Senti Biosciences Holdings, Inc 8-K, filed Dec 2, 2024
Senti Biosciences Holdings, Inc. (SNTI)
8-K
2024-12-02
For: 2024-11-25
View Original
Added on
April 11, 2026
About this 8-K
Senti Biosciences Holdings, Inc filed this 8-K on December 2, 2024, reporting on events of November 25, 2024.
Items reported
- Item 1.01: Entered into a material agreement
- Item 2.03: New debt or off-balance-sheet obligation
- Item 3.02: Unregistered sale of equity
- Item 3.03: Change to shareholders' rights
- Item 5.02: Director or officer change, or executive pay
- Item 5.03: Charter or bylaw amendment, or fiscal year change
- Item 8.01: Other events
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 25, 2024
(Exact name of Registrant as Specified in Its Charter)
|
|
|
|
|
(State or Other Jurisdiction of Incorporation)
|
(Commission File Number)
|
(IRS Employer Identification No.)
|
|
|
||
|
|
|
|
|
(Address of Principal Executive Offices)
|
(Zip Code)
|
Registrant’s Telephone
Number, Including Area Code: 650 -239-2030
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
Securities registered pursuant to Section 12(b) of the Act:
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
||
|
|
|
|
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this
chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to
use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒
| Item 1.01 |
Entry into a Material Definitive Agreement.
|
Securities Purchase Agreement
On December 2, 2024, Senti Biosciences, Inc. (the “Company”) entered into a securities purchase agreement (the “Securities Purchase Agreement”) with
certain accredited investors (the “Investors”), pursuant to which the Company agreed to issue and sell, in a private placement (the “Offering”), (i) up to 21,157 shares of Series A Convertible Preferred Stock, par value $0.0001 per share, for an
aggregate offering price of $47.6 million (the “Series A Preferred Stock”) and (ii) accompanying warrants (the “Warrants” and the shares underlying the Warrants, the “Warrant Shares”) to purchase up to 31,735,500 shares of common stock, par value
$0.0001 per share (the “Common Stock”).
The Investors are venture capital and other institutional investment funds. The Investors include entities affiliated with New Enterprise Associates, Inc. (“NEA”),
which is associated with a member of the Company’s board of directors and is a holder of more than 5% of the Company’s outstanding capital stock, as well as entities affiliated with Bayer Healthcare, LLC, which is also holder of more than 5% of
the Company’s outstanding capital stock.
Pursuant to the Certificate of Designation of Preferences, Rights and Limitations of the Series A Convertible Voting Preferred Stock, which is filed as
Exhibit 3.1 to this Current Report on Form 8-K (the “Certificate of Designation”), each share of Series A Preferred Stock will be issued at $2,250.00 per share and, subject to the Stockholder Approval (as defined below), is convertible into 1,000
shares of Common Stock.
Subject to the terms and limitations contained in the Certificate of Designation, the Series A Preferred Stock issued in the Offering will not become
convertible until the Company’s stockholders approve (i) the issuance of all Common Stock issuable upon conversion of the Series A Preferred Stock and (ii) the issuance of the Warrant Shares upon exercise of the Warrants (collectively, the
“Stockholder Approval”). On the first trading day following the announcement of the Stockholder Approval, the Company may, at its option, cause each share of Series A Preferred Stock to automatically convert into such number of shares of Common
Stock, at the conversion price of $2.25 per share (the “Conversion Price”), subject to the terms and limitations contained in the Certificate of Designation. Additionally, subject to the terms and limitations in the Certificate of Designation, if
the Company has not elected to automatically convert the Series A Preferred Stock, then at the option of each individual holder of Series A Preferred Stock, each share of the Series A Preferred Stock held by such holder, not otherwise converted,
shall be convertible into the applicable number of shares of Common Stock at the Conversion Price.
Pursuant to the Certificate of Designation, the Company shall effect automatic conversions
by delivering to each holder of Series A Preferred Stock a notice of election as of the date of delivery of such notice. For optional conversions, the holders shall provide to the Company and its transfer agent a form of conversion notice that
includes the number of shares of Series A Preferred Stock to be converted, the number of shares of Series A Preferred Stock owned prior to the conversion at issue, and the number of shares of Common Stock to be issued in respect of the conversion
at issue. Subject to the terms and conditions contained in the Certificate of Designation, the Company’s transfer agent shall issue and electronically transfer the applicable shares of Common Stock following the automatic or optional conversion.
Additional information on the Certificate of Designation is set forth under Item 5.03 of this Current Report on Form 8-K.
Each Warrant has an exercise price per share of $2.30. The Warrants are exercisable at any time and from time to time on or after the Stockholder
Approval (as defined below) and on or prior to the five year anniversary of the original issuance date. A holder of a Warrant may not exercise the Warrant if the holder, together with its affiliates, would beneficially own more than 4.99% (or, at
the election of the holder, 9.99%) of the number of shares of the Common Stock outstanding immediately after giving effect to such exercise. A holder of a Warrant may increase or decrease this percentage not in excess of 45.00% by providing at
least 61 days’ prior notice to the Company.
The Offering
An initial closing of the issuance of 16,713 shares of Series A Preferred Stock and Warrants to purchase 25,069,500 shares of Common Stock will be
effected on or about December 5, 2024, subject to the satisfaction of customary closing conditions. The gross proceeds of the initial issuance of Series A Preferred Stock and Warrants are estimated to be approximately $37.6 million, before
deducting fees to be paid to the placement agent of the Company and other offering expenses payable by the Company. The fees to be paid to the placement agent shall be the greater of $1,500,000 or 6% of the gross proceeds of the Offering pursuant
to the engagement letter with the placement agent. Additionally, pursuant to the terms of the Securities Purchase Agreement, a certain investor has the option to purchase up to an additional 4,444 shares of Series A Preferred Stock and Warrants to
purchase 6,666,000 shares of Common Stock at a subsequent closing to occur no later than December 27, 2024, for gross proceeds of up to $9.9 million. The Company intends to use the net proceeds from the Offering for working capital purposes,
general corporate purposes, other research and development activities and to advance its SENTI-202 program.
The securities issued in the Offering were issued in a private placement transaction exempt from the registration requirements of under the Securities
Act of 1933, as amended (the “Securities Act”) and have not been registered under the Securities Act, and until so registered the securities may not be offered or sold absent registration or availability of an applicable exemption from
registration. There is no established public trading market for the Series A Preferred Stock or the Warrants, and the Company does not intend to list such securities on any national securities exchange or nationally recognized trading system.
Pursuant to the Securities Purchase Agreement and the Registration Rights Agreement, which is filed as Exhibit 10.2 to this Current Report on Form 8-K
(the “Registration Rights Agreement”), as promptly as reasonably practicable following the closing of the Offering, but, in any event, not later than one hundred twenty (120) days thereafter (the “Filing Date”) the Company has agreed to file a
resale registration statement on Form S-3 (or Form S-1 if Form S-3 is not available) providing for the resale by the Investors of (i) the shares of Common Stock issuable upon conversion of the Series A Preferred Stock and (ii) the Warrant Shares
((i) and (ii) collectively, the “Registrable Shares”), and to use commercially reasonable efforts to cause such resale registration statement to be declared effective as soon as practicable but in any event no later than the earlier of (a) the
seventy-fifth (75th) calendar day following the Filing Date of the registration statement if the U.S. Securities Exchange Commission (the “SEC”) notifies the Company that it will “review” the registration statement and (b) the fifth (5th)
business day after the date the Company is notified (orally or in writing, whichever is earlier) by the SEC that the registration statement will not be “reviewed” or will not be subject to further review. The Company further agreed to take all
steps necessary to keep such registration statement effective at all times until all Registrable Shares have been resold, or there remains no Registrable Shares. The Company has agreed to pay a liquidated damages penalty upon certain failures to
meet the deadlines set forth above or to keep the resale registration statement continuously effective, which penalties will not exceed 5% of the aggregate subscription amount.
The Securities Purchase Agreement contains certain representations and warranties, covenants and indemnities customary for similar transactions. The
representations, warranties and covenants contained in the Securities Purchase Agreement were made solely for the benefit of the parties to the Securities Purchase Agreement and may be subject to limitations agreed upon by the contracting parties.
Pursuant to the Securities Purchase Agreement, the Company has agreed to certain restrictions on the issuance and sale of shares of the Company’s securities until the earlier of (a) sixty (60) days after the Closing Date (as defined in the
Securities Purchase Agreement) and (b) the business day immediately following the effective date of the registration statement filed pursuant to the Registration Rights Agreement, subject to certain exceptions.
Designation Agreements
Pursuant to (i) a letter agreement executed with Celadon Partners SPV 24 (“Celadon”) and (ii) a letter agreement executed with New Enterprise
Associates 15, L.P. (“NEA”), each of Celadon and NEA have the right to designate certain directors to the Company’s Board of Directors (the “Board”), subject to the terms and conditions provided in the respective letter agreements.
The form of Certificate of Designation, the form of Warrant, the Securities Purchase Agreement, the Registration Rights Agreement (swap order to match
the exhibit list) and the Letter Agreement with each of Celadon and NEA are filed as Exhibits 3.1, 4.1, 10.1, 10.2, 10.3 and 10.4, respectively, to this Current Report on Form 8-K. The foregoing summaries of the terms of the Certificate of
Designation, the Series A Preferred Stock, the Warrants, the Warrant Shares, and the Common Stock and the terms of the Securities Purchase Agreement are subject to, and qualified in their entirety by, the full text of such documents, where
applicable, which are incorporated herein by reference.
No statement in this report or the attached exhibits is an offer to sell or a solicitation of an offer to purchase the Company’s securities, and no
offer, solicitation or sale will be made in any jurisdiction in which such offer, solicitation or sale is unlawful.
| Item 2.03 |
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
|
The information set forth under Item 1.01 of this Current Report on Form 8-K is incorporated
into this Item 2.03 by reference.
| Item 3.02 |
Unregistered Sales of Equity Securities.
|
The information contained above in Item 1.01 is hereby incorporated by reference into this Item 3.02. The Preferred Stock and Warrants are being sold
and, upon conversion of the Series A Preferred Stock and upon exercise of the Warrants, the securities underlying the Series A Preferred Stock and Warrants will be issued without registration under the Securities Act, in reliance on the exemptions
provided by Section 4(a)(2) of the Securities Act as a transaction not involving a public offering and Rule 506 promulgated under the Securities Act as sales to accredited investors, and in reliance on similar exemptions under applicable state
laws.
| Item 3.03 |
Material Modification to Rights of Security Holders.
|
The information set forth below in Item 5.03 regarding the Certificate of Designation is incorporated into this Item 3.03 by reference.
| Item 5.02 |
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
|
(a)
Resignation of Omid Farokhzad
On November 25, 2024, Omid Farokhzad, M.D., a member of the Board and the Audit Committee of the Board, notified the Board of his resignation as a
director of the Company and all committees thereof, effective November 25, 2024. Dr. Farokhzad’s resignation was not a result of any dispute or disagreement with the Board or management of the Company on any matter related to the operations,
policies, or practices of the Company. The Company thanks Dr. Farokhzad for his years of service as a director.
(d)
Appointment of Fran Schulz
On December 2, 2024, upon the recommendation of its Nominating and Corporate Governance Committee, the Board unanimously appointed Frances D. Schulz to fill a newly created vacancy on the Board resulting from the resignation of Dr. Farokhzad, such
appointment to be effective upon the initial closing of the Offering. Ms. Schulz was appointed as a Class I director of the Company, to serve in such capacity until the annual meeting of the Company’s stockholders in 2026 or until her earlier
resignation, death or removal. Ms. Schulz has also been appointed to serve as a member of the Audit Committee of the Board.
Ms. Shulz was one of the founding members and senior partners in Ernst & Young’s (“EY”) Life Sciences Practice and held various roles at EY over 35
years. She currently serves as a Board Member, Audit Committee Chair, ex-officio member of the Finance Committee and member of the Governance and Investment Committee for Menlo College (2019 - present) and as a Board Member and Audit Committee
Chair for EDAP TMS SA (Nasdaq: EDAP) (2024 - present). Previously, she served as a Board Member, Audit Committee Chair and Finance Committee Chair for the National Board of Women in Bio (2013 - 2023) as well as a Board Member and an Audit Committee
member for the California Life Sciences Industry Association. Ms. Schulz is a certified public accountant (CPA) licensed in California. Ms. Schulz received her B.S. in Business Administration from Menlo College. The Company believes Ms. Schulz is
qualified to serve on the Board because of her experience in leadership positions in the biotechnology and life science industry, her finance and accounting expertise, and her educational background.
Ms. Schulz will be compensated for her service as a non-employee director in accordance with the Company’s Non-Employee Director Compensation Policy and will receive an initial option award to purchase 12,500 shares of Common Stock, pursuant to
the Company’s 2022 Equity Incentive Plan (the “Plan”), which shall vest in equal monthly installments over three years from its grant date, subject to Ms. Schulz’s continued service on the Board; provided, that upon a Change of Control (as
defined in the Plan), all shares of common stock subject to the option shall become full vested and exercisable, provided, further, however, that all vesting shall cease if Ms. Schulz resigns from the Board or otherwise ceases to serve as a
director of the Company, unless the Company and Ms. Schulz have entered into a written agreement for Ms. Schulz to provide uninterrupted services to the Company in a capacity other than as a director at such time or prior to such time Ms.
Schulz resigns from or ceases to serve as a director, and such written agreement expressly states that such services constitute Continuous Service (as defined in the Plan), in which case, all vesting shall cease upon termination of the
Continuous Service. As a non-employee director, Ms. Schulz will also be eligible to receive an annual stock option grant to purchase 62,500 shares of Common Stock, as well as annual cash retainers of $35,000 for serving as a member of the Board
and $7,500 for serving as a member of the Audit Committee of the Board.
Ms. Schulz has no family relationship with any of the executive officers or directors of the Company. There are no arrangements or understandings
between Ms. Schulz and any other person pursuant to which she was appointed as a director of the Company.
In connection with Ms. Schulz’s election to the Board, Ms. Schulz entered into the Company’s standard form of indemnification agreement, a copy of
which was filed as Exhibit 10.5 to the Company’s Registration Statement on Form S-4, as amended (File No. 333- 262707) filed with the Securities and Exchange Commission on May 10, 2022. Pursuant to the terms of the indemnification agreement, the
Company may be required, among other things, to indemnify Ms. Schulz for some expenses, including attorneys’ fees, judgments, fines, penalties, excise taxes and settlement amounts actually and reasonably incurred by her in any action or proceeding
arising out of her service as one of the Company’s directors.
A copy of the Company’s press release announcing the appointment of Ms. Schulz is attached as Exhibit 99.1 to this Current Report on Form 8-K and is
incorporated herein by reference.
Appointment of Brenda Cooperstone to the Audit Committee
Effective December 2, 2024, upon the recommendation of its Nominating and Corporate Governance Committee, the Board unanimously appointed Brenda
Cooperstone to serve as a member of the Audit Committee of the Board in addition to serving as a member of the Compensation Committee of the Board. In addition to the annual stock grant and the annual cash retainers for serving as a member of the
Board and the Compensation Committee of the Board, Ms. Cooperstone will be eligible to receive $7,500 annually for serving as a member of the Audit Committee of the Board.
Appointment of Celadon Director Designee
Pursuant to the terms of a letter agreement executed with Celadon, the Board approved the appointment of Donald Tang, to the Board, effective upon the
closing of the Offering. In connection with Mr. Tang’s appointment, the Board approved an increase in the authorized number of members in the Board from five (5) to six (6) members. Mr. Tang was
appointed to fill the vacancy created by the foregoing increase in the size of the Board, as a Class III director of the Company, to serve in such capacity until the annual meeting of the Company’s stockholders in 2028 or until his earlier
resignation, death or removal.
Mr. Tang had founded Celadon Partners, a private equity firm that invests in companies
well positioned to leverage new innovations in technology or business models and unlock transformative value. Mr. Tang currently has served on the Board of Directors of Vicarious Surgical Inc. since 2021. From 2020 until its business combination
in 2021, Mr. Tang was a director of D8 Holding Corp. and from 2004 to 2017, Mr. Tang worked at D.E. Shaw & Co., most recently as chief executive officer of D.E. Shaw & Co. (Asia-Pacific). He was the sole D.E. Shaw & Co. partner on the
investment side in Asia, and a founding member of the firm’s Asian private equity business. Mr. Tang started his career at Citadel Investment Group in 2003. He is a member of the Harvard Kennedy School Mossavar-Rahmani Center for Business and
Government Advisory Council, Special Advisor (China) to the Milken Institute and a member of the Aspen Global Leadership Network. Mr. Tang graduated from Carnegie Mellon University with a degree in computer science and business administration,
and a minor in computational finance. The Company believes Mr. Tang is qualified to serve on the Board because of his experience managing public companies and his extensive business, finance and private equity experience.
Mr. Tang will be compensated for his service as a non-employee director in accordance with the Company’s Non-Employee Director Compensation Policy and will receive an
initial option award to purchase 12,500 shares of Common Stock, pursuant to the Plan, which shall vest in equal monthly installments over three years from its grant date, subject to Mr. Tang’s continued service on the Board; provided, that upon a
Change of Control (as defined in the Plan), all shares of common stock subject to the option shall become full vested and exercisable, provided, further, however, that all vesting shall cease if Mr. Tang resigns from the Board or otherwise ceases
to serve as a director of the Company, unless the Company and Mr. Tang have entered into a written agreement for Mr. Tang to provide uninterrupted services to the Company in a capacity other than as a director at such time or prior to such time Ms.
Schulz resigns from or ceases to serve as a director, and such written agreement expressly states that such services constitute Continuous Service (as defined in the Plan), in which case, all vesting shall cease upon termination of the Continuous
Service. As a non-employee director, Mr. Tang will also be eligible to receive an annual stock option grant to purchase 62,500 shares of Common Stock, as well as annual cash retainers of $35,000 for serving as a member of the Board.
Mr. Tang has no family relationship with any of the executive officers or directors of the Company.
In connection with Mr. Tang’s election to the Board, Mr. Tang will enter into the Company’s standard form of indemnification agreement, a copy of which was filed as
Exhibit 10.5 to the Company’s Registration Statement on Form S-4, as amended (File No. 333- 262707) filed with the Securities and Exchange Commission on May 10, 2022. Pursuant to the terms of the indemnification agreement, the Company may be
required, among other things, to indemnify Mr. Tang for some expenses, including attorneys’ fees, judgments, fines, penalties, excise taxes and settlement amounts actually and reasonably incurred by his in any action or proceeding arising out of
his service as one of the Company’s directors.
| Item 5.03 |
Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
|
Certificate of Designation and Designation of Series A Preferred Stock
The information contained above in Item 1.01 is hereby incorporated by reference into this Item 5.03.
Pursuant to the terms of the Securities Purchase Agreement, on December 2, 2024, the Company filed the Certificate of Designation with the Delaware
Secretary of State designating 21,200 shares of its authorized and unissued preferred stock as Series A Preferred Stock, each with a stated value of $2,250.00 per share (the “Original Per Share Price”). The Certificate of Designation sets forth the
rights, preferences and limitations of the shares of Series A Preferred Stock. Terms not otherwise defined in this item shall have the meanings given in the Certificate of Designation.
The following is a summary of the terms of the Series A Preferred Stock:
Dividends. Subject to the terms and conditions in the Certificate of Designation, from and after the date of the issuance of any shares of Series A Preferred Stock, dividends at the rate per annum of 18% of the Original
Per Share Price of such share, plus the amount of previously accrued dividends, compounded annually, shall accrue on each share then outstanding (the “Accruing Dividends”), such that the first compounded dividend will be payable on January 1,
2026, with compounding annually from June 30, 2025 on any unpaid dividends. Accruing Dividends shall accrue on a quarterly basis whether or not declared, and shall be cumulative; provided, however, that except as set forth in the Certificate of Designation, such Accruing Dividends shall be payable only when, as, and if declared
by the Board of Directors and, except as provided in the Certificate of Designation, the Company shall be under no obligation to pay such Accruing Dividends. The Accruing Dividends shall be payable at the option of the Company in cash, additional
shares of Series A Preferred Stock, or any combination thereof, and shall be paid on June 30 and December 31 of each calendar year with respect to any shares of Series A Preferred Stock then outstanding; provided, that for the avoidance of doubt,
(i) the first Dividend Payment Date shall be June 30, 2025 (but shall not be payable on any shares of Series A Preferred Stock that prior to such date have been converted into Common Stock) and (ii) in the event all the shares of Series A
Preferred Stock have been converted into Common Stock on or before June 30, 2025, no Accruing Dividends shall be payable. If the Company receives the Stockholder Approval prior to June 30, 2025 and the Company consummates an automatic conversion
or any holder of Series A Preferred Stock consummates an optional conversion, all Accruing Dividends that would be payable after the date of such conversion with respect to any shares of Series A Preferred Stock so converted shall be cancelled
and shall no longer be payable.
Voting Rights. Except
as provided in the Certificate of Designation or as otherwise required by the Delaware General Corporation Law, the holders of the Series A Preferred Stock shall have no voting rights. However, so long as at least 6,347 shares of the Series A
Preferred Stock remain outstanding, the Company shall not, either directly or indirectly by amendment, merger, consolidation, domestication, transfer, continuance, recapitalization, reclassification, waiver, statutory conversion, or otherwise,
effect certain acts or transactions, as provided in the Certificate of Designation, without (in addition to any other vote required by law or the Certificate of Incorporation) the written consent or affirmative vote of at least a majority of the
then outstanding shares of Series A Preferred Stock, voting together as a single class.
Liquidation. Prior to
the Stockholder Approval, in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, including a change of control transaction, or deemed liquidation event (any such event, a “Liquidation”) the holders of
shares of Series A Preferred Stock then outstanding shall be entitled to be paid out of the assets of the Company available for distribution to its stockholders, and in the event of a deemed liquidation event, the holders of shares of Series A
Preferred Stock then outstanding shall be entitled to be paid out of the consideration payable to stockholders in such deemed liquidation event or the other proceeds available for distribution to stockholders, before any payment shall be made to
the holders of any other shares of capital stock of the Company by reason of their ownership thereof, an amount in cash equal to the three times (3X) the Original Per Share Price, together with any Accruing Dividends accrued but unpaid thereon,
whether or not declared, together with any other dividends declared but unpaid thereon (the “Liquidation Preference”).
Redemption. Unless
prohibited by (a) Delaware law governing distributions to stockholders or (b) applicable stock exchange rule or regulation, the Company, if elected by any individual holder of Series A
Preferred Stock upon written notice delivered to the Company at any time on or after the date two hundred ten (210) days following the issuance date of the Series A Preferred Stock (the “Redemption Trigger Date”), the Company shall redeem all
then-outstanding shares of Series A Preferred Stock held by such holder of Series A Preferred Stock, at a price per share of Series A Preferred Stock equal to the then Liquidation Preference (the “Redemption Price”), on a date no later than ten
(10) days after the Company’s receipt of such notice of the holder’s election to redeem (such date, the “Redemption Date”). In order to effect such redemption, the Company shall apply all of its assets to any such redemption, and to no other
corporate purpose, except to the extent prohibited by Delaware law governing distributions to stockholders. On each applicable Redemption Date, the Company shall redeem the total number of shares of Series A Preferred Stock held by the electing
holder of Series A Preferred Stock immediately prior to the Redemption Date; provided, however,
that certain excluded shares shall not be redeemed and shall be excluded from the calculations set forth in the Certificate of Designation. If, on the applicable Redemption Date, Delaware law governing distributions to stockholders prevents the
Company from redeeming all shares of Series A Preferred Stock to be redeemed from the electing holder of Series A Preferred Stock, the Company shall redeem the maximum number of shares that it may redeem consistent with such law, and shall redeem
the remaining shares as soon as it may lawfully do so under such law; provided, that in the event the Company is obligated to redeem shares of Series A Preferred Stock from more than one holder of Series A Preferred Stock on an applicable
Redemption Date, the Company shall ratably redeem the maximum number of shares that it may redeem in accordance with Delaware law from all electing holders of Series A Preferred Stock, and shall ratably redeem the remaining shares from such
electing holders of Series A Preferred Stock as soon as it may lawfully do so under such law.
The foregoing summary of the terms of the Series A Preferred Stock is qualified in its entirety by reference to the text of the Certificate of
Designation, which is filed hereto as Exhibit 3.1 and is incorporated herein by reference.
| Item 8.01 |
Other Events.
|
On December 2, 2024, the Company issued a press release announcing the Offering, a copy of which is attached hereto as Exhibit 99.2 and incorporated
herein by reference.
Cautionary Note Regarding Forward Looking Statements
This Current Report on Form 8-K and other related materials may contain a number of “forward-looking statements” within the meaning of the Private Securities
Litigation Reform Act of 1995, as amended, including statements regarding the Company’s expectation about any or all of the following: anticipated benefits of and activities
under the Offering and the timing and certainty of completion of the Offering, and the Company’s use of proceeds from the Offering. Forward-looking statements can be identified by terms such as “will,” “intent,” “expect,” “plan,” “potential,”
“would” or similar expressions and the negative of those terms. The Company has based these forward-looking statements largely on its current expectations and projections about future events and financial trends that it believes may affect its
business, financial condition and results of operations. Although the Company believes that such statements are based on reasonable assumptions, forward-looking statements are neither promises nor guarantees and they are necessarily subject to a
high degree of uncertainty and risk. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and some of which are beyond the Company’s control, you should not rely on
these forward-looking statements as predictions of future events. These risks and uncertainties include, among others, those risk and uncertainties described under the heading “Risk Factors” in the Company’s Quarterly Report on Form 10-Q filed with
the U.S. Securities and Exchange Commission on November 14, 2024, and in any other filings made by the Company with the U.S. Securities and Exchange Commission, which are available at www.sec.gov. Existing and prospective investors are cautioned
not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. The Company disclaims any obligation or undertaking to update or revise any forward-looking statements contained in this Current Report
on Form 8-K, other than to the extent required by law.
|
Item 9.01
|
Financial Statements and Exhibits.
|
|
Exhibit
Number
|
Description
|
|
3.1
|
|
|
4.1
|
|
|
10.1#
|
|
|
10.2#
|
|
|
10.3
|
|
|
10.4
|
|
|
99.1
|
|
|
99.2
|
|
|
104
|
Cover Page Interactive Data File-the cover page XBRL tags are embedded within the Inline XBRL document.
|
# Certain exhibits and schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601(b)(2). The Company agrees to furnish supplementally a
copy of all omitted exhibits and schedules to the Securities and Exchange Commission upon its request.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
|
Senti Biosciences, Inc.
|
|||
|
Date:
|
December 2, 2024
|
By:
|
/s/ Timothy Lu, M.D., Ph.D.
|
|
Timothy Lu, M.D., Ph.D.
|
|||
|
Chief Executive Officer
|
Exhibit 3.1
SENTI BIOSCIENCES, INC.
CERTIFICATE OF DESIGNATION OF PREFERENCES, RIGHTS AND LIMITATIONS
OF
SERIES A CONVERTIBLE PREFERRED STOCK
PURSUANT TO SECTION 151 OF THE
DELAWARE GENERAL CORPORATION LAW
SENTI BIOSCIENCES, INC., a
Delaware corporation (the “Corporation”), in accordance with the provisions of Section 103 of the Delaware General Corporation Law (the “DGCL”) does hereby certify that, in accordance with Sections 141(c) and 151 of the DGCL, the following resolution was duly adopted by a committee of the Board of Directors of the Corporation
acting upon authority delegated by the Board of Directors, which resolution remains in full force and effect on the date hereof:
RESOLVED, pursuant to authority
expressly set forth in the Second Amended and Restated Certificate of Incorporation, as amended of the Corporation (the “Certificate of Incorporation”), the issuance
of a series of Preferred Stock designated as the Series A Convertible Preferred Stock, par value $0.0001 per share, of the Corporation is hereby authorized and the designation, number of shares, powers, preferences, rights, qualifications,
limitations and restrictions thereof (in addition to any provisions set forth in the Certificate of Incorporation that are applicable to the Preferred Stock of all classes and series) are hereby fixed, and the Certificate of Designation of
Preferences, Rights and Limitations of Series A Convertible Preferred Stock (this “Certificate of Designation”) is hereby approved as follows:
SERIES A CONVERTIBLE VOTING PREFERRED STOCK
Section 1. Definitions.
For the purposes hereof, the following terms shall have the following meanings:
“Business Day” means any day except Saturday, Sunday, any day which shall be a federal
legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.
“Commission” means the U.S. Securities and Exchange Commission.
“Common Stock” means the Corporation’s common stock, par value
$0.0001 per share, and stock of any other class of securities into which such securities may hereafter be reclassified into.
“Conversion Date” means the date on which the Series A Preferred
Stock is converted pursuant to Section 6.
“Conversion Price” for the Series A Preferred Stock shall be $2.25
per share, subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization.
“Conversion Shares” means, collectively, the shares of Common Stock
issuable upon conversion of the shares of Series A Preferred Stock in accordance with the terms hereof.
“Conversion Ratio” means the ratio pursuant to which the Series A
Preferred Stock is converted pursuant to Section 6.
“Deemed Liquidation Event” means (a) a merger or consolidation in
which (i) the Corporation is a constituent party or (ii) a subsidiary of the Corporation is a constituent party and the Corporation issues shares of its capital stock pursuant to such merger or consolidation, except any such merger or consolidation
involving the Corporation or a subsidiary in which the shares of capital stock of the Corporation outstanding immediately prior to such merger or consolidation continue to represent, or are converted into or exchanged for shares of capital stock
that represent, immediately following such merger or consolidation, at least a majority, by voting power, of the capital stock of (1) the surviving or resulting corporation; or (2) if the surviving or resulting corporation is a wholly owned
subsidiary of another corporation immediately following such merger or consolidation, the parent corporation of such surviving or resulting corporation; or (b) the sale, lease, transfer, exclusive license or other disposition, in a single
transaction or series of related transactions, by the Corporation or any subsidiary of the Corporation of all or substantially all the assets of the Corporation and its subsidiaries taken as a whole, or the sale or disposition (whether by merger,
consolidation or otherwise) of one or more subsidiaries of the Corporation if substantially all of the assets of the Corporation and its subsidiaries taken as a whole are held by such subsidiary or subsidiaries, except where such sale, lease,
transfer, exclusive license or other disposition is to a wholly owned subsidiary of the Corporation.
“DGCL” shall mean the Delaware General Corporation Law.
“Exchange Act” means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
“Excluded Shares” has the meaning set forth in Section 9(b).
“Holder” means any holder of Series A Preferred Stock.
“Issuance Date” means December 5, 2024.
“Original Per Share Price” means $2,250.00 per share.
“Liquidation” has the meaning set forth in Section 5(a).
“Person” means any individual or corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Proposals” has the meaning set forth in Section 8.
“Redemption Date” has the meaning set forth in Section 9(a).
“Redemption Notice” has the meaning set forth in Section 9(b).
“Redemption Price” has the meaning set forth in Section 9(a).
“Requisite Approval” means the date that the Corporation’s
stockholders first approve the Proposal relating to the issuance of the Conversion Shares.
“Requisite Holders” means Holders of at least a majority of the
then outstanding shares of Series A Preferred Stock, voting together as a single class.
2
“Securities Purchase Agreement” means that certain Securities
Purchase Agreement by and among the Corporation and the parties listed as Investors therein, pursuant to which the shares of Series A Preferred Stock are being issued.
“Series A Preferred Stock” has the meaning set forth in Section 2(a).
“Standard Settlement Period” means the standard settlement period,
expressed in a number of Trading Days, for the Corporation’s primary trading market or quotation system with respect to the Common Stock that is in effect on the Conversion Date, which as of the Issuance Date was “T+1”.
“Trading Day” means a day on which the Common Stock is traded for
any period on a principal securities exchange or if the Common Stock is not traded on a principal securities exchange, on a day that the Common Stock is traded on another securities market on which the Common Stock is then being traded.
“Warrants” means the warrants to purchase shares of Common Stock at
an exercise price of $2.30 per share of Common Stock.
Section 2. Designation, Amount and Par Value; Assignment; Ranking.
(a) The distinctive serial designations of the series of Preferred Stock designated by this Certificate of Designation shall be designated as the
Corporation’s Series A Convertible Preferred Stock (the “Series A Preferred Stock”). Each share of Series A Preferred Stock shall be identical in all respects to every
other share of Series A Preferred Stock. The number of shares of Series A Preferred Stock so designated shall be 21,200. The Series A Preferred Stock shall have a par value of $0.0001 per share.
(b) The Corporation shall register shares of the Series A Preferred Stock, upon records to be maintained by the Corporation’s transfer agent for
that purpose (the “Series A Preferred Stock Register”), in the name of the Holders thereof from time to time. The Corporation and its transfer agent may deem and treat
the registered Holder of shares of Series A Preferred Stock as the absolute owner thereof for the purpose of any conversion thereof and for all other purposes. Shares of Series A Preferred Stock may be issued solely in book-entry form. The
Corporation or its transfer agent shall register the transfer of any shares of Series A Preferred Stock in the Series A Preferred Stock Register, upon surrender of the shares of Series A Preferred Stock evidencing such shares to be transferred, to
the Corporation’s transfer agent. Upon any such registration or transfer, a new or book-entry notation evidencing the shares of Series A Preferred Stock so transferred shall be issued to the transferee and a new book-entry notation evidencing the
remaining portion of the shares not so transferred, if any, shall be issued to the transferring Holder, in each case, within two Business Days. The provisions of this Certificate of Designation are intended to be for the benefit of all Holders from
time to time and shall be enforceable by any such Holder.
(c) The Series A Preferred Stock will be senior to the Common Stock and all other series or classes of stock and equity securities of the
Corporation with respect to dividend rights and rights on the distribution of assets on any voluntary or involuntary Liquidation, dissolution or winding up of the affairs of the Corporation.
3
Section 3. Dividends.
(a) (i) From and after the date of the issuance of any shares of Series A Preferred
Stock, dividends at the rate per annum of 18% of the Original Per Share Price of such share, plus the amount of previously accrued dividends, compounded annually, shall accrue on each share then outstanding (the “Accruing Dividends”), such that the first compounded dividend will be payable on January 1, 2026 with compounding annually from June 30, 2025 on any unpaid
dividends.
(ii) Accruing Dividends shall accrue on a quarterly basis whether or not declared, and shall be cumulative; provided, however, that except as set
forth in the following sentence, Section 5(a) or Section 9(a), such Accruing Dividends shall be payable only when, as, and if declared by the Board of Directors and, except as provided in the following sentence or in Section 5(a) and Section 9(a),
the Corporation shall be under no obligation to pay such Accruing Dividends. Accruing Dividends shall be payable at the option of the Corporation in cash, additional shares of Series A Preferred Stock, or any combination thereof, and shall be paid
on June 30 and December 31 of each calendar year with respect to any shares of Series A Preferred Stock then outstanding; provided, that for the avoidance of doubt, (i) the first Dividend Payment Date shall be June 30, 2025 (but shall not be
payable on any shares of Series A Preferred Stock that prior to such date have been converted into Common Stock) and (ii) in the event all the shares of Series A Preferred Stock have been converted into Common Stock on or before June 30, 2025, no
Accruing Dividends shall be payable pursuant to this Certificate of Designation. If the Corporation receives Requisite Approval prior to June 30, 2025 and the Corporation consummates an Automatic Conversion pursuant to Section 6(c) or any Holder
consummates an optional conversion pursuant to Section 6(d), all Accruing Dividends that would be payable after the date of such conversion with respect to any shares of Series A Preferred Stock so converted shall be cancelled and no longer be
payable.
(b) The Corporation shall not declare, pay or set aside any dividends on shares of any other class or series of capital stock of the Corporation
unless (in addition to the obtaining of any consents required elsewhere in this Certificate of Designation) the holders of the Series A Preferred Stock then outstanding shall first receive, or simultaneously receive, a dividend on each outstanding
share of Series A Preferred Stock in an amount at least equal to the sum of (i) the amount of the aggregate Accruing Dividends then accrued on such share of Series A Preferred Stock and not previously paid and (ii) either:
|
|
(A)
|
in the case of a dividend on Common Stock or any class or series that is convertible into Common Stock, that dividend per share of the
Series A Preferred Stock as would equal the product of (1) the dividend payable on each share of such class or series determined, if applicable, as if all shares of such class or series had been converted into Common Stock and (2) the
number of shares of Common Stock issuable upon conversion of a share of such Series A Preferred Stock, in each case calculated on the record date for determination of holders entitled to receive such dividend or
|
|
(B)
|
in the case of a dividend on any class or series that is not convertible into Common Stock, at a rate per share of Series A Preferred
Stock determined by (1) dividing the amount of the dividend payable on each share of such class or series of capital stock by the original issuance price of such class or series of capital stock (subject to appropriate adjustment in the
event of any stock dividend, stock split, combination or other similar recapitalization with respect to such class or series) and (2) multiplying such fraction by an amount equal to the applicable Original Per Share Price;
|
provided that if the Corporation declares, pays or sets aside, on the same date, a dividend on shares of more than one class or series of capital
stock of the Corporation, the dividend payable to the holders of Series A Preferred Stock pursuant to this Section 3 shall be calculated based upon the dividend on the class or series of capital stock that would result in the highest dividend for
such Series A Preferred Stock.
4
Section 4. Voting Rights.
(a) Except as otherwise provided herein or as otherwise required by the DGCL, the Series A Preferred Stock shall have no voting rights. However,
so long as at least 6,347 shares of Series A Preferred Stock are outstanding, the Corporation shall not, either directly or indirectly by amendment, merger, consolidation, domestication, transfer, continuance, recapitalization, reclassification,
waiver, statutory conversion, or otherwise, effect any of the following acts or transactions without (in addition to any other vote required by law or the Certificate of Incorporation) without the written consent or affirmative vote of the
Requisite Holders:
(i) amend, alter or repeal any provision of this Certificate of Designation, the Certificate of Incorporation or Bylaws of the Corporation;
(ii) liquidate, dissolve or wind-up the business and affairs of the Corporation or effect any Deemed Liquidation Event or any other direct or indirect merger,
consolidation, statutory conversion, transfer, domestication or continuance of the Corporation;
(iii) create, or authorize the creation of, or issue or obligate itself to issue shares of, or reclassify, any capital stock, other than in an
Exempt Issuance (as defined in the Securities Purchase Agreement);
(iv) increase or decrease the authorized number of shares of Series A Preferred Stock, or any additional class or series of capital stock of the
Corporation unless the same ranks junior to the Series A Preferred Stock with respect to its special rights, powers and preferences;
(v) purchase or redeem (or permit any subsidiary to purchase or redeem) or pay or declare any dividend or make any distribution on, any shares of
capital stock of the Corporation other than (x) redemptions of or dividends or distributions on the Series A Preferred Stock as expressly authorized herein and (y) repurchases of stock from former employees, officers, directors, consultants or
other persons who performed services for the Corporation or any subsidiary in connection with the cessation of such employment or service at no greater than the original purchase price thereof;
(vi) other than equipment leases, lines of credit with suppliers or trade payables incurred in the ordinary course of business, create, or
authorize the creation of, or issue, or authorize the issuance of any debt security, create any lien, security interest, pledge, mortgage or other encumbrance on any of the Corporation’s assets, including its intellectual property assets (except
for (x) any liens or encumbrances granted under the Corporation’s license and collaboration agreements with third parties as in effect prior to the Issuance Date; (y) any licenses granted by the Corporation to suppliers, vendors or service
providers in the ordinary course of business to the extent necessary for such suppliers, vendors or service providers to perform their contractual obligations to the Corporation; and (z) any purchase money liens or statutory liens of landlords,
mechanics, materialmen, workmen, warehousemen and other similar persons arising or incurred in the ordinary course of business), or incur any indebtedness for borrowed money, including but not limited to obligations and contingent obligations under
guarantees, or permit any subsidiary to take any such action with respect to any debt security lien, security interest or other indebtedness for borrowed money;
(vii) sell, transfer or otherwise dispose of (either by license or otherwise) any material assets of the Corporation, make any material investment
in any third party (including any joint venture) or enter into any joint venture or similar arrangement;
5
(viii) create, or hold capital stock in, any subsidiary that is not wholly owned (either directly or through one or more other subsidiaries) by
the Corporation, or permit any subsidiary to create, or authorize the creation of, or issue or obligate itself to issue, any shares of any class or series of capital stock, or sell, transfer or otherwise dispose of any capital stock of any direct
or indirect subsidiary of the Corporation, or permit any direct or indirect subsidiary to sell, lease, transfer, exclusively license or otherwise dispose (in a single transaction or series of related transactions) of all or substantially all of the
assets of such subsidiary; or
(ix) increase or decrease the authorized number of directors constituting the Board of Directors.
Section 5. Liquidation.
