FORM OF CLOSING CERTIFICATE OF THE COMPANY AND THE SELLERS
Pursuant to Section 7.2 of the Stock Purchase Agreement
[_], 2024
This Closing Certificate (this "Certificate") is delivered pursuant to Section 7.2 of that certain Stock Purchase Agreement, dated as of June 10, 2024 (the "Agreement"), by and among Penterra Pharmaceuticals Corp., a Delaware corporation ("Buyer"), Veridian Biosciences, Inc., a Delaware corporation (the "Company"), the stockholders of the Company identified on the signature pages thereto (the "Sellers"), and David Ng, solely in his capacity as the Stockholder Representative (the "Stockholder Representative").
Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Agreement.
Section 1 — Certifying Officer Identification
The undersigned, Dr. Julian Marek, hereby certifies that he is the Chief Executive Officer of Veridian Biosciences, Inc., a Delaware corporation. In such capacity, the undersigned is duly authorized to execute and deliver this Certificate on behalf of the Company and the Sellers in connection with the consummation of the transactions contemplated by the Agreement (the "Transactions"). The undersigned is delivering this Certificate pursuant to Section 7.2 of the Agreement in satisfaction of the conditions to the obligations of Buyer to consummate the Closing as set forth therein.
The undersigned further certifies that he is familiar with the Agreement and the terms and conditions thereof and with the matters set forth in this Certificate. The undersigned has made such investigation and inquiry as he has deemed necessary and appropriate in order to deliver this Certificate on behalf of the Company and the Sellers. The statements and certifications set forth below are made by the undersigned in his capacity as Chief Executive Officer of the Company and on behalf of each of the Sellers, and not in his individual capacity, except to the extent the undersigned is himself a Seller under the Agreement.
Section 2 — Certification Regarding Representations and Warranties (Section 7.2(a))
The undersigned hereby certifies, on behalf of the Company and the Sellers, as follows:
(a) The representations and warranties of the Company and the Sellers set forth in the Agreement (other than the Fundamental Representations (as defined in the Agreement)) are true and correct in all respects as of the date of the Agreement and as of the Closing Date as though made on and as of the Closing Date (except to the extent that any such representations and warranties expressly relate to a specified date, in which case such representations and warranties are true and correct in all respects as of such specified date), except where the failure of such representations and warranties to be so true and correct has not had, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. For the avoidance of doubt, the bring-down standard set forth in this paragraph is consistent with, and is intended to satisfy, the condition to Closing set forth in Section 7.2(a)(i) of the Agreement.
(b) The Fundamental Representations of the Company and the Sellers (as defined in Section 9.1(a) of the Agreement, including the representations and warranties set forth in Section 3.1 (Organization and Good Standing), Section 3.2 (Authorization; Enforceability), Section 3.3 (Capitalization), Section 3.5 (Title to Shares), Section 3.22 (Brokers' Fees), Section 4.1 (Authority and Capacity), Section 4.2 (Title to Shares), and Section 4.4 (No Brokers)) are true and correct in all respects (other than de minimis inaccuracies) as of the date of the Agreement and as of the Closing Date as though made on and as of the Closing Date (except to the extent that any such Fundamental Representations expressly relate to a specified date, in which case such Fundamental Representations are true and correct in all respects (other than de minimis inaccuracies) as of such specified date). The bring-down standard set forth in this paragraph is consistent with, and is intended to satisfy, the condition to Closing set forth in Section 7.2(a)(ii) of the Agreement.
Section 3 — Certification Regarding Covenants (Section 7.2(c))
The undersigned hereby certifies, on behalf of the Company and the Sellers, that the Company and each of the Sellers have performed and complied in all material respects with all covenants and agreements required by the Agreement to be performed or complied with by them at or prior to the Closing, in satisfaction of the condition to Closing set forth in Section 7.2(c) of the Agreement.
Without limiting the generality of the foregoing, the undersigned certifies that:
(a) The Company has complied in all material respects with the interim operating covenants set forth in Section 5.1 of the Agreement, including the obligation to conduct the business of the Company in the ordinary course of business consistent with past practice during the period between the date of the Agreement and the Closing Date, and has not taken any of the actions prohibited by Section 5.1(a) of the Agreement without the prior written consent of Buyer;
(b) The Company has complied in all material respects with the notification obligations set forth in Section 5.1(b) of the Agreement, including the obligation to promptly notify Buyer of any event, development, occurrence, or change of which the Company becomes aware that would reasonably be expected to cause any representation or warranty of the Company or the Sellers to be untrue or inaccurate in any material respect, or that would reasonably be expected to result in the failure of any condition set forth in Section 7.2 of the Agreement; and
(c) The Company and the Sellers have complied in all material respects with the no-shop provisions of Section 5.4 of the Agreement, including the obligation not to, directly or indirectly, (i) solicit, initiate, knowingly encourage, or knowingly facilitate any inquiry, proposal, or offer relating to any Acquisition Proposal (as defined in the Agreement), (ii) enter into, maintain, or continue discussions or negotiations with any Person (other than Buyer and its Representatives) with respect to any Acquisition Proposal, or (iii) enter into any letter of intent, memorandum of understanding, merger agreement, acquisition agreement, or similar agreement relating to any Acquisition Proposal.
