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CALDERWOOD & HARKNESS LLP

200 Park Avenue, 42nd Floor New York, New York 10166

PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT

PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT — FOR INTERNAL FIRM USE ONLY

MEMORANDUM

TO: Managing Partner, Calderwood & Harkness LLP

FROM: Oliver Mackenzie, Partner, Mergers & Acquisitions

DATE: October 8, 2024

RE: Matter Status Report — Matter No. 1018-00008: Penterra Pharmaceuticals Corp. / Veridian Biosciences, Inc. — Transaction Terminated

CLASSIFICATION: Privileged and Confidential; For Internal Firm Use Only

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I. EXECUTIVE SUMMARY

Matter No. 1018-00008 was opened on February 14, 2024, for the representation of Penterra Pharmaceuticals Corp. ("Penterra" or "PPC"), a Delaware corporation publicly traded on the Nasdaq Global Select Market (ticker: PPCA), with its principal executive offices located at 1100 Meridian Boulevard, Suite 400, Princeton, New Jersey 08540, in connection with its proposed $900,000,000 all-cash acquisition of 100% of the outstanding capital stock of Veridian Biosciences, Inc. ("Veridian"), a privately held Delaware corporation and clinical-stage biotechnology company headquartered at 550 Gateway Drive, Cambridge, Massachusetts 02142.

The Stock Purchase Agreement (the "SPA") governing the proposed acquisition was negotiated over a period of approximately four months and was executed on June 10, 2024, by and among Penterra, as buyer, Veridian, and the stockholders of Veridian represented by David Ng, Managing Partner of Crestline Ventures, LP, in his capacity as Stockholder Representative (the "Stockholder Representative").

On September 30, 2024, Penterra formally terminated the SPA pursuant to Section 8.1(d) thereof, on the basis that a material adverse effect ("MAE") had occurred with respect to Veridian, rendering the conditions to Buyer's closing obligations under Sections 7.2(a) (bring-down of Sellers' representations and warranties) and 7.2(b) (absence of a material adverse effect) incapable of satisfaction prior to the Outside Date of December 10, 2024. The termination was predicated on the devastating clinical trial results from the Marlowe Asset Management-2 Phase II study of Veridian's lead product candidate, VRD-4187, including a significant increase in severe cytokine release syndrome events and treatment-related deaths, as well as the subsequent imposition by the United States Food and Drug Administration (the "FDA") of a partial clinical hold on VRD-4187 under IND 154832.

The matter is currently transitioning from a transactional posture to an anticipated litigation defense posture. On October 15, 2024, counsel for Veridian delivered a demand letter threatening claims for breach of contract and specific performance. We anticipate that Veridian will file a complaint in the Court of Chancery of the State of Delaware on or about November 15, 2024. The matter accordingly remains open, and the firm's engagement continues.

This memorandum provides a comprehensive status report on the transaction, the factual and legal grounds for termination, anticipated litigation exposure and defensive preparations, ongoing work, staffing, and a billing summary through the date of termination.

II. TRANSACTION OVERVIEW

A. Parties and Advisors

1. Buyer / Client. Penterra Pharmaceuticals Corp. ("Penterra" or "PPC") is a Delaware corporation publicly traded on the Nasdaq Global Select Market under the ticker symbol "PPCA." Penterra's principal executive offices are located at 1100 Meridian Boulevard, Suite 400, Princeton, New Jersey 08540.

Penterra is a mid-cap specialty pharmaceutical company with an approximate market capitalization of $14.2 billion as of June 2024, fiscal year 2023 revenue of $4.87 billion, and approximately $2.1 billion in cash and cash equivalents on hand as reported in its second quarter 2024 financial statements (Form 10-Q filed August 5, 2024). Penterra maintains a commercial portfolio of twelve marketed products spanning oncology, immunology, and rare diseases, with its largest revenue-generating asset being Oncrevant (pembrolizumab biosimilar), which accounted for approximately $1.3 billion in fiscal year 2023 net sales.

The strategic rationale for the proposed acquisition of Veridian was to bolster Penterra's immuno-oncology pipeline following the failure of its internally developed candidate PPC-0921, a PD-L1/TIM-3 bispecific antibody. A Phase III futility analysis completed on November 18, 2023, demonstrated that PPC-0921 was unlikely to meet its primary efficacy endpoint in non-small cell lung cancer, resulting in the discontinuation of the PPC-0921 program and a resulting gap in Penterra's late-stage pipeline. The acquisition of Veridian and its VeriTCE T-cell engager platform was identified by Penterra's corporate development team as a priority transaction to address this pipeline gap.

Key personnel at Penterra relevant to this matter include:

• Dr. Anand Rajagopal, Chief Executive Officer — signatory to the SPA and primary executive sponsor of the transaction

• Catherine M. Burgess, Chief Financial Officer — oversaw financial analysis, financing arrangements, and integration planning

• Thomas F. Holbrook, General Counsel — primary client contact for Calderwood & Harkness; oversees all legal matters and is the designated recipient of the litigation hold notice issued on October 5, 2024

• Natalie Reiner, Senior Vice President, Corporate Development — led the commercial and strategic diligence process and served as day-to-day deal team lead on the client side

• Margaret Liu Whitfield, Chair of the Board of Directors — presided over Board deliberations regarding the acquisition, the MAE analysis, and the ultimate authorization of termination

2. Target. Veridian Biosciences, Inc. ("Veridian") is a privately held Delaware corporation and clinical-stage biotechnology company with its principal offices at 550 Gateway Drive, Cambridge, Massachusetts 02142. Veridian was founded in 2016 by Dr. Julian Marek and Dr. Priya Chandrasekaran, who developed the company's proprietary VeriTCE T-cell engager platform during their prior academic research at the Massachusetts Institute of Technology and the Broad Institute of MIT and Harvard.

As of the date of signing, Veridian had approximately 148 employees, including a scientific and clinical team of approximately 85 personnel. Veridian is a pre-revenue, clinical-stage company; it reported zero revenue for fiscal year 2023, with a net loss of $87.3 million driven primarily by research and development expenditures related to VRD-4187 and earlier-stage pipeline candidates. As of March 31, 2024, Veridian reported cash and cash equivalents of $112.4 million, which was expected to fund operations through approximately mid-2025 in the absence of additional financing or the closing of this transaction. To date, Veridian has raised approximately $420 million in total venture capital financing across its Series A through Series D rounds.

Veridian's lead product candidate is VRD-4187, a bispecific T-cell engager targeting DLL3-expressing tumors, principally small cell lung cancer ("SCLC"). At the time of signing, VRD-4187 was in Phase II clinical trials (the Marlowe Asset Management-2 study, NCT05837291) and was considered by Broadleaf Scientific Consulting LLC to represent a potentially differentiated approach to DLL3-directed T-cell engagement therapy, although with acknowledged safety risks inherent to the T-cell engager modality.

Key personnel at Veridian relevant to this matter include:

• Dr. Julian Marek, Chief Executive Officer and Co-Founder — signatory to the SPA

• Dr. Priya Chandrasekaran, Chief Scientific Officer and Co-Founder — led VRD-4187 preclinical and early clinical development

• Steven R. Kessler, Chief Financial Officer — managed Veridian financial reporting and served as primary contact for financial due diligence

• Dr. Anne-Marie Fontaine, Vice President, Regulatory Affairs — responsible for all FDA interactions, including the IND for VRD-4187 and the response to the partial clinical hold

• Rachel Stein-Goldberg, General Counsel — served as primary legal contact at Veridian and coordinated with Zalcourt Archer & Cole LLP

3. Major Veridian Stockholders. The following entities and individuals held the most significant equity positions in Veridian as of the date of signing:

David Ng, Managing Partner of Crestline Ventures, LP, was designated as the Stockholder Representative under the SPA, with authority to act on behalf of the selling stockholders in connection with post-closing indemnification claims, disputes, and other matters. In that capacity, Mr. Ng was also the designated recipient of the Termination Notice delivered on September 30, 2024.

4. Sellers' Counsel. Zalcourt Archer & Cole LLP, One Federal Street, 30th Floor, Boston, Massachusetts 02110. The engagement was led by Rebecca Whitmore, Partner, with significant involvement from Jonathan Pratt, Associate, and Elaine Sato, Tax Partner. Ms. Whitmore served as lead negotiating counsel for Veridian and the selling stockholders throughout the transaction process, and is the attorney who signed the October 15, 2024 demand letter on behalf of Veridian threatening litigation.

5. Buyer's Financial Advisor. Garrison Zanthor & Co., LLC, 383 Madison Avenue, New York, New York 10179. The engagement was led by Kevin Driscoll, Managing Director. Garrison Zanthor provided financial advisory services to Penterra, including valuation analysis, deal structuring advice, and a fairness opinion delivered to the Penterra Board on June 9, 2024, opining that the $900,000,000 purchase price was fair, from a financial point of view, to Penterra. The Garrison Zanthor advisory fee of $2,500,000 was payable regardless of whether the transaction closed, and accordingly constitutes a sunk cost.

6. Target's Financial Advisor. Ridgeway Partners LLC, 101 Huntington Avenue, Suite 2500, Boston, Massachusetts 02199. The engagement was led by Laura Beckett, Managing Director. Ridgeway Partners represented Veridian in the sale process, including the initial outreach to potential acquirers, the management of the data room, and the negotiation of deal economics.

7. Escrow Agent. Fidelis National Escrow Corp., 601 Riverside Avenue, Jacksonville, Florida 32204. The designated officer was Brian Mulcahy, Senior Vice President. Fidelis was selected as escrow agent to hold the $180,000,000 indemnification escrow and the $2,500,000 Stockholder Representative expense fund that would have been deposited at closing. No deposits were made, and a notice of non-closing was delivered to Fidelis on October 1, 2024.

8. Financing Sources. Summit Ridge Capital Partners, LP (Philip Ostrander, Managing Director) served as lead arranger of the $500,000,000 committed term loan facility. Ironclad Trust Company, N.A. (Samantha Hwang, Vice President), located at 60 Wall Street, New York, New York 10005, served as administrative agent under the financing commitment. A formal notice of SPA termination and request for termination of the financing commitment was delivered to Ironclad on October 1, 2024.

9. R&W Insurance. Atlas Indemnity Insurance Co. (Graham Fielding, Senior Vice President) issued a representations and warranties insurance policy, Policy No. AIC-RWI-2024-07892, which was brokered by Prescott Whitfield Insurance Brokers, Inc. (Amanda Chen-Kowalski). The policy was bound on June 12, 2024, two days after SPA execution. Details of the policy terms and current status are set forth in Section II.D below.

10. Clinical / Scientific Due Diligence Advisor. Broadleaf Scientific Consulting LLC (Dr. Raymond Kapoor), 225 Franklin Street, Suite 1900, Boston, Massachusetts 02110. Broadleaf was engaged on March 18, 2024, to conduct clinical and scientific due diligence on Veridian's product pipeline, with a particular emphasis on VRD-4187, the VeriTCE platform technology, the competitive landscape for DLL3-directed therapies, and the design and status of the Marlowe Asset Management-2 Phase II clinical trial. Broadleaf delivered its initial due diligence report on May 22, 2024, and a supplemental clinical assessment on August 19, 2024, following the adverse DMC findings.

11. Antitrust Counsel. Stonebridge HSW Antitrust Advisors LLP (Martin Prumvane, Partner), 1440 New York Avenue NW, Suite 700, Washington, DC 20005. Stonebridge HSW was engaged to prepare and file the Hart-Scott-Rodino pre-merger notification and to advise on any antitrust issues arising during the regulatory review period. Following early termination of the HSR waiting period on May 20, 2024, Stonebridge HSW's active involvement in the matter concluded.

12. Auditors. Veridian's Auditor: Northbridge Accounting Group LLP (Patrick Calloway, Engagement Partner). Northbridge audited Veridian's financial statements for fiscal years 2021 through 2023, which were provided during the financial due diligence process.

Penterra's Auditor: Tarrant & Co. (Diana Rourke, Engagement Partner). Clearwater's involvement in the transaction was limited to providing comfort letters in connection with the financing commitment.

B. Deal Terms

The principal economic and structural terms of the SPA, as executed on June 10, 2024, are summarized below:

Purchase Price. The aggregate purchase price was $900,000,000 in cash, payable at closing to the selling stockholders of Veridian on a pro rata basis in accordance with each stockholder's percentage ownership of the outstanding capital stock of Veridian, as set forth in the allocation schedule attached to the SPA as Exhibit A (SPA § 2.1).

Structure. The transaction was structured as a stock purchase — Penterra would acquire 100% of the outstanding shares of capital stock of Veridian (including all common stock and preferred stock on an as-converted basis) directly from the selling stockholders. No Section 338(h)(10) election under the Internal Revenue Code was contemplated, as the parties were unable to reach agreement on the tax allocation mechanics during negotiations.