(a) Prior to the date that is five (5) days after the date that the Company has provided to each Investor written notice that it has obtained the
Requisite Approval, in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, including a change of control transaction, or Deemed Liquidation Event (any such event, a “Liquidation”), the holders of shares of Series A Preferred Stock then outstanding shall be entitled to be paid out of the assets of the Corporation available for distribution to its stockholders, and
in the event of a Deemed Liquidation Event, the holders of shares of Series A Preferred Stock then outstanding shall be entitled to be paid out of the consideration payable to stockholders in such Deemed Liquidation Event or the other proceeds
available for distribution to stockholders, before any payment shall be made to the holders of any other shares of capital stock of the Corporation by reason of their ownership thereof, an amount in cash per share equal to three times (3X) the
Original Per Share Price, plus any Accruing Dividends accrued but unpaid thereon, whether or not declared, together with any other dividends declared but unpaid thereon (the “Liquidation
Preference”).
(b) If, upon any such Liquidation, the assets of the Corporation available for distribution to its stockholders shall be insufficient to pay the
holders of shares of Series A Preferred Stock the full Liquidation Preference, the holders of shares of Series A Preferred Stock shall share ratably in any distribution of the assets available for distribution in proportion to the respective
amounts which would otherwise be payable in respect of the shares held by them upon such distribution if all amounts payable on or with respect to such shares were paid in full, and no amounts shall be distributed to any other stockholder.
(c) After the payment in full of the Liquidation Preference, the remaining assets
of the Corporation available for distribution to its stockholders or, in the case of a Deemed Liquidation Event, the consideration not payable to the holders of shares of Series A Preferred Stock pursuant to the paragraph above, shall be
distributed among the holders of shares of Common Stock, pro rata based on the number of shares held by each such holder, treating for this purpose all shares of Series A Preferred Stock as if they had been converted to Common Stock pursuant to
the terms of this Certificate of Designation immediately prior to such Liquidation without
regard to any limitations on conversion set forth herein or otherwise and without regard as to whether sufficient shares of Common Stock are available out of the Company’s authorized but unissued stock for the purpose of effecting the conversion
of the Series A Preferred Stock. The aggregate amount which a holder of a share of Series A Preferred Stock is entitled to receive pursuant to this Section 5 is hereinafter referred to as the “Liquidation Amount.”
6
(d) Following the Requisite Approval, upon any Liquidation, the assets of the Corporation available for distribution to its stockholders shall be
distributed among the holders of the shares of Series A Preferred Stock and Common Stock, pro rata, in the same form of consideration, based on the number of shares held by each such holder, treating for this purpose all shares of Series A
Preferred Stock as if they had been converted to Common Stock pursuant to the terms of this Certificate of Designation immediately prior to such Liquidation, without regard to any limitations on conversion set forth herein or otherwise and without
regard to any limitations on conversion set forth herein or otherwise and without regard as to whether sufficient shares of Common Stock are available out of the Company’s authorized but unissued stock for the purpose of effecting the conversion of
the Series A Preferred Stock. For the avoidance of doubt, following the Requisite Approval, there will be no Liquidation Preference on the shares of Series A Preferred Stock.
Section 6. Conversion.
(a) No Conversion. Prior to the receipt of the Requisite Approval, subject to Section 5(a) above, the Series A Preferred Stock is not convertible by the Holder thereof.
(b) Conversion Ratio. The Conversion Ratio for each share of the Series A Preferred
Stock shall be equal to the Original Per Share Price, plus all declared and unpaid dividends, divided by the Conversion Price, rounded down to the nearest whole share of Common Stock (the “Conversion Ratio”).
(c) Automatic Conversion by the Corporation. At any time on or after the first (1st)
Trading Day following the public announcement of the Requisite Approval, the Corporation may, at its option, cause each share of Series A Preferred Stock issued and outstanding to automatically convert into such number of shares of Common Stock
equal to the product of the Conversion Ratio and the number of shares of Series A Preferred Stock to be converted (an “Automatic Conversion”).
(d) Conversions at Option of Holder. Subject to Section 6(a) and Section 6(b), and provided, that the Corporation has not elected to effect an Automatic Conversion pursuant to Section 6(c), at the option of the Holder thereof, each share of Series A Preferred Stock not otherwise converted pursuant to Section 6(c) above shall be
convertible into such number of shares of Common Stock equal to the product of the Conversion Ratio and the number of shares of Series A Preferred Stock to be converted.
(e) Mechanics of Conversion.
| (i) |
Notice of Conversion. The Corporation shall effect conversions under Section 6(c)
by delivering to each Holder of Series A Preferred Stock a notice of its election to effect an Automatic Conversion as of the date of delivery of such notice (the “Automatic Conversion Date”). Holders shall effect conversions under Section 6(d) by
providing the Corporation and its transfer agent with the form of conversion notice attached hereto as Annex A (a “Notice
of Conversion”), duly completed and executed. The Notice of Conversion must specify the number of shares of Series A Preferred Stock to be
converted, the number of shares of Series A Preferred Stock owned prior to the conversion at issue, and the number of shares of Common Stock to be issued in respect of the conversion at issue. Provided the Corporation’s transfer agent is
participating in the Depository Trust Company (“DTC”) Fast Automated Securities Transfer program, the Notice of Conversion may specify, at the Holder’s election, whether the applicable Conversion Shares shall be credited to the DTC participant account nominated by
the Holder through DTC’s Deposit Withdrawal Agent Commission system (a “DWAC Delivery”). The date on which such a
conversion shall be deemed effective (an “Optional Conversion Date” and together with the Automatic Conversion Date, a “Conversion Date”), shall be defined as the Trading Day that the Notice of Conversion, completed and executed, is sent by facsimile or other electronic transmission to, and
received during regular business hours by, the Corporation and its transfer agent. The calculations set forth in the Notice of Conversion shall control in the absence of manifest or mathematical error.
|
7
| (ii) |
Delivery of Electronic Issuance Upon Conversion. Not
later than the number of Trading Days comprising the Standard Settlement Period after the applicable Conversion Date (the “Share Delivery Date”), the
Corporation’s transfer agent shall issue (a) in the case of a DWAC Delivery (if so requested by the Holder and subject to compliance with applicable securities laws and Section 4.1 of the Securities Purchase Agreement), electronically
transfer such Conversion Shares by crediting the DTC participant account nominated by the Holder through the DWAC System or (b) if the shares of Series A Preferred Stock being converted have been issued in global form eligible for
book-entry settlement with DTC, the Conversion Shares shall be delivered to the Holder through book-entry transfer through the facilities of DTC (if so requested by the Holder and subject to compliance with applicable securities laws and
Section 5.7 of the Securities Purchase Agreement). If, in the case of a DWAC Delivery, such shares are not electronically delivered to or as directed by the applicable Holder by the Share Delivery Date, the applicable Holder shall be
entitled to elect to rescind any Notice of Conversion by written notice to the Corporation and its transfer agent at any time on or before its electronic receipt of such shares, as applicable, in which event the Corporation’s transfer
agent shall promptly direct the return of any shares of Common Stock delivered to the Holder through the DWAC System, representing the shares of Series A Preferred Stock unsuccessfully tendered for conversion to the Corporation. It is
understood and agreed that the Conversion Shares are restricted securities and shall bear the restrictive legend set forth in Section 4.10 of the Securities Purchase Agreement, provided, however, that such restrictive legends may be
removed subject and pursuant to the provisions of Section 5.7 of the Securities Purchase Agreement; provided further that such restrictive legends may only be removed (i) in connection with a sale pursuant to the Registration Statement or
(ii) in connection with and pursuant to Rule 144 if the Investor has held the Series A Preferred Stock or Conversion Shares, as applicable, for more than one (1) year.
|
| (iii) |
Obligation Absolute. Subject to the Holder’s right to
rescind a Notice of Conversion pursuant to Section 6(d)(ii) above, the Corporation’s obligation to issue and deliver the Conversion Shares upon conversion of Series A Preferred Stock in accordance with the terms hereof are absolute and
unconditional, irrespective of any action or inaction by a Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any
setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by such Holder or any other Person of any obligation to the Corporation or any violation or alleged violation of law by such Holder or any other
Person, and irrespective of any other circumstance which might otherwise limit such obligation of the Corporation to such Holder in connection with the issuance of such Conversion Shares. Nothing herein shall limit a Holder’s right to
pursue actual damages for the Corporation’s failure to deliver Conversion Shares within the period specified herein and such Holder shall have the right to pursue all remedies available to it hereunder, at law or in equity including,
without limitation, a decree of specific performance and/or injunctive relief; provided that the Holder shall not receive duplicate damages for the Corporation’s
failure to deliver Conversion Shares within the period specified herein. The exercise of any such rights shall not prohibit a Holder from seeking to enforce damages pursuant to any other Section hereof or under applicable law.
|
8
| (iv) |
Compensation for Buy-In on Failure to Timely Deliver Shares Upon Conversion. If the Corporation fails to effect a DWAC Delivery, as applicable, by the Share Delivery Date pursuant to Section 6(e)(ii) (other than a failure
caused by incorrect or incomplete information provided by Holder to the Corporation), and if after such Share Delivery Date such Holder is required to or otherwise purchases (in an open market transaction or otherwise), shares of Common
Stock to deliver in satisfaction of a sale by such Holder of the Conversion Shares which such Holder was entitled to receive upon the conversion relating to such Share Delivery Date (a “Buy-In”), then the Corporation shall (A) pay in cash to such Holder (in addition to any other remedies available to or elected by such Holder) the amount by which (x) such Holder’s total purchase price
(including any brokerage commissions) for the shares of Common Stock so purchased exceeds (y) the product of (1) the aggregate number of shares of Common Stock that such Holder was entitled to receive from the conversion at issue
multiplied by (2) the actual sale price at which the sell order giving rise to such purchase obligation was executed (including any brokerage commissions) and (B) at the option of such Holder, either reissue (if surrendered) the shares of
Series A Preferred Stock equal to the number of shares of Series A Preferred Stock submitted for conversion or deliver to such Holder the number of shares of Common Stock that would have been issued if the Corporation had timely complied
with its delivery requirements under Section 6(e)(ii). For example, if a Holder purchases shares of Common Stock having a total purchase price of $11,000 to cover a Buy-In with
respect to an attempted conversion of shares of Series A Preferred Stock, as applicable, with respect to which the actual sale price (including any brokerage commissions) giving rise to such purchase obligation was a total of $10,000
under clause (A) of the immediately preceding sentence, the Corporation shall be required to pay such Holder $1,000. The Holder shall provide the Corporation written notice, within three (3) Trading Days after the occurrence of a Buy-In,
indicating the amounts payable to such Holder in respect of such Buy-In together with applicable confirmations and other evidence reasonably requested by the Corporation. Nothing herein shall limit a Holder’s right to pursue any other
remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Corporation’s failure to timely deliver shares of Common Stock upon
conversion of the shares of Series A Preferred Stock as required pursuant to the terms hereof; provided, however, that the Holder shall not be entitled to both (i) require the reissuance of the shares of Series A Preferred Stock submitted for conversion for which such conversion was not timely honored and (ii) receive the
number of shares of Common Stock that would have been issued if the Corporation had timely complied with its delivery requirements under Section 6(e)(ii).
|
9
| (v) |
Reservation of Shares Issuable Upon Conversion. The
Corporation covenants that it will at all times following receipt of the Requisite Approval reserve and keep available out of its authorized and unissued shares of Common Stock for the sole purpose of issuance upon conversion of the
Series A Preferred Stock, free from preemptive rights or any other actual contingent purchase rights of Persons other than the Holders of the Series A Preferred Stock, not less than such aggregate number of shares of the Common Stock as
shall be issuable (taking into account the adjustments of Section 7) upon the conversion of all outstanding shares of Series A Preferred Stock. The Corporation covenants that
following the receipt of the Requisite Approval all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid, non-assessable and free and clear of all liens and other encumbrances.
|
| (vi) |
Fractional Shares. No fractional shares or scrip
representing fractional shares of Common Stock shall be issued upon the conversion of the Series A Preferred Stock. All fractional shares shall be rounded down to the nearest whole shares of Common Stock.
|
| (vii) |
Transfer Taxes. The issuance of book entry notations for
Conversion Shares shall be made without charge to any Holder for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such book entry notation, provided that the Corporation shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such book entry notation upon conversion in a
name other than that of the registered Holder(s) of such shares of Series A Preferred Stock and the Corporation shall not be required to issue or deliver such book entry notation unless or until the Person or Persons requesting the
issuance thereof shall have paid to the Corporation the amount of such tax or shall have established to the satisfaction of the Corporation that such tax has been paid.
|
(f) Status as Stockholder. Upon each Conversion Date in which the Series A Preferred
Stock converts into Common Stock: (i) the shares of Series A Preferred Stock being converted shall be deemed converted into shares of Common Stock; and (ii) the Holder’s rights as a holder of such converted shares of Series A Preferred Stock shall
cease and terminate, excepting only the right to receive book entry notations for such shares of Common Stock and to any remedies provided herein or otherwise available at law or in equity to such Holder because of a failure by the Corporation to
comply with the terms of this Certificate of Designation. In all cases, the holder shall retain all of its rights and remedies for the Corporation’s failure to convert Series A Preferred Stock.
Section 7. Certain Adjustments.
(a) Stock Dividends and Stock Splits. If the Corporation, at any time while any
shares of Series A Preferred Stock are outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of Common Stock with respect to the then outstanding shares of Common Stock; (ii) subdivides
outstanding shares of Common Stock into a larger number of shares; or (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares, then the Conversion Price shall be multiplied by a
fraction of which the numerator shall be the number of shares of Common Stock (excluding any treasury shares of the Corporation) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock
outstanding immediately after such event (excluding any treasury shares of the Corporation). Any adjustment made pursuant to this Section 7(a) shall become effective immediately after the
record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision or combination.
10
(b) Reclassification, Exchange or Substitution. If the Common Stock issuable upon the
conversion of the Series A Preferred Stock shall be changed into the same or a different number of shares of any class or classes of stock, whether by capital reorganization, reclassification, or otherwise (other than a subdivision or combination
of shares or stock dividend provided for above, or a reorganization, merger, consolidation, or sale of assets provided for below), then and in each such event the holder of each such share of Series A Preferred Stock shall have the right thereafter
to convert such share into the kind and amount of shares of stock and other securities and property receivable, upon such reorganization, reclassification, or other change, by holders of the number of shares of Common Stock into which such shares
of Series A Preferred Stock might have been converted immediately prior to such reorganization, reclassification, or change, all subject to further adjustment as provided herein.
(c) Merger or Reorganization, etc. If there shall occur any reorganization,
recapitalization, reclassification, consolidation or merger involving the Company in which the Common Stock (but not the Series A Preferred Stock) is converted into or exchanged for securities, cash or other property (other than a transaction
covered by paragraphs (a) or (b) of this Section 7), then, following any such reorganization, recapitalization, reclassification, consolidation or merger, each share of Series A Preferred Stock shall be convertible into the kind and amount of
securities, cash or other property which a holder of the number of shares of Common Stock of the Company issuable upon conversion of one share of Series A Preferred Stock immediately prior to such reorganization, recapitalization, reclassification,
consolidation or merger would have been entitled to receive pursuant to such transaction; and, in such case, appropriate adjustment (as determined in good faith by the Board of Directors) shall be made in the application of the provisions in this
Section 7 with respect to the rights and interests thereafter of the holders of the Series A Preferred Stock to the end that the provisions set forth in this Section 7 (including provisions with respect to changes in and other adjustments of the
Conversion Price, as applicable) shall thereafter be applicable, as nearly as reasonably may be, in relation to any securities or other property thereafter deliverable upon the conversion of the Series A Preferred Stock.
(d) Calculations. All calculations under this Section 7 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 7, the number of shares of Common
Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding any treasury shares of the Corporation) issued and outstanding.
(e) Notice to the Holders.
| (i) |
Adjustment to Conversion Price. Whenever the Conversion Price is
adjusted pursuant to any provision of this Section 7, the Corporation shall promptly deliver to each Holder a notice setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such
adjustment.
|
11
| (ii) |
Other Notices. If (i) the Corporation shall declare a dividend (or any other distribution
in whatever form) on the Common Stock, (ii) the Corporation shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (iii) the Corporation shall authorize the granting to all holders of the Common Stock
of rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (iv) the approval of any stockholders of the Corporation shall be required in connection with any reclassification of the Common
Stock, any consolidation or merger to which the Corporation is a party, any sale or transfer of all or substantially all of the assets of the Corporation, or any compulsory share exchange whereby the Common Stock is converted into other
securities, cash or property, or (v) the Corporation shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Corporation, then, in each case, the Corporation shall cause to be filed at
each office or agency maintained for the purpose of conversion of the shares of Series A Preferred Stock, and shall cause to be delivered to each Holder at its last address as it shall appear upon the stock books of the Corporation, at
least 10 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants,
or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such
reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their
shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange, provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall
not affect the validity of the corporate action required to be specified in such notice; and provided further, that in each case, the Corporation will only be required to provide such information to the Holder if such information shall have be made known to the public
prior to or in conjunction with such notice being provided to the Holder.
|
Section 8. Requisite Approval.
(a) The Corporation shall, as soon as practicable following the Issuance Date, but not more than forty-five (45) days thereafter, or, if
applicable, the Subsequent Closing (as defined in the Securities Purchase Agreement), but not more than fifteen (15) days thereafter, in consultation with the Investor, file a preliminary proxy statement for a special meeting of its stockholders,
at which the Corporation’s stockholders shall be asked to (i) approve the issuance of all Conversion Shares and all shares of Common Stock issuable upon the exercise of the Warrants in compliance with Nasdaq Listing Rule 5635(b) and/or (d) and (ii)
approve an amendment to the 2022 Equity Incentive Plan, as amended, to increase the number of shares available for issuance thereunder (collectively, the “Proposals”).
The Corporation shall notify and consult with the Investors in respect of any comments on the preliminary proxy statement received from the staff of the Commission and, as soon as practicable following notification from the staff of the Commission
that it has completed its review of the preliminary proxy statement or that it will not review the preliminary proxy statement, shall file and mail a definitive proxy statement for the special meeting and vote of its stockholders to approve the
Proposals and hold the special meeting as promptly as possible thereafter. The Corporation covenants and agrees that its Board of Directors shall unanimously recommend that the Proposals be approved by the Corporation’s stockholders at all meetings
in which such Proposals are considered.
(b) The Corporation shall keep the Investors informed with respect to the proxies received with respect to the special meeting. If requested by
the Requisite Holders, the Corporation shall adjourn the special meeting one or more times, for a period of no more than two weeks each, to solicit additional votes in favor of the Proposals. If the Corporation’s stockholders do not approve the
Proposals at the first meeting in which they are voted on by stockholders (including any adjournments), the Corporation covenants and agrees that it will submit the Proposals for approval of the Corporation’s stockholders at least semi-annually
until such approval is obtained.
12
(c) The Corporation shall provide prompt
written notice to each Investor of the results of and any delay in any vote on the Proposals.
Section 9. Redemption by the Corporation.
(a) General. (i) Unless prohibited by (a) Delaware law governing distributions to
stockholders or (b) applicable stock exchange rule or regulation, if elected by any individual Holder upon written notice delivered to the Corporation at any time on or after the date two hundred ten (210) days following the Issuance Date (the “Redemption Trigger Date”), the Corporation shall redeem all then-outstanding shares of Series A Preferred Stock held by such Holder, at a price per share of Series A
Preferred Stock equal to the then Liquidation Preference (the “Redemption Price”), on a date no later than ten (10) days after the Corporation’s receipt of such notice
of the Holder’s election to redeem (such date, the “Redemption Date”). In order to effect such redemption, the Corporation shall apply all of its assets to any such
redemption, and to no other corporate purpose, except to the extent prohibited by Delaware law governing distributions to stockholders. On each applicable Redemption Date, the Corporation shall redeem the total number of shares of Series A
Preferred Stock held by the electing Holder immediately prior to the Redemption Date; provided, however,
that Excluded Shares (as defined below) shall not be redeemed and shall be excluded from the calculations set forth in this sentence and in clause (ii) below.
(ii) If, on the applicable Redemption Date, Delaware law governing distributions to stockholders prevents the Corporation from redeeming all
shares of Series A Preferred Stock to be redeemed from the electing Holder, the Corporation shall redeem the maximum number of shares that it may redeem consistent with such law, and shall redeem the remaining shares as soon as it may lawfully do
so under such law; provided, that in the event the Corporation is obligated to redeem shares of Series A Preferred Stock under this Section 9 from more than one Holder on an applicable Redemption Date, the Corporation shall ratably redeem the
maximum number of shares that it may redeem in accordance with Delaware law from all electing Holders, and shall ratably redeem the remaining shares from such electing Holders as soon as it may lawfully do so under such law.
(b) Redemption Notice. The Corporation shall send written notice of the availability
of the option to elect redemption (the “Redemption Notice”) to each holder of record of Series A Preferred Stock not less than forty (40) days prior to the Redemption
Trigger Date. The Redemption Notice shall state:
(i) the number of shares of Series A Preferred Stock held by the holder as of the Redemption Trigger Date;
(ii) the Redemption Price;
(iii) the date upon which the holder’s right to convert such shares terminates (which shall be the date that is one Business Day immediately
preceding the Redemption Trigger Date); and
(iv) for holders of shares in certificated form, that the holder is to surrender to the Corporation, in the manner and at the place designated,
his, her or its certificate or certificates representing the shares of Series A Preferred Stock in the event such holder elects to have such shares be redeemed.
13
If the Corporation receives, on or prior to the twentieth (20th) day after the date of delivery of the Redemption Notice to a holder of Series A
Preferred Stock, written notice from such holder that such holder elects to be excluded from any redemption provided in this Section 9, then the shares of Series A Preferred Stock
registered on the books of the Corporation in the name of such holder at the time of the Corporation’s receipt of such notice shall thereafter be “Excluded Shares.”
Excluded Shares shall not be redeemed or redeemable pursuant to this Section 9, whether on the Redemption Date or thereafter.
(c) Surrender of Certificates; Payment. On or before each applicable Redemption Date,
each holder of shares of Series A Preferred Stock to be redeemed on such Redemption Date, unless the Corporation has exercised its option to convert such shares or such holder has exercised his, her or its right to convert such shares as provided
in Section 6, shall, if a holder of shares in certificated form, surrender the certificate or certificates representing such shares (or, if such registered holder alleges that such
certificate has been lost, stolen or destroyed, a lost certificate affidavit and agreement reasonably acceptable to the Corporation to indemnify the Corporation against any claim that may be made against the Corporation on account of the alleged
loss, theft or destruction of such certificate) to the Corporation, in the manner and at the place designated in the Redemption Notice, and thereupon the Redemption Price for such shares shall be payable to the order of the person whose name
appears on such certificate or certificates as the owner thereof. In the event less than all of the shares of Series A Preferred Stock represented by a certificate are redeemed, a new certificate, instrument, or book entry representing the
unredeemed shares of Series A Preferred Stock shall promptly be issued to such holder.
(d) Failure to Redeem. If any shares of Series A Preferred Stock are not redeemed for
any reason on an applicable Redemption Date, all such unredeemed shares shall remain outstanding and entitled to all the rights and preferences provided herein.
(e) Rights Subsequent to Redemption. If the Redemption Notice shall have been duly
given, and if on the applicable Redemption Date the Redemption Price payable upon redemption of the shares of Series A Preferred Stock to be redeemed on such Redemption Date is fully paid or tendered for payment, then notwithstanding that any
certificates evidencing any of the shares of Series A Preferred Stock so called for redemption shall not have been surrendered, dividends with respect to such shares of Series A Preferred Stock shall cease to accrue after the Redemption Date and
all rights with respect to such shares shall forthwith after the Redemption Date terminate, except only the right of the holders to receive the Redemption Price upon surrender of any such certificate or certificates therefor.
(f) For the avoidance of doubt, (i) the provisions of this Section 9 will cease to
apply following the Requisite Approval and issuance of Conversion Shares in accordance with the terms hereof and (ii) any payment of the Liquidation Amount or the Redemption Price shall be mutually exclusive, and each holder of any shares of Series
A Preferred Stock shall in any event be entitled to one, but not both, of the Liquidation Amount or the Redemption Price, based on the first to occur of either the consummation of a Liquidation or any redemption in accordance with Section 9(a)
herein.
14
Section 10. Miscellaneous.
(a) Waivers; Amendments. Any waiver by the Corporation or a Holder of a breach of any
provision of this Certificate of Designation shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Certificate of Designation or a waiver by any other Holders. The
failure of the Corporation or a Holder to insist upon strict adherence to any term of this Certificate of Designation on one or more occasions shall not be considered a waiver or deprive that party (or any other Holder) of the right thereafter to
insist upon strict adherence to that term or any other term of this Certificate of Designation. Any waiver by the Corporation or a Holder must be in writing. Notwithstanding any provision in this Certificate of Designation to the contrary, any
provision contained herein and any right of the Holders of Series A Preferred Stock granted hereunder may be waived or amended as to all shares of Series A Preferred Stock (and the Holders thereof) upon the written consent of the Holders of a
majority of the shares of Series A Preferred Stock then outstanding, unless a higher percentage is required by the DGCL, in which case the written consent of the Holders of not less than such higher percentage shall be required. Any waiver or
amendment effected in accordance with this Section 10(a) shall be binding on all the Holders of Series A Preferred Stock, and all of such party’s successors and permitted assigns, whether
or not any such party, successor or assignee entered into or approved such waiver or amendment.
(b) Severability. If any provision of this Certificate of Designation is invalid,
illegal or unenforceable, the balance of this Certificate of Designation shall remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and circumstances. If
it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest
permitted under applicable law.
(c) Next Business Day. Whenever any payment or other obligation hereunder shall be
due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day.
(d) Notices. Any and all notices or other communications or deliveries to be provided
by the holders hereunder including, without limitation, any Notice of Conversion, shall be in writing and delivered personally, via email, or sent by a nationally recognized overnight courier service, addressed to the Corporation, at 2 Corporate
Drive, First Floor, South San Francisco, CA 94080, Email: tim.lu@sentibio.com, or such other e-mail address or address as the Corporation may specify for such purposes by notice to the holders delivered in accordance with this Section 10(d). Any
and all notices or other communications or deliveries to be provided by the Corporation hereunder shall be in writing and delivered personally, by email at the email address of such holder appearing on the books of the Corporation, or if no such
email address appears on the books of the Corporation, at the principal place of business of such holder. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission,
if such notice or communication is delivered via email at the email address specified in this Section 10(d) prior to 5:30 p m. (New York City time) on any date, (ii) the date immediately following the date of transmission, if such notice or
communication is delivered via email at the email address specified in this Section 10(d) between 5:30 p.m. and 11:59 p m. (New York City time) on any date, (iii) the second business day following the date of mailing, if sent by nationally
recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given.
(e) Headings. The headings contained herein are for convenience only, do not
constitute a part of this Certificate of Designation and shall not be deemed to limit or affect any of the provisions hereof.
15
(f) Status of Converted Series A Preferred Stock. If any shares of Series A Preferred
Stock shall be converted or redeemed by the Corporation, such shares shall, without the need for any action by the Board of Directors or otherwise, resume the status of authorized but unissued shares of preferred stock and shall no longer be
designated as Series A Preferred Stock.
********************
16
IN WITNESS WHEREOF, Senti
Biosciences, Inc. has caused this Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock to be executed by its duly authorized officer this 2nd day of December 2024.
|
SENTI BIOSCIENCES, INC.
|
|||
|
By:
|
/s/ Timothy Lu | ||
|
Name: Timothy Lu
|
|||
|
Title: Chief Executive Officer
|
|||
[SIGNATURE PAGE TO CERTIFICATE OF DESIGNATION]
ANNEX A-1
NOTICE OF CONVERSION
(TO BE EXECUTED BY THE REGISTERED HOLDER
IN ORDER TO CONVERT SHARES OF SERIES A PREFERRED STOCK)
The undersigned Holder hereby irrevocably elects to convert the number of shares of Series A Preferred Stock indicated below, represented by stock
certificate No(s). (the “Preferred Stock Certificates”), into shares of Common Stock of Senti Biosciences, Inc., a Delaware corporation (the “Corporation”), as of the date written below. If securities are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect
thereto. Capitalized terms utilized but not defined herein shall have the meaning ascribed to such terms in that certain Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock (the “Certificate of Designation”) filed by the Corporation with the Delaware Secretary of State on December 2, 2024.
Conversion calculations:
|
Date to Effect Conversion:
|
|
Number of shares of Series A Preferred Stock owned prior to Conversion:
|
|
Number of shares of Series A Preferred Stock to be Converted:
|
|
Number of shares of Common Stock to be Issued:
|
|
Address for delivery of physical certificates:
|
|
Or
|
For DWAC Delivery:
|
|
DWAC Instructions:
|
|
Broker No::
|
|
Account No.:
|
|
HOLDER
|
||
| By: |
||
| Name: |
||
| Title: |
||
| Date: |
-i-
Exhibit 4.1
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF THIS WARRANT (THE “SECURITIES”) HAVE NOT BEEN REGISTERED UNDER SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED UNLESS (I) SUCH SECURITIES HAVE BEEN REGISTERED
FOR SALE PURSUANT TO THE SECURITIES ACT, (II) SUCH SECURITIES MAY BE SOLD PURSUANT TO RULE 144, (III) THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSFER MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER
THE SECURITIES ACT, OR (IV) THE SECURITIES ARE TRANSFERRED WITHOUT CONSIDERATION TO AN AFFILIATE OF SUCH HOLDER OR A CUSTODIAL NOMINEE (WHICH FOR THE AVOIDANCE OF DOUBT SHALL REQUIRE NEITHER CONSENT NOR THE DELIVERY OF AN OPINION).
FORM OF WARRANT TO PURCHASE COMMON STOCK
Number of Shares: [•]
(subject to adjustment)
|
Warrant No. [•]
|
Original Issue Date: December [•], 2024
|
Senti Biosciences, Inc., a Delaware corporation (the “Company”), hereby certifies that, for good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, [•] or its permitted assigns (the “Holder”), is entitled, subject to the terms set forth below, to purchase
from the Company up to a total of [•] shares of common stock, $0.0001 par value per share (the “Common Stock”), of the
Company (each such share, a “Warrant Share” and all such shares, the “Warrant Shares”) at an exercise
price per share equal to $2.30 (as adjusted from time to time as provided in Section 9 herein, the “Exercise Price”), upon surrender of this Warrant to Purchase Common Stock (including any Warrants to Purchase Common Stock issued in exchange, transfer or replacement hereof, the
“Warrant”) at any time and from time to time on or after the Stockholder Approval Date (the “Initial Exercise
Date”) and on or prior to the five-year anniversary of the Original Issue Date (the “Termination Date”) but not thereafter. For avoidance of doubt, the Initial
Exercise Date shall the date on which the Company receives stockholder approval for the exercise of Warrant in accordance with applicable Nasdaq Rules.
1. Definitions. For purposes of this Warrant, the following terms shall have the following meanings:
“Affiliate” means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such Person, as such terms are used in and construed
under Rule 405 under the Securities Act, but only for so long as such control shall continue.
“Attribution Parties” means, collectively, the following
Persons and entities: (i) any direct or indirect Affiliates of the Holder, (ii) any Person acting or who reasonably could be deemed to be acting as a Group together with the Holder or any Attribution Parties and (iii) any other Persons whose
beneficial ownership of the Company’s Common Stock reasonably could be aggregated with the Holder’s and/or any other Attribution Parties for purposes of Section 13(d) or Section 16 of the Exchange Act. For clarity, the purpose of the foregoing is
to subject collectively the Holder and all other Attribution Parties to the Maximum Percentage.
“Closing Sale Price” means, for any security as of any date,
the last trade price for such security on the Principal Trading Market for such security, as reported by Bloomberg Financial Markets, or, if such Principal Trading Market begins to operate on an extended hours basis and does not designate the last
trade price, then the last trade price of such security prior to 4:00 P.M., New York City time, as reported by Bloomberg Financial Markets, or if the foregoing do not apply, the last trade price of such security in the over-the-counter market on
the electronic bulletin board for such security as reported by Bloomberg Financial Markets, or, if no last trade price is reported for such security by Bloomberg Financial Markets, the average of the bid and ask prices, of any market makers for
such security as reported in the OTC Link or “pink sheets” by OTC Markets Group Inc. (formerly OTC Markets Inc.) as of 4:00 P.M., New York City time on such date. If the Closing Sale Price cannot be calculated for a security on a particular date on
any of the foregoing bases, the Closing Sale Price of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of
such security, then the board of directors of the Company shall use its good faith judgment to determine the fair market value. The determination of the board of directors of the Company shall be binding upon all parties absent demonstrable error.
All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during the applicable calculation period.
“Commission” means the U.S. Securities and Exchange
Commission.
“Exchange Act” means the U.S. Securities Exchange Act of
1934, as amended, and all of the rules and regulations promulgated thereunder.
“Group” shall have the meaning ascribed to it in Section
13(d) of the Exchange Act, and all related rules, regulations and jurisprudence.
“Person” means an individual, partnership, corporation,
limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture or any other entity or organization.
“Principal Trading Market” means the national securities
exchange or other trading market on which the Common Stock is primarily listed on and quoted for trading, which, as of the Original Issue Date, shall be the Nasdaq Capital Market.
“Securities Act” means the U.S. Securities Act of 1933, as
amended, and all of the rules and regulations promulgated thereunder.
“Securities Purchase Agreement” means that certain
Securities Purchase Agreement, dated as of December 2, 2024, among the Company and the investors party thereto.
“Series A Directors” shall have the meaning set forth in
Section 5.3 of the Securities Purchase Agreement.
“Standard Settlement Period” means the standard settlement
period, expressed in a number of Trading Days, for the Principal Trading Market with respect to the Common Stock that is in effect on the date of delivery of an applicable Exercise Notice, which as of the Original Issue Date was “T+1.”
2
“Stockholder Approval Date” means the date on which the
Company obtains stockholder approval of the Proposals (as defined in the Certificate of Designation for the Series A Preferred Stock).
“Trading Day” means any weekday on which the Principal
Trading Market is normally open for trading.
“Trading Market” means any of the following markets or
exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York Stock Exchange (or any successors
to any of the foregoing).
“Transfer Agent” means Continental Stock Transfer and Trust
Company, the Company’s transfer agent and registrar for the Common Stock, and any successor appointed in such capacity.
“VWAP” means, for any date, the price determined by the
first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on
which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average
price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on The
Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock
as determined by an independent appraiser selected in good faith by the holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
2. Issuance of Securities; Registration of Warrants. The Warrant, as initially issued by the Company, is offered and sold pursuant to the Securities
Purchase Agreement. Accordingly, the Warrant and the Warrant Shares are “restricted securities” under Rule 144 promulgated under the Securities Act. The Company shall register ownership of this Warrant, upon records to be maintained by the
Company for that purpose (the “Warrant Register”), in the name of the record Holder (which shall include the initial Holder or, as the case may be, any assignee to which
this Warrant is permissibly assigned hereunder) from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner and holder hereof for the purpose of any exercise hereof or any distribution to the
Holder, and for all other purposes, absent actual notice to the contrary.
3. Registration of Transfers. Subject to compliance with all applicable securities laws, the Company shall, or will cause its Transfer
Agent to, register the transfer of all or any portion of this Warrant in the Warrant Register, upon surrender of this Warrant, and payment for all applicable transfer taxes (if any). Upon any such registration or transfer, a new warrant to
purchase Common Stock in substantially the form of this Warrant (any such new warrant, a “New Warrant”) evidencing the portion of this Warrant so transferred shall be
issued to the transferee, and a New Warrant evidencing the remaining portion of this Warrant not so transferred, if any, shall be issued to the transferring Holder. The acceptance of the New Warrant by the transferee thereof shall be deemed the
acceptance by such transferee of all of the rights and obligations in respect of the New Warrant that the Holder has in respect of this Warrant. The Company shall, or will cause its Transfer Agent to, prepare, issue and deliver at the Company’s
own expense any New Warrant under this Section 3. Until due presentment for registration of transfer, the Company may deem and treat the registered Holder hereof as the absolute owner
and holder for all purposes absent actual notice to the contrary.
3
4. Exercise of Warrants.
(a) All or any part of this Warrant shall be exercisable by the registered Holder in any manner permitted by this Warrant (including Section 11) at any time and from
time to time on or after the Initial Exercise Date and on or before the Termination Date.
(b) The Holder may exercise this Warrant by delivering to the Company (i) an exercise notice, in the form attached as Schedule 1 hereto (the “Exercise Notice”), completed and duly signed, and (ii) payment of the aggregate Exercise Price for the
number of Warrant Shares as to which this Warrant is being exercised (which may take the form of a “cashless exercise” if so indicated in the Exercise Notice and such “cashless exercise” is permitted pursuant to Section 10 below), and
the date on which the Exercise Notice is delivered to the Company (as determined in accordance with the notice provisions hereof) is an “Exercise
Date.” In the event that the aggregate Exercise Price is being paid in cash (a “Cash Exercise”), the Holder shall deliver the aggregate Exercise Price for the Warrant
Shares specified in the applicable Exercise Notice by wire transfer within one (1) Trading Day following the Exercise Date (the “Exercise Price
Delivery Deadline”). The Holder shall not be required to deliver the original Warrant in order to effect an exercise hereunder. Execution and delivery of the Exercise
Notice shall have the same effect as cancellation of the original Warrant and issuance of a New Warrant evidencing the right to purchase the remaining number of Warrant Shares, if any.
(c) The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this section, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares
available for purchase hereunder at any given time may be less than the amount stated on the face hereof.
(d) After the Trigger Date (as defined herein) and until the Termination Date, the Company may, within ten (10) Trading Days after the Trigger Date, call for the “cashless exercise” (as defined in section 10 herein) of all or any portion of
this Warrant for which a Notice of Exercise has not yet been delivered (such right, a “Call”) for consideration equal to the issuance of the Warrant Shares. To exercise
this right, the Company must deliver to the Holder an irrevocable written notice (a “Call Notice”), indicating therein the portion of unexercised portion of this Warrant to
which such notice applies; provided, however, that in order to exercise such right the VWAP on the Trading Day immediately preceding the date the Company delivers the Call Notice to the Holders must exceed the three times (3x) the Exercise
Price. If the conditions set forth below for such Call are satisfied from the period from the date of the Call Notice through and including the Call Date (as defined below), then this Warrant will be cancelled at 6:30 p.m. (New York City time)
on the twentieth Trading Day after the date of the Call Notice (such date and time, the “Call Date”). In furtherance thereof, the Company covenants and agrees that it will
honor all Notices of Exercise with respect to Warrant Shares subject to a Call Notice that are tendered through 6:30 p.m. (New York City time) on the Call Date. Notwithstanding anything to the contrary set forth in this Warrant, the Company may
not deliver a Call Notice or require the cancellation of this Warrant (and any such Call Notice shall be void), unless, from Trigger Date through the Call Date, (1) the Company honors in accordance with the terms of this Warrant all Notices of
Exercise delivered by 6:30 p.m. (New York City time) on the Call Date, (2) a registration statement is effective as to all Warrant Shares and the prospectus thereunder is available for the sale of all such Warrant Shares, (3) the Common Stock
shall be listed or quoted for trading on the Trading Market, (4) the Holders are not within the prohibition period pursuant to the written lock-up agreement in Section 6.2(g) of the Securities Purchase Agreement and (5) there is a sufficient
number of authorized shares of Common Stock available for issuance of all Warrant Shares. The Company’s right to call the Warrants under this Section 4(d) shall be exercised ratably among the Holders based on the Warrant Shares underlying each
Holder’s Warrants. For the purposes of this section 4(d), the “Trigger Date” shall mean the date on which the VWAP on the Trading Day immediately preceding the date the Company delivers the Call Notice to the Holders exceeds three times (3x)
the Exercise Price.
4
5. Delivery of Warrant Shares.
(a) Upon exercise of this Warrant, the Company shall promptly upon the request of the Holder but in no event later than the number of Trading Days comprising the Standard Settlement
Period following the Exercise Date (or, in the case of a Cash Exercise, if the applicable aggregate Exercise Price is not received by the Company by the Exercise Price
Delivery Deadline, one (1) Trading Day after the date the applicable aggregate Exercise Price is received by the Company) cause the Transfer Agent: (1) to credit such aggregate number of shares of Common Stock specified by the Holder in the
Exercise Notice and to which the Holder is entitled pursuant to such exercise (the “Exercise Shares”) to (i) the Holder’s or its designee’s balance account with The Depository Trust Company (“DTC”) through its Deposit Withdrawal At Custodian system or (ii) in book-entry form via a direct registration system (“DRS”) maintained by or on behalf of the Transfer Agent, in each case, so long as either (A) there is an effective registration statement
permitting the issuance of the Warrant Shares to or the resale of such Warrant Shares by the Holder or (B) the Exercise Shares are eligible for resale by the Holder without volume or manner-of-sale restrictions pursuant to Rule 144
promulgated under the Securities Act (assuming cashless exercise of this Warrant). If (A) and (B) above are not true, the Company shall cause the Transfer Agent to either (i) record the Exercise Shares in the name of the Holder or its
designee on the certificates reflecting the Exercise Shares with an appropriate legend regarding restriction on transferability, which shall be issued and dispatched by overnight courier to the address as specified in the Exercise Notice, and
on the Company’s share register or (ii) issue such Exercise Shares in the name of the Holder or its designee in restricted book-entry form in the Company’s share register. The Company agrees to maintain a transfer agent that is a participant
in the FAST Program of DTC so long as this Warrant remains outstanding and exercisable. The Holder, or any other Person permissibly so designated by the Holder to receive Warrant Shares, shall be deemed to have become the holder of record of
such Warrant Shares as of the Exercise Date, irrespective of the date such Warrant Shares are credited to the Holder’s or its designee’s DTC account, the date of the book entry positions or the date of delivery of the certificates evidencing
such Exercise Shares, as the case may be.
