of common stock are listed and traded on The Nasdaq Global Select Market under the ticker symbol "PPCA," entered into a definitive Stock Purchase Agreement to acquire one hundred percent (100%) of the outstanding capital stock of Veridian Biosciences, Inc. (the "Company" or "Veridian") for an aggregate purchase price of Nine Hundred Million Dollars ($900,000,000) in cash, subject to customary adjustments for working capital, indebtedness, transaction expenses, and the escrow arrangements described below (the "Transaction").

Veridian is a privately held, clinical-stage biotechnology company incorporated under the laws of the State of Delaware, with its principal executive offices located at 550 Gateway Drive, Cambridge, Massachusetts 02142. The Company was founded in 2016 and is focused on the development of novel therapeutic candidates in the areas of immuno-oncology and autoimmune diseases. Veridian has not generated any product revenue to date and its operations have been funded primarily through equity financing from venture capital and growth equity investors.

The SPA was executed on behalf of Penterra by Dr. Anand Rajagopal, the Company's Chief Executive Officer, and on behalf of Veridian by Dr. Julian Marek, the Company's Chief Executive Officer and Co-Founder. David Ng, Managing Partner of Crestline Ventures, LP, executed the SPA in his capacity as the Stockholder Representative, a role to which he was designated by the consenting stockholders as described further below. The Transaction is structured as a direct stock purchase in which each stockholder of Veridian will sell, transfer, assign, and deliver to Penterra all shares of capital stock of the Company held by such stockholder, in exchange for such stockholder's pro rata portion of the aggregate purchase price (less the applicable escrow amounts and expense fund contributions), subject to the terms and conditions set forth in the SPA.

Veridian's outside counsel in the Transaction is the law firm of Zalcourt Archer & Cole LLP, with offices located at One Federal Street, 30th Floor, Boston, Massachusetts 02110. The lead partner on the engagement is Rebecca Whitmore, who has been supported by Jonathan Pratt, an associate at the firm. Calderwood & Harkness LLP has interacted extensively with Zalcourt Archer & Cole LLP in connection with the negotiation and execution of the SPA, the due diligence process, and the stockholder written consent process that is the subject of this memorandum.

B. Requirement for Stockholder Approval

The SPA requires, as a condition to the obligation of the parties to consummate the closing (see SPA § 7.1, "Conditions to Obligations of All Parties"), that the holders of the minimum number of shares of Veridian's capital stock necessary under applicable law and Veridian's organizational documents approve the Transaction and deliver executed written consents and joinder agreements in the form attached to the SPA as Exhibit A thereto. Satisfaction of this condition was designated as a mutual condition, meaning that neither Penterra nor the Selling Stockholders would be obligated to close unless and until the requisite stockholder approval was obtained.

Because the Transaction involves the purchase and sale of one hundred percent (100%) of Veridian's outstanding capital stock, it effectively constitutes a sale of substantially all of the Company's assets, which would ordinarily require approval under DGCL § 271 if structured as an asset sale. Although the Transaction is structured as a stock purchase rather than an asset sale, the SPA nonetheless requires corporate-level stockholder approval of the Transaction as a prudent measure and in light of the fact that the Certificate of Incorporation characterizes a transaction of this nature as a "Deemed Liquidation Event" requiring affirmative stockholder approval. In addition, the structure of the SPA requires the individual joinder and agreement of each stockholder as a "Selling Stockholder" who will sell his, her, or its shares to Penterra. Accordingly, the stockholder written consent serves a dual purpose: (i) it constitutes the corporate-level approval of the Transaction by the stockholders of Veridian, and (ii) it serves as each stockholder's individual joinder to the SPA as a Selling Stockholder.

In addition to approving the SPA and the transactions contemplated thereby, the written consent also requires that the consenting stockholders approve the following matters:

(i) the appointment of David Ng, Managing Partner of Crestline Ventures, LP, as the Stockholder Representative, to act on behalf of the Selling Stockholders in connection with post-closing matters, including indemnification claims, purchase price adjustments, and releases from escrow, pursuant to the Stockholder Representative Agreement;

(ii) the Escrow Agreement among Penterra, the Stockholder Representative, and Fidelis National Escrow Corp. (the "Escrow Agent"), providing for the deposit of One Hundred Eighty Million Dollars ($180,000,000) in an indemnification escrow account and Two Million Five Hundred Thousand Dollars ($2,500,000) in a Stockholder Representative Expense Fund, each to be funded from the aggregate purchase price at closing; and

(iii) the allocation of the Stockholder Representative Expense Fund in the amount of Two Million Five Hundred Thousand Dollars ($2,500,000), to be used by the Stockholder Representative for the payment of expenses incurred in connection with the performance of his duties, including legal fees, accounting fees, and other professional expenses.

C. Veridian's Capitalization Overview

The capitalization of Veridian has been the subject of a comprehensive corporate due diligence review conducted by this firm. For a detailed discussion, reference is made to the Corporate Due Diligence Memorandum dated May 10, 2024, prepared by this firm in connection with the Transaction (the "Due Diligence Memorandum"). The following summary is derived from that memorandum and from the Company's stock ledger and capitalization table as of the record date of June 10, 2024.

Since its founding in 2016 by Dr. Julian Marek and Dr. Priya Chandrasekaran, Veridian has raised approximately Four Hundred Twenty Million Dollars ($420,000,000) in aggregate venture capital and growth equity financing through four rounds of preferred stock financing — the Series A, Series B, Series C, and Series D rounds. As of the date of signing of the SPA, Veridian employed approximately 148 full-time employees. The Company maintains an employee stock option plan (the "Equity Incentive Plan"), under which options and other equity awards have been granted to employees, officers, directors, and consultants. The pool of shares reserved under the Equity Incentive Plan represents approximately 9.8% of the Company's fully diluted equity capitalization.

Veridian's registered agent in the State of Delaware is Tidewater Registered Agents LLC, located at 838 Walker Road, Suite 21-2, Dover, Delaware 19904. The Company's Employer Identification Number (EIN) is 84-2193047.

The following table sets forth the key stockholders of Veridian and their respective holdings on a fully diluted, as-converted basis as of the record date:

Several observations regarding the capitalization are relevant to the written consent analysis:

• The combined holdings of the three lead institutional investors — Crestline Ventures, LP, Boreal Health Partners Fund III, LP, and Apex Growth Equity Fund II, LP — represent 62.1% of Veridian's outstanding capital stock on a fully diluted, as-converted basis (28.3% + 19.7% + 14.1% = 62.1%). This exceeds the majority approval threshold and the 60% drag-along trigger threshold under the Investors' Rights Agreement.

• The combined holdings of the three lead institutional investors together with the two co-founders — Dr. Julian Marek and Dr. Priya Chandrasekaran — represent 76.7% of Veridian's outstanding capital stock on a fully diluted, as-converted basis (62.1% + 8.4% + 6.2% = 76.7%). This figure, standing alone, would be sufficient to satisfy any approval threshold applicable to the Transaction.

• Each of the three lead institutional investors holds a majority of the shares of the series of preferred stock for which it served as lead investor. Crestline Ventures, LP holds a majority of the outstanding shares of Series A Preferred Stock and Series B Preferred Stock; Boreal Health Partners Fund III, LP holds a majority of the outstanding shares of Series C Preferred Stock; and Apex Growth Equity Fund II, LP holds a majority of the outstanding shares of Series D Preferred Stock. This is significant because the Certificate of Incorporation requires separate class votes of each series of preferred stock to approve a Deemed Liquidation Event, as discussed further in Section III below.

III. Legal Framework — DGCL § 228 Written Consent in Lieu of Meeting

A. Statutory Requirements of DGCL § 228

The stockholder written consent process is governed by Section 228 of the Delaware General Corporation Law. Section 228(a) provides, in relevant part:

"Unless otherwise provided in the certificate of incorporation, any action required or permitted to be taken at any annual or special meeting of stockholders of a corporation . . . may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted . . . ."

The statute thus establishes three key requirements for a valid stockholder action by written consent: (i) the certificate of incorporation must not prohibit or restrict action by written consent; (ii) the consent must be in writing, setting forth the action so taken; and (iii) the consent must be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize such action at a duly convened meeting at which all shares entitled to vote were present and voted.

Additionally, Section 228(d)(1) of the DGCL provides that a consent may be given by a telegram, cablegram, or other electronic transmission, provided that the electronic transmission sets forth or is delivered with information from which the corporation can determine (A) that the electronic transmission was transmitted by the stockholder or proxyholder or by a person or persons authorized to act for the stockholder or proxyholder and (B) the date on which such stockholder or proxyholder or authorized person or persons transmitted such electronic transmission.

Under Section 228(c) of the DGCL, prompt notice of the taking of corporate action without a meeting by less than unanimous written consent shall be given to those stockholders or members who have not consented in writing and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for notice of such meeting had been the record date for determining the stockholders entitled to consent to the action. This notice requirement is mandatory under the statute and applies whenever the consent is not unanimous — that is, whenever fewer than all stockholders entitled to vote have executed the written consent.

Section 228(c) also provides that the effective date of the stockholder action taken by written consent is the date on which the last required consent is delivered to the corporation. In no event shall a consent given by a stockholder be deemed effective if it is delivered more than 60 days after the earliest dated consent delivered to the corporation.

B. Minimum Approval Threshold

Determining the minimum approval threshold for the Transaction requires consideration of both the DGCL and the Certificate of Incorporation, each of which imposes approval requirements.

Under DGCL § 271, the sale of all or substantially all of the assets of a corporation requires authorization by a resolution adopted by the board of directors and approval by the holders of a majority of the outstanding stock entitled to vote thereon. While the Transaction is structured as a stock purchase rather than an asset sale, the economic substance of the Transaction — the acquisition of one hundred percent (100%) of the outstanding capital stock of Veridian — is equivalent to a sale of all of the Company's assets. The corporate-level approval obtained through the written consent process mirrors the DGCL § 271 standard as a matter of best practice.