Indemnification Escrow. At closing, $180,000,000 (representing 20% of the aggregate purchase price) would have been deposited into an indemnity escrow account with Fidelis National Escrow Corp., pursuant to the terms of the Escrow Agreement (the "Indemnification Escrow Amount") (SPA § 2.3). This escrow was the exclusive source of recovery for Buyer's indemnification claims under Article IX of the SPA, subject to certain exceptions for Fundamental Representations and fraud.

Stockholder Representative Expense Fund. An additional $2,500,000 would have been deposited at closing with Fidelis to fund the Stockholder Representative's expenses in administering post-closing indemnification claims and other matters on behalf of the selling stockholders (SPA § 2.3(b)).

Net Closing Payment. Had the transaction closed, the net amount payable to the selling stockholders at closing (exclusive of the escrow deposits) would have been $717,500,000, calculated as follows: $900,000,000 (purchase price) minus $180,000,000 (indemnification escrow) minus $2,500,000 (stockholder representative expense fund).

Indemnification Terms. The indemnification framework under Article IX of the SPA provided for the following key parameters:

• Indemnification Cap: $180,000,000 (20% of the purchase price), except that claims based on Fundamental Representations and fraud were not subject to the cap and were recoverable up to the full purchase price of $900,000,000.

• Indemnification Basket: $9,000,000 (1% of the purchase price), structured as a tipping basket (i.e., once aggregate claims exceeded the basket amount, the selling stockholders were liable for the full amount of claims from the first dollar, not merely the excess over the basket).

• Survival Period: General representations and warranties survived for 18 months following the closing date. Fundamental Representations (including organization, authorization, capitalization, and title to shares) and tax representations survived for the full applicable statute of limitations plus 60 days.

Reverse Termination Fee. Penterra agreed to pay a reverse termination fee of $45,000,000 (representing 5% of the purchase price) in the event the SPA was terminated due to a financing failure — specifically, if all conditions to closing had been satisfied or waived other than the availability of the debt financing contemplated by the commitment letter, and Penterra failed to consummate the closing. The reverse termination fee was structured as the sole and exclusive remedy of Veridian and the selling stockholders in the event of a financing failure (SPA § 8.3(b)).

Target Termination Fee. Veridian agreed to pay, or cause to be paid, a target termination fee of $36,000,000 (representing 4% of the purchase price) in the event the SPA was terminated by Penterra as a result of Veridian's breach of the no-shop provision contained in SPA § 5.4 (SPA § 8.3(c)).

No-Shop. SPA § 5.4 contained a customary no-shop provision prohibiting Veridian and its representatives from soliciting, initiating, encouraging, or facilitating any competing acquisition proposals from the date of execution through the earlier of closing or termination. The no-shop included a limited fiduciary-out permitting the Veridian board to engage with an unsolicited superior proposal, subject to providing Penterra four business days' written notice and matching rights before any change of board recommendation or termination in favor of such superior proposal.

Material Adverse Effect Definition. The MAE definition, set forth in SPA § 1.1, was a heavily negotiated provision. The definition provided that a "Material Adverse Effect" means any event, circumstance, change, effect, development, condition, or occurrence that, individually or in the aggregate, has had or would reasonably be expected to have a material adverse effect on the business, operations, condition (financial or otherwise), assets, liabilities, or results of operations of the Company and its Subsidiaries, taken as a whole. The definition included the following carveouts, which excluded from the MAE determination any adverse effects arising from or relating to:

(i) general economic or political conditions in the United States or any other jurisdiction in which the Company conducts material operations;

(ii) conditions generally affecting the biotechnology or pharmaceutical industry;

(iii) changes in applicable law or in generally accepted accounting principles (GAAP), or changes in the interpretation or enforcement thereof;

(iv) pandemics, epidemics, or public health emergencies;

(v) natural disasters, acts of war, sabotage, terrorism, military action, or any escalation or worsening thereof;

(vi) changes in or affecting financial, banking, or securities markets generally (including any disruption thereof and any decline in the price of any security or any market index); and

(vii) the announcement or pendency of the transactions contemplated by the SPA.

Critically, the carveouts enumerated in clauses (i) through (vi) were subject to a disproportionate-impact exception providing that, to the extent the relevant event, circumstance, or condition had a disproportionate adverse effect on the Company relative to other companies operating in the biotechnology or pharmaceutical industry, the incremental disproportionate impact could be taken into account in determining whether a Material Adverse Effect had occurred. The carveout in clause (vii), relating to the announcement or pendency of the transactions, was not subject to this disproportionate-impact exception.

Governing Law and Dispute Resolution. The SPA is governed by the laws of the State of Delaware, without regard to conflicts of laws principles. The parties irrevocably consented to the exclusive jurisdiction of the Court of Chancery of the State of Delaware (or, if such court lacks subject matter jurisdiction, the Superior Court of the State of Delaware or the United States District Court for the District of Delaware) for the resolution of any disputes arising out of or relating to the SPA (SPA § 10.6). The parties waived their respective rights to a jury trial (SPA § 10.7).

Specific Performance. SPA § 10.12 expressly provided that each party was entitled to seek an injunction, specific performance, and other equitable relief to prevent breaches of the SPA and to enforce specifically the terms and provisions thereof, in addition to any other remedy to which such party may be entitled at law or in equity. This provision is significant because it expressly contemplates the availability of specific performance as a remedy, which Veridian has now invoked in its October 15, 2024 demand letter.

Outside Date. The Outside Date for consummation of the transactions was December 10, 2024, representing 180 days following the date of execution of the SPA. Either party was entitled to terminate the SPA if the closing had not occurred on or before the Outside Date, provided that the terminating party was not then in material breach of its obligations under the SPA (SPA § 8.1(b)).

C. Financing Structure

Penterra's funding plan for the $900,000,000 all-cash purchase price contemplated a combination of committed debt financing and cash on hand, as follows:

Committed Term Loan Facility. Summit Ridge Capital Partners, LP, as lead arranger, and Ironclad Trust Company, N.A., as administrative agent, executed a financing commitment letter (Commitment Letter Ref. CL-2024-PPCA-0607, dated June 7, 2024) pursuant to which they committed to provide Penterra with a $500,000,000 senior secured term loan facility to fund a portion of the purchase price. The commitment letter was delivered to Penterra three days prior to SPA execution and was a condition precedent to the Board's authorization of the transaction.

The principal terms of the committed term loan facility were as follows:

• Facility Size: $500,000,000 senior secured term loan

• Interest Rate: Secured Overnight Financing Rate (SOFR) plus 225 basis points

• Commitment Fee: 0.35% per annum on unfunded commitments, payable quarterly in arrears, which equated to approximately $1,750,000 on an annualized basis

• Ticking Fee: 0.175% per annum, commencing 90 days after the date of the commitment letter (i.e., September 8, 2024), payable on unfunded commitments, designed to incentivize timely closing

• Expiration: The financing commitment was co-terminous with the SPA Outside Date of December 10, 2024

• Conditions to Funding: The commitment was subject to customary conditions, including the accuracy of specified representations, the absence of a material adverse effect (as defined in the SPA), the delivery of specified closing documents, and the contemporaneous consummation of the acquisition

Cash on Hand. The remaining $400,000,000 of the purchase price was to be funded from Penterra's available cash and cash equivalents, which totaled approximately $2.1 billion as of June 30, 2024. The use of Penterra's cash for this purpose had been approved by the Penterra Board as part of its authorization of the transaction.

Following the termination of the SPA on September 30, 2024, a notice was delivered to Ironclad Trust Company, N.A. on October 1, 2024, requesting formal termination of the financing commitment. As of the date of this memorandum, confirmation of the termination of the commitment has not yet been received, although Ironclad's preliminary response indicated that termination would be processed in the ordinary course. Penterra's obligation to pay the commitment fee and ticking fee ceased upon termination of the SPA, subject to any accrued and unpaid amounts through September 30, 2024.

D. R&W Insurance

In connection with the transaction, Penterra obtained a representations and warranties insurance policy to provide an additional layer of protection beyond the contractual indemnification escrow. The key terms of the policy are as follows:

• Insurer: Atlas Indemnity Insurance Co. (Graham Fielding, Senior Vice President)

• Policy Number: AIC-RWI-2024-07892

• Broker: Prescott Whitfield Insurance Brokers, Inc. (Amanda Chen-Kowalski)

• Binding Date: June 12, 2024 (two days after SPA execution)

• Policy Limit: $180,000,000 (matching the indemnification cap under the SPA)

• Self-Insured Retention (SIR): $9,000,000 (matching the indemnification basket under the SPA)

• Premium: $3,960,000 (representing 2.2% of the policy limit), paid in full upon binding

• Underwriting Fee: $75,000, paid to Atlas Indemnity in connection with the underwriting process

• Policy Type: Buyer-side policy, providing coverage to Penterra for breaches of Veridian's representations and warranties in the SPA

Current Status. Because the transaction did not close, the R&W policy was not triggered and no claims have been or will be submitted under the policy. A notice of non-closing was delivered to Atlas Indemnity on October 3, 2024. Pursuant to the policy terms, the premium of $3,960,000 and the underwriting fee of $75,000 are non-refundable, and these amounts constitute sunk costs of the transaction. The total non-refundable amount paid to Atlas Indemnity is $4,035,000.

III. TRANSACTION TIMELINE AND KEY EVENTS

A. Pre-Signing Phase (February – June 2024)

The following is a chronological summary of the material events during the pre-signing phase of the transaction:

February 12, 2024. The Penterra Board of Directors, at a special meeting convened for this purpose, authorized management and its advisors to explore a potential acquisition of Veridian Biosciences, Inc. The Board resolution reflected the strategic rationale described in Section II.A above, including the need to replenish Penterra's immuno-oncology pipeline following the failure of PPC-0921. The Board authorized Dr. Rajagopal and Ms. Reiner to engage financial and legal advisors and to submit a non-binding indication of interest to Veridian.

February 14, 2024. Calderwood & Harkness LLP was formally engaged as outside counsel to Penterra for the proposed acquisition. Simultaneously, Garrison Zanthor & Co., LLC was engaged as Penterra's exclusive financial advisor. The firm opened Matter No. 1018-00008, designating Oliver Mackenzie as responsible partner and Harrison Wexford as billing partner.

March 1, 2024. Penterra submitted a non-binding indication of interest to Veridian's board of directors and its financial advisor, Ridgeway Partners LLC, expressing interest in acquiring 100% of Veridian's outstanding capital stock at an indicative enterprise value of $850 million to $950 million. The indication of interest was subject to satisfactory completion of due diligence, negotiation of definitive agreements, and receipt of all necessary internal approvals.

March 4, 2024. A mutual Confidentiality Agreement (NDA) was executed between Penterra and Veridian, enabling the exchange of non-public information in connection with the evaluation of a potential transaction. The NDA contained customary provisions regarding use restrictions, a two-year standstill, and non-solicitation of employees, as well as return/destruction obligations upon termination or completion of the evaluation process.

March 11, 2024. Following execution of the NDA, Veridian granted Penterra and its advisors access to Veridian's virtual data room, hosted on Thackeray Solutions, containing approximately 4,200 documents organized across 18 diligence categories, including corporate organization, capitalization, financial statements, intellectual property, clinical and regulatory filings, material contracts, employment matters, real property, environmental compliance, and litigation.

March 18, 2024. Broadleaf Scientific Consulting LLC was engaged by Penterra, at the recommendation of Calderwood & Harkness, to conduct an independent clinical and scientific due diligence review of Veridian's product pipeline, with a particular focus on VRD-4187, the Marlowe Asset Management-2 study protocol and available clinical data, the VeriTCE platform technology, and the competitive landscape for DLL3-directed T-cell engager therapies. Dr. Raymond Kapoor served as the lead consultant.

April 15, 2024. Calderwood & Harkness circulated an initial draft of the Stock Purchase Agreement to Zalcourt Archer & Cole LLP. The initial draft reflected Penterra's preferred positions on key economic and legal terms, including the MAE definition, the indemnification framework, the operating covenants, the closing conditions, and the termination provisions. The SPA draft was accompanied by drafts of the Escrow Agreement, the forms of officer's certificates, and a summary of proposed ancillary agreements.

April 22, 2024. A Hart-Scott-Rodino ("HSR") pre-merger notification was filed with the Federal Trade Commission ("FTC") and the Antitrust Division of the U.S. Department of Justice ("DOJ") by both Penterra and Veridian, as required under the HSR Act. The applicable filing fee was $280,500, based on the transaction value. Stonebridge HSW Antitrust Advisors LLP coordinated the preparation and filing of the notification.

May 20, 2024. The FTC granted early termination of the HSR waiting period. No second request or supplemental information request was issued. The antitrust clearance removed a significant condition precedent to closing and eliminated regulatory timing risk.

