1018-00004 · Penterra Pharmaceuticals Corp · Correspondence

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CALDERWOOD & HARKNESS LLP Attorneys at Law

280 Park Avenue, 34th Floor New York, NY 10017

Healthcare & Life Sciences Practice Group

Miriam Calloway Partner Direct Dial: (212) 554-8120

Email: mcalloway@calderwoodharkness.com

June 16, 2023

Via Email and Sundial Data Systems

Allison Whitmore, Esq. Partner Whitmore, Jansen & Callahan LLP 1500 Market Street, Suite 3200 Philadelphia, PA 19102

Re: Master Clinical Trial Agreement between Penterra Pharmaceuticals Corp. and Veridian Health Research Network, Inc. — Protocol PPC-4871-III (CLARION) Calderwood & Harkness Matter No. 1018-00004

Dear Allison:

On behalf of our client, Penterra Pharmaceuticals Corp. ("Penterra"), we are pleased to enclose herewith the near-final draft of the Master Clinical Trial Agreement (the "MCTA") by and between Penterra and Veridian Health Research Network, Inc. ("Veridian") for Protocol PPC-4871-III, the CLARION trial (Clinical Assessment of Response with Longitudinal Investigation in ONcology). This draft reflects all material agreements reached by the parties during the in-person negotiation session held on June 9, 2023, at the offices of Whitmore, Jansen & Callahan in Philadelphia, as well as the subsequent discussions and email exchanges among counsel during the week of June 12, 2023. We are enclosing both a clean version of the near-final draft and a redline version marked against the Second Draft MCTA that was circulated on May 19, 2023, to facilitate your review of the revisions in their totality.

We believe that the near-final draft is substantially complete and reflects the full scope of the commercial, clinical, and legal terms upon which the parties have reached agreement. Set forth below is a summary of the key revisions incorporated in this draft, together with a brief discussion of the limited remaining bracketed items, our proposed timeline for finalization and execution, and a reminder regarding conditions precedent to closing.

I. Summary of Key Revisions Incorporated in the Near-Final Draft

A. Subject-Injury Indemnification Provisions (Exhibit D)

The indemnification provisions set forth in Exhibit D have been finalized in accordance with the structure agreed upon at the June 9 session and consistent with the indemnification term sheet exchanged between the parties on May 5, 2023. The near-final draft reflects the following framework:

Penterra's Indemnification of Veridian and Site Parties. Penterra will indemnify, defend, and hold harmless Veridian, each participating site institution, principal investigators, sub-investigators, and site staff (collectively, the "Site Indemnitees") from and against any and all claims, losses, damages, liabilities, costs, and expenses (including reasonable attorneys' fees) arising from: (a) subject injury caused by the investigational product (penterafenib/PPC-4871) administered in accordance with the Protocol; (b) defects in the investigational product, including manufacturing, formulation, packaging, labeling, or design defects; (c) Penterra's breach of the MCTA or the Protocol; and (d) the negligence or willful misconduct of Penterra, its employees, agents, or subcontractors.

Caps on Sponsor Indemnity. As negotiated, the MCTA provides for a per-subject medical care cap of $500,000 for study-related injuries not otherwise covered by the subject's own health insurance, with an aggregate cap of $15,000,000 across all participating Veridian Network sites. Importantly, and as specifically agreed at the June 9 session, the MCTA provides that indemnification for claims arising from product defects shall be uncapped, reflecting the parties' mutual understanding that defect-based claims properly rest with the sponsor.

Carve-Outs from Sponsor Indemnity. The sponsor's indemnification obligations are subject to the following carve-outs: (i) claims arising from the negligence or willful misconduct of the site, investigator, or site personnel; (ii) claims arising from Protocol deviations that were not authorized by Penterra in writing and were not required for immediate subject safety; and (iii) claims arising from a site's breach of the MCTA or applicable law, including federal, state, or local regulatory requirements.

Reciprocal Site/Investigator Indemnification of Penterra. Veridian and each site institution shall indemnify, defend, and hold harmless Penterra from and against claims arising from the foregoing carve-out categories, subject to a cap of $5,000,000 per site per occurrence and an aggregate cap of $20,000,000 across all Veridian Network sites.

Notice Requirements. The MCTA provides for a 30-calendar-day notice period for indemnification claims. In accordance with the agreement reached at the June 9 session, the draft includes a provision specifying that the failure to provide timely notice shall not relieve Penterra of its indemnification obligations except to the extent that Penterra demonstrates that it has suffered material prejudice as a result of such failure. We believe this language appropriately balances Penterra's legitimate interest in timely notification with the protection of Site Indemnitees.

B. Insurance Requirements (Exhibit E)

The insurance provisions in Exhibit E have been fully resolved in accordance with the agreement reached at the June 9 session. The near-final draft reflects the following terms:

Penterra Clinical Trial Liability Insurance. Penterra will maintain clinical trial liability insurance in the amount of $25,000,000 per occurrence and $75,000,000 in the aggregate through Briarcliff Mutual Insurance Company (Policy No. BM-CTL-2023-04182), with a subject-injury sublimit of $10,000,000 per occurrence and $50,000,000 in the aggregate. As you will recall, the parties were originally at an impasse over Veridian's initial demand for $50,000,000 in per-occurrence coverage; this matter was resolved at $25,000,000 per occurrence following the parties' joint review of the Briarcliff policy terms and applicable industry benchmarking data presented during the June 9 session.

