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PRIVILEGED & CONFIDENTIAL ATTORNEY WORK PRODUCT

CALDERWOOD & HARKNESS LLP

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

INTERNAL MEMORANDUM

This memorandum constitutes attorney work product and is protected by the attorney-client privilege. It is intended solely for the internal use of the Calderwood & Harkness LLP deal team members identified above. This memorandum should not be copied, distributed, or disclosed to any person outside of Calderwood & Harkness LLP without the prior written consent of Oliver Mackenzie.

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I. INTRODUCTION AND TRANSACTION OVERVIEW

A. Purpose of This Memorandum

The purpose of this memorandum is to set forth the proposed staffing plan, allocation of responsibilities, anticipated budget, and coordination framework for the representation of Penterra Pharmaceuticals Corp. ("Penterra" or the "Client") (Nasdaq: PPCA) in its proposed acquisition of one hundred percent (100%) of the outstanding capital stock of Veridian Biosciences, Inc. ("Veridian" or the "Target"), a privately held clinical-stage biotechnology company. This memorandum is intended to serve as the primary reference document for the Calderwood & Harkness LLP ("C&H" or the "Firm") deal team throughout the engagement and will be supplemented and revised at key milestones as the transaction progresses.

Each member of the deal team should review this memorandum carefully and familiarize themselves with their assigned responsibilities, the anticipated timeline, the budget parameters, and the coordination protocols described herein. Given the complexity of this transaction and the number of external advisors involved, disciplined adherence to the communication and reporting protocols outlined in Section V is essential to efficient execution.

B. The Client

Penterra Pharmaceuticals Corp. is a Delaware corporation headquartered at 1100 Meridian Boulevard, Suite 400, Princeton, New Jersey 08540. Penterra is a publicly traded pharmaceutical company listed on the Nasdaq Global Select Market under the ticker symbol "PPCA." The Company has a diversified portfolio of commercial-stage oncology and immunology products and a robust late-stage clinical pipeline. As of the most recent quarterly report, Penterra reported cash and cash equivalents of approximately $2.1 billion, providing substantial financial capacity for the proposed acquisition.

The principal client contacts for this engagement are as follows:

• Thomas F. Holbrook — General Counsel and Secretary, Penterra Pharmaceuticals Corp. Mr. Holbrook is the primary legal contact and will serve as the day-to-day client liaison for the C&H deal team on all legal matters relating to the transaction.

• Natalie Reiner — Senior Vice President, Corporate Development, Penterra Pharmaceuticals Corp. Ms. Reiner is leading the commercial and strategic aspects of the transaction from the Penterra side and is the principal business contact for deal negotiations and strategic discussions.

• Catherine M. Burgess — Chief Financial Officer, Penterra Pharmaceuticals Corp. Ms. Burgess oversees all financial aspects of the transaction, including financing arrangements, and is the designated billing contact for C&H invoices.

• Dr. Anand Rajagopal — Chief Executive Officer, Penterra Pharmaceuticals Corp. Dr. Rajagopal is the ultimate decision-maker on the Penterra side and will be involved at key strategic junctures, including board presentations and final negotiation of material terms.

C. The Target

Veridian Biosciences, Inc. is a privately held Delaware corporation headquartered at 550 Gateway Drive, Cambridge, Massachusetts 02142. Veridian is a clinical-stage biotechnology company focused primarily on the development of novel immuno-oncology therapeutics. The Target's lead product candidate is VRD-4187, a bispecific T-cell engager currently in Phase II clinical trials under IND 154832 (the "Marlowe Asset Management-2" trial, registered as NCT05837291). As of the most recent data available, the Marlowe Asset Management-2 trial has enrolled 387 patients across 42 clinical sites in the United States, Europe, and Asia-Pacific. In addition to VRD-4187, Veridian's proprietary VeriTCE platform is designed to generate next-generation T-cell engager candidates across multiple oncology indications.

Veridian is a clinical-stage company with no approved products and no product revenue. For fiscal year 2023, the Target reported net revenue of $0 and a net loss of approximately ($87.3 million). The company has been funded through successive rounds of venture capital financing, having raised approximately $420 million in aggregate through Series A, B, C, and D preferred stock financings. This venture-backed capital structure introduces significant complexity into the transaction, as discussed further below.

D. Indicative Deal Terms

The proposed transaction is structured as an all-cash stock purchase, pursuant to which Penterra will acquire one hundred percent (100%) of the outstanding capital stock of Veridian. On March 1, 2024, Penterra submitted a non-binding indication of interest to Veridian's Board of Directors proposing an acquisition at an indicative deal value in the range of $850 million to $950 million. This valuation range is expected to be refined following the completion of due diligence and further negotiation of the definitive Stock Purchase Agreement (the "SPA"). The final purchase price will be determined through ongoing discussions between the parties and their respective financial advisors.

E. Transaction Parties and Advisors

The Target's legal counsel is Zalcourt Archer & Cole LLP, with offices at One Federal Street, 30th Floor, Boston, Massachusetts 02110. The lead partner on the sell-side engagement is Rebecca Whitmore, with Jonathan Pratt serving as the lead associate and Elaine Sato serving as the tax partner. The Target's financial advisor is Ridgeway Partners LLC, led by Laura Beckett, Managing Director, who is managing the sell-side process.

Penterra's financial advisor is Garrison Zanthor & Co., LLC, located at 383 Madison Avenue, New York, New York 10179. Kevin Driscoll, Managing Director, is leading the advisory engagement for Penterra and will be responsible for valuation analysis, fairness opinion preparation, negotiation support, and board presentation materials.

F. Board Authorization and Engagement Commencement

On February 12, 2024, the Penterra Board of Directors, under the oversight of Board Chair Margaret Liu Whitfield, authorized the exploration of a potential acquisition of Veridian Biosciences, Inc. and delegated authority to Penterra's management team, in consultation with outside legal and financial advisors, to pursue due diligence, negotiate definitive transaction documents, and bring a final proposal back to the Board for approval prior to execution.

Calderwood & Harkness's engagement on this matter commenced on February 14, 2024, upon execution of the engagement letter between C&H and Penterra. Conflicts clearance was completed on February 13, 2024, with no conflicts identified.

G. Key Complexity Factors

Several factors contribute to the complexity of this transaction and will shape our approach to staffing, due diligence, and negotiation:

1. Clinical-Stage Target with No Product Revenue. Veridian is a pre-commercial, clinical-stage company. The absence of revenue and the dependence of the Target's value on the success of VRD-4187 and the VeriTCE platform present unique valuation and risk allocation challenges. The definition of "material adverse effect" in the SPA will be heavily negotiated, and the parties will need to address the allocation of clinical development risk during the interim period between signing and closing.