June 3, 2024. Calderwood & Harkness delivered a comprehensive due diligence summary memorandum to the Penterra Board of Directors, summarizing the firm's findings across all diligence categories. The memorandum identified key risks, including the inherent clinical risk associated with VRD-4187's mechanism of action (cytokine release syndrome being a known class effect of T-cell engager therapies), certain pending patent prosecution matters related to the VeriTCE platform, and Veridian's reliance on a single contract research organization for the Marlowe Asset Management-2 study. The memorandum also identified the significant upside associated with VRD-4187 in the event of favorable Phase II results, including the potential for accelerated regulatory approval given the limited approved treatment options in relapsed/refractory SCLC.

June 7, 2024. The financing commitment letter (Ref. CL-2024-PPCA-0607) was executed by Summit Ridge Capital Partners, LP (as lead arranger) and Ironclad Trust Company, N.A. (as administrative agent), committing to provide the $500,000,000 senior secured term loan facility described in Section II.C above. The commitment letter was reviewed and marked up by Calderwood & Harkness prior to execution.

June 9, 2024. Garrison Zanthor & Co. delivered its fairness opinion to the Penterra Board, opining that, based upon and subject to the assumptions, limitations, qualifications, and conditions described in the opinion, the $900,000,000 purchase price to be paid by Penterra for 100% of the outstanding capital stock of Veridian was fair, from a financial point of view, to Penterra. The fairness opinion was a condition to the Board's authorization of the transaction.

June 10, 2024. The Stock Purchase Agreement was executed by Dr. Anand Rajagopal, on behalf of Penterra, and Dr. Julian Marek, on behalf of Veridian, along with the Stockholder Representative and each of the major selling stockholders. Simultaneously, the Penterra Board adopted resolutions ratifying and approving the execution and delivery of the SPA and the consummation of the transactions contemplated thereby. A Secretary's certificate was delivered, certifying the Board resolutions and the incumbency of authorized officers. The Escrow Agreement was also executed in connection with signing.

June 12, 2024. The R&W insurance policy (Policy No. AIC-RWI-2024-07892) was bound by Atlas Indemnity Insurance Co. The premium of $3,960,000 and underwriting fee of $75,000 were paid by Penterra.

June 14, 2024. Veridian delivered to Penterra a stockholder written consent executed by holders of more than 90% of Veridian's outstanding capital stock, approving the transactions contemplated by the SPA. The consenting stockholders included Crestline Ventures, LP, Boreal Health Partners Fund III, LP, and Apex Growth Equity Fund II, LP, as well as both founders and a substantial number of smaller institutional investors. The stockholder approval satisfied the condition set forth in SPA § 7.1(c).

B. Interim Period and Adverse Developments (June – September 2024)

Following execution of the SPA on June 10, 2024, the parties entered the interim period during which they were obligated to satisfy the remaining conditions to closing, including Veridian's compliance with the interim operating covenants set forth in SPA § 5.1. Calderwood & Harkness maintained a detailed interim operating covenant compliance tracker, updated on a bi-weekly basis from June 11, 2024 through September 30, 2024, to monitor Veridian's compliance with its obligations during the pre-closing period. For the first approximately two months of the interim period, no material issues arose.

The critical developments that ultimately precipitated the termination of the SPA occurred beginning in August 2024, and are summarized below in chronological order.

August 14, 2024. The Data Monitoring Committee ("DMC") for the Marlowe Asset Management-2 Phase II clinical trial (NCT05837291) completed a pre-planned interim analysis of the trial data. The Marlowe Asset Management-2 study was being conducted across 42 clinical sites and had enrolled 387 patients, with 194 patients randomized to the VRD-4187 treatment arm and 193 patients randomized to the control arm (standard-of-care chemotherapy). The DMC's findings, which were communicated to Veridian's clinical team on the same date, were profoundly negative and included the following:

• Cytokine Release Syndrome (CRS): Grade ≥3 CRS events were observed in 23.4% of patients in the VRD-4187 treatment arm, compared to 4.1% of patients in the control arm. This represented a differential of 19.3 percentage points — a level of severe CRS significantly exceeding the rates reported in Veridian's earlier Phase I dose-escalation study and significantly exceeding the rates observed with other T-cell engager therapies in the same disease setting.

• Treatment-Related Deaths: Seven treatment-related deaths (3.6% of the treatment arm) were reported in the VRD-4187 arm, compared to one treatment-related death (0.5%) in the control arm. The treatment-related deaths in the VRD-4187 arm included four attributable to severe CRS, two to neurotoxicity (immune effector cell-associated neurotoxicity syndrome, or ICANS), and one to disseminated intravascular coagulation.

• Efficacy: The overall response rate (ORR) in the VRD-4187 arm was 31.4%, compared to 28.9% in the control arm — a difference that was not statistically significant (p = 0.58). Thus, the interim data showed no meaningful efficacy advantage for VRD-4187 over the control therapy, while demonstrating a dramatically worse safety profile.

Based on these findings, the DMC recommended immediate suspension of enrollment in the Marlowe Asset Management-2 study and implementation of a dose modification protocol for patients already enrolled.

August 16, 2024. Pursuant to its notification obligations under SPA § 5.1(b), Veridian provided written notice to Penterra of the DMC's findings. The notification letter was delivered by Rachel Stein-Goldberg, Veridian's General Counsel, to Thomas F. Holbrook, Penterra's General Counsel, with a copy to Calderwood & Harkness. The notification included a summary of the DMC's findings but did not include the underlying data tables or the DMC's full written report, which Penterra subsequently requested and ultimately received on August 20, 2024.

August 19, 2024. Broadleaf Scientific Consulting LLC, at the request of Calderwood & Harkness, delivered a supplemental clinical assessment evaluating the significance of the Marlowe Asset Management-2 interim data. Dr. Kapoor's assessment confirmed the severity of the clinical findings and concluded that: (a) the safety signal was unlikely to be attributable solely to the specific dosing regimen and likely reflected an intrinsic characteristic of VRD-4187's molecular design; (b) the efficacy data failed to demonstrate the clinically meaningful benefit that would be necessary to justify the observed safety risks; (c) even with dose modifications, it was uncertain whether an acceptable therapeutic window for VRD-4187 could be identified; and (d) the likelihood that VRD-4187 would achieve regulatory approval in the current indication (relapsed/refractory SCLC) had materially diminished.

August 22, 2024. The FDA imposed a partial clinical hold on VRD-4187 under IND 154832. The partial clinical hold prohibited new patient enrollment in the Marlowe Asset Management-2 study but permitted continuation of treatment for patients already enrolled, subject to enhanced safety monitoring and reporting requirements. The FDA's action was based on its review of the adverse event data from the DMC interim analysis, which Veridian had reported to the FDA in safety reports filed on August 15 and 17, 2024. The partial clinical hold required Veridian to submit a complete response addressing the safety concerns, including a proposed risk mitigation strategy, before the FDA would consider lifting the hold.

August 28, 2024. Veridian implemented Protocol Amendment v4.0 for the Marlowe Asset Management-2 study, which introduced two principal modifications: (a) mandatory tocilizumab prophylaxis for all patients receiving VRD-4187 (tocilizumab being an IL-6 receptor antagonist used for the management of CRS); and (b) a dose reduction from 1.5 mg/kg to 0.75 mg/kg for VRD-4187. The protocol amendment was submitted to the FDA as part of Veridian's initial response to the partial clinical hold.

August 30, 2024. Calderwood & Harkness, on behalf of Penterra, delivered a consent request letter to Zalcourt Archer & Cole LLP, requesting that Veridian obtain Penterra's prior written consent to the Protocol Amendment v4.0, as required under the interim operating covenants of SPA § 5.1. Specifically, Calderwood & Harkness took the position that the protocol amendment constituted a material change to the conduct of Veridian's clinical trial program that required Buyer's prior consent, given that the dose reduction to 0.75 mg/kg would fundamentally alter the development program for VRD-4187 and could not be characterized as an action taken in the ordinary course of business. Veridian, through Zalcourt Archer & Cole, took the position that the protocol amendment was required by the FDA and was therefore exempt from the consent requirement under the exception for actions required by applicable law or regulation. This dispute remained unresolved at the time of termination.

C. MAE Analysis, Deficiency Notice, and Termination (August – September 2024)

Following receipt of the Marlowe Asset Management-2 interim data and the FDA's imposition of a partial clinical hold, Calderwood & Harkness undertook a comprehensive legal and factual analysis of whether the adverse developments constituted a Material Adverse Effect under the SPA's definition, thereby excusing Penterra from its closing obligations and providing a basis for termination.

August 23 – September 3, 2024. Calderwood & Harkness prepared a series of detailed internal memoranda addressing the following topics:

(i) VRD-4187 Clinical Data Analysis: A memorandum analyzing the clinical significance of the Marlowe Asset Management-2 interim data, incorporating the Broadleaf supplemental assessment and publicly available clinical data from comparable T-cell engager programs, to demonstrate that the adverse safety data represented a material and potentially durable setback to VRD-4187's development program.

(ii) FDA Partial Clinical Hold Impact: A memorandum analyzing the regulatory implications of the partial clinical hold on IND 154832, including historical data on the likelihood and timing of clinical hold resolutions, the regulatory requirements for lifting a partial clinical hold, and the impact on Veridian's development timeline and approvability.

(iii) Delaware MAE Case Law Survey: A comprehensive survey of Delaware case law on the interpretation and application of MAE provisions, with particular focus on the Court of Chancery's decision in Akorn, Inc. v. Fresenius Kabi AG, 2018 WL 4719347 (Del. Ch. Oct. 1, 2018), aff'd, 198 A.3d 724 (Del. 2018) — the only case in which the Court of Chancery found that a material adverse effect had actually occurred — and subsequent decisions interpreting the Akorn framework. The memorandum addressed the key elements of Delaware MAE analysis, including the quantitative threshold (typically a decline of 40% or more in the relevant financial metric, sustained over a commercially significant period), the "durational significance" requirement, and the contextual factors relevant to clinical-stage biotechnology companies.

(iv) MAE Carveout Applicability: A memorandum analyzing whether any of the SPA's MAE carveouts applied to the adverse clinical data. Our analysis concluded that the carveouts do not apply. The adverse clinical trial results are company-specific — they arise from the particular molecular characteristics of VRD-4187 and Veridian's proprietary VeriTCE platform — and are not attributable to general economic conditions, industry-wide conditions, changes in law, pandemics, natural disasters, or financial market conditions. We further concluded that even if an industry-wide carveout were arguably applicable (e.g., if one characterized severe CRS as an industry-wide risk inherent in the T-cell engager class), the disproportionate-impact exception would be triggered, because the Marlowe Asset Management-2 data reflects a degree of CRS severity and treatment-related mortality significantly exceeding that observed in other T-cell engager programs in the DLL3 and broader oncology space.

(v) Disproportionate Impact Exception Analysis: A supplemental memorandum conducting a comparative analysis of VRD-4187's safety profile against comparably situated T-cell engager programs, including Greaves Industries's tarlatamab-dlle (Imdelltra), which received FDA approval in May 2024 for SCLC with a Grade ≥3 CRS rate of approximately 1%, demonstrating the disproportionate nature of VRD-4187's safety findings.

September 6, 2024. Following completion of the MAE analysis, Penterra, through Calderwood & Harkness, delivered a formal Deficiency Notice to Veridian and the Stockholder Representative. The Deficiency Notice alleged that a Material Adverse Effect had occurred within the meaning of SPA § 1.1, and that the conditions to Buyer's closing obligations under SPA §§ 7.2(a) and 7.2(b) were no longer capable of being satisfied. Specifically, the Deficiency Notice cited the following grounds:

(a) The Marlowe Asset Management-2 Phase II interim data, including the 23.4% rate of Grade ≥3 CRS, seven treatment-related deaths, and the absence of statistically significant efficacy, constituted a fundamental setback to VRD-4187's development program and materially diminished the value of Veridian's business;

(b) The FDA's imposition of a partial clinical hold on IND 154832 imposed significant regulatory uncertainty regarding the future development path and approvability of VRD-4187; and

(c) The cumulative impact of these developments, taken together, constituted a Material Adverse Effect that was durationally significant and not subject to any of the SPA's MAE carveouts.

The Deficiency Notice expressly reserved Penterra's rights under the SPA, including its right to terminate the SPA under Section 8.1(d).

September 8, 2024. The ticking fee on the $500,000,000 term loan commitment commenced, as the 90-day post-signing threshold was reached on this date. The ticking fee of 0.175% per annum applied to the full $500,000,000 unfunded commitment amount, resulting in an incremental cost of approximately $2,397 per day.

