Rebecca,
Good morning — copying Nathaniel and Jennifer for visibility on all of the below.
I wanted to get you a summary of where things stand coming out of yesterday's session while it's fresh. As you know, we spent the better part of the day at Whitmore, Jansen & Callahan's offices at 1500 Market Street in Philadelphia negotiating the remaining open items from Veridian's second markup (received June 2). On our side it was you, me, and Sean; Veridian had Gregory Callahan and Patricia Dunne, with Allison Whitmore and David Kesselman from WJC. Thank you again for making the trip — having you in the room for the insurance and wind-down discussions made a real difference.
Bottom line: the session was very productive. We resolved the vast majority of the outstanding issues and are down to essentially one substantive open item. Sean is preparing a detailed negotiation session summary and action items memo that will follow separately, but I wanted to give you all the highlights now so we can start thinking about next steps over the weekend.
**Insurance — Resolved at Our Number**
This was one of the biggest open items, and I'm pleased to report we landed it cleanly. Veridian dropped its initial demand for $50,000,000 per-occurrence coverage and agreed to Penterra's position: $25,000,000 per occurrence / $75,000,000 aggregate under the Briarcliff Mutual policy (Policy No. BM-CTL-2023-04182). Veridian and each participating site will be added as additional insureds under the Briarcliff policy. On their side, Veridian's own insurance requirement is confirmed at $5,000,000 per occurrence / $10,000,000 aggregate (covering both general liability and professional liability). Certificate exchange will occur within 15 business days of MCTA execution. Getting this resolved at our number is a meaningful win — Veridian came in at twice our position and we held the line.
**Publication Rights / Investigator Independence — Compromise Reached**
Veridian had been insisting on unrestricted academic freedom for investigators to publish study results. We reached a workable compromise: investigators may publish results from Protocol PPC-4871-III subject to a 60-day Penterra review period for confidential information and patentable subject matter. Penterra may request an additional delay of up to 90 days beyond the review period for patent filing purposes. Veridian accepted this framework after we walked through how this is consistent with standard industry practice for sponsored Phase III trials and protects both parties' interests. The agreed language will be reflected in Exhibit G (IP and Publication Rights).
**Protocol Deviation Liability — Framework Agreed**
We had an extensive discussion on allocation of liability for protocol deviations, specifically the distinction between medically necessary deviations and non-authorized deviations. The agreed framework is as follows:
- Deviations made by investigators for immediate subject safety (i.e., medically necessary) will **not** constitute a carve-out from sponsor indemnification, provided the investigator (a) notifies Penterra and Meridian CRO within 24 hours and (b) documents the medical rationale in the study record. - Non-authorized deviations that are not medically necessary remain carved out from sponsor indemnification and fall under site/investigator responsibility.
This was a nuanced discussion — Allison Whitmore pushed hard on broadening the definition of "medically necessary" and on extending the notification window — but we believe the framework we landed on appropriately balances the interests and is consistent with FDA/GCP expectations. Sean will have the specific language in his memo.
**Confirmation of Previously Agreed Terms**
For completeness, the indemnification financial terms from the May 5 term sheet remain intact as previously agreed:
- Sponsor indemnification: per-subject medical care cap of $500,000; aggregate cap of $15,000,000; uncapped for product-defect claims - Carve-outs: investigator negligence/willful misconduct, unauthorized protocol deviations (now refined per the framework above), and site breach of the MCTA - Reciprocal site indemnity: $5,000,000 per site/per occurrence; $20,000,000 aggregate across all Veridian sites - 30-calendar-day notice requirement for indemnification claims
Payment structure is also confirmed as previously negotiated: milestone-based per-patient payments at 25%/25%/25%/25% ($13,000 per milestone × 4 = $52,000 per subject). Total deal value remains $80,000,000 across the 38 sites.
All other provisions are agreed and in good shape, including confidentiality (10-year term), data ownership (exclusive to Penterra), site record retention (15 years post-study), governing law (New York), dispute resolution (30-day negotiation / 60-day AAA mediation / binding arbitration in New York with a three-arbitrator panel), regulatory compliance representations, and the safety reporting framework (24-hour SAE reporting, 7-day and 15-day IND safety reports).
**Remaining Open Item: Termination Wind-Down Payment Obligations**
This was the one substantive issue we did not fully close yesterday. Veridian wants assurance that Penterra will continue to fund per-patient costs for subjects in active treatment during the 120-day wind-down period following any termination. Our position is that subjects in active treatment at the time of termination must be permitted to complete their current treatment cycle and that Penterra will cover the associated costs. Veridian wants broader language obligating Penterra to cover costs through study completion for all enrolled subjects — which, depending on where we are in the trial, could be a materially different financial commitment. We need to discuss this internally and land on a compromise position. I plan to call Allison early next week to try to resolve it directly.
**Next Steps**
1. Sean Morrissey and Christopher Aiken will prepare the near-final draft of the MCTA incorporating all agreements from yesterday's session, targeting circulation to WJC by **June 16**. 2. I will call Allison Whitmore early next week to work through the termination wind-down payment issue. 3. **Rebecca / Nathaniel:** I'd like to get your input on the wind-down question before I make that call — specifically, what level of post-termination financial commitment Penterra is willing to accept. Can we find time for a call Monday or Tuesday? I have some thoughts on a middle-ground approach I'd like to walk you through. 4. **Jennifer:** Once the MCTA is finalized, closing conditions will include delivery of insurance certificates, IRB approvals for the lead sites (Graystone — IRB00012847, and Veridian Central IRB for non-Pennsylvania sites), and executed investigator signature pages across all 38 sites. I'd suggest clinical ops begin coordinating with Dr. Aldridge and Dr. Matsuoka now to ensure readiness on those items so they don't become a bottleneck. 5. We are still targeting MCTA execution by end of June to keep on track for the **August 14 first-patient-in date**.
Overall, I feel very good about where we are. Yesterday moved things forward substantially, and we're in a strong position heading into the final stretch. The Veridian team was constructive and I think both sides want to get this done.
Happy to discuss any of the above by phone over the weekend if anything is pressing — don't hesitate to call or text.
Best,
Miriam
--- **Miriam Calloway** Senior Partner
*Matter No. 1018-00004*
*This email may contain information that is privileged, confidential, or otherwise protected from disclosure. If you are not the intended recipient, please notify the sender immediately and delete this message.*