2. Immuno-Oncology Pipeline Risk. The lead candidate VRD-4187 is currently in Phase II clinical trials. The outcome of the Marlowe Asset Management-2 trial is uncertain, and adverse clinical results during the interim period could have a material impact on the value of the Target. We will need to carefully structure the closing conditions, MAE definition, and interim operating covenants to appropriately allocate this risk.

3. Complex Venture Capital Ownership Structure. Veridian's capitalization is characterized by significant venture capital and institutional ownership, as follows:

• Crestline Ventures — 28.3%

• Boreal Health Partners Fund III — 19.7%

• Apex Growth Equity Fund II — 14.1%

• Founders and management — approximately 14.6%

• Employee Stock Ownership Plan (ESOP) — 9.8%

• Other institutional investors — approximately 13.5%

This ownership structure will require careful attention to the stockholder consent process under Section 228 of the Delaware General Corporation Law ("DGCL"), the allocation of purchase price among the various classes and series of stock, and the negotiation of a stockholder representative agreement to govern post-closing indemnification claims.

4. Tax Complexity. Veridian has accumulated approximately $312 million in estimated federal net operating loss ("NOL") carryforwards. However, the Series C financing round in 2020 is believed to have triggered an "ownership change" under Section 382 of the Internal Revenue Code, resulting in a limitation on approximately $148 million of pre-change NOLs at an estimated annual limitation of approximately $5.9 million per year. The tax workstream will require detailed analysis of the NOL history, the potential benefits and drawbacks of a Section 338(h)(10) election, and the structuring of tax representations, warranties, and indemnification provisions in the SPA. Leonard Cross will lead this analysis.

5. Regulatory Considerations. The transaction will require a pre-merger notification filing under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"). Additionally, given the clinical-stage nature of the Target's business, FDA regulatory compliance and the status of Veridian's investigational new drug applications will be key diligence workstreams.

II. DEAL TEAM COMPOSITION AND ROLE ASSIGNMENTS

A. Core Calderwood & Harkness Team

This Section sets forth the composition of the C&H deal team, the hourly billing rates for each timekeeper, the specific responsibilities assigned to each team member, and the estimated hours anticipated through closing. The following individuals constitute the core C&H team for this matter.

1. Oliver Mackenzie — Responsible Partner, Mergers & Acquisitions.

Hourly Rate: $1,850

Role and Responsibilities:

Oliver Mackenzie will serve as the Responsible Partner for this engagement and will exercise overall supervision and strategic direction over all workstreams. In this capacity, Mr. Mackenzie's specific responsibilities include:

• Serving as the primary relationship partner for the Client, with direct reporting relationships to Thomas F. Holbrook (General Counsel) and Natalie Reiner (SVP, Corporate Development);

• Leading all negotiations with opposing counsel on the key provisions of the Stock Purchase Agreement, including the MAE definition and carve-outs, indemnification structure and caps, termination rights, and closing conditions;

• Reviewing and providing sign-off on all significant deliverables, including the SPA, ancillary agreements, due diligence memoranda, and material correspondence to opposing counsel;

• Preparing and delivering board presentations and senior management presentations to the Penterra Board of Directors and executive team, in coordination with Garrison Zanthor & Co.;

• Engaging directly with Rebecca Whitmore, lead partner at Zalcourt Archer & Cole LLP, on all senior-level negotiations and strategic discussions; and

• Providing oversight of the budget and ensuring that the engagement proceeds within the parameters established by this memorandum.

Estimated Hours: 250–325 hours (through closing)

2. Harrison Wexford — Billing Partner, Mergers & Acquisitions.

Hourly Rate: $1,750

Role and Responsibilities:

Harrison Wexford will serve as the Billing Partner for this engagement, with overall responsibility for billing administration, matter budgeting, and client invoicing. In addition to his administrative responsibilities, Mr. Wexford will play a substantive role on the transaction, including:

• Managing all billing administration, including the preparation of monthly billing statements, monitoring of fee accruals against the budget estimate, and submission of invoices to Catherine M. Burgess (CFO) and Thomas F. Holbrook (General Counsel) at Penterra;

• Providing secondary partner-level support on the drafting and negotiation of the Stock Purchase Agreement;

• Taking the lead on the drafting and negotiation of the ancillary transaction agreements, including the escrow agreement, the stockholder representative agreement, the non-competition agreements (for key Veridian personnel, specifically Dr. James Marek and Dr. Priya Chandrasekaran), and the transition services agreement;

• Supporting the review of financing documentation, including the commitment letter and credit agreement; and

• Coordinating with Megan Chu on closing logistics and funds flow matters.

Estimated Hours: 175–225 hours (through closing)

3. Megan Chu — Lead Associate, Mergers & Acquisitions.

Hourly Rate: $985

Role and Responsibilities:

Megan Chu will serve as the Lead Associate on this transaction and will assume day-to-day management of the engagement. Ms. Chu is expected to carry the heaviest workload among the deal team members and will serve as the primary point of contact for associate-level matters across all workstreams. Her specific responsibilities include:

• Day-to-day management of the transaction, including coordination of all internal and external workstreams, maintenance of the master timeline, and tracking of open action items;

• Preparation of the initial draft and subsequent mark-ups of the Stock Purchase Agreement, incorporating input from Oliver Mackenzie, Harrison Wexford, and Leonard Cross;

• Drafting and revision of all ancillary transaction documents in coordination with the applicable partner lead;

• Leading the compilation and review of disclosure schedules, ensuring that all schedules are complete, accurate, and consistent with the diligence findings;

• Coordinating due diligence workstreams across the team, managing the due diligence request lists, overseeing data room review, and ensuring that diligence findings are promptly communicated to the relevant team members;

• Drafting board resolutions, officer's certificates, secretary's certificates, and closing certificates for both the buyer and seller sides;

• Managing the closing conditions tracking checklist and ensuring that all conditions precedent are satisfied or waived in a timely manner;

• Serving as the day-to-day counterpart to Jonathan Pratt, the lead associate at Zalcourt Archer & Cole LLP, on all document exchanges, scheduling matters, and working-level negotiations;

• Coordinating with Prescott Whitfield Insurance Brokers, Inc. (Amanda Chen-Kowalski) on the procurement of the representations and warranties insurance policy, including managing the underwriting process with the carrier and ensuring alignment of policy terms with the SPA indemnification provisions;

• Reviewing the financing commitment letter and credit agreement and maintaining the financing conditions checklist;

• Monitoring interim operating covenant compliance during the period between signing and closing; and

• Preparing the funds flow memorandum for signing and closing.