September 13, 2024. Veridian, through Zalcourt Archer & Cole LLP, delivered a detailed written response to the Deficiency Notice. In its response, Veridian disputed that a Material Adverse Effect had occurred, advancing the following principal arguments:

(a) The clinical data was preliminary, representing an interim analysis rather than a final study readout, and that further data maturation and the dose modification protocol could yield improved results;

(b) The Protocol Amendment v4.0, including mandatory tocilizumab prophylaxis and the dose reduction to 0.75 mg/kg, was expected to adequately address the safety concerns;

(c) The partial clinical hold was routine in the context of emerging safety signals in oncology clinical trials and did not reflect a final regulatory determination regarding VRD-4187's approvability;

(d) None of the cited events met the durational significance threshold established by Delaware case law for a finding of a Material Adverse Effect; and

(e) Penterra was obligated to close and could not invoke the MAE provision to avoid a transaction that it simply no longer found economically attractive.

Veridian's response concluded by demanding that Penterra proceed to closing in accordance with the terms of the SPA.

September 15, 2024. Calderwood & Harkness delivered an internal strategy memorandum to Thomas F. Holbrook analyzing three alternative courses of action available to Penterra:

Option 1 — Proceed to Closing: This option would eliminate litigation risk but would require Penterra to consummate an acquisition at a price that no longer reflected the risk-adjusted value of Veridian. Based on Broadleaf's assessment and Garrison Zanthor' preliminary revised valuation analysis, the risk-adjusted value of Veridian had declined from approximately $850–$950 million (the basis for the agreed purchase price) to approximately $200–$350 million, reflecting the diminished probability of VRD-4187's regulatory success.

Option 2 — Negotiate a Price Reduction: This option would involve approaching Veridian and the Stockholder Representative to negotiate a reduction in the purchase price to reflect the post-DMC valuation. The memorandum assessed the likelihood that Veridian would agree to a meaningful price reduction as low, given the selling stockholders' financial incentives and the legal positions articulated in Veridian's September 13 response.

Option 3 — Terminate Under § 8.1(d): This option involved formal termination of the SPA on the basis that the closing conditions under §§ 7.2(a) and 7.2(b) were incapable of satisfaction. The memorandum assessed the litigation risk associated with this option, including the likelihood that Veridian would seek specific performance (high), the probability of success on the MAE defense (assessed at 55–65%, given the strength of the factual basis but the heavy burden imposed by Delaware law on MAE claims), and the potential damages exposure in the event the defense failed (up to $900,000,000 in expectation damages, or specific performance compelling closing at the full price).

The memorandum concluded with an assessment that Option 3, while carrying meaningful litigation risk, was the course of action most consistent with Penterra's fiduciary obligations to its stockholders and the most defensible path given the severity of the adverse developments.

September 16, 2024. Calderwood & Harkness delivered a supplemental memorandum analyzing the specific arguments raised in Veridian's September 13 response to the Deficiency Notice, addressing each of Veridian's contentions and identifying the weaknesses in Veridian's position.

September 24, 2024. Calderwood & Harkness delivered a formal board memorandum to the Penterra Board of Directors, recommending termination of the SPA under Section 8.1(d). The memorandum summarized the factual basis for the MAE determination, the legal analysis, the litigation risk assessment, and the strategic considerations supporting termination. The memorandum was reviewed and discussed by the Board at a special meeting held on September 27, 2024.

September 27, 2024. The Penterra Board of Directors, at a special meeting attended by all directors, adopted resolutions authorizing and directing Penterra's management and legal counsel to deliver a notice of termination of the SPA to Veridian and the Stockholder Representative pursuant to Section 8.1(d). The Board's decision was unanimous, with Dr. Rajagopal and Ms. Whitfield providing detailed statements supporting the termination on the record.

September 30, 2024. Penterra delivered a formal Termination Notice to Veridian and David Ng (Stockholder Representative) pursuant to SPA § 8.1(d). The Termination Notice was delivered by counsel (Calderwood & Harkness) via overnight courier and email to Veridian at its principal office at 550 Gateway Drive, Cambridge, MA 02142, and to David Ng at Crestline Ventures, LP, with copies to Zalcourt Archer & Cole LLP. The Termination Notice stated that Penterra was exercising its right to terminate the SPA based on the occurrence of a Material Adverse Effect that rendered the conditions to Buyer's closing obligations under SPA §§ 7.2(a) and 7.2(b) incapable of satisfaction prior to the Outside Date. The Termination Notice reiterated the factual and legal bases set forth in the September 6, 2024 Deficiency Notice and stated that the SPA was terminated effective immediately.

IV. BASIS FOR TERMINATION

Penterra terminated the SPA pursuant to Section 8.1(d), which provides that the SPA may be terminated by either party if the closing conditions of the other party are incapable of being satisfied prior to the Outside Date (December 10, 2024), provided that the terminating party is not then in material breach of its own obligations under the SPA.

The specific closing conditions that Penterra contends are incapable of satisfaction are as follows:

SPA § 7.2(a) — Bring-Down of Sellers' Representations and Warranties. Section 7.2(a) conditions Buyer's obligation to close on the accuracy of Sellers' representations and warranties as of the closing date, with such accuracy measured against a Material Adverse Effect-qualified standard (i.e., the representations and warranties must be accurate in all respects except where the failure to be accurate would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect). Penterra contends that this condition is not satisfied because the clinical trial data from Marlowe Asset Management-2 and the FDA's imposition of a partial clinical hold on VRD-4187 have rendered Veridian's representations concerning its business, operations, regulatory status, and the status and prospects of its lead product candidate inaccurate in all material respects. In particular, the representations regarding the conduct of clinical trials in compliance with applicable regulations, the absence of material adverse regulatory actions, and the accuracy of information provided to the FDA are implicated by the recent developments.

SPA § 7.2(b) — No Material Adverse Effect. Section 7.2(b) conditions Buyer's obligation to close on the absence of any Material Adverse Effect since the date of the Agreement. Penterra contends that this condition is not satisfied because the cumulative impact of the Marlowe Asset Management-2 Phase II adverse data and the FDA partial clinical hold on VRD-4187 constitutes a Material Adverse Effect within the meaning of SPA § 1.1. The core of the MAE claim rests on the following factual predicates:

(a) The Marlowe Asset Management-2 interim data revealed a safety profile for VRD-4187 that is substantially worse than anticipated at the time of signing, including a Grade ≥3 CRS rate of 23.4% (compared to the approximately 8–10% rate observed in the Phase I dose-escalation study that formed the basis for the transaction valuation) and seven treatment-related deaths;

(b) The efficacy data showed no statistically significant benefit of VRD-4187 over the control arm (ORR of 31.4% vs. 28.9%, p = 0.58), eliminating the previously anticipated efficacy advantage that was central to the value proposition;

(c) The FDA's partial clinical hold suspended new enrollment in Marlowe Asset Management-2, creating significant regulatory uncertainty regarding the timing and feasibility of the continued development of VRD-4187;

(d) Veridian's risk-adjusted enterprise value has declined by an estimated 60–75% as a result of these developments, far exceeding the quantitative thresholds applied by Delaware courts; and

(e) The adverse developments are durationally significant — the safety concerns relate to fundamental characteristics of VRD-4187's molecular design, the dose reduction to 0.75 mg/kg may compromise efficacy, and the partial clinical hold has no guaranteed resolution timeline.

Calderwood & Harkness's legal analysis has concluded that none of the SPA's MAE carveouts apply to the adverse developments. The adverse clinical trial results and the resulting FDA regulatory action are company-specific events arising from the particular characteristics of Veridian's proprietary product candidate, VRD-4187. They do not arise from general economic conditions, conditions generally affecting the biotechnology or pharmaceutical industry, changes in law or accounting standards, pandemics, natural disasters, acts of war or terrorism, or changes in financial markets. Even if an industry-wide carveout were arguably applicable — for example, if Veridian were to contend that CRS risk is inherent in the T-cell engager class and therefore constitutes an industry-wide condition — the disproportionate-impact exception would apply, as the Marlowe Asset Management-2 data reflects a degree of CRS severity (23.4% Grade ≥3) and treatment-related mortality (3.6%) that far exceeds the rates observed in comparable T-cell engager programs, including the recently approved tarlatamab (Grade ≥3 CRS rate of approximately 1%).

Regarding the financial implications of termination, the reverse termination fee of $45,000,000 is not payable by Penterra. Under the SPA, the reverse termination fee is triggered solely by a financing failure — that is, the inability of Penterra to consummate the closing due to the unavailability of the committed debt financing. Penterra's termination was predicated on the failure of Buyer's closing conditions due to the occurrence of a Material Adverse Effect, not on an inability to fund the purchase price. The committed financing remained available through the Outside Date. Accordingly, the reverse termination fee provision of SPA § 8.3(b) has not been triggered.

Similarly, the target termination fee of $36,000,000 is not payable by Veridian, as there has been no breach of the no-shop provision of SPA § 5.4. While the target termination fee is academic in the context of the current dispute (it would run in favor of Penterra, not against it), we note for completeness that no competing acquisition proposal was received by Veridian during the pendency of the SPA, and the no-shop provision was not implicated.

V. POST-TERMINATION ACTIONS COMPLETED

A. Notices to Third Parties

Following the delivery of the Termination Notice on September 30, 2024, Calderwood & Harkness, at the direction of Penterra, delivered the following notices to third parties:

October 1, 2024 — Notice to Financing Sources. Calderwood & Harkness delivered a letter on behalf of Penterra to Ironclad Trust Company, N.A. (Samantha Hwang, Vice President), providing formal notice of the termination of the SPA and requesting termination of the $500,000,000 senior secured term loan commitment under Commitment Letter Ref. CL-2024-PPCA-0607, dated June 7, 2024. The letter requested confirmation of the commitment termination and a final accounting of all fees and expenses owed by Penterra, including accrued and unpaid commitment fees and ticking fees through the date of SPA termination. As of the date of this memorandum, Ironclad's formal written confirmation of commitment termination is pending, although Ironclad has acknowledged receipt of the notice and indicated that the termination will be processed in accordance with the terms of the commitment letter.

October 1, 2024 — Notice to Escrow Agent. Calderwood & Harkness delivered a letter on behalf of Penterra to Fidelis National Escrow Corp. (Brian Mulcahy, Senior Vice President), advising that the SPA had been terminated effective September 30, 2024, and that no escrow deposits would be made — neither the $180,000,000 Indemnification Escrow Amount nor the $2,500,000 Stockholder Representative Expense Fund. The letter further advised that any further instructions regarding the Escrow Agreement should be directed to Calderwood & Harkness.

October 3, 2024 — Notice to R&W Insurer. Calderwood & Harkness delivered a letter on behalf of Penterra to Atlas Indemnity Insurance Co. (Graham Fielding, Senior Vice President), providing notice that the SPA had been terminated, that the acquisition did not close, and that the R&W insurance policy (Policy No. AIC-RWI-2024-07892) would not be triggered. The letter inquired regarding the status of the premium paid at binding. Atlas Indemnity confirmed that the premium of $3,960,000 and the underwriting fee of $75,000 are non-refundable under the terms of the policy, regardless of whether the underlying transaction closes. The total non-recoverable amount paid to Atlas Indemnity is $4,035,000.

B. Litigation Preservation

October 2, 2024 — Post-Termination Obligations Checklist. Calderwood & Harkness prepared and circulated a post-termination obligations checklist to the Penterra deal team (Thomas F. Holbrook, Catherine M. Burgess, Natalie Reiner, and their respective teams), identifying all outstanding obligations under the SPA and ancillary agreements that survive termination, including confidentiality obligations, return/destruction of confidential information, and the terms and conditions governing the release of claims and the non-applicability of termination fees.

October 5, 2024 — Litigation Hold Notice. In anticipation of litigation in the Delaware Court of Chancery, Calderwood & Harkness prepared and delivered a litigation hold notice addressed to Thomas F. Holbrook, General Counsel of Penterra. The litigation hold directed the preservation of all documents, communications, data, and electronically stored information ("ESI") relating to the Veridian acquisition, the Marlowe Asset Management-2 clinical data, the MAE analysis, the Deficiency Notice and Termination Notice, and all related internal deliberations and external communications. The litigation hold specifically identified the following categories of information subject to preservation:

(a) All drafts, comments, and execution versions of the SPA, ancillary agreements, and related transaction documents;

(b) All diligence materials received from Veridian, including data room contents;

(c) All internal Penterra analyses, presentations, board materials, and communications relating to the Veridian acquisition, the Marlowe Asset Management-2 clinical data, and the termination decision;

(d) All communications between Penterra and Veridian (or their respective counsel and advisors), including the Deficiency Notice, Veridian's response, the consent request letter, and the Termination Notice;

(e) All clinical and scientific data relating to VRD-4187, including the DMC interim analysis report and the Broadleaf assessments;

(f) All communications with financing sources, insurance providers, and other third-party advisors relating to the transaction; and

(g) All email, instant messages, text messages, voicemail, and other electronic communications of Penterra personnel involved in the transaction.