More significantly, the Certificate of Incorporation imposes its own approval requirements for transactions constituting a "Deemed Liquidation Event." Specifically, the Certificate of Incorporation requires the affirmative vote or written consent of:

(i) the holders of a majority of the outstanding shares of common stock and preferred stock, voting together as a single class on an as-converted-to-common-stock basis; and

(ii) the holders of a majority of the outstanding shares of each series of preferred stock (Series A, Series B, Series C, and Series D), each voting as a separate class,

to approve any Deemed Liquidation Event. The term "Deemed Liquidation Event" is defined in the Certificate of Incorporation to include, among other things, (a) a merger, consolidation, or similar transaction in which the stockholders of the Company prior to the transaction do not retain a majority of the voting power of the surviving entity, (b) a sale, lease, transfer, exclusive license, or other disposition of all or substantially all of the assets of the Company, or (c) a sale, transfer, or other disposition by the stockholders of the Company of shares representing a majority of the voting power of the Company.

The Transaction, which involves the sale of one hundred percent (100%) of the outstanding capital stock of Veridian to Penterra, falls squarely within the definition of a Deemed Liquidation Event under clause (c) above, and thus requires the dual-threshold approval described in subparagraphs (i) and (ii) above.

In addition to the foregoing statutory and charter-based requirements, the Investors' Rights Agreement contains drag-along provisions that impose contractual obligations on all parties thereto to participate in a sale transaction that has been approved by holders of at least sixty percent (60%) of the outstanding shares of the Company. The drag-along mechanism does not, itself, constitute a separate approval threshold, but rather provides a contractual enforcement mechanism to compel participation by minority stockholders once the 60% threshold has been met. As discussed further below, the three lead institutional investors alone hold 62.1% of the outstanding capital stock, thereby independently triggering the drag-along obligation.

C. Veridian's Certificate of Incorporation — Relevant Provisions

We have reviewed the Fifth Amended and Restated Certificate of Incorporation of Veridian Biosciences, Inc., as filed with the Secretary of State of the State of Delaware on March 15, 2022, in connection with the Company's Series D Preferred Stock financing (the "Certificate of Incorporation"). The following provisions are relevant to the written consent analysis:

Action by Written Consent. Article VII, Section 7.1 of the Certificate of Incorporation expressly provides that any action required or permitted to be taken by the stockholders of the Company may be taken without a meeting if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted, in accordance with Section 228 of the DGCL. Critically, the Certificate of Incorporation does not contain any provision prohibiting or restricting stockholder action by written consent. This is consistent with the default rule under DGCL § 228(a) and confirms that the written consent procedure is available for the approval of the Transaction.

Deemed Liquidation Event Definition. Article IV, Section 4.3(a) of the Certificate of Incorporation defines "Deemed Liquidation Event" to include, among other things, (i) the sale, lease, transfer, exclusive license, or other disposition of all or substantially all of the assets of the Company, and (ii) the sale or transfer by the stockholders of the Company of securities representing a majority of the voting power of the Company. As noted above, the Transaction constitutes a Deemed Liquidation Event under this definition.

Protective Provisions — Separate Class Votes. Article IV, Section 4.5 of the Certificate of Incorporation sets forth the protective provisions applicable to the preferred stock, including the requirement that the holders of a majority of the outstanding shares of each series of preferred stock (Series A, Series B, Series C, and Series D), voting as separate classes, must approve any Deemed Liquidation Event. These protective provisions operate in addition to, and not in lieu of, the general stockholder approval requirement described above.

Relevant excerpts from the Certificate of Incorporation are attached hereto as Appendix D.

D. Bylaws — Relevant Provisions

We have also reviewed the Amended and Restated Bylaws of Veridian Biosciences, Inc., as adopted by the Board of Directors on March 15, 2022 (the "Bylaws"). The following provisions are relevant to the written consent analysis:

Action by Written Consent. Article II, Section 2.11 of the Bylaws provides that any action required or permitted to be taken by the stockholders of the Company may be effected by written consent in lieu of a meeting, in accordance with the Certificate of Incorporation and Section 228 of the DGCL. This provision is consistent with, and does not impose any requirements beyond, the Certificate of Incorporation and the statute.

Filing and Notice Requirements. Article II, Section 2.11 of the Bylaws further provides that all executed written consents shall be filed with the corporate secretary of the Company and maintained with the minutes of the proceedings of stockholders. The Bylaws also require that the corporate secretary provide notice to non-consenting stockholders promptly after the written consents are delivered, in accordance with DGCL § 228(c). We have confirmed with Zalcourt Archer & Cole LLP that these filing and notice requirements are being or will be satisfied in connection with the Transaction.

IV. Analysis of the Stockholder Written Consent Process

A. Form of Written Consent and Joinder Agreement

Calderwood & Harkness LLP prepared the Form of Stockholder Written Consent and Joinder Agreement (the "Written Consent") in connection with the SPA, with an effective date of June 10, 2024. The Written Consent was negotiated with Zalcourt Archer & Cole LLP, counsel to Veridian, and was finalized and attached to the executed SPA as Exhibit A thereto. The Written Consent was designed to serve as both the corporate-level stockholder approval instrument and the individual stockholder joinder to the SPA.

The Written Consent provides, in relevant part, that each stockholder executing the Written Consent:

(i) approves the Stock Purchase Agreement and the transactions contemplated thereby, including the sale of one hundred percent (100%) of the outstanding capital stock of Veridian to Penterra for an aggregate purchase price of $900,000,000, subject to the adjustments and escrow arrangements described in the SPA;

(ii) agrees to sell all shares of capital stock of Veridian held by such stockholder to Penterra, pursuant to and on the terms and conditions set forth in the SPA, and thereby becomes a party to the SPA as a "Selling Stockholder";

(iii) appoints David Ng as Stockholder Representative under the Stockholder Representative Agreement, granting him full power and authority to act on behalf of the Selling Stockholders in connection with all post-closing matters, including the resolution of indemnification claims, purchase price adjustments, and the administration of the escrow and expense fund;

(iv) agrees to be bound by the Escrow Agreement with Fidelis National Escrow Corp. (as Escrow Agent), including the deposit of One Hundred Eighty Million Dollars ($180,000,000) into the indemnification escrow account (representing twenty percent (20%) of the aggregate purchase price) and Two Million Five Hundred Thousand Dollars ($2,500,000) into the Stockholder Representative Expense Fund, in each case to be funded from the aggregate purchase price at closing on a pro rata basis in proportion to each Selling Stockholder's share of the purchase price;

(v) acknowledges the indemnification provisions set forth in Article IX of the SPA, including: (a) the indemnification cap of One Hundred Eighty Million Dollars ($180,000,000), representing twenty percent (20%) of the $900,000,000 aggregate purchase price; (b) the tipping basket of Nine Million Dollars ($9,000,000), representing one percent (1%) of the aggregate purchase price, pursuant to which indemnification claims by Penterra for breaches of general representations and warranties shall not be payable unless and until the aggregate amount of such claims exceeds the tipping basket, at which point the full amount of such claims (including the amount of the tipping basket) shall be payable from the indemnification escrow; and (c) the survival periods of eighteen (18) months for general representations and warranties and the full applicable statute of limitations plus sixty (60) days for fundamental representations and tax representations; and

(vi) waives any dissenters' or appraisal rights to which such stockholder may be entitled under the DGCL, the Certificate of Incorporation, the Bylaws, or any other applicable law, to the fullest extent permitted by law, in connection with the Transaction and the SPA.

The Written Consent was circulated to all stockholders of Veridian by Zalcourt Archer & Cole LLP promptly following the execution of the SPA on June 10, 2024. Each stockholder was provided with the full text of the Written Consent, together with the accompanying materials described in Section IV.B below.

B. Solicitation and Collection Process

The process of soliciting and collecting the executed Written Consents from Veridian's stockholders was led by Zalcourt Archer & Cole LLP, as counsel to Veridian. Rebecca Whitmore, as lead partner, and Jonathan Pratt, as the responsible associate, coordinated the distribution of the written consent materials to all stockholders of record as of the record date of June 10, 2024. Calderwood & Harkness LLP provided support and coordination throughout the process, including reviewing draft communications to stockholders and monitoring the progress of the consent collection.

The written consent materials distributed to Veridian's stockholders included the following:

(i) a cover letter from Dr. Julian Marek (CEO and Co-Founder) and David Ng (Managing Partner of Crestline Ventures, LP, in his capacity as proposed Stockholder Representative), urging stockholders to approve the Transaction and execute the Written Consent and Joinder Agreement;

(ii) a summary of the Transaction and the material terms of the SPA, including the aggregate purchase price, the escrow arrangements, the indemnification provisions, and the expected timeline to closing;

(iii) the full text of the SPA (execution version dated June 10, 2024), including all exhibits and schedules thereto;

(iv) the Escrow Agreement among Penterra, the Stockholder Representative, and Fidelis National Escrow Corp.;

(v) the Stockholder Representative Agreement between David Ng, in his capacity as Stockholder Representative, and the Selling Stockholders; and

(vi) the Form of Stockholder Written Consent and Joinder Agreement (Exhibit A to the SPA), for execution and return by each stockholder.

The distribution was made by electronic mail to each stockholder of record, with hard copies available upon request. Zalcourt Archer & Cole LLP established a dedicated email address and a secure online portal for the receipt of executed Written Consents, and maintained a tracking log of all consents received. Calderwood & Harkness LLP received periodic updates from Zalcourt Archer & Cole LLP regarding the status of the consent collection process.

The solicitation and collection process was coordinated between Zalcourt Archer & Cole LLP and Calderwood & Harkness LLP to ensure consistency of communications and compliance with applicable legal requirements. No information statement or other disclosure document was required to be filed with the Securities and Exchange Commission in connection with the written consent process, as Veridian is a private company with no class of securities registered under the Securities Exchange Act of 1934.

Note on Drag-Along Provisions. As referenced in Section III.B above, the Investors' Rights Agreement contains drag-along provisions that are triggered upon the approval of a sale transaction by holders of at least sixty percent (60%) of the outstanding shares of the Company. Given that the three lead institutional investors — Crestline Ventures, LP, Boreal Health Partners Fund III, LP, and Apex Growth Equity Fund II, LP — collectively hold 62.1% of the outstanding capital stock, any stockholder who is a party to the Investors' Rights Agreement and who is subject to the drag-along provisions would be contractually obligated to participate in the Transaction and to sell his, her, or its shares on the same terms and conditions as the consenting stockholders, regardless of whether such stockholder independently elected to execute the Written Consent. This drag-along mechanism provides an additional layer of assurance that all stockholders subject to the Investors' Rights Agreement will be bound by the Transaction. Relevant excerpts from the drag-along provisions of the Investors' Rights Agreement are attached hereto as Appendix E.