Estimated Hours: 600–750 hours (through closing)

4. Derek Okonkwo — Working Associate, Mergers & Acquisitions.

Hourly Rate: $795

Role and Responsibilities:

Derek Okonkwo will serve as the Working Associate on this transaction, providing substantial support across multiple due diligence workstreams and on transactional documentation. Mr. Okonkwo's specific responsibilities include:

• Conducting due diligence review across multiple workstreams, including corporate organization and capitalization, material contracts, litigation and contingent liabilities, insurance, environmental compliance, and employment and benefits matters;

• Preparing detailed research memoranda on key legal issues, including Delaware case law on material adverse effect definitions, specific performance remedies in acquisition agreements, stockholder consent procedures under DGCL Section 228, and other topics as assigned;

• Supporting Megan Chu in the drafting and revision of the Stock Purchase Agreement and the compilation and review of disclosure schedules;

• Providing drafting support for regulatory filings, including coordination with Stonebridge HSW Antitrust Advisors LLP on the HSR filing narrative and Item 4 document preparation;

• Assisting with the competitive overlap analysis for antitrust purposes and coordinating the collection of Item 4(c) and 4(d) documents from Penterra;

• Preparing individual due diligence memoranda for each assigned workstream, summarizing findings, identifying risks, and recommending appropriate representations, warranties, and indemnification provisions;

• Assisting with closing logistics, including document assembly, execution coordination, and preparation of the closing binder; and

• Conducting the stockholder consent process analysis under DGCL Section 228, including preparation of the form of written consent and analysis of the required approval thresholds.

Estimated Hours: 500–650 hours (through closing)

5. Leonard Cross — Specialist Partner, Tax.

Hourly Rate: $1,650

Role and Responsibilities:

Leonard Cross will serve as the specialist tax partner on this transaction, providing comprehensive tax due diligence and structuring advice. Mr. Cross's specific responsibilities include:

• Conducting tax due diligence, including a thorough review of Veridian's federal and state income tax returns for all open tax years, analysis of the estimated $312 million in federal NOL carryforwards, and assessment of any potential tax exposures;

• Performing a detailed Section 382 ownership change analysis, including an evaluation of the 2020 Series C financing round that is believed to have triggered an ownership change, resulting in a limitation on approximately $148 million of pre-change NOLs at an estimated annual limitation of approximately $5.9 million per year;

• Advising on the optimal transaction structure from a tax perspective, including a comparative analysis of a stock purchase versus an asset purchase and an assessment of whether a Section 338(h)(10) election would be beneficial given the existing NOLs and the Section 382 limitation;

• Drafting and negotiating the tax representations and warranties in the SPA, including representations regarding the Target's tax return filing history, tax payment compliance, NOL carryforward amounts, and the absence of tax liens or pending tax proceedings;

• Structuring and negotiating the tax indemnification provisions in the SPA, including the allocation of liability for pre-closing tax periods and the mechanics for tax contest provisions;

• Conducting a state tax nexus analysis for key jurisdictions, including Massachusetts, California, and Maryland, to assess Veridian's state income tax compliance and any potential exposure;

• Reviewing Veridian's R&D tax credit claims and assessing the availability and supportability of such credits;

• Drafting and negotiating the transfer tax provisions of the SPA (anticipated to be Section 6.8);

• Structuring the pre-closing tax period indemnification provisions, including the proration methodology and straddle period allocation; and

• Coordinating directly with Elaine Sato, the tax partner at Zalcourt Archer & Cole LLP representing the sellers, on all tax-related provisions of the SPA and ancillary documents.

Estimated Hours: 80–120 hours (through closing)

B. External Counsel Coordination

1. Stonebridge HSW Antitrust Advisors LLP.

Office: 1440 New York Avenue NW, Suite 700, Washington, DC 20005

Lead Partner: Martin Prumvane

Role: Stonebridge HSW Antitrust Advisors LLP ("Stonebridge HSW") serves as antitrust counsel to Penterra on this transaction. Stonebridge HSW is responsible for all aspects of the antitrust workstream, including the preparation and filing of the HSR Act pre-merger notification, preparation of Item 4 documentary submissions, serving as the primary liaison with the Federal Trade Commission and the Department of Justice Antitrust Division, and providing a comprehensive antitrust risk assessment.

Coordination Protocol: Oliver Mackenzie and Derek Okonkwo will serve as the primary C&H contacts for Stonebridge HSW. Derek Okonkwo will be responsible for day-to-day coordination with Martin Prumvane and his team, including the preparation of the competitive overlap analysis, the collection of Item 4(c) and 4(d) documents from Penterra, and the review of the HSR filing narrative. Oliver Mackenzie will be consulted on all strategic antitrust matters and will participate in any substantive discussions with the reviewing agency.

Anticipated Timing: The HSR filing is targeted for mid- to late April 2024. The initial thirty (30) day waiting period under the HSR Act will commence upon filing. Given the clinical-stage nature of the Target and the limited competitive overlap between Penterra's existing product portfolio and Veridian's pipeline candidates in the immuno-oncology space, we anticipate a low level of antitrust risk and believe there is a reasonable basis to expect early termination of the waiting period. However, the team should remain prepared for the possibility of substantive engagement with the reviewing agency.

Budget: Stonebridge HSW's fees for this engagement are estimated at $250,000 to $400,000. This estimate is based on Stonebridge HSW's separate engagement with Penterra and is not included within the C&H fee budget. The estimate assumes a standard HSR filing process without a second request.

C. Other Advisors (Non-Legal, Engaged by Client)

In addition to legal counsel, Penterra has engaged or is expected to engage several non-legal advisors in connection with this transaction. The C&H deal team will coordinate with each of these advisors as described below.

1. Garrison Zanthor & Co., LLC — Kevin Driscoll, Managing Director, 383 Madison Avenue, New York, New York 10179. Garrison Zanthor serves as Penterra's financial advisor for the transaction and is responsible for valuation analysis, the preparation and delivery of a fairness opinion to the Penterra Board of Directors, and negotiation support. C&H will coordinate closely with Garrison Zanthor on transaction structure, board presentation materials, and the timing and content of the fairness opinion. Oliver Mackenzie and Megan Chu will serve as the primary C&H contacts for Garrison Zanthor.

2. Broadleaf Scientific Consulting LLC — Dr. Raymond Kapoor, Managing Director, 225 Franklin Street, Suite 1900, Boston, Massachusetts 02110. Broadleaf has been engaged by Penterra as a clinical and scientific due diligence advisor, with the engagement commencing on March 18, 2024. Broadleaf will conduct an independent assessment of Veridian's clinical pipeline, including the VRD-4187 Phase II trial data and the VeriTCE platform technology. C&H will coordinate with Broadleaf to integrate scientific diligence findings into the legal risk assessment, with particular attention to the implications for the MAE definition, closing conditions, and interim operating covenants. Megan Chu will serve as the primary C&H contact for Broadleaf, with Derek Okonkwo providing supporting coordination on regulatory matters.