5
(b) In addition to any other rights available to the Holder, if within the Standard Settlement Period after the Exercise Date (or, in the case of a Cash Exercise, if the applicable
aggregate Exercise Price is not received by the Company by the Exercise Price Delivery Deadline, one (1) Trading Day after the date the applicable aggregate Exercise Price is received by the Company), the Company fails to cause the Transfer
Agent to deliver to the Holder or its designee Exercise Shares in the manner required pursuant to Section 5(a) within the Standard Settlement Period following the Exercise Date (or, in the case of a Cash Exercise, if the applicable
aggregate Exercise Price is not received by the Company by the Exercise Price Delivery Deadline, one (1) Trading Day after the date the applicable aggregate Exercise Price is received by the Company, but other than a failure caused by
incorrect or incomplete information provided by the Holder to the Company), and the Holder or the Holder’s broker on its behalf purchases (in an open market
transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”) but did not receive within the Standard Settlement Period, then the Company shall, within two (2) Trading Days after
the Holder’s request and in the Holder’s sole and absolute discretion either (1) pay in cash to the Holder, as liquidated damages and not as a penalty, an amount equal
to the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased, at which point the Company’s obligation to issue such Warrant Shares shall terminate or (2) promptly honor its
obligation to deliver to the Holder or its designee the Exercise Shares pursuant to Section 5(a) or credit the Holder’s or its designee’s balance account with DTC for such Exercise Shares and pay cash to the Holder in an amount equal to the
excess (if any) of Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased in the Buy-In, less the product of (A) the number of shares of Common Stock purchased in the Buy-In, times
(B) the price at which the sell order giving rise to such purchase obligation was executed by the Holder. The Holder shall provide the Company written notice promptly after the occurrence of a Buy-In, indicating the amounts payable to the
Holder in respect of the Buy-In together with applicable confirmations and other evidence reasonably requested by the Company.
(c) To the fullest extent permitted by law and subject to Section 5(b), the Company’s obligations to issue and deliver Warrant Shares in accordance with and subject to the terms
hereof (including the limitations set forth in Section 11 below) are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver
or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the
Holder or any other Person of any obligation to the Company or any violation or alleged violation of law by the Holder or any other Person, and irrespective of any other circumstance that might otherwise limit such obligation of the Company to
the Holder in connection with the issuance of Warrant Shares. Subject to Section 5(b), nothing herein shall limit the Holder’s right to pursue any other remedies available to it
hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver Exercise Shares; provided, however, that the Holder shall not be
entitled to both (i) require the Company to reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not timely honored and (ii) receive the number of shares of Common Stock that would have been
issued if the Company had timely complied with its delivery requirements under Section 5(a).
6. Charges, Taxes and Expenses. Issuance and delivery of Exercise Shares shall be made without charge to the Holder for any issue or
transfer tax, transfer agent fee or other incidental tax or expense (excluding any applicable stamp duties) in respect of the issuance of such shares, all of which taxes and expenses shall be paid by the Company; provided, however, that the
Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the registration of any Warrant Shares or the Warrants in a name other than that of the Holder or an Affiliate thereof. The Holder shall be
responsible for all other tax liability that may arise as a result of holding or transferring this Warrant or receiving Warrant Shares upon exercise hereof.
7. Replacement of Warrant. If this Warrant is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and
substitution for and upon cancellation hereof, or in lieu of and substitution for this Warrant, a New Warrant, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction (in such case) and, in
each case, a customary and reasonable contractual indemnity, if requested by the Company. If a New Warrant is requested as a result of a mutilation of this Warrant, then the Holder shall deliver such mutilated Warrant to the Company as a
condition precedent to the Company’s obligation to issue the New Warrant.
6
8. Reservation of Warrant Shares. The Company covenants that it will,
at all times while this Warrant is outstanding, reserve and keep available out of the aggregate of its authorized but unissued and otherwise unreserved Common Stock, solely for the purpose of enabling it to issue Warrant Shares upon exercise
of this Warrant as herein provided, the number of Warrant Shares that are initially issuable and deliverable upon the exercise of this entire Warrant, free from preemptive rights or any other contingent purchase rights of persons other than
the Holder (taking into account the adjustments and restrictions of Section 9). The failure of the Company to reserve and keep available out of the aggregate of its authorized but unissued and otherwise unreserved Common Stock a
sufficient number of shares of Common Stock to enable it to issue Warrant Shares upon exercise of this Warrant as herein provided is referred to herein as an “Authorized Share Failure.” The Company covenants that all Warrant Shares so issuable and deliverable shall, upon issuance and the payment of the
applicable Exercise Price in accordance with the terms hereof, be duly and validly authorized, issued and fully paid and non-assessable. The Company will take all such action as may be reasonably necessary to assure that such shares of Common
Stock may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of any securities exchange or automated quotation system upon which the Common Stock may be listed or of any contract to which the Company or any of its subsidiaries is bound. The Company further covenants that it will not, without the prior written consent of the Holder, take
any actions to increase the par value of the Common Stock at any time while this Warrant is outstanding. In furtherance of the Company’s obligations set forth in this Section 8, as soon as practicable after the date of the occurrence of an
Authorized Share Failure, but in no event later than ninety (90) days after the occurrence of such Authorized Share Failure, the Company shall hold a meeting of its stockholders for the approval of an increase in the number of authorized
shares of Common Stock. In connection with such meeting, the Company shall provide each stockholder with a proxy statement and shall use its commercially reasonable efforts to solicit its stockholders’ approval of such increase in authorized
shares of Common Stock and to cause its board of directors to recommend to the stockholders that they approve such proposal.
9. Certain Adjustments. The Exercise Price and number of Warrant Shares issuable upon exercise of this Warrant (the “Number of Warrant Shares”) are subject to adjustment from time to time as set forth in this Section 9.
(a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding, (i) pays a stock dividend on its Common Stock or otherwise makes a distribution on any
class of capital stock or any other equity or equity equivalent securities issued and outstanding on the Original Issue Date and in accordance with the terms of such stock on the Original Issue Date or as amended, that is payable in shares of
Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides its outstanding shares of Common Stock into a larger number of shares of Common
Stock, (iii) combines its outstanding shares of Common Stock into a smaller number of shares of Common Stock (including by way of reverse stock split) or (iv) issues by reclassification of shares of capital stock any additional shares of Common
Stock of the Company, then in each such case the Number of Warrant Shares shall be multiplied by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately after such event and the denominator of
which shall be the number of shares of Common Stock outstanding immediately before such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this
Warrant shall remain unchanged.. Any adjustment made pursuant to clause (i) of this paragraph shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution,
provided, however, that if such record date shall have been fixed and such dividend is not fully paid on the date fixed therefor, the Number of Warrant Shares shall be recomputed accordingly as of the close of business on such record date and
thereafter the Number of Warrant Shares shall be adjusted pursuant to this paragraph as of the time of actual payment of such dividends. Any adjustment pursuant to clause (ii), (iii) or (iv) of this paragraph shall become effective immediately
after the effective date of such subdivision, combination or issuance.
7
(b) Pro Rata Distributions. If, on or after the Original Issue Date, the Company shall declare or make any dividend or other pro rata distribution of its assets (or rights to acquire
its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property, options, evidence of indebtedness or any other assets by
way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction, but, for the avoidance of doubt, excluding any distribution of shares of Common Stock subject to Section 9(a), any distribution of Purchase Rights (as defined below) subject to Section
9(c) and any Fundamental Transaction (as defined below) subject to Section 9(d)) (a “Distribution”)
then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete
exercise of this Warrant (without regard to any limitations or restrictions on exercise of this Warrant, including without limitation, the Maximum Percentage (as defined below)) immediately before the date on which a record is taken for such
Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, that to the extent that the Holder’s right to participate
in any such Distribution would result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Distribution to such extent (and shall not be entitled to
beneficial ownership of such shares of Common Stock as a result of such Distribution (and beneficial ownership) to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time or
times as its right thereto would not result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, at which time or times the Holder shall be granted (all or such portion of) such Distribution (and any Distributions
declared or made on such initial Distribution or on any subsequent Distribution held similarly in abeyance) to the same extent as if there had been no such limitation).
(c) Purchase Rights. If at any time on or after the Original Issue Date, the Company grants, issues or sells any Options, Convertible Securities or rights to purchase stock, warrants,
securities or other property, in each case pro rata to the record holders of any class of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire,
upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard
to any limitations or restrictions on exercise of this Warrant, including without limitation, the Maximum Percentage) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such
record is taken, the date as of which the record holders of Common Stock are to be determined for the grant, issuance or sale of such Purchase Rights (provided, that to the extent that the Holder’s right to participate in any such Purchase
Right would result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Purchase Right to such extent (and shall not be entitled to beneficial ownership
of such Common Stock as a result of such Purchase Right (and beneficial ownership) to such extent) and at the Holder’s election, in its sole discretion, either (1) such Purchase Right to such extent shall be held in abeyance for the benefit of
the Holder until such time or times as its right thereto would not result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, at which time or times the Holder shall be granted such right (and any Purchase Right
granted, issued or sold on such initial Purchase Right or on any subsequent Purchase Right to be held similarly in abeyance) to the same extent as if there had been no such limitation) or (2) the Company shall offer the Holder the right upon
exercise of such Purchase Right to acquire a security (e.g. a pre-funded warrant) that would not result in the Holder and the other Attribution Parties exceeding the Maximum Percentage but will otherwise to the extent possible have economic and
other rights, preferences and privileges substantially consistent and on par with the securities or other property issuable upon exercise of the originally offered Purchase Rights. As used in this Section
9(c), (i) “Options” means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities and (ii) “Convertible Securities” mean any stock or securities (other than Options) directly
or indirectly convertible into or exercisable or exchangeable for shares of Common Stock.
8
(d) Fundamental Transactions. If, at any time while this Warrant is outstanding (i) the Company, directly or indirectly, in one or more related transactions effects any merger or
consolidation of the Company with or into another Person, in which the Company is not the surviving entity or in which the stockholders of the Company immediately prior to such merger or consolidation do not own, directly or indirectly, more
than 50% of the voting power of the surviving entity immediately after such merger or consolidation, (ii) the Company effects any sale, lease, license, assignment, transfer, conveyance or other disposition to another Person of all or
substantially all of its assets in one or a series of related transactions, (iii) pursuant to any purchase offer, tender offer or exchange offer (whether by the Company or another Person) that is completed pursuant to which holders of the capital stock of the Company sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of more than 50% of the
outstanding shares of the capital stock of the Company or more than 50% of the voting power of the capital stock of the Company, (iv) the Company, directly or indirectly, in one or more related transactions consummates a stock or share
purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another Person or group of Persons whereby such other Person or group
acquires more than 50% of the outstanding shares of capital stock of the Company or more than 50% of the voting power of the capital stock of the Company (except for any such transaction in which the stockholders of the Company immediately
prior to such transaction maintain, in substantially the same proportions, the voting power of such Person immediately after the transaction) or (v) the Company, directly or indirectly, in one or more or related transactions effects a stock
or share purchase agreement or other business combination (including, without limitation any reclassification of the capital stock of the Company or any compulsory share exchange pursuant to which the capital stock is effectively converted
into or exchanged for other securities, cash or property with another Person or group of Persons whereby such other Person or group acquires more than 50% of the outstanding shares of capital stock of the Company or more than 50% of the
voting power of the capital stock of the Company (other than as a result of a subdivision or combination of shares of Common Stock covered by Section 9(a) above) (in any such case, a “Fundamental Transaction”), then following such Fundamental Transaction the Holder shall have the right to receive, upon
exercise of this Warrant, the same amount and kind of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to such Fundamental
Transaction, the holder of the number of Warrant Shares then issuable upon exercise in full of this Warrant (including any Distributions or Purchase Rights then held in abeyance pursuant to Sections 9(b) or 9(c) above) without
regard to any limitations on exercise contained herein (the “Alternate Consideration”). The Company shall not effect any Fundamental Transaction in which the Company is not the surviving entity or the Alternate Consideration includes securities of another Person unless (i) the Alternate Consideration is solely cash
and the Company provides for the simultaneous “cashless exercise” of this Warrant pursuant to Section 10 below or (ii) prior to or simultaneously with the consummation thereof, any successor to the Company, surviving entity or other
Person (including any purchaser of assets of the Company) shall assume the obligation to deliver to the Holder such Alternate Consideration as, in accordance with the foregoing provisions, the Holder may be entitled to receive, and the other
obligations under this Warrant. If the Company undertakes a Fundamental Transaction in which the Company is not the surviving entity and the Alternate Consideration
includes securities of another Person, then the Company shall provide that, prior to or simultaneously with the consummation of such Fundamental Transaction, any successor to the Company, surviving entity or other Person (including any
purchaser of assets of the Company) shall assume the obligation to deliver to the Holder such Alternate Consideration as the Holder is entitled to receive in accordance with the foregoing provisions, and to assume the other obligations under
this Warrant. The provisions of this paragraph (d) shall similarly apply to subsequent transactions analogous to a Fundamental Transaction type. The Holder shall not be entitled to receive any portion of the Alternate Consideration in the
form of cash unless all stockholders of the Company are provided with the option to receive cash in exchange for the securities they own at the time of the Fundamental Transaction in an amount equal to the fair market value of such Alternate
Consideration.
9
(e) Notwithstanding anything to the contrary, in the event of a Fundamental Transaction (other than (x) any stock split or reverse stock split, (y) any transaction effected solely for the purpose of changing the jurisdiction of incorporation
of the Company, or (z) any holding company reorganization or parent-subsidiary merger not requiring stockholder approval pursuant to Sections 251(g) or 253 of the General Corporation Law of the State of Delaware (or any successor provisions
thereof)), the Company or any Successor Entity (as defined below) shall, at the Holder’s option, exercisable at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction (or, if later, the date of the
public announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder an amount of cash equal to the Black Scholes Value (as defined below) of the remaining unexercised portion of this
Warrant on the date of the consummation of such Fundamental Transaction, provided, however, that, if the Fundamental Transaction is not within the Company’s control, including not approved by the Company’s board of directors, the Holder shall
only be entitled to receive from the Company or any Successor Entity the same type or form of consideration (and in the same proportion). “Black Scholes Value” means the fair value of this Warrant on the date of settlement of the Warrant as
determined by an independent third-party valuation specialist using the Black-Scholes Option Pricing Model and approved by the Company’s Board of Directors, including the Series A Directors. The basis of fair value for this provision follows
the principles of the United States generally accepted accounting principles. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds within five Trading Days of the Holder’s election (or, if later,
on the effective date of the Fundamental Transaction). The terms of any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving entity to comply with the provisions of this
Section 9(d) and insuring that this Warrant (or any such replacement security) will be similarly adjusted upon any subsequent Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the
Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant in accordance with the provisions of this
Section 9(d) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder,
deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of
capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such
Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction
and the value of such shares of capital stock, such adjustments to the number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of
such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for the Company (so that
from and after the date of such Fundamental Transaction, the provisions of this Warrant referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the
obligations of the Company under this Warrant with the same effect as if such Successor Entity had been named as the Company herein. Notwithstanding the foregoing, and without limiting Section 11 hereof, the Holder may elect, at its sole
option, by delivery of written notice to the Company to waive this Section 9(d) to permit a Fundamental Transaction without the assumption of this Warrant.
10
(f) Certain Events. If any event occurs of the type contemplated by, or similar to, the provisions of this Section 9 but not expressly provided for by such provisions, then the
Company’s board of directors will make an appropriate adjustment in the Exercise Price and the number of Common Shares obtainable upon exercise of this Warrant so as to protect the rights of the Holder; provided that no such adjustment will
increase the Exercise Price or decrease the number of Common Shares obtainable as otherwise determined pursuant to this Section 9.
(g) Number of Warrant Shares. Simultaneously with any adjustment to the Number of Warrant Shares pursuant to paragraph (a) of this Section
9 (including any adjustment to the Exercise Price that would have been effected but for the final sentence in this paragraph (g)), the number of Warrant Shares that may be purchased upon exercise of this Warrant shall be
increased or decreased proportionately, so that after such adjustment the aggregate Exercise Price payable hereunder for the increased or decreased Number of Warrant Shares shall be the same as the aggregate Exercise Price in effect immediately
prior to such adjustment. Notwithstanding the foregoing, in no event may the Exercise Price be adjusted below the par value of the Common Stock then in effect.
(h) Calculations. All calculations under this Section 9 shall be made to the nearest one-ten-hundredth of one cent or the
nearest share, as applicable.
(i) Notice of Adjustments. Upon the occurrence of each adjustment pursuant to this Section 9, the Company at its expense
will, at the written request of the Holder, promptly compute such adjustment, in good faith, in accordance with the terms of this Warrant and prepare a certificate setting forth such adjustment, including a statement of the adjusted Exercise
Price and adjusted number or type of Warrant Shares or other securities issuable upon exercise of this Warrant (as applicable), describing the transactions giving rise to such adjustments and showing in detail the facts upon which such
adjustment is based. Upon written request, the Company will promptly deliver a copy of each such certificate to the Holder and to the Transfer Agent.
11
(j) Notice of Corporate Events. If, while this Warrant is outstanding, the Company (i) declares a dividend or any other pro rata distribution of cash, securities or other property
in respect of its Common Stock, including, without limitation, any granting of rights or warrants to subscribe for or purchase any capital stock of the Company or any subsidiary, (ii) authorizes or approves, enters into any agreement
contemplating or solicits stockholder approval for any Fundamental Transaction or (iii) authorizes the voluntary dissolution, liquidation or winding up of the affairs of the Company, then the Company shall deliver to the Holder a notice of such
transaction at least ten (10) days prior to the applicable record or effective date on which a Person would need to hold Common Stock in order to participate in or vote with respect to such transaction; provided, however, that the failure to
deliver such notice or any defect therein shall not affect the validity of the corporate action required to be described in such notice. In addition, if while this Warrant is outstanding, the Company authorizes or approves, enters into any
agreement contemplating or solicits stockholder approval for any Fundamental Transaction contemplated by Section 9(d), other than a Fundamental Transaction under clause (iii) of Section 9(d), the Company shall deliver to the Holder a notice of such Fundamental Transaction at least thirty (30) days prior to the date such Fundamental Transaction is consummated.
Holder agrees to maintain any information disclosed pursuant to this Section 9(h) in confidence until such information is publicly available, and shall comply with applicable law with
respect to trading in the Company’s securities following receipt of any such information.
10. Payment of Exercise Price. Notwithstanding anything contained herein to the contrary, the Holder may, in its sole discretion, satisfy its obligation
to pay the Exercise Price through a “cashless exercise”, in which event the Company shall issue to the Holder the number of Warrant Shares in an exchange of securities effected pursuant to Section 3(a)(9) of the Securities Act, determined as
follows:
X = Y [(A-B)/A]
where:
“X” equals
the number of Warrant Shares to be issued to the Holder;
“Y” equals
the total number of Warrant Shares with respect to which this Warrant is then being exercised;
“A” equals
the VWAP of the shares of Common Stock (as reported by Bloomberg Financial Markets) as of the Trading Day on the date immediately preceding the Exercise Date; and
“B” equals
the Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise.
For purposes of Rule 144 promulgated under the Securities Act, it is intended, understood and acknowledged that the Warrant Shares issued in a
“cashless exercise” transaction shall be deemed to have been acquired by the Holder, and the holding period for the Warrant Shares shall be deemed to have commenced, on the Original Issuance Date (provided that the Commission continues to take the
position that such treatment is proper at the time of such exercise). In the event that a registration statement registering the issuance of Warrant Shares is, for any reason, not effective at the time of exercise of this Warrant, then this Warrant
may only be exercised through a cashless exercise, as set forth in this Section 10. If the Warrant Shares are issued in such a cashless exercise, the Company acknowledges and agrees that,
in accordance with Section 3(a)(9) of the Securities Act, the Exercise Shares issued in such exercise shall take on the registered characteristics of the Warrants being exercised and may be tacked on to the holding period of the Warrants being
exercised. Except as set forth in Section 5(b) (Buy-In Remedy) and Section 12 (No Fractional Shares), in no event will the
exercise of this Warrant be settled in cash.
12
11. Limitations on Exercise.
(a) Notwithstanding anything to the contrary contained herein, the Company shall not effect the exercise of any portion of this Warrant, and the Holder of this Warrant shall not exercise any portion of the Warrant, and any such exercise shall
be null and void ab initio and treated as if the exercise had not been made, to the extent that immediately prior to or following such exercise, the Holder, together with its Attribution Parties, beneficially owns or would beneficially own as
determined in accordance with Section 13(d) of the Exchange Act, in excess of [4.99][9.99]% (the “Maximum Percentage”) of the Common Stock that would be issued and
outstanding following such exercise. For purposes of calculating beneficial ownership for determining whether the Maximum Percentage is or will be exceeded, the aggregate number of shares of Common Stock held and/or beneficially owned by the
Holder together with its Attribution Parties, shall include the number of shares of Common Stock held and/or beneficially owned by the Holder together with the Attribution Parties plus the number of shares of Common Stock issuable upon exercise
of this Warrant with respect to which the determination is being made but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, unexercised Warrant held and/or beneficially owned by the
Holder or its Attribution Parties and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company held and/or beneficially owned by such Holder, together with its Attribution Parties (including,
without limitation, any convertible notes, convertible stock or warrants) that are subject to a limitation on conversion or exercise analogous to the limitation contained herein. For purposes of this Section 11(a), beneficial ownership of the Holder or the Attribution Parties shall, except as set forth in the immediately preceding sentence, be calculated and determined in accordance with Section 13(d) of the
Exchange Act and the rules promulgated thereunder. For purposes of this Warrant, in determining the number of outstanding shares of Common Stock, a Holder of this Warrant may rely on the number of outstanding shares of Common Stock as reflected
in (1) the Company’s most recent Form 10-K, Form 10-Q, Current Report on Form 8-K or other public filing with the Commission, as the case may be, (2) a more recent public announcement by the Company or (3) any other written notice by the
Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding (such issued and outstanding shares, the “Reported Outstanding Share Number”).
For any reason at any time, upon the written or oral request of the Holder, the Company shall within one (1) Trading Day confirm orally and in writing or by electronic mail to the Holder the number of shares of Common Stock then outstanding.
The Holder shall disclose to the Company the number of shares of Common Stock that it, together with the Attribution Parties holds and/or beneficially owns and has the right to acquire through the exercise of derivative securities and any
limitations on exercise or conversion analogous to the limitation contained herein contemporaneously or immediately prior to submitting an Exercise Notice for the relevant Warrant. If the Company receives an Exercise Notice from the Holder at a
time when the actual number of outstanding shares of Common Stock is less than the Reported Outstanding Share Number, the Company shall (i) notify the Holder in writing of the number of shares of Common Stock then outstanding and, to the extent
that such Exercise Notice would otherwise cause the Holder’s, together with the Attribution Parties’, beneficial ownership, as determined pursuant to this Section 11(a), to exceed the
Maximum Percentage, the Holder must notify the Company of a reduced number of Warrant Shares to be purchased pursuant to such Exercise Notice (the number of shares by which such purchase is reduced, the “Reduction Shares”) and (ii) as soon as reasonably practicable, the Company shall return to the Holder any exercise price paid by the Holder for the Reduction Shares. In any case, the number of outstanding
shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder and the Attribution Parties since the date as of which the Reported Outstanding
Share Number was reported. In the event that the issuance of Common Stock to the Holder upon exercise of this Warrant results in the Holder, together with the Attribution Parties, being deemed to beneficially own, in the aggregate, more than
the Maximum Percentage of the number of outstanding shares of Common Stock (as determined under Section 13(d) of the Exchange Act), the number of shares so issued by which the Holder’s, together with the Attribution Parties’, aggregate
beneficial ownership exceeds the Maximum Percentage (the “Excess Shares”) shall be deemed null and void and shall be cancelled ab initio, and the Holder and/or the
Attribution Parties shall not have the power to vote or to transfer the Excess Shares. As soon as reasonably practicable after the issuance of the Excess Shares has been deemed null and void, the Company shall return to the Holder the exercise
price paid by the Holder for the Excess Shares. By written notice to the Company, a Holder of this Warrant may from time to time increase or decrease the Maximum Percentage to any other percentage not in excess of 45% specified in such notice;
provided that any increase in the Maximum Percentage will not be effective until the 61st day after such notice is delivered to the Company and shall not negatively affect
any partial exercise effected prior to such change.
13
(b) This Section 11 shall not restrict the number of shares of Common Stock which a Holder or the Attribution Parties may receive or beneficially own in order to determine the amount
of securities or other consideration that such Holder or the Attribution Parties may receive in the event of a Fundamental Transaction as contemplated in Section 9(c) of this Warrant.
For purposes of clarity, the shares of Common Stock issuable pursuant to the terms of this Warrant in excess of the Maximum Percentage shall not be deemed to be beneficially owned by the Holder or the Attribution Parties for any purpose
including for purposes of Section 13(d) of the Exchange Act and the rules promulgated thereunder or Section 16 of the Exchange Act and the rules promulgated thereunder, including Rule 16a-1(a)(1). No prior inability to exercise this Warrant
pursuant to this paragraph shall have any effect on the applicability of the provisions of this paragraph with respect to any subsequent determination of exercisability. The provisions of this paragraph shall be construed and implemented in a
manner otherwise than in strict conformity with the terms of this Section 11 to the extent necessary to correct this paragraph or any portion of this paragraph which may be defective
or inconsistent with the intended beneficial ownership limitation contained in this Section 11 or to make changes or supplements necessary or desirable to properly give effect to such
limitation. The limitation contained in this paragraph may not be waived and shall apply to a successor holder of this Warrant.
12. No Fractional Shares. No fractional Warrant Shares will be issued in connection with any exercise of this Warrant. In lieu of any fractional
shares that would otherwise be issuable, the number of Warrant Shares to be issued shall be rounded down to the next whole number and the Company shall pay the Holder in cash the fair market value (based on the Closing Sale Price) for any such
fractional shares.
13. Notices. Any and all notices or other communications or deliveries hereunder (including, without limitation, any Exercise Notice) shall be in
writing and shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered confirmed e-mail at the e-mail address specified by the Company prior to 5:30 P.M., New York City
time, on a Trading Day, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via confirmed e-mail at the e-mail address specified by the Company on a day that is not a Trading Day or later than
5:30 P.M., New York City time, on any Trading Day, (iii) the Trading Day following the date of mailing, if sent by nationally recognized overnight courier service specifying next business day delivery, or (iv) upon actual receipt by the Person
to whom such notice is required to be given, if by hand delivery.
14
14. Warrant Agent. The Company shall initially serve as warrant agent under this Warrant. Upon 30 days’ notice to the Holder, the Company may
appoint a new warrant agent. Any corporation into which the Company or any new warrant agent may be merged or any corporation resulting from any consolidation to which the Company or any new warrant agent shall be a party or any corporation to
which the Company or any new warrant agent transfers substantially all of its corporate trust or stockholders services business shall be a successor warrant agent under this Warrant without any further act. Any such successor warrant agent
shall promptly cause notice of its succession as warrant agent to be mailed (by first class mail, postage prepaid) to the Holder at the Holder’s last address as shown on the Warrant Register.
15. Miscellaneous.
(a) No Rights as a Stockholder. Except as otherwise set forth in this Warrant, the Holder, solely in such Person’s capacity as a holder of this Warrant, shall not be entitled to vote
or receive dividends or be deemed the holder of share capital of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in such Person’s capacity as the Holder of this Warrant,
any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, amalgamation, conveyance or
otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the Holder of the Warrant Shares which such Person is then entitled to receive upon the due exercise of this Warrant. In
addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are
asserted by the Company or by creditors of the Company.
(b) Further Assurances. Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate
or articles of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the
terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant
against impairment. Without limiting the generality of the foregoing, the Company will (a) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value,
(b) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and non-assessable Warrant Shares upon the exercise of this Warrant, and (c) use commercially reasonable efforts to
obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof as may be necessary to enable the Company to perform its obligations under this Warrant. Before taking any action which would
result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any
public regulatory body or bodies having jurisdiction thereof.
(c) Successors and Assigns. Subject to compliance with applicable securities laws, this Warrant may be assigned by the Holder. This Warrant may not be assigned by the Company without
the written consent of the Holder, except to a successor in the event of a Fundamental Transaction. This Warrant shall be binding on and inure to the benefit of the Company and the Holder and their respective successors and assigns. Subject to
the preceding sentence, nothing in this Warrant shall be construed to give to any Person other than the Company and the Holder any legal or equitable right, remedy or cause of action under this Warrant. This Warrant may be amended only in
writing signed by the Company and the Holder, or their successors and assigns.
15
(d) Amendment and Waiver. Except as otherwise provided herein, the provisions of this Warrant may be amended and the Company may take any action herein prohibited, or omit to perform
any act herein required to be performed by it, only if the Company has obtained the written consent of the Holder.
(e) Acceptance. Receipt of this Warrant by the Holder shall constitute acceptance of and agreement to all of the terms and conditions contained herein.
(f) Governing Law; Jurisdiction. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF. EACH OF THE COMPANY AND THE HOLDER HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING
IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN, FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN (INCLUDING WITH RESPECT TO THE ENFORCEMENT OF ANY OF THE
TRANSACTION DOCUMENTS), AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT. EACH OF THE COMPANY AND THE HOLDER HEREBY
IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF VIA REGISTERED OR CERTIFIED MAIL OR OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY) TO SUCH
PERSON AT THE ADDRESS IN EFFECT FOR NOTICES TO IT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS
IN ANY MANNER PERMITTED BY LAW. EACH OF THE COMPANY AND THE HOLDER HEREBY WAIVES ALL RIGHTS TO A TRIAL BY JURY.
(g) Headings. The headings herein are for convenience only, do not constitute a part of this Warrant and shall not be deemed to limit or affect any of the provisions hereof.
(h) Severability. If any part or provision of this Warrant is held unenforceable or in conflict with the applicable laws or regulations of any jurisdiction, the invalid or
unenforceable part or provisions shall be replaced with a provision which accomplishes, to the extent possible, the original business purpose of such part or provision in a valid and enforceable manner, and the remainder of this Warrant shall
remain binding upon the parties hereto.
16
(i) Interpretation. When a reference is made in this Warrant to a Section, such reference shall be to a Section of this Warrant unless otherwise indicated. Whenever the words
“include,” “includes” or “including” are used in this Warrant, they shall be deemed to be followed by the words “without limitation.” The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Warrant shall refer
to this Warrant as a whole and not to any particular provision of this Warrant unless the context requires otherwise. The words “date hereof’ when used in this Warrant shall refer to the date of this Warrant. The terms “or,” “any” and “either”
are not exclusive. The word “extent” in the phrase “to the extent” shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply “if.” The word “will” shall be construed to have the same meaning and
effect as the word “shall.” All terms defined in this Warrant shall have the defined meanings when used in any document made or delivered pursuant hereto unless otherwise defined therein. The definitions contained in this Warrant are applicable
to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such term. Any agreement, instrument or statute defined or referred to herein or in any agreement or instrument that
is referred to herein means such agreement, instrument or statute as from time to time amended, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the case of statutes) by succession of
comparable successor statutes and references to all attachments thereto and instruments incorporated therein. Unless otherwise specifically indicated, all references to “dollars” or “$” shall refer to, and all payments hereunder shall be made
in, the lawful money of the United States. References to a Person are also to its successors and permitted assigns. When calculating the period of time between which, within which or following which any act is to be done or step taken pursuant
to this Warrant, the date that is the reference date in calculating such period shall be excluded (and, unless otherwise required by law, if the last day of such period is not a Business Day, the period in question shall end on the next
succeeding Business Day).
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
17
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its authorized officer as of the date first indicated
above.
|
SENTI BIOSCIENCES, INC.
|
|||
|
By:
|
|||
|
Name:
|
Timothy Lu
|
|
|
Title:
|
Chief Executive Officer
|
SCHEDULE 1
FORM OF WARRANT EXERCISE NOTICE
[To be executed by the Holder to purchase shares of Common Stock under the Warrant]
Ladies and Gentlemen:
(1) The undersigned is the Holder of Warrant No. __ (the “Warrant”) issued by SENTI BIOSCIENCES, INC.,
a Delaware corporation (the “Company”). Capitalized terms used herein and not otherwise defined herein have the respective meanings set forth in the Warrant.
(2) The undersigned hereby exercises its right to purchase _____ Warrant Shares pursuant to the Warrant.
(3) The Holder intends that payment of the Exercise Price shall be made as (check one):
| ☐ |
Cash Exercise
|
| ☐ |
“Cashless Exercise” under Section 10 of the Warrant
|
(4) If the Holder has elected a Cash Exercise, the Holder shall pay the sum of $ _____ in immediately available funds to the Company in accordance with the terms of
the Warrant.
(5) Pursuant to this Exercise Notice, the Company shall deliver to the Holder Warrant Shares determined in accordance with the terms of the Warrant.
(6) By its delivery of this Exercise Notice, the undersigned represents and warrants to the Company that in giving effect to the exercise evidenced hereby (i) the
Holder is an “accredited investor” as defined in Regulation D promulgated under the Securities Act of 1933, as amended and (ii) the Holder will not beneficially own in excess of the number of shares of Common Stock (as determined in accordance with
Section 13(d) of the Securities Exchange Act of 1934, as amended) permitted to be owned under Section 11(a) of the Warrant to which this notice relates.
|
Dated:
|
||
|
Name of Holder:
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
(Signature must conform in all respects to name of Holder as specified on the face of the Warrant)
Exhibit 10.1
Execution Version
SECURITIES PURCHASE AGREEMENT
This SECURITIES PURCHASE AGREEMENT (this “Agreement”) is dated as of December 2, 2024, by and among Senti Biosciences,
Inc., a Delaware corporation (the “Company”), and each of the entities listed on Exhibit A attached to this Agreement (each, an “Investor” and together, the “Investors”).
WHEREAS, the Company and the Investors are executing and delivering this Agreement in reliance
upon the exemption from securities registration afforded by Section 4(a)(2) of the Securities Act (as defined below) and Rule 506 of Regulation D promulgated under the Securities Act;
WHEREAS, the Company desires to sell to the Investors, and each Investor desires to purchase
from the Company, severally and not jointly, upon the terms and subject to the conditions stated in this Agreement, (A) shares of the Company’s Series A convertible preferred stock, par value $0.0001 per share (the “Series
A Preferred Stock”), and accompanying (B) warrants to purchase shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”) substantially in the form attached hereto as Exhibit
B (the “Warrants”);
WHEREAS, contemporaneously with the sale of the shares of Series A Preferred Stock and the
Warrants, the parties hereto will execute and deliver a Registration Rights Agreement (as defined below), substantially in the form attached hereto as Exhibit C, pursuant to which the Company will agree to provide certain registration
rights in respect of the shares of Common Stock issuable upon the conversion of the Series A Preferred Stock (the “Conversion Shares”) and the Warrant Shares (as defined below in Section 3.4) under the
Securities Act and applicable state securities laws; and
WHEREAS, pursuant to this Agreement and the Certificate of Designation of Preferences, Rights
and Limitations of Series A Convertible Preferred Stock, substantially in the form attached hereto as Exhibit D (the “Certificate of Designation”), each share of Series A Preferred Stock is
convertible into Conversion Shares (such Conversion Shares, together with the shares of Series A Preferred Stock, Warrants and Warrant Shares, the “Securities”).
NOW THEREFORE, in consideration of the mutual agreements, representations, warranties and
covenants herein contained, the Company and each Investor, severally and not jointly, agree as follows:
1. Definitions. As used in this Agreement, the following terms shall have the following respective meanings:
“Affiliate” means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediates, controls, is controlled by or
is under common control with such Person.
“Agreement” has the meaning set forth in the recitals.
“Amended and Restated Bylaws” means the Bylaws of the Company, as currently in effect.
“Amended and Restated Certificate of Incorporation” means the Second Amended and Restated Certificate of Incorporation of the Company, as amended to date and
as currently in effect.
“Antitakeover Provisions” means the provisions of any stockholder rights plan or agreement, “poison pill” or substantially similar anti-takeover agreement or
any “business combination”, “control share acquisition”, “fair price”, “moratorium” or similar anti-takeover provision under the Amended and Restated Certificate of Incorporation, the Amended and Restated Bylaws, or applicable law (including Section
203 of the DGCL).
“Benefit Plan” or “Benefit Plans” means employee benefit plans as defined in Section 3(3) of ERISA and all other
employee benefit practices or arrangements, including, without limitation, any such practices or arrangements providing severance pay, sick leave, vacation pay, salary continuation for disability, retirement benefits, deferred compensation, bonus
pay, incentive pay, stock options or other stock-based compensation, hospitalization insurance, medical insurance, life insurance, scholarships or tuition reimbursements, maintained by the Company or to which the Company or any of its subsidiaries is
obligated to contribute for employees or former employees of the Company and its subsidiaries.
“Board of Directors” means the board of directors of the Company.
“Business Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which banking
institutions in the State of New York are authorized or required by law or other governmental action to close.
“Celadon Investor” means Celadon Partners SPV 24.
“Certificate of Designation” has the meaning set forth in the recitals.
“Closing” has the meaning set forth in Section 2.2.
“Closing Date” has the meaning set forth in Section 2.2.
“Code” means the U.S. Internal Revenue Code of 1986, as amended.
“Common Stock” has the meaning set forth in the recitals.
“Common Stock Equivalents” means any securities of the Company that would entitle the holder thereof to acquire at any time Common Stock, including, without
limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
“Company” has the meaning set forth in the recitals.
“Confidential Data” has the meaning set forth in Section 3.38.
2
“Confidential Information” means non-public information regarding the Company or its subsidiaries furnished by or on behalf of the Company, directly or
indirectly, to an Investor or its Representatives, together with all analyses, compilations, forecasts, studies or other documents prepared by the Investor or its Representatives which contain such information. “Confidential Information” shall not
include such portions of the Confidential Information that (a) are or become generally available to the public other than as a result of such Investor’s disclosure in violation of this Agreement, (b) become available to the Investor or its Affiliates
on a non-confidential basis from a source other than the Company or its subsidiaries, (c) were already in the Investor’s or its Representatives’ possession prior to the date on which such information was provided by or on behalf of the Company or (d)
are independently developed by the Investor or its Affiliates or Representatives without use of or reference to the Confidential Information.
“Contract” has the meaning set forth in Section 3.2(b).
“Conversion Shares” has the meaning set forth in the recitals.
“Designation Agreement” has the meaning set forth in Section 5.3.
“Disclosure Document” has the meaning set forth in Section 5.5.
“Disclosure Schedules” means the Disclosure Schedules of the Company delivered concurrently herewith.
“Disqualification Event” has the meaning set forth in Sections 3.34 and 4.14.
“Drug Regulatory Agency” means the U.S. Food and Drug Administration (“FDA”) or other foreign, state, local or
comparable governmental authority responsible for regulation of the research, development, testing, manufacturing, processing, storage, labeling, sale, marketing, advertising, distribution and importation or exportation of drug or biological products
and drug or biological product candidates.
“Environmental Laws” has the meaning set forth in Section 3.18.
“ERISA” means the U.S. Employee Retirement Income Security Act of 1974, as amended.
“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended, and all of the rules and regulations promulgated thereunder.
“Exempt Issuance” means the issuance of (a) shares of Common Stock, options to purchase shares of Common Stock, or other equity awards exercisable, convertible
or exchangeable for shares of Common Stock to employees, officers, directors or consultants of the Company pursuant to any stock-based compensation plans in effect on the date hereof and duly adopted for such purpose, by a majority of the
non-employee members of the Board of Directors or a majority of the members of a committee of non-employee directors established for such purpose for services rendered to the Company; provided that the issuance of any such securities to any
consultant (i) are issued as “restricted securities” (as defined in Rule 144) and carry no registration rights that require or permit the filing of any registration statement in connection therewith during the prohibition period in Section 5.13
herein or (ii) are subject to a written lock-up agreement for the term of prohibition period in Section 6.2(g) herein; (b) securities upon the exercise or exchange of or conversion of any Securities issued hereunder, and/or other securities
exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date of this Agreement, provided that such securities have not been amended since the date of this Agreement to increase the number of such
securities or to decrease the exercise price, exchange price or conversion price of such securities (other than in connection with stock splits or combinations) or to extend the term of such securities; (c) shares of Common Stock pursuant to the
Amended and Restated Common Stock Purchase Agreement, dated as of July 6, 2024 (as amended, restated or otherwise modified up to the date hereof), between the Company and Chardan Capital Markets LLC and (d) shares of Common Stock pursuant to the
Option Agreement by and the Company and GeneFab, LLC, dated August 7, 2023 (as may be amended, restated or otherwise modified from time to time).