C. Results of the Written Consent Process

As of June 14, 2024, executed Written Consents and Joinder Agreements were received from stockholders representing more than ninety percent (90%) of Veridian's outstanding capital stock, on a fully diluted, as-converted basis. The following table summarizes the key consenting stockholders and their respective holdings:

A complete list of all consenting stockholders, together with their respective share counts, percentage holdings, executing signatories, and dates of execution, is set forth in Appendix B attached hereto.

The results of the written consent process satisfy all applicable approval thresholds, as follows:

Majority of Outstanding Shares (Single Class, As-Converted Basis). The threshold for approval under the Certificate of Incorporation — the affirmative vote or written consent of the holders of a majority of the outstanding shares of common stock and preferred stock, voting together as a single class on an as-converted basis — was far exceeded. The consenting stockholders hold more than 90% of the outstanding capital stock on a fully diluted, as-converted basis, well in excess of the required majority of approximately 50.1%.

Separate Class Votes — Each Series of Preferred Stock. The separate class vote requirement for each series of preferred stock was also satisfied. As noted in the capitalization overview in Section II.C above, the lead investor in each series of preferred stock holds a majority of the outstanding shares of such series. Specifically:

• Crestline Ventures, LP holds a majority of the outstanding shares of both the Series A Preferred Stock and the Series B Preferred Stock and delivered its executed Written Consent;

• Boreal Health Partners Fund III, LP holds a majority of the outstanding shares of the Series C Preferred Stock and delivered its executed Written Consent; and

• Apex Growth Equity Fund II, LP holds a majority of the outstanding shares of the Series D Preferred Stock and delivered its executed Written Consent.

Accordingly, the separate class vote requirement for each series of preferred stock has been independently satisfied.

Drag-Along Threshold. The drag-along threshold under the Investors' Rights Agreement — approval by holders of at least sixty percent (60%) of the outstanding shares — was independently exceeded by the consents of the three lead institutional investors alone (62.1%), and was further exceeded by the aggregate consents received (more than 90%). Any remaining stockholders who are parties to the Investors' Rights Agreement and who are subject to the drag-along provisions are therefore contractually obligated to participate in the Transaction, regardless of whether they independently executed Written Consents.

D. Compliance with DGCL § 228 and Notice Requirements

Based on our review, the written consent process satisfies each of the requirements of DGCL § 228:

Writing Requirement. The Written Consents are in writing, in the form of the Stockholder Written Consent and Joinder Agreement prepared by this firm and attached to the SPA as Exhibit A. Each Written Consent sets forth the actions taken — namely, the approval of the SPA and the transactions contemplated thereby, the appointment of the Stockholder Representative, the approval of the Escrow Agreement and the Stockholder Representative Expense Fund, the acknowledgment of the indemnification provisions, and the waiver of dissenters' and appraisal rights. Each Written Consent has been signed by the applicable stockholder (or, in the case of entity stockholders, by a duly authorized representative of such entity).

Minimum Vote Requirement. The Written Consents have been signed by holders of outstanding stock having more than the minimum number of votes that would be necessary to authorize the actions at a meeting at which all shares entitled to vote thereon were present and voted. As detailed above, the consenting stockholders hold more than 90% of the outstanding capital stock on a fully diluted, as-converted basis, which exceeds both the majority threshold for the single-class vote and the majority threshold for each separate class vote of preferred stock.

Notice to Non-Consenting Stockholders. Pursuant to DGCL § 228(c), prompt notice of the taking of corporate action by written consent must be given to those stockholders who did not consent in writing. We have confirmed with Zalcourt Archer & Cole LLP that Veridian's corporate secretary, Rachel Stein-Goldberg (who also serves as the Company's General Counsel), is responsible for providing such notice and that such notice was delivered or will be delivered promptly following June 14, 2024, the effective date of the stockholder action. The notice will inform non-consenting stockholders of the actions taken by written consent and will be delivered in accordance with the Bylaws and DGCL § 228(c).

Filing with Corporate Records. The executed Written Consents have been or will be filed with the minutes of the proceedings of stockholders maintained by Veridian's corporate secretary, in accordance with Article II, Section 2.11 of the Bylaws and DGCL § 228(c).

Effective Date. The effective date of the stockholder action is June 14, 2024, being the date on which the last consent necessary to satisfy the minimum vote requirement was delivered to the Company. This is consistent with DGCL § 228(c), which provides that the effective date of the stockholder action is the date on which the last required consent is delivered. All consents were delivered within the 60-day period prescribed by the statute.

E. Record Date Considerations

Section 213(b) of the DGCL provides that the board of directors of a corporation may fix a record date for the purpose of determining the stockholders entitled to consent to corporate action in writing without a meeting. If no record date is fixed by the board of directors, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the board of directors is required, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the corporation.

We have confirmed with Zalcourt Archer & Cole LLP that the Board of Directors of Veridian adopted a resolution, at a meeting of the Board held on June 10, 2024 (the same date on which the SPA was executed), fixing the record date for the determination of stockholders entitled to act by written consent in connection with the Transaction as June 10, 2024 (the "Record Date"). This is consistent with customary practice in transactions of this nature and ensures that the record date aligns with the date of the SPA.

All stockholders of record as of the Record Date of June 10, 2024 were identified from the Company's stock ledger and were solicited in connection with the written consent process. The capitalization table attached hereto as Appendix A reflects the stockholders of record as of the Record Date.

V. SPA Condition Satisfaction — Section 7.1

Section 7.1 of the SPA sets forth the conditions to the obligations of all parties to consummate the closing of the Transaction. Among these mutual conditions is the requirement that the requisite stockholder approval of the Transaction be obtained. Specifically, Section 7.1(d) of the SPA provides:

"The Requisite Stockholder Approval shall have been obtained in the manner contemplated by Section 6.4 of this Agreement, and the Sellers' Representative shall have delivered to Buyer evidence of such approval reasonably satisfactory to Buyer."

The term "Requisite Stockholder Approval" is defined in the SPA to mean the approval of the Transaction, the SPA, and the ancillary agreements by the holders of the minimum number of shares of the Company's capital stock necessary under the DGCL and the Company's organizational documents, obtained by written consent in lieu of a meeting in accordance with DGCL § 228.

Based on the delivery of executed Written Consents and Joinder Agreements from holders of more than ninety percent (90%) of Veridian's outstanding capital stock on June 14, 2024, the Requisite Stockholder Approval has been obtained, and the stockholder approval condition under SPA § 7.1(d) has been satisfied. Zalcourt Archer & Cole LLP has confirmed that it will deliver, or has delivered, to Calderwood & Harkness LLP (on behalf of Penterra) evidence of such approval, including copies of the executed Written Consents and the consent tracking log, in a form reasonably satisfactory to Penterra.

No further stockholder approval actions are required in connection with the Transaction. The pre-closing conditions satisfaction checklist maintained by this firm in connection with the Transaction should be updated to reflect the satisfaction of this condition as of June 14, 2024.

VI. Potential Issues and Observations

A. Non-Consenting Stockholders

Stockholders representing approximately ten percent (10%) or less of Veridian's outstanding capital stock on a fully diluted, as-converted basis did not execute Written Consents and Joinder Agreements as of June 14, 2024. Based on our review of the capitalization table and the consent tracking log, these non-consenting stockholders are believed to consist primarily of smaller institutional investors who participated in one or more of the preferred stock financing rounds and former employees who hold vested but unexercised stock options under the Equity Incentive Plan.

The non-participation of these stockholders does not affect the validity or effectiveness of the stockholder approval, as the requisite majorities (both the single-class majority and the separate class majorities) have been achieved. However, because the SPA contemplates the sale of one hundred percent (100%) of Veridian's outstanding capital stock, it is desirable — and, under the terms of the SPA, ultimately required — that all stockholders participate as Selling Stockholders.

To the extent that non-consenting stockholders are parties to the Investors' Rights Agreement containing drag-along provisions, they are contractually obligated to sell their shares on the same terms and conditions as the consenting stockholders. The drag-along provisions provide that, upon the approval of a sale transaction by holders of at least sixty percent (60%) of the outstanding shares, all stockholders who are parties to the Investors' Rights Agreement shall be required to (i) vote (or consent in writing) in favor of the transaction, (ii) sell their shares on the same terms, (iii) refrain from exercising any dissenters' or appraisal rights, and (iv) take all other actions necessary to consummate the transaction. Zalcourt Archer & Cole LLP has confirmed that it is following up with all non-consenting stockholders who are parties to the Investors' Rights Agreement to obtain their executed Joinder Agreements or, if necessary, to enforce the drag-along provisions through formal demand letters and, ultimately, judicial enforcement.

With respect to any stockholders who are not parties to the Investors' Rights Agreement (which may include certain former employees or other holders who received shares outside of the venture financing rounds), the drag-along provisions would not apply as a contractual matter. However, given that such stockholders represent a very small fraction of the outstanding capital stock, and given that the SPA provides for customary remedies in the event that individual Selling Stockholders fail to deliver their shares at closing (including the right of Penterra to deposit the applicable purchase price with the Escrow Agent pending resolution), we do not anticipate that the non-participation of any such stockholders would present a material impediment to closing.

Under Delaware law, there is no statutory appraisal right available in connection with the sale of stock (as opposed to a merger under DGCL § 251 or a similar statutory reorganization). This is a significant distinction between the stock purchase structure employed in the Transaction and a merger structure. Because the Transaction is structured as a stock purchase, stockholders of Veridian do not have appraisal rights under DGCL § 262. The waiver of dissenters' and appraisal rights included in the Written Consent form is incorporated as an additional precaution and as a contractual bar to any claim that a stockholder might otherwise assert under the Certificate of Incorporation, the Bylaws, or other applicable law, but the absence of statutory appraisal rights in a stock purchase provides substantial additional protection against any such claims.

B. ESOP/Option Holders

Holders of vested stock options under Veridian's Equity Incentive Plan represent up to 9.8% of the fully diluted equity capitalization. These option holders are not stockholders of record and, as holders of options rather than shares, were not entitled to vote or consent in connection with the stockholder written consent process. However, the treatment of outstanding options at closing is a significant component of the Transaction and merits discussion in this context.