3. Prescott Whitfield Insurance Brokers, Inc. — Amanda Chen-Kowalski, Managing Director. Prescott Whitfield has been engaged as the representations and warranties insurance broker for this transaction. Megan Chu will coordinate with Prescott Whitfield on the procurement of a buyer-side R&W insurance policy, the management of the underwriting process with the selected carrier, and the alignment of the policy terms and conditions with the indemnification provisions of the SPA.

4. Northbridge Accounting Group LLP — Patrick Calloway, Engagement Partner. Northbridge serves as Veridian's independent auditor and has audited Veridian's financial statements for fiscal years 2021 through 2023. Leonard Cross will review the audited financial statements and will coordinate any accounting-related diligence questions through Zalcourt Archer & Cole, as appropriate.

5. Tarrant & Co. — Diana Rourke, Engagement Partner. Clearwater serves as Penterra's independent registered public accounting firm. C&H will coordinate with Clearwater as necessary regarding any financial disclosures that Penterra may be required to make in connection with the transaction, including any required current report filings on Form 8-K.

III. WORKSTREAM BREAKDOWN AND RESPONSIBILITY MATRIX

This Section sets forth the detailed workstream breakdown for each phase of the transaction, identifying the lead and supporting team members for each task and the key deliverables associated with each workstream. The deal team should use this Section as a working reference throughout the engagement.

A. Phase 1: Due Diligence (March–May 2024)

The due diligence phase is expected to be intensive given the clinical-stage nature of the Target, the complexity of its capitalization, and the significance of its intellectual property portfolio. The following table sets forth the principal due diligence workstreams, lead assignments, supporting personnel, and key deliverables.

Due Diligence Focus Areas. Given that Veridian is a clinical-stage company with $0 in fiscal year 2023 revenue and a net loss of ($87.3 million), the due diligence effort will focus heavily on the following areas:

Pipeline Assets. The VRD-4187 lead candidate and the proprietary VeriTCE platform represent the core value drivers for this acquisition. Megan Chu will lead the intellectual property and regulatory due diligence workstreams and will work closely with Broadleaf Scientific Consulting to ensure that the legal analysis is informed by the scientific assessment. Key focus areas will include patent coverage and freedom-to-operate analysis, the status and terms of any third-party license agreements, regulatory exclusivity and data protection periods, and the status of the Marlowe Asset Management-2 trial (IND 154832, NCT05837291, with 387 enrolled patients across 42 clinical sites).

intellectual Property Portfolio. Given that the Target's value is substantially dependent on its proprietary technology, the IP due diligence workstream will be one of the most critical components of the overall diligence effort. Megan Chu will conduct a comprehensive review of Veridian's patent portfolio, pending patent applications, trade secrets, know-how, and any IP-related agreements, including in-license and out-license agreements, collaboration agreements, and material transfer agreements.

Capitalization Complexity. Veridian's capital structure includes Series A through Series D preferred stock, representing approximately $420 million in aggregate venture capital financing. Derek Okonkwo will lead the corporate organization and capitalization workstream, which will involve a detailed review of the Target's certificate of incorporation (including all amendments and certificates of designation), equity incentive plans, outstanding option and warrant grants, the ESOP structure, and any anti-dilution or other protective provisions that may affect the mechanics of the purchase price allocation.

148-Employee Workforce. Derek Okonkwo will lead the employment and benefits due diligence workstream, which will include a review of all employment agreements, offer letters, severance arrangements, change-of-control provisions, non-competition and non-solicitation agreements, employee benefit plans, and compliance with applicable labor and employment laws.

Each due diligence memorandum should follow the standard C&H format, including an executive summary, a description of the documents reviewed, key findings and observations, identified risks, and recommended representations, warranties, and indemnification provisions for the SPA. All workstream memoranda are to be completed no later than May 31, 2024, with preliminary findings communicated to Oliver Mackenzie on a rolling basis as they become available.

B. Phase 2: Transaction Documentation (April–June 2024)

The preparation, negotiation, and finalization of the definitive transaction documents will constitute the most substantive legal workstream of this engagement. The following table sets forth the key documents, lead drafters, reviewers, and target completion dates.

Key Negotiation Points. Based on our experience with comparable clinical-stage biotechnology acquisitions and our preliminary discussions with opposing counsel, we anticipate that the following issues will be among the most heavily negotiated provisions of the SPA:

Material Adverse Effect Definition and Carve-Outs. Given the clinical-stage nature of the Target, the MAE definition will be a critical provision. We expect the sellers to seek broad carve-outs, including for pandemic-related effects, general economic and industry conditions, and changes in law or accounting standards. We will seek a "disproportionate impact" exception to any general industry conditions carve-out, such that industry-wide developments that disproportionately affect Veridian relative to similarly situated companies would not be excluded from the MAE definition.

No-Shop Provision and Fiduciary Out Mechanics. We expect to include a standard no-shop provision restricting the Target from soliciting or engaging with competing acquisition proposals during the interim period. The sellers will likely seek a fiduciary out provision permitting the Target's Board to consider unsolicited superior proposals, subject to matching rights and termination fee obligations.

Indemnification Structure. Our target negotiating position on the key indemnification parameters is as follows: (i) an aggregate indemnification cap of twenty percent (20%) of the purchase price, which at a $900 million midpoint purchase price would equal $180 million; (ii) a tipping basket of one percent (1%) of the purchase price, or $9 million, below which no claims may be made; (iii) fundamental representations (including capitalization, organization, authority, and tax) to be subject to indemnification at one hundred percent (100%) of the purchase price, uncapped; and (iv) survival periods of eighteen (18) months for general representations and warranties, with fundamental representations and tax representations surviving until the expiration of the applicable statute of limitations plus sixty (60) days.

Termination Rights and Fees. We anticipate negotiation of a reverse termination fee payable by Penterra in the event of a buyer financing failure, as well as a Target termination fee payable in connection with any breach of the no-shop provision or exercise of a fiduciary out. The specific dollar amounts and trigger conditions will be negotiated in the context of the overall deal terms.

Specific Performance. We expect to seek a specific performance provision entitling Penterra to obtain specific performance of the Target's obligations under the SPA, including the obligation to consummate the closing, subject to satisfaction of all conditions precedent.