Veridian/Site Insurance Requirements. Veridian and each participating site institution shall maintain general liability and professional liability insurance coverage of at least $5,000,000 per occurrence and $10,000,000 in the aggregate throughout the term of the MCTA and for a period of three years following study completion or termination.

Additional Insured Status. Veridian and each participating site institution are to be named as additional insureds on Penterra's clinical trial liability policy. Penterra will provide a separate additional insured endorsement to each site.

Certificate Exchange. Certificates of insurance shall be exchanged within 15 business days of execution of the MCTA and annually thereafter for the duration of the study. Each party shall provide at least 30 days' prior written notice of any material change in, cancellation of, or non-renewal of any required insurance coverage.

C. Protocol Deviation Liability Framework

The near-final draft incorporates the medically necessary protocol deviation framework that was discussed and agreed upon at length during the June 9 session. This framework, which is reflected in Article 7 of the MCTA and the corresponding provisions of Exhibit D, draws a clear distinction among three categories of protocol deviations:

(a) Deviations Required for Immediate Subject Safety. Where an investigator deviates from the Protocol as necessary to protect the immediate safety or well-being of a study subject, no liability shall be allocated to the investigator or site, and such deviations shall not constitute a basis for any carve-out from Penterra's indemnification obligations.

(b) Pre-Authorized Deviations. Where a deviation from the Protocol has been authorized by Penterra in writing prior to its occurrence, such deviation shall be treated as an amendment to the Protocol for purposes of indemnification, and liability shall not be allocated to the investigator or site.

(c) Unauthorized, Non-Safety-Related Deviations. Where a site or investigator deviates from the Protocol without prior written authorization from Penterra and outside the scope of immediate subject safety, such deviation shall be allocated to the site and investigator under the reciprocal indemnification provisions of Exhibit D.

The language has been refined to specifically address situations in which an investigator exercises clinical judgment in emergent circumstances that may not meet the threshold of "immediate subject safety" as strictly defined, but where clinical judgment reasonably warrants a deviation. In such cases, the MCTA requires prompt notification to Penterra's medical monitor and Meridian Contract Research Organization, Inc. ("Meridian CRO") within 24 hours of the deviation, together with documentation of the investigator's clinical rationale. We believe this framework provides appropriate protections for both parties while prioritizing subject welfare.

D. Publication Rights (Exhibit G)

Exhibit G reflects the finalized compromise on investigator academic freedom that was reached during the June 9 session. The key provisions are as follows:

Investigator Publication Rights. Investigators retain the right to publish or present study results in peer-reviewed journals and at scientific conferences, subject to Penterra's right to review any proposed publication or presentation for a period of 60 days following receipt of the manuscript or abstract. Penterra's review shall be limited to identifying and requesting removal of Penterra confidential information and reviewing for patentable subject matter.

Patent Filing Extension. In the event that Penterra identifies patentable subject matter in a proposed publication, Penterra may request an additional delay of up to 90 days solely for the purpose of preparing and filing patent applications. This additional delay period may not be used for any other purpose, and Penterra shall use commercially reasonable efforts to complete any patent filings within the 90-day period.

Multi-Center Publication Coordination. In recognition of the multi-center nature of the CLARION trial, the MCTA provides that the first publication of study results shall be authored by the trial steering committee, including the Global Principal Investigator, Dr. Catherine Aldridge. Individual site publications shall be permitted only after the primary multi-center publication has been accepted for publication or 18 months after database lock, whichever is earlier. This provision is consistent with ICMJE guidelines and standard industry practice for multi-center oncology trials of this scope.

E. Payment Structure (Exhibit B)

The payment structure set forth in Exhibit B reflects the financial terms negotiated by the parties and memorialized in the budget summary exchanged during the week of June 12, 2023. The principal payment components are as follows:

Per-Patient Fees. Per-patient fees of $52,000 per subject, to be paid in four equal milestone installments of $13,000 each: (1) upon randomization; (2) upon completion of the Week 12 assessment; (3) upon completion of the Week 24 assessment; and (4) upon study completion/final visit.

Start-Up Fees. Start-up fees of $75,000 per site across the 38 participating Veridian Network sites, for a total of $2,850,000. Start-up fees are payable in two equal installments: 50% ($37,500) upon site activation and 50% ($37,500) upon enrollment of the first patient at each site.

Annual Site Maintenance Fees. Annual site maintenance fees of $40,000 per site per year across 38 sites, with an estimated average study duration of 3.5 years, yielding a projected total of $5,320,000 in site maintenance payments.

Network Coordination/Administrative Fee. A network coordination and administrative fee payable to Veridian's central office in the amount of $300,000 per quarter over the anticipated 14-quarter study period, for a total of $4,200,000. This fee covers Veridian's centralized site management, quality assurance, and network coordination functions.

Investigator Grants. Investigator grants in the aggregate amount of $1,500,000, to be disbursed upon acceptance of manuscripts for publication in peer-reviewed journals, in accordance with the publication provisions of Exhibit G.

Technology/EDC Integration Costs. Technology and electronic data capture integration costs in the amount of $1,230,000, payable to Pinnacle Data Solutions, Inc. in accordance with the technology integration work order attached as Schedule 4.

Contingency/Change Order Reserve. A contingency and change order reserve of $2,500,000, to be drawn upon only with the mutual written agreement of Penterra and Veridian and subject to the change order procedures set forth in Article 10 of the MCTA.