Section 4 — Certification Regarding No Material Adverse Effect (Section 7.2(b))
The undersigned hereby certifies, on behalf of the Company and the Sellers, that since the date of the Agreement (June 10, 2024), no event, change, development, occurrence, condition, or effect has occurred that, individually or in the aggregate, has had or would reasonably be expected to have a Material Adverse Effect on:
(a) the business, results of operations, financial condition, or assets of the Company, taken as a whole; or
(b) the ability of the Company or any of the Sellers to consummate the Transactions contemplated by the Agreement.
The foregoing certification is made with reference to the definition of "Material Adverse Effect" set forth in Section 1.1 of the Agreement, including all qualifications, carve-outs, and exceptions set forth therein, and is intended to satisfy the condition to Closing set forth in Section 7.2(b) of the Agreement.
Section 5 — Certification Regarding Legal Proceedings
The undersigned hereby certifies, on behalf of the Company and the Sellers, that as of the date hereof, no action, suit, proceeding, claim, arbitration, or governmental investigation (whether at law or in equity, and whether civil, criminal, or administrative) is pending or, to the knowledge of the Company, threatened against the Company or any Seller by any Person (including any Governmental Authority) that:
(a) seeks to restrain, enjoin, prevent, or prohibit the consummation of any of the Transactions contemplated by the Agreement;
(b) seeks damages or other relief in connection with the Transactions that, if awarded, would reasonably be expected to have a Material Adverse Effect; or
(c) challenges the validity or enforceability of the Agreement or any of the transactions contemplated thereby.
The foregoing certification is made with reference to the mutual condition set forth in Section 7.1(c) of the Agreement regarding the absence of injunctions, restraining orders, and other legal restraints or prohibitions preventing or making illegal the consummation of the Transactions.
Section 6 — Certification Regarding Delivery of Closing Deliverables
The undersigned hereby certifies, on behalf of the Company and the Sellers, that the Company and/or the Sellers, as applicable, have delivered or stand ready to deliver at the Closing all documents, instruments, certificates, and other items required to be delivered by them at or prior to the Closing pursuant to Section 7.2 of the Agreement and the other applicable provisions of the Agreement, including without limitation the following:
(a) Stock certificates (or, where shares are held in book-entry form, evidence of book-entry ownership and appropriate transfer instructions) representing all of the issued and outstanding shares of capital stock of the Company, duly endorsed in blank or accompanied by duly executed stock powers in form reasonably acceptable to Buyer, together with any requisite stock transfer tax stamps, sufficient to transfer to Buyer good, valid, and marketable title to all such shares, free and clear of all Liens (other than restrictions arising under applicable securities laws and Liens arising under the Agreement);
(b) An executed counterpart of the Escrow Agreement, dated as of the Closing Date, by and among Buyer, the Stockholder Representative, and Fidelis National Escrow Corp., as escrow agent, in the form attached as Exhibit A to the Agreement, duly executed by each of the parties thereto other than Buyer;
(c) Evidence, in form and substance reasonably satisfactory to Buyer, of the release or termination of all Liens on the capital stock of the Company (other than Liens arising under the Agreement, Liens imposed by applicable securities laws, and Liens created by Buyer), including UCC-3 termination statements, lien release letters, and such other instruments as may be necessary to evidence the release of any such Liens;
(d) Certificates of good standing (or the equivalent) for the Company issued by the Secretary of State of the State of Delaware (the Company's state of incorporation) and by the appropriate Governmental Authority in each jurisdiction in which the Company is qualified to do business as a foreign corporation, namely the Commonwealth of Massachusetts, the State of California, and the State of Maryland, each dated not more than ten (10) business days prior to the Closing Date;
(e) Executed Non-Competition and Non-Solicitation Agreements, in the forms attached as Exhibit C to the Agreement, duly executed by each of Dr. Julian Marek and Dr. Priya Chandrasekaran;
(f) Written resignations, effective as of the Closing, of each director and officer of the Company whose resignation has been requested by Buyer in writing at least three (3) business days prior to the Closing Date, in form and substance reasonably satisfactory to Buyer;
(g) A certificate in compliance with Treasury Regulations Section 1.1445-2(b)(2), duly executed by the Company and dated as of the Closing Date, certifying that the Company is not, and has not been at any time during the applicable period specified in Section 897(c)(1)(A)(ii) of the Internal Revenue Code of 1986, as amended, a "United States real property holding corporation" within the meaning of Section 897(c)(2) of the Code (or, in the alternative, such other evidence as Buyer may reasonably request to establish that withholding under Section 1445 of the Code is not required with respect to the Transactions), together with a notice to the Internal Revenue Service in accordance with the requirements of Treasury Regulations Section 1.1445-2(d)(2);
(h) Payoff letters, in form and substance reasonably satisfactory to Buyer, from each holder of Indebtedness of the Company that is to be repaid at or in connection with the Closing, setting forth the aggregate amount required to be paid to satisfy in full all obligations of the Company in respect of such Indebtedness (including principal, accrued and unpaid interest, prepayment penalties, breakage costs, and other fees and expenses), wire transfer instructions for payment thereof, and a commitment by the applicable holder to release all related Liens upon receipt of such payoff amount; and
(i) A certificate of the Secretary (or equivalent officer) of the Company, dated as of the Closing Date, certifying as to (i) the Company's certificate of incorporation and all amendments thereto as in effect as of the Closing Date, (ii) the Company's bylaws as in effect as of the Closing Date, and (iii) resolutions duly adopted by the board of directors of the Company (and, to the extent required, by the stockholders of the Company) authorizing the execution, delivery, and performance of the Agreement and the consummation of the Transactions, together with a certification that such resolutions have not been amended, modified, revoked, or rescinded and remain in full force and effect as of the Closing Date.