Closing Conditions. The closing conditions will include the bring-down of representations and warranties to a negotiated standard (we will seek an MAE-qualified bring-down for general representations), the absence of any material adverse effect, the receipt of HSR clearance, the delivery of all required closing certificates and other deliverables, and the satisfaction of any other conditions to be negotiated.

C. Phase 3: Financing (May–June 2024)

Penterra intends to finance the acquisition through a combination of a committed term loan facility and cash on hand. The anticipated financing structure is summarized below.

Financing Terms. The anticipated financing arrangement consists of a $500 million committed term loan facility provided by Summit Ridge Capital Partners (Philip Ostrander, lead) and Ironclad Trust Company, N.A. (Samantha Hwang), referenced under commitment letter CL-2024-PPCA-0607. Key terms of the facility are expected to include an interest rate of SOFR plus 225 basis points, a commitment fee of 0.35% per annum (approximately $1,750,000 per annum), and a ticking fee of 0.175% per annum commencing ninety (90) days after the execution of the SPA. The balance of the purchase price, estimated at approximately $400 million, will be funded from Penterra's cash on hand, which stood at approximately $2.1 billion as of the second quarter of 2024.

Megan Chu will take the lead on reviewing the commitment letter and credit agreement, marking up the financing documents, maintaining the financing conditions checklist, and coordinating with Summit Ridge and Ironclad. Oliver Mackenzie will be involved in any strategic discussions regarding the interplay between the financing conditions and the SPA closing conditions.

D. Phase 4: Regulatory (April–May 2024)

The HSR filing will be prepared and submitted by Stonebridge HSW, with C&H providing supporting coordination and document collection from Penterra. The applicable HSR filing fee, based on the anticipated deal value of approximately $900 million and the 2024 fee schedule, is $280,500. Derek Okonkwo will monitor the thirty-day waiting period and coordinate with Stonebridge HSW on any requests or communications from the reviewing agency. As noted above, we anticipate a low level of antitrust risk given the clinical-stage nature of the Target.

E. Phase 5: Representations and Warranties Insurance (May–June 2024)

Anticipated R&W Policy Terms. We expect to procure a buyer-side representations and warranties insurance policy with a policy limit of $180 million, matching the anticipated aggregate indemnification cap in the SPA. The self-insured retention under the policy is expected to be $9 million, consistent with the basket threshold. Based on current market conditions for comparable clinical-stage biotechnology acquisitions, we estimate a policy premium in the range of 2.0% to 2.5% of the policy limit, which would result in an estimated premium of approximately $3,500,000 to $4,500,000. The R&W underwriting process will be managed by Prescott Whitfield, with Atlas Indemnity (Graham Fielding, contact) identified as a potential lead carrier. Megan Chu will be responsible for ensuring that the policy terms are aligned with the indemnification provisions of the SPA.

F. Phase 6: Board Approvals and Signing (June 2024)

Oliver Mackenzie will lead the preparation and delivery of board presentation materials, working jointly with Garrison Zanthor (Kevin Driscoll) on valuation and strategic rationale. The board presentation will include a summary of the transaction terms, a discussion of the key legal risks and mitigants identified during due diligence, an overview of the indemnification structure and R&W insurance program, and the recommendation of Penterra's management and outside advisors. Megan Chu will prepare the board resolutions authorizing the execution of the SPA and the consummation of the transactions contemplated thereby. Derek Okonkwo will prepare a memorandum analyzing the stockholder consent process under DGCL Section 228, including the required approval thresholds and the mechanics for obtaining written consent from Veridian's stockholders.

G. Phase 7: Interim Period / Pre-Closing (June–Closing)

During the interim period between signing and closing, Megan Chu will be responsible for monitoring Veridian's compliance with the interim operating covenants set forth in the SPA. This will include regular communication with Jonathan Pratt at Zalcourt Archer & Cole to ensure that any actions by the Target that require Penterra's consent are identified and addressed in a timely manner. Derek Okonkwo will assist in maintaining the pre-closing conditions checklist and preparing the closing deliverables. Any requests by Veridian for consent to take actions outside the ordinary course of business during the interim period will be escalated to Oliver Mackenzie for review and decision in consultation with the Client.

H. Phase 8: Closing

Target Closing Date: Within 90 to 120 days of signing, with a target of September to October 2024. The Outside Date, as defined in the SPA, is anticipated to be December 10, 2024.

Megan Chu will prepare the final funds flow memorandum, which will set forth the wire transfer instructions, the allocation of the purchase price among the various classes and series of Veridian stock, the escrow deposit amount, and the net amounts payable to each stockholder. Harrison Wexford will review and approve the funds flow memorandum prior to distribution to the parties. Escrow funding will be coordinated with Fidelis National Escrow Corp. (Brian Mulcahy, contact). Following closing, Derek Okonkwo will be responsible for assembling the closing binder, including executed copies of all transaction documents, closing certificates, and other deliverables.

IV. BUDGET ESTIMATE

A. Calderwood & Harkness Fee Estimate

The following table sets forth the estimated professional fees for each C&H timekeeper through a successful closing of the transaction. These estimates are based on our experience with comparable transactions and reflect our current assessment of the complexity and anticipated timeline of this engagement.

Important Note: This estimate reflects anticipated fees through a successful closing of the transaction. If the negotiation process involves significant additional complexity — for example, contested MAE issues, protracted negotiation of indemnification terms, or unexpected post-signing complications — fees could exceed the high end of this estimate. The fee range set forth above does not include any fees associated with post-closing indemnification claims, post-closing integration matters, or litigation of any nature.

Disbursements. In addition to professional fees, we estimate disbursements (including travel, printing, data room access fees, legal research database charges, courier services, and related expenses) of approximately $100,000 to $200,000 over the course of the engagement. We will endeavor to manage disbursements efficiently and will flag any significant expense items to the Client in advance.

B. External Counsel and Advisor Budget (Penterra's Account, Not C&H Fees)

For the Client's reference and planning purposes, the following table summarizes the estimated costs for external counsel and advisors engaged by Penterra in connection with this transaction. These costs are not included within the C&H fee budget and are billed directly to Penterra by the respective service providers.

The above estimates are based on our current understanding of the advisor engagements and fee arrangements. Actual costs may vary depending on the complexity of the work performed, the duration of the engagement, and the ultimate outcome of the transaction.

C. Budget Assumptions and Caveats

The fee estimates set forth in this memorandum are based on the following assumptions and are subject to the following caveats:

1. Cooperative Bilateral Negotiation. The budget assumes a cooperative, bilateral negotiation process between Penterra and Veridian (and their respective advisors) without contested auction dynamics. If the process becomes competitive or if the sellers engage in parallel negotiations with other potential acquirors, additional legal work may be required.