Total Deal Value. The total deal value under the MCTA is $80,000,000.

Payment Terms. All payments shall be made net 45 days from Penterra's receipt of a proper invoice in accordance with the invoicing procedures specified in Exhibit B, Section 6.

F. Termination and Wind-Down Provisions

The termination and wind-down provisions in Article 12 of the MCTA have been finalized to include the following key terms:

Wind-Down Period. Upon termination of the MCTA for any reason, a 120-day wind-down period shall apply for the purpose of ensuring the safety and continuity of care of enrolled subjects. During the wind-down period, subjects in active treatment must be transitioned to alternative care arrangements or permitted to complete their current treatment cycle, as clinically appropriate and in the judgment of the treating investigator.

Payment Obligations During Wind-Down. This draft addresses the open item from the June 9 session regarding Penterra's payment obligations during the wind-down period. As agreed, Penterra will continue to make milestone payments for subjects who are actively enrolled as of the termination notice date through the completion of their current treatment cycle. Site maintenance fees shall be prorated through the end of the wind-down period. The network coordination fee shall continue to be payable through the end of the wind-down period to support Veridian's centralized coordination of the close-out process.

G. Dispute Resolution

The dispute resolution provisions in Article 14 of the MCTA reflect the three-step escalation mechanism agreed upon by the parties:

(1) Negotiation. Designated senior representatives of each party shall attempt to resolve any dispute through good-faith negotiation for a period of 30 days following written notice of the dispute.

(2) Mediation. If the dispute is not resolved through negotiation, the parties shall submit the dispute to mediation under the American Arbitration Association ("AAA") Commercial Mediation Rules for a period of 60 days. Mediation shall be conducted in New York, New York.

(3) Binding Arbitration. If the dispute is not resolved through mediation, the dispute shall be submitted to binding arbitration in New York, New York under AAA rules. The arbitration shall be conducted before a panel of three arbitrators, each of whom shall have experience in healthcare and life sciences transactions.

Governing Law. The MCTA shall be governed by and construed in accordance with the laws of the State of New York, without regard to its conflicts of law principles.

Injunctive Relief. Notwithstanding the foregoing, either party may seek temporary, preliminary, or permanent injunctive relief from state and federal courts located in New York County, New York, and each party irrevocably consents to the exclusive jurisdiction and venue of such courts for such purposes.

H. Regulatory Compliance (Exhibit H)

Exhibit H sets forth the regulatory compliance representations, warranties, and covenants of each party. These provisions address compliance with the following regulatory frameworks:

• 21 C.F.R. Part 11 (Electronic Records; Electronic Signatures);

• 21 C.F.R. Part 50 (Protection of Human Subjects);

• 21 C.F.R. Part 54 (Financial Disclosure by Clinical Investigators);

• 21 C.F.R. Part 56 (Institutional Review Boards);

• 21 C.F.R. Part 312 (Investigational New Drug Application);

• ICH E6(R2) Guideline for Good Clinical Practice;

• HIPAA Privacy and Security Rules (45 C.F.R. Parts 160 and 164).

In addition, Exhibit H includes specific representations regarding compliance with the federal Anti-Kickback Statute (42 U.S.C. § 1320a-7b) and the Physician Payments Sunshine Act / CMS Open Payments program (42 U.S.C. § 1320a-7h), including representations that all payments to investigators under the MCTA have been established at fair market value for bona fide services and are properly structured to comply with applicable safe harbors.

Safety Reporting. The safety reporting procedures set forth in Exhibit J require each site to report serious adverse events ("SAEs") to Penterra's drug safety department and Meridian CRO within 24 hours of the site's awareness of the event. IND safety reports shall be submitted to the FDA in accordance with 21 C.F.R. § 312.32 at 7-day timelines for fatal or life-threatening events and 15-day timelines for all other IND safety reports.

I. Confidentiality (Exhibit F)

Exhibit F sets forth the confidentiality obligations of the parties, which include the following key provisions:

Confidentiality Term. A 10-year confidentiality term from the date of disclosure of confidential information by either party.

Scope of Confidential Information. Confidential information includes all Protocol-related information, investigational product specifications, manufacturing information, study data, financial terms of the MCTA, and all other proprietary information disclosed by either party in connection with the CLARION trial.

Permitted Disclosures. Confidential information may be disclosed to the extent necessary for IRB submissions, disclosures to regulatory authorities, and disclosures to legal counsel, provided that in each case the recipient is bound by obligations of confidentiality at least as protective as those set forth in the MCTA.

J. Data Ownership (Exhibit G)

As reflected in Exhibit G, Penterra retains exclusive ownership of all clinical trial data generated in connection with the CLARION trial, including case report form data, source data transcribed into the EDC system, laboratory data, biomarker data, imaging data, and all analyses and reports derived therefrom. Investigators and sites shall have the right to access and use de-identified study data for academic and research purposes in accordance with the publication provisions described above.

Site Record Retention. Each site shall retain all study records, including source documents, regulatory files, and correspondence, for a minimum of 15 years following study completion or as required by applicable law, institutional policy, or regulatory authority, whichever period is longest.

K. Other Provisions

The near-final draft also reflects the parties' agreement on the following additional matters:

Approved Subcontractors (Exhibit K). Exhibit K identifies the following approved subcontractors: (i) Meridian Contract Research Organization, Inc., which will serve as the contract research organization for the CLARION trial; (ii) Pinnacle Data Solutions, Inc., which will provide electronic data capture services and systems integration; and (iii) Northbridge Bioanalytical Laboratories, Inc., which will serve as the central laboratory.