3
“Financial Statements” has the meaning set forth in Section 3.8(b).
“Fundamental Representations” means the representations and warranties made by the Company in Sections 3.1 (Organization and Power), 3.2 (Capitalization), 3.4
(Authorization), 3.5 (Valid Issuance), 3.6 (No Conflict), 3.7 (Consents), 3.8 (SEC Filings; Financial Statements), 3.21 (Nasdaq Stock Market), 3.23 (Sarbanes-Oxley Act), 3.28 (Price Stabilization of Common Stock), 3.30 (Investment Company Act), 3.31
(General Solicitation; No Integration or Aggregation), 3.32 (Brokers and Finders), 3.33 (Reliance by the Investors), 3.34 (No Disqualification Events), 3.35 (Other Covered Persons) and 3.36 (No Additional Agreements).
“GAAP” has the meaning set forth in Section 3.8(b).
“Governmental Authorizations” has the meaning set forth in Section 3.13.
“Governmental Entity” means any supranational, national, state, municipal, local or foreign government, any court, tribunal, arbitrator or arbitral body
(public or private), administrative agency, commission or other governmental official, authority or instrumentality (including any legislature, commission, regulatory administrative authority, governmental agency, bureau, branch or department).
“Health Care Laws” has the meaning set forth in Section 3.25.
“HIPAA” has the meaning set forth in Section 3.38.
“Indemnified Person” has the meaning set forth in Section 5.12.
“Initial Closing” has the meaning set forth in Section 2.2.
“Intellectual Property” has the meaning set forth in Section 3.15.
“Investor” and “Investors” have the meanings set forth in the recitals.
“Issuer Covered Person” has the meaning set forth in Section 3.34.
“IT Systems” has the meaning set forth in Section 3.38.
“Laws” has the meaning set forth in Section 3.13.
4
“Lien” means any lien, mortgage, pledge, conditional or installment sale agreement, title defect, encumbrance, covenant, condition, restriction, charge, right
of first refusal, right of first offer, purchase option, easement, security interest, lease, deed of trust, right-of-way, encroachment, defect of title, occupancy right, community property interest or other similar restriction or encumbrance of any
kind, including any restriction on the use, voting, transfer or other exercise of any attributes of ownership.
“Material Adverse Effect” means any change, event, circumstance, development, condition, occurrence, state of facts or effect that, individually or in the
aggregate with any other change, event, circumstance, development, condition, occurrence, state of facts or effect, has or would reasonably be expected to have a material
adverse effect on (a) the business, financial condition, properties, assets (including intangible assets), liabilities (actual or contingent), stockholders’ equity or results of operations of the Company and its subsidiaries, taken as a
whole as currently conducted or as currently proposed to be conducted, (b) the legality or enforceability of any of the Transaction Documents or (c) the ability of
the Company to comply, including preventing or materially impairing the Company from complying, with its obligations under this Agreement, the other Transaction Agreements, or with respect to the Closing, or would reasonably be expected to do so.
“Material Contract” has the meaning set forth in Section 3.12.
“Nasdaq” means the Nasdaq Stock Market LLC.
“National Exchange” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question, together
with any successor thereto: the NYSE American, The New York Stock Exchange, the Nasdaq Global Market, the Nasdaq Global Select Market and the Nasdaq Capital Market.
“Permitted Liens” means (i) Liens for Taxes or other governmental charges not yet due and payable or the amount or validity of which is being contested in good
faith by appropriate proceedings by the Company or its subsidiaries and for which appropriate reserves have been established in accordance with GAAP; (ii) mechanics’, materialmen’s, carriers’, workers’, warehousemen’s, repairers’ and similar
statutory Liens arising or incurred in the ordinary course of business for amounts which are not delinquent and which are not, individually or in the aggregate, significant; (iii) zoning, entitlement, building and other land use regulations imposed
by Governmental Entities having jurisdiction over the leased real property and which are not violated by the current use or occupancy of such leased real property; (iv) covenants, conditions, restrictions, easements and other similar matters of
record affecting title to the leased real property and which are not violated by the current use or occupancy of such leased real property; (v) Liens arising under worker’s compensation, unemployment insurance, social security, retirement and similar
legislation; (vi) Liens arising in connection with sales of foreign receivables; (vii) Liens on goods in transit incurred pursuant to documentary letters of credit; and (viii) purchase money Liens and Liens securing rental payments under ordinary
course capital lease arrangements.
“Person” means an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association,
joint venture or any other entity or organization.
5
“Personal Data” has the meaning set forth in Section 3.38.
“Placement Agent” means Leerink Partners LLC.
“Privacy Laws” has the meaning set forth in Section 3.40.
“Privacy Statements” has the meaning set forth in Section 3.40.
“Process” or “Processing” has the meaning set forth in Section 3.40.
“Proposal” has the meaning set forth in Section 5.2.
“Purchase Option” has the meaning set forth in Section 2.2
“Registration Rights Agreement” has the meaning set forth in Section 6.1(j).
“Regulatory Agencies” has the meaning set forth in Section 3.24.
“Representatives” means a Person’s Affiliates, employees, agents, consultants, accountants, attorneys or financial advisors.
“Rule 144” means Rule 144 promulgated by the SEC pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the SEC having substantially the same effect as such Rule.
“SEC” means the U.S. Securities and Exchange Commission.
“SEC Reports” means (a) the Company’s most recently filed Annual Report on Form 10-K and (b)
all Quarterly Reports on Form 10-Q or Current Reports on Form 8-K filed or furnished (as applicable) by the Company following the end of the most recent fiscal year for which an Annual Report on Form 10-K has been filed, together in each case with
any documents incorporated by reference therein or exhibits thereto.
“Securities” has the meaning set forth in the recitals.
“Securities Act” means the U.S. Securities Act of 1933, as amended, and all of the rules and regulations promulgated thereunder.
“Series A Directors” has the meaning set forth in Section 5.3.
“Series A Preferred Stock” has the meaning set forth in the recitals.
“Short Sales” include, without limitation, (a) all “short sales” as defined in Rule 200 promulgated under Regulation SHO under the Exchange Act, whether or not
against the box, and all types of direct and indirect stock pledges, forward sale contracts, options, puts, calls, short sales, swaps, “put equivalent positions” (as defined in Rule 16a-1(h) under the Exchange Act) and similar arrangements (including
on a total return basis), and (b) sales and other transactions through non-U.S. broker dealers or non-U.S. regulated brokers (but shall not be deemed to include the location and/or reservation of borrowable shares of Common Stock).
6
“Studies” has the meaning set forth in Section 3.24.
“Subsequent Closing” has the meaning set forth in Section 2.
“Tax Returns” means returns, reports, information statements and other documentation (including any additional or supporting material) filed or maintained, or
required to be filed or maintained, in connection with the calculation, determination, assessment or collection of any Tax and shall include any amended returns required as a result of examination adjustments made by the Internal Revenue Service or
other Tax authority.
“Tax” or “Taxes” means any and all federal, state, local, foreign and other taxes, levies, fees, imposts, duties and
charges of whatever kind (including any interest, penalties or additions to the tax imposed in connection therewith or with respect thereto), whether or not imposed on the Company, including, without limitation, taxes imposed on, or measured by,
income, franchise, profits or gross receipts, and also ad valorem, value added, sales, use, service, real or personal property, capital stock, license, payroll, withholding, employment, social security, workers’ compensation, unemployment
compensation, utility, severance, production, excise, stamp, occupation, premium, windfall profits, transfer and gains taxes and customs duties.
“Transaction Agreements” means this Agreement, the Warrants, the Certificate of Designation, the Registration Rights Agreement, the Designation Agreements and
any other documents or agreements executed in connection with the transactions contemplated thereunder and hereunder.
“Transfer Agent” means, with respect to the Common Stock, Continental Stock Transfer and Trust Company or such other financial institution that provides
transfer agent services as the Company may engage from time to time.
“Warrant Shares” has the meaning set forth in Section 3.4.
“Warrants” has the meaning set forth in the recitals.
2. Purchase and Sale of Securities.
2.1 Purchase and Sale. On the applicable Closing Date, upon the terms and subject to the conditions set forth herein, the Company agrees to sell, and the Investors, severally
and not jointly, agree to purchase, the number of shares of Series A Preferred Stock and Warrants, for the aggregate purchase price, set forth opposite the Investor’s name on Exhibit A under the heading “Initial Closing” and, following notice
from the Celadon Investor (as defined below) pursuant to Section 2.2 and upon the terms and conditions set forth herein, as set forth opposite the Investor’s name on Exhibit A under the heading “Subsequent Closing.” The price per
share of Series A Preferred Stock and accompanying Warrant is $2,250.00.
7
2.2 Closing. Subject to the satisfaction or waiver of the conditions set forth in Section 5.8 of this Agreement, the closing of the purchase and sale of the shares of Series A Preferred Stock
and Warrants (the “Initial Closing” and together with the Subsequent Closing (as defined below), the “Closing” and the date on which the applicable Closing occurs, the
“Closing Date”) shall occur remotely via the exchange of documents and signatures at such time as agreed to by the Company and the Investors but (i) in no event earlier than the first Business Day after the
date of this Agreement and (ii) in no event later than the fifth Business Day after the date of this Agreement. On a date subsequent to the Initial Closing, the Company agrees, upon Celadon Partner SPV 24’s (the “Celadon
Investor’s”) election and delivery of written notice to the Company (which may be via e-mail), on a date no later than thirty (30) days following the Initial Closing (the “Subsequent Closing”), to
sell, and the Celadon Investor agrees to purchase up to the number of shares of Series A Preferred Stock and Warrants, for up to the aggregate purchase price as set forth opposite the Celadon Investor’s name on Exhibit A under the heading
“Subsequent Closing,” upon the terms and subject to the conditions set forth herein (the “Purchase Option”); provided that the Celadon Investor may transfer the right to purchase the shares of Series A
Preferred Stock and accompanying Warrants pursuant to the Purchase Option, to its Affiliates, other Investors or Persons not party to this Agreement; provided further, that any Subsequent Closing pursuant to the Purchase Option shall in no event
occur later than December 27, 2024. At the applicable Closing, (a) the shares of Series A Preferred Stock shall be issued and registered in the name of the Investor, or in such nominee name(s) as designated by such Investor, representing the number
of shares of Series A Preferred Stock to be purchased by the Investor at such Closing as set forth in Exhibit A and (b) the Company shall deliver to the Investor (or such Investor’s designated custodian per its delivery instructions), or in
such nominee name(s) as designated by such Investor, a Warrant exercisable for a number of shares of Common Stock as set forth in Exhibit A with respect to such Investor in each case against payment to the Company of the purchase price
therefor in full, by wire transfer to the Company of immediately available funds, at or prior to the applicable Closing, in accordance with wire instructions provided by the Company to the Investors no less than one Business Day prior to the
applicable Closing. On the applicable Closing Date, the Company will cause the Transfer Agent to issue the shares of Series A Preferred Stock in book-entry form, free and clear of all restrictive and other legends (except as expressly provided in Section
4.10). In the event that the applicable Closing has not occurred within one Business Day after the expected applicable Closing Date, unless otherwise agreed by the Company and such Investor, the Company shall promptly (but no later than one
Business Day thereafter) return the previously wired amounts to each respective Investor by wire transfer of United States dollars in immediately available funds to the account specified by each Investor, and any book entries for the shares of
Series A Preferred Stock and Warrants shall be deemed cancelled; provided that, unless this Agreement has been terminated pursuant to Section 7, such return of funds shall not terminate this Agreement or relieve such Investor of its
obligation to purchase, or the Company of its obligation to issue and sell, the Series A Preferred Stock and Warrants at the applicable Closing.
3. Representations and Warranties of the Company. Except as set forth in the SEC Reports, excluding (i) any exhibits to the SEC Reports and (ii) any risk factor disclosures, any
“forward-looking statements” or similar disclaimer and any other forward-looking statements contained in the SEC Reports (other than as to the Fundamental Representations, which are not so qualified by the SEC Reports), or the Disclosure Schedules, which applicable disclosures in the SEC Reports and the Disclosure Schedules shall be deemed a part hereof and shall qualify any representation or otherwise made
herein to the extent the applicability of the disclosure contained in the corresponding section of the SEC Reports or the Disclosure Schedules is reasonably apparent from the face of such disclosure, the Company hereby represents and warrants to each
of the Investors and the Placement Agent that the statements contained in this Section 3 are true and correct as of the date of this Agreement and as of the applicable Closing Date (except for the representations and warranties that speak as
of a specific date, which shall be made as of such date).
8
3.1 Organization and Power. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, has the requisite power and
authority to own, lease and operate its properties and to carry on its business as now conducted and described in the SEC Reports and is qualified to do business in each jurisdiction in which the character of its properties or the nature of its
business requires such qualification, except where such failure to be in good standing or to have such power and authority or to so qualify would not reasonably be expected to have a Material Adverse Effect. Each of the Company’s subsidiaries is (i)
duly incorporated and validly existing and in good standing under the laws of the jurisdiction of its incorporation and has the requisite power and authority to carry on its business as now conducted and to own or lease its properties and (ii)
qualified to do business as a foreign corporation and in good standing in each jurisdiction in which such qualification is required, except in each case as would not cause a Material Adverse Effect.
3.2 Capitalization.
(a) The Company’s disclosure of its authorized, issued and outstanding capital stock, including disclosure of its issued and outstanding common stock, common stock options, restricted stock
units, performance stock units, and obligations to potentially issue shares of common stock pursuant to earnouts or the GeneFab Option, on the cover page and in the chart in Note 7 of the Company’s Form 10-Q for the quarterly period ended September
30, 2024 was accurate in all material respects as of the date indicated in such SEC Report. Since the date indicated in such SEC Report, except as set forth in the Disclosure Schedules, there has not been any change in the Company’s capital stock,
including in any options, restricted stock units, performance stock units or other obligations to issue shares of common stock. All of the issued and outstanding shares of the Company’s capital stock have been duly authorized and validly issued and
are fully paid and nonassessable; none of such shares were issued in violation of any preemptive rights; and such shares were issued in compliance in all material respects with applicable state and federal securities law and any rights of third
parties.
(b) The shares of Series A Preferred Stock, Conversion Shares and the Warrant Shares have been duly authorized and, when issued in accordance with the terms hereof, with respect to the Series
A Preferred Stock, and with respect to the Conversion Shares, the terms of the Certificate of Designation, and with respect to the Warrant Shares, the terms of the Warrants, the shares of Series A Preferred Stock, Conversion Shares and the Warrant
Shares will be, duly authorized and validly issued and fully paid and non-assessable and will not be subject to any preemptive right, right of first refusal or similar right or any restrictions on transfer under applicable Law or any mortgage, loan
or credit agreement, indenture, bond, note, deed of trust, lease, sublease, license, contract or other agreement (each, a “Contract”) to which the Company is a party, other than, in the case of restrictions on
transfer, those under applicable state and federal securities laws and Sections 4.10 and 6.2(g) of this Agreement. No share of Common Stock has been, and none of the shares of Series A Preferred Stock, Conversion Shares or Warrant Shares will be when
issued, issued in violation of any preemptive right arising by operation of Law, under the Certificate of Incorporation, the Bylaws or any Contract, or otherwise. None of the shares of Series A Preferred Stock, Conversion Shares or Warrant Shares
will be when issued subject to any restrictions on transfer under applicable Law or any Contract to which the Company is a party, other than, in the case of restrictions on transfer, those under applicable state and federal securities laws, and
Sections 4.10 and 6.2(g) of this Agreement. When issued in accordance with the terms hereof and the terms of the Certificate of Designation or the Warrants (as applicable), the shares of Series A Preferred Stock, Conversion Shares and the Warrant
Shares will be free and clear of all Liens (other than Liens incurred by Purchaser or its Affiliates, restrictions arising under applicable securities laws, or restrictions imposed by this Agreement, the Certificate of Designation or the Registration
Rights Agreement).
9
(c) No Person is entitled to preemptive or similar statutory or contractual rights with respect to the issuance by the Company of any securities of the Company, including, without
limitation, the Securities.
(d) Except for the Registration Rights Agreement or otherwise irrevocably waived by all of the parties thereto, there are no voting agreements, buy-sell agreements, option or right of first
purchase agreements or other agreements of any kind among the Company and any of the securityholders of the Company relating to the securities of the Company held by them.
(e) Except as otherwise expressly described in this Section 3.2 or as disclosed in Section 3.2 of the Disclosure Schedules: (i) no subscription, warrant, option, convertible security or
other right, commitment, agreement, arrangement issued by the Company or any other obligation of the Company to purchase or acquire any shares of capital stock of the Company is authorized or outstanding; (ii) there is no commitment, agreement,
arrangement or obligation of the Company to issue any subscription, warrant, option, convertible security or other such right or to issue or distribute capital stock of, or other equity or voting interest (or voting debt) in, the Company; (iii) the
Company has no obligation to purchase, redeem or otherwise acquire any shares of its capital stock or to pay any dividend or make any other distribution in respect thereof; (iv) there are no obligations of the Company to grant, extend or enter into
any subscription, warrant, right, convertible or exchangeable security or other similar agreement or commitment relating to any capital stock of, or other equity or voting interests (or voting debt) in, the Company; (v) there are no outstanding
shares of capital stock of, or other equity or voting interests of any character in, the Company as of the date hereof other than shares that have become outstanding after the Capitalization Date which were reserved for issuance as described in the
portion of the SEC Reports described in Section 3.2(a) or pursuant to the exercise or vesting, as applicable, after the Capitalization Date, of outstanding stock options, restricted stock units, warrants or performance-based restricted stock units
described in this Section 3.2, or stock options, restricted stock units, warrants or performance-based restricted stock units issued and subsequently exercised or vested, as applicable, after the Capitalization Date; (vi) there are no agreements,
arrangements or commitments between the Company and any Person relating to the acquisition, disposition or voting of the capital stock of, or other equity or voting interest (or voting debt) in, the Company; and (vii) there are no equity
appreciation, phantom equity, profit participation or similar rights with respect to the Company or any of its capital stock or equity interests.
3.3 Registration Rights. Except as set forth in the Transaction Agreements or as disclosed in the SEC Reports, the Company is presently not under any obligation, and has not granted
any rights, to register under the Securities Act any of the Company’s presently outstanding securities or any of its securities that may hereafter be issued, other than such rights and obligations that have expired or been satisfied or waived.
10
3.4 Authorization. The Company has all requisite corporate power and authority to enter into the Transaction Agreements and to carry out and perform its obligations under the terms
of the Transaction Agreements, including (i) the issuance and sale of the shares of Series A Preferred Stock and Warrants, (ii) the issuance of the Conversion Shares in accordance with the terms of the Certificate of Designation and (iii) the
issuance of the shares of Common Stock issuable upon exercise of the Warrants in accordance with the terms thereof (the “Warrant Shares”). The Board of Directors, or a committee thereof duly authorized by
resolution of the Board of Directors (which resolutions have been provided to all Investors), has approved the execution, delivery and performance by the Company of all Transaction Agreements and the consummation of all transactions contemplated by
the Transaction Agreements, including for purposes of Section 203 of the Delaware General Corporation Law, and has taken all action necessary to render inapplicable any Antitakeover Provision or other Law that is or would have been applicable to any
or all of the Investors. All corporate action on the part of the Company, its officers, directors and stockholders necessary for the authorization of the shares of Series A Preferred Stock, Conversion Shares and the Warrant Shares, the
authorization, execution, delivery and performance of the Transaction Agreements and the consummation of the transactions contemplated herein, including the issuance and sale of the shares of Series A Preferred Stock, Conversion Shares and the
Warrant Shares, has been taken. This Agreement has been duly executed and delivered by the Company and, assuming the due authorization, execution and delivery by each Investor and that this Agreement constitutes the legal, valid and binding
agreement of each Investor, this Agreement and each of the Warrants constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium and similar laws relating to or affecting creditors generally or by general equity principles (regardless of whether such enforceability is considered in a proceeding in equity or at law). Upon its
execution by the Company and the other parties thereto and assuming that it constitutes legal, valid and binding agreements of the other parties thereto, the Registration Rights Agreement will constitute a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and similar laws relating to or affecting creditors generally or by general
equity principles (regardless of whether such enforceability is considered in a proceeding in equity or at law). Any member of the Board of Directors who is an Investor or an Affiliate of an Investor recused themselves from all votes of the Board of
Directors (or any committee of the Board of Directors) pricing and approving the transactions contemplated by the Transaction Agreements. There are no agreements or understandings with any Investor with respect to the transactions contemplated by the
Transaction Agreements other than as specified in the Transaction Agreements.
11
3.5 Valid Issuance. The shares of Series A Preferred Stock being purchased by the Investors hereunder have been duly and validly authorized and, upon issuance pursuant to the terms of
this Agreement against full payment therefor in accordance with the terms of this Agreement, will be duly and validly issued, fully paid and non-assessable and will be issued free and clear of any Liens or other restrictions (other than those as
provided in the Transaction Agreements or restrictions on transfer under applicable state and federal securities laws), and the holder of the shares of Series A Preferred Stock shall be entitled to all rights accorded to a holder of Series A
Preferred Stock until such shares of Series A Preferred Stock are converted to Common Stock. The Conversion Shares issuable upon conversion of the shares of Series A Preferred Stock in accordance with the terms of the Certificate of Designation will
be validly issued, fully paid and non-assessable and will be issued free and clear of any Liens or other restrictions (other than those as provided in the Transaction Agreements or restrictions on transfer under applicable state and federal
securities laws), and the holder of the Conversion Shares shall be entitled to all rights accorded to a holder of Common Stock. The Warrant Shares have been duly and validly authorized and reserved for issuance and, upon issuance pursuant to the
terms of the Warrants against full payment therefor in accordance with the terms of the Warrants, will be duly and validly issued, fully paid and non-assessable and will be issued free and clear of any Liens or other restrictions (other than those as
provided in the Transaction Agreements or restrictions on transfer under applicable state and federal securities laws), and the holder of the Warrant Shares shall be entitled to all rights accorded to a holder of Common Stock. Subject to the
accuracy of the representations and warranties made by the Investors in Section 4, the offer and sale of the shares of Series A Preferred Stock and Warrants to the Investors is and will be in compliance with applicable exemptions from (i) the
registration and prospectus delivery requirements of the Securities Act and (ii) the registration and qualification requirements of applicable securities laws of the states of the United States.
3.6 No Conflict. The execution, delivery and performance of the Transaction Agreements by the Company, the issuance and sale of the
Securities and the consummation of the other transactions contemplated by the Transaction Agreements, including the filing of the Certificate of Designation, does not and will not (i) violate any provision of the Amended and Restated Certificate of
Incorporation or Amended and Restated Bylaws of the Company, (ii) conflict with or result in a breach of or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any
obligation, a change of control right or to a loss of a benefit under any agreement or instrument, credit facility, franchise, license, judgment, order, statute, law, ordinance, rule or regulations (including the Nasdaq Listing Rules), applicable to
the Company or any of its subsidiaries or their respective properties or assets, (iii) result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or
governmental authority to which the Company or any of its subsidiaries is subject (including federal and state securities laws and regulations) and the rules and regulations (including the Nasdaq Listing Rules) of any self-regulatory organization to which the Company or its securities are subject, or by which any property or asset of the Company or any of its subsidiaries is bound or affected, or (iv) result in the creation of any Lien upon any
assets of the Company or any of its subsidiaries or the suspension, revocation or forfeiture of any franchise, permit or license granted by a Governmental Entity to the Company or any of its subsidiaries, other than Liens under federal or state
securities laws, except, in the case of clauses (ii) and (iii), as would not, individually or in the aggregate, be reasonably expected to have a Material Adverse Effect.
12
3.7 Consents. Assuming the accuracy of the representations and warranties of the Investors, no consent, approval, authorization, filing with or order of or registration with, any
court or governmental agency or body (including Nasdaq) is required in connection with the authorization, execution or delivery by the Company of the Transaction Agreements, the issuance and sale of the Securities and the performance by the Company
of its other obligations under the Transaction Agreements, except such as (a) have been or will be obtained or made under the Securities Act or the Exchange Act, (b) the filing of any requisite notices and/or application(s) to the National Exchange
for the issuance and sale of the shares of Series A Preferred Stock, the Conversion Shares or the Warrant Shares and the listing of the Conversion Shares or the Warrant Shares for trading or quotation, as the case may be, thereon in the time and
manner required thereby, (c) customary post-closing filings with the SEC or pursuant to state securities laws in connection with the offer and sale of the shares of Series A Preferred Stock, the Conversion Shares, the Warrants or the Warrant Shares
by the Company in the manner contemplated herein, which will be filed on a timely basis, (d) the filing of the registration statement required to be filed by the Registration Rights Agreement, or (e) such that the failure of which to obtain would not
have a Material Adverse Effect. All notices, consents, authorizations, orders, filings and registrations which the Company is required to deliver or obtain prior to the Closing pursuant to the preceding sentence have been obtained or made or will be
delivered or obtained or effected, and shall remain in full force and effect, on or prior to the Closing.
3.8 SEC Filings; Financial Statements.
(a) The Company has filed all forms, statements, certifications, reports and documents required to be filed by it with the SEC under Section 13, 14(a) and 15(d) of the Exchange Act for the
one year preceding the date of this Agreement and is in compliance with General Instruction I.A.3 of Form S-3. As of the time it was filed with the SEC (or, if amended or superseded by a filing prior to the date of this Agreement, then on the date
of such filing), each of the filed SEC Reports complied in all material respects with the applicable requirements of the Exchange Act, and, as of the time they were filed, none of the filed SEC Reports contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. There are no outstanding or unresolved comments
from the SEC staff with respect to the SEC Reports. To the Company’s knowledge, none of the SEC Reports are the subject of an ongoing SEC review.
(b) The financial statements of the Company included in the SEC Reports (collectively, the “Financial Statements”) comply in all material respects with
applicable accounting requirements and the rules and regulations of the SEC with respect thereto as in effect at the time of filing (or to the extent corrected by a subsequent restatement) and fairly present in all material respects the consolidated
financial position of the Company as of the dates indicated, and the results of its operations and cash flows for the periods therein specified, all in accordance with United States generally accepted accounting principles (“GAAP”) (except as otherwise noted therein, and in the case of unaudited financial statements, as permitted by Form 10-Q under the Exchange Act, and except that the unaudited financial statements may not contain footnotes and are
subject to normal and recurring year-end adjustments) applied on a consistent basis throughout the periods therein specified (unless otherwise noted therein). Except as set forth in the Financial Statements filed prior to the date of this Agreement,
the Company has not incurred any liabilities, contingent or otherwise, except (i) those incurred in the ordinary course of business, consistent with past practices since the date of such financial statements or (ii) liabilities not required under
GAAP to be reflected in the Financial Statements, in either case, none of which, individually or in the aggregate, have had or would reasonably be expected to have a Material Adverse Effect.
13
3.9 Subsidiaries. Other than any subsidiaries of the Company acquired or formed following the filing of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021,
the Company’s subsidiaries consist solely of all the entities listed on Exhibit 21.1 to the Company’s Form 10-K for the year ended December 31, 2021. The Company, directly or indirectly, owns of record and beneficially, free and clear of all Liens
other than Permitted Liens, all of the issued and outstanding capital stock or equity interests of each of its subsidiaries. All of the issued and outstanding capital stock or equity interests of the Company’s subsidiaries has been duly authorized
and validly issued, were not issued in violation of a preemptive right, right of first refusal or similar right, and in the case of corporations, is fully paid and non-assessable. There are no outstanding rights, options, warrants, preemptive rights,
conversion rights, rights of first refusal or similar rights for the purchase or acquisition from any of the Company’s subsidiaries of any securities of such subsidiaries nor are there any commitments to issue or execute any such rights, options,
warrants, preemptive rights, conversion rights or rights of first refusal.
3.10 Absence of Changes. Between December 31, 2023 and the date of this Agreement, (a) the Company has conducted its business only in the ordinary course of business and there have been
no material transactions entered into by the Company (except for the execution and performance of this Agreement and the discussions, negotiations and transactions related thereto); (b) no material change to any material contract or arrangement by
which the Company is bound or to which any of its assets or properties is subject has been entered into that has not been disclosed in the SEC Reports; and (c) there has not been any other event or condition of any character that has had or would
reasonably be expected to have a Material Adverse Effect; provided, however, that none of the following will be deemed in themselves, either alone or in combination, to constitute, and that none of the following will be taken into account in
determining whether there has been or will be, a Material Adverse Effect under this Section 3.10:
(i) any change generally affecting the economy, financial markets or political, economic or regulatory conditions in the United States or any other geographic region in which the Company
conducts business, provided that the Company is not disproportionately affected thereby;
(ii) general financial, credit or capital market conditions, including interest rates or exchange rates, or any changes therein, provided that the Company is not disproportionately affected
thereby;
(iii) any change that generally affects industries in which the Company and its subsidiaries conduct business, provided that the Company is not disproportionately affected thereby;
(iv) earthquakes, hurricanes, tsunamis, tornadoes, floods, mudslides, fires or other natural disasters, weather conditions, global pandemics, including the COVID-19 pandemic and related strains,
epidemic or similar health emergency, and other force majeure events in the United States or any other location, provided that the Company is not disproportionately affected thereby;
(v) national or international political or social conditions (or changes in such conditions), whether or not pursuant to the declaration of a national emergency or war, or the occurrence of
any military or terrorist attack, provided that the Company is not disproportionately affected thereby;
14
(vi) material changes in laws after the date of this Agreement; and
(vii) in and of itself, any material failure by the Company to meet any published or internally prepared estimates of revenues, expenses, earnings or other economic performance for any period
ending on or after the date of this Agreement (it being understood that the facts and circumstances giving rise to such failure may be deemed to constitute, and may be taken into account in determining whether there has been, a Material Adverse
Effect to the extent that such facts and circumstances are not otherwise described in clauses (i)-(v) of this definition).
3.11 Absence of Litigation. There is no action, suit, proceeding, arbitration, claim, investigation, charge, complaint or inquiry pending or, to the Company’s knowledge, threatened
against the Company or any of its subsidiaries which, individually or in the aggregate, has had or would reasonably be expected to have a Material Adverse Effect, nor are there any orders, writs, injunctions, judgments or decrees outstanding of any
court or government agency or instrumentality and binding upon the Company or any of its subsidiaries that have had or would reasonably be expected to have a Material Adverse Effect. Neither the Company nor any
subsidiary, nor to the knowledge of the Company, any director or officer of the Company or any subsidiary, is, or within the last ten years has been, the subject of any action involving a claim of violation of or liability under federal or state
securities laws relating to the Company or such subsidiary or a claim of breach of fiduciary duty relating to the Company or such subsidiary.
3.12 Contracts. Each Contract that is a “material contract” (as such term is defined in Item 601(b)(10) of Regulation S-K promulgated by the SEC), in each case, to which the
Company or any of its subsidiaries is a party or by which the Company, any of its subsidiaries or any of their respective properties or assets is bound (each, a “Material Contract”) is valid and binding on the
Company and any of its subsidiaries to the extent such Person is a party thereto, as applicable, and to the knowledge of the Company, each other party thereto, and is in full force and effect, except where the failure to be valid, binding or in full
force and effect, individually or in the aggregate, has not had and would not reasonably be expected to have a Material Adverse Effect. The Company and each of its subsidiaries, and, to the knowledge of the Company, any other party thereto, is in
compliance in all material respects with all Material Contracts and has performed all obligations required to be performed by it, except where such noncompliance, individually or in the aggregate, has not had and would not reasonably be expected to
have a Material Adverse Effect.
3.13 Compliance with Law; Permits. Neither the Company nor any of its subsidiaries is, or at any time during the last two years has been, in violation of, or has received any notices
of violations with respect to, any laws, statutes, ordinances, rules or regulations (collectively, “Laws”) of
any Governmental Entity, except for violations which, individually or in the aggregate, have not had and would not reasonably be expected to have a Material Adverse Effect. The Company and its subsidiaries have all required licenses, permits,
certificates and other authorizations (collectively, “Governmental Authorizations”) from such Governmental Entities that are currently necessary for the operation of the business of the Company and its
subsidiaries as currently conducted, except where the failure to possess currently such Governmental Authorizations has not had and is not reasonably expected to have a Material Adverse Effect. Neither the Company nor any subsidiary has received any
written (or, to the Company’s knowledge, oral) notice regarding any revocation or material modification of any such Governmental Authorization, which, individually or in the aggregate, if the subject of an unfavorable decision, ruling or finding, has
or would reasonably be expected to result in a Material Adverse Effect.
15
3.14 Labor Matters.
(a) Neither the Company nor any of its subsidiaries is party to or bound by any collective bargaining agreements or other agreements with labor organizations. To the Company’s knowledge,
neither the Company nor any of its subsidiaries has violated in any material respect any laws, regulations, orders or contract terms affecting the collective bargaining rights of employees or labor organizations, or any laws, regulations or orders
affecting employment discrimination, equal opportunity employment, or employees’ health, safety, welfare, wages and hours.
(b) No material labor dispute with the employees of the Company or any of its subsidiaries, or with the employees of any principal supplier, manufacturer, customer or contractor of the
Company or any of its subsidiaries, exists or, to the Company’s knowledge, is threatened or imminent.
3.15 Intellectual Property. The Company and its subsidiaries own, or have rights to use, all material inventions, patent applications, patents, trademarks, trade names, service names,
service marks, copyrights, trade secrets, know how (including unpatented and/or unpatentable proprietary or confidential information, systems or procedures) and other intellectual property as described in the SEC Reports necessary for, or used in
the conduct of their respective businesses (including as described in the SEC Reports) (collectively, “Intellectual Property”), except where any failure to own, possess or acquire such Intellectual Property has
not had, and would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Intellectual Property of the Company and its subsidiaries has not been adjudged by a court of competent jurisdiction to be
invalid or unenforceable, in whole or in part. To the Company’s knowledge (after reasonable inquiry): (i) there are no third parties who have rights to any Intellectual Property, including no Liens, security interests, or other encumbrances; and
(ii) there is no infringement by third parties of any Intellectual Property, except, in each case, which, individually or in the aggregate, have not had and would not reasonably be expected to have a Material Adverse Effect. No action, suit, or
other proceeding is pending, or, to the Company’s knowledge, is threatened: (A) challenging the Company’s or its subsidiaries’ rights in or to any Intellectual Property; (B) challenging the validity, enforceability or scope of any Intellectual
Property; or (C) alleging that the Company or any of its subsidiaries infringes, misappropriates, or otherwise violates any patent, trademark, trade name, service name, copyright, trade secret or other proprietary rights of others, except, in each
case, which, individually or in the aggregate, have not had and would not reasonably be expected to have a Material Adverse Effect. The Company and its subsidiaries have complied in all material respects with the terms of each agreement pursuant to
which Intellectual Property has been licensed to the Company or any of its subsidiaries in all material respects, and all such agreements are in full force and effect. There are no material defects in any of the patents or patent applications
included in the Intellectual Property. The Company and its subsidiaries have taken all reasonable steps to protect, maintain and safeguard their Intellectual Property.
16
3.16 Employee Benefits. Except as would not be reasonably likely to result in a Material Adverse Effect, each Benefit Plan has been established and administered in accordance with its
terms and in compliance with the applicable provisions of ERISA, the Code, the Patient Protection and Affordable Care Act of 2010, as amended, and other applicable laws, rules and regulations. The Company and its subsidiaries are in compliance with
all applicable federal, state and local laws, rules and regulations regarding employment, except for any failures to comply that are not reasonably likely, individually or in the aggregate, to have a Material Adverse Effect. There is no labor
dispute, strike or work stoppage against the Company or its subsidiaries pending or threatened which may interfere with the business activities of the Company, except where such dispute, strike or work stoppage is not reasonably likely, individually
or in the aggregate, to have a Material Adverse Effect.
3.17 Taxes. The Company and its subsidiaries have filed all federal, state and foreign income Tax Returns and other Tax Returns required to have been filed under applicable law (or
extensions have been duly obtained) and have paid all Taxes required to have been paid by them, except for those which are being contested in good faith and except where failure to file such Tax Returns or pay such Taxes would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect. No assessment in connection with United States federal tax returns has been made against the Company. The charges, accruals and reserves on the books of the Company in respect
of any income and corporation tax liability for any years not finally determined are adequate to meet any assessments or reassessments for additional income tax for any years not finally determined, except to the extent of any inadequacy that would
not result in a Material Adverse Effect. No audits, examinations, or other proceedings with respect to any material amounts of Taxes of the Company and its subsidiaries are presently in progress or have been asserted or proposed in writing without
subsequently being paid, settled or withdrawn. There are no Liens on any of the assets of the Company. At all times since inception, the Company has been and continues to be classified as a corporation for U.S. federal income tax purposes. Neither
the Company nor any of its subsidiaries has been a United States real property holding corporation within the meaning of Code Section 897(c)-2 during the period specified in Code Section 897(c)(1)(A)(ii).
3.18 Environmental Laws. The Company and its subsidiaries (i) are in compliance with any and all applicable foreign, federal, state and local laws and regulations relating to the
protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”), (ii) have received all permits and other Governmental
Authorizations required under applicable Environmental Laws to conduct their business and (iii) are in compliance with all terms and conditions of any such permit, license or approval, except where such noncompliance with Environmental Laws, failure
to receive required permits, licenses or other approvals or failure to comply with the terms and conditions of such permits, licenses or approvals would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
None of the Company nor any of its subsidiaries has received since January 1, 2023, any written notice or other communication (in writing or otherwise), whether from a governmental authority or other Person, that alleges that the Company or any
subsidiary is not in compliance with any Environmental Law and, to the knowledge of the Company, there are no circumstances that may prevent or interfere with the Company’s or any subsidiary’s compliance in any material respects with any
Environmental Law in the future, except where such failure to comply would not reasonably be expected to have a Material Adverse Effect. To the knowledge of the Company: (i) no current or (during the time a prior property was leased or controlled by
the Company) prior property leased or controlled by the Company or any subsidiary has received since January 1, 2023, any written notice or other communication relating to property owned or leased at any time by the Company, whether from a
governmental authority, or other Person, that alleges that such current or prior owner or the Company or any subsidiary is not in compliance with or violated any Environmental Law relating to such property and (ii) the Company has no material
liability under any Environmental Law.
17
3.19 Title. Each of the Company and its subsidiaries has good and marketable title to all personal property owned by it that is material to the business of the Company, free and clear
of all Liens, encumbrances and defects except such as do not materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Company or its subsidiaries, as the case may be. Any
real property and buildings held under lease by the Company or its subsidiaries is held under valid, subsisting and enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed to be made of such
property and buildings by the Company or its subsidiaries, as the case may be. The Company does not own any real property.
3.20 Insurance. The Company carries or is entitled to the benefits of insurance in such amounts and covering such risks that is customary for comparably situated companies and is
adequate for the conduct of its business and the value of its real and personal properties (owned or leased) and tangible assets, and each of such insurance policies is in full force and effect and the Company is in compliance in all material
respects with the terms of such insurance policies. Other than customary end-of-policy notifications from insurance carriers, since January 1, 2023, the Company has not received any notice or other communication regarding any actual or possible: (i)
cancellation or invalidation of any material insurance policy or (ii) refusal or denial of any coverage, reservation of rights or rejection of any material claim under any insurance policy.
3.21 Nasdaq Stock Market. The issued and outstanding shares of Common Stock are registered pursuant to Section 12(b) of the Exchange Act and are listed for trading on the Nasdaq
Capital Market under the symbol “SNTI”. The Company is in compliance with all listing requirements of Nasdaq applicable to the Company. There is no suit, action, proceeding or investigation pending or, to the knowledge of the Company, threatened
against the Company by Nasdaq or the SEC, respectively, to prohibit or terminate the listing of the Common Stock on the Nasdaq Capital Market or to deregister the Common Stock under the Exchange Act. The Company has taken no action as of the date of
this Agreement that is designed to, or could reasonably be expected to, terminate the listing of the Common Stock on the Nasdaq Capital Market or the registration of the Common Stock under the Exchange Act.
3.22 Indebtedness.
(a) As of the date of this Agreement, the Company is not party to any agreement that by its terms restricts, limits, prohibits or prevents the Company from paying dividends or other
distributions of or on equity interests.
18
(b) As of the date of this Agreement, the Company is not party to any agreement relating to (x) the incurrence or assumption of any indebtedness or to mortgaging, pledging or otherwise placing
a Lien on any material portion of the assets of the Company or its Subsidiaries or to mortgaging, pledging or otherwise placing a Lien (other than a Permitted Lien) securing any obligation in excess of $500,000 on any assets of the Company or its
Subsidiaries or (y) any guaranty of any indebtedness or other material guaranty.