2. HSR Clearance Without Second Request. The budget assumes that HSR clearance will be obtained within the initial thirty-day waiting period, potentially through early termination, and that the reviewing agency will not issue a second request for additional information. A second request would significantly increase both the C&H and Stonebridge HSW budgets.

3. No Material Litigation or Government Investigation. The budget assumes that no material litigation, regulatory enforcement action, or government investigation arises with respect to either party during the pre-closing period that would require significant additional legal work.

4. Stockholder Consent Obtained Without Difficulty. The budget assumes that Veridian's stockholders will deliver written consent to the transaction without material delay or opposition. Given the concentrated ownership structure (Crestline Ventures at 28.3%, Boreal Health Partners Fund III at 19.7%, and Apex Growth Equity Fund II at 14.1% represent more than 60% of the outstanding equity), we expect that the requisite stockholder approval will be obtained promptly following signing.

5. Post-Closing Matters Excluded. The budget does not account for post-closing integration, indemnification disputes, earnout calculations (if any), or any litigation that may arise following the closing of the transaction. A separate staffing plan and budget will be prepared for any such matters as needed.

6. Clinical Trial Risk. Clinical trial developments during the interim period between signing and closing could introduce unanticipated complexity and additional legal work. For example, adverse clinical results from the Marlowe Asset Management-2 trial, an FDA clinical hold, or other regulatory action could require detailed analysis of whether such developments constitute a material adverse effect, the impact on closing conditions, the potential exercise of termination rights, and related matters. Such contingencies could result in significant additional partner and associate hours beyond the estimates provided herein.

7. Budget Review at Key Milestones. The budget will be formally reviewed and updated at the following key milestones: (i) completion of the due diligence phase (target: late May 2024); (ii) execution of the SPA; and (iii) the occurrence of any material interim period development that has a significant impact on the scope of work required.

V. COMMUNICATION AND REPORTING PROTOCOL

Effective communication among the C&H deal team, the Client, and the various external advisors is essential to the efficient execution of this transaction. The following protocols will govern communications throughout the engagement.

Weekly Status Calls with Penterra Deal Team. Oliver Mackenzie and Megan Chu will lead weekly status calls with the Penterra deal team, including Thomas F. Holbrook (General Counsel) and Natalie Reiner (SVP, Corporate Development). These calls will cover the status of all workstreams, upcoming milestones, open issues requiring Client input or decision, and any other matters of significance. Additional participants will be included on these calls as appropriate depending on the topics to be discussed.

Bi-Weekly Written Status Updates. Megan Chu will prepare bi-weekly written status updates to Thomas F. Holbrook summarizing the progress of the engagement, key developments, and anticipated next steps. These updates will be reviewed by Oliver Mackenzie prior to distribution.

Real-Time Escalation. Any material developments or counterparty disputes should be escalated to Oliver Mackenzie in real time, without waiting for the next scheduled status call or written update. This includes, without limitation, any material diligence findings, disputed negotiation positions, communications from regulatory agencies, adverse clinical trial developments, and any other matters that may affect the strategic direction or risk profile of the transaction.

Coordination with Garrison Zanthor. Oliver Mackenzie and Megan Chu will coordinate regularly with Kevin Driscoll at Garrison Zanthor & Co. on valuation matters, the timing and delivery of the fairness opinion, and the preparation of board presentation materials. The frequency and format of these interactions will be determined as the transaction progresses and will be adapted to the needs of each phase.

Counterparty Counsel Coordination. Megan Chu will serve as the day-to-day counterpart to Jonathan Pratt, the lead associate at Zalcourt Archer & Cole LLP, on all document exchanges, scheduling matters, and working-level negotiations. Oliver Mackenzie will engage directly with Rebecca Whitmore, lead partner at Zalcourt Archer & Cole, on all senior-level negotiations and strategic discussions. These channels of communication should be observed consistently; team members should avoid ad hoc communications with opposing counsel that have not been coordinated through the designated points of contact.

Tax Coordination. Leonard Cross will coordinate directly with Elaine Sato, the tax partner at Zalcourt Archer & Cole, on all tax-related provisions of the SPA and ancillary documents. Mr. Cross will keep Oliver Mackenzie and Megan Chu informed of the progress of tax negotiations and will flag any issues that may have implications for the broader SPA negotiation.

Antitrust Coordination. Derek Okonkwo will serve as the primary C&H contact for Martin Prumvane at Stonebridge HSW on all HSR-related deliverables and day-to-day coordination. Oliver Mackenzie will be consulted on strategic antitrust matters.

Monthly Billing. Monthly billing statements will be prepared by Harrison Wexford and submitted to Catherine M. Burgess (CFO) and Thomas F. Holbrook (General Counsel) at Penterra in accordance with the billing terms of the engagement letter. Harrison Wexford will monitor fee accruals against the budget and will promptly notify Oliver Mackenzie if actual fees are trending materially above or below the budgeted range.

VI. ANTICIPATED TIMELINE AND KEY MILESTONES

The following table sets forth the anticipated timeline for the transaction, including key milestones, target dates, and lead team members. This timeline is subject to change as the transaction progresses and will be updated at key milestones.

The timeline above reflects our current best estimate based on the information available to date. Actual timing may be affected by the pace of negotiations, the duration of the due diligence process, the HSR review timeline, the availability of Penterra's Board for the approval meeting, and other factors outside of C&H's control. Megan Chu will maintain a detailed project management timeline with specific task-level deadlines and will circulate updates to the deal team on a regular basis.

VII. POTENTIAL CONTINGENCIES AND ADDITIONAL STAFFING NEEDS

While the staffing plan and budget set forth in this memorandum are designed to cover the anticipated scope of work for this transaction, a number of potential contingencies could require additional staffing and incremental budget. The deal team should be aware of these contingencies and should alert Oliver Mackenzie promptly if any of them appear likely to materialize.

HSR Second Request. If the HSR review process results in the issuance of a second request for additional information by the FTC or DOJ — which we consider unlikely given Veridian's clinical-stage status and the limited competitive overlap with Penterra's existing portfolio — the antitrust workstream would become significantly more resource-intensive. Additional staffing from Stonebridge HSW would be required, and C&H associate time (primarily Derek Okonkwo and potentially additional associates) would increase substantially. The incremental budget impact of a second request is estimated at $500,000 to $1,000,000, inclusive of both Stonebridge HSW and C&H incremental fees.

Adverse Clinical Developments. If material adverse developments occur with respect to Veridian's clinical programs during the pre-closing period — for example, adverse trial data for VRD-4187, an FDA clinical hold on IND 154832, serious adverse event reports, or other regulatory actions — C&H may need to conduct detailed analysis of the MAE provisions of the SPA, the implications for closing conditions, and Penterra's termination rights. Depending on the nature and severity of such developments, this analysis could require significant additional partner and associate hours and could involve engagement of specialist FDA regulatory counsel.