IRB Structure. The MCTA provides that the Graystone University Institutional Review Board (IRB00012847) will serve as the IRB of record for the lead site, Graystone University Medical Center, and for any Pennsylvania-based Veridian Network sites electing to cede review. For non-Pennsylvania network sites, the Veridian Central IRB will serve as the reviewing IRB under IRB Authorization Agreements, consistent with the requirements of 45 C.F.R. § 46.114 and the Final Rule on cooperative research.

II. Remaining Bracketed Items

We wish to draw your attention to the fact that the near-final draft contains a minimal number of remaining bracketed provisions, specifically:

1. Schedule 1 — Participating Site List. The final list of 38 participating Veridian Network sites requires confirmation. We understand that Diane Prescott's team at Veridian is in the process of finalizing the site list and expects to provide confirmation shortly. We would appreciate receiving this confirmation at the earliest opportunity so that Schedule 1 may be completed.

2. Exhibit C — Form of Individual Site Agreement. Minor conforming edits to the Form of Individual Site Agreement are required to reflect the agreed termination wind-down payment language set forth in Article 12 and Exhibit B. These edits are purely ministerial and involve updating internal cross-references and incorporating the prorated site maintenance fee language into the site-level payment schedule.

We view both of these remaining items as ministerial in nature and do not anticipate that they will require any further substantive negotiation between the parties.

III. Request for Final Comments and Proposed Timeline

We respectfully request that Veridian and Whitmore, Jansen & Callahan provide any final comments or edits to the near-final draft by Wednesday, June 21, 2023. It is the shared objective of both parties to finalize the execution version of the MCTA by Friday, June 23, 2023, and to execute the MCTA on or about June 28, 2023.

As you know, the target first-patient-in date for the CLARION trial is August 14, 2023. Timely execution of the MCTA is critical to allow the parties to satisfy the conditions precedent to closing and to enable the initiation of site activation activities necessary to achieve this milestone on schedule. Any delay in execution of the MCTA would compress the timeline for satisfaction of conditions precedent and completion of pre-study activities, potentially jeopardizing the first-patient-in target.

IV. Conditions Precedent Reminder

We wish to remind both parties that upon execution of the MCTA, the parties will need to promptly satisfy the following conditions precedent to closing:

• Insurance Certificates. Delivery of certificates of insurance by both Penterra (through Briarcliff Mutual Insurance Company) and Veridian/sites within 15 business days of execution.

• IRB Approvals for Lead Sites. Obtaining IRB approval for Protocol PPC-4871-III at the lead sites, specifically Graystone University Medical Center and Lakemont Medical Center. We understand that IRB submissions at these sites are substantially prepared but have not yet been formally submitted.

• Executed Investigator Signature Pages. Delivery of executed investigator signature pages from Dr. Catherine Aldridge (Global PI), Dr. Howard Matsuoka (Lead Site PI, Lakemont Medical Center), and all other site principal investigators identified in Schedule 1.

• Executed IP Side Letter. Execution of the intellectual Property Side Letter, which is to be signed concurrently with the MCTA.

Given the timeline constraints discussed above, we would respectfully encourage Veridian to begin initiating IRB submissions at Graystone University Medical Center and Lakemont Medical Center in parallel with the finalization of the MCTA, to the extent Veridian has not already done so. Early initiation of the IRB review process will be important to maintaining the study activation schedule and achieving the August 14 first-patient-in date.

V. Availability for Discussion

Should you, your colleagues, or Veridian's team wish to discuss any remaining points or have any questions regarding the near-final draft, Miriam Calloway and Sean Morrissey are available to discuss by telephone or videoconference at your convenience. For day-to-day drafting questions and coordination regarding the remaining bracketed items and conforming edits, please do not hesitate to contact Christopher Aiken directly at (212) 554-8247 or caiken@calderwoodharkness.com.

We look forward to working with you and your team to bring this matter to a prompt and successful closing.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Miriam Calloway Partner Healthcare & Life Sciences Practice Group 280 Park Avenue, 34th Floor New York, NY 10017 Tel: (212) 554-8120

Email: mcalloway@calderwoodharkness.com

cc: (via email)

Nathaniel Briggs, Esq., Vice President & General Counsel, Penterra Pharmaceuticals Corp. Rebecca Liang, Esq., Associate General Counsel, Clinical Affairs, Penterra Pharmaceuticals Corp. Jennifer Holt, Vice President, Clinical Operations, Penterra Pharmaceuticals Corp. Samantha Novak, Director, Clinical Contracts, Penterra Pharmaceuticals Corp. Joel Strauss, Esq., Partner, Calderwood & Harkness LLP Sean Morrissey, Esq., Associate, Calderwood & Harkness LLP Christopher Aiken, Esq., Associate, Calderwood & Harkness LLP David Kesselman, Esq., Whitmore, Jansen & Callahan LLP Gregory Callahan, Esq., Vice President, Legal & Compliance, Veridian Health Research Network, Inc. Patricia Dunne, Director, Sponsored Research Agreements, Veridian Health Research Network, Inc.

