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Stock Purchase Agreement
On January 23, 2022, Casdin PMF and Casdin
PGEII entered into the Series B-1 Convertible Preferred Stock Purchase Agreement (the “Stock Purchase Agreement”) with the
Issuer, pursuant to which the Issuer agreed to issue and sell (a) 78,750 shares of Series B-1 Preferred Stock to Casdin PMF in exchange
for cash consideration of $78,750,000 and (b) 33,750 shares of Series B-1 Preferred Stock to Casdin PGEII in exchange for cash consideration
of $33,750,000.
The shares issued to Casdin PMF and Casdin
PGEII pursuant to the Stock Purchase Agreement were subject to certain transfer restrictions until October 4, 2022. Each of Casdin PMF
and Casdin PGEII has agreed to a customary standstill until the later of April 4, 2023 and such time as the shares beneficially owned
by Casdin PMF and Casdin PGEII no longer represent 7.5% or more of the total number Shares issued and outstanding, calculated on an as-converted
basis. For as long as Casdin PMF and Casdin PGEII continue to own 25% of the Acquired Shares (as defined in the Stock Purchase Agreement),
Casdin PMF and Casdin PGEII are entitled to certain information rights and preemptive rights.
Loan Agreement
On January 23, 2022, the Issuer entered into
a loan agreement (the “Loan Agreement”), dated and effective as of January 23, 2022, pursuant to which (a) Casdin PMF provided
a term loan to the Issuer in an aggregate original principal amount of $8,750,000 and (b) Casdin PGEII provided a term loan to the Issuer
in an aggregate original principal amount of $3,750,000.
The loans were fully drawn on January 24, 2022.
Upon the issuance of the Series B-1 Preferred Stock pursuant to the Stock Purchase Agreement, the aggregate principal amount of the term
loan and all unpaid interest owed to Casdin PMF was automatically converted into 10,696 shares of Series B-1 Preferred Stock and the aggregate
principal amount of the term loan and all unpaid interest owed to Casdin PGEII was automatically converted into 4,584 shares of Series
B-1 Preferred Stock, in each case in accordance with the terms of the Loan Agreement.
Registration Rights Agreement
On January 23, 2022, the Issuer entered into
a registration rights agreement (the “Registration Rights Agreement”) with Casdin PGEII, Casdin PMF and the other stockholders
party thereto (together with any other party that may become party to the Registration Rights Agreement, “Holders”), pursuant
to which, among other things, and on the terms and subject to certain limitations set forth therein, the Issuer is obligated to use its
reasonable best efforts to prepare and file within 120 days after the date of the Registration Rights Agreement a registration statement
registering the sale or distribution of Registrable Securities (as defined in the Registration Rights Agreement), which includes: (i)
the Series B-1 Preferred Stock acquired by Casdin PGEII and Casdin PMF pursuant to the Purchase Agreement and the Loan Agreement, (ii)
any Shares acquired pursuant to the conversion of the Series B-1 Preferred Stock in accordance with the Certificate of Designations (as
defined below), and (iii) any other securities issued or issuable with respect to any such Shares or Series B-1 Preferred Stock by way
of share split, share dividend, distribution, recapitalization, merger, exchange, replacement or similar event or otherwise.
In addition, pursuant to the Registration Rights Agreement,
Holders have the right to require the Issuer, subject to certain limitations set forth therein, to effect a sale of any or all of their
Registrable Securities by means of an underwritten offering.
The Issuer is not obligated to effect any underwritten
offering (a) subject to certain exceptions, unless the dollar amount of the Registrable Securities of Holder(s) demanding such underwritten
offering to be included therein is anticipated to result in gross proceeds of at least $25,000,000, (b) if three underwritten offerings
have already been launched at the request of Holder(s) within a 365-day period (or more than two underwritten offerings in the case of
a long-form registration statement), (c) if the underwritten offering would be within 60 days following a prior offering in which Holders
sold (or had the opportunity to sell) Registrable Securities (or within 90 days in the case of a long-form registration statement) or
(d) subject to certain limitations, during the Issuer’s blackout period under its insider trading policy.
The Registration Rights Agreement also provides
Holders with customary piggyback registration rights.
These registration rights are subject to certain
conditions and limitations, including the right of the underwriters to limit the number of shares to be included in a registration or
offering and the Issuer’s right to delay or withdraw a registration statement under certain circumstances.
Certificate of Designations of Series B-1 Preferred Stock
On April 1, 2022, in connection with the consummation
of the Stock Purchase Agreement, the Issuer filed a Certificate of Designations of Series B-1 Convertible Preferred Stock (the “Certificate
of Designations”) with the Secretary of State of the State of Delaware, designating the Series B-1 Preferred Stock and establishing
the powers, designations, preferences, rights and privileges of the shares of Series B-1 Preferred Stock included in such series. The
Certificate of Designations became effective on filing.
The Series B-1 Preferred Stock ranks senior
to the Shares with respect to dividend rights, redemption rights and rights on the distribution of assets on any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Issuer. The holders of Series B-1 Preferred Stock are entitled to participate
in all dividends declared on the Shares on an as-converted basis, on the terms and subject to the conditions set forth in the Series B-1
Certificate of Designations.
In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Issuer, the Series B-1 Preferred Stock has a liquidation preference equal
to the greater of (i) the Liquidation Preference (as defined in the Series B-1 Certificate of Designations) and (ii) the amount per share
of Series B-1 Preferred Stock that such holder would have received had all holders of Series B-1 Preferred Stock, immediately prior to
such voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Issuer, converted all shares of Series B-1
Preferred Stock into Shares pursuant to the terms of the Series B-1 Certificate of Designations (without regard to any limitations on
conversion contained therein).