Pursuant to Section 2.6 of the SPA, at the closing of the Transaction, all outstanding vested options under the Equity Incentive Plan will be cancelled and converted into the right to receive a cash payment equal to the excess of the per-share purchase price (as determined on a fully diluted, as-converted basis) over the applicable per-share exercise price of such option, less applicable tax withholdings. Unvested options will be cancelled for no consideration, unless otherwise provided in the applicable option agreement or acceleration schedule.

Option holders who did not execute Written Consents (and who, as noted above, were not required to do so in their capacity as option holders) will be bound by the terms of the Equity Incentive Plan with respect to the treatment of their options at closing. Section 13.2 of the Equity Incentive Plan provides that the plan administrator — which, for these purposes, is the Board of Directors of Veridian — may, in its discretion, provide for the cancellation and cash-out of outstanding options in connection with a "Change of Control" (as defined in the Equity Incentive Plan) that has been approved by the Board and stockholders. The Board of Directors approved the Transaction at its meeting on June 10, 2024, and the stockholder approval has been obtained as described in this memorandum. Accordingly, the plan administrator has the authority to effect the cancellation and cash-out of outstanding options without the individual consent of each option holder, subject to the terms of the plan and the applicable option agreements.

We note, however, that certain option holders may also hold shares of common stock of the Company (e.g., shares obtained through prior exercises of options) and may, in that capacity, have been solicited in connection with the written consent process. To the extent any such stockholder/option holder did not execute a Written Consent, the analysis in Section VI.A above with respect to non-consenting stockholders would apply.

C. Documentation Completeness

In order to ensure the completeness of the closing documentation and the integrity of the transaction record, we recommend the following actions:

1. Executed Written Consents and Joinder Agreements. Calderwood & Harkness LLP should obtain from Zalcourt Archer & Cole LLP complete copies (and, to the extent available, originals) of all executed Written Consents and Joinder Agreements for inclusion in the closing binder. The consent tracking log maintained by Zalcourt Archer & Cole LLP should also be obtained and reviewed for completeness.

2. Notice to Non-Consenting Stockholders. Copies of the notice delivered to non-consenting stockholders pursuant to DGCL § 228(c) should be obtained from Veridian's corporate secretary (Rachel Stein-Goldberg) or from Zalcourt Archer & Cole LLP and included in the closing file. The form of notice and evidence of delivery (e.g., email delivery receipts or certified mail return receipts) should be preserved.

3. Board Resolutions. Copies of the resolutions adopted by the Board of Directors of Veridian on June 10, 2024, including the resolution approving the Transaction, the resolution fixing the Record Date for the written consent process, and the resolution authorizing the cancellation and cash-out of outstanding options under the Equity Incentive Plan, should be obtained and included in the closing binder if not already in our files.

VII. Conclusion and Recommendations

Based on the foregoing analysis, we conclude as follows:

The stockholder written consent process for the approval of the Stock Purchase Agreement dated June 10, 2024, by and among Penterra Pharmaceuticals Corp., the stockholders of Veridian Biosciences, Inc., and David Ng as Stockholder Representative, has been completed in compliance with Section 228 of the Delaware General Corporation Law, the Amended and Restated Certificate of Incorporation of Veridian, the Amended and Restated Bylaws of Veridian, and the Fourth Amended and Restated Investors' Rights Agreement.

Holders of more than ninety percent (90%) of Veridian's outstanding capital stock, on a fully diluted, as-converted basis, delivered executed Written Consents and Joinder Agreements on June 14, 2024, approving the SPA and the transactions contemplated thereby, the appointment of the Stockholder Representative, the Escrow Agreement, and the related ancillary agreements. The level of approval obtained — exceeding 90% — is well in excess of the required majority under the Certificate of Incorporation and the DGCL, both for the single-class vote and for each separate series class vote of preferred stock.

The stockholder approval condition to closing under Section 7.1(d) of the SPA has been satisfied. No further stockholder approval actions are required in connection with the Transaction.

We recommend the following next steps to complete the documentation and administration of the written consent process:

1. Obtain and File Originals. Obtain and file all executed Written Consent and Joinder Agreement originals (or, at minimum, complete copies of fully executed versions) from Zalcourt Archer & Cole LLP for inclusion in the closing binder and the permanent transaction files.

2. Confirm Delivery of Notice to Non-Consenting Stockholders. Confirm with Zalcourt Archer & Cole LLP and/or Rachel Stein-Goldberg (General Counsel and Corporate Secretary of Veridian) that the notice required by DGCL § 228(c) has been delivered to all stockholders who did not execute Written Consents, and obtain copies of such notice and evidence of delivery for the closing file.

3. Monitor Drag-Along Enforcement. Monitor the drag-along enforcement process being conducted by Zalcourt Archer & Cole LLP with respect to any non-consenting stockholders who are parties to the Investors' Rights Agreement. Obtain periodic status updates and escalate any enforcement issues to Oliver Mackenzie and Harrison Wexford as necessary.

4. Update Pre-Closing Conditions Satisfaction Checklist. Update the Pre-Closing Conditions Satisfaction Checklist maintained by this firm in connection with the Transaction to reflect the satisfaction of the stockholder approval condition (SPA § 7.1(d)) as of June 14, 2024.

We are available to discuss this memorandum and its conclusions at your convenience. Please do not hesitate to contact us with any questions.

Prepared by:

Megan Chu Associate, Mergers & Acquisitions Calderwood & Harkness LLP Direct: (212) 555-4821 mchu@calderwoodharkness.com

Derek Okonkwo Associate, Mergers & Acquisitions Calderwood & Harkness LLP Direct: (212) 555-4837 dokonkwo@calderwoodharkness.com

Appendices

The following appendices are referenced in this memorandum and are attached hereto or maintained in the closing file:

Appendix A: Summary Capitalization Table of Veridian Biosciences, Inc. (as of the Record Date, June 10, 2024), listing all stockholders of record, share counts by class and series, and percentage holdings on a fully diluted, as-converted basis.

Appendix B: List of Consenting Stockholders, including the name of each consenting stockholder, the date of execution (June 14, 2024 for all listed), percentage holdings on a fully diluted, as-converted basis, and the identity of the executing signatory for each stockholder.

Appendix C: Form of Stockholder Written Consent and Joinder Agreement (cross-reference to Exhibit A to the Stock Purchase Agreement dated June 10, 2024).

Appendix D: Relevant excerpts from the Fifth Amended and Restated Certificate of Incorporation of Veridian Biosciences, Inc. (provisions relating to stockholder action by written consent (Article VII, Section 7.1) and approval of Deemed Liquidation Events (Article IV, Sections 4.3 and 4.5)).

Appendix E: Relevant excerpts from the Fourth Amended and Restated Investors' Rights Agreement dated March 15, 2022 (drag-along provisions).

PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION — ATTORNEY WORK PRODUCT Calderwood & Harkness LLP	Matter No. 1018-00008
Stockholder	Series / Type	Fully Diluted %	Representative / Signatory
Crestline Ventures, LP	Series A & B Preferred	28.3%	David Ng, Managing Partner
Boreal Health Partners Fund III, LP	Series C Preferred	19.7%	Sarah Dalmqvist, Managing Director
Apex Growth Equity Fund II, LP	Series D Preferred	14.1%	Marcus Doyle, Partner
Dr. Julian Marek (CEO & Co-Founder)	Common Stock	8.4%	—
Dr. Priya Chandrasekaran (CSO & Co-Founder)	Common Stock	6.2%	—
Other Management and Employees (ESOP Pool)	Common Stock / Options	9.8%	Various
Other Institutional Investors	Various Preferred / Common	~13.5%	Various
Total	100.0%
Consenting Stockholder	Fully Diluted %	Executing Signatory	Date of Execution
Crestline Ventures, LP	28.3%	David Ng, Managing Partner	June 14, 2024
Boreal Health Partners Fund III, LP	19.7%	Sarah Dalmqvist, Managing Director	June 14, 2024
Apex Growth Equity Fund II, LP	14.1%	Marcus Doyle, Partner	June 14, 2024
Dr. Julian Marek (CEO & Co-Founder)	8.4%	Dr. Julian Marek	June 14, 2024
Dr. Priya Chandrasekaran (CSO & Co-Founder)	6.2%	Dr. Priya Chandrasekaran	June 14, 2024
Other management, employees, and institutional holders	Balance to exceed 90%	Various	June 14, 2024
Total Consenting	> 90%

PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT COMMUNICATION ATTORNEY WORK PRODUCT
CALDERWOOD & HARKNESS LLP 200 Park Avenue, 42nd Floor New York, New York 10166
Matter No. 1018-00008 June 11, 2024
MEMORANDUM
TO: Oliver Mackenzie, Partner, Mergers & Acquisitions Harrison Wexford, Partner, Mergers & Acquisitions
FROM: Megan Chu, Associate, Mergers & Acquisitions Derek Okonkwo, Associate, Mergers & Acquisitions
RE: Veridian Biosciences, Inc. — Analysis of Stockholder Written Consent Process Under DGCL § 228 in Connection with the Stock Purchase Agreement Dated June 10, 2024
CLIENT: Penterra Pharmaceuticals Corp.
This memorandum is a privileged and confidential attorney-client communication and constitutes attorney work product. It is prepared solely for the use of the attorneys and client identified above in connection with their representation of Penterra Pharmaceuticals Corp. in connection with the proposed acquisition of Veridian Biosciences, Inc. This memorandum should not be disclosed to any third party without the prior written consent of Calderwood & Harkness LLP.
I. Executive Summary
The purpose of this memorandum is to analyze the stockholder written consent process for the approval of the Stock Purchase Agreement, dated as of June 10, 2024 (the "SPA"), by and among Penterra Pharmaceuticals Corp. ("Penterra" or "Buyer"), the stockholders of Veridian Biosciences, Inc. ("Veridian" or the "Company"), a Delaware corporation, and David Ng, solely in his capacity as Stockholder Representative (the "Stockholder Representative"). Specifically, this memorandum addresses the legal requirements applicable to obtaining stockholder approval of the SPA and the related transactions by written consent in lieu of a meeting, pursuant to Section 228 of the Delaware General Corporation Law (the "DGCL"), and confirms whether those requirements have been satisfied.
The SPA requires, as a condition precedent to closing, that stockholders of Veridian holding a sufficient number of shares to approve the transaction deliver written consents in lieu of holding a stockholder meeting, in accordance with Section 228 of the DGCL and the applicable provisions of Veridian's Amended and Restated Certificate of Incorporation (the "Certificate of Incorporation") and Amended and Restated Bylaws (the "Bylaws"). This process was undertaken in lieu of convening a special meeting of stockholders, which is permissible under Delaware law for private companies whose governing documents do not restrict or prohibit action by written consent.
Based on our review of Veridian's Certificate of Incorporation (as amended through the Fifth Amended and Restated Certificate of Incorporation filed in connection with the Series D Preferred Stock financing), Bylaws, capitalization records maintained by the Company, the Fourth Amended and Restated Investors' Rights Agreement dated as of March 15, 2022 (the "Investors' Rights Agreement"), the form of Stockholder Written Consent and Joinder Agreement prepared in connection with the SPA, and correspondence with Veridian's outside counsel, Zalcourt Archer & Cole LLP, we conclude that the requisite stockholder approval can be, and was, obtained by written consent in lieu of a meeting.
As of June 14, 2024, holders representing more than ninety percent (90%) of Veridian's outstanding capital stock, on a fully diluted, as-converted basis, delivered executed written consents and joinder agreements approving the transaction, the SPA, and the related ancillary agreements. The consenting stockholders include, among others:
•  Crestline Ventures, LP — 28.3% of outstanding capital stock (on a fully diluted, as-converted basis);
•  Boreal Health Partners Fund III, LP — 19.7% of outstanding capital stock;
•  Apex Growth Equity Fund II, LP — 14.1% of outstanding capital stock;
•  Dr. Julian Marek (CEO and Co-Founder) — 8.4% of outstanding capital stock; and
•  Dr. Priya Chandrasekaran (CSO and Co-Founder) — 6.2% of outstanding capital stock.
Based on the foregoing, we have concluded that the written consent process has been completed in compliance with DGCL § 228, the Certificate of Incorporation, the Bylaws, and the Investors' Rights Agreement. The stockholder approval condition to closing set forth in Section 7.1 of the SPA has been satisfied. The balance of this memorandum sets forth the background, legal framework, detailed analysis, and recommendations supporting this conclusion.
II. Background
A. The Transaction
On June 10, 2024, Penterra Pharmaceuticals Corp. ("Penterra"), a Delaware corporation whose shares of common stock are listed and traded on The Nasdaq Global Select Market under the ticker symbol "PPCA," entered into a definitive Stock Purchase Agreement to acquire one hundred percent (100%) of the outstanding capital stock of Veridian Biosciences, Inc. (the "Company" or "Veridian") for an aggregate purchase price of Nine Hundred Million Dollars ($900,000,000) in cash, subject to customary adjustments for working capital, indebtedness, transaction expenses, and the escrow arrangements described below (the "Transaction").
Veridian is a privately held, clinical-stage biotechnology company incorporated under the laws of the State of Delaware, with its principal executive offices located at 550 Gateway Drive, Cambridge, Massachusetts 02142. The Company was founded in 2016 and is focused on the development of novel therapeutic candidates in the areas of immuno-oncology and autoimmune diseases. Veridian has not generated any product revenue to date and its operations have been funded primarily through equity financing from venture capital and growth equity investors.
The SPA was executed on behalf of Penterra by Dr. Anand Rajagopal, the Company's Chief Executive Officer, and on behalf of Veridian by Dr. Julian Marek, the Company's Chief Executive Officer and Co-Founder. David Ng, Managing Partner of Crestline Ventures, LP, executed the SPA in his capacity as the Stockholder Representative, a role to which he was designated by the consenting stockholders as described further below. The Transaction is structured as a direct stock purchase in which each stockholder of Veridian will sell, transfer, assign, and deliver to Penterra all shares of capital stock of the Company held by such stockholder, in exchange for such stockholder's pro rata portion of the aggregate purchase price (less the applicable escrow amounts and expense fund contributions), subject to the terms and conditions set forth in the SPA.
Veridian's outside counsel in the Transaction is the law firm of Zalcourt Archer & Cole LLP, with offices located at One Federal Street, 30th Floor, Boston, Massachusetts 02110. The lead partner on the engagement is Rebecca Whitmore, who has been supported by Jonathan Pratt, an associate at the firm. Calderwood & Harkness LLP has interacted extensively with Zalcourt Archer & Cole LLP in connection with the negotiation and execution of the SPA, the due diligence process, and the stockholder written consent process that is the subject of this memorandum.
B. Requirement for Stockholder Approval
The SPA requires, as a condition to the obligation of the parties to consummate the closing (see SPA § 7.1, "Conditions to Obligations of All Parties"), that the holders of the minimum number of shares of Veridian's capital stock necessary under applicable law and Veridian's organizational documents approve the Transaction and deliver executed written consents and joinder agreements in the form attached to the SPA as Exhibit A thereto. Satisfaction of this condition was designated as a mutual condition, meaning that neither Penterra nor the Selling Stockholders would be obligated to close unless and until the requisite stockholder approval was obtained.
Because the Transaction involves the purchase and sale of one hundred percent (100%) of Veridian's outstanding capital stock, it effectively constitutes a sale of substantially all of the Company's assets, which would ordinarily require approval under DGCL § 271 if structured as an asset sale. Although the Transaction is structured as a stock purchase rather than an asset sale, the SPA nonetheless requires corporate-level stockholder approval of the Transaction as a prudent measure and in light of the fact that the Certificate of Incorporation characterizes a transaction of this nature as a "Deemed Liquidation Event" requiring affirmative stockholder approval. In addition, the structure of the SPA requires the individual joinder and agreement of each stockholder as a "Selling Stockholder" who will sell his, her, or its shares to Penterra. Accordingly, the stockholder written consent serves a dual purpose: (i) it constitutes the corporate-level approval of the Transaction by the stockholders of Veridian, and (ii) it serves as each stockholder's individual joinder to the SPA as a Selling Stockholder.
In addition to approving the SPA and the transactions contemplated thereby, the written consent also requires that the consenting stockholders approve the following matters:
(i) the appointment of David Ng, Managing Partner of Crestline Ventures, LP, as the Stockholder Representative, to act on behalf of the Selling Stockholders in connection with post-closing matters, including indemnification claims, purchase price adjustments, and releases from escrow, pursuant to the Stockholder Representative Agreement;
(ii) the Escrow Agreement among Penterra, the Stockholder Representative, and Fidelis National Escrow Corp. (the "Escrow Agent"), providing for the deposit of One Hundred Eighty Million Dollars ($180,000,000) in an indemnification escrow account and Two Million Five Hundred Thousand Dollars ($2,500,000) in a Stockholder Representative Expense Fund, each to be funded from the aggregate purchase price at closing; and
(iii) the allocation of the Stockholder Representative Expense Fund in the amount of Two Million Five Hundred Thousand Dollars ($2,500,000), to be used by the Stockholder Representative for the payment of expenses incurred in connection with the performance of his duties, including legal fees, accounting fees, and other professional expenses.
C. Veridian's Capitalization Overview
The capitalization of Veridian has been the subject of a comprehensive corporate due diligence review conducted by this firm. For a detailed discussion, reference is made to the Corporate Due Diligence Memorandum dated May 10, 2024, prepared by this firm in connection with the Transaction (the "Due Diligence Memorandum"). The following summary is derived from that memorandum and from the Company's stock ledger and capitalization table as of the record date of June 10, 2024.
Since its founding in 2016 by Dr. Julian Marek and Dr. Priya Chandrasekaran, Veridian has raised approximately Four Hundred Twenty Million Dollars ($420,000,000) in aggregate venture capital and growth equity financing through four rounds of preferred stock financing — the Series A, Series B, Series C, and Series D rounds. As of the date of signing of the SPA, Veridian employed approximately 148 full-time employees. The Company maintains an employee stock option plan (the "Equity Incentive Plan"), under which options and other equity awards have been granted to employees, officers, directors, and consultants. The pool of shares reserved under the Equity Incentive Plan represents approximately 9.8% of the Company's fully diluted equity capitalization.
Veridian's registered agent in the State of Delaware is Tidewater Registered Agents LLC, located at 838 Walker Road, Suite 21-2, Dover, Delaware 19904. The Company's Employer Identification Number (EIN) is 84-2193047.
The following table sets forth the key stockholders of Veridian and their respective holdings on a fully diluted, as-converted basis as of the record date:
Several observations regarding the capitalization are relevant to the written consent analysis:
•  The combined holdings of the three lead institutional investors — Crestline Ventures, LP, Boreal Health Partners Fund III, LP, and Apex Growth Equity Fund II, LP — represent 62.1% of Veridian's outstanding capital stock on a fully diluted, as-converted basis (28.3% + 19.7% + 14.1% = 62.1%). This exceeds the majority approval threshold and the 60% drag-along trigger threshold under the Investors' Rights Agreement.
•  The combined holdings of the three lead institutional investors together with the two co-founders — Dr. Julian Marek and Dr. Priya Chandrasekaran — represent 76.7% of Veridian's outstanding capital stock on a fully diluted, as-converted basis (62.1% + 8.4% + 6.2% = 76.7%). This figure, standing alone, would be sufficient to satisfy any approval threshold applicable to the Transaction.
•  Each of the three lead institutional investors holds a majority of the shares of the series of preferred stock for which it served as lead investor. Crestline Ventures, LP holds a majority of the outstanding shares of Series A Preferred Stock and Series B Preferred Stock; Boreal Health Partners Fund III, LP holds a majority of the outstanding shares of Series C Preferred Stock; and Apex Growth Equity Fund II, LP holds a majority of the outstanding shares of Series D Preferred Stock. This is significant because the Certificate of Incorporation requires separate class votes of each series of preferred stock to approve a Deemed Liquidation Event, as discussed further in Section III below.