The litigation hold notice identified the custodians whose documents are subject to preservation, including D

CALDERWOOD & HARKNESS LLP
200 Park Avenue, 42nd Floor New York, New York 10166
PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT
PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT — FOR INTERNAL FIRM USE ONLY
MEMORANDUM
TO: Managing Partner, Calderwood & Harkness LLP
FROM: Oliver Mackenzie, Partner, Mergers & Acquisitions
DATE: October 8, 2024
RE: Matter Status Report — Matter No. 1018-00008: Penterra Pharmaceuticals Corp. / Veridian Biosciences, Inc. — Transaction Terminated
CLASSIFICATION: Privileged and Confidential; For Internal Firm Use Only
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I. EXECUTIVE SUMMARY
Matter No. 1018-00008 was opened on February 14, 2024, for the representation of Penterra Pharmaceuticals Corp. ("Penterra" or "PPC"), a Delaware corporation publicly traded on the Nasdaq Global Select Market (ticker: PPCA), with its principal executive offices located at 1100 Meridian Boulevard, Suite 400, Princeton, New Jersey 08540, in connection with its proposed $900,000,000 all-cash acquisition of 100% of the outstanding capital stock of Veridian Biosciences, Inc. ("Veridian"), a privately held Delaware corporation and clinical-stage biotechnology company headquartered at 550 Gateway Drive, Cambridge, Massachusetts 02142.
The Stock Purchase Agreement (the "SPA") governing the proposed acquisition was negotiated over a period of approximately four months and was executed on June 10, 2024, by and among Penterra, as buyer, Veridian, and the stockholders of Veridian represented by David Ng, Managing Partner of Crestline Ventures, LP, in his capacity as Stockholder Representative (the "Stockholder Representative").
On September 30, 2024, Penterra formally terminated the SPA pursuant to Section 8.1(d) thereof, on the basis that a material adverse effect ("MAE") had occurred with respect to Veridian, rendering the conditions to Buyer's closing obligations under Sections 7.2(a) (bring-down of Sellers' representations and warranties) and 7.2(b) (absence of a material adverse effect) incapable of satisfaction prior to the Outside Date of December 10, 2024. The termination was predicated on the devastating clinical trial results from the Marlowe Asset Management-2 Phase II study of Veridian's lead product candidate, VRD-4187, including a significant increase in severe cytokine release syndrome events and treatment-related deaths, as well as the subsequent imposition by the United States Food and Drug Administration (the "FDA") of a partial clinical hold on VRD-4187 under IND 154832.
The matter is currently transitioning from a transactional posture to an anticipated litigation defense posture. On October 15, 2024, counsel for Veridian delivered a demand letter threatening claims for breach of contract and specific performance. We anticipate that Veridian will file a complaint in the Court of Chancery of the State of Delaware on or about November 15, 2024. The matter accordingly remains open, and the firm's engagement continues.
This memorandum provides a comprehensive status report on the transaction, the factual and legal grounds for termination, anticipated litigation exposure and defensive preparations, ongoing work, staffing, and a billing summary through the date of termination.
II. TRANSACTION OVERVIEW
A. Parties and Advisors
1. Buyer / Client. Penterra Pharmaceuticals Corp. ("Penterra" or "PPC") is a Delaware corporation publicly traded on the Nasdaq Global Select Market under the ticker symbol "PPCA." Penterra's principal executive offices are located at 1100 Meridian Boulevard, Suite 400, Princeton, New Jersey 08540.
Penterra is a mid-cap specialty pharmaceutical company with an approximate market capitalization of $14.2 billion as of June 2024, fiscal year 2023 revenue of $4.87 billion, and approximately $2.1 billion in cash and cash equivalents on hand as reported in its second quarter 2024 financial statements (Form 10-Q filed August 5, 2024). Penterra maintains a commercial portfolio of twelve marketed products spanning oncology, immunology, and rare diseases, with its largest revenue-generating asset being Oncrevant (pembrolizumab biosimilar), which accounted for approximately $1.3 billion in fiscal year 2023 net sales.
The strategic rationale for the proposed acquisition of Veridian was to bolster Penterra's immuno-oncology pipeline following the failure of its internally developed candidate PPC-0921, a PD-L1/TIM-3 bispecific antibody. A Phase III futility analysis completed on November 18, 2023, demonstrated that PPC-0921 was unlikely to meet its primary efficacy endpoint in non-small cell lung cancer, resulting in the discontinuation of the PPC-0921 program and a resulting gap in Penterra's late-stage pipeline. The acquisition of Veridian and its VeriTCE T-cell engager platform was identified by Penterra's corporate development team as a priority transaction to address this pipeline gap.
Key personnel at Penterra relevant to this matter include:
• Dr. Anand Rajagopal, Chief Executive Officer — signatory to the SPA and primary executive sponsor of the transaction
• Catherine M. Burgess, Chief Financial Officer — oversaw financial analysis, financing arrangements, and integration planning
• Thomas F. Holbrook, General Counsel — primary client contact for Calderwood & Harkness; oversees all legal matters and is the designated recipient of the litigation hold notice issued on October 5, 2024
• Natalie Reiner, Senior Vice President, Corporate Development — led the commercial and strategic diligence process and served as day-to-day deal team lead on the client side
• Margaret Liu Whitfield, Chair of the Board of Directors — presided over Board deliberations regarding the acquisition, the MAE analysis, and the ultimate authorization of termination
2. Target. Veridian Biosciences, Inc. ("Veridian") is a privately held Delaware corporation and clinical-stage biotechnology company with its principal offices at 550 Gateway Drive, Cambridge, Massachusetts 02142. Veridian was founded in 2016 by Dr. Julian Marek and Dr. Priya Chandrasekaran, who developed the company's proprietary VeriTCE T-cell engager platform during their prior academic research at the Massachusetts Institute of Technology and the Broad Institute of MIT and Harvard.
As of the date of signing, Veridian had approximately 148 employees, including a scientific and clinical team of approximately 85 personnel. Veridian is a pre-revenue, clinical-stage company; it reported zero revenue for fiscal year 2023, with a net loss of $87.3 million driven primarily by research and development expenditures related to VRD-4187 and earlier-stage pipeline candidates. As of March 31, 2024, Veridian reported cash and cash equivalents of $112.4 million, which was expected to fund operations through approximately mid-2025 in the absence of additional financing or the closing of this transaction. To date, Veridian has raised approximately $420 million in total venture capital financing across its Series A through Series D rounds.
Veridian's lead product candidate is VRD-4187, a bispecific T-cell engager targeting DLL3-expressing tumors, principally small cell lung cancer ("SCLC"). At the time of signing, VRD-4187 was in Phase II clinical trials (the Marlowe Asset Management-2 study, NCT05837291) and was considered by Broadleaf Scientific Consulting LLC to represent a potentially differentiated approach to DLL3-directed T-cell engagement therapy, although with acknowledged safety risks inherent to the T-cell engager modality.
Key personnel at Veridian relevant to this matter include:
• Dr. Julian Marek, Chief Executive Officer and Co-Founder — signatory to the SPA
• Dr. Priya Chandrasekaran, Chief Scientific Officer and Co-Founder — led VRD-4187 preclinical and early clinical development
• Steven R. Kessler, Chief Financial Officer — managed Veridian financial reporting and served as primary contact for financial due diligence
• Dr. Anne-Marie Fontaine, Vice President, Regulatory Affairs — responsible for all FDA interactions, including the IND for VRD-4187 and the response to the partial clinical hold
• Rachel Stein-Goldberg, General Counsel — served as primary legal contact at Veridian and coordinated with Zalcourt Archer & Cole LLP
3. Major Veridian Stockholders. The following entities and individuals held the most significant equity positions in Veridian as of the date of signing:
David Ng, Managing Partner of Crestline Ventures, LP, was designated as the Stockholder Representative under the SPA, with authority to act on behalf of the selling stockholders in connection with post-closing indemnification claims, disputes, and other matters. In that capacity, Mr. Ng was also the designated recipient of the Termination Notice delivered on September 30, 2024.
4. Sellers' Counsel. Zalcourt Archer & Cole LLP, One Federal Street, 30th Floor, Boston, Massachusetts 02110. The engagement was led by Rebecca Whitmore, Partner, with significant involvement from Jonathan Pratt, Associate, and Elaine Sato, Tax Partner. Ms. Whitmore served as lead negotiating counsel for Veridian and the selling stockholders throughout the transaction process, and is the attorney who signed the October 15, 2024 demand letter on behalf of Veridian threatening litigation.
5. Buyer's Financial Advisor. Garrison Zanthor & Co., LLC, 383 Madison Avenue, New York, New York 10179. The engagement was led by Kevin Driscoll, Managing Director. Garrison Zanthor provided financial advisory services to Penterra, including valuation analysis, deal structuring advice, and a fairness opinion delivered to the Penterra Board on June 9, 2024, opining that the $900,000,000 purchase price was fair, from a financial point of view, to Penterra. The Garrison Zanthor advisory fee of $2,500,000 was payable regardless of whether the transaction closed, and accordingly constitutes a sunk cost.
6. Target's Financial Advisor. Ridgeway Partners LLC, 101 Huntington Avenue, Suite 2500, Boston, Massachusetts 02199. The engagement was led by Laura Beckett, Managing Director. Ridgeway Partners represented Veridian in the sale process, including the initial outreach to potential acquirers, the management of the data room, and the negotiation of deal economics.
7. Escrow Agent. Fidelis National Escrow Corp., 601 Riverside Avenue, Jacksonville, Florida 32204. The designated officer was Brian Mulcahy, Senior Vice President. Fidelis was selected as escrow agent to hold the $180,000,000 indemnification escrow and the $2,500,000 Stockholder Representative expense fund that would have been deposited at closing. No deposits were made, and a notice of non-closing was delivered to Fidelis on October 1, 2024.
8. Financing Sources. Summit Ridge Capital Partners, LP (Philip Ostrander, Managing Director) served as lead arranger of the $500,000,000 committed term loan facility. Ironclad Trust Company, N.A. (Samantha Hwang, Vice President), located at 60 Wall Street, New York, New York 10005, served as administrative agent under the financing commitment. A formal notice of SPA termination and request for termination of the financing commitment was delivered to Ironclad on October 1, 2024.
9. R&W Insurance. Atlas Indemnity Insurance Co. (Graham Fielding, Senior Vice President) issued a representations and warranties insurance policy, Policy No. AIC-RWI-2024-07892, which was brokered by Prescott Whitfield Insurance Brokers, Inc. (Amanda Chen-Kowalski). The policy was bound on June 12, 2024, two days after SPA execution. Details of the policy terms and current status are set forth in Section II.D below.
10. Clinical / Scientific Due Diligence Advisor. Broadleaf Scientific Consulting LLC (Dr. Raymond Kapoor), 225 Franklin Street, Suite 1900, Boston, Massachusetts 02110. Broadleaf was engaged on March 18, 2024, to conduct clinical and scientific due diligence on Veridian's product pipeline, with a particular emphasis on VRD-4187, the VeriTCE platform technology, the competitive landscape for DLL3-directed therapies, and the design and status of the Marlowe Asset Management-2 Phase II clinical trial. Broadleaf delivered its initial due diligence report on May 22, 2024, and a supplemental clinical assessment on August 19, 2024, following the adverse DMC findings.
11. Antitrust Counsel. Stonebridge HSW Antitrust Advisors LLP (Martin Prumvane, Partner), 1440 New York Avenue NW, Suite 700, Washington, DC 20005. Stonebridge HSW was engaged to prepare and file the Hart-Scott-Rodino pre-merger notification and to advise on any antitrust issues arising during the regulatory review period. Following early termination of the HSR waiting period on May 20, 2024, Stonebridge HSW's active involvement in the matter concluded.
12. Auditors. Veridian's Auditor: Northbridge Accounting Group LLP (Patrick Calloway, Engagement Partner). Northbridge audited Veridian's financial statements for fiscal years 2021 through 2023, which were provided during the financial due diligence process.
Penterra's Auditor: Tarrant & Co. (Diana Rourke, Engagement Partner). Clearwater's involvement in the transaction was limited to providing comfort letters in connection with the financing commitment.
B. Deal Terms
The principal economic and structural terms of the SPA, as executed on June 10, 2024, are summarized below:
Purchase Price. The aggregate purchase price was $900,000,000 in cash, payable at closing to the selling stockholders of Veridian on a pro rata basis in accordance with each stockholder's percentage ownership of the outstanding capital stock of Veridian, as set forth in the allocation schedule attached to the SPA as Exhibit A (SPA § 2.1).
Structure. The transaction was structured as a stock purchase — Penterra would acquire 100% of the outstanding shares of capital stock of Veridian (including all common stock and preferred stock on an as-converted basis) directly from the selling stockholders. No Section 338(h)(10) election under the Internal Revenue Code was contemplated, as the parties were unable to reach agreement on the tax allocation mechanics during negotiations.
Indemnification Escrow. At closing, $180,000,000 (representing 20% of the aggregate purchase price) would have been deposited into an indemnity escrow account with Fidelis National Escrow Corp., pursuant to the terms of the Escrow Agreement (the "Indemnification Escrow Amount") (SPA § 2.3). This escrow was the exclusive source of recovery for Buyer's indemnification claims under Article IX of the SPA, subject to certain exceptions for Fundamental Representations and fraud.
Stockholder Representative Expense Fund. An additional $2,500,000 would have been deposited at closing with Fidelis to fund the Stockholder Representative's expenses in administering post-closing indemnification claims and other matters on behalf of the selling stockholders (SPA § 2.3(b)).