Enclosures:

1. Near-Final Draft — Master Clinical Trial Agreement (clean) (dated June 16, 2023)

2. Near-Final Draft — MCTA Redline Against Second Draft (May 19, 2023)

CALDERWOOD & HARKNESS LLP Attorneys at Law
280 Park Avenue, 34th Floor New York, NY 10017
Healthcare & Life Sciences Practice Group
Miriam Calloway Partner Direct Dial: (212) 554-8120
Email: mcalloway@calderwoodharkness.com
June 16, 2023
Via Email and Sundial Data Systems
Allison Whitmore, Esq. Partner Whitmore, Jansen & Callahan LLP 1500 Market Street, Suite 3200 Philadelphia, PA 19102
Re: Master Clinical Trial Agreement between Penterra Pharmaceuticals Corp. and Veridian Health Research Network, Inc. — Protocol PPC-4871-III (CLARION) Calderwood & Harkness Matter No. 1018-00004
Dear Allison:
On behalf of our client, Penterra Pharmaceuticals Corp. ("Penterra"), we are pleased to enclose herewith the near-final draft of the Master Clinical Trial Agreement (the "MCTA") by and between Penterra and Veridian Health Research Network, Inc. ("Veridian") for Protocol PPC-4871-III, the CLARION trial (Clinical Assessment of Response with Longitudinal Investigation in ONcology). This draft reflects all material agreements reached by the parties during the in-person negotiation session held on June 9, 2023, at the offices of Whitmore, Jansen & Callahan in Philadelphia, as well as the subsequent discussions and email exchanges among counsel during the week of June 12, 2023. We are enclosing both a clean version of the near-final draft and a redline version marked against the Second Draft MCTA that was circulated on May 19, 2023, to facilitate your review of the revisions in their totality.
We believe that the near-final draft is substantially complete and reflects the full scope of the commercial, clinical, and legal terms upon which the parties have reached agreement. Set forth below is a summary of the key revisions incorporated in this draft, together with a brief discussion of the limited remaining bracketed items, our proposed timeline for finalization and execution, and a reminder regarding conditions precedent to closing.
I. Summary of Key Revisions Incorporated in the Near-Final Draft
A. Subject-Injury Indemnification Provisions (Exhibit D)
The indemnification provisions set forth in Exhibit D have been finalized in accordance with the structure agreed upon at the June 9 session and consistent with the indemnification term sheet exchanged between the parties on May 5, 2023. The near-final draft reflects the following framework:
Penterra's Indemnification of Veridian and Site Parties. Penterra will indemnify, defend, and hold harmless Veridian, each participating site institution, principal investigators, sub-investigators, and site staff (collectively, the "Site Indemnitees") from and against any and all claims, losses, damages, liabilities, costs, and expenses (including reasonable attorneys' fees) arising from: (a) subject injury caused by the investigational product (penterafenib/PPC-4871) administered in accordance with the Protocol; (b) defects in the investigational product, including manufacturing, formulation, packaging, labeling, or design defects; (c) Penterra's breach of the MCTA or the Protocol; and (d) the negligence or willful misconduct of Penterra, its employees, agents, or subcontractors.
Caps on Sponsor Indemnity. As negotiated, the MCTA provides for a per-subject medical care cap of $500,000 for study-related injuries not otherwise covered by the subject's own health insurance, with an aggregate cap of $15,000,000 across all participating Veridian Network sites. Importantly, and as specifically agreed at the June 9 session, the MCTA provides that indemnification for claims arising from product defects shall be uncapped, reflecting the parties' mutual understanding that defect-based claims properly rest with the sponsor.
Carve-Outs from Sponsor Indemnity. The sponsor's indemnification obligations are subject to the following carve-outs: (i) claims arising from the negligence or willful misconduct of the site, investigator, or site personnel; (ii) claims arising from Protocol deviations that were not authorized by Penterra in writing and were not required for immediate subject safety; and (iii) claims arising from a site's breach of the MCTA or applicable law, including federal, state, or local regulatory requirements.
Reciprocal Site/Investigator Indemnification of Penterra. Veridian and each site institution shall indemnify, defend, and hold harmless Penterra from and against claims arising from the foregoing carve-out categories, subject to a cap of $5,000,000 per site per occurrence and an aggregate cap of $20,000,000 across all Veridian Network sites.
Notice Requirements. The MCTA provides for a 30-calendar-day notice period for indemnification claims. In accordance with the agreement reached at the June 9 session, the draft includes a provision specifying that the failure to provide timely notice shall not relieve Penterra of its indemnification obligations except to the extent that Penterra demonstrates that it has suffered material prejudice as a result of such failure. We believe this language appropriately balances Penterra's legitimate interest in timely notification with the protection of Site Indemnitees.
B. Insurance Requirements (Exhibit E)
The insurance provisions in Exhibit E have been fully resolved in accordance with the agreement reached at the June 9 session. The near-final draft reflects the following terms:
Penterra Clinical Trial Liability Insurance. Penterra will maintain clinical trial liability insurance in the amount of $25,000,000 per occurrence and $75,000,000 in the aggregate through Briarcliff Mutual Insurance Company (Policy No. BM-CTL-2023-04182), with a subject-injury sublimit of $10,000,000 per occurrence and $50,000,000 in the aggregate. As you will recall, the parties were originally at an impasse over Veridian's initial demand for $50,000,000 in per-occurrence coverage; this matter was resolved at $25,000,000 per occurrence following the parties' joint review of the Briarcliff policy terms and applicable industry benchmarking data presented during the June 9 session.
Veridian/Site Insurance Requirements. Veridian and each participating site institution shall maintain general liability and professional liability insurance coverage of at least $5,000,000 per occurrence and $10,000,000 in the aggregate throughout the term of the MCTA and for a period of three years following study completion or termination.