Section 7 — Certification Regarding Stockholder Approval
The undersigned hereby certifies that Sellers holding more than ninety percent (90%) of the issued and outstanding shares of capital stock of the Company (on an as-converted, fully diluted basis) have duly executed and delivered written consents in lieu of a meeting of stockholders, in accordance with Section 228 of the Delaware General Corporation Law and the applicable provisions of the Company's certificate of incorporation and bylaws, approving and adopting the Agreement and the Transactions contemplated thereby, including the sale of all issued and outstanding shares of capital stock of the Company to Buyer on the terms and conditions set forth in the Agreement. Such written consents were delivered on June 14, 2024, and remain in full force and effect as of the date hereof, without modification, amendment, or revocation. No additional stockholder vote or consent is required under applicable Law or the Company's organizational documents in order to consummate the Transactions.
Section 8 — No Knowledge of Buyer Breach
The undersigned hereby certifies that, to the knowledge of the undersigned (after reasonable inquiry), as of the date hereof, no facts or circumstances exist that would give the Company or the Sellers a right to terminate the Agreement pursuant to Section 8.1 of the Agreement. Without limiting the foregoing, the undersigned is not aware of any breach or failure by Buyer to perform any of its representations, warranties, covenants, or agreements under the Agreement that would give rise to a right of termination under Section 8.1 of the Agreement or that would result in the failure of any condition to the obligations of Buyer set forth in Section 7.3 of the Agreement.
Section 9 — Limitation / No Expansion of Liability
This Certificate is delivered solely pursuant to and in accordance with Section 7.2 of the Agreement and shall not be deemed to expand, modify, or otherwise alter the representations, warranties, covenants, or agreements of the Company or the Sellers set forth in the Agreement. This Certificate does not constitute an independent source of representations, warranties, covenants, or agreements by the Company, the Sellers, or the undersigned and shall not give rise to any liability or obligation of the Company, the Sellers, or the undersigned that is separate from or in addition to the liabilities and obligations arising under the Agreement.
The certifications and statements set forth in this Certificate are subject in all respects to the limitations, qualifications, exceptions, and other terms and conditions set forth in the Agreement, including without limitation the provisions of Article IX (Indemnification) thereof, including the survival periods, deductible thresholds, caps, and other limitations on liability set forth therein. Nothing in this Certificate shall be construed to modify or waive any limitation on liability or any other right or defense available to the Company, the Sellers, or the Stockholder Representative under the Agreement or applicable Law.
Section 10 — Governing Law
This Certificate shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware, consistent with Section 10.6 of the Agreement.
[Signature Page Follows]
IN WITNESS WHEREOF, the undersigned has duly executed this Closing Certificate as of the date first written above.
VERIDIAN BIOSCIENCES, INC.
By: ________
Name: Dr. Julian Marek
Title: Chief Executive Officer
Delivered on behalf of the Company and the Sellers in accordance with Section 7.2 of the Agreement.
ATTACHMENTS AND EXHIBITS
The following documents are to be attached to this Certificate at or prior to the Closing, as applicable:
• Schedule of Closing Deliverables (cross-referenced to Section 6 above)
• Good Standing Certificates (Delaware, Massachusetts, California, and Maryland)
• FIRPTA Certificate (Treasury Regulations Section 1.1445-2(b))
• Payoff Letters for Indebtedness to be repaid at Closing
• Resignation Letters of Directors and Officers
• Secretary's Certificate of the Company (with attached organizational documents and resolutions)
• Executed Non-Competition and Non-Solicitation Agreements
• Executed Escrow Agreement
• Evidence of Release or Termination of Liens on Capital Stock
• Stock Certificates or Book-Entry Transfer Documentation with Stock Powers