The Series B-1 Preferred Stock is convertible
at the option of the holders thereof at any time into 294.1176 Shares, subject to adjustment as set forth in the Series B-1 Certificate
of Designations (the “Conversion Rate”).
At any time after April 4, 2027, if the last
reported sale price of the Shares is greater than 250% of an amount equal to $1,000 divided by the Conversion Rate as of such time for
at least 20 consecutive trading days immediately preceding the date of the notice of mandatory conversion, the Issuer may elect to convert
all of the outstanding shares of Series B-1 Preferred Stock into Shares.
If the Issuer undergoes certain change of control
transactions, each holder of outstanding Series B-1 Preferred Stock has the option, subject to the holder’s right to convert all
or a portion of the shares of Series B-1 Preferred Stock held by such holder into Shares prior to such redemption, to require the Issuer
to purchase all or a portion of such holder’s outstanding shares of Series B-1 Preferred Stock that have not been converted into
Shares at a purchase price per share of Series B-1 Preferred Stock, payable in cash, equal to the greater of (A) the Liquidation Preference
of such share of Series B-1 Preferred Stock, and (B) the amount of cash and/or other assets that such holder would have been entitled
to receive if such holder had converted such share of Series B-1 Preferred Stock into Shares immediately prior to the change of control
transaction (“B-1 Change of Control Put”).
In the event of a change of control in which
the Issuer is anticipated to merge with another person and will not be the surviving corporation or if the Shares will no longer be listed
on a U.S. national securities exchange, the Issuer has a right to redeem, subject to the holder’s right to convert into Shares prior
to such redemption, all of such holder’s shares of Series B-1 Preferred Stock, or if a holder exercises the B-1 Change of Control
Put in part, the remainder of such holder’s shares of Series B-1 Preferred Stock, at a redemption price per share payable in cash,
equal to the greater of (A) the Liquidation Preference of such share of Series B-1 Preferred Stock, and (B) the amount of cash and/or
other assets that the holder would have received if such holder had converted such share of Series B-1 Preferred Stock into Shares immediately
prior to the change of control transaction.
The holders of shares of Series B-1 Preferred
Stock have voting power measured in a manner related to the conversion ratio of the shares of Series B-1 Preferred Stock and are entitled
to vote as a single class with the holders of the Shares and the holders of any other class or series of equity interest of the Issuer
then entitled to vote with the Shares on all matters submitted to a vote of the holders of Shares; provided, among other things, that
to the extent the Series B-1 Preferred Stock held by the Casdin Parties (as defined the Stock Purchase Agreement) would, in the aggregate,
represent voting rights with respect to more than 19.9% of the Shares (including the Series B-1 Preferred Stock on an as-converted basis)
(the “Voting Threshold”), Casdin will not be permitted to exercise the voting rights with respect to any shares of Series
B-1 Preferred Stock, as applicable, held by them in excess of the Voting Threshold and the Chief Financial Officer or General Counsel
of the Issuer shall exercise the voting rights with respect to such shares of Series B-1 Preferred Stock in excess of the Voting Threshold
in a neutral manner. The Series B-1 Certificate of Designations also provides that the holders of shares of the Series B-1 Preferred Stock
have separate class approval rights over certain specified actions that would affect the rights of holders of the Series B-1 Preferred
Stock and other specified matters.
In addition, for so long as Casdin and its
Permitted Transferees (as defined in the Series B-1 Certificate of Designations) continue to beneficially own shares of Series B-1 Preferred
Stock that represent at least 7.5% of the outstanding shares of Shares, on an as converted basis (the “Casdin Ownership Percentage”),
on the terms and subject to the conditions set forth in the Series B-1 Certificate of Designations, the holders of a majority of the outstanding
shares of Series B-1 Preferred Stock have the right to nominate for election and to elect one member to the Board of Directors (the “Series
B-1 Preferred Director”). Eli Casdin, Casdin’s nominee, was appointed as the Series B-1 Preferred Director. Subject to applicable
law and Nasdaq listing standards, the Series B-1 Preferred Director shall be offered the opportunity, with respect to each standing committee
of the Board of Directors, to sit on such committee. Further, the Series B-1 Preferred Director will hold office until the following year’s
annual meeting of the Issuer’s stockholders and until his or her successor is duly elected or qualified or until his or her earlier
death, incapacity, resignation or removal. For purposes of clarity, the Series B-1 Preferred Director shall not be classified with the
remaining members of the Board of Directors.
The Certificate of Designations also provides that
for so long as the Casdin Ownership Percentage continues to be met or exceeded for the Series B-1 Preferred Stock, the Series B-1 Director
will continue to have certain consent rights over, among other things: (i) any increase in the number of directors on the Board of Directors
beyond seven; (ii) the hiring, promotion, demotion, or termination of the Issuer’s Chief Executive Officer; (iii) entering into
or modifying (including by waiver) any transaction, agreement or arrangement with any Related Person (as such term is defined in the Certificates
of Designations), subject to certain exceptions; (iv) any voluntary petition under any applicable federal or state bankruptcy or insolvency
law effected by the Issuer; (v) any change in the principal business of the Issuer or entry by the Issuer into any material new line of
business; and (vi) until April 4, 2025, (A) any acquisition (including by merger, consolidation or acquisition of stock or assets) of
any assets, securities or property of any other person or (B) any sale, lease, license, transfer or other disposition of any assets of
the Issuer or any of its subsidiaries, in each case, other than acquisitions or disposition of inventory or equipment in the ordinary
course of business consistent with past practice, for consideration in excess of $50,000,000 in the aggregate in any six-month period.
The transactions by the Reporting Persons in the Shares
during the past sixty days are set forth in Exhibit B. All such transactions were carried out in open market transactions. |
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