III. Legal Framework — DGCL § 228 Written Consent in Lieu of Meeting
A. Statutory Requirements of DGCL § 228
The stockholder written consent process is governed by Section 228 of the Delaware General Corporation Law. Section 228(a) provides, in relevant part:
"Unless otherwise provided in the certificate of incorporation, any action required or permitted to be taken at any annual or special meeting of stockholders of a corporation . . . may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted . . . ."
The statute thus establishes three key requirements for a valid stockholder action by written consent: (i) the certificate of incorporation must not prohibit or restrict action by written consent; (ii) the consent must be in writing, setting forth the action so taken; and (iii) the consent must be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize such action at a duly convened meeting at which all shares entitled to vote were present and voted.
Additionally, Section 228(d)(1) of the DGCL provides that a consent may be given by a telegram, cablegram, or other electronic transmission, provided that the electronic transmission sets forth or is delivered with information from which the corporation can determine (A) that the electronic transmission was transmitted by the stockholder or proxyholder or by a person or persons authorized to act for the stockholder or proxyholder and (B) the date on which such stockholder or proxyholder or authorized person or persons transmitted such electronic transmission.
Under Section 228(c) of the DGCL, prompt notice of the taking of corporate action without a meeting by less than unanimous written consent shall be given to those stockholders or members who have not consented in writing and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for notice of such meeting had been the record date for determining the stockholders entitled to consent to the action. This notice requirement is mandatory under the statute and applies whenever the consent is not unanimous — that is, whenever fewer than all stockholders entitled to vote have executed the written consent.
Section 228(c) also provides that the effective date of the stockholder action taken by written consent is the date on which the last required consent is delivered to the corporation. In no event shall a consent given by a stockholder be deemed effective if it is delivered more than 60 days after the earliest dated consent delivered to the corporation.
B. Minimum Approval Threshold
Determining the minimum approval threshold for the Transaction requires consideration of both the DGCL and the Certificate of Incorporation, each of which imposes approval requirements.
Under DGCL § 271, the sale of all or substantially all of the assets of a corporation requires authorization by a resolution adopted by the board of directors and approval by the holders of a majority of the outstanding stock entitled to vote thereon. While the Transaction is structured as a stock purchase rather than an asset sale, the economic substance of the Transaction — the acquisition of one hundred percent (100%) of the outstanding capital stock of Veridian — is equivalent to a sale of all of the Company's assets. The corporate-level approval obtained through the written consent process mirrors the DGCL § 271 standard as a matter of best practice.
More significantly, the Certificate of Incorporation imposes its own approval requirements for transactions constituting a "Deemed Liquidation Event." Specifically, the Certificate of Incorporation requires the affirmative vote or written consent of:
(i) the holders of a majority of the outstanding shares of common stock and preferred stock, voting together as a single class on an as-converted-to-common-stock basis; and
(ii) the holders of a majority of the outstanding shares of each series of preferred stock (Series A, Series B, Series C, and Series D), each voting as a separate class,
to approve any Deemed Liquidation Event. The term "Deemed Liquidation Event" is defined in the Certificate of Incorporation to include, among other things, (a) a merger, consolidation, or similar transaction in which the stockholders of the Company prior to the transaction do not retain a majority of the voting power of the surviving entity, (b) a sale, lease, transfer, exclusive license, or other disposition of all or substantially all of the assets of the Company, or (c) a sale, transfer, or other disposition by the stockholders of the Company of shares representing a majority of the voting power of the Company.
The Transaction, which involves the sale of one hundred percent (100%) of the outstanding capital stock of Veridian to Penterra, falls squarely within the definition of a Deemed Liquidation Event under clause (c) above, and thus requires the dual-threshold approval described in subparagraphs (i) and (ii) above.
In addition to the foregoing statutory and charter-based requirements, the Investors' Rights Agreement contains drag-along provisions that impose contractual obligations on all parties thereto to participate in a sale transaction that has been approved by holders of at least sixty percent (60%) of the outstanding shares of the Company. The drag-along mechanism does not, itself, constitute a separate approval threshold, but rather provides a contractual enforcement mechanism to compel participation by minority stockholders once the 60% threshold has been met. As discussed further below, the three lead institutional investors alone hold 62.1% of the outstanding capital stock, thereby independently triggering the drag-along obligation.
C. Veridian's Certificate of Incorporation — Relevant Provisions
We have reviewed the Fifth Amended and Restated Certificate of Incorporation of Veridian Biosciences, Inc., as filed with the Secretary of State of the State of Delaware on March 15, 2022, in connection with the Company's Series D Preferred Stock financing (the "Certificate of Incorporation"). The following provisions are relevant to the written consent analysis:
Action by Written Consent. Article VII, Section 7.1 of the Certificate of Incorporation expressly provides that any action required or permitted to be taken by the stockholders of the Company may be taken without a meeting if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted, in accordance with Section 228 of the DGCL. Critically, the Certificate of Incorporation does not contain any provision prohibiting or restricting stockholder action by written consent. This is consistent with the default rule under DGCL § 228(a) and confirms that the written consent procedure is available for the approval of the Transaction.
Deemed Liquidation Event Definition. Article IV, Section 4.3(a) of the Certificate of Incorporation defines "Deemed Liquidation Event" to include, among other things, (i) the sale, lease, transfer, exclusive license, or other disposition of all or substantially all of the assets of the Company, and (ii) the sale or transfer by the stockholders of the Company of securities representing a majority of the voting power of the Company. As noted above, the Transaction constitutes a Deemed Liquidation Event under this definition.
Protective Provisions — Separate Class Votes. Article IV, Section 4.5 of the Certificate of Incorporation sets forth the protective provisions applicable to the preferred stock, including the requirement that the holders of a majority of the outstanding shares of each series of preferred stock (Series A, Series B, Series C, and Series D), voting as separate classes, must approve any Deemed Liquidation Event. These protective provisions operate in addition to, and not in lieu of, the general stockholder approval requirement described above.
Relevant excerpts from the Certificate of Incorporation are attached hereto as Appendix D.
D. Bylaws — Relevant Provisions
We have also reviewed the Amended and Restated Bylaws of Veridian Biosciences, Inc., as adopted by the Board of Directors on March 15, 2022 (the "Bylaws"). The following provisions are relevant to the written consent analysis:
Action by Written Consent. Article II, Section 2.11 of the Bylaws provides that any action required or permitted to be taken by the stockholders of the Company may be effected by written consent in lieu of a meeting, in accordance with the Certificate of Incorporation and Section 228 of the DGCL. This provision is consistent with, and does not impose any requirements beyond, the Certificate of Incorporation and the statute.
Filing and Notice Requirements. Article II, Section 2.11 of the Bylaws further provides that all executed written consents shall be filed with the corporate secretary of the Company and maintained with the minutes of the proceedings of stockholders. The Bylaws also require that the corporate secretary provide notice to non-consenting stockholders promptly after the written consents are delivered, in accordance with DGCL § 228(c). We have confirmed with Zalcourt Archer & Cole LLP that these filing and notice requirements are being or will be satisfied in connection with the Transaction.
IV. Analysis of the Stockholder Written Consent Process
A. Form of Written Consent and Joinder Agreement
Calderwood & Harkness LLP prepared the Form of Stockholder Written Consent and Joinder Agreement (the "Written Consent") in connection with the SPA, with an effective date of June 10, 2024. The Written Consent was negotiated with Zalcourt Archer & Cole LLP, counsel to Veridian, and was finalized and attached to the executed SPA as Exhibit A thereto. The Written Consent was designed to serve as both the corporate-level stockholder approval instrument and the individual stockholder joinder to the SPA.
The Written Consent provides, in relevant part, that each stockholder executing the Written Consent:
(i) approves the Stock Purchase Agreement and the transactions contemplated thereby, including the sale of one hundred percent (100%) of the outstanding capital stock of Veridian to Penterra for an aggregate purchase price of $900,000,000, subject to the adjustments and escrow arrangements described in the SPA;
(ii) agrees to sell all shares of capital stock of Veridian held by such stockholder to Penterra, pursuant to and on the terms and conditions set forth in the SPA, and thereby becomes a party to the SPA as a "Selling Stockholder";
(iii) appoints David Ng as Stockholder Representative under the Stockholder Representative Agreement, granting him full power and authority to act on behalf of the Selling Stockholders in connection with all post-closing matters, including the resolution of indemnification claims, purchase price adjustments, and the administration of the escrow and expense fund;
(iv) agrees to be bound by the Escrow Agreement with Fidelis National Escrow Corp. (as Escrow Agent), including the deposit of One Hundred Eighty Million Dollars ($180,000,000) into the indemnification escrow account (representing twenty percent (20%) of the aggregate purchase price) and Two Million Five Hundred Thousand Dollars ($2,500,000) into the Stockholder Representative Expense Fund, in each case to be funded from the aggregate purchase price at closing on a pro rata basis in proportion to each Selling Stockholder's share of the purchase price;
(v) acknowledges the indemnification provisions set forth in Article IX of the SPA, including: (a) the indemnification cap of One Hundred Eighty Million Dollars ($180,000,000), representing twenty percent (20%) of the $900,000,000 aggregate purchase price; (b) the tipping basket of Nine Million Dollars ($9,000,000), representing one percent (1%) of the aggregate purchase price, pursuant to which indemnification claims by Penterra for breaches of general representations and warranties shall not be payable unless and until the aggregate amount of such claims exceeds the tipping basket, at which point the full amount of such claims (including the amount of the tipping basket) shall be payable from the indemnification escrow; and (c) the survival periods of eighteen (18) months for general representations and warranties and the full applicable statute of limitations plus sixty (60) days for fundamental representations and tax representations; and
(vi) waives any dissenters' or appraisal rights to which such stockholder may be entitled under the DGCL, the Certificate of Incorporation, the Bylaws, or any other applicable law, to the fullest extent permitted by law, in connection with the Transaction and the SPA.
The Written Consent was circulated to all stockholders of Veridian by Zalcourt Archer & Cole LLP promptly following the execution of the SPA on June 10, 2024. Each stockholder was provided with the full text of the Written Consent, together with the accompanying materials described in Section IV.B below.