Additional Insured Status. Veridian and each participating site institution are to be named as additional insureds on Penterra's clinical trial liability policy. Penterra will provide a separate additional insured endorsement to each site.
Certificate Exchange. Certificates of insurance shall be exchanged within 15 business days of execution of the MCTA and annually thereafter for the duration of the study. Each party shall provide at least 30 days' prior written notice of any material change in, cancellation of, or non-renewal of any required insurance coverage.
C. Protocol Deviation Liability Framework
The near-final draft incorporates the medically necessary protocol deviation framework that was discussed and agreed upon at length during the June 9 session. This framework, which is reflected in Article 7 of the MCTA and the corresponding provisions of Exhibit D, draws a clear distinction among three categories of protocol deviations:
(a) Deviations Required for Immediate Subject Safety. Where an investigator deviates from the Protocol as necessary to protect the immediate safety or well-being of a study subject, no liability shall be allocated to the investigator or site, and such deviations shall not constitute a basis for any carve-out from Penterra's indemnification obligations.
(b) Pre-Authorized Deviations. Where a deviation from the Protocol has been authorized by Penterra in writing prior to its occurrence, such deviation shall be treated as an amendment to the Protocol for purposes of indemnification, and liability shall not be allocated to the investigator or site.
(c) Unauthorized, Non-Safety-Related Deviations. Where a site or investigator deviates from the Protocol without prior written authorization from Penterra and outside the scope of immediate subject safety, such deviation shall be allocated to the site and investigator under the reciprocal indemnification provisions of Exhibit D.
The language has been refined to specifically address situations in which an investigator exercises clinical judgment in emergent circumstances that may not meet the threshold of "immediate subject safety" as strictly defined, but where clinical judgment reasonably warrants a deviation. In such cases, the MCTA requires prompt notification to Penterra's medical monitor and Meridian Contract Research Organization, Inc. ("Meridian CRO") within 24 hours of the deviation, together with documentation of the investigator's clinical rationale. We believe this framework provides appropriate protections for both parties while prioritizing subject welfare.
D. Publication Rights (Exhibit G)
Exhibit G reflects the finalized compromise on investigator academic freedom that was reached during the June 9 session. The key provisions are as follows:
Investigator Publication Rights. Investigators retain the right to publish or present study results in peer-reviewed journals and at scientific conferences, subject to Penterra's right to review any proposed publication or presentation for a period of 60 days following receipt of the manuscript or abstract. Penterra's review shall be limited to identifying and requesting removal of Penterra confidential information and reviewing for patentable subject matter.
Patent Filing Extension. In the event that Penterra identifies patentable subject matter in a proposed publication, Penterra may request an additional delay of up to 90 days solely for the purpose of preparing and filing patent applications. This additional delay period may not be used for any other purpose, and Penterra shall use commercially reasonable efforts to complete any patent filings within the 90-day period.
Multi-Center Publication Coordination. In recognition of the multi-center nature of the CLARION trial, the MCTA provides that the first publication of study results shall be authored by the trial steering committee, including the Global Principal Investigator, Dr. Catherine Aldridge. Individual site publications shall be permitted only after the primary multi-center publication has been accepted for publication or 18 months after database lock, whichever is earlier. This provision is consistent with ICMJE guidelines and standard industry practice for multi-center oncology trials of this scope.
E. Payment Structure (Exhibit B)
The payment structure set forth in Exhibit B reflects the financial terms negotiated by the parties and memorialized in the budget summary exchanged during the week of June 12, 2023. The principal payment components are as follows:
Per-Patient Fees. Per-patient fees of $52,000 per subject, to be paid in four equal milestone installments of $13,000 each: (1) upon randomization; (2) upon completion of the Week 12 assessment; (3) upon completion of the Week 24 assessment; and (4) upon study completion/final visit.
Start-Up Fees. Start-up fees of $75,000 per site across the 38 participating Veridian Network sites, for a total of $2,850,000. Start-up fees are payable in two equal installments: 50% ($37,500) upon site activation and 50% ($37,500) upon enrollment of the first patient at each site.
Annual Site Maintenance Fees. Annual site maintenance fees of $40,000 per site per year across 38 sites, with an estimated average study duration of 3.5 years, yielding a projected total of $5,320,000 in site maintenance payments.
Network Coordination/Administrative Fee. A network coordination and administrative fee payable to Veridian's central office in the amount of $300,000 per quarter over the anticipated 14-quarter study period, for a total of $4,200,000. This fee covers Veridian's centralized site management, quality assurance, and network coordination functions.
Investigator Grants. Investigator grants in the aggregate amount of $1,500,000, to be disbursed upon acceptance of manuscripts for publication in peer-reviewed journals, in accordance with the publication provisions of Exhibit G.
Technology/EDC Integration Costs. Technology and electronic data capture integration costs in the amount of $1,230,000, payable to Pinnacle Data Solutions, Inc. in accordance with the technology integration work order attached as Schedule 4.