Net Closing Payment. Had the transaction closed, the net amount payable to the selling stockholders at closing (exclusive of the escrow deposits) would have been $717,500,000, calculated as follows: $900,000,000 (purchase price) minus $180,000,000 (indemnification escrow) minus $2,500,000 (stockholder representative expense fund).
Indemnification Terms. The indemnification framework under Article IX of the SPA provided for the following key parameters:
• Indemnification Cap: $180,000,000 (20% of the purchase price), except that claims based on Fundamental Representations and fraud were not subject to the cap and were recoverable up to the full purchase price of $900,000,000.
• Indemnification Basket: $9,000,000 (1% of the purchase price), structured as a tipping basket (i.e., once aggregate claims exceeded the basket amount, the selling stockholders were liable for the full amount of claims from the first dollar, not merely the excess over the basket).
• Survival Period: General representations and warranties survived for 18 months following the closing date. Fundamental Representations (including organization, authorization, capitalization, and title to shares) and tax representations survived for the full applicable statute of limitations plus 60 days.
Reverse Termination Fee. Penterra agreed to pay a reverse termination fee of $45,000,000 (representing 5% of the purchase price) in the event the SPA was terminated due to a financing failure — specifically, if all conditions to closing had been satisfied or waived other than the availability of the debt financing contemplated by the commitment letter, and Penterra failed to consummate the closing. The reverse termination fee was structured as the sole and exclusive remedy of Veridian and the selling stockholders in the event of a financing failure (SPA § 8.3(b)).
Target Termination Fee. Veridian agreed to pay, or cause to be paid, a target termination fee of $36,000,000 (representing 4% of the purchase price) in the event the SPA was terminated by Penterra as a result of Veridian's breach of the no-shop provision contained in SPA § 5.4 (SPA § 8.3(c)).
No-Shop. SPA § 5.4 contained a customary no-shop provision prohibiting Veridian and its representatives from soliciting, initiating, encouraging, or facilitating any competing acquisition proposals from the date of execution through the earlier of closing or termination. The no-shop included a limited fiduciary-out permitting the Veridian board to engage with an unsolicited superior proposal, subject to providing Penterra four business days' written notice and matching rights before any change of board recommendation or termination in favor of such superior proposal.
Material Adverse Effect Definition. The MAE definition, set forth in SPA § 1.1, was a heavily negotiated provision. The definition provided that a "Material Adverse Effect" means any event, circumstance, change, effect, development, condition, or occurrence that, individually or in the aggregate, has had or would reasonably be expected to have a material adverse effect on the business, operations, condition (financial or otherwise), assets, liabilities, or results of operations of the Company and its Subsidiaries, taken as a whole. The definition included the following carveouts, which excluded from the MAE determination any adverse effects arising from or relating to:
(i) general economic or political conditions in the United States or any other jurisdiction in which the Company conducts material operations;
(ii) conditions generally affecting the biotechnology or pharmaceutical industry;
(iii) changes in applicable law or in generally accepted accounting principles (GAAP), or changes in the interpretation or enforcement thereof;
(iv) pandemics, epidemics, or public health emergencies;
(v) natural disasters, acts of war, sabotage, terrorism, military action, or any escalation or worsening thereof;
(vi) changes in or affecting financial, banking, or securities markets generally (including any disruption thereof and any decline in the price of any security or any market index); and
(vii) the announcement or pendency of the transactions contemplated by the SPA.
Critically, the carveouts enumerated in clauses (i) through (vi) were subject to a disproportionate-impact exception providing that, to the extent the relevant event, circumstance, or condition had a disproportionate adverse effect on the Company relative to other companies operating in the biotechnology or pharmaceutical industry, the incremental disproportionate impact could be taken into account in determining whether a Material Adverse Effect had occurred. The carveout in clause (vii), relating to the announcement or pendency of the transactions, was not subject to this disproportionate-impact exception.
Governing Law and Dispute Resolution. The SPA is governed by the laws of the State of Delaware, without regard to conflicts of laws principles. The parties irrevocably consented to the exclusive jurisdiction of the Court of Chancery of the State of Delaware (or, if such court lacks subject matter jurisdiction, the Superior Court of the State of Delaware or the United States District Court for the District of Delaware) for the resolution of any disputes arising out of or relating to the SPA (SPA § 10.6). The parties waived their respective rights to a jury trial (SPA § 10.7).
Specific Performance. SPA § 10.12 expressly provided that each party was entitled to seek an injunction, specific performance, and other equitable relief to prevent breaches of the SPA and to enforce specifically the terms and provisions thereof, in addition to any other remedy to which such party may be entitled at law or in equity. This provision is significant because it expressly contemplates the availability of specific performance as a remedy, which Veridian has now invoked in its October 15, 2024 demand letter.
Outside Date. The Outside Date for consummation of the transactions was December 10, 2024, representing 180 days following the date of execution of the SPA. Either party was entitled to terminate the SPA if the closing had not occurred on or before the Outside Date, provided that the terminating party was not then in material breach of its obligations under the SPA (SPA § 8.1(b)).
C. Financing Structure
Penterra's funding plan for the $900,000,000 all-cash purchase price contemplated a combination of committed debt financing and cash on hand, as follows:
Committed Term Loan Facility. Summit Ridge Capital Partners, LP, as lead arranger, and Ironclad Trust Company, N.A., as administrative agent, executed a financing commitment letter (Commitment Letter Ref. CL-2024-PPCA-0607, dated June 7, 2024) pursuant to which they committed to provide Penterra with a $500,000,000 senior secured term loan facility to fund a portion of the purchase price. The commitment letter was delivered to Penterra three days prior to SPA execution and was a condition precedent to the Board's authorization of the transaction.
The principal terms of the committed term loan facility were as follows:
• Facility Size: $500,000,000 senior secured term loan
• Interest Rate: Secured Overnight Financing Rate (SOFR) plus 225 basis points
• Commitment Fee: 0.35% per annum on unfunded commitments, payable quarterly in arrears, which equated to approximately $1,750,000 on an annualized basis
• Ticking Fee: 0.175% per annum, commencing 90 days after the date of the commitment letter (i.e., September 8, 2024), payable on unfunded commitments, designed to incentivize timely closing
• Expiration: The financing commitment was co-terminous with the SPA Outside Date of December 10, 2024
• Conditions to Funding: The commitment was subject to customary conditions, including the accuracy of specified representations, the absence of a material adverse effect (as defined in the SPA), the delivery of specified closing documents, and the contemporaneous consummation of the acquisition
Cash on Hand. The remaining $400,000,000 of the purchase price was to be funded from Penterra's available cash and cash equivalents, which totaled approximately $2.1 billion as of June 30, 2024. The use of Penterra's cash for this purpose had been approved by the Penterra Board as part of its authorization of the transaction.
Following the termination of the SPA on September 30, 2024, a notice was delivered to Ironclad Trust Company, N.A. on October 1, 2024, requesting formal termination of the financing commitment. As of the date of this memorandum, confirmation of the termination of the commitment has not yet been received, although Ironclad's preliminary response indicated that termination would be processed in the ordinary course. Penterra's obligation to pay the commitment fee and ticking fee ceased upon termination of the SPA, subject to any accrued and unpaid amounts through September 30, 2024.
D. R&W Insurance
In connection with the transaction, Penterra obtained a representations and warranties insurance policy to provide an additional layer of protection beyond the contractual indemnification escrow. The key terms of the policy are as follows:
• Insurer: Atlas Indemnity Insurance Co. (Graham Fielding, Senior Vice President)
• Policy Number: AIC-RWI-2024-07892
• Broker: Prescott Whitfield Insurance Brokers, Inc. (Amanda Chen-Kowalski)
• Binding Date: June 12, 2024 (two days after SPA execution)
• Policy Limit: $180,000,000 (matching the indemnification cap under the SPA)
• Self-Insured Retention (SIR): $9,000,000 (matching the indemnification basket under the SPA)
• Premium: $3,960,000 (representing 2.2% of the policy limit), paid in full upon binding
• Underwriting Fee: $75,000, paid to Atlas Indemnity in connection with the underwriting process
• Policy Type: Buyer-side policy, providing coverage to Penterra for breaches of Veridian's representations and warranties in the SPA
Current Status. Because the transaction did not close, the R&W policy was not triggered and no claims have been or will be submitted under the policy. A notice of non-closing was delivered to Atlas Indemnity on October 3, 2024. Pursuant to the policy terms, the premium of $3,960,000 and the underwriting fee of $75,000 are non-refundable, and these amounts constitute sunk costs of the transaction. The total non-refundable amount paid to Atlas Indemnity is $4,035,000.
III. TRANSACTION TIMELINE AND KEY EVENTS
A. Pre-Signing Phase (February – June 2024)
The following is a chronological summary of the material events during the pre-signing phase of the transaction:
February 12, 2024. The Penterra Board of Directors, at a special meeting convened for this purpose, authorized management and its advisors to explore a potential acquisition of Veridian Biosciences, Inc. The Board resolution reflected the strategic rationale described in Section II.A above, including the need to replenish Penterra's immuno-oncology pipeline following the failure of PPC-0921. The Board authorized Dr. Rajagopal and Ms. Reiner to engage financial and legal advisors and to submit a non-binding indication of interest to Veridian.
February 14, 2024. Calderwood & Harkness LLP was formally engaged as outside counsel to Penterra for the proposed acquisition. Simultaneously, Garrison Zanthor & Co., LLC was engaged as Penterra's exclusive financial advisor. The firm opened Matter No. 1018-00008, designating Oliver Mackenzie as responsible partner and Harrison Wexford as billing partner.
March 1, 2024. Penterra submitted a non-binding indication of interest to Veridian's board of directors and its financial advisor, Ridgeway Partners LLC, expressing interest in acquiring 100% of Veridian's outstanding capital stock at an indicative enterprise value of $850 million to $950 million. The indication of interest was subject to satisfactory completion of due diligence, negotiation of definitive agreements, and receipt of all necessary internal approvals.
March 4, 2024. A mutual Confidentiality Agreement (NDA) was executed between Penterra and Veridian, enabling the exchange of non-public information in connection with the evaluation of a potential transaction. The NDA contained customary provisions regarding use restrictions, a two-year standstill, and non-solicitation of employees, as well as return/destruction obligations upon termination or completion of the evaluation process.
March 11, 2024. Following execution of the NDA, Veridian granted Penterra and its advisors access to Veridian's virtual data room, hosted on Thackeray Solutions, containing approximately 4,200 documents organized across 18 diligence categories, including corporate organization, capitalization, financial statements, intellectual property, clinical and regulatory filings, material contracts, employment matters, real property, environmental compliance, and litigation.
March 18, 2024. Broadleaf Scientific Consulting LLC was engaged by Penterra, at the recommendation of Calderwood & Harkness, to conduct an independent clinical and scientific due diligence review of Veridian's product pipeline, with a particular focus on VRD-4187, the Marlowe Asset Management-2 study protocol and available clinical data, the VeriTCE platform technology, and the competitive landscape for DLL3-directed T-cell engager therapies. Dr. Raymond Kapoor served as the lead consultant.
April 15, 2024. Calderwood & Harkness circulated an initial draft of the Stock Purchase Agreement to Zalcourt Archer & Cole LLP. The initial draft reflected Penterra's preferred positions on key economic and legal terms, including the MAE definition, the indemnification framework, the operating covenants, the closing conditions, and the termination provisions. The SPA draft was accompanied by drafts of the Escrow Agreement, the forms of officer's certificates, and a summary of proposed ancillary agreements.
April 22, 2024. A Hart-Scott-Rodino ("HSR") pre-merger notification was filed with the Federal Trade Commission ("FTC") and the Antitrust Division of the U.S. Department of Justice ("DOJ") by both Penterra and Veridian, as required under the HSR Act. The applicable filing fee was $280,500, based on the transaction value. Stonebridge HSW Antitrust Advisors LLP coordinated the preparation and filing of the notification.
May 20, 2024. The FTC granted early termination of the HSR waiting period. No second request or supplemental information request was issued. The antitrust clearance removed a significant condition precedent to closing and eliminated regulatory timing risk.
June 3, 2024. Calderwood & Harkness delivered a comprehensive due diligence summary memorandum to the Penterra Board of Directors, summarizing the firm's findings across all diligence categories. The memorandum identified key risks, including the inherent clinical risk associated with VRD-4187's mechanism of action (cytokine release syndrome being a known class effect of T-cell engager therapies), certain pending patent prosecution matters related to the VeriTCE platform, and Veridian's reliance on a single contract research organization for the Marlowe Asset Management-2 study. The memorandum also identified the significant upside associated with VRD-4187 in the event of favorable Phase II results, including the potential for accelerated regulatory approval given the limited approved treatment options in relapsed/refractory SCLC.