B. Solicitation and Collection Process
The process of soliciting and collecting the executed Written Consents from Veridian's stockholders was led by Zalcourt Archer & Cole LLP, as counsel to Veridian. Rebecca Whitmore, as lead partner, and Jonathan Pratt, as the responsible associate, coordinated the distribution of the written consent materials to all stockholders of record as of the record date of June 10, 2024. Calderwood & Harkness LLP provided support and coordination throughout the process, including reviewing draft communications to stockholders and monitoring the progress of the consent collection.
The written consent materials distributed to Veridian's stockholders included the following:
(i) a cover letter from Dr. Julian Marek (CEO and Co-Founder) and David Ng (Managing Partner of Crestline Ventures, LP, in his capacity as proposed Stockholder Representative), urging stockholders to approve the Transaction and execute the Written Consent and Joinder Agreement;
(ii) a summary of the Transaction and the material terms of the SPA, including the aggregate purchase price, the escrow arrangements, the indemnification provisions, and the expected timeline to closing;
(iii) the full text of the SPA (execution version dated June 10, 2024), including all exhibits and schedules thereto;
(iv) the Escrow Agreement among Penterra, the Stockholder Representative, and Fidelis National Escrow Corp.;
(v) the Stockholder Representative Agreement between David Ng, in his capacity as Stockholder Representative, and the Selling Stockholders; and
(vi) the Form of Stockholder Written Consent and Joinder Agreement (Exhibit A to the SPA), for execution and return by each stockholder.
The distribution was made by electronic mail to each stockholder of record, with hard copies available upon request. Zalcourt Archer & Cole LLP established a dedicated email address and a secure online portal for the receipt of executed Written Consents, and maintained a tracking log of all consents received. Calderwood & Harkness LLP received periodic updates from Zalcourt Archer & Cole LLP regarding the status of the consent collection process.
The solicitation and collection process was coordinated between Zalcourt Archer & Cole LLP and Calderwood & Harkness LLP to ensure consistency of communications and compliance with applicable legal requirements. No information statement or other disclosure document was required to be filed with the Securities and Exchange Commission in connection with the written consent process, as Veridian is a private company with no class of securities registered under the Securities Exchange Act of 1934.
Note on Drag-Along Provisions. As referenced in Section III.B above, the Investors' Rights Agreement contains drag-along provisions that are triggered upon the approval of a sale transaction by holders of at least sixty percent (60%) of the outstanding shares of the Company. Given that the three lead institutional investors — Crestline Ventures, LP, Boreal Health Partners Fund III, LP, and Apex Growth Equity Fund II, LP — collectively hold 62.1% of the outstanding capital stock, any stockholder who is a party to the Investors' Rights Agreement and who is subject to the drag-along provisions would be contractually obligated to participate in the Transaction and to sell his, her, or its shares on the same terms and conditions as the consenting stockholders, regardless of whether such stockholder independently elected to execute the Written Consent. This drag-along mechanism provides an additional layer of assurance that all stockholders subject to the Investors' Rights Agreement will be bound by the Transaction. Relevant excerpts from the drag-along provisions of the Investors' Rights Agreement are attached hereto as Appendix E.
C. Results of the Written Consent Process
As of June 14, 2024, executed Written Consents and Joinder Agreements were received from stockholders representing more than ninety percent (90%) of Veridian's outstanding capital stock, on a fully diluted, as-converted basis. The following table summarizes the key consenting stockholders and their respective holdings:
A complete list of all consenting stockholders, together with their respective share counts, percentage holdings, executing signatories, and dates of execution, is set forth in Appendix B attached hereto.
The results of the written consent process satisfy all applicable approval thresholds, as follows:
Majority of Outstanding Shares (Single Class, As-Converted Basis). The threshold for approval under the Certificate of Incorporation — the affirmative vote or written consent of the holders of a majority of the outstanding shares of common stock and preferred stock, voting together as a single class on an as-converted basis — was far exceeded. The consenting stockholders hold more than 90% of the outstanding capital stock on a fully diluted, as-converted basis, well in excess of the required majority of approximately 50.1%.
Separate Class Votes — Each Series of Preferred Stock. The separate class vote requirement for each series of preferred stock was also satisfied. As noted in the capitalization overview in Section II.C above, the lead investor in each series of preferred stock holds a majority of the outstanding shares of such series. Specifically:
•  Crestline Ventures, LP holds a majority of the outstanding shares of both the Series A Preferred Stock and the Series B Preferred Stock and delivered its executed Written Consent;
•  Boreal Health Partners Fund III, LP holds a majority of the outstanding shares of the Series C Preferred Stock and delivered its executed Written Consent; and
•  Apex Growth Equity Fund II, LP holds a majority of the outstanding shares of the Series D Preferred Stock and delivered its executed Written Consent.
Accordingly, the separate class vote requirement for each series of preferred stock has been independently satisfied.
Drag-Along Threshold. The drag-along threshold under the Investors' Rights Agreement — approval by holders of at least sixty percent (60%) of the outstanding shares — was independently exceeded by the consents of the three lead institutional investors alone (62.1%), and was further exceeded by the aggregate consents received (more than 90%). Any remaining stockholders who are parties to the Investors' Rights Agreement and who are subject to the drag-along provisions are therefore contractually obligated to participate in the Transaction, regardless of whether they independently executed Written Consents.
D. Compliance with DGCL § 228 and Notice Requirements
Based on our review, the written consent process satisfies each of the requirements of DGCL § 228:
Writing Requirement. The Written Consents are in writing, in the form of the Stockholder Written Consent and Joinder Agreement prepared by this firm and attached to the SPA as Exhibit A. Each Written Consent sets forth the actions taken — namely, the approval of the SPA and the transactions contemplated thereby, the appointment of the Stockholder Representative, the approval of the Escrow Agreement and the Stockholder Representative Expense Fund, the acknowledgment of the indemnification provisions, and the waiver of dissenters' and appraisal rights. Each Written Consent has been signed by the applicable stockholder (or, in the case of entity stockholders, by a duly authorized representative of such entity).
Minimum Vote Requirement. The Written Consents have been signed by holders of outstanding stock having more than the minimum number of votes that would be necessary to authorize the actions at a meeting at which all shares entitled to vote thereon were present and voted. As detailed above, the consenting stockholders hold more than 90% of the outstanding capital stock on a fully diluted, as-converted basis, which exceeds both the majority threshold for the single-class vote and the majority threshold for each separate class vote of preferred stock.
Notice to Non-Consenting Stockholders. Pursuant to DGCL § 228(c), prompt notice of the taking of corporate action by written consent must be given to those stockholders who did not consent in writing. We have confirmed with Zalcourt Archer & Cole LLP that Veridian's corporate secretary, Rachel Stein-Goldberg (who also serves as the Company's General Counsel), is responsible for providing such notice and that such notice was delivered or will be delivered promptly following June 14, 2024, the effective date of the stockholder action. The notice will inform non-consenting stockholders of the actions taken by written consent and will be delivered in accordance with the Bylaws and DGCL § 228(c).
Filing with Corporate Records. The executed Written Consents have been or will be filed with the minutes of the proceedings of stockholders maintained by Veridian's corporate secretary, in accordance with Article II, Section 2.11 of the Bylaws and DGCL § 228(c).
Effective Date. The effective date of the stockholder action is June 14, 2024, being the date on which the last consent necessary to satisfy the minimum vote requirement was delivered to the Company. This is consistent with DGCL § 228(c), which provides that the effective date of the stockholder action is the date on which the last required consent is delivered. All consents were delivered within the 60-day period prescribed by the statute.
E. Record Date Considerations
Section 213(b) of the DGCL provides that the board of directors of a corporation may fix a record date for the purpose of determining the stockholders entitled to consent to corporate action in writing without a meeting. If no record date is fixed by the board of directors, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the board of directors is required, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the corporation.
We have confirmed with Zalcourt Archer & Cole LLP that the Board of Directors of Veridian adopted a resolution, at a meeting of the Board held on June 10, 2024 (the same date on which the SPA was executed), fixing the record date for the determination of stockholders entitled to act by written consent in connection with the Transaction as June 10, 2024 (the "Record Date"). This is consistent with customary practice in transactions of this nature and ensures that the record date aligns with the date of the SPA.
All stockholders of record as of the Record Date of June 10, 2024 were identified from the Company's stock ledger and were solicited in connection with the written consent process. The capitalization table attached hereto as Appendix A reflects the stockholders of record as of the Record Date.
V. SPA Condition Satisfaction — Section 7.1
Section 7.1 of the SPA sets forth the conditions to the obligations of all parties to consummate the closing of the Transaction. Among these mutual conditions is the requirement that the requisite stockholder approval of the Transaction be obtained. Specifically, Section 7.1(d) of the SPA provides:
"The Requisite Stockholder Approval shall have been obtained in the manner contemplated by Section 6.4 of this Agreement, and the Sellers' Representative shall have delivered to Buyer evidence of such approval reasonably satisfactory to Buyer."
The term "Requisite Stockholder Approval" is defined in the SPA to mean the approval of the Transaction, the SPA, and the ancillary agreements by the holders of the minimum number of shares of the Company's capital stock necessary under the DGCL and the Company's organizational documents, obtained by written consent in lieu of a meeting in accordance with DGCL § 228.
Based on the delivery of executed Written Consents and Joinder Agreements from holders of more than ninety percent (90%) of Veridian's outstanding capital stock on June 14, 2024, the Requisite Stockholder Approval has been obtained, and the stockholder approval condition under SPA § 7.1(d) has been satisfied. Zalcourt Archer & Cole LLP has confirmed that it will deliver, or has delivered, to Calderwood & Harkness LLP (on behalf of Penterra) evidence of such approval, including copies of the executed Written Consents and the consent tracking log, in a form reasonably satisfactory to Penterra.
No further stockholder approval actions are required in connection with the Transaction. The pre-closing conditions satisfaction checklist maintained by this firm in connection with the Transaction should be updated to reflect the satisfaction of this condition as of June 14, 2024.
VI. Potential Issues and Observations
A. Non-Consenting Stockholders
Stockholders representing approximately ten percent (10%) or less of Veridian's outstanding capital stock on a fully diluted, as-converted basis did not execute Written Consents and Joinder Agreements as of June 14, 2024. Based on our review of the capitalization table and the consent tracking log, these non-consenting stockholders are believed to consist primarily of smaller institutional investors who participated in one or more of the preferred stock financing rounds and former employees who hold vested but unexercised stock options under the Equity Incentive Plan.