Contingency/Change Order Reserve. A contingency and change order reserve of $2,500,000, to be drawn upon only with the mutual written agreement of Penterra and Veridian and subject to the change order procedures set forth in Article 10 of the MCTA.
Total Deal Value. The total deal value under the MCTA is $80,000,000.
Payment Terms. All payments shall be made net 45 days from Penterra's receipt of a proper invoice in accordance with the invoicing procedures specified in Exhibit B, Section 6.
F. Termination and Wind-Down Provisions
The termination and wind-down provisions in Article 12 of the MCTA have been finalized to include the following key terms:
Wind-Down Period. Upon termination of the MCTA for any reason, a 120-day wind-down period shall apply for the purpose of ensuring the safety and continuity of care of enrolled subjects. During the wind-down period, subjects in active treatment must be transitioned to alternative care arrangements or permitted to complete their current treatment cycle, as clinically appropriate and in the judgment of the treating investigator.
Payment Obligations During Wind-Down. This draft addresses the open item from the June 9 session regarding Penterra's payment obligations during the wind-down period. As agreed, Penterra will continue to make milestone payments for subjects who are actively enrolled as of the termination notice date through the completion of their current treatment cycle. Site maintenance fees shall be prorated through the end of the wind-down period. The network coordination fee shall continue to be payable through the end of the wind-down period to support Veridian's centralized coordination of the close-out process.
G. Dispute Resolution
The dispute resolution provisions in Article 14 of the MCTA reflect the three-step escalation mechanism agreed upon by the parties:
(1) Negotiation. Designated senior representatives of each party shall attempt to resolve any dispute through good-faith negotiation for a period of 30 days following written notice of the dispute.
(2) Mediation. If the dispute is not resolved through negotiation, the parties shall submit the dispute to mediation under the American Arbitration Association ("AAA") Commercial Mediation Rules for a period of 60 days. Mediation shall be conducted in New York, New York.
(3) Binding Arbitration. If the dispute is not resolved through mediation, the dispute shall be submitted to binding arbitration in New York, New York under AAA rules. The arbitration shall be conducted before a panel of three arbitrators, each of whom shall have experience in healthcare and life sciences transactions.
Governing Law. The MCTA shall be governed by and construed in accordance with the laws of the State of New York, without regard to its conflicts of law principles.
Injunctive Relief. Notwithstanding the foregoing, either party may seek temporary, preliminary, or permanent injunctive relief from state and federal courts located in New York County, New York, and each party irrevocably consents to the exclusive jurisdiction and venue of such courts for such purposes.
H. Regulatory Compliance (Exhibit H)
Exhibit H sets forth the regulatory compliance representations, warranties, and covenants of each party. These provisions address compliance with the following regulatory frameworks:
• 21 C.F.R. Part 11 (Electronic Records; Electronic Signatures);
• 21 C.F.R. Part 50 (Protection of Human Subjects);
• 21 C.F.R. Part 54 (Financial Disclosure by Clinical Investigators);
• 21 C.F.R. Part 56 (Institutional Review Boards);
• 21 C.F.R. Part 312 (Investigational New Drug Application);
• ICH E6(R2) Guideline for Good Clinical Practice;
• HIPAA Privacy and Security Rules (45 C.F.R. Parts 160 and 164).
In addition, Exhibit H includes specific representations regarding compliance with the federal Anti-Kickback Statute (42 U.S.C. § 1320a-7b) and the Physician Payments Sunshine Act / CMS Open Payments program (42 U.S.C. § 1320a-7h), including representations that all payments to investigators under the MCTA have been established at fair market value for bona fide services and are properly structured to comply with applicable safe harbors.
Safety Reporting. The safety reporting procedures set forth in Exhibit J require each site to report serious adverse events ("SAEs") to Penterra's drug safety department and Meridian CRO within 24 hours of the site's awareness of the event. IND safety reports shall be submitted to the FDA in accordance with 21 C.F.R. § 312.32 at 7-day timelines for fatal or life-threatening events and 15-day timelines for all other IND safety reports.
I. Confidentiality (Exhibit F)
Exhibit F sets forth the confidentiality obligations of the parties, which include the following key provisions:
Confidentiality Term. A 10-year confidentiality term from the date of disclosure of confidential information by either party.
Scope of Confidential Information. Confidential information includes all Protocol-related information, investigational product specifications, manufacturing information, study data, financial terms of the MCTA, and all other proprietary information disclosed by either party in connection with the CLARION trial.
Permitted Disclosures. Confidential information may be disclosed to the extent necessary for IRB submissions, disclosures to regulatory authorities, and disclosures to legal counsel, provided that in each case the recipient is bound by obligations of confidentiality at least as protective as those set forth in the MCTA.
J. Data Ownership (Exhibit G)
As reflected in Exhibit G, Penterra retains exclusive ownership of all clinical trial data generated in connection with the CLARION trial, including case report form data, source data transcribed into the EDC system, laboratory data, biomarker data, imaging data, and all analyses and reports derived therefrom. Investigators and sites shall have the right to access and use de-identified study data for academic and research purposes in accordance with the publication provisions described above.
Site Record Retention. Each site shall retain all study records, including source documents, regulatory files, and correspondence, for a minimum of 15 years following study completion or as required by applicable law, institutional policy, or regulatory authority, whichever period is longest.
K. Other Provisions
The near-final draft also reflects the parties' agreement on the following additional matters:
Approved Subcontractors (Exhibit K). Exhibit K identifies the following approved subcontractors: (i) Meridian Contract Research Organization, Inc., which will serve as the contract research organization for the CLARION trial; (ii) Pinnacle Data Solutions, Inc., which will provide electronic data capture services and systems integration; and (iii) Northbridge Bioanalytical Laboratories, Inc., which will serve as the central laboratory.
IRB Structure. The MCTA provides that the Graystone University Institutional Review Board (IRB00012847) will serve as the IRB of record for the lead site, Graystone University Medical Center, and for any Pennsylvania-based Veridian Network sites electing to cede review. For non-Pennsylvania network sites, the Veridian Central IRB will serve as the reviewing IRB under IRB Authorization Agreements, consistent with the requirements of 45 C.F.R. § 46.114 and the Final Rule on cooperative research.
II. Remaining Bracketed Items
We wish to draw your attention to the fact that the near-final draft contains a minimal number of remaining bracketed provisions, specifically:
1. Schedule 1 — Participating Site List. The final list of 38 participating Veridian Network sites requires confirmation. We understand that Diane Prescott's team at Veridian is in the process of finalizing the site list and expects to provide confirmation shortly. We would appreciate receiving this confirmation at the earliest opportunity so that Schedule 1 may be completed.
2. Exhibit C — Form of Individual Site Agreement. Minor conforming edits to the Form of Individual Site Agreement are required to reflect the agreed termination wind-down payment language set forth in Article 12 and Exhibit B. These edits are purely ministerial and involve updating internal cross-references and incorporating the prorated site maintenance fee language into the site-level payment schedule.
We view both of these remaining items as ministerial in nature and do not anticipate that they will require any further substantive negotiation between the parties.
III. Request for Final Comments and Proposed Timeline
We respectfully request that Veridian and Whitmore, Jansen & Callahan provide any final comments or edits to the near-final draft by Wednesday, June 21, 2023. It is the shared objective of both parties to finalize the execution version of the MCTA by Friday, June 23, 2023, and to execute the MCTA on or about June 28, 2023.
As you know, the target first-patient-in date for the CLARION trial is August 14, 2023. Timely execution of the MCTA is critical to allow the parties to satisfy the conditions precedent to closing and to enable the initiation of site activation activities necessary to achieve this milestone on schedule. Any delay in execution of the MCTA would compress the timeline for satisfaction of conditions precedent and completion of pre-study activities, potentially jeopardizing the first-patient-in target.
IV. Conditions Precedent Reminder
We wish to remind both parties that upon execution of the MCTA, the parties will need to promptly satisfy the following conditions precedent to closing:
• Insurance Certificates. Delivery of certificates of insurance by both Penterra (through Briarcliff Mutual Insurance Company) and Veridian/sites within 15 business days of execution.
• IRB Approvals for Lead Sites. Obtaining IRB approval for Protocol PPC-4871-III at the lead sites, specifically Graystone University Medical Center and Lakemont Medical Center. We understand that IRB submissions at these sites are substantially prepared but have not yet been formally submitted.
• Executed Investigator Signature Pages. Delivery of executed investigator signature pages from Dr. Catherine Aldridge (Global PI), Dr. Howard Matsuoka (Lead Site PI, Lakemont Medical Center), and all other site principal investigators identified in Schedule 1.
• Executed IP Side Letter. Execution of the intellectual Property Side Letter, which is to be signed concurrently with the MCTA.
Given the timeline constraints discussed above, we would respectfully encourage Veridian to begin initiating IRB submissions at Graystone University Medical Center and Lakemont Medical Center in parallel with the finalization of the MCTA, to the extent Veridian has not already done so. Early initiation of the IRB review process will be important to maintaining the study activation schedule and achieving the August 14 first-patient-in date.
V. Availability for Discussion
Should you, your colleagues, or Veridian's team wish to discuss any remaining points or have any questions regarding the near-final draft, Miriam Calloway and Sean Morrissey are available to discuss by telephone or videoconference at your convenience. For day-to-day drafting questions and coordination regarding the remaining bracketed items and conforming edits, please do not hesitate to contact Christopher Aiken directly at (212) 554-8247 or caiken@calderwoodharkness.com.
We look forward to working with you and your team to bring this matter to a prompt and successful closing.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Miriam Calloway Partner Healthcare & Life Sciences Practice Group 280 Park Avenue, 34th Floor New York, NY 10017 Tel: (212) 554-8120
Email: mcalloway@calderwoodharkness.com
cc: (via email)
Nathaniel Briggs, Esq., Vice President & General Counsel, Penterra Pharmaceuticals Corp. Rebecca Liang, Esq., Associate General Counsel, Clinical Affairs, Penterra Pharmaceuticals Corp. Jennifer Holt, Vice President, Clinical Operations, Penterra Pharmaceuticals Corp. Samantha Novak, Director, Clinical Contracts, Penterra Pharmaceuticals Corp. Joel Strauss, Esq., Partner, Calderwood & Harkness LLP Sean Morrissey, Esq., Associate, Calderwood & Harkness LLP Christopher Aiken, Esq., Associate, Calderwood & Harkness LLP David Kesselman, Esq., Whitmore, Jansen & Callahan LLP Gregory Callahan, Esq., Vice President, Legal & Compliance, Veridian Health Research Network, Inc. Patricia Dunne, Director, Sponsored Research Agreements, Veridian Health Research Network, Inc.
Enclosures:
1. Near-Final Draft — Master Clinical Trial Agreement (clean) (dated June 16, 2023)
2. Near-Final Draft — MCTA Redline Against Second Draft (May 19, 2023)

CALDERWOOD & HARKNESS LLP Attorneys at Law

CALDERWOOD & HARKNESS LLP

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