Post-Closing Matters. Post-closing indemnification claims, purchase price adjustments, escrow disputes, and integration matters are not covered by this staffing plan. If and when the transaction closes, a separate staffing plan and budget will be prepared for any post-closing workstreams, including any claims against the escrow fund, R&W insurance claims, and integration-related legal work.

Litigation Contingency. If the transaction becomes contested — for example, if a competing bidder emerges and Veridian's Board exercises a fiduciary out, if either party threatens litigation during the interim period, or if a stockholder brings a challenge to the transaction — the C&H litigation group may need to be engaged. Any such engagement would be subject to a separate staffing plan and budget and would be coordinated between Oliver Mackenzie and the relevant litigation partner.

Additional Specialist Counsel. If additional specialist counsel is needed in the course of the engagement — for example, FDA regulatory counsel to advise on specific regulatory matters, California employment law counsel to address state-specific employment issues arising from Veridian's operations, or foreign counsel for any international aspects of the clinical trial program — such engagements will be coordinated through Megan Chu with Oliver Mackenzie's approval. The costs of any such engagements would be in addition to the fee estimates set forth in this memorandum.

VIII. ADMINISTRATIVE MATTERS

The following administrative details govern the management of this engagement:

Matter Number: 1018-00008

PRIVILEGED & CONFIDENTIAL ATTORNEY WORK PRODUCT
CALDERWOOD & HARKNESS LLP
200 Park Avenue, 42nd Floor New York, New York 10166
INTERNAL MEMORANDUM
This memorandum constitutes attorney work product and is protected by the attorney-client privilege. It is intended solely for the internal use of the Calderwood & Harkness LLP deal team members identified above. This memorandum should not be copied, distributed, or disclosed to any person outside of Calderwood & Harkness LLP without the prior written consent of Oliver Mackenzie.
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I. INTRODUCTION AND TRANSACTION OVERVIEW
A. Purpose of This Memorandum
The purpose of this memorandum is to set forth the proposed staffing plan, allocation of responsibilities, anticipated budget, and coordination framework for the representation of Penterra Pharmaceuticals Corp. ("Penterra" or the "Client") (Nasdaq: PPCA) in its proposed acquisition of one hundred percent (100%) of the outstanding capital stock of Veridian Biosciences, Inc. ("Veridian" or the "Target"), a privately held clinical-stage biotechnology company. This memorandum is intended to serve as the primary reference document for the Calderwood & Harkness LLP ("C&H" or the "Firm") deal team throughout the engagement and will be supplemented and revised at key milestones as the transaction progresses.
Each member of the deal team should review this memorandum carefully and familiarize themselves with their assigned responsibilities, the anticipated timeline, the budget parameters, and the coordination protocols described herein. Given the complexity of this transaction and the number of external advisors involved, disciplined adherence to the communication and reporting protocols outlined in Section V is essential to efficient execution.
B. The Client
Penterra Pharmaceuticals Corp. is a Delaware corporation headquartered at 1100 Meridian Boulevard, Suite 400, Princeton, New Jersey 08540. Penterra is a publicly traded pharmaceutical company listed on the Nasdaq Global Select Market under the ticker symbol "PPCA." The Company has a diversified portfolio of commercial-stage oncology and immunology products and a robust late-stage clinical pipeline. As of the most recent quarterly report, Penterra reported cash and cash equivalents of approximately $2.1 billion, providing substantial financial capacity for the proposed acquisition.
The principal client contacts for this engagement are as follows:
• Thomas F. Holbrook — General Counsel and Secretary, Penterra Pharmaceuticals Corp. Mr. Holbrook is the primary legal contact and will serve as the day-to-day client liaison for the C&H deal team on all legal matters relating to the transaction.
• Natalie Reiner — Senior Vice President, Corporate Development, Penterra Pharmaceuticals Corp. Ms. Reiner is leading the commercial and strategic aspects of the transaction from the Penterra side and is the principal business contact for deal negotiations and strategic discussions.
• Catherine M. Burgess — Chief Financial Officer, Penterra Pharmaceuticals Corp. Ms. Burgess oversees all financial aspects of the transaction, including financing arrangements, and is the designated billing contact for C&H invoices.
• Dr. Anand Rajagopal — Chief Executive Officer, Penterra Pharmaceuticals Corp. Dr. Rajagopal is the ultimate decision-maker on the Penterra side and will be involved at key strategic junctures, including board presentations and final negotiation of material terms.
C. The Target
Veridian Biosciences, Inc. is a privately held Delaware corporation headquartered at 550 Gateway Drive, Cambridge, Massachusetts 02142. Veridian is a clinical-stage biotechnology company focused primarily on the development of novel immuno-oncology therapeutics. The Target's lead product candidate is VRD-4187, a bispecific T-cell engager currently in Phase II clinical trials under IND 154832 (the "Marlowe Asset Management-2" trial, registered as NCT05837291). As of the most recent data available, the Marlowe Asset Management-2 trial has enrolled 387 patients across 42 clinical sites in the United States, Europe, and Asia-Pacific. In addition to VRD-4187, Veridian's proprietary VeriTCE platform is designed to generate next-generation T-cell engager candidates across multiple oncology indications.
Veridian is a clinical-stage company with no approved products and no product revenue. For fiscal year 2023, the Target reported net revenue of $0 and a net loss of approximately ($87.3 million). The company has been funded through successive rounds of venture capital financing, having raised approximately $420 million in aggregate through Series A, B, C, and D preferred stock financings. This venture-backed capital structure introduces significant complexity into the transaction, as discussed further below.
D. Indicative Deal Terms
The proposed transaction is structured as an all-cash stock purchase, pursuant to which Penterra will acquire one hundred percent (100%) of the outstanding capital stock of Veridian. On March 1, 2024, Penterra submitted a non-binding indication of interest to Veridian's Board of Directors proposing an acquisition at an indicative deal value in the range of $850 million to $950 million. This valuation range is expected to be refined following the completion of due diligence and further negotiation of the definitive Stock Purchase Agreement (the "SPA"). The final purchase price will be determined through ongoing discussions between the parties and their respective financial advisors.
E. Transaction Parties and Advisors
The Target's legal counsel is Zalcourt Archer & Cole LLP, with offices at One Federal Street, 30th Floor, Boston, Massachusetts 02110. The lead partner on the sell-side engagement is Rebecca Whitmore, with Jonathan Pratt serving as the lead associate and Elaine Sato serving as the tax partner. The Target's financial advisor is Ridgeway Partners LLC, led by Laura Beckett, Managing Director, who is managing the sell-side process.