The non-participation of these stockholders does not affect the validity or effectiveness of the stockholder approval, as the requisite majorities (both the single-class majority and the separate class majorities) have been achieved. However, because the SPA contemplates the sale of one hundred percent (100%) of Veridian's outstanding capital stock, it is desirable — and, under the terms of the SPA, ultimately required — that all stockholders participate as Selling Stockholders.
To the extent that non-consenting stockholders are parties to the Investors' Rights Agreement containing drag-along provisions, they are contractually obligated to sell their shares on the same terms and conditions as the consenting stockholders. The drag-along provisions provide that, upon the approval of a sale transaction by holders of at least sixty percent (60%) of the outstanding shares, all stockholders who are parties to the Investors' Rights Agreement shall be required to (i) vote (or consent in writing) in favor of the transaction, (ii) sell their shares on the same terms, (iii) refrain from exercising any dissenters' or appraisal rights, and (iv) take all other actions necessary to consummate the transaction. Zalcourt Archer & Cole LLP has confirmed that it is following up with all non-consenting stockholders who are parties to the Investors' Rights Agreement to obtain their executed Joinder Agreements or, if necessary, to enforce the drag-along provisions through formal demand letters and, ultimately, judicial enforcement.
With respect to any stockholders who are not parties to the Investors' Rights Agreement (which may include certain former employees or other holders who received shares outside of the venture financing rounds), the drag-along provisions would not apply as a contractual matter. However, given that such stockholders represent a very small fraction of the outstanding capital stock, and given that the SPA provides for customary remedies in the event that individual Selling Stockholders fail to deliver their shares at closing (including the right of Penterra to deposit the applicable purchase price with the Escrow Agent pending resolution), we do not anticipate that the non-participation of any such stockholders would present a material impediment to closing.
Under Delaware law, there is no statutory appraisal right available in connection with the sale of stock (as opposed to a merger under DGCL § 251 or a similar statutory reorganization). This is a significant distinction between the stock purchase structure employed in the Transaction and a merger structure. Because the Transaction is structured as a stock purchase, stockholders of Veridian do not have appraisal rights under DGCL § 262. The waiver of dissenters' and appraisal rights included in the Written Consent form is incorporated as an additional precaution and as a contractual bar to any claim that a stockholder might otherwise assert under the Certificate of Incorporation, the Bylaws, or other applicable law, but the absence of statutory appraisal rights in a stock purchase provides substantial additional protection against any such claims.
B. ESOP/Option Holders
Holders of vested stock options under Veridian's Equity Incentive Plan represent up to 9.8% of the fully diluted equity capitalization. These option holders are not stockholders of record and, as holders of options rather than shares, were not entitled to vote or consent in connection with the stockholder written consent process. However, the treatment of outstanding options at closing is a significant component of the Transaction and merits discussion in this context.
Pursuant to Section 2.6 of the SPA, at the closing of the Transaction, all outstanding vested options under the Equity Incentive Plan will be cancelled and converted into the right to receive a cash payment equal to the excess of the per-share purchase price (as determined on a fully diluted, as-converted basis) over the applicable per-share exercise price of such option, less applicable tax withholdings. Unvested options will be cancelled for no consideration, unless otherwise provided in the applicable option agreement or acceleration schedule.
Option holders who did not execute Written Consents (and who, as noted above, were not required to do so in their capacity as option holders) will be bound by the terms of the Equity Incentive Plan with respect to the treatment of their options at closing. Section 13.2 of the Equity Incentive Plan provides that the plan administrator — which, for these purposes, is the Board of Directors of Veridian — may, in its discretion, provide for the cancellation and cash-out of outstanding options in connection with a "Change of Control" (as defined in the Equity Incentive Plan) that has been approved by the Board and stockholders. The Board of Directors approved the Transaction at its meeting on June 10, 2024, and the stockholder approval has been obtained as described in this memorandum. Accordingly, the plan administrator has the authority to effect the cancellation and cash-out of outstanding options without the individual consent of each option holder, subject to the terms of the plan and the applicable option agreements.
We note, however, that certain option holders may also hold shares of common stock of the Company (e.g., shares obtained through prior exercises of options) and may, in that capacity, have been solicited in connection with the written consent process. To the extent any such stockholder/option holder did not execute a Written Consent, the analysis in Section VI.A above with respect to non-consenting stockholders would apply.
C. Documentation Completeness
In order to ensure the completeness of the closing documentation and the integrity of the transaction record, we recommend the following actions:
1.  Executed Written Consents and Joinder Agreements. Calderwood & Harkness LLP should obtain from Zalcourt Archer & Cole LLP complete copies (and, to the extent available, originals) of all executed Written Consents and Joinder Agreements for inclusion in the closing binder. The consent tracking log maintained by Zalcourt Archer & Cole LLP should also be obtained and reviewed for completeness.
2.  Notice to Non-Consenting Stockholders. Copies of the notice delivered to non-consenting stockholders pursuant to DGCL § 228(c) should be obtained from Veridian's corporate secretary (Rachel Stein-Goldberg) or from Zalcourt Archer & Cole LLP and included in the closing file. The form of notice and evidence of delivery (e.g., email delivery receipts or certified mail return receipts) should be preserved.
3.  Board Resolutions. Copies of the resolutions adopted by the Board of Directors of Veridian on June 10, 2024, including the resolution approving the Transaction, the resolution fixing the Record Date for the written consent process, and the resolution authorizing the cancellation and cash-out of outstanding options under the Equity Incentive Plan, should be obtained and included in the closing binder if not already in our files.
VII. Conclusion and Recommendations
Based on the foregoing analysis, we conclude as follows:
The stockholder written consent process for the approval of the Stock Purchase Agreement dated June 10, 2024, by and among Penterra Pharmaceuticals Corp., the stockholders of Veridian Biosciences, Inc., and David Ng as Stockholder Representative, has been completed in compliance with Section 228 of the Delaware General Corporation Law, the Amended and Restated Certificate of Incorporation of Veridian, the Amended and Restated Bylaws of Veridian, and the Fourth Amended and Restated Investors' Rights Agreement.
Holders of more than ninety percent (90%) of Veridian's outstanding capital stock, on a fully diluted, as-converted basis, delivered executed Written Consents and Joinder Agreements on June 14, 2024, approving the SPA and the transactions contemplated thereby, the appointment of the Stockholder Representative, the Escrow Agreement, and the related ancillary agreements. The level of approval obtained — exceeding 90% — is well in excess of the required majority under the Certificate of Incorporation and the DGCL, both for the single-class vote and for each separate series class vote of preferred stock.
The stockholder approval condition to closing under Section 7.1(d) of the SPA has been satisfied. No further stockholder approval actions are required in connection with the Transaction.
We recommend the following next steps to complete the documentation and administration of the written consent process:
1.  Obtain and File Originals. Obtain and file all executed Written Consent and Joinder Agreement originals (or, at minimum, complete copies of fully executed versions) from Zalcourt Archer & Cole LLP for inclusion in the closing binder and the permanent transaction files.
2.  Confirm Delivery of Notice to Non-Consenting Stockholders. Confirm with Zalcourt Archer & Cole LLP and/or Rachel Stein-Goldberg (General Counsel and Corporate Secretary of Veridian) that the notice required by DGCL § 228(c) has been delivered to all stockholders who did not execute Written Consents, and obtain copies of such notice and evidence of delivery for the closing file.
3.  Monitor Drag-Along Enforcement. Monitor the drag-along enforcement process being conducted by Zalcourt Archer & Cole LLP with respect to any non-consenting stockholders who are parties to the Investors' Rights Agreement. Obtain periodic status updates and escalate any enforcement issues to Oliver Mackenzie and Harrison Wexford as necessary.
4.  Update Pre-Closing Conditions Satisfaction Checklist. Update the Pre-Closing Conditions Satisfaction Checklist maintained by this firm in connection with the Transaction to reflect the satisfaction of the stockholder approval condition (SPA § 7.1(d)) as of June 14, 2024.
We are available to discuss this memorandum and its conclusions at your convenience. Please do not hesitate to contact us with any questions.
Prepared by:
Megan Chu Associate, Mergers & Acquisitions Calderwood & Harkness LLP Direct: (212) 555-4821 mchu@calderwoodharkness.com
Derek Okonkwo Associate, Mergers & Acquisitions Calderwood & Harkness LLP Direct: (212) 555-4837 dokonkwo@calderwoodharkness.com
Appendices
The following appendices are referenced in this memorandum and are attached hereto or maintained in the closing file:
Appendix A: Summary Capitalization Table of Veridian Biosciences, Inc. (as of the Record Date, June 10, 2024), listing all stockholders of record, share counts by class and series, and percentage holdings on a fully diluted, as-converted basis.
Appendix B: List of Consenting Stockholders, including the name of each consenting stockholder, the date of execution (June 14, 2024 for all listed), percentage holdings on a fully diluted, as-converted basis, and the identity of the executing signatory for each stockholder.
Appendix C: Form of Stockholder Written Consent and Joinder Agreement (cross-reference to Exhibit A to the Stock Purchase Agreement dated June 10, 2024).
Appendix D: Relevant excerpts from the Fifth Amended and Restated Certificate of Incorporation of Veridian Biosciences, Inc. (provisions relating to stockholder action by written consent (Article VII, Section 7.1) and approval of Deemed Liquidation Events (Article IV, Sections 4.3 and 4.5)).
Appendix E: Relevant excerpts from the Fourth Amended and Restated Investors' Rights Agreement dated March 15, 2022 (drag-along provisions).
PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION — ATTORNEY WORK PRODUCT Calderwood & Harkness LLP | Matter No. 1018-00008
Stockholder | Series / Type | Fully Diluted % | Representative / Signatory
Crestline Ventures, LP | Series A & B Preferred | 28.3% | David Ng, Managing Partner
Boreal Health Partners Fund III, LP | Series C Preferred | 19.7% | Sarah Dalmqvist, Managing Director
Apex Growth Equity Fund II, LP | Series D Preferred | 14.1% | Marcus Doyle, Partner
Dr. Julian Marek (CEO & Co-Founder) | Common Stock | 8.4% | —
Dr. Priya Chandrasekaran (CSO & Co-Founder) | Common Stock | 6.2% | —
Other Management and Employees (ESOP Pool) | Common Stock / Options | 9.8% | Various
Other Institutional Investors | Various Preferred / Common | ~13.5% | Various
Total | 100.0%
Consenting Stockholder | Fully Diluted % | Executing Signatory | Date of Execution
Crestline Ventures, LP | 28.3% | David Ng, Managing Partner | June 14, 2024
Boreal Health Partners Fund III, LP | 19.7% | Sarah Dalmqvist, Managing Director | June 14, 2024
Apex Growth Equity Fund II, LP | 14.1% | Marcus Doyle, Partner | June 14, 2024
Dr. Julian Marek (CEO & Co-Founder) | 8.4% | Dr. Julian Marek | June 14, 2024
Dr. Priya Chandrasekaran (CSO & Co-Founder) | 6.2% | Dr. Priya Chandrasekaran | June 14, 2024
Other management, employees, and institutional holders | Balance to exceed 90% | Various | June 14, 2024
Total Consenting | > 90%

PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT COMMUNICATION ATTORNEY WORK PRODUCT

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