June 7, 2024. The financing commitment letter (Ref. CL-2024-PPCA-0607) was executed by Summit Ridge Capital Partners, LP (as lead arranger) and Ironclad Trust Company, N.A. (as administrative agent), committing to provide the $500,000,000 senior secured term loan facility described in Section II.C above. The commitment letter was reviewed and marked up by Calderwood & Harkness prior to execution.
June 9, 2024. Garrison Zanthor & Co. delivered its fairness opinion to the Penterra Board, opining that, based upon and subject to the assumptions, limitations, qualifications, and conditions described in the opinion, the $900,000,000 purchase price to be paid by Penterra for 100% of the outstanding capital stock of Veridian was fair, from a financial point of view, to Penterra. The fairness opinion was a condition to the Board's authorization of the transaction.
June 10, 2024. The Stock Purchase Agreement was executed by Dr. Anand Rajagopal, on behalf of Penterra, and Dr. Julian Marek, on behalf of Veridian, along with the Stockholder Representative and each of the major selling stockholders. Simultaneously, the Penterra Board adopted resolutions ratifying and approving the execution and delivery of the SPA and the consummation of the transactions contemplated thereby. A Secretary's certificate was delivered, certifying the Board resolutions and the incumbency of authorized officers. The Escrow Agreement was also executed in connection with signing.
June 12, 2024. The R&W insurance policy (Policy No. AIC-RWI-2024-07892) was bound by Atlas Indemnity Insurance Co. The premium of $3,960,000 and underwriting fee of $75,000 were paid by Penterra.
June 14, 2024. Veridian delivered to Penterra a stockholder written consent executed by holders of more than 90% of Veridian's outstanding capital stock, approving the transactions contemplated by the SPA. The consenting stockholders included Crestline Ventures, LP, Boreal Health Partners Fund III, LP, and Apex Growth Equity Fund II, LP, as well as both founders and a substantial number of smaller institutional investors. The stockholder approval satisfied the condition set forth in SPA § 7.1(c).
B. Interim Period and Adverse Developments (June – September 2024)
Following execution of the SPA on June 10, 2024, the parties entered the interim period during which they were obligated to satisfy the remaining conditions to closing, including Veridian's compliance with the interim operating covenants set forth in SPA § 5.1. Calderwood & Harkness maintained a detailed interim operating covenant compliance tracker, updated on a bi-weekly basis from June 11, 2024 through September 30, 2024, to monitor Veridian's compliance with its obligations during the pre-closing period. For the first approximately two months of the interim period, no material issues arose.
The critical developments that ultimately precipitated the termination of the SPA occurred beginning in August 2024, and are summarized below in chronological order.
August 14, 2024. The Data Monitoring Committee ("DMC") for the Marlowe Asset Management-2 Phase II clinical trial (NCT05837291) completed a pre-planned interim analysis of the trial data. The Marlowe Asset Management-2 study was being conducted across 42 clinical sites and had enrolled 387 patients, with 194 patients randomized to the VRD-4187 treatment arm and 193 patients randomized to the control arm (standard-of-care chemotherapy). The DMC's findings, which were communicated to Veridian's clinical team on the same date, were profoundly negative and included the following:
• Cytokine Release Syndrome (CRS): Grade ≥3 CRS events were observed in 23.4% of patients in the VRD-4187 treatment arm, compared to 4.1% of patients in the control arm. This represented a differential of 19.3 percentage points — a level of severe CRS significantly exceeding the rates reported in Veridian's earlier Phase I dose-escalation study and significantly exceeding the rates observed with other T-cell engager therapies in the same disease setting.
• Treatment-Related Deaths: Seven treatment-related deaths (3.6% of the treatment arm) were reported in the VRD-4187 arm, compared to one treatment-related death (0.5%) in the control arm. The treatment-related deaths in the VRD-4187 arm included four attributable to severe CRS, two to neurotoxicity (immune effector cell-associated neurotoxicity syndrome, or ICANS), and one to disseminated intravascular coagulation.
• Efficacy: The overall response rate (ORR) in the VRD-4187 arm was 31.4%, compared to 28.9% in the control arm — a difference that was not statistically significant (p = 0.58). Thus, the interim data showed no meaningful efficacy advantage for VRD-4187 over the control therapy, while demonstrating a dramatically worse safety profile.
Based on these findings, the DMC recommended immediate suspension of enrollment in the Marlowe Asset Management-2 study and implementation of a dose modification protocol for patients already enrolled.
August 16, 2024. Pursuant to its notification obligations under SPA § 5.1(b), Veridian provided written notice to Penterra of the DMC's findings. The notification letter was delivered by Rachel Stein-Goldberg, Veridian's General Counsel, to Thomas F. Holbrook, Penterra's General Counsel, with a copy to Calderwood & Harkness. The notification included a summary of the DMC's findings but did not include the underlying data tables or the DMC's full written report, which Penterra subsequently requested and ultimately received on August 20, 2024.
August 19, 2024. Broadleaf Scientific Consulting LLC, at the request of Calderwood & Harkness, delivered a supplemental clinical assessment evaluating the significance of the Marlowe Asset Management-2 interim data. Dr. Kapoor's assessment confirmed the severity of the clinical findings and concluded that: (a) the safety signal was unlikely to be attributable solely to the specific dosing regimen and likely reflected an intrinsic characteristic of VRD-4187's molecular design; (b) the efficacy data failed to demonstrate the clinically meaningful benefit that would be necessary to justify the observed safety risks; (c) even with dose modifications, it was uncertain whether an acceptable therapeutic window for VRD-4187 could be identified; and (d) the likelihood that VRD-4187 would achieve regulatory approval in the current indication (relapsed/refractory SCLC) had materially diminished.
August 22, 2024. The FDA imposed a partial clinical hold on VRD-4187 under IND 154832. The partial clinical hold prohibited new patient enrollment in the Marlowe Asset Management-2 study but permitted continuation of treatment for patients already enrolled, subject to enhanced safety monitoring and reporting requirements. The FDA's action was based on its review of the adverse event data from the DMC interim analysis, which Veridian had reported to the FDA in safety reports filed on August 15 and 17, 2024. The partial clinical hold required Veridian to submit a complete response addressing the safety concerns, including a proposed risk mitigation strategy, before the FDA would consider lifting the hold.
August 28, 2024. Veridian implemented Protocol Amendment v4.0 for the Marlowe Asset Management-2 study, which introduced two principal modifications: (a) mandatory tocilizumab prophylaxis for all patients receiving VRD-4187 (tocilizumab being an IL-6 receptor antagonist used for the management of CRS); and (b) a dose reduction from 1.5 mg/kg to 0.75 mg/kg for VRD-4187. The protocol amendment was submitted to the FDA as part of Veridian's initial response to the partial clinical hold.
August 30, 2024. Calderwood & Harkness, on behalf of Penterra, delivered a consent request letter to Zalcourt Archer & Cole LLP, requesting that Veridian obtain Penterra's prior written consent to the Protocol Amendment v4.0, as required under the interim operating covenants of SPA § 5.1. Specifically, Calderwood & Harkness took the position that the protocol amendment constituted a material change to the conduct of Veridian's clinical trial program that required Buyer's prior consent, given that the dose reduction to 0.75 mg/kg would fundamentally alter the development program for VRD-4187 and could not be characterized as an action taken in the ordinary course of business. Veridian, through Zalcourt Archer & Cole, took the position that the protocol amendment was required by the FDA and was therefore exempt from the consent requirement under the exception for actions required by applicable law or regulation. This dispute remained unresolved at the time of termination.
C. MAE Analysis, Deficiency Notice, and Termination (August – September 2024)
Following receipt of the Marlowe Asset Management-2 interim data and the FDA's imposition of a partial clinical hold, Calderwood & Harkness undertook a comprehensive legal and factual analysis of whether the adverse developments constituted a Material Adverse Effect under the SPA's definition, thereby excusing Penterra from its closing obligations and providing a basis for termination.
August 23 – September 3, 2024. Calderwood & Harkness prepared a series of detailed internal memoranda addressing the following topics:
(i) VRD-4187 Clinical Data Analysis: A memorandum analyzing the clinical significance of the Marlowe Asset Management-2 interim data, incorporating the Broadleaf supplemental assessment and publicly available clinical data from comparable T-cell engager programs, to demonstrate that the adverse safety data represented a material and potentially durable setback to VRD-4187's development program.
(ii) FDA Partial Clinical Hold Impact: A memorandum analyzing the regulatory implications of the partial clinical hold on IND 154832, including historical data on the likelihood and timing of clinical hold resolutions, the regulatory requirements for lifting a partial clinical hold, and the impact on Veridian's development timeline and approvability.
(iii) Delaware MAE Case Law Survey: A comprehensive survey of Delaware case law on the interpretation and application of MAE provisions, with particular focus on the Court of Chancery's decision in Akorn, Inc. v. Fresenius Kabi AG, 2018 WL 4719347 (Del. Ch. Oct. 1, 2018), aff'd, 198 A.3d 724 (Del. 2018) — the only case in which the Court of Chancery found that a material adverse effect had actually occurred — and subsequent decisions interpreting the Akorn framework. The memorandum addressed the key elements of Delaware MAE analysis, including the quantitative threshold (typically a decline of 40% or more in the relevant financial metric, sustained over a commercially significant period), the "durational significance" requirement, and the contextual factors relevant to clinical-stage biotechnology companies.
(iv) MAE Carveout Applicability: A memorandum analyzing whether any of the SPA's MAE carveouts applied to the adverse clinical data. Our analysis concluded that the carveouts do not apply. The adverse clinical trial results are company-specific — they arise from the particular molecular characteristics of VRD-4187 and Veridian's proprietary VeriTCE platform — and are not attributable to general economic conditions, industry-wide conditions, changes in law, pandemics, natural disasters, or financial market conditions. We further concluded that even if an industry-wide carveout were arguably applicable (e.g., if one characterized severe CRS as an industry-wide risk inherent in the T-cell engager class), the disproportionate-impact exception would be triggered, because the Marlowe Asset Management-2 data reflects a degree of CRS severity and treatment-related mortality significantly exceeding that observed in other T-cell engager programs in the DLL3 and broader oncology space.
(v) Disproportionate Impact Exception Analysis: A supplemental memorandum conducting a comparative analysis of VRD-4187's safety profile against comparably situated T-cell engager programs, including Greaves Industries's tarlatamab-dlle (Imdelltra), which received FDA approval in May 2024 for SCLC with a Grade ≥3 CRS rate of approximately 1%, demonstrating the disproportionate nature of VRD-4187's safety findings.
September 6, 2024. Following completion of the MAE analysis, Penterra, through Calderwood & Harkness, delivered a formal Deficiency Notice to Veridian and the Stockholder Representative. The Deficiency Notice alleged that a Material Adverse Effect had occurred within the meaning of SPA § 1.1, and that the conditions to Buyer's closing obligations under SPA §§ 7.2(a) and 7.2(b) were no longer capable of being satisfied. Specifically, the Deficiency Notice cited the following grounds:
(a) The Marlowe Asset Management-2 Phase II interim data, including the 23.4% rate of Grade ≥3 CRS, seven treatment-related deaths, and the absence of statistically significant efficacy, constituted a fundamental setback to VRD-4187's development program and materially diminished the value of Veridian's business;
(b) The FDA's imposition of a partial clinical hold on IND 154832 imposed significant regulatory uncertainty regarding the future development path and approvability of VRD-4187; and
(c) The cumulative impact of these developments, taken together, constituted a Material Adverse Effect that was durationally significant and not subject to any of the SPA's MAE carveouts.
The Deficiency Notice expressly reserved Penterra's rights under the SPA, including its right to terminate the SPA under Section 8.1(d).
September 8, 2024. The ticking fee on the $500,000,000 term loan commitment commenced, as the 90-day post-signing threshold was reached on this date. The ticking fee of 0.175% per annum applied to the full $500,000,000 unfunded commitment amount, resulting in an incremental cost of approximately $2,397 per day.
September 13, 2024. Veridian, through Zalcourt Archer & Cole LLP, delivered a detailed written response to the Deficiency Notice. In its response, Veridian disputed that a Material Adverse Effect had occurred, advancing the following principal arguments:
(a) The clinical data was preliminary, representing an interim analysis rather than a final study readout, and that further data maturation and the dose modification protocol could yield improved results;
(b) The Protocol Amendment v4.0, including mandatory tocilizumab prophylaxis and the dose reduction to 0.75 mg/kg, was expected to adequately address the safety concerns;
(c) The partial clinical hold was routine in the context of emerging safety signals in oncology clinical trials and did not reflect a final regulatory determination regarding VRD-4187's approvability;
(d) None of the cited events met the durational significance threshold established by Delaware case law for a finding of a Material Adverse Effect; and