3.23 Sarbanes-Oxley Act. The Company is, and since January 1, 2023 has been, in compliance in all material respects with all applicable requirements of the Sarbanes-Oxley Act of 2002 and
applicable rules and regulations promulgated by the SEC thereunder.
3.24 Clinical Data and Regulatory Compliance. (i) All materials, preclinical tests and clinical trials and other studies used to support regulatory approval (collectively, “Studies”) previously conducted or being conducted by the Company are described in, or the results of which are referred to in, the SEC Reports, and the Studies were (and, if still pending, are being) conducted in
all material respects in accordance with the protocols, procedures and controls designed and approved for such Studies and with standard medical and scientific research procedures for products or product candidates comparable to those being developed
by the Company and its subsidiaries and all applicable statutes and all applicable rules and regulations of the FDA or from any other U.S. federal, state or local government or foreign government or Drug Regulatory Agency, or Institutional Review
Board, each having jurisdiction over biopharmaceutical products (collectively, the “Regulatory Agencies”); (ii) each description of the results of such Studies is accurate and complete in all material respects
and fairly presents the data derived from such Studies, and the Company and its subsidiaries have no knowledge of any other studies the results of which are inconsistent with, or otherwise call into question, the results described or referred to in
the SEC Reports when viewed in the context in which such results are described and the stage of development of the Company’s product candidates; (iii) the Company and its subsidiaries have made all such filings and obtained all such approvals as may
be required by the Regulatory Agencies for the conduct of its business as described in the SEC Reports, except where such non-compliance would not, individually or in the aggregate, have a Material Adverse Effect;
and (iv) neither the Company nor any of its subsidiaries has received any written notice of, or correspondence from, any of the Regulatory Agencies requiring or threatening the termination material modification or suspension of or imposing any
clinical hold on any preclinical studies or clinical trials that are described or referred to in the SEC Reports.
19
3.25 Compliance with Health Care Laws. The Company and its subsidiaries are in compliance in all material respects with all Health Care Laws to the extent applicable to the Company’s
current business. For purposes of this Agreement, “Health Care Laws” means: (i) the Federal Food, Drug, and Cosmetic Act (21 U.S.C. Section 301 et seq.) and the Public Health Service Act (42 U.S.C. Section 201
et seq.), and the regulations promulgated thereunder; (ii) all applicable federal, state, local and foreign health care fraud and abuse laws, including, without limitation, the Anti-Kickback Statute (42 U.S.C. Section 1320a-7b(b)); (iii) HIPAA, as
amended by the Health Information Technology for Economic and Clinical Health Act (42 U.S.C. Section 17921 et seq.); (iv) the European Union (“EU”) Clinical Trials Regulation (Regulation (EU) No. 536/2014); (v)
the EU Regulation regarding community procedures for authorization and supervision of medicinal products for human and veterinary use and establishing a European Medicines Agency (Regulation (EC) No. 726/2004); (vi) licensure, quality, safety and
accreditation requirements under applicable federal, state, local or foreign laws or regulatory bodies; (vii) all other local, state, federal laws, relating to the regulation of the Company or its subsidiaries, and (viii) the regulations promulgated
pursuant to such statutes. Neither the Company nor any of its subsidiaries has received written notice of any claim, action, suit, proceeding, hearing, enforcement, investigation, arbitration or other action from any court or arbitrator or
governmental or regulatory authority or third party alleging that any product operation or activity is in material violation of any Health Care Laws nor, to the Company’s knowledge, is any such claim, action, suit, proceeding, hearing, enforcement,
investigation, arbitration or other action threatened. The Company and its subsidiaries have filed, maintained or submitted all material reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments as
required by any Health Care Laws, and all such reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments were complete and accurate on the date filed in all material respects (or were corrected or
supplemented by a subsequent submission). Neither the Company nor any of its subsidiaries is a party to any corporate integrity agreements, monitoring agreements, consent decrees, settlement orders, or similar agreements with or imposed by any
governmental or regulatory authority. Additionally, neither the Company nor any of its subsidiaries nor any of their respective employees, officers, directors, or, to the knowledge of the Company, agents has been excluded, suspended or debarred from
participation in any U.S. federal health care program or human clinical research or, to the knowledge of the Company, is subject to a governmental inquiry, investigation, proceeding, or other similar action that would reasonably be expected to result
in debarment, suspension, or exclusion.
3.26 Internal Control Over Financial Reporting. The Company has disclosed, based on its most recent evaluation prior to the date hereof, to the Company’s outside auditors and the Audit
Committee of the Board of Directors (a) any significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that are reasonably likely to
adversely affect the Company’s ability to record, process, summarize and report financial information and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal
control over financial reporting.
3.27 Accounting Controls and Disclosure Controls and Procedures. The Company maintains, and at all time since January 1, 2023 has maintained, a system of internal control over
financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes
in accordance with GAAP, including policies and procedures sufficient to provide reasonable assurance (i) that the Company maintains records that in reasonable detail accurately and fairly reflect the Company’s transactions and dispositions of
assets, (ii) that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, (iii) that receipts and expenditures are made only in accordance with authorizations of management and the Board of
Directors and (iv) regarding prevention or timely detection of the unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the Company’s financial statements. Except as disclosed in the Company’s SEC
Reports filed prior to the date of this Agreement, the Company has not identified any material weaknesses in the design or operation of the Company’s internal control over financial reporting. The Company’s “disclosure controls and procedures” (as
defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) are designed to provide reasonable assurance that all information (both financial and non-financial) required to be disclosed by the Company in the reports that it files or submits under
the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that all such information is accumulated and communicated to the Company’s management as appropriate to allow
timely decisions regarding required disclosure.
20
3.28 Price Stabilization of Common Stock. The Company has not taken, nor will it take, directly or indirectly, any action designed to stabilize or manipulate the price of the Common
Stock to facilitate the sale or resale of the Conversion Shares or the Warrant Shares.
3.29 Investment Company Act. The Company is not required to be registered as, and immediately after receipt of payment for the Securities will not be required to register as, an
“investment company” within the meaning of the U.S. Investment Company Act of 1940, as amended.
3.30 General Solicitation; No Integration or Aggregation. Neither the Company nor any other person or entity authorized by the Company to act on its behalf has engaged in a general
solicitation or general advertising (within the meaning of Regulation D of the Securities Act) of investors with respect to offers or sales of Securities pursuant to this Agreement. The Company has not, directly or indirectly, sold, offered for
sale, solicited offers to buy or otherwise negotiated in respect of, any security (as defined in the Securities Act) which, to its knowledge, is or will be (i) integrated with the Securities sold pursuant to this Agreement for purposes of the
Securities Act or (ii) aggregated with prior offerings by the Company for the purposes of the rules and regulations of the Nasdaq Capital Market. Assuming the accuracy of the representations and warranties
of the Investors set forth in Section 4, neither the Company nor any of its Affiliates, its subsidiaries nor any Person acting on their behalf has, directly or indirectly, made any offers or sales of any Company security or solicited any
offers to buy any Company security, under circumstances that would adversely affect reliance by the Company on Section 4(a)(2) and/or Rule 506 of Regulation D promulgated thereunder for the exemption from registration for the transactions
contemplated hereby.
3.31 Brokers and Finders. Other than the Placement Agent, neither the Company nor any other Person authorized by the Company to act on its behalf has retained, utilized or been
represented by any broker or finder in connection with the transactions contemplated by this Agreement.
3.32 Reliance by the Investors. The Company has a reasonable basis for making each of the representations set forth in this Section 3. The Company acknowledges that each of
the Investors will rely upon the truth and accuracy of, and the Company’s compliance with, the representations, warranties, agreements, acknowledgements and understandings of the Company set forth herein.
21
3.33 No Disqualification Events. Neither the Company nor any of its (i) predecessors, (ii) Affiliates, (iii) directors, (iv) executive officers, (v) non-executive officers
participating in the placement contemplated by this Agreement, (vi) beneficial owners of 20% or more of its outstanding voting equity securities (calculated on the basis of voting power), (vii) promoters or (viii) investment managers (including any
of such investment managers’ directors, executive officers or officers participating in the placement contemplated by this Agreement) or general partners or managing members of such investment managers (including any of such general partners’ or
managing members’ directors, executive officers or officers participating in the placement contemplated by this Agreement) (each, an “Issuer Covered Person” and, together, “Issuer
Covered Persons”) is subject to the disqualification provisions of Rule 506(d)(1)(i-viii) of Regulation D under the Securities Act (a “Disqualification Event”). The Company has complied, to the extent
applicable, with its disclosure obligations under Rule 506(e), and has furnished to the Investors a copy of any disclosures provided thereunder.
3.34 Other Covered Persons. Other than the Placement Agent, the Company is not aware of any person (other than any Issuer Covered Person) that has been or will be paid (directly or
indirectly) remuneration for solicitation of purchasers in connection with the sale of any Securities.
3.35 No Additional Agreements. There are no agreements or understandings between the Company and any Investor with respect to the transactions contemplated by the Transaction
Agreements other than (i) as specified in the Transaction Agreements and (ii) any side letter agreements with any of the Investors, which side letters the Company has shared with all Investors.
3.36 Anti-Bribery and Anti-Money Laundering Laws. Each of the Company, its subsidiaries and, any of their respective officers, directors, supervisors, managers, agents, or employees are
and have at all times been in compliance with and their participation in the offering will not violate: (A) anti-bribery laws, including but not limited to, any applicable law, rule, or regulation of any locality, including but not limited to any
law, rule, or regulation promulgated to implement the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, signed December 17, 1997, including the U.S. Foreign Corrupt Practices Act of 1977, as
amended, the U.K. Bribery Act 2010, or any other law, rule or regulation of similar purposes and scope or (B) anti-money laundering laws, including, but not limited to, applicable federal, state, international, foreign or other laws, regulations or
government guidance regarding anti-money laundering, including, without limitation, Title 18 US. Code sections 1956 and 1957, the Patriot Act, the Bank Secrecy Act, and international anti-money laundering principles or procedures by an
intergovernmental group or organization, such as the Financial Action Task Force on Money Laundering, of which the United States is a member and with which designation the United States representative to the group or organization continues to concur,
all as amended, and any executive order, directive, or regulation pursuant to the authority of any of the foregoing, or any orders or licenses issued thereunder.
22
3.37 Cybersecurity. The Company and its subsidiaries’ information technology assets and equipment, computers, systems, networks, hardware, software, websites, applications, and databases
(collectively, “IT Systems”) are adequate, to the Company’s knowledge, for, and operate and perform in all material respects as required in connection with the operation of the business of the Company and its
subsidiaries as currently conducted, and, to the Company’s knowledge, are free and clear of all material Trojan horses, time bombs, malware and other malicious code. The Company and its subsidiaries have implemented and maintained commercially
reasonable physical, technical and administrative controls designed to maintain and protect the confidentiality, integrity, availability, privacy and security of all sensitive, confidential or regulated data (“Confidential
Data”) and Personal Data (defined below) used or maintained in connection with their businesses, and the integrity, availability continuous operation, redundancy and security of all IT Systems. “Personal Data”
means the following data used in connection with the Company’s and its subsidiaries’ businesses and in their possession or control: (i) a natural person’s name, street address, telephone number, e-mail address, photograph, social security number or
other tax identification number, driver’s license number, passport number, credit card number or bank information; (ii) information that identifies or may reasonably be used to identify an individual and is regulated under applicable Privacy Laws or
would qualify as “personal data,” personal information” or similar term under the Privacy laws; and (iii) any information that would qualify as “protected health information” under the Health Insurance Portability and Accountability Act of 1996, as
amended by the Health Information Technology for Economic and Clinical Health Act (collectively, “HIPAA”). To the Company’s knowledge, there have been no breaches, outages or unauthorized uses of or accesses to
the Company’s IT Systems, Confidential Data, or Personal Data that would require notification under Privacy Laws (as defined below).
3.38 Antitakeover Provisions. Neither the Company nor any of its subsidiaries is party to an Antitakeover Provision.
3.39 Compliance with Data Privacy Laws. The Company and its subsidiaries are, and in the past three (3) years have been, to the Company’s knowledge, in material compliance with all
applicable privacy and data security laws and regulations regarding the collection, use, storage, retention, disclosure, transfer, disposal, or any other processing (collectively “Process” or “Processing”) of Personal Data (collectively, the “Privacy Laws”). The Company and its subsidiaries have in place, comply with, and take appropriate steps intended to comply
in all material respects with their policies and procedures relating to data privacy and security, and the Processing of Personal Data (the “Privacy Statements”) as well as the Privacy Laws. The Company and its
subsidiaries have, except as would not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect, in the past three (3) years provided accurate notice of their Privacy Statements then in effect to its customers,
employees, third party vendors and Representatives. To the Company’s knowledge, none of such disclosures made or contained in any Privacy Statements have been materially inaccurate, misleading, incomplete, or in material violation of any Privacy
Laws.
3.40 Transactions with Affiliates and Employees. No relationship, direct or indirect, exists between or among the Company, on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company, on the other hand, that is required to be described in the SEC Reports that is not so described.
3.41 CFIUS. The Company does not engage in (a) the design, fabrication, development, testing, production or manufacture of one (1) or more “critical technologies” (as defined in 31
C.F.R. § 800.215); (b) the ownership, operation, maintenance, supply, manufacture, or servicing of “covered investment critical infrastructure” (as defined in 31 C.F.R. § 800.212); or (c) the maintenance or collection, directly or indirectly, of
“sensitive personal data” of U.S. citizens (as defined in 31 C.F.R. § 800.241).
23
4. Representations and Warranties of Each Investor. Each Investor, severally for itself and not jointly with any other Investor, represents and warrants to the Company and the
Placement Agent that the statements contained in this Section 4 are true and correct as of the date of this Agreement and the Closing Date:
4.1 Organization. The Investor is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has the requisite power and
authority to own, lease and operate its properties and to carry on its business as now conducted.
4.2 Authorization. The Investor has all requisite corporate or similar power and authority to enter into this Agreement and the other Transaction Agreements to which it will be a
party and to carry out and perform its obligations hereunder and thereunder. All corporate, member or partnership action on the part of such Investor or its stockholders, members or partners necessary for the authorization, execution, delivery and
performance of this Agreement and the other Transaction Agreements to which it will be a party and the consummation of the other transactions contemplated in this Agreement has been taken. The execution, delivery and performance by such Investor of
the Transaction Agreements to which such Investor is a party has been duly authorized and each has been duly executed. Assuming this Agreement constitutes the legal and binding agreement of the Company, this Agreement constitutes a legal, valid and
binding obligation of such Investor, enforceable against such Investor in accordance with its respective terms, except as such enforceability may be limited or otherwise affected by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and/or similar laws relating to or affecting the rights of creditors generally or by general equity principles (regardless of whether such enforceability is considered in a proceeding in equity or at law).
4.3 No Conflicts. The execution, delivery and performance of the Transaction Agreements by the Investor, the purchase of the Securities in accordance with their terms and the
consummation by the Investor of the other transactions contemplated hereby will not conflict with or result in any violation of, breach or default by such Investor (with or without notice or lapse of time, or both) under, conflict with, or give rise
to a right of termination, cancellation or acceleration of any obligation, a change of control right or to a loss of a material benefit under (i) any provision of the organizational documents of the Investor, including, without limitation, its
incorporation or formation papers, bylaws, indenture of trust or partnership or operating agreement, as may be applicable or (ii) any agreement or instrument, undertaking, credit facility, franchise, license, judgment, order, ruling, statute, law,
ordinance, rule or regulations, applicable to such Investor or its respective properties or assets, except, in the case of clause (ii), as would not, individually or in the aggregate, be reasonably expected to materially delay or hinder the ability
of the Investor to perform its obligations under the Transaction Agreements.
4.4 Residency. The Investor’s residence (if an individual) or offices in which its investment decision with respect to the Securities was made (if an entity) are located at the
address immediately below the Investor’s name on Exhibit A, except as otherwise communicated by the Investor to the Company.
4.5 Brokers and Finders. The Investor has not retained, utilized or been represented by any broker or finder in connection with the transactions contemplated by this Agreement whose
fees the Company would be required to pay.
24
4.6 Investment Representations and Warranties. The Investor hereby represents and warrants that, it (i) as of the date of this Agreement is, if an entity, a “qualified institutional
buyer” (as defined in Rule 144A under the Securities Act) or an institutional “accredited investor” as that term is defined in Rule 501(a) under Regulation D promulgated pursuant to the Securities Act; or (ii) if an individual, is an “accredited
investor” as that term is defined in Rule 501(a) of Regulation D of the Securities Act and has such knowledge and experience in financial and business matters as to be able to protect its own interests in connection with an investment in the
Securities. The Investor further represents and warrants that (x) it is capable of evaluating the merits and risk of such investment, and (y) that it has not been organized for the purpose of acquiring the Securities and is an “institutional account”
as defined by FINRA Rule 4512(c). The Investor understands and agrees that the offering and sale of the Securities has not been registered under the Securities Act or any applicable state securities laws and is being made in reliance upon federal and
state exemptions for transactions not involving a public offering which depend upon, among other things, the bona fide nature of the investment intent and the accuracy of the Investor’s representations as expressed herein.
4.7 Intent. The Investor is purchasing the Securities solely for the Investor’s own account and not for the account of others, and not with a view to the resale or distribution of any
part thereof in violation of the Securities Act, and the Investor has no present intention of selling, granting any participation in, or otherwise distributing the same in violation of the Securities Act without prejudice, however, to the Investor’s
right at all times to sell or otherwise dispose of all or any part of such Securities in compliance with applicable federal and state securities laws. Notwithstanding the foregoing, if the Investor is purchasing the Securities as a fiduciary or
agent for one or more investor accounts, the Investor has full investment discretion with respect to each such account, and the full power and authority to make the acknowledgements, representations and agreements herein on behalf of each owner of
each such account. The Investor has no present arrangement to sell the Securities to or through any person or entity. The Investor understands that the Securities must be held indefinitely unless such Securities are resold pursuant to a registration
statement under the Securities Act or an exemption from registration is available. Nothing contained herein shall be deemed a representation or warranty by the Investor to hold the Securities for any period of time.
4.8 Investment Experience; Ability to Protect Its Own Interests and Bear Economic Risks. The Investor acknowledges that it can bear the economic risk and complete loss of its
investment in the Securities and has knowledge and experience in finance, securities, taxation, investments and other business matters as to be capable of evaluating the merits and risks of investments of the kind described in this Agreement and
contemplated hereby, and the Investor has had an opportunity to seek, and has sought, such accounting, legal, business and tax advice as the Investor has considered necessary to make an informed investment decision. The Investor acknowledges that the
Investor (i) is a sophisticated investor, experienced in investing in private placements of equity securities and capable of evaluating investment risks independently, both in general and with regard to all transactions and investment strategies
involving a security or securities and (ii) has exercised independent judgment in evaluating its participation in the purchase of the Securities. The Investor acknowledges that the Investor is aware that there are substantial risks incident to the
purchase and ownership of the Securities, including those set forth in the Company’s filings with the SEC. Alone, or together with any professional advisor(s), the Investor has adequately analyzed and fully considered the risks of an investment in
the Securities and determined that the Securities are a suitable investment for the Investor. The Investor is, at this time and in the foreseeable future, able to afford the loss of the Investor’s entire investment in the Securities and the Investor
acknowledges specifically that a possibility of total loss exists.
25
4.9 Independent Investment Decision. The Investor understands that nothing in the Transaction Agreements or any other materials presented by or on behalf of the Company to the Investor
in connection with the purchase of the Securities constitutes legal, tax or investment advice. The Investor has consulted such legal, tax and investment advisors as it, in such Investor’s sole discretion, has deemed necessary or appropriate in
connection with its purchase of the Securities.
4.10 Securities Not Registered; Legends. The Investor acknowledges and agrees that the Securities are being offered in a transaction not involving any public offering within the meaning
of the Securities Act, and the Investor understands that the Securities have not been registered under the Securities Act, by reason of their issuance by the Company in a transaction exempt from the registration requirements of the Securities Act,
and that the Securities must continue to be held and may not be offered, resold, transferred, pledged or otherwise disposed of by the Investor unless a subsequent disposition thereof is registered under the Securities Act or is exempt from such
registration and in each case in accordance with any applicable securities laws of any state of the United States. The Investor understands that the exemptions from registration afforded by Rule 144 (the provisions of which are known to it)
promulgated under the Securities Act depend on the satisfaction of various conditions including, but not limited to, the time and manner of sale, the holding period and on requirements relating to the Company which are outside of the Investor’s
control and which the Company may not be able to satisfy, and that, if applicable, Rule 144 may afford the basis for sales only in limited amounts. The Investor acknowledges and agrees that it has been advised to consult legal counsel prior to making
any offer, resale, transfer, pledge or disposition of any of the Securities. The Investor acknowledges that no federal or state agency has passed upon or endorsed the merits of the offering of the Securities or made any findings or determination as
to the fairness of this investment.
The Investor understands that any certificates or book entry notations evidencing the shares of Securities may bear one or more legends in substantially the following form and substance:
“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED UNLESS (I) SUCH SECURITIES HAVE BEEN REGISTERED FOR SALE PURSUANT TO THE SECURITIES ACT, (II) SUCH SECURITIES MAY BE SOLD PURSUANT TO RULE 144,
(III) THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSFER MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT, OR (IV) THE SECURITIES ARE TRANSFERRED WITHOUT CONSIDERATION TO AN AFFILIATE OF
SUCH HOLDER OR A CUSTODIAL NOMINEE (WHICH FOR THE AVOIDANCE OF DOUBT SHALL REQUIRE NEITHER CONSENT NOR THE DELIVERY OF AN OPINION).”
26
In addition, the Securities may contain a legend regarding affiliate status of the Investor, if applicable.
4.11 No General Solicitation. The Investor acknowledges and agrees that the Investor is purchasing the Securities directly from the Company. Investor became aware of this offering of
the Securities solely by means of direct contact from the Placement Agent or directly from the Company as a result of a pre-existing, substantive relationship with the Company or the Placement Agent, and/or their respective advisors (including,
without limitation, attorneys, accountants, bankers, consultants and financial advisors), agents, control persons, Representatives, Affiliates, directors, officers, managers, members, and/or employees, and/or the Representatives of such persons. The
Securities were offered to Investor solely by direct contact between Investor and the Company, the Placement Agent and/or their respective Representatives. Investor did not become aware of this offering of the Securities, nor were the Securities
offered to Investor, by any other means, and none of the Company, the Placement Agent and/or their respective Representatives acted as investment advisor, broker or dealer to Investor. The Investor is not purchasing the Securities as a result of any
general or public solicitation or general advertising, or publicly disseminated advertisement, article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television, radio
or the internet or presented at any seminar or any other general solicitation or general advertisement, including any of the methods described in Section 502(c) of Regulation D under the Securities Act.
4.12 Access to Information. The Investor acknowledges and agrees that the Investor and the Investor’s professional advisor(s), if any, have had the opportunity to ask such questions,
receive such answers and obtain such information from the Company regarding the Company, its business and the terms and conditions of the offering of the Securities as the Investor and the Investor’s professional advisor(s), if any, have deemed
necessary to make an investment decision with respect to the Securities and that the Investor has independently made its own analysis and decision to invest in the Company. Neither such inquiries nor any other due diligence investigation conducted by
the Investor shall modify, limit or otherwise affect the Investor’s right to rely on the Company’s representations and warranties contained in this Agreement.
4.13 Certain Trading Activities. Other than consummating the transaction contemplated hereby, the Investor has not, nor has any Person acting on behalf of or pursuant to any
understanding with the Investor, directly or indirectly executed any purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that the Investor was first contacted by the Company or any
other Person regarding the transaction contemplated hereby and ending immediately prior to the date of this Agreement. Notwithstanding the foregoing, in the case of an Investor that is a multi-managed investment vehicle whereby separate portfolio
managers manage separate portions of such Investor’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Investor’s assets, the representation set forth
above shall only apply with respect to the portion of the assets managed by the portfolio manager that made the investment decision to purchase the Securities covered by this Agreement. Other than to other Persons party to this Agreement and to its
advisors and agents who had a need to know such information, the Investor has maintained the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction). Notwithstanding
the foregoing, for avoidance of doubt, nothing contained herein shall constitute a representation or warranty, or preclude any actions, with respect to the identification of the availability of, or securing of, available shares to borrow in order to
effect Short Sales or similar transactions in the future.
27
4.14 Disqualification Event. To the extent the Investor is one of the covered persons identified in Rule 506(d)(1), the Investor represents that no Disqualification Event is applicable
to the Investor or any of its Rule 506(d) Related Parties (as defined below), except, if applicable, for a Disqualification Event as to which Rule 506(d)(2)(ii) or (iii) or (d)(3) is applicable. The Investor hereby agrees that it shall notify the
Company promptly in writing in the event a Disqualification Event becomes applicable to the Investor or any of its Rule 506(d) Related Parties, except, if applicable, for a Disqualification Event as to which Rule 506(d)(2)(ii) or (iii) or (d)(3) is
applicable. For purposes of this Section, “Rule 506(d) Related Party” means a person or entity that is a beneficial owner of the Investor’s securities for purposes of Rule 506(d) of the Securities Act.
4.15 Regulation M. Such Investor is aware that the anti-manipulation rules of Regulation M under the Exchange Act may apply to sales of Common Stock and other activities with respect
to the Common Stock by the Investors.
5. Covenants.
5.1 Further Assurances. Each party agrees to cooperate with each other and their respective officers, employees, attorneys, accountants and other agents, and, generally, do such
other reasonable acts and things in good faith as may be necessary to effectuate the intents and purposes of this Agreement, subject to the terms and conditions of this Agreement and compliance with applicable law, including taking reasonable action
to facilitate the filing of any document or the taking of reasonable action to assist the other parties hereto in complying with the terms of this Agreement. The Investor acknowledges that the Company and the Placement Agent will rely on the
acknowledgments, understandings, agreements, representations and warranties contained in this Agreement. Prior to the Closing, the Investor agrees to promptly notify the Company if any of the acknowledgments, understandings, agreements,
representations and warranties set forth in Section 4 of this Agreement are no longer accurate.
5.2 Stockholder Approval; Listing.
(a) The Company shall use commercially reasonable efforts to maintain the listing and trading of its Common Stock on the Nasdaq Capital Market and, in accordance therewith, shall use
reasonable best efforts to comply in all material respects with the Company’s reporting, filing and other obligations under the rules and regulations of Nasdaq.
28
(b) The Company shall, as soon as practicable following the Subsequent Closing, but not more than fifteen (15) days thereafter, file with the SEC a preliminary proxy statement for a special
meeting of its stockholders, at which the Company’s stockholders will be asked to approve the issuance of all Conversion Shares and all shares of Common Stock issuable upon the exercise of the Warrants in compliance with Nasdaq Listing Rule 5635(b)
and/or (d) in compliance with the rules and regulations of The Nasdaq Stock Market LLC (the “Proposal”). The Company shall give each Investor that requests a draft of the preliminary proxy statement a
reasonable opportunity to review and comment on the draft prior to the initial filing of the preliminary proxy statement. No other business other than a proposal for the approval of an increase in the shares of Common Stock reserved for issuance
under the Company’s 2022 Stock Incentive Plan shall be conducted at the stockholders’ meeting except with the consent of the Celadon Investor, such consent not to be unreasonably withheld.
(c) The Company shall notify and consult with the Investors in respect of any comments on the preliminary proxy statement received from the staff of the Commission and, as soon as practicable
following notification from the staff of the Commission that it has completed its review of the preliminary proxy statement or that it will not review the preliminary proxy statement, shall file and mail a definitive proxy statement for the special
meeting and vote of its stockholders to approve the Proposal and hold the special meeting as promptly as possible thereafter.
(d) The Company covenants and agrees that its Board of Directors shall unanimously recommend that the Proposal be approved by the Corporation’s stockholders at all meetings in which such
Proposal are considered.
(e) In accordance with the Certificate of Designation, the Company shall cause a number of shares of Common Stock equal to the total number of Conversion Shares and the Warrant Shares to be
authorized, reserved, and kept available at all times, free and clear of preemptive rights and all Liens, to allow for full conversion of the Series A Preferred Stock in accordance with the terms thereof.
(f) From time to time following approval by the Company’s stockholders of the Proposal, the Company shall cause the number of shares of Common Stock issuable upon conversion or redemption of
the then outstanding shares of Series A Preferred Stock (including, for the avoidance of doubt, any shares of Common Stock issuable upon conversion of dividends that are paid in kind on the shares of Series A Preferred Stock) and the Warrants to be
approved for listing on the Nasdaq Capital Market.
(g) The Company shall pay all fees and expenses in connection with satisfying the obligations under this Section 5.2.
5.3 Corporate Opportunities.
(a) In recognition and anticipation that (1) certain directors, principals, officers, employees or other representatives of the Investors and their Affiliates may serve as directors, officers
or agents of the Company, and (2) the Investors and their Affiliates, and the directors designated by the Investors pursuant to certain designation agreements (each a “Designation Agreement”) dated as of the
date of this Agreement (the “Series A Directors”) and their respective Affiliates, may now engage and may continue to engage in the same or similar activities or lines of business as, or in other activities or
lines of business that overlap with or compete with, those in which the Company, directly or indirectly, now engages or may engage or proposes to engage, the provisions of this Section 5.3 are set forth to regulate and define the conduct of
certain affairs of the Company with respect to certain classes or categories of business opportunities as they may involve the Investors, the Series A Directors or their respective Affiliates, as applicable, and the powers, rights, duties and
liabilities of the Company and its directors, officers and stockholders in connection therewith.
29
(b) None of (1) the Investors or any of their Affiliates, or (2) the Series A Directors or any of their respective Affiliates (the Persons identified in (1) and (2) above being referred to
as “Identified Persons”) shall, to the fullest extent permitted by law, have any duty to refrain from, directly or indirectly, (A) engaging in the same or similar activities or lines of business in which the
Company or any of its Affiliates now engages or proposes to engage or (B) otherwise competing with the Company or any of its Affiliates, and, to the fullest extent permitted by law, no Identified Person shall be liable to the Company or its
stockholders or to any Affiliate of the Company for breach of any fiduciary duty solely by reason of the fact that such Identified Person engages in any such activities.
(c) To the fullest extent permitted by law, the Company hereby renounces any interest or expectancy in, or right to be offered an opportunity to participate in, any business opportunity that
may be a corporate opportunity for an Identified Person and the Company or any of its Affiliates. Subject to the following sentence, in the event that any Identified Person acquires knowledge of a potential transaction or other business opportunity
that may be a corporate opportunity for itself, herself or himself and the Company or any of its Affiliates, such Identified Person shall, to the fullest extent permitted by law, have no duty to communicate or offer such transaction or other business
opportunity to the Company or any of its Affiliates and, to the fullest extent permitted by law, shall not be liable to the Company or its stockholders or to any Affiliate of the Company for breach of any fiduciary duty as a stockholder, director or
officer of the Company solely by reason of the fact that such Identified Person pursues or acquires such corporate opportunity for itself, herself or himself, or offers or directs such corporate opportunity to another Person or does not communicate
information regarding such corporate opportunity to the Company. Notwithstanding the foregoing, the Company does not renounce its interest in any corporate opportunity offered to a Series A Director (including if a Series A Director serves as an
officer of this Company) if such opportunity is offered to such person solely in his or her capacity as a director or officer of the Company, and this section shall not apply to any such corporate opportunity.
(d) In addition to and notwithstanding the foregoing provisions of this Agreement or anything to the contrary in the Certificate of Designation, to the fullest extent permitted by law, a
potential corporate opportunity shall not be deemed to be a corporate opportunity for the Company if it is a business opportunity that (1) the Company is neither financially or legally able, nor contractually permitted, to undertake, (2) from its
nature, is not in the line of the Company’s business or is of no practical advantage to the Company, or (3) is one in which the Company has no interest or reasonable expectancy.
(e) To the fullest extent permitted by law, any Person purchasing or otherwise acquiring or holding any interest in any shares of capital stock of the Company shall be deemed to have notice
of and to have consented to the provisions of this Section 5.3.
30
5.4 Antitakeover Provisions. If, after the execution and delivery of this Agreement, any Antitakeover Provision shall apply or purport to apply to this Agreement, the
Registration Rights Agreement, the Certificate of Designation or any of the transactions contemplated by this Agreement, the Registration Rights Agreement or the Certificate of Designation, the Board of Directors shall, to the fullest extent
permitted by applicable Law, take all actions necessary so that such transactions may be consummated as promptly as practicable on the terms required by, or provided for, in this Agreement, the Registration Rights Agreement and the Certificate of
Designation, and otherwise take all such other actions as are necessary to eliminate or minimize to the greatest extent possible the effects of any such Antitakeover Provision thereupon or upon the transactions contemplated thereby.
5.5 Disclosure of Transactions.
(a) The Company shall, by 9:00 a.m., New York City time, on the first (1st) Business Day immediately following the date of this Agreement, file with the SEC a Current Report on Form 8-K
(including all exhibits thereto, the “Disclosure Document”) disclosing all material terms of the transactions contemplated hereby and by the other Transaction Agreements and attaching this Agreement and the
other Transaction Documents as exhibits to such Disclosure Document. Notwithstanding anything in this Agreement to the contrary, the Company shall not publicly disclose the name of any Investor or any of its affiliates or advisers, or include the
name of any Investor or any of its affiliates or advisers in any press release or filing with the SEC (other than any registration statement contemplated by the Registration Rights Agreement) or any regulatory agency, without the prior written
consent of the Investor, except (i) as required by the federal securities law in connection with (A) any registration statement contemplated by the Registration Rights Agreement and (B) the filing of final Transaction Agreements with the SEC or
pursuant to other routine proceedings of regulatory authorities, or (ii) to the extent such disclosure is required by law, at the request of the staff of the SEC or regulatory agency or under the regulations of the Nasdaq Capital Market.
(b) No later than December 31, 2024 the Company shall issue a press release and/or a Current Report on Form 8-K (the actual date of such press release and/or Current Report on Form 8-K, the
“Disclosure Date”) disclosing all material non-public information concerning the Company disclosed to the Investors. Consequently, following the Disclosure Date, no Investor shall be in possession of any
material non-public information concerning the Company disclosed to the Investors by the Company or its Representatives in connection with the transactions contemplated under this Agreement. The Company understands and confirms that the Investors
will rely on the foregoing representation in effecting securities transactions.
(c) Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents and upon compliance by the Company of this Section 5.5 or Section 8.1
herein, the Company covenants and agrees that, following the Disclosure Date, neither it, nor any other Person acting on its behalf will provide the Investor or its agents or counsel with any information that constitutes, or the Company reasonably
believes constitutes, material non-public information, unless prior thereto the Investor shall have consented to the receipt of such information and agreed with the Company to keep such information confidential. The Company understands and confirms
that each Investor shall be relying on the foregoing covenant in effecting transactions in securities of the Company. To the extent that the Company, any of its subsidiaries, or any of their respective officers, directors, agents, employees or
Affiliates delivers any material, non-public information to an Investor without the Investor’s consent, following the Disclosure Date, the Company hereby covenants and agrees that the Investor shall not have any duty of confidentiality to the
Company, any of its subsidiaries, or any of their respective officers, directors, agents, employees or Affiliates, or a duty to the Company, any of its subsidiaries or any of their respective officers, directors, agents, employees or Affiliates not
to trade on the basis of, such material, non-public information, provided that the Investor shall remain subject to applicable law. The Company understands and confirms that each Investor shall be relying on the foregoing covenant in effecting
transactions in securities of the Company.
31
(d) Notwithstanding Section 5.5(c) or any other provision to the contrary herein , the Company, or any other Person acting on its behalf, may at any time on or after the date hereof provide
to any Investor, to the extent such Investor (i) is then serving as a director, officer or employee of the Company or (ii) is represented by any designee(s) then serving on the Board of Directors, any information that constitutes, or the Company
reasonably believes constitutes, material non-public information, without obtaining prior consent from such Investor to the receipt of such information. Any information provided to the Investor pursuant to this Section 5.5(d) shall be kept
confidential by the Investor.
5.6 Integration. The Company shall not, and shall use its commercially reasonable efforts to ensure that no Affiliate of the Company shall, sell, offer for sale or solicit offers to
buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that will be integrated with the offer or sale of the Securities in a manner that would require the registration under the Securities Act of the
sale of the Securities to the Investors, or that will be integrated with the offer or sale of the Securities for purposes of the rules and regulations of any National Exchange such that it would require stockholder approval prior to the closing of
such other transaction unless stockholder approval is obtained before the closing of such subsequent transaction.
5.7 Removal of Legends.
(a) In connection with any sale, assignment, transfer or other disposition of the shares of Series A Preferred Stock, Conversion Shares or Warrant Shares by an Investor pursuant to Rule 144
or pursuant to any other exemption under the Securities Act such that the purchaser acquires freely tradable shares and upon compliance by the Investor with the requirements of this Agreement, if requested by the Investor by notice to the Company,
the Company shall request the Transfer Agent to remove any restrictive legends related to the book entry account holding such shares and make a new, unlegended entry for such book entry shares sold or disposed of without restrictive legends as soon
as reasonably practicable following any such request therefor from the Investor, provided that the Company has timely received from the Investor customary representations and other documentation reasonably acceptable to the Company in connection
therewith. The Company shall be responsible for the fees of its Transfer Agent and its legal counsel associated with such legend removal.
32
(b) Subject to receipt from the Investor by the Company and the Transfer Agent of customary representations and other documentation reasonably acceptable to the Company and the Transfer
Agent in connection therewith, upon the earliest of such time as the shares of Series A Preferred Stock, Conversion Shares or Warrant Shares (i) have been sold under the Securities Act pursuant to an effective registration statement; (ii) have been
sold pursuant to Rule 144, or (iii) are eligible for resale under Rule 144(b)(1) without the requirement for the Company to be in compliance with the current public information requirements under Rule 144(c)(1) (or any successor provision), the
Company shall, in accordance with the provisions of this Section 5.7(b) and as soon as reasonably practicable following any request therefor from an Investor accompanied by such customary and reasonably acceptable documentation referred to
above, (A) deliver to the Transfer Agent irrevocable instructions that the Transfer Agent shall make a new, unlegended entry for such book entry shares, and (B) cause its counsel to deliver to the Transfer Agent one or more opinions to the effect
that the removal of such legends in such circumstances may be effected under the Securities Act if required by the Transfer Agent to effect the removal of the legend in accordance with the provisions of this Agreement.
(c) Notwithstanding anything provided in Sections 5.7(a) and 5.7(b) herein, the restrictive legends related to the Series A Preferred Stock, Conversion Shares or Warrant Shares shall only be
removed (i) in connection with a sale pursuant to the Registration Statement or (ii) in connection with and pursuant to Rule 144 if the Investor has held the Series A Preferred Stock, Conversion Shares or Warrant Shares, as applicable, for more than
one (1) year.
5.8 Withholding Taxes. Each Investor agrees to furnish the Company with any information, representations and forms as shall reasonably be requested by the Company from time to time
to assist the Company in complying with any applicable tax law (including any withholding obligations).
5.9 Fees and Commissions. The Company shall be solely responsible for the payment of any placement agent’s fees, financial advisory fees, or broker’s commissions (other than for
Persons engaged by an Investor) relating to or arising out of the transactions contemplated hereby, including, without limitation, any fees or commissions payable to the Placement Agent.
5.10 Compliance with Transaction Agreements. The Company shall comply with each of its obligations under the Transaction Agreements.
5.11 No Conflicting Agreements. The Company will not take any action, enter into any agreement or make any commitment that would conflict or interfere in any material respect with the
Company’s obligations to the Investors under the Transaction Agreements.
5.12 Indemnification.
(a) The Company agrees to indemnify and hold harmless each Investor and its Affiliates, and their respective directors, officers, trustees, members, managers, employees, investment advisers
and agents (collectively, the “Indemnified Persons”), from and against any and all losses, claims, damages, liabilities and expenses (including without limitation reasonable and documented attorney fees and
disbursements and other documented out-of-pocket expenses reasonably incurred in connection with investigating, preparing or defending any action, claim or proceeding, pending or threatened and the costs of enforcement thereof) to which such Person
may become subject as a result of any breach of representation, warranty, covenant or agreement made by or to be performed on the part of the Company under the Transaction Agreements, and will reimburse any such Person promptly upon demand for all
such amounts as they are incurred by such Person, provided, that any Person so reimbursed by the Company shall return such amounts to the Company solely to the extent such amounts have been finally judicially determined to have resulted from such Person’s fraud or willful misconduct.