Penterra's financial advisor is Garrison Zanthor & Co., LLC, located at 383 Madison Avenue, New York, New York 10179. Kevin Driscoll, Managing Director, is leading the advisory engagement for Penterra and will be responsible for valuation analysis, fairness opinion preparation, negotiation support, and board presentation materials.
F. Board Authorization and Engagement Commencement
On February 12, 2024, the Penterra Board of Directors, under the oversight of Board Chair Margaret Liu Whitfield, authorized the exploration of a potential acquisition of Veridian Biosciences, Inc. and delegated authority to Penterra's management team, in consultation with outside legal and financial advisors, to pursue due diligence, negotiate definitive transaction documents, and bring a final proposal back to the Board for approval prior to execution.
Calderwood & Harkness's engagement on this matter commenced on February 14, 2024, upon execution of the engagement letter between C&H and Penterra. Conflicts clearance was completed on February 13, 2024, with no conflicts identified.
G. Key Complexity Factors
Several factors contribute to the complexity of this transaction and will shape our approach to staffing, due diligence, and negotiation:
1. Clinical-Stage Target with No Product Revenue. Veridian is a pre-commercial, clinical-stage company. The absence of revenue and the dependence of the Target's value on the success of VRD-4187 and the VeriTCE platform present unique valuation and risk allocation challenges. The definition of "material adverse effect" in the SPA will be heavily negotiated, and the parties will need to address the allocation of clinical development risk during the interim period between signing and closing.
2. Immuno-Oncology Pipeline Risk. The lead candidate VRD-4187 is currently in Phase II clinical trials. The outcome of the Marlowe Asset Management-2 trial is uncertain, and adverse clinical results during the interim period could have a material impact on the value of the Target. We will need to carefully structure the closing conditions, MAE definition, and interim operating covenants to appropriately allocate this risk.
3. Complex Venture Capital Ownership Structure. Veridian's capitalization is characterized by significant venture capital and institutional ownership, as follows:
• Crestline Ventures — 28.3%
• Boreal Health Partners Fund III — 19.7%
• Apex Growth Equity Fund II — 14.1%
• Founders and management — approximately 14.6%
• Employee Stock Ownership Plan (ESOP) — 9.8%
• Other institutional investors — approximately 13.5%
This ownership structure will require careful attention to the stockholder consent process under Section 228 of the Delaware General Corporation Law ("DGCL"), the allocation of purchase price among the various classes and series of stock, and the negotiation of a stockholder representative agreement to govern post-closing indemnification claims.
4. Tax Complexity. Veridian has accumulated approximately $312 million in estimated federal net operating loss ("NOL") carryforwards. However, the Series C financing round in 2020 is believed to have triggered an "ownership change" under Section 382 of the Internal Revenue Code, resulting in a limitation on approximately $148 million of pre-change NOLs at an estimated annual limitation of approximately $5.9 million per year. The tax workstream will require detailed analysis of the NOL history, the potential benefits and drawbacks of a Section 338(h)(10) election, and the structuring of tax representations, warranties, and indemnification provisions in the SPA. Leonard Cross will lead this analysis.
5. Regulatory Considerations. The transaction will require a pre-merger notification filing under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"). Additionally, given the clinical-stage nature of the Target's business, FDA regulatory compliance and the status of Veridian's investigational new drug applications will be key diligence workstreams.
II. DEAL TEAM COMPOSITION AND ROLE ASSIGNMENTS
A. Core Calderwood & Harkness Team
This Section sets forth the composition of the C&H deal team, the hourly billing rates for each timekeeper, the specific responsibilities assigned to each team member, and the estimated hours anticipated through closing. The following individuals constitute the core C&H team for this matter.
1. Oliver Mackenzie — Responsible Partner, Mergers & Acquisitions.
Hourly Rate: $1,850
Role and Responsibilities:
Oliver Mackenzie will serve as the Responsible Partner for this engagement and will exercise overall supervision and strategic direction over all workstreams. In this capacity, Mr. Mackenzie's specific responsibilities include:
• Serving as the primary relationship partner for the Client, with direct reporting relationships to Thomas F. Holbrook (General Counsel) and Natalie Reiner (SVP, Corporate Development);
• Leading all negotiations with opposing counsel on the key provisions of the Stock Purchase Agreement, including the MAE definition and carve-outs, indemnification structure and caps, termination rights, and closing conditions;
• Reviewing and providing sign-off on all significant deliverables, including the SPA, ancillary agreements, due diligence memoranda, and material correspondence to opposing counsel;
• Preparing and delivering board presentations and senior management presentations to the Penterra Board of Directors and executive team, in coordination with Garrison Zanthor & Co.;
• Engaging directly with Rebecca Whitmore, lead partner at Zalcourt Archer & Cole LLP, on all senior-level negotiations and strategic discussions; and
• Providing oversight of the budget and ensuring that the engagement proceeds within the parameters established by this memorandum.
Estimated Hours: 250–325 hours (through closing)
2. Harrison Wexford — Billing Partner, Mergers & Acquisitions.
Hourly Rate: $1,750
Role and Responsibilities:
Harrison Wexford will serve as the Billing Partner for this engagement, with overall responsibility for billing administration, matter budgeting, and client invoicing. In addition to his administrative responsibilities, Mr. Wexford will play a substantive role on the transaction, including:
• Managing all billing administration, including the preparation of monthly billing statements, monitoring of fee accruals against the budget estimate, and submission of invoices to Catherine M. Burgess (CFO) and Thomas F. Holbrook (General Counsel) at Penterra;
• Providing secondary partner-level support on the drafting and negotiation of the Stock Purchase Agreement;
• Taking the lead on the drafting and negotiation of the ancillary transaction agreements, including the escrow agreement, the stockholder representative agreement, the non-competition agreements (for key Veridian personnel, specifically Dr. James Marek and Dr. Priya Chandrasekaran), and the transition services agreement;
• Supporting the review of financing documentation, including the commitment letter and credit agreement; and
• Coordinating with Megan Chu on closing logistics and funds flow matters.
Estimated Hours: 175–225 hours (through closing)
3. Megan Chu — Lead Associate, Mergers & Acquisitions.
Hourly Rate: $985
Role and Responsibilities:
Megan Chu will serve as the Lead Associate on this transaction and will assume day-to-day management of the engagement. Ms. Chu is expected to carry the heaviest workload among the deal team members and will serve as the primary point of contact for associate-level matters across all workstreams. Her specific responsibilities include:
• Day-to-day management