(e) Penterra was obligated to close and could not invoke the MAE provision to avoid a transaction that it simply no longer found economically attractive.
Veridian's response concluded by demanding that Penterra proceed to closing in accordance with the terms of the SPA.
September 15, 2024. Calderwood & Harkness delivered an internal strategy memorandum to Thomas F. Holbrook analyzing three alternative courses of action available to Penterra:
Option 1 — Proceed to Closing: This option would eliminate litigation risk but would require Penterra to consummate an acquisition at a price that no longer reflected the risk-adjusted value of Veridian. Based on Broadleaf's assessment and Garrison Zanthor' preliminary revised valuation analysis, the risk-adjusted value of Veridian had declined from approximately $850–$950 million (the basis for the agreed purchase price) to approximately $200–$350 million, reflecting the diminished probability of VRD-4187's regulatory success.
Option 2 — Negotiate a Price Reduction: This option would involve approaching Veridian and the Stockholder Representative to negotiate a reduction in the purchase price to reflect the post-DMC valuation. The memorandum assessed the likelihood that Veridian would agree to a meaningful price reduction as low, given the selling stockholders' financial incentives and the legal positions articulated in Veridian's September 13 response.
Option 3 — Terminate Under § 8.1(d): This option involved formal termination of the SPA on the basis that the closing conditions under §§ 7.2(a) and 7.2(b) were incapable of satisfaction. The memorandum assessed the litigation risk associated with this option, including the likelihood that Veridian would seek specific performance (high), the probability of success on the MAE defense (assessed at 55–65%, given the strength of the factual basis but the heavy burden imposed by Delaware law on MAE claims), and the potential damages exposure in the event the defense failed (up to $900,000,000 in expectation damages, or specific performance compelling closing at the full price).
The memorandum concluded with an assessment that Option 3, while carrying meaningful litigation risk, was the course of action most consistent with Penterra's fiduciary obligations to its stockholders and the most defensible path given the severity of the adverse developments.
September 16, 2024. Calderwood & Harkness delivered a supplemental memorandum analyzing the specific arguments raised in Veridian's September 13 response to the Deficiency Notice, addressing each of Veridian's contentions and identifying the weaknesses in Veridian's position.
September 24, 2024. Calderwood & Harkness delivered a formal board memorandum to the Penterra Board of Directors, recommending termination of the SPA under Section 8.1(d). The memorandum summarized the factual basis for the MAE determination, the legal analysis, the litigation risk assessment, and the strategic considerations supporting termination. The memorandum was reviewed and discussed by the Board at a special meeting held on September 27, 2024.
September 27, 2024. The Penterra Board of Directors, at a special meeting attended by all directors, adopted resolutions authorizing and directing Penterra's management and legal counsel to deliver a notice of termination of the SPA to Veridian and the Stockholder Representative pursuant to Section 8.1(d). The Board's decision was unanimous, with Dr. Rajagopal and Ms. Whitfield providing detailed statements supporting the termination on the record.
September 30, 2024. Penterra delivered a formal Termination Notice to Veridian and David Ng (Stockholder Representative) pursuant to SPA § 8.1(d). The Termination Notice was delivered by counsel (Calderwood & Harkness) via overnight courier and email to Veridian at its principal office at 550 Gateway Drive, Cambridge, MA 02142, and to David Ng at Crestline Ventures, LP, with copies to Zalcourt Archer & Cole LLP. The Termination Notice stated that Penterra was exercising its right to terminate the SPA based on the occurrence of a Material Adverse Effect that rendered the conditions to Buyer's closing obligations under SPA §§ 7.2(a) and 7.2(b) incapable of satisfaction prior to the Outside Date. The Termination Notice reiterated the factual and legal bases set forth in the September 6, 2024 Deficiency Notice and stated that the SPA was terminated effective immediately.
IV. BASIS FOR TERMINATION
Penterra terminated the SPA pursuant to Section 8.1(d), which provides that the SPA may be terminated by either party if the closing conditions of the other party are incapable of being satisfied prior to the Outside Date (December 10, 2024), provided that the terminating party is not then in material breach of its own obligations under the SPA.
The specific closing conditions that Penterra contends are incapable of satisfaction are as follows:
SPA § 7.2(a) — Bring-Down of Sellers' Representations and Warranties. Section 7.2(a) conditions Buyer's obligation to close on the accuracy of Sellers' representations and warranties as of the closing date, with such accuracy measured against a Material Adverse Effect-qualified standard (i.e., the representations and warranties must be accurate in all respects except where the failure to be accurate would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect). Penterra contends that this condition is not satisfied because the clinical trial data from Marlowe Asset Management-2 and the FDA's imposition of a partial clinical hold on VRD-4187 have rendered Veridian's representations concerning its business, operations, regulatory status, and the status and prospects of its lead product candidate inaccurate in all material respects. In particular, the representations regarding the conduct of clinical trials in compliance with applicable regulations, the absence of material adverse regulatory actions, and the accuracy of information provided to the FDA are implicated by the recent developments.
SPA § 7.2(b) — No Material Adverse Effect. Section 7.2(b) conditions Buyer's obligation to close on the absence of any Material Adverse Effect since the date of the Agreement. Penterra contends that this condition is not satisfied because the cumulative impact of the Marlowe Asset Management-2 Phase II adverse data and the FDA partial clinical hold on VRD-4187 constitutes a Material Adverse Effect within the meaning of SPA § 1.1. The core of the MAE claim rests on the following factual predicates:
(a) The Marlowe Asset Management-2 interim data revealed a safety profile for VRD-4187 that is substantially worse than anticipated at the time of signing, including a Grade ≥3 CRS rate of 23.4% (compared to the approximately 8–10% rate observed in the Phase I dose-escalation study that formed the basis for the transaction valuation) and seven treatment-related deaths;
(b) The efficacy data showed no statistically significant benefit of VRD-4187 over the control arm (ORR of 31.4% vs. 28.9%, p = 0.58), eliminating the previously anticipated efficacy advantage that was central to the value proposition;
(c) The FDA's partial clinical hold suspended new enrollment in Marlowe Asset Management-2, creating significant regulatory uncertainty regarding the timing and feasibility of the continued development of VRD-4187;
(d) Veridian's risk-adjusted enterprise value has declined by an estimated 60–75% as a result of these developments, far exceeding the quantitative thresholds applied by Delaware courts; and
(e) The adverse developments are durationally significant — the safety concerns relate to fundamental characteristics of VRD-4187's molecular design, the dose reduction to 0.75 mg/kg may compromise efficacy, and the partial clinical hold has no guaranteed resolution timeline.
Calderwood & Harkness's legal analysis has concluded that none of the SPA's MAE carveouts apply to the adverse developments. The adverse clinical trial results and the resulting FDA regulatory action are company-specific events arising from the particular characteristics of Veridian's proprietary product candidate, VRD-4187. They do not arise from general economic conditions, conditions generally affecting the biotechnology or pharmaceutical industry, changes in law or accounting standards, pandemics, natural disasters, acts of war or terrorism, or changes in financial markets. Even if an industry-wide carveout were arguably applicable — for example, if Veridian were to contend that CRS risk is inherent in the T-cell engager class and therefore constitutes an industry-wide condition — the disproportionate-impact exception would apply, as the Marlowe Asset Management-2 data reflects a degree of CRS severity (23.4% Grade ≥3) and treatment-related mortality (3.6%) that far exceeds the rates observed in comparable T-cell engager programs, including the recently approved tarlatamab (Grade ≥3 CRS rate of approximately 1%).
Regarding the financial implications of termination, the reverse termination fee of $45,000,000 is not payable by Penterra. Under the SPA, the reverse termination fee is triggered solely by a financing failure — that is, the inability of Penterra to consummate the closing due to the unavailability of the committed debt financing. Penterra's termination was predicated on the failure of Buyer's closing conditions due to the occurrence of a Material Adverse Effect, not on an inability to fund the purchase price. The committed financing remained available through the Outside Date. Accordingly, the reverse termination fee provision of SPA § 8.3(b) has not been triggered.
Similarly, the target termination fee of $36,000,000 is not payable by Veridian, as there has been no breach of the no-shop provision of SPA § 5.4. While the target termination fee is academic in the context of the current dispute (it would run in favor of Penterra, not against it), we note for completeness that no competing acquisition proposal was received by Veridian during the pendency of the SPA, and the no-shop provision was not implicated.
V. POST-TERMINATION ACTIONS COMPLETED
A. Notices to Third Parties
Following the delivery of the Termination Notice on September 30, 2024, Calderwood & Harkness, at the direction of Penterra, delivered the following notices to third parties:
October 1, 2024 — Notice to Financing Sources. Calderwood & Harkness delivered a letter on behalf of Penterra to Ironclad Trust Company, N.A. (Samantha Hwang, Vice President), providing formal notice of the termination of the SPA and requesting termination of the $500,000,000 senior secured term loan commitment under Commitment Letter Ref. CL-2024-PPCA-0607, dated June 7, 2024. The letter requested confirmation of the commitment termination and a final accounting of all fees and expenses owed by Penterra, including accrued and unpaid commitment fees and ticking fees through the date of SPA termination. As of the date of this memorandum, Ironclad's formal written confirmation of commitment termination is pending, although Ironclad has acknowledged receipt of the notice and indicated that the termination will be processed in accordance with the terms of the commitment letter.
October 1, 2024 — Notice to Escrow Agent. Calderwood & Harkness delivered a letter on behalf of Penterra to Fidelis National Escrow Corp. (Brian Mulcahy, Senior Vice President), advising that the SPA had been terminated effective September 30, 2024, and that no escrow deposits would be made — neither the $180,000,000 Indemnification Escrow Amount nor the $2,500,000 Stockholder Representative Expense Fund. The letter further advised that any further instructions regarding the Escrow Agreement should be directed to Calderwood & Harkness.
October 3, 2024 — Notice to R&W Insurer. Calderwood & Harkness delivered a letter on behalf of Penterra to Atlas Indemnity Insurance Co. (Graham Fielding, Senior Vice President), providing notice that the SPA had been terminated, that the acquisition did not close, and that the R&W insurance policy (Policy No. AIC-RWI-2024-07892) would not be triggered. The letter inquired regarding the status of the premium paid at binding. Atlas Indemnity confirmed that the premium of $3,960,000 and the underwriting fee of $75,000 are non-refundable under the terms of the policy, regardless of whether the underlying transaction closes. The total non-recoverable amount paid to Atlas Indemnity is $4,035,000.
B. Litigation Preservation
October 2, 2024 — Post-Termination Obligations Checklist. Calderwood & Harkness prepared and circulated a post-termination obligations checklist to the Penterra deal team (Thomas F. Holbrook, Catherine M. Burgess, Natalie Reiner, and their respective teams), identifying all outstanding obligations under the SPA and ancillary agreements that survive termination, including confidentiality obligations, return/destruction of confidential information, and the terms and conditions governing the release of claims and the non-applicability of termination fees.
October 5, 2024 — Litigation Hold Notice. In anticipation of litigation in the Delaware Court of Chancery, Calderwood & Harkness prepared and delivered a litigation hold notice addressed to Thomas F. Holbrook, General Counsel of Penterra. The litigation hold directed the preservation of all documents, communications, data, and electronically stored information ("ESI") relating to the Veridian acquisition, the Marlowe Asset Management-2 clinical data, the MAE analysis, the Deficiency Notice and Termination Notice, and all related internal deliberations and external communications. The litigation hold specifically identified the following categories of information subject to preservation:
(a) All drafts, comments, and execution versions of the SPA, ancillary agreements, and related transaction documents;
(b) All diligence materials received from Veridian, including data room contents;
(c) All internal Penterra analyses, presentations, board materials, and communications relating to the Veridian acquisition, the Marlowe Asset Management-2 clinical data, and the termination decision;
(d) All communications between Penterra and Veridian (or their respective counsel and advisors), including the Deficiency Notice, Veridian's response, the consent request letter, and the Termination Notice;
(e) All clinical and scientific data relating to VRD-4187, including the DMC interim analysis report and the Broadleaf assessments;
(f) All communications with financing sources, insurance providers, and other third-party advisors relating to the transaction; and
(g) All email, instant messages, text messages, voicemail, and other electronic communications of Penterra personnel involved in the transaction.
The litigation hold notice identified the custodians whose documents are subject to preservation, including D

CALDERWOOD & HARKNESS LLP

MEMORANDUM

I. EXECUTIVE SUMMARY

II. TRANSACTION OVERVIEW

III. TRANSACTION TIMELINE AND KEY EVENTS

IV. BASIS FOR TERMINATION

V. POST-TERMINATION ACTIONS COMPLETED

Record

Parties

Dates

Amounts