33
(b) Any person entitled to indemnification hereunder shall (i) give prompt written notice to the indemnifying party of any claim of which such person has actual knowledge with respect to
which it seeks indemnification and (ii) permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party; provided that any person entitled to indemnification hereunder shall have the
right to employ separate counsel and to participate in the defense of such claim, but the fees and expenses of such counsel shall be at the expense of such person unless (a) the indemnifying party has agreed in writing to pay such fees or expenses,
(b) the indemnifying party shall have failed to assume the defense of such claim and employ counsel reasonably satisfactory to such person or (c) in the reasonable judgment of any such person, based upon written advice of its counsel, a conflict of
interest exists between such person and the indemnifying party with respect to such claims (in which case, if the person notifies the indemnifying party in writing that such person elects to employ separate counsel at the expense of the indemnifying
party, the indemnifying party shall not have the right to assume the defense of such claim on behalf of such person); and provided, further, that the failure of any indemnified party to give written notice as provided herein shall not relieve the
indemnifying party of its obligations hereunder, except to the extent that such failure to give notice shall materially adversely affect the indemnifying party in the defense of any such claim or litigation. It is understood that the indemnifying
party shall not, in connection with any proceeding in the same jurisdiction, be liable for fees or expenses of more than one separate firm of attorneys at any time for all such indemnified parties. No indemnifying party will, except with the consent
of the indemnified party, which consent shall not be unreasonably withheld, conditioned or delayed, consent to entry of any judgment or enter into any settlement unless such judgment or settlement (i) imposes no liability or obligation on, (ii)
includes as an unconditional term thereof the giving of a complete, explicit and unconditional release from the party bringing such indemnified claims of all liability of the indemnified party and its affiliates in respect of such claim or litigation
in favor of, and (iii) does not include any admission of fault, culpability, wrongdoing, or wrongdoing or malfeasance by or on behalf of, the indemnified party. No indemnified party will, except with the consent of the indemnifying party, which
consent shall not be unreasonably withheld, conditioned or delayed, consent to entry of any judgment or enter into any settlement of any action for which such indemnified party is seeking indemnification hereunder.
5.13 Subsequent Equity Sales. From the date of this Agreement until the earlier of (a) sixty (60) days after the Closing Date and (b) the Business Day immediately following the
effective date of the registration statement filed pursuant to the Registration Rights Agreement, the Company shall not (A) issue shares of Common Stock or Common Stock Equivalents, (B) effect a reverse stock split, recapitalization, share
consolidation, reclassification or similar transaction affecting the outstanding Common Stock or (C) file with the SEC a registration statement under the Securities Act relating to any shares of Common Stock or Common Stock Equivalents, except
pursuant to the terms of the Registration Rights Agreement. Notwithstanding the foregoing, the provisions of this Section 5.13 shall not apply to (i) the issuance of the Securities hereunder, (ii) the filing of a registration statement on
Form S-8 under the Securities Act to register the offer and sale of securities on an equity incentive plan or employee stock purchase plan, or (iii) in respect of any Exempt Issuance.
34
5.14 Reservation of Common Stock. As of the date of this Agreement, the Company has reserved and the Company shall continue to reserve and keep available at all times, free of
preemptive rights, a sufficient number of shares of Common Stock for the purpose of enabling the Company to issue the (i) Warrant Shares that are issuable upon the exercise of the Warrants and (ii) Conversion Shares that are issuable upon the
conversion of the shares of Series A Preferred Stock.
5.15 Tax Matters.
(a) USRPHC Status. As of the Closing Date, the Company is not, and never has been, a U.S. real property holding corporation within the
meaning of Section 897(c)(2) of the Code (a “USRPHC”). The Company shall notify the Investors promptly following any “determination date” (as defined in Treasury
Regulation Section 1.897-2(c)(1)) or otherwise within five (5) business days of becoming aware that the Company is, or is reasonably likely to be, a USRPHC. At any Investor’s request from time to time while
such Investor owns an equity interest in the Company, the Company shall use commercially reasonable efforts to determine as promptly as practicable whether it is a USRPHC and shall promptly notify the Investor in writing of its determination of its status as a USRPHC (and if in connection with a sale, shall, to the extent the Company determines that equity interests in the Company are not United States real
property interests under Code Section 897, promptly provide to such Investor a statement in accordance with Treasury Regulations Section 1.897-2(h)(1) where it determines
the interest being sold is not a United States real property interest within the meaning of Section 897 of the Code).
(b) Tax Treatment. The Company and the Investors acknowledge and agree not to treat the Series A
Preferred Stock as “preferred stock” within the meaning of Section 305 of the Code and Treasury Regulation Section 1.305-5 for U.S. federal income Tax and withholding Tax purposes, and neither the Company nor the Investors shall take any position
with respect to the Series A Preferred Stock for U.S. federal income Tax and withholding Tax purposes that is inconsistent with such treatment.
(c) Dividends. Each of the Company and the Investors intend that neither the Investors nor any of their
Affiliates shall be required to include in income any dividend income for U.S. federal income Tax purposes by reason of the application of Section 305 of the Code to the Series A Preferred Stock or otherwise except to the extent of the amount of
any dividends on the Series A Preferred Stock that are declared and paid in cash. The Company and the Investors agree to take no positions or actions inconsistent with such intended treatment (including on any IRS Form 1099), unless otherwise
required by a change in applicable law after the date hereof or pursuant to a “determination” within the meaning of Section 1313(a) of the Code.
(d) Redemptions. The Company shall use commercially reasonable efforts to cooperate with the Investors to
structure any redemption or repurchase of Series A Preferred Stock permitted under the Certificate of Designation to be treated as a payment in exchange for stock pursuant to Section 302 of the Code.
35
(e) Liquidations, etc. For so long as the Investors own equity or securities convertible into
equity in the Company, the Company shall not be liquidated, merged, or converted into a limited liability company, or otherwise enter into a transaction, in each case if the Company (or the surviving company following a merger) ceases to exist as
an entity treated as a corporation for U.S. federal income Tax purposes (and state and local Tax purposes, where applicable), without at least a majority in interest of the Securities then held by the Investors.
(f) Transfer Taxes. Except as provided in Section 13 of the Certificate of Designation, the Company will
pay any and all transfer, documentary, sales, use, registration and other similar Taxes incurred in connection with this Agreement and the issuance and purchase of shares of Series A Preferred Stock.
(g) IRS Form. At the Closing, each Investor shall deliver to the Company a duly executed, valid,
accurate and properly completed Internal Revenue Service (“IRS”) Form W-9 or applicable IR Form W-8 (with any required attachments). Each Investor agrees that if the information provided on any IRS Form W-9 or IRS Form W-8 previously delivered by the
Investor changes, or if a lapse in time or change in circumstances renders the information on such IRS Form W-9 or IRS Form W-8 obsolete, expired or inaccurate in any material respect, the Investor shall promptly inform the Company and deliver
promptly an updated IRS Form W-9 or IRS Form W-8.
(h) Withholding. The Company shall withhold such amounts as it is required to withhold pursuant to applicable law with respect to cash distributions or payments relating to the Series
A Preferred Stock, in a manner consistent with Section 5.15(c) and amounts so withheld in accordance with this Section 5.15(h) shall be treated as having been paid to the party with respect to which such withholding is made. The Company shall remit
and pay the amounts so withheld to the applicable governmental authorities in accordance with applicable law. If the Company determines that any amounts are so required to be deducted and withheld from any such payment made to a holder of Series A
Preferred Stock, at least five (5) Business Days prior to the date the applicable payment is scheduled to be made, the Company shall provide such holder of Series A Preferred Stock with (i) written notice of such intent to deduct and withhold, which
notice shall include the basis for the withholding and an estimate of the amount proposed to be deducted and withheld, and (ii) a reasonable opportunity to provide forms or other evidence that would exempt such amounts from withholding, and the
Company shall reasonably cooperate with the holder of the Series A Preferred Stock to reduce or eliminate amounts required to be withheld in accordance with applicable law.
5.16 Use of Proceeds. The net proceeds of the sale of the Securities hereunder shall be used by the Company for non-clinical and clinical development activities, research and business
development activities, repayment of debt, working capital and general corporate purposes.
5.17 Negative Covenants. From the date of this Agreement until there are less than 6,347 shares of Series A Preferred Stock outstanding, the Company and its subsidiaries shall
operate their businesses in the ordinary course, and, without the prior written consent of the Requisite Holders (as defined in the Certificate of Designation) (which consent shall not be unreasonably
withheld, conditioned or delayed), the Company shall not and shall cause its subsidiaries not to:
36
(a) take any action that would require the consent of the Requisite Holders pursuant to Section 4 of the Certificate of Designation;
(b) split, combine, subdivide, recapitalize, reclassify or make like change to any shares of its capital stock or other equity or voting interests;
(c) make any material amendments to the organizational documents of any of the Company’s subsidiaries;
(d) issue capital stock of the Company that would cause require the Company to obtain approval of its stockholders under the continued listing requirements of the Nasdaq;
(e) grant any Lien on the material property or assets of the Company or its subsidiaries other than Permitted Liens; or
(f) agree, authorize or commit to do any of the foregoing; provided, however, that any approval of the foregoing items that is contingent upon
receipt of the consent of the Investors required pursuant to this Section 5.17 shall not, solely by reason thereof, be deemed to be an action in violation hereof.
5.18 State Securities Laws. The Company shall use its reasonable best efforts to (a) obtain all necessary
permits and qualifications, if any, or secure an exemption therefrom, required by any state or country prior to the offer, sale and issuance of the Conversion Shares, the shares of Series A Preferred Stock or the Warrant Shares and (b) cause such
authorization, approval, permit or qualification to be effective as of the Closing and as of any conversion of Series A Preferred Stock.
5.19 Sponsor.
(a) Notwithstanding anything to the contrary set forth in this Agreement, none of the terms or provisions of this Agreement shall in any way limit the activities of Celadon Partners (Asia
Pacific) Limited (the “Sponsor”) or any of its Affiliates (collectively, the “Sponsor Group”), other than the Investors (the “Excluded
Sponsor Parties”), so long as (i) no such Excluded Sponsor Party or any of its Representatives is acting on behalf of or at the direction of any Investor with respect to any matter that otherwise would violate any term or provision of this
Agreement and (ii) no Confidential Information is made directly available to any Excluded Sponsor Party or any of its Representatives by or on behalf of any Investor or any of their Representatives, except with respect to any such Representative who
is (x) compliance personnel for compliance purposes and (y) non-compliance personnel of Sponsor who are directors or officers of, or function in a similar oversight role at, such Affiliate as long as Confidential Information is not otherwise
disclosed to such Affiliate.
37
(b) The Investors and the Company hereby agree, notwithstanding anything to the contrary in any other agreement or at law or in equity, that, to the maximum extent permitted by law, when the
Investors take any action under this Agreement to give or withhold their consent, the Investor shall have no duty (fiduciary or other) to consider the interests of the Company or the other stockholders of the Company and may act exclusively in their
own interest; provided, however, that the foregoing shall in no way affect the obligations of the parties hereto to comply with the provisions of this Agreement.
6. Conditions of Closing.
6.1 Conditions to the Obligation of the Investors. The several obligations of each Investor to consummate the transactions to be consummated at the Closing, and to purchase and pay for
the Securities being purchased by it at the Closing pursuant to this Agreement, are subject to the satisfaction or waiver in writing of the following conditions precedent:
(a) Representations and Warranties. The representations and warranties of the Company contained herein shall be true and correct in all material respects, except for those
representation and warranties qualified by materiality or Material Adverse Effect, which shall be true and correct in all respects, as of the date of this Agreement and as of the Closing Date, as though made on and as of such date, except to the
extent any such representation or warranty expressly speaks as of an earlier date, in which case such representation or warranty shall be true and correct in all material respects as of such earlier date, except for those representations and
warranties qualified by materiality or Material Adverse Effect, which shall be true and correct in all respects as of such earlier date.
(b) Performance. The Company shall have performed in all material respects the obligations and conditions herein required to be performed or observed by the Company on or prior to
the Closing Date.
(c) No Injunction. The purchase of and payment for the Securities by each Investor shall not be prohibited or enjoined by any law or governmental or court order or regulation and no
such prohibition shall have been threatened in writing.
(d) Consents. The Company shall have obtained any and all consents, permits, approvals, registrations and waivers necessary for the consummation of the purchase and sale of the
Securities, all of which shall be in full force and effect.
(e) Transfer Agent. The Company shall have furnished all required materials to the Transfer Agent to reflect the issuance of the shares of Series A Preferred Stock and Warrants at the
Closing.
(f) Adverse Changes. Since the date of this Agreement, no event or series of events shall have occurred that has had or would reasonably be expected to have a Material Adverse
Effect.
(g) Opinion of Company Counsel. The Company shall have delivered to the Investors and the Placement Agent the opinion of Goodwin Procter LLP, dated as of the Closing Date, in
customary form and substance to be reasonably agreed upon with the Investors and addressing such legal matters as the Investors and the Company reasonably agree.
38
(h) Compliance Certificate. An authorized officer of the Company shall have delivered to the Investors at the Closing Date a certificate certifying that the conditions specified in Sections
6.1(a) (Representations and Warranties), 6.1(b) (Performance), 6.1(c) (No Injunction), 6.1(d) (Consents), 6.1(e) (Transfer Agent), 6.1(f) (Adverse Changes), 6.1(k) (Listing Requirements) and 6.1(l)
(No Injunction) of this Agreement have been fulfilled.
(i) Secretary’s Certificate. The Secretary of the Company shall have delivered to the Investors at the Closing Date a certificate certifying (i) the Amended and Restated Certificate
of Incorporation; (ii) the Certificate of Designation, (iii) the Amended and Restated Bylaws; and (iv) resolutions of the Company’s Board of Directors (or an authorized committee thereof) approving this Agreement, the other Transaction Agreements,
the transactions contemplated by this Agreement and the issuance of the Securities.
(j) Registration Rights Agreement. The Company shall have executed and delivered the Registration Rights Agreement in the form attached hereto as Exhibit B (the “Registration Rights Agreement”) to the Investors.
(k) Listing Requirements. No stop order or suspension of trading shall have been imposed by Nasdaq, the SEC or any other governmental or regulatory body with respect to public
trading in the Common Stock. The Common Stock shall be listed on a National Exchange and shall not have been suspended, as of the Closing Date, by the SEC or the National Exchange from trading thereon nor shall suspension by the SEC or the National
Exchange have been threatened, as of the Closing Date, in writing by the SEC or the National Exchange.
(l) No Injunction. No judgment, writ, order, injunction, award or decree of or by any court, or judge, justice or magistrate, including any bankruptcy court or judge, or any order of
or by any Governmental Entity, shall have been issued, and no action or proceeding shall have been instituted by any Governmental Entity, enjoining or preventing the consummation of the transactions contemplated hereby or in the other Transaction
Agreements.
(m) Payment. The Company shall have received payment, by wire transfer of immediately available funds, in the full amount of the purchase price for the number of Securities being
purchased by each Investor at the Closing as set forth in Exhibit A.
(n) Certificate of Designation. The Company shall have filed the Certificate of Designation with the Secretary of State for the State of Delaware and such Certificate of Designation
shall continue to be in full force and effect as of the Closing Date.
(o) Nasdaq Pre-Clearance. The Company shall have filed with Nasdaq a Notification Form: Listing of Additional Shares for the listing of the Conversion Shares and the Warrant
Shares and received notification from Nasdaq that the review process has been completed, and Nasdaq shall have raised no objection (not subsequently withdrawn) that the consummation of the transactions contemplated by this Agreement would violate
the Nasdaq listing rules applicable to the Company and that if not withdrawn would result in the delisting of the Common Stock.
39
6.2 Conditions to the Obligation of the Company. The obligation of the Company to consummate the transactions to be consummated at the Closing, and to issue and sell to each Investor
the Securities to be purchased by it at the Closing pursuant to this Agreement, is subject to the satisfaction or waiver in writing of the following conditions precedent:
(a) Representations and Warranties. The representations and warranties of each Investor in Section 4 hereto shall be true and correct on and as of the Closing Date, with the
same force and effect as though made on and as of the Closing Date and consummation of the Closing shall constitute a reaffirmation by the Investor of each of the representations, warranties, covenants and agreements of the Investor contained in this
Agreement as of the Closing Date.
(b) Performance. Each Investor shall have performed or complied with in all material respects all obligations and conditions herein required to be performed or observed by such
Investor on or prior to the Closing Date.
(c) Injunction. The purchase of and payment for the Securities by each Investor shall not be prohibited or enjoined by any law or governmental or court order or regulation.
(d) Registration Rights Agreement. Each Investor shall have executed and delivered the Registration Rights Agreement to the Company in the form attached as Exhibit B.
(e) Payment. The Company shall have received payment, by wire transfer of immediately available funds, in the full amount of the purchase price for the number of shares of Series A
Preferred Stock and Warrants being purchased by each Investor at the Closing as set forth in Exhibit A.
(f) Nasdaq Pre-Clearance. The Company shall have filed with Nasdaq a Notification Form: Listing of Additional Shares for the listing of the Conversion Shares and the Warrant
Shares and Nasdaq shall have raised no objection to such notice and the transactions contemplated hereby.
(g) Lock-Up. Each Investor shall have executed a customary lock-up agreement covering the period through the date ninety (90) days from the conversion of the Series A Preferred Stock
into Conversion Shares, in such form as agreed to by the Company and such Investor.
7. Termination.
7.1 Termination. The obligations of the Company, on the one hand, and the Investors, on the other hand, to effect the Closing shall terminate as follows:
(i) Upon the mutual written consent of the Company and the Investors that agreed to purchase a majority of the Securities prior to the Closing;
(ii) By the Company if any of the conditions set forth in Section 6.2 shall have become incapable of fulfillment, and shall not have been waived by the Company;
40
(iii) By an Investor (with respect to itself only) if any of the conditions set forth in Section 6.1 shall have become incapable of fulfillment, and shall not have been waived by such
Investor; or
(iv) By either the Company or an Investor (with respect to itself only) if the Closing has not occurred on or prior to the fifth Business Day following the date of this Agreement;
provided, however, that, in the case of clauses (ii) and (iii) above, the party seeking to terminate its obligation to effect the Closing shall not then be in breach of any of its representations,
warranties, covenants or agreements contained in the Transaction Agreements if such breach has resulted in the circumstances giving rise to such party’s seeking to terminate its obligation to effect the Closing.
7.2 Notice. In the event of termination by the Company or the Investor of its obligations to effect the Closing pursuant to Section 7.1, written notice thereof shall be given
to the other Investors by the Company. Nothing in this Section 7 shall be deemed to release any party from any liability for any breach by such party of the other terms and provisions of the Transaction Agreements or to impair the right of
any party to compel specific performance by any other party of its other obligations under the Transaction Agreements.
8. Miscellaneous Provisions.
8.1 Public Statements or Releases. Except as set forth in Section 5.5, neither the Company nor any Investor shall make any public announcement with respect to the existence or terms
of this Agreement or the transactions provided for herein without the prior consent of the other party (which consent shall not be unreasonably withheld). Notwithstanding the foregoing, and subject to compliance with Section 5.5, nothing in this
Section 8.1 shall prevent any party from making any public announcement it considers necessary in order to satisfy its obligations under the law, including applicable securities laws, or under the rules of any national securities exchange or
securities market, in which case the Company shall allow the Investors reasonable time to comment on such release or announcement in advance of such issuance, and the Company will consider in good faith any Investor comments. The Company shall not
include the name of the Investor in any press release or public announcement (which, for the avoidance of doubt, shall not include any filing with the SEC) without the prior written consent of the Investors, except as otherwise required by law or the
applicable rules or regulations of any securities exchange or securities market, in which case the Company shall allow the Investors, to the extent reasonably practicable in the circumstances, reasonable time to comment on such release or
announcement in advance of such issuance. Notwithstanding anything to the contrary in this Section 8.1, Investor and Company review shall not be required for Company and Investor disclosures that are substantially consistent with prior Company or
Investor disclosures.
8.2 Notices. Any notices or other communications required or permitted to be given hereunder shall be in writing and shall be deemed to be given (a) when delivered if personally
delivered to the party for whom it is intended, (b) when delivered, if sent by electronic mail during normal business hours of the recipient, and if not sent during normal business hours, then on the recipient’s next Business Day, (c) three (3) days
after having been sent by certified or registered mail, return-receipt requested and postage prepaid, or (d) one (1) Business Day after deposit with a nationally recognized overnight courier, freight prepaid, specifying next business day delivery,
with written verification of receipt:
41
(a) If to the Company, addressed as follows:
Senti Biosciences, Inc.
2 Corporate Drive, First Floor
South San Francisco, CA 94080
Attention: Chief Executive Officer
Email: [***]
with a copy (which shall not constitute notice):
Goodwin Procter LLP
Three Embarcadero Center
San Francisco, CA 94111
Attention: Maggie Wong, Esq.
Email: [***]
(b) If to any Investor, at its address or e-mail address set forth on Exhibit A, or such address as subsequently modified by written notice given in accordance with this Section
8.2.
Any Person may change the address to which notices and communications to it are to be addressed by notification as provided for herein.
8.3 Consent to Electronic Notice. Each Investor consents to the delivery of any stockholder notice pursuant to the Delaware General Corporation Law (the “DGCL”), as amended or superseded from time to time, by electronic mail pursuant to Section 232 of the DGCL (or any successor thereto) at the e-mail address set forth below the Investor’s name on the signature page or Exhibit A, as
updated from time to time by notice to the Company. To the extent that any notice given by means of electronic mail is returned or undeliverable for any reason, the foregoing consent shall be deemed to have been revoked until a new or corrected
e-mail address has been provided, and such attempted electronic notice shall be ineffective and deemed to not have been given. Each party agrees to promptly notify the other parties of any change in its e-mail address, and that failure to do so shall
not affect the foregoing.
8.4 Severability. If any part or provision of this Agreement is held unenforceable or in conflict with the applicable laws or regulations of any jurisdiction, the invalid or
unenforceable part or provisions shall be replaced with a provision which accomplishes, to the extent possible, the original business purpose of such part or provision in a valid and enforceable manner, and the remainder of this Agreement shall
remain binding upon the parties hereto.
8.5 Governing Law; Dispute Resolution.
(a) This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York without regard to choice of laws or conflicts of laws provisions thereof that
would require the application of the laws of any other jurisdiction, except to the extent that mandatory principles of Delaware law may apply.
42
(b) The Company and each of the Investors hereby irrevocably and unconditionally:
(i) submits for itself and its property in any legal action or proceeding relating solely to this Agreement or the transactions contemplated hereby, to the general jurisdiction of the any
state court or United States Federal court sitting in the Borough of Manhattan, City of New York in the State of New York;
(ii) consents that any such action or proceeding may be brought in such courts, and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any
such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same to the extent permitted by applicable law;
(iii) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail),
postage prepaid, to the party, as the case may be, at its address set forth in Section 8.2 or at such other address of which the other party shall have been notified pursuant thereto;
(iv) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction for
recognition and enforcement of any judgment or if jurisdiction in the courts referenced in the foregoing clause (i) are not available despite the intentions of the parties hereto;
(v) agrees that final judgment in any such suit, action or proceeding brought in such a court may be enforced in the courts of any jurisdiction to which such party is subject by a suit upon
such judgment, provided that service of process is effected upon such party in the manner specified herein or as otherwise permitted by law;
(vi) agrees that to the extent that such party has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process with respect to itself or its property, such
party hereby irrevocably waives such immunity in respect of its obligations under this Agreement, to the extent permitted by law; and
(vii) irrevocably and unconditionally waives trial by jury in any legal action or proceeding in relation to this Agreement.
8.6 Expenses. Except as expressly set forth in the Transaction Agreements to the contrary, each party shall pay its own out-of-pocket fees and expenses, including the fees and
expenses of attorneys, accountants and consultants employed by such party, incurred in connection with the proposed investment in the Securities and the consummation of the transactions contemplated thereby; provided, however, that the Company shall
pay all Transfer Agent fees (including, without limitation, any fees required for same-day processing of any instruction letter delivered by the Company), stamp taxes and other taxes (other than income taxes) and duties levied in connection with the
delivery of any Securities to the Investors. Notwithstanding the foregoing, the Company shall pay the reasonable fees and expenses of the Celadon Investor, in an amount not to exceed $350,000.00 in the aggregate. The Company shall pay all Placement
Agent fees relating to or arising out of the transactions contemplated by this Agreement.
43
8.7 Assignment. None of the parties may assign its rights or obligations under this Agreement or designate another person (i) to perform all or part of its obligations under this
Agreement or (ii) to have all or part of its rights and benefits under this Agreement, in each case without the prior written consent of (x) the Company, in the case of an Investor, and (y) the Investors, in the case of the Company, provided that an
Investor may, without the prior consent of the Company, assign its rights to purchase the Securities hereunder to any of its affiliates or to any other investment funds or accounts managed or advised by the investment manager who acts on behalf of
such Investor (provided each such assignee agrees to be bound by the terms of this Agreement and makes the same representations and warranties set forth in Section 4 ). In the event of any assignment in accordance with the terms of this
Agreement, the assignee shall specifically assume and be bound by the provisions of this Agreement by executing a writing agreeing to be bound by and subject to the provisions of this Agreement and shall deliver an executed counterpart signature page
to this Agreement and, notwithstanding such assumption or agreement to be bound hereby by an assignee, no such assignment shall relieve any party assigning any interest hereunder from its obligations or liability pursuant to this Agreement.
8.8 Confidential Information. (a) Each Investor covenants that until such time as the transactions contemplated by this Agreement and any material non-public information provided to
such Investor are publicly disclosed by the Company, such Investor will maintain the confidentiality of all disclosures of material non-public information made to it in connection with this transaction (including the existence and terms of this
transaction), other than to such Investor’s outside attorney, accountant, auditor or investment advisor only to the extent necessary to permit evaluation of the investment, and the performance of the necessary or required tax, accounting, financial,
legal, or administrative tasks and services and other than as may be required by law.
(b) The Company may request from the Investors such reasonable and customary additional information as the Company may deem necessary to evaluate the eligibility of the Investor to acquire
the Securities, and the Investor shall promptly provide such information as may reasonably be requested to the extent readily available; provided, that the Company agrees to keep any such information provided by the Investor confidential, except (i)
as required by the federal securities laws, rules or regulations and (ii) to the extent such disclosure is required by other laws, rules or regulations, at the request of the staff of the SEC or regulatory agency or under the regulations of Nasdaq.
The Investor acknowledges that the Company may file a copy of this Agreement and the Registration Rights Agreement with the SEC as exhibit to a periodic report or a registration statement of the Company.
44
8.9 Reliance by and Exculpation of Placement Agent.
(a) Each Investor agrees for the express benefit of the Placement Agent, its affiliates and its representatives that (i) the Placement Agent, its affiliates and its representatives have not
made, and will not make any representations or warranties with respect to the Company or the offer and sale of the Securities, and the Investor will not rely on any statements made by the Placement Agent, orally or in writing, to the contrary, (ii)
the Investor will be responsible for conducting its own due diligence investigation with respect to the Company and the offer and sale of the Securities, (iii) the Investor will be purchasing Securities based on the results of its own due diligence
investigation of the Company and the Placement Agent and each of its directors, officers, employees, representatives, and controlling persons have made no independent investigation with respect to the Company, the Securities, or the accuracy,
completeness, or adequacy of any information supplied to the Investor by the Company, (iv) the Investor has negotiated the offer and sale of the Securities directly with the Company, and the Placement Agent will not be responsible for the ultimate
success of any such investment and (v) the decision to invest in the Company will involve a significant degree of risk, including a risk of total loss of such investment. Each Investor further represents and warrants to the Placement Agent that it,
including any fund or funds that it manages or advises that participates in the offer and sale of the Securities, is permitted under its constitutive documents (including, without limitation, all limited partnership agreements, charters, bylaws,
limited liability company agreements, all applicable side letters with investors, and similar documents) to make investments of the type contemplated by this Agreement. This Section 8.10 shall survive any termination of this Agreement.
(b) The Company agrees and acknowledges that the Placement Agent may rely on its representations, warranties, agreements and covenants contained in this Agreement and each Investor agrees
that the Placement Agent may rely on such Investor’s representations and warranties contained in this Agreement as if such representations and warranties, as applicable, were made directly to the Placement Agent.
(c) Neither the Placement Agent nor any of its affiliates or representatives (1) shall be liable for any improper payment made in accordance with the information provided by the Company; (2)
makes any representation or warranty, or has any responsibilities as to the validity, accuracy, value or genuineness of any information, certificates or documentation delivered by or on behalf of the Company pursuant to the Transaction Agreements or
in connection with any of the transactions contemplated therein; or (3) shall be liable (x) for any action taken, suffered or omitted by any of them in good faith and reasonably believed to be authorized or within the discretion or rights or powers
conferred upon it by the Transaction Agreements or (y) for anything which any of them may do or refrain from doing in connection with the Transaction Agreements, except in each case for such party’s own gross negligence or willful misconduct.
(d) The Company agrees that the Placement Agent, its affiliates and representatives shall be entitled to (1) rely on, and shall be protected in acting upon, any certificate, instrument,
notice, letter or any other document or security delivered to any of them by or on behalf of the Company, and (2) be indemnified by the Company for acting as the Placement Agent hereunder pursuant to the indemnification provisions set forth in the
applicable letter agreement between the Company and the Placement Agent.
8.10 Third Parties. Nothing in this Agreement, express or implied, is intended to confer on any Person other than the parties to this Agreement any rights, remedies, claims, benefits,
obligations or liabilities under or by reason of this Agreement, and no Person that is not a party to this Agreement (including, without limitation, any partner, member, shareholder, director, officer, employee or other beneficial owner of any party
to this Agreement, in its own capacity as such or in bringing a derivative action on behalf of a party to this Agreement) shall have any standing as a third party beneficiary with respect to this Agreement or the transactions contemplated hereby.
Notwithstanding the foregoing, (i) the Placement Agent is an intended third-party beneficiary of the representations and warranties of the Company and of each Investor set forth in Section 3, Section 4 and Section 6.1(h) and Section
8.10 respectively, of this Agreement and (ii) the Indemnified Persons are intended third-party beneficiaries of Section 5.13.
45
8.11 Independent Nature of Investors’ Obligations and Right. The obligations of each Investor under this Agreement are several and not joint with the obligations of any other Investor,
and no Investor shall be responsible in any way for the performance obligations of any other Investor under this Agreement. Nothing contained herein, and no action taken by any Investor pursuant hereto, shall be deemed to constitute the Investors as,
and the Company acknowledges that the Investors do not so constitute, a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Investors are in any way acting in concert or as a group, and the
Company will not assert any such claim with respect to such obligations or the transactions contemplated by this Agreement. The Company acknowledges and each Investor confirms that it has independently participated in the negotiation of the
transaction contemplated hereby with the advice of its own counsel and advisors. Each Investor also acknowledges that Goodwin Procter LLP has not rendered legal advice to such Investor. Each Investor shall be entitled to independently protect and
enforce its rights, including, without limitation, the rights arising out of this Agreement, and it shall not be necessary for any other Investor to be joined as an additional party in any proceeding for such purpose. The Company has elected to
provide all Investors with the same terms and Transaction Agreements for the convenience of the Company and not because it was required or requested to do so by any Investor.
8.12 Headings. The titles, subtitles and headings in this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement.
8.13 Counterparts. This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and shall become effective
when counterparts have been signed by each party and delivered to the other party; provided that a facsimile or pdf signature including any electronic signatures complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com shall be
considered due execution and shall be binding upon the signatory thereto with the same force and effect as if the signature were an original, not a facsimile or pdf (or other electronic reproduction of a) signature.
8.14 Entire Agreement; Amendments. This Agreement, including the Disclosure Schedules, and the other Transaction Agreements (including all schedules and exhibits hereto and thereto),
together with any side letter agreements with any of the Investors, constitute the entire agreement between the parties hereto respecting the subject matter of this Agreement and supersedes all prior agreements, negotiations, understandings,
representations and statements respecting the subject matter of this Agreement, whether written or oral. No amendment, modification, alteration, or change in any of the terms of this Agreement shall be valid or binding upon the parties hereto unless
made in writing and duly executed by the Company and the Investors of at least a majority in interest of the Securities then held by the Investors, provided that prior to the Closing the consent of all Investors shall be required Notwithstanding the
foregoing, this Agreement may not be amended and the observance of any term of this Agreement may not be waived with respect to any Investor without the written consent of such Investor unless such amendment or waiver applies to all Investors in the
same fashion. The Company, on the one hand, and each Investor, on the other hand, may by an instrument signed in writing by such parties waive the performance, compliance or satisfaction by such Investor or the Company, respectively, with any term
or provision of this Agreement or any condition hereto to be performed, complied with or satisfied by such Investor or the Company, respectively. Notwithstanding the foregoing or anything else herein to the contrary, no amendment, modification,
alteration, change or waiver of this Section 8.15 shall be valid without the prior written consent of the Placement Agent, which consent may be granted or withheld in the sole discretion of the Placement Agent.
46
8.15 Survival. The covenants, representations and warranties made by each party hereto contained in this Agreement shall survive the Closing and the delivery of the Securities in
accordance with their respective terms. Each Investor shall be responsible only for its own representations, warranties, agreements and covenants hereunder.
8.16 Contract Interpretation. This Agreement is the joint product of each Investor and the Company and each provision of this Agreement has been subject to the mutual consultation,
negotiation and agreement of such parties and shall not be construed for or against any party hereto.
8.17 Arm’s Length Negotiations. For the avoidance of doubt, the parties acknowledge and confirm that the terms and conditions of the Securities were determined as a result of
arm’s-length negotiations.
[Remainder of Page Intentionally Left Blank.]
47
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.
|
COMPANY:
|
||
|
SENTI BIOSCIENCES, INC.
|
||
|
By:
|
||
|
Name:
|
Timothy Lu
|
|
|
Title:
|
Chief Executive Officer
|
[Signature Page to Securities Purchase Agreement]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.
|
INVESTOR:
|
||
|
[NAME]
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
|
Address:
|
||
|
Email:
|
||
[Signature Page to Securities Purchase Agreement]
EXHIBIT A
INVESTORS
[***]
A-1
EXHIBIT B
FORM OF WARRANT
[***]
B-1
EXHIBIT C
REGISTRATION RIGHTS AGREEMENT
[***]
C-1
EXHIBIT D
CERTIFICATE OF DESIGNATION
[***]
D-1
Exhibit 10.2
Execution Version
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”),
dated as of December 2, 2024, is entered into by and among Senti Biosciences, Inc., a Delaware corporation (the “Company”), and the several investors signatory hereto (individually as an “Investor” and collectively together with their respective permitted assigns, the “Investors”). Capitalized terms used herein and not otherwise defined herein shall have the respective meanings set forth in
the Securities Purchase Agreement by and among the parties hereto, dated as of the date hereof (as amended, restated, supplemented or otherwise modified from time to time, the “Purchase Agreement”).
WHEREAS:
A. Upon the terms and subject to the conditions of the Purchase
Agreement, the Company has agreed to issue to the Investors, and the Investors have agreed to purchase, severally and not jointly, an aggregate of up to $47,603,250.00 of (x) shares (the “Initial Shares”) of the Company’s Series A convertible preferred stock, par value $0.0001 per share (the “Series A Preferred Stock”), and (y) warrants (the “Warrants”) to purchase shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”),
in each case, pursuant to the Purchase Agreement. The shares of Common Stock issuable upon conversion of the Initial Shares and the shares of Common Stock issuable upon exercise of the Warrants, are collectively referred to herein as the “Shares.”
B. To induce the Investors to enter into the Purchase Agreement, the
Company has agreed to provide certain registration rights under the U.S. Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor statute (collectively, the “Securities Act”), and applicable state securities laws.
NOW, THEREFORE, in consideration of the promises and
the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Investors hereby agree as follows:
| 1. |
DEFINITIONS.
|
For purposes of this Agreement, the following terms shall have the following
meanings:
(a) “Person” means an individual, partnership,
corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture or any other entity or organization.
(b) “Register,” “Registered,” and “Registration” refer to a
registration effected by preparing and filing one or more registration statements of the Company in compliance with the Securities Act and providing for offering securities on a continuous basis, and the declaration or ordering of effectiveness
of such registration statement(s) by the U.S. Securities and Exchange Commission (the “SEC”).
(c) “Registrable Securities” means the Shares and any Common Stock issued or issuable with respect to the Shares as a result of any stock split or subdivision, stock dividend,
recapitalization, exchange or similar event. Registrable Securities shall cease to be Registrable Securities upon the date on which the Investors shall have resold all the Registrable Securities covered by the Registration Statement.
(d) “Registration Expenses” means all registration and filing fee expenses incurred by the Company in effecting any registration pursuant to this Agreement, including (i) all registration, qualification, and
filing fees, printing expenses, and any other fees and expenses associated with filings required to be made with the SEC, FINRA or any other regulatory authority, (ii) all fees and expenses in connection with compliance with or clearing the
Registrable Securities for sale under any securities or “Blue Sky” laws, (iii) all printing, duplicating, word processing, messenger, telephone, facsimile and delivery expenses, and (iv) all fees and disbursements of counsel for the Company and
of all independent certified public accountants of the Company (including the expenses of any special audit and cold comfort letters required by or incident to such performance).
(e) “Registration Statement” means any registration statement of the Company filed with, or to be filed with, the SEC under the Securities Act, that Registers Registrable Securities, including the related
prospectus, amendments and supplements to such registration statement, including pre- and post-effective amendments, and all exhibits and all material incorporated by reference in such registration statement as may be necessary to comply with
applicable securities laws. “Registration Statement” shall also include a New Registration Statement, as amended when each became effective, including all documents filed as part thereof or incorporated by reference therein, and including any
information contained in a prospectus subsequently filed with the SEC.
(f) “Selling Expenses” means all underwriting discounts and selling commissions applicable to the sale of Registrable Securities and all similar fees and commissions relating to the Investors’ disposition of the
Registrable Securities.
| 2. |
REGISTRATION.
|
(a) Mandatory
Registration. The Company shall, as promptly as reasonably practicable and in any event no later than 120 days after the Closing Date (the “Filing Deadline”), prepare and file with the SEC an initial Registration Statement (the “Initial Registration
Statement”) Registering the resale of all Registrable Securities. Before filing the Registration Statement, the Company shall furnish to the Investors a copy of the Registration Statement. The Investors and their counsel shall have at
least three Business Days prior to the anticipated filing date of a Registration Statement to review and comment upon such Registration Statement and any amendment or supplement to such Registration Statement and any related prospectus, prior to
its filing with the SEC. Subject to any SEC comments, such Registration Statement shall include the plan of distribution substantially in the form attached hereto as Exhibit A. The
Company shall (a) use its reasonable best efforts to address in each such document prior to being so filed with the SEC such comments as the Investor or its counsel reasonably proposed by the Investor, and (b) not file any Registration Statement
or related prospectus or any amendment or supplement thereto containing information regarding the Investor to which Investor reasonably objects, unless such information is required to comply with any applicable law or regulation. The Investors
shall promptly furnish all information reasonably requested by the Company and as shall be reasonably required in connection with any registration referred to in this Agreement.
2
(b) Effectiveness. The Company shall use its reasonable best efforts to have the Initial Registration Statement and any amendment declared effective
by the SEC at the earliest possible date, but in any event no later than the earlier of: (a) the 75th calendar day following the initial filing date of the Initial Registration Statement if the SEC notifies the Company that it will
“review” the Initial Registration Statement and (b) the fifth Business Day after the date the Company is notified (orally or in writing, whichever is earlier) by the SEC that the Initial Registration Statement will not be “reviewed” or will not
be subject to further review (the “Effectiveness Deadline”). The Company shall notify the Investor by e-mail as promptly as practicable, and in any event, within 24 hours,
after the Registration Statement is declared effective or is supplemented and shall provide the Investor with copies of any related prospectus to be used in connection with the sale or other disposition of the securities covered thereby. The
Company shall use reasonable best efforts to keep the Initial Registration Statement continuously effective pursuant to Rule 415 promulgated under the Securities Act and available for the resale by the Investors of all of the Registrable
Securities covered thereby at all times until the earliest to occur of the following events: (i) the date on which the Investors shall have resold all the Registrable Securities covered thereby; and (ii) the date on which the Registrable
Securities may be resold by the Investors without registration and without regard to any volume or manner-of-sale limitations by reason of Rule 144, without the requirement for the Company to be in compliance with the current public information
requirement under Rule 144 under the Securities Act or any other rule of similar effect (the “Registration Period”). The Initial Registration Statement (including any
amendments or supplements thereto and prospectuses contained therein) shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading.
(c) Sufficient Number
of Shares Registered. In the event the number of shares available under the Initial Registration Statement at any time is insufficient to cover the Registrable Securities, the Company shall, to the extent necessary and permissible,
amend the Initial Registration Statement or file a new registration statement (together with any prospectuses or prospectus supplements thereunder, a “New Registration Statement”),
so as to cover all of such Registrable Securities as soon as reasonably practicable, but in any event not later than ten Business Days after the necessity therefor arises (the “New
Registration Filing Deadline”). The Company shall use its reasonable best efforts to have such amendment and/or New Registration Statement become effective as soon as reasonably practicable following the filing thereof but no later than
the earlier of the 75th calendar day following the initial filing date of the New Registration Statement if the SEC notifies the Company that it will “review” the New Registration Statement and (b) the fifth Business Day after the date the
Company is notified (orally or in writing, whichever is earlier) by the SEC that the New Registration Statement will not be “reviewed” or will not be subject to further review (the earlier of such dates, the “New Registration Effectiveness Deadline”). The provisions of Section 2(a)
and (b) shall apply to the New Registration Statement, except as modified hereby.
(d) Liquidated Damages. If (i) the Initial Registration Statement has not been filed by the Filing Deadline, (ii) the Initial Registration Statement has not been declared effective by the Effectiveness Deadline, (iii) the
New Registration Statement has not been filed by the New Registration Filing Deadline, (iv) the New Registration Statement has not been declared effective by the New Registration Effectiveness Deadline or (v) after any Registration Statement
has been declared effective by the SEC, sales cannot be made pursuant to such Registration Statement for any reason (including without limitation by reason of a stop order, or the Company’s failure to update such Registration Statement), but
excluding any Allowed Delay (as defined below) or, if the Registration Statement is on Form S-1, for a period of 20 days following the date on which the Company files a post-effective amendment to incorporate the Company’s Annual Report on Form
10-K (a “Maintenance Failure”), then the Company will make pro rata payments to each Investor then holding Registrable Securities, as liquidated damages and not as a
penalty, in an amount equal to 1.0% of the aggregate amount paid pursuant to the Purchase Agreement by such Investor for such Registrable Securities then held by such Investor for each 30-day period or pro rata for any portion thereof during
which the failure continues (the “Blackout Period”). Such payments shall constitute the Investors’ exclusive monetary remedy for such events, but shall not affect the right
of the Investors to seek injunctive relief. The amounts payable as liquidated damages pursuant to this paragraph shall be paid in cash no later than five Business Days after each such 30-day period following the commencement of the Blackout
Period until the termination of the Blackout Period (the “Blackout Period Payment Date”). Interest shall accrue at the rate of 1.0% per month on any such liquidated damages payments that shall not be paid by the Blackout Period Payment Date
until such amount is paid in full. Notwithstanding the above, in no event shall the aggregate amount of liquidated damages (or interest thereon) paid under this Agreement to any Investor exceed, in the aggregate, 5.0% of the aggregate purchase
price of the Shares purchased by such Investor under the Purchase Agreement. Notwithstanding anything in this Section 2(d) to the contrary, during any periods that the Company is unable to meet its obligations hereunder with respect to the
registration of the Registrable Securities because any Investor fails to furnish information required to be provided pursuant to Section 2(a) or Section 4(a) within three Business Days of the Company’s request, any liquidated damages that would
otherwise accrue as to such Investor only shall be tolled until such information is delivered to the Company.]
3
(e) Allowable Delays. On no more than two occasions and for not more than 30 consecutive days or for a total of not more than 60 days in any 12 month period, the Company may delay the effectiveness of the Initial
Registration Statement or any other Registration Statement, or suspend the use of any prospectus included in any Registration Statement, in the event that the Company determines in good faith that such delay or suspension is necessary to (A)
delay the disclosure of material non-public information concerning the Company, the disclosure of which at the time is not, in the good faith opinion of the Company, in the best interests of the Company or (B) amend or supplement the affected
Registration Statement or the related prospectus so that such Registration Statement or prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the
statements therein, in the case of the prospectus in light of the circumstances under which they were made, not misleading (an “Allowed Delay”); provided, that the Company
shall promptly (a) notify each Investor in writing of the commencement of an Allowed Delay, but shall not (without the prior written consent of an Investor) disclose to such Investor any material non-public information giving rise to an Allowed
Delay, (b) advise the Investors in writing to cease all sales under the Registration Statement until the end of the Allowed Delay and (c) use commercially reasonable efforts to terminate an Allowed Delay as promptly as practicable.
(f) Rule 415; Cutback. If at any time the SEC takes the position that the offering of some or all of the Registrable Securities in any Registration Statement is not eligible to be made on a
delayed or continuous basis under the provisions of Rule 415 under the Securities Act (provided, however, the Company shall be obligated to use reasonable best efforts to advocate with the SEC for the registration of all of the Registrable
Securities) or requires any Investor to be named as an “underwriter,” the Company shall (i) promptly notify each holder of Registrable Securities thereof and (ii) make commercially reasonable efforts to persuade the SEC that the offering
contemplated by such Registration Statement is a valid secondary offering and not an offering “by or on behalf of the issuer” as defined in Rule 415 and that none of the Investors is an “underwriter.” The Investors shall have the right to
select one legal counsel (“Legal Counsel”) to review and oversee any registration or matters pursuant to this Section 2(f),
including reviewing the definitive proxy statement relating to the requisite stockholder approval of the Purchase Agreement, participation in any meetings or discussions with the SEC regarding the SEC’s position and to comment on any written
submission made to the SEC with respect thereto. The Company shall pay the fees and expenses of such Legal Counsel arising out of such review up to a maximum amount of $35,000. No such written submission with respect to this matter shall be
made to the SEC to which any Investor’s counsel reasonably objects. In the event that, despite the Company’s reasonable best efforts and compliance with the terms of this Section 2(f),
the SEC refuses to alter its position, the Company shall (i) remove from such Registration Statement such portion of the Registrable Securities (the “Cut Back Shares”)
and/or (ii) agree to such restrictions and limitations on the registration and resale of the Registrable Securities as the SEC may require to assure the Company’s compliance with the requirements of Rule 415 (collectively, the “SEC Restrictions”); provided, however, that the Company shall not name any Investor as an “underwriter” in such Registration Statement without the prior written consent of such
Investor (provided that, in the event an Investor withholds such consent, the Company shall have no obligation hereunder to include any Registrable Securities of such Investor in any Registration Statement covering the resale thereof until such
time as the SEC no longer requires such Investor to be named as an “underwriter” in such Registration Statement or such Investor otherwise consents in writing to being so named). Any cut-back imposed on the Investors pursuant to this Section 2(f) shall be allocated among the Investors on a pro rata basis and shall be applied first to any of the Registrable Securities of such Investor as such Investor shall designate,
unless the SEC Restrictions otherwise require or provide or the Investors otherwise agree. No liquidated damages shall accrue as to any Cut Back Shares until such date as the Company is able to effect the registration of such Cut Back Shares in
accordance with any SEC Restrictions applicable to such Cut Back Shares (such date, the “Restriction Termination Date”). From and after the Restriction Termination Date
applicable to any Cut Back Shares, all of the provisions of this Section 2 (including the Company’s obligations with respect to the filing of a Registration Statement and its
obligations to use reasonable efforts to have such Registration Statement declared effective within the time periods set forth herein and the liquidated damages provisions relating thereto) shall again be applicable to such Cut Back Shares;
provided, however, that the date by which the Company is required to file the Registration Statement with respect to such Cut Back Shares shall be the tenth day following the Restriction Termination Date and the date by which the Company is
required to have the Registration Statement effective with respect to such Cut Back Shares shall be the 55th day immediately after the Restriction Termination Date.
4
| 3. |
RELATED COMPANY OBLIGATIONS.
|
With respect to the Registration Statement and whenever any Registrable Securities are to be Registered pursuant to Section 2, including on the Initial Registration Statement or on any New Registration Statement, the Company shall use its reasonable best efforts to effect the registration of the Registrable
Securities in accordance with the intended method of disposition thereof and, pursuant thereto, the Company shall have the following obligations:
(a) Notifications.
The Company will promptly notify the Investors promptly of the time when any subsequent amendment to the Initial Registration Statement or any New Registration Statement, other than documents incorporated by reference, has been filed with the SEC
and/or has become effective or where a receipt has been issued therefor or any subsequent supplement to a prospectus has been filed and of any request by the SEC for any amendment or supplement to the Registration Statement, any New Registration
Statement or any prospectus or for additional information.
(b) Amendments.
The Company will prepare and file with the SEC any amendments, post-effective amendments or supplements to the Initial Registration Statement, any New Registration Statement or any related prospectus, as applicable, that, (a) as may be necessary
to keep such Registration Statement effective for the Registration Period and to comply with the provisions of the Securities Act and the U.S. Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder, or any similar
successor statute (the “Exchange Act”) with respect to the distribution of all of the Registrable Securities covered thereby, or (b) in the reasonable opinion of the
Investors and the Company, as may be necessary or advisable in connection with any acquisition or sale of Registrable Securities by the Investors.
(c) Investor Review.
The Company will not file any amendment or supplement to the Registration Statement, any New Registration Statement or any prospectus, other than documents incorporated by reference, relating to the Investors, the Registrable Securities or the
transactions contemplated hereby unless (A) the Investors and their counsel shall have been advised and afforded the opportunity to review and comment thereon at least three (3) Business Days prior to filing with the SEC and (B) the Company shall
have given reasonable due consideration to any comments thereon received from the Investors or their counsel.
5
(d) Copies Available. The Company will furnish to any Investor whose Registrable Securities are included in any Registration Statement and its counsel copies of the Initial Registration Statement, any prospectus
thereunder (including all documents incorporated by reference therein), any prospectus supplement thereunder, any New Registration Statement and all amendments to the Initial Registration Statement or any New Registration Statement that are
filed with the SEC during the Registration Period (including all documents filed with or furnished to the SEC during such period that are deemed to be incorporated by reference therein), each letter written by or on behalf of the Company to the
SEC or the staff of the SEC, and each item of correspondence from the SEC or the staff of the SEC, in each case relating to such Registration Statement (other than any portion thereof which contains information for which the Company has sought
confidential treatment) and such other documents as Investor may reasonably request in order to facilitate the disposition of the Registrable Securities owned by Investor that
are covered by such Registration Statement, in each case as soon as reasonably practicable upon such Investor’s request and in such quantities as such Investor may from time to time reasonably request; provided, however, that the
Company shall not be required to furnish any document to the Investor to the extent such document is available on EDGAR.
(e) Notification of
Stop Orders; Material Changes. The Company shall use best efforts to (i) prevent the issuance of any stop order or other suspension of effectiveness and, (ii) if such order is issued, obtain the withdrawal of any such order as soon
as practicable. The Company shall advise the Investors promptly (but in no event later than 24 hours) and shall confirm such advice in writing, in each case: (i) of the Company’s receipt of notice of any request by the SEC or any other federal or
state governmental authority for amendment of or a supplement to the Registration Statement or any prospectus or for any additional information; (ii) of the Company’s receipt of notice of the issuance by the SEC or any other federal or state
governmental authority of any stop order suspending the effectiveness of the Initial Registration Statement or prohibiting or suspending the use of any prospectus or prospectus supplement, or any New Registration Statement, or of the Company’s
receipt of any notification of the suspension of qualification of the Registrable Securities for offering or sale in any jurisdiction or the initiation or contemplated initiation of any proceeding for such purpose; and (iii) of the Company
becoming aware of the happening of any event, which makes any statement of a material fact made in any Registration Statement or any prospectus untrue or which requires the making of any additions to or changes to the statements then made in any
Registration Statement or any prospectus in order to state a material fact required by the Securities Act to be stated therein or necessary in order to make the statements then made therein (in the case of any prospectus, in light of the
circumstances under which they were made) not misleading, or of the necessity to amend any Registration Statement or any prospectus to comply with the Securities Act or any other law. The Company shall not be required to disclose to the Investors
the substance of specific reasons of any of the events set forth in clause (i) to (iii) of the immediately preceding sentence (each, a “Suspension Event”), but rather, shall
only be required to disclose that the event has occurred. If at any time the SEC, or any other federal or state governmental authority shall issue any stop order suspending the effectiveness of any Registration Statement or prohibiting or
suspending the use of any prospectus or prospectus supplement, the Company shall use its reasonable best efforts to obtain the withdrawal of such order at the earliest practicable time. The Company shall furnish to the Investors, without charge,
a copy of any correspondence from the SEC or the staff of the SEC, or any other federal or state governmental authority to the Company or its representatives relating to the Initial Registration Statement, any New Registration Statement or any
prospectus, or prospectus supplement as the case may be. In the event of a Suspension Event set forth in clause (iii) of the first sentence of this Section 3(e), the Company will use
its commercially reasonable efforts to publicly disclose such event as soon as reasonably practicable, or otherwise resolve the matter such that sales under Registration Statements may resume; provided, however, that if the Company has a bona
fide business purpose for not making such information public, the Company may suspend the use of all Registration Statements for up to 60 consecutive calendar days; provided, further, that the Company may not suspend the use of all Registration
Statements more than twice, or for more than 90 total calendar days, in each case during any twelve-month period.
6
(f) Confirmation of Effectiveness. If reasonably requested by an Investor at any time in respect of any Registration Statement, the Company shall deliver to such Investor a written confirmation from Company’s counsel of
whether or not the effectiveness of such Registration Statement has lapsed at any time for any reason (including, without limitation, the issuance of a stop order) and whether or not such Registration Statement is currently effective and
available to the Company for sale of Registrable Securities.
(g) Listing. The Company shall use best efforts to cause all Registrable Securities covered by a Registration Statement to be listed on the Nasdaq Capital Market.
(h) Compliance. The Company shall otherwise use best efforts to comply with all applicable rules and regulations of the SEC under the Securities Act and the Exchange Act, including, without limitation, Rule 172 under the
Securities Act, file any final prospectus, including any supplement or amendment thereof, with the SEC pursuant to Rule 424 under the Securities Act, promptly inform the Investor in writing if, at any time during the Registration Period, the
Company does not satisfy the conditions specified in Rule 172 and, as a result thereof, the Investor is required to deliver a prospectus in connection with any disposition of Registrable Securities and take such other actions as may be
reasonably necessary to facilitate the registration of the Registrable Securities hereunder, and make available to its security holders, as soon as reasonably practicable, but not later than the Availability Date (as defined below), an earnings
statement covering a period of at least 12 months, beginning after the effective date of each Registration Statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act, including Rule 158 promulgated
thereunder (for the purpose of this subsection 3(h), “Availability Date” means the 45th day
following the end of the fourth fiscal quarter that includes the effective date of such Registration Statement, except that, if such fourth fiscal quarter is the last quarter of the Company’s fiscal year, “Availability Date” means the 90th day after the end of such fourth fiscal quarter).
(i) Blue-Sky. The Company shall register or qualify or cooperate with the Investor and their counsel in connection with the registration or qualification of such Registrable Securities for the offer and sale under the
securities or blue sky laws of such jurisdictions reasonably requested by the Investor; provided, however, that the Company shall not be required in connection therewith or as a condition thereto to (i) qualify to do business in any
jurisdiction where it would not otherwise be required to qualify but for this Section 3(i), (ii) subject itself to general taxation in any jurisdiction where it would not otherwise be
so subject but for this Section 3(i), or (iii) file a general consent to service of process in any such jurisdiction.
(j) Rule 144. With a view to making available to the Investors the benefits of Rule 144 (or its successor rule) and any other rule or regulation of the SEC that may at any time permit the Investors to sell shares of Common
Stock to the public without registration, the Company covenants and agrees to: (i) make and keep adequate current public information available, as those terms are understood and defined in Rule 144, until the earlier of (A) six months after
such date as all of the Registrable Securities may be sold without restriction by the holders thereof pursuant to Rule 144 or any other rule of similar effect or (B) such date as there are no longer Registrable Securities; and (ii) file with
the SEC in a timely manner all reports and other documents required of the Company under the Exchange Act; (iii) furnish electronically to each Investor upon request, as long as such Investor owns any Registrable Securities, (A) a written
statement by the Company that it has complied with the reporting requirements of the Exchange Act, (B) a copy of or electronic access to the Company’s most recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q, and (C) such other
information as may be reasonably requested in order to avail such Investor of any rule or regulation of the SEC that permits the selling of any such Registrable Securities without registration and (iv) provide any legal opinions.
7
(k) Cooperation. The Company shall cooperate with the holders of the Registrable Securities to facilitate the timely preparation and delivery of certificates or uncertificated shares representing the Registrable Securities
to be sold pursuant to such Registration Statement or Rule 144 free of any restrictive legends and representing such number of shares of Common Stock and registered in such names as the holders of the Registrable Securities may reasonably
request to the extent permitted by such Registration Statement or Rule 144 to effect sales of Registrable Securities ; for the avoidance of doubt, the Company may satisfy its obligations hereunder without issuing physical stock certificates
through the use of The Depository Trust Company’s Direct Registration System.
| 4. |
OBLIGATIONS OF THE INVESTORS.
|
(a) Investor
Information. Each Investor shall provide a completed Investor Questionnaire in the form attached hereto as Exhibit B in connection with the registration of the
Registrable Securities. If the Company has not received such completed Questionnaire from an Investor within three business days of the Company’s request, the Company may file the Registration Statement without including such Investor’s
Registrable Securities.
(b) Suspension of Sales. Each Investor, severally and not
jointly with any other Investor, agrees that, upon receipt of any notice from the Company of the existence of Suspension Event as set forth in Section 3(e), the Investor will immediately discontinue disposition of Registrable Securities pursuant
to any Registration Statement covering such Registrable Securities until the Investor’s receipt of a notice from the Company confirming the resolution of such Suspension Event and that such dispositions may again be made.
(c) Investor Cooperation. Each Investor, severally and not jointly with any other Investor, agrees to cooperate with the Company as reasonably requested by the Company
in connection with the preparation and filing of any amendments and supplements to any Registration Statement or New Registration Statement hereunder, unless such Investor has notified the Company in writing of its election to exclude all of
its Registrable Securities from such Registration Statement.
| 5. |
EXPENSES OF REGISTRATION.
|
All Registration Expenses incurred in connection with registrations pursuant to this Agreement shall be borne by the Company.
All Selling Expenses relating to securities registered on behalf of the Investors shall be borne by the Investor incurring the relevant Selling Expense.
8
| 6. |
INDEMNIFICATION.
|
(a) To the fullest extent permitted by law, the Company will, and hereby
does, indemnify, hold harmless and defend the Investors, each Person, if any, who controls the Investors, the members, the directors, officers, partners, employees, members, managers, agents, representatives and advisors of the Investors and each
Person, if any, who controls the Investors within the meaning of the Securities Act or the Exchange Act (each, an “Indemnified Person”), against any losses, obligation,
claims, damages, liabilities, contingencies, judgments, fines, penalties, charges, costs (including, without limitation, court costs and costs of preparation), reasonable and documented attorneys’ fees, amounts paid in settlement or reasonable
and documented expenses, (collectively, “Claims”) reasonably incurred in investigating, preparing or defending any action, claim, suit, inquiry, proceeding, investigation or
appeal taken from the foregoing by or before any court or governmental, administrative or other regulatory agency or body or the SEC, whether pending or threatened, whether or not an indemnified party is or may be a party thereto (“Indemnified Damages”), to which any of them may become subject insofar as such Claims (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out
of or are based upon: (i) any untrue statement or alleged untrue statement or omission or alleged omission of any material fact contained in any Registration Statement, any preliminary prospectus or final prospectus, or any amendment or
supplement thereof, or (ii) any violation or alleged violation by the Company or any of its subsidiaries of the Securities Act, Exchange Act or any other state securities or other “blue sky” laws of any jurisdiction in which Registrable
Securities are offered or any rule or regulation promulgated thereunder applicable to the Company or its agents and relating to action or inaction required of the Company in connection with such registration of the Registrable Securities (the
matters in the foregoing clauses (i) and (ii) being, collectively, “Violations”). The Company shall reimburse each Indemnified Person promptly as such expenses are incurred
and are due and payable, for any reasonable out-of-pocket legal fees or other reasonable and documented expenses incurred by them in connection with investigating or defending any such Claim. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Section 6(a): (A) shall not apply to a Claim by an Indemnified Person arising out of or based upon a Violation which occurs in
reliance upon and in conformity with information furnished in writing to the Company by the Investors or such Indemnified Person specifically for use in such Registration Statement or prospectus and was reviewed and approved in writing by such
Investor or such Indemnified Person expressly for use in connection with the preparation of any Registration Statement, any prospectus or any such amendment thereof or supplement thereto, if such in each case if the foregoing was timely made
available by the Company; (B) with respect to any superseded prospectus, shall not inure to the benefit of any such Person from whom the Person asserting any such Claim purchased the Registrable Securities that are the subject thereof (or to the
benefit of any other Indemnified Person) if the untrue statement or omission of material fact contained in the superseded prospectus was corrected in the revised prospectus, as then amended or supplemented, and the Indemnified Person was promptly
advised in writing not to use the outdated, defective or incorrect prospectus prior to the use giving rise to a violation; (C) shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written
consent of the Company, which consent shall not be unreasonably withheld, conditioned or delayed. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Indemnified Person and shall
survive the transfer of the Registrable Securities by the Investor pursuant to Section 8.
(b) In connection with the Initial Registration Statement, any New
Registration Statement or any prospectus, the Investors, severally and not jointly, agree to indemnify, hold harmless and defend, the Company, each of its directors, each of its officers who signed the Initial Registration Statement or signs any New Registration Statement, each Person, if any, who controls the Company within the meaning of the Securities Act or the Exchange Act (collectively and together with
an Indemnified Person, an “Indemnified Party”), against any Claims resulting from any Violation, in each case to the extent, and only to the extent, that such Violation
occurs in reliance upon and in conformity with information about an Investor furnished in writing by such Investor to the Company and reviewed and approved in writing by such Investor or such Indemnified Person expressly for use in connection
with the preparation of the Registration Statement, any New Registration Statement, any prospectus or any such amendment thereof or supplement thereto. In no event shall the liability of an Investor be greater in amount than the dollar amount of
the proceeds (net of all expense paid by such Investor in connection with any claim relating to this Section 6 and the amount of any damages such Investor has otherwise been required to
pay by reason of such untrue statement or omission) received by such Investor upon the sale of the Registrable Securities included in such Registration Statement giving rise to such indemnification obligation. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of such Indemnified Party and shall survive the transfer of the Registrable Securities by any Investor pursuant to Section 8.
9
(c) Promptly after receipt by an
Indemnified Person or Indemnified Party under this Section 6 of notice of the commencement of any action or proceeding (including any governmental action or proceeding) involving a
Claim, such Indemnified Person or Indemnified Party shall, if a Claim in respect thereof is to be made against any indemnifying party under this Section 6, deliver to the indemnifying
party a written notice of the commencement thereof, and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume
control of the defense thereof with counsel mutually satisfactory to the indemnifying party and the Indemnified Person or the Indemnified Party, as the case may be, and upon such notice, the indemnifying party shall not be liable to the
Indemnified Person or the Indemnified Party for any legal or other expenses subsequently incurred by the Indemnified Person or the Indemnified Party in connection with the defense thereof; provided, however, that an Indemnified Person or
Indemnified Party (together with all other Indemnified Persons and Indemnified Parties that may be represented without conflict by one counsel) shall have the right to retain its own counsel with the reasonable fees and expenses to be paid by
the indemnifying party, if, in the reasonable opinion of counsel retained by the indemnifying party, the representation by such counsel of the Indemnified Person or Indemnified Party and the indemnifying party would be inappropriate due to
actual or potential differing interests between such Indemnified Person or Indemnified Party and any other party represented by such counsel in such proceeding. The Indemnified Party or Indemnified Person shall cooperate with the indemnifying
party in connection with any negotiation or defense of any such action or claim by the indemnifying party and shall furnish to the indemnifying party all information reasonably available to the Indemnified Party or Indemnified Person which
relates to such action or claim. The indemnifying party shall keep the Indemnified Party or Indemnified Person fully apprised as to the status of the defense or any settlement negotiations with respect thereto. No indemnifying party shall be
liable for any settlement of any action, claim or proceeding effected without its written consent, provided, however, that the indemnifying party shall not unreasonably withhold, delay or condition its consent. No indemnifying party shall,
without the consent of the Indemnified Party or Indemnified Person, consent to entry of any judgment or enter into any settlement or other compromise unless such judgment or settlement (i) imposes no liability or obligation on, (ii) includes as
an unconditional term thereof the giving of a complete, explicit and unconditional release from the party bringing such indemnified claims of all liability of the Indemnified Party or Indemnified Person in respect to or arising out of such
claim or litigation in favor of, and (iii) does not include any admission of fault, culpability, wrongdoing, or wrongdoing or malfeasance by or on behalf of, the Indemnified Party or Indemnified Person.. Following indemnification as provided
for hereunder, the indemnifying party shall be subrogated to all rights of the Indemnified Party or Indemnified Person with respect to all third parties, firms or corporations relating to the matter for which indemnification has been made. The
failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability to the Indemnified Person or Indemnified Party under this Section 6, except to the extent that the indemnifying party is prejudiced in its ability to defend such action.
(d) The indemnification required by this Section 6 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or Indemnified Damages are incurred. Any Person receiving a
payment pursuant to this Section 6 which person is later determined to not be entitled to such payment shall return such payment (including reimbursement of expenses) to the person
making it.
(e) The indemnity agreements contained herein shall be in addition to
(i) any cause of action or similar right of the Indemnified Party or Indemnified Person against the indemnifying party or others, and (ii) any liabilities the indemnifying party may be subject to pursuant to the law.
| 7. |
CONTRIBUTION.
|
To the extent any indemnification by an indemnifying party is prohibited or limited by law, the indemnifying party agrees to
make the maximum contribution with respect to any amounts for which it would otherwise be liable under Section 6 to the fullest extent permitted by law; provided, however, that: (i) no
seller of Registrable Securities guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any seller of Registrable Securities who was not guilty of fraudulent
misrepresentation; and (ii) contribution by any seller of Registrable Securities shall be limited in amount to the net amount of proceeds (net of all expenses paid by such holder in connection with any claim relating to this Section 7 and the amount of any damages such holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission) received by such
seller from the sale of such Registrable Securities giving rise to such contribution obligation.
10
| 8. |
ASSIGNMENT OF REGISTRATION RIGHTS.
|
The Company shall not assign this Agreement or any rights or obligations hereunder (whether by operation of law or otherwise)
without the prior written consent of the Investors holding a majority of the Registrable Securities then outstanding (determined as if all of the Warrants then outstanding have been exercised without regard to any limitations on the exercise of
such Warrants); provided, however, that in any transaction, whether by merger, reorganization, restructuring, consolidation, financing or otherwise, whereby the Company is a party and in which the Registrable Securities are converted into the
equity securities of another Person, from and after the effective time of such transaction, such Person shall, by virtue of such transaction, be deemed to have assumed the obligations of the Company hereunder, the term “Company” shall be deemed
to refer to such Person and the term “Registrable Securities” shall be deemed to include the securities received by the Investor in connection with such transaction unless such securities are otherwise freely tradable by the Investor after giving
effect to such transaction, and the prior written consent of the Investors holding a majority of the Registrable Securities then outstanding (determined as if all of the Warrants then outstanding have been exercised without regard to any
limitations on the exercise of such Warrants) shall not be required for such transaction.
An Investor may transfer or assign its rights hereunder, in whole or from time to time in part, to one or more Persons in
connection with the transfer of not fewer than 1,000,000 shares (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization) of Registrable Securities (including Registrable
Securities issuable upon exercise of Warrants) by such Investor to such Person, provided that such Investor complies with all laws applicable thereto, and the provisions of the Purchase Agreement, and provides written notice of assignment to the
Company promptly after such assignment is effected, and such Person agrees in writing to be bound by all of the provisions contained herein.
The provisions of this Agreement shall be binding upon and inure to the benefit of the Investor
and its successors and permitted assigns.
| 9. |
AMENDMENTS AND WAIVERS.
|
The provisions of this Agreement, including the provisions of this sentence, may be amended, modified or supplemented, or
waived only by a written instrument executed by (i) the Company and (ii) the holders of a majority-in-interest of the then outstanding Registrable Securities (determined as if all of the Warrants then outstanding have been exercised without regard
to any limitations on the exercise of such Warrants), provided that (A) any party may give a waiver as to itself, and provided further that, (B) any amendment, modification, supplement or waiver that disproportionately and adversely affects the
rights and obligations of any Investor relative to the comparable rights and obligations of the other Investors shall require the prior written consent of such adversely affected Investor or each Investor, as applicable, and (C) any amendment,
modification, supplement or waiver of Section 2(a), Section 2(b), Section 6 or Section 7 shall require the consent of the holders of a majority of then outstanding Registrable Securities. Notwithstanding the foregoing, a waiver or consent to depart
from the provisions hereof with respect to a matter that relates exclusively to the rights of one or more Investors and that does not adversely directly or indirectly affect the rights of other Investors may be given by Investors holding all of the
Registrable Securities to which such waiver or consent relates.
11
| 10. |
MISCELLANEOUS.
|
(a) Notices. Any notices or other communications required or permitted to be given hereunder shall be in writing and shall be deemed to be given (a) when delivered if personally delivered to the party for whom it
is intended, (b) when delivered, if sent by electronic mail during normal business hours of the recipient, and if not sent during normal business hours, then on the recipient’s next business day, (c) three days after having been sent by
certified or registered mail, return-receipt requested and postage prepaid, or (d) one business day after deposit with a nationally recognized overnight courier, freight prepaid, specifying next business day delivery, with written verification
of receipt:
i. If to the
Company, addressed as follows:
Senti Biosciences, Inc.
2 Corporate Drive, First Floor
South San Francisco, CA 94080
Attention: Chief Executive Officer
Email: [***]
with a copy (which shall not constitute notice):
Goodwin Procter LLP
Three Embarcadero Center
San Francisco, CA 94111
Attention: Maggie Wong, Esq.
Email: [***]
ii. If to any
Investor, at its e-mail address or address set forth on its signature page to the Purchase Agreement or to such e-mail address, or address as subsequently modified by written notice given in accordance with this Section 10.
Any Person may change the address to which notices and communications to it are to be addressed by notification as provided for herein.
(b) Consent to
Electronic Notice. Each Investor consents to the delivery of any stockholder notice pursuant to the Delaware General Corporation Law (the “DGCL”), as amended
or superseded from time to time, by electronic mail pursuant to Section 232 of the DGCL (or any successor thereto) at the e-mail address set forth below the Investor’s name on the signature page or Exhibit
A, as updated from time to time by notice to the Company. To the extent that any notice given by means of electronic mail is returned or undeliverable for any reason, the foregoing consent shall be deemed to have been revoked until
a new or corrected e-mail address has been provided, and such attempted electronic notice shall be ineffective and deemed to not have been given. Each party agrees to promptly notify the other parties of any change in its e-mail address, and that
failure to do so shall not affect the foregoing.
(c) Waiver. No waiver of any term, provision or condition of this Agreement, whether by conduct or otherwise, in any one or more instances, shall be deemed to be, or be construed as, a further or continuing waiver of any
such term, provision or condition or as a waiver of any other term, provision or condition of this Agreement.
(d) Governing
Law. The provisions of Section 8.5 of the Purchase Agreement are incorporated by reference herein mutatis
mutandis.
12
(e) Integration. This Agreement and
the other Transaction Agreements (including all schedules and exhibits hereto and thereto) constitute the entire agreement between the parties hereto respecting the subject matter hereof and supersedes all prior agreements, negotiations,
understandings, representations and statements respecting the subject matter hereof, whether written or oral.
(f) Headings. The titles, subtitles and headings in this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement.
(g) Counterparts.
This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party;
provided that a facsimile or pdf signature including any electronic signatures complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com shall be considered due execution and shall be binding upon the signatory thereto with the
same force and effect as if the signature were an original, not a facsimile or pdf (or other electronic reproduction of a) signature.
(h) Further Assurances.
Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents as the other party may reasonably request in
order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.
(i) Contract
Interpretation. This Agreement is the joint product of each Investor and the Company and each provision hereof has been subject to the mutual consultation, negotiation and agreement of such parties and shall not be construed for or
against any party hereto.
(j) No Third Party
Beneficiaries. Nothing in this Agreement, express or implied, is intended to confer on any Person other than the parties to this Agreement any rights, remedies, claims, benefits, obligations or liabilities under or by reason of
this Agreement, and no Person that is not a party to this Agreement (including, without limitation, any partner, member, shareholder, director, officer, employee or other beneficial owner of any party to this Agreement, in its own capacity as
such or in bringing a derivative action on behalf of a party to this Agreement) shall have any standing as a third party beneficiary with respect to this Agreement or the transactions contemplated hereby.
(k) Severability. If any part or provision of this Agreement is held unenforceable or in conflict with the applicable laws or regulations of any jurisdiction, the invalid or unenforceable part or provisions shall be
replaced with a provision which accomplishes, to the extent possible, the original business purpose of such part or provision in a valid and enforceable manner, and the remainder of this Agreement shall remain binding upon the parties hereto.
(l) Non-Recourse. Notwithstanding anything that may be expressed or implied in this Agreement, the Company covenants, agrees and acknowledges that no recourse under this Agreement or any documents or instruments delivered
in connection with this Agreement shall be had against any current or future director, officer, employee, stockholder, general or limited partner or member of the Investors or of any affiliates or assignees thereof, whether by the enforcement
of any assessment or by any legal or equitable proceeding, or by virtue of any statute, regulation or other applicable law, it being expressly agreed and acknowledged that no personal liability whatsoever shall attach to, be imposed on or
otherwise be incurred by any current or future director, officer, employee, stockholder, general or limited partner or member of the Investors or of any affiliates or assignees thereof, as such for any obligation of the Investors under this
Agreement or any documents or instruments delivered in connection with this Agreement for any claim based on, in respect of or by reason of such obligations or their creation.
13
(m) Specific Performance. In addition to any and all other remedies that may be available at law in the event of any breach of this Agreement, each Investor shall be entitled to specific performance of the agreements and
obligations of the Company hereunder and to such other injunction or other equitable relief as may be granted by a court of competent jurisdiction.
(n) Cumulative Remedies. The remedies provided herein are cumulative and not exclusive of any remedies provided by law.
[Signature Page Follows]
14
IN WITNESS WHEREOF, the parties have caused this
Registration Rights Agreement to be duly executed as of date first written above.
|
COMPANY:
|
||
|
SENTI BIOSCIENCES, INC.
|
||
|
By:
|
||
|
Name:
|
Timothy Lu
|
|
|
Title:
|
Chief Executive Officer
|
[Signature Page to Registration Rights Agreement]
IN WITNESS WHEREOF, the parties have caused this Registration Rights Agreement to be duly executed as of date first written above.
|
INVESTOR:
|
||
|
[NAME]
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
[Signature Page to Registration Rights Agreement]
Exhibit A
PLAN OF DISTRIBUTION
The selling stockholders, which as used herein includes donees, pledgees, transferees or other successors-in-interest selling shares of common stock or interests in
shares of common stock received after the date of this prospectus from a selling stockholder as a gift, pledge, partnership distribution or other transfer, may, from time to time, sell, transfer or otherwise dispose of any or all of their shares of
common stock or interests in shares of common stock on any stock exchange, market or trading facility on which the shares are traded or in private transactions. These dispositions may be at fixed prices, at prevailing market prices at the time of
sale, at prices related to the prevailing market price, at varying prices determined at the time of sale, or at negotiated prices.
The selling stockholders may use any one or more of the following methods when disposing of shares or interests therein:
| • |
distributions to members, partners, stockholders or other equityholders of the selling stockholders;
|
| • |
ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;
|
| • |
block trades in which the broker-dealer will attempt to sell the shares as agent, but may position and resell a portion of the block as principal to facilitate the transaction;
|
| • |
purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
|
| • |
an exchange distribution in accordance with the rules of the applicable exchange;
|
| • |
privately negotiated transactions;
|
| • |
short sales and settlement of short sales entered into after the effective date of the registration statement of which this prospectus is a part;
|
| • |
through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;
|
| • |
broker-dealers may agree with the selling stockholders to sell a specified number of such shares at a stipulated price per share;
|
| • |
a combination of any such methods of sale; and
|
| • |
any other method permitted pursuant to applicable law.
|
The selling stockholders may, from time to time, pledge or grant a security interest in some or all of the shares of common stock owned by them and, if they default in
the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of common stock, from time to time, under this prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or other applicable
provision of the Securities Act, amending the list of selling stockholders to include the pledgee, transferee or other successors in interest as selling stockholders under this prospectus. The selling stockholders also may transfer the shares of
common stock in other circumstances, in which case the transferees, pledgees or other successors in interest will be the selling stockholders for purposes of this prospectus.
A-1
In connection with the sale of our common stock or interests therein, the selling stockholders may enter into hedging transactions with broker-dealers or other
financial institutions, which may in turn engage in short sales of the common stock in the course of hedging the positions they assume. The selling stockholders may also sell shares of our common stock short and deliver these securities to close
out their short positions, or loan or pledge the common stock to broker-dealers that in turn may sell these securities. The selling stockholders may also enter into option or other transactions with broker-dealers or other financial institutions or
the creation of one or more derivative securities which require the delivery to such broker-dealer or other financial institution of shares offered by this prospectus, which shares such broker-dealer or other financial institution may resell
pursuant to this prospectus (as supplemented or amended to reflect such transaction).
The aggregate proceeds to the selling stockholders from the sale of the common stock offered by them will be the purchase price of the common stock less discounts or
commissions, if any. Each of the selling stockholders reserves the right to accept and, together with their agents from time to time, to reject, in whole or in part, any proposed purchase of common stock to be made directly or through agents. We
will not receive any of the proceeds from this offering. Upon any exercise of the common warrants by payment of cash, however, we will receive the exercise price of the common warrants.
The selling stockholders also may resell all or a portion of the shares in open market transactions in reliance upon Rule 144 under the Securities Act, provided that
they meet the criteria and conform to the requirements of that rule, or another available exemption from the registration requirements under the Securities Act.
The selling stockholders and any underwriters, broker-dealers or agents that participate in the sale of the common stock or interests therein may be “underwriters”
within the meaning of Section 2(a)(11) of the Securities Act (it being understood that the selling stockholders shall not be deemed to be underwriters solely as a result of their participation in this offering). Any discounts, commissions,
concessions or profit they earn on any resale of the shares may be underwriting discounts and commissions under the Securities Act. Selling stockholders who are “underwriters” within the meaning of Section 2(a)(11) of the Securities Act will be
subject to the prospectus delivery requirements of the Securities Act.
To the extent required, the shares of our common stock to be sold, the names of the selling stockholders, the respective purchase prices and public offering prices,
the names of any agent, dealer or underwriter, and any applicable commissions or discounts with respect to a particular offer will be set forth in an accompanying prospectus supplement or, if appropriate, a post-effective amendment to the
registration statement that includes this prospectus.
In order to comply with the securities laws of some states, if applicable, the common stock may be sold in these jurisdictions only through registered or licensed
brokers or dealers. In addition, in some states the common stock may not be sold unless it has been registered or qualified for sale or an exemption from registration or qualification requirements is available and is complied with.
A-2
We have advised the selling stockholders that the anti-manipulation rules of Regulation M under the Exchange Act may apply to sales of shares in the market and to the
activities of the selling stockholders and their affiliates. In addition, to the extent applicable, we will make copies of this prospectus (as it may be supplemented or amended from time to time) available to the selling stockholders for the
purpose of satisfying the prospectus delivery requirements of the Securities Act. The selling stockholders may indemnify any broker-dealer that participates in transactions involving the sale of the shares against certain liabilities, including
liabilities arising under the Securities Act.
We have agreed to indemnify the selling stockholders against liabilities, including liabilities under the Securities Act and state securities laws, relating to the
registration of the shares offered by this prospectus.
We have agreed with the selling stockholders to use commercially reasonable efforts to cause the registration statement of which this prospectus constitutes a part to
become effective and to remain continuously effective until the earlier of: (i) the date on which the selling stockholders shall have resold or otherwise disposed of all the shares covered by this prospectus and (ii) the date on which the shares
covered by this prospectus no longer constitute “Registrable Securities” as such term is defined in the Registration Rights Agreement, such that they may be resold by the selling stockholders without registration and without regard to any volume or
manner-of-sale limitations and without current public information pursuant to Rule 144 under the Securities Act or any other rule of similar effect.
A-3
Exhibit B
[***]
B-1
Exhibit 10.3
Execution Version
Designation Agreement
December 2, 2024
Senti Biosciences, Inc.
2 Corporate Drive, First Floor
South San Francisco, CA 94080
Celadon Partners SPV 24
PO Box 500
71 Fort Street
Grand Cayman, KY1-1106
Cayman Islands
Ladies and Gentlemen:
Reference is hereby made in this agreement (“Agreement”) to that certain
Securities Purchase Agreement, dated as of the date hereof, by and among Senti Biosciences, Inc., a Delaware corporation (the “Company”) and the parties named therein (the “Purchase Agreement”) pursuant to which Celadon Partners SPV 24, a Cayman Islands limited liability company (the “Investor”)
shall purchase certain of the Company’s Securities. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Purchase Agreement.
In consideration of the representations, warranties, covenants and agreements contained herein and in the Purchase Agreement and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, intending to be legally bound hereby, the Company and the Investor hereby agree as follows:
| 1. |
Board of Directors Composition.
|
| (a) |
Following the Initial Closing, upon the approval by the Company’s Board of Directors, the authorized number of directors of the Company’s Board of Directors shall be set at nine members. For so
long as the Investor and its affiliates in the aggregate beneficially own at least either 2,666 shares of the Series A Preferred Stock (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other
similar recapitalization with respect to such Series A Preferred Stock) issued pursuant to the Purchase Agreement or 2,666,500 of the Conversion Shares issuable upon conversion of the Series A Preferred Stock pursuant to the Certificate of
Designation, the Company thereafter shall not increase the size of the Board of Directors without the consent of the Investor.
|
| (b) |
Following the increase in the authorized size of the Company’s Board of Directors in 1(a) herein (the “Board Increase”), (i)
the Board of Directors shall comprise of Edward Mathers, Fran Schulz, Brenda Cooperstone, James Collins, Timothy Lu and four (4) vacant seats, subject to the filling of such vacant seats at or immediately following the Board Increase as
provided below, and (ii) Brenda Cooperstone, James Collins and Fran Schulz shall initially be among the “independent directors” as defined under Nasdaq Listing Rule 5602(a)(2).
|
| (c) |
For so long as the Investor and its affiliates in the aggregate beneficially own at least either 2,666 shares of the Series A Preferred Stock (subject to appropriate adjustment in the event of any
stock dividend, stock split, combination or other similar recapitalization with respect to such Series A Preferred Stock) issued pursuant to the Purchase Agreement or 2,666,500 of the Conversion Shares issuable upon conversion of the Series
A Preferred Stock pursuant to the Certificate of Designation (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to such Conversion Shares), the
Investor shall have the right to designate (i) two (2) directors to the Board of Directors, who can be non-independent directors, and (ii) one (1) additional director to the Board of Directors, who shall qualify as an “independent director”
as defined under Nasdaq Listing Rule 5605(a)(2).
|
| (d) |
If, at any time on or after the date of this Agreement, Investor and its affiliates in the aggregate cease to beneficially own at least 2,666 of the Series A Preferred Stock issued pursuant to the
Purchase Agreement (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to such Series A Preferred Stock) or 2,666,500 of the Conversion Shares
issuable upon conversion of the Series A Preferred Stock pursuant to the Certificate of Designation (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with
respect to such Conversion), the rights conferred under this section shall no longer apply and, if requested by the Company, the Investor shall request its director designees mentioned in clauses (i) and (ii) herein to resign from the Board
of Directors; provided that once the Investor ceases to beneficially own its threshold amount of Series A Preferred Stock or Conversion Shares, the Company will have
no obligation to include these director designees as nominees in the Company’s annual meeting of stockholders for the applicable year(s) when such director designees’ term is completed.
|
| (e) |
For the avoidance of doubt, all director candidates to the Board of Directors, including the designees set forth above, shall be subject to (i) evaluation and approval by the Board of Directors and
the Nominating and Corporate Governance Committee of the Board of Directors (the “NCGC”) in accordance with the Company’s Corporate Governance Guidelines, (ii)
appointment by the Board of Directors in accordance with the Company’s Amended and Restated Bylaws, as amended and/or restated from time to time, (iii) following any initial appointment, election by the Company’s stockholders in accordance
with the Company’s Second Amended and Restated Certificate of Incorporation, as amended and/or restated from time to time, (iv) satisfaction of eligibility, independence and other criteria applicable generally to all other members of the
Company’s Board of Directors and (v) compliance with applicable law or regulation or the rules of the principal market on which the Common Stock is traded. For the avoidance of doubt, the Investor will endeavor to ensure that directors meet
reasonable requirements of expertise set by the NCGC, and furthermore, will remain open to director nominations suggested by the rest of the Board of Directors.
|
| (f) |
Subject to the right of the Investor to substitute or replace designees, the Investor’s initial designees pursuant to Section 1(c)(i) shall initially consist of one vacancy and Donald Tang and the
Investor’s initial designee pursuant to Section 1(c)(ii) shall initially consist of one vacancy. The Company agrees that such persons satisfy all criteria for appointment to and membership on the Board of Directors, including as provided in
Section 1(e).
|
2
| (g) |
The Company agrees to appoint the directors designated by the Investor (i) pursuant to Section 1(c)(i) herein, initially as Class II Director (which class’s term will end at the Company’s annual
meeting of stockholders to be held in 2027) and (ii) pursuant to Section 1(c)(ii) herein, initially as Class III Director (which class’s term will end at the Company’s annual meeting of stockholders to be held in 2028), effective at or
immediately following the Board Increase. Upon or prior to the Board Increase, the Company shall take all necessary action by the Company or its Board of Directors to effect such appointments effective automatically at such time.
|
| (h) |
Upon the conclusion of the term(s) on the Company’s Board of Directors of each of directors designated by the Investor, so long as the Investor maintains its applicable threshold amount pursuant to
Section 1(c) and subject to Section 1(e) herein, the Company agrees to include the directors designated by the Investor as a nominee in the Company’s slate of nominees for election as directors of the Company at the Company’s annual meeting
of stockholders for the applicable year(s), and to use its best efforts to cause the election of such directors (which efforts shall be no less than the Company’s efforts with respect to any other nominee). Furthermore, for the avoidance of
doubt, failure of the stockholders of the Company to elect the directors designated by the Investor for one or more additional terms shall not be deemed a breach of the Company’s obligations hereunder. In such case, and in the event any
designated director is not elected by the stockholders or resigns or otherwise ceases to serve as a director for any reason, pursuant to Section 1(c) herein, the Investor may designate substitute directors, subject to the nomination
criteria in Section 1(e) herein, who the Company shall appoint to the Board of Directors promptly following notice by the Investor.
|
| (i) |
The Company’s Board of Directors and/or its NCGC shall offer the directors designated by the Investor the opportunity to serve on each of the committees of the Company’s Board of Directors,
including those existing at the date hereof and those created by the Board of Directors hereafter, subject to the satisfaction of independence and other qualifications required to serve on such committee(s).
|
| (j) |
In connection with the appointment of the directors designated by the Investor to the Company’s Board of Directors (A) such appointed directors must provide to the Company (i) all information
reasonably requested by the Company that is required to be or customarily disclosed for directors, candidates for directors, and their affiliates and representatives in a proxy statement or other filings under applicable law or regulation
or stock exchange rules or listing standards, in each case, relating to his or her nomination or election as a director of the Company and (ii) information reasonably requested by the Company in connection with assessing eligibility,
independence and other criteria applicable to directors or satisfying compliance and legal or regulatory obligations, in each case, relating to his or her nomination or election as a director of the Company, including, any customary
background checks, interviews, questionnaires or other investigations as may be conducted by or on behalf of the Company with respect to all directors generally, and (B) such appointed directors must agree to comply with all of the
Company’s policies and procedures to the same extent as each other director of the Company, including, but not limited to, any corporate governance guidelines, code of conduct and securities trading policy, in each case as may be adopted
and/or amended from time to time.
|
3
| 2. |
Information Rights.
|
| (a) |
For so long as the Investor has the right to designate the one or more directors to the Board of Directors pursuant to Section 1(c) herein, the Company shall deliver to the Investor copies of all
material substantive materials provided to (i) the Board of Directors or any committee thereof at substantially the same time as provided to the directors of the Company or to the directors of the Company serving on such committee, as
applicable and (ii) the Company’s senior lenders at substantially the same time as provided to the Company’s senior lenders; provided that each such Investor may elect, from time and time and in its sole discretion, not to receive copies of
any or all of such materials; provided, further, that the Company should not be required to comply with this Section 2(a) to the extent a director designated pursuant to Section 1(c)(i) herein is currently a director on the Company’s Board
of Directors.
|
| (b) |
For so long as the Investor holds record and beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of more than five percent (5%) of the outstanding shares of the Company’s
Common Stock (which shall be determined assuming the conversion of all of the shares of Series A Preferred Stock and the Warrant Shares), the Company shall provide to the Investor reasonable access, to the extent reasonably requested by
such Investor, to the Company and its subsidiaries’ office properties, books and records, and to discuss their affairs, finances and matters related to capital structure and financing with its and their officers, all upon reasonable notice
and at reasonable times at the Company’s principal place of business; provided that any access pursuant to this Section 2(b) shall be conducted in a manner as not to interfere unreasonably with the conduct of the business of the Company and
its subsidiaries.
|
| 3. |
Miscellaneous.
|
| (a) |
Except as set forth in the Purchase Agreement or this Agreement, the Company shall not make any public announcement with respect to the existence or terms of this Agreement or the transactions
provided for herein without the prior consent of the other party (which consent shall not be unreasonably withheld). Notwithstanding the foregoing, nothing in this Section 2(a) shall prevent any party from making any public announcement it
considers necessary in order to satisfy its obligations under the law, including applicable securities laws, or under the rules of any national securities exchange or securities market, in which case the Company shall allow the Investor
reasonable time to comment on such release or announcement in advance of such issuance, and the Company will consider in good faith the Investor’s comments. The Company shall not include the name of the Investor in any press release or
public announcement (which, for the avoidance of doubt, shall not include any filing with the SEC) without the prior written consent of the Investor, except as otherwise required by law or the applicable rules or regulations of any
securities exchange or securities market, after consultation with legal counsel, in which case the Company shall allow the Investor, to the extent reasonably practicable in the circumstances, reasonable time to comment on such release or
announcement in advance of such issuance.
|
| (b) |
Any notices or other communications required or permitted to be given hereunder shall be provided pursuant to the Purchase Agreement.
|
| (c) |
If any part or provision of this Agreement is held unenforceable or in conflict with the applicable laws or regulations of any jurisdiction, the invalid or unenforceable part or provisions shall be
replaced with a provision which accomplishes, to the extent possible, the original business purpose of such part or provision in a valid and enforceable manner, and the remainder of this Agreement shall remain binding upon the parties
hereto.
|
4
| (d) |
This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York without regard to choice of laws or conflicts of laws provisions thereof that would require
the application of the laws of any other jurisdiction, except to the extent that mandatory principles of Delaware law may apply. The parties (a) hereby irrevocably and unconditionally submit to the jurisdiction of the state and federal
courts sitting in the City of New York, Borough of Manhattan for the purpose of any suit, action or other proceeding arising out of or based upon this Agreement, (b) agree not to commence any suit, action or other proceeding arising out of
or based upon this Agreement except in the state and federal courts sitting in the City of New York, Borough of Manhattan, and (c) hereby waive, and agree not to assert, by way of motion, as a defense, or otherwise, in any such suit, action
or proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient
forum, that the venue of the suit, action or proceeding is improper or that this Agreement or the subject matter hereof may not be enforced in or by such court.
|
| (e) |
EACH PARTY HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR THE SUBJECT MATTER HEREOF OR THEREOF. THE SCOPE OF THIS WAIVER IS
INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS (INCLUDING NEGLIGENCE), BREACH OF
DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THIS SECTION 2(E) HAS BEEN FULLY DISCUSSED BY EACH OF THE PARTIES HERETO AND THESE PROVISIONS WILL NOT BE SUBJECT TO ANY EXCEPTIONS. EACH PARTY HERETO HEREBY FURTHER WARRANTS AND
REPRESENTS THAT SUCH PARTY HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.
|
| (f) |
No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in case of an amendment, by the Company and the Investor. Any waiver of any
term or condition shall be in writing executed by the party entitled to waive such term or condition. Any waiver of any term or condition shall not be construed as a waiver of any subsequent breach or a subsequent waiver of the same term or
condition, or a waiver of any other term or condition of this Agreement. The failure of either party to assert any of its rights hereunder shall not constitute a waiver of such rights.
|
| (g) |
The Company acknowledges and agrees that the Investor would be damaged irreparably and would not have an adequate remedy at law if any provision of this Agreement is not performed in accordance
with its specific terms or is otherwise breached. Accordingly, in addition to any other remedy to which the Investor may be entitled, at law or in equity, the Investor will be entitled to an injunction or injunctions to prevent breaches or
threatened breaches of the provisions of this Agreement and to seek to enforce specifically this Agreement and its provisions, without bond or other security being required and without any proof of actual damages. The rights, obligations
and remedies created by this Agreement are cumulative and in addition to any other rights, obligations or remedies otherwise available at law or in equity. Nothing herein will be considered an election of remedies or a waiver of the right
to pursue any other right or remedy to which the Investors may be entitled.
|
5
| (h) |
The titles, subtitles and headings in this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement.
|
| (i) |
This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party; provided that a facsimile or pdf signature including any electronic signatures complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com shall be considered due execution and
shall be binding upon the signatory thereto with the same force and effect as if the signature were an original, not a facsimile or pdf (or other electronic reproduction of a) signature.
|
| (j) |
This Agreement constitutes the entire agreement between the parties hereto respecting the subject matter of this Agreement and supersedes all prior agreements, negotiations, understandings,
representations and statements respecting the subject matter of this Agreement, whether written or oral.
|
| (k) |
The obligations set forth herein this Agreement shall terminate upon the mutual written consent of the Company and the Investor.
|
[signature pages follow]
6
IN WITNESS WHEREOF, the
parties hereto have executed this Agreement as of the day and year first above written.
|
COMPANY:
|
||
|
SENTI BIOSCIENCES, INC.
|
||
|
By:
|
||
|
Name:
|
Timothy Lu
|
|
|
Title:
|
Chief Executive Officer
|
[Signature Page to Agreement with Celadon]
IN WITNESS WHEREOF, the
parties hereto have executed this Agreement as of the day and year first above written.
|
INVESTOR:
|
||
|
CELADON PARTNERS SPV 24
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
[Signature Page to Agreement with Celadon]
Exhibit 10.4
Execution Version
Designation Agreement
December 2, 2024
Senti Biosciences, Inc.
2 Corporate Drive, First Floor
South San Francisco, CA 94080
New Enterprises Associates 15, L.P.
1954 Greenspring Drive, Suite 600,
Timonium, MD 20193
Ladies and Gentlemen:
Reference is hereby made in this agreement (“Agreement”) to that certain Securities Purchase Agreement, dated as of the date hereof, by and among
Senti Biosciences, Inc., a Delaware corporation (the “Company”) and the parties named therein (the “Purchase
Agreement”) pursuant to which New Enterprise Associates, Inc. (the “Investor”) shall purchase certain of the Company’s Securities. Capitalized terms used but not
defined herein shall have the meanings ascribed to them in the Purchase Agreement.
In consideration of the representations, warranties, covenants and agreements contained herein and in the Purchase Agreement and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, intending to be legally bound hereby, the Company and the Investor hereby agree as follows:
| 1. |
Board of Directors Composition.
|
| (a) |
Following the Initial Closing, upon the approval by the Company’s Board of Directors, the authorized number of directors of the Company’s Board of Directors shall be set at nine members. For so
long as the Investor and its affiliates in the aggregate beneficially own at least either 1,666 shares of the Series A Preferred Stock (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other
similar recapitalization with respect to such Series A Preferred Stock) issued pursuant to the Purchase Agreement or 1,666,500 of the Conversion Shares issuable upon conversion of the Series A Preferred Stock pursuant to the Certificate of
Designation, the Company thereafter shall not increase the size of the Board of Directors without the consent of the Investor.
|
| (b) |
Following the increase in the authorized size of the Company’s Board of Directors in 1(a) herein (the “Board Increase”), (i)
the Board of Directors shall comprise of Edward Mathers, Fran Schulz, Brenda Cooperstone, James Collins, Timothy Lu and four (4) vacant seats, subject to the filling of such vacant seats at or immediately following the Board Increase as
provided below, and (ii) Brenda Cooperstone, James Collins and Fran Schulz shall initially be among the “independent directors” as defined under Nasdaq Listing Rule 5602(a)(2).
|
| (c) |
For so long as the Investor and its affiliates in the aggregate beneficially own at least either 1,666 shares of the Series A Preferred Stock (subject to appropriate adjustment in the event of any
stock dividend, stock split, combination or other similar recapitalization with respect to such Series A Preferred Stock) issued pursuant to the Purchase Agreement or 1,666,500 of the Conversion Shares issuable upon conversion of the Series
A Preferred Stock pursuant to the Certificate of Designation (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to such Conversion Shares), the
Investor shall have the right to designate (i) one (1) director to the Board of Directors, who shall initially be Edward Mathers, and (ii) one (1) additional director to the Board of Directors, who shall qualify as an “independent director”
as defined under Nasdaq Listing Rule 5605(a)(2).
|
| (d) |
If, at any time on or after the date of this Agreement, Investor and its affiliates in the aggregate cease to beneficially own at least 1,666 of the Series A Preferred Stock issued pursuant to the
Purchase Agreement (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to such Series A Preferred Stock) or 1,666,500 of the Conversion Shares
issuable upon conversion of the Series A Preferred Stock pursuant to the Certificate of Designation (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with
respect to such Conversion), the rights conferred under this section shall no longer apply and, if requested by the Company, the Investor shall request its director designees mentioned in clauses (i) and (ii) herein to resign from the Board
of Directors; provided that once the Investor ceases to beneficially own its threshold amount of Series A Preferred Stock or Conversion Shares, the Company will have
no obligation to include these director designees as nominees in the Company’s annual meeting of stockholders for the applicable year(s) when such director designees’ term is completed.
|
| (e) |
For the avoidance of doubt, all director candidates to the Board of Directors, including the designees set forth above, shall be subject to (i) evaluation and approval by the Board of Directors and
the Nominating and Corporate Governance Committee of the Board of Directors (the “NCGC”) in accordance with the Company’s Corporate Governance Guidelines, (ii)
appointment by the Board of Directors in accordance with the Company’s Amended and Restated Bylaws, as amended and/or restated from time to time, (iii) following any initial appointment, election by the Company’s stockholders in accordance
with the Company’s Second Amended and Restated Certificate of Incorporation, as amended and/or restated from time to time, (iv) satisfaction of eligibility, independence and other criteria applicable generally to all other members of the
Company’s Board of Directors and (v) compliance with applicable law or regulation or the rules of the principal market on which the Common Stock is traded. For the avoidance of doubt, the Investor will endeavor to ensure that directors meet
reasonable requirements of independence (including as required by Nasdaq corporate governance standards) or expertise (as the case may be) set by the NCGC, and furthermore, will remain open to director nominations suggested by the rest of
the Board of Directors.
|
| (f) |
Subject to the right of the Investor to substitute or replace designees, the Investor shall designate Edward Mathers as its initial designee pursuant to Section 1(c)(i) and the designee pursuant
to Section 1(c)(ii) shall initially be vacant. The Company agrees that such persons satisfy all criteria for appointment to and membership on the Board of Directors, including as provided in Section 1(e).
|
2
| (g) |
The Company agrees to appoint the directors designated by the Investor (i) pursuant to Section 1(c)(i) herein, initially as a Class I Director (which class’s term will end at the Company’s annual
meeting of stockholders to be held in 2026) and (ii) pursuant to Section 1(c)(ii) herein, initially as a Class II Director (which class’s term will end at the Company’s annual meeting of stockholders to be held in 2027), effective at or
immediately following the Board Increase. Upon or prior to the Board Increase, the Company shall take all necessary action by the Company or its Board of Directors to effect such appointments effective automatically at such time.
|
| (h) |
Upon the conclusion of the term(s) on the Company’s Board of Directors of each of directors designated by the Investor, so long as the Investor maintains its applicable threshold amount pursuant to
Section 1(c) and subject to Section 1(e) herein, the Company agrees to include the directors designated by the Investor as a nominee in the Company’s slate of nominees for election as directors of the Company at the Company’s annual meeting
of stockholders for the applicable year(s), and to use its best efforts to cause the election of such directors (which efforts shall be no less than the Company’s efforts with respect to any other nominee). Furthermore, for the avoidance of
doubt, failure of the stockholders of the Company to elect the directors designated by the Investor for one or more additional terms shall not be deemed a breach of the Company’s obligations hereunder. In such case, and in the event any
designated director is not elected by the stockholders or resigns or otherwise ceases to serve as a director for any reason, pursuant to Section 1(c) herein, the Investor may designate substitute directors, subject to the nomination
criteria in Section 1(e) herein, who the Company shall appoint to the Board of Directors promptly following notice by the Investor.
|
| (i) |
The Company’s Board of Directors and/or its NCGC shall offer the directors designated by the Investor the opportunity to serve on each of the committees of the Company’s Board of Directors,
including those existing at the date hereof and those created by the Board of Directors hereafter, subject to the satisfaction of independence and other qualifications required to serve on such committee(s).
|
| (j) |
In connection with the appointment of the directors designated by the Investor to the Company’s Board of Directors (A) such appointed directors must provide to the Company (i) all information
reasonably requested by the Company that is required to be or customarily disclosed for directors, candidates for directors, and their affiliates and representatives in a proxy statement or other filings under applicable law or regulation
or stock exchange rules or listing standards, in each case, relating to his or her nomination or election as a director of the Company and (ii) information reasonably requested by the Company in connection with assessing eligibility,
independence and other criteria applicable to directors or satisfying compliance and legal or regulatory obligations, in each case, relating to his or her nomination or election as a director of the Company, including, any customary
background checks, interviews, questionnaires or other investigations as may be conducted by or on behalf of the Company with respect to all directors generally, and (B) such appointed directors must agree to comply with all of the
Company’s policies and procedures to the same extent as each other director of the Company, including, but not limited to, any corporate governance guidelines, code of conduct and securities trading policy, in each case as may be adopted
and/or amended from time to time.
|
3
| 2. |
Information Rights.
|
| (a) |
For so long as the Investor has the right to designate the one or more directors to the Board of Directors pursuant to Section 1(c) herein, the Company shall deliver to the Investor copies of all
material substantive materials provided to (i) the Board of Directors or any committee thereof at substantially the same time as provided to the directors of the Company or to the directors of the Company serving on such committee, as
applicable and (ii) the Company’s senior lenders at substantially the same time as provided to the Company’s senior lenders; provided that each such Investor may elect, from time and time and in its sole discretion, not to receive copies of
any or all of such materials; provided, further, that the Company should not be required to comply with this Section 2(a) to the extent a director designated pursuant to Section 1(c) herein is currently a director on the Company’s Board of
Directors.
|
| (b) |
For so long as the Investor holds record and beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of more than five percent (5%) of the outstanding shares of the Company’s
Common Stock (which shall be determined assuming the conversion of all of the shares of Series A Preferred Stock and the Warrant Shares), the Company shall provide to the Investor reasonable access, to the extent reasonably requested by
such Investor, to the Company and its subsidiaries’ office properties, books and records, and to discuss their affairs, finances and matters related to capital structure and financing with its and their officers, all upon reasonable notice
and at reasonable times at the Company’s principal place of business; provided that any access pursuant to this Section 2(b) shall be conducted in a manner as not to interfere unreasonably with the conduct of the business of the Company and
its subsidiaries.
|
| 3. |
Miscellaneous.
|
| (a) |
Except as set forth in the Purchase Agreement or this Agreement, the Company shall not make any public announcement with respect to the existence or terms of this Agreement or the transactions
provided for herein without the prior consent of the other party (which consent shall not be unreasonably withheld). Notwithstanding the foregoing, nothing in this Section 2(a) shall prevent any party from making any public announcement it
considers necessary in order to satisfy its obligations under the law, including applicable securities laws, or under the rules of any national securities exchange or securities market, in which case the Company shall allow the Investor
reasonable time to comment on such release or announcement in advance of such issuance, and the Company will consider in good faith the Investor’s comments. The Company shall not include the name of the Investor in any press release or
public announcement (which, for the avoidance of doubt, shall not include any filing with the SEC) without the prior written consent of the Investor, except as otherwise required by law or the applicable rules or regulations of any
securities exchange or securities market, after consultation with legal counsel, in which case the Company shall allow the Investor, to the extent reasonably practicable in the circumstances, reasonable time to comment on such release or
announcement in advance of such issuance.
|
| (b) |
Any notices or other communications required or permitted to be given hereunder shall be provided pursuant to the Purchase Agreement.
|
| (c) |
If any part or provision of this Agreement is held unenforceable or in conflict with the applicable laws or regulations of any jurisdiction, the invalid or unenforceable part or provisions shall be
replaced with a provision which accomplishes, to the extent possible, the original business purpose of such part or provision in a valid and enforceable manner, and the remainder of this Agreement shall remain binding upon the parties
hereto.
|
4
| (d) |
This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York without regard to choice of laws or conflicts of laws provisions thereof that would require
the application of the laws of any other jurisdiction, except to the extent that mandatory principles of Delaware law may apply. The parties (a) hereby irrevocably and unconditionally submit to the jurisdiction of the state and federal
courts sitting in the City of New York, Borough of Manhattan for the purpose of any suit, action or other proceeding arising out of or based upon this Agreement, (b) agree not to commence any suit, action or other proceeding arising out of
or based upon this Agreement except in the state and federal courts sitting in the City of New York, Borough of Manhattan, and (c) hereby waive, and agree not to assert, by way of motion, as a defense, or otherwise, in any such suit, action
or proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient
forum, that the venue of the suit, action or proceeding is improper or that this Agreement or the subject matter hereof may not be enforced in or by such court.
|
| (e) |
EACH PARTY HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR THE SUBJECT MATTER HEREOF OR THEREOF. THE SCOPE OF THIS WAIVER IS
INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS (INCLUDING NEGLIGENCE), BREACH OF
DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THIS SECTION 2(E) HAS BEEN FULLY DISCUSSED BY EACH OF THE PARTIES HERETO AND THESE PROVISIONS WILL NOT BE SUBJECT TO ANY EXCEPTIONS. EACH PARTY HERETO HEREBY FURTHER WARRANTS AND
REPRESENTS THAT SUCH PARTY HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.
|
| (f) |
No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in case of an amendment, by the Company and the Investor. Any waiver of any
term or condition shall be in writing executed by the party entitled to waive such term or condition. Any waiver of any term or condition shall not be construed as a waiver of any subsequent breach or a subsequent waiver of the same term or
condition, or a waiver of any other term or condition of this Agreement. The failure of either party to assert any of its rights hereunder shall not constitute a waiver of such rights.
|
| (g) |
The Company acknowledges and agrees that the Investor would be damaged irreparably and would not have an adequate remedy at law if any provision of this Agreement is not performed in accordance
with its specific terms or is otherwise breached. Accordingly, in addition to any other remedy to which the Investor may be entitled, at law or in equity, the Investor will be entitled to an injunction or injunctions to prevent breaches or
threatened breaches of the provisions of this Agreement and to seek to enforce specifically this Agreement and its provisions, without bond or other security being required and without any proof of actual damages. The rights, obligations
and remedies created by this Agreement are cumulative and in addition to any other rights, obligations or remedies otherwise available at law or in equity. Nothing herein will be considered an election of remedies or a waiver of the right
to pursue any other right or remedy to which the Investors may be entitled.
|
| (h) |
The titles, subtitles and headings in this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement.
|
5
| (i) |
This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party; provided that a facsimile or pdf signature including any electronic signatures complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com shall be considered due execution and
shall be binding upon the signatory thereto with the same force and effect as if the signature were an original, not a facsimile or pdf (or other electronic reproduction of a) signature.
|
| (j) |
This Agreement constitutes the entire agreement between the parties hereto respecting the subject matter of this Agreement and supersedes all prior agreements, negotiations, understandings,
representations and statements respecting the subject matter of this Agreement, whether written or oral.
|
| (k) |
The obligations set forth herein this Agreement shall terminate upon the mutual written consent of the Company and the Investor.
|
[signature pages follow]
6
IN WITNESS WHEREOF, the
parties hereto have executed this Agreement as of the day and year first above written.
|
COMPANY:
|
||
|
SENTI BIOSCIENCES, INC.
|
||
|
By:
|
||
|
Name: Timothy Lu
|
||
|
Title: Chief Executive Officer
|
||
[Signature Page to Agreement with NEA]
IN WITNESS WHEREOF, the
parties hereto have executed this Agreement as of the day and year first above written.
|
INVESTOR:
|
||
|
NEW ENTERPRISE ASSOCIATES 15, L.P.
|
||
|
By:
|
||
[Signature Page to Agreement with NEA]
Exhibit 99.1
Senti Bio Appoints Fran Schulz to Board of Directors
– Biotechnology industry executive with a proven track record of advising management teams on corporate and financial strategy for more than 30 years –
SOUTH SAN FRANCISCO, Calif., December 2, 2024 -- Senti Biosciences, Inc. (Nasdaq: SNTI) (“Senti Bio” or the “Company”), a clinical-stage biotechnology company developing next-generation cell and gene therapies using its
proprietary Gene Circuit platform, today announced that it has appointed Fran Schulz, a highly experienced biotechnology and financial executive, to the Senti Bio Board of Directors (“Board”).
“We are excited to welcome Fran to the Senti Bio Board of Directors,” said Timothy Lu, MD, PhD, Chief Executive Officer and Co-Founder of Senti Bio. “Fran’s deep expertise in the life sciences industry—spanning finance,
strategic planning, operations, and transactions—will be invaluable as we drive growth and innovation across our pipeline. Fran’s track record of working with life science companies to drive financial and operational success aligns with our vision
for the future, especially as Senti advances multiple clinical programs. I am confident her leadership will be instrumental in strengthening our leadership position in developing next-generation cell and gene therapies with Gene Circuits.”
“I am honored to join the Senti Bio Board and look forward to collaborating with such an experienced team to advance the Company’s goals,” said Ms. Schulz. “Senti Bio’s commitment to Gene Circuit technologies as the
foundation for developing smarter medicines is inspiring, and I am eager to contribute to its mission of creating cell therapies that outsmart complex diseases using novel and unprecedented approaches.”
Concurrent with Ms. Schulz’s appointment to the Board, she will serve as the chairperson of the Board’s Audit Committee. In conjunction with Ms. Schulz’s appointment, Dr. Omid Farokhzad is departing from the Board. The
Company thanks Dr. Farokhzad for his years of service as a director.
Ms. Schulz was one of the founding members and senior partners in Ernst & Young’s (“EY”) Life Sciences Practice and has held various roles at EY over 35 years. While at EY, Ms. Schulz directly contributed to the
growth of EY into a $45B firm recognized on the Fortune 100 Best Companies to Work For® list 22 years in a row. She is also qualified to serve as a financial expert under SEC, NYSE and NASDAQ rules. Ms. Schulz has spent her career working with
large public and emerging private companies throughout the life sciences industry. She has deep experience guiding companies to execute a broad range of corporate deals including collaboration agreements, corporate spin-offs, reorganizations, and
mergers and acquisitions, with personal involvement in over 100 total equity and debt transactions, raising over $15 billion in aggregate. Ms. Schulz also has significant experience with the U.S. Securities and Exchange Commission (“SEC”) and
International Financial Reporting Standards (“IFRS”).
Ms. Schulz currently serves as a Board Member and Audit Committee Chair of EDAP TMS SA (Nasdaq:EDAP), a global leader in robotic energy-based therapies and as a Board Member and Audit Committee Chair of Menlo College.
Previously, she served as a Board Member, Audit Committee Chair and Finance Committee Chair for the National Board of Women in Bio (2013–2023) as well as a Board Member and an Audit Committee member for the California Life Sciences Industry
Association. Ms. Schulz is a certified public accountant (CPA) licensed in California. Ms. Schulz received her B.S. in Business Administration from Menlo College.
About Senti Bio
Senti Bio is a clinical-stage biotechnology company developing a new generation of cell and gene therapies for patients living with incurable diseases. To achieve this, Senti Bio is leveraging a synthetic biology platform
called Gene Circuits to create therapies with enhanced precision and control. These Gene Circuits are designed to precisely kill cancer cells, spare healthy cells, increase specificity to target cells and control the expression of drugs even after
administration. The Company’s wholly-owned pipeline includes off-the-shelf CAR-NK cells, outfitted with Gene Circuits, to target challenging liquid and solid tumor indications. Senti Bio has also preclinically demonstrated that its Gene Circuits
can function in T cells. Additionally, Senti Bio has preclinically demonstrated the potential breadth of Gene Circuits in other cell and gene therapy modalities, diseases outside of oncology, and continues to advance these capabilities through
partnerships with Roche/Spark Therapeutics and Bayer/BlueRock Therapeutics.
Forward-Looking Statements
This press release and document contain certain statements that are not historical facts and are considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements generally are identified by the words “believe,” “could,” “predict,” “continue,” “ongoing,” “project,” “expect,” “anticipate,” “estimate,” “intend,”
“strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” “forecast,” “seek,” “target” and similar expressions that predict or indicate future events or trends or that are not
statements of historical matters. Forward-looking statements are predictions, projections, and other statements about future events that are based on current expectations of Senti Bio’s management and assumptions, whether or not identified in this
document, and, as a result, are subject to risks and uncertainties. Forward-looking statements include, but are not limited to, expectations regarding Senti Bio’s growth, strategy, progress and business development. These forward-looking statements
are provided for illustrative purposes only and are not intended to serve as and must not be relied on by any investor as, a guarantee, an assurance, a prediction, or a definitive statement of fact or probability. Actual events and circumstances
are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond the control of Senti Bio. Many factors could cause actual future results to differ materially from the forward-looking
statements in this document, including but not limited to: (i) changes in domestic and foreign business, market, financial, political and legal conditions, (ii) changes in the competitive and highly regulated industries in which Senti Bio operates,
variations in operating performance across competitors, changes in laws and regulations affecting Senti Bio’s business, (iii) the ability to implement business plans, forecasts and other expectations, (iv) the risk of downturns and a changing
regulatory landscape in Senti Bio’s highly competitive industry, (v) risks relating to the uncertainty of any projected financial information with respect to Senti Bio, (vi) risks related to uncertainty in the timing or results of Senti Bio’s
clinical trial start up, clinical studies, patient enrollment, and GMP manufacturing startup activities, (vii) Senti Bio’s dependence on third parties in connection with clinical trial startup, clinical studies, and GMP manufacturing activities,
(viii) risks related to delays and other impacts from macroeconomic and geopolitical events, increasing rates of inflation and rising interest rates on business operations, (ix) risks related to the timing and utilization of the grant from CIRM,
and (x) the success of any future research and development efforts by Senti Bio. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties described in the “Risk
Factors” section of Senti Bio’s most recent periodic report filed with the SEC, and other documents filed by Senti Bio from time to time with the SEC. These filings identify and address other important risks and uncertainties that could cause
actual events and results to differ materially from those contained in the forward-looking statements in this document. There may be additional risks that Senti Bio does not presently know, or that Senti Bio currently believes are immaterial that
could also cause actual results to differ from those contained in the forward-looking statements in this document. Forward-looking statements speak only as of the date they are made. Senti Bio anticipates that subsequent events and developments may
cause Senti Bio’s assessments to change. Except as required by law, Senti Bio assumes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.
Availability of Other Information About Senti Biosciences, Inc.
For more information, please visit the Senti Bio website at https://www.sentibio.com or follow Senti Bio on X (formerly Twitter) (@SentiBio)
and LinkedIn (Senti Biosciences). Investors and others should note that we communicate with our investors and the public using our company website (www.sentibio.com), including, but not limited to, company
disclosures, investor presentations and FAQs, Securities and Exchange Commission filings, press releases, public conference call transcripts and webcast transcripts, as well as on X and LinkedIn. The information that we post on our website or on
X or LinkedIn could be deemed to be material information. As a result, we encourage investors, the media and others interested to review the information that we post there on a regular basis. The contents of our website or social media shall not
be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended.
Senti Bio Contacts
Investors: investors@sentibio.com
Media: media@sentibio.com
Exhibit 99.2
Senti Biosciences, Inc. Announces Oversubscribed $37.6 Million Private Placement Equity Financing
SOUTH SAN FRANCISCO, Calif., December 2, 2024 – Senti Biosciences, Inc. (Nasdaq: SNTI) (“Senti Bio” or the “Company”), a clinical-stage biotechnology company developing next-generation cell and gene
therapies using its proprietary Gene Circuit platform, has entered into a securities purchase agreement with certain existing and new accredited investors to issue and sell an aggregate of 16,713 shares of Series A Convertible Preferred Stock (the
“Preferred Stock”) through a private investment in public equity (the “PIPE”) financing. Senti Bio anticipates the gross proceeds from the PIPE financing to be approximately $37.6 million, before deducting offering expenses. In addition, investors,
upon receipt of stockholder approval by the Company’s stockholders, will have the right to exercise warrants to purchase up to an additional 25,069,500 in shares of the Company’s common stock. The PIPE financing is anticipated to close on or before
December 5, 2024, subject to customary closing conditions. The Company has also granted to a certain investor an option to purchase an additional 4,444 shares of Preferred Stock and accompanying warrants for gross proceeds of approximately $10.0
million at a subsequent closing to occur no later than December 27, 2024.
The PIPE financing was led by Celadon Partners, with participation from New Enterprise Associates (NEA), Leaps by Bayer, Nantahala Capital, The Red Hook Fund LP, and other institutional
and accredited investors. The Company intends to use the net proceeds from the offering, together with existing cash, cash equivalents and investments, to fund the continued development of its SENTI-202 program and manufacturing ramp-up, other
research and development activities, and for general corporate purposes.
Leerink Partners is acting as the placement agent for the PIPE financing.
The securities sold in the PIPE financing are being made in a transaction not involving a public offering and have not been registered under the Securities Act of 1933, as amended, and may not be
offered or sold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements. Concurrently with the execution of the securities purchase agreement, Senti Bio and the
investors entered into a registration rights agreement pursuant to which the Company has agreed to file a registration statement with the Securities and Exchange Commission registering the resale of the common stock issued or issuable in connection
with the PIPE financing.
This press release shall not constitute an offer to sell or a solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or other jurisdiction in
which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction. Any offering of the securities described above under the resale registration
statement will only be by means of a prospectus.
About Senti Bio
Senti Bio is a clinical-stage biotechnology company developing a new generation of cell and gene therapies for patients living with incurable diseases. To achieve this, Senti Bio is leveraging a
synthetic biology platform called Gene Circuits to create therapies with enhanced precision and control. These Gene Circuits are designed to precisely kill cancer cells, spare healthy cells, increase specificity to target cells and control the
expression of drugs even after administration. The Company’s wholly-owned pipeline includes off-the-shelf CAR-NK cells, outfitted with Gene Circuits, to target challenging liquid and solid tumor indications. Senti Bio has also preclinically
demonstrated that its Gene Circuits can function in T cells. Additionally, Senti Bio has preclinically demonstrated the potential breadth of Gene Circuits in other cell and gene therapy modalities, diseases outside of oncology, and continues to
advance these capabilities through partnerships with Roche/Spark Therapeutics and Bayer/BlueRock Therapeutics.
Forward-Looking Statements
This press release contains certain statements that are not historical facts and are considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements generally are identified by the words “believe,” “could,” “predict,” “continue,” “ongoing,” “project,” “expect,” “anticipate,” “estimate,”
“intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” “forecast,” “seek,” “target” and similar expressions that predict or indicate future events or trends or that
are not statements of historical matters. Forward-looking statements are predictions, projections, and other statements about future events that are based on current expectations of Senti Bio’s management and assumptions, whether or not identified
in this document, and, as a result, are subject to risks and uncertainties. Forward-looking statements include, but are not limited to, statements regarding future events, including the closing of the Company’s private placement offering, the
timely funding to the Company by each investor in the private placement offering, the development of the SENTI-202 program, and financial projections and future financial and operating results. These forward-looking statements are provided for
illustrative purposes only and are not intended to serve as and must not be relied on by any investor as, a guarantee, an assurance, a prediction, or a definitive statement of fact or probability. Actual events and circumstances are difficult or
impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond the control of Senti Bio. Many factors could cause actual future results to differ materially from the forward-looking statements in this
document, including but not limited to: (i) changes in domestic and foreign business, market, financial, political and legal conditions, (ii) changes in the competitive and highly regulated industries in which Senti Bio operates, variations in
operating performance across competitors, changes in laws and regulations affecting Senti Bio’s business, (iii) the ability to implement business plans, forecasts and other expectations, (iv) the risk of downturns and a changing regulatory
landscape in Senti Bio’s highly competitive industry, (v) risks relating to the uncertainty of any projected financial information with respect to Senti Bio, (vi) risks related to uncertainty in the timing or results of Senti Bio’s clinical trial
initiation and the progress of clinical trials, patient enrollment, and GMP manufacturing activities, (vii) Senti Bio’s dependence on third parties in connection with clinical trial startup, clinical studies, and GMP manufacturing activities,
(viii) risks related to delays and other impacts from macroeconomic and geopolitical events, increasing rates of inflation and rising interest rates on business operations, (ix) risks related to the timing and utilization of Senti Bio’s grant from
CIRM and net proceeds of the PIPE financing, and (x) the success of any future research and development efforts by Senti Bio. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks
and uncertainties described in the “Risk Factors” section of Senti Bio’s most recent Quarterly Report on Form 10-Q, filed with the U.S. Securities and Exchange Commission (“SEC”), and other documents filed by Senti Bio from time to time with the
SEC. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements in this document. There may be additional risks
that Senti Bio does not presently know, or that Senti Bio currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements in this document. Forward-looking statements speak
only as of the date they are made. Senti Bio anticipates that subsequent events and developments may cause Senti Bio’s assessments to change. Except as required by law, Senti Bio assumes no obligation to update publicly any forward-looking
statements, whether as a result of new information, future events, or otherwise.
Senti Bio Contact:
Investors: investors@sentibio.com
Media: media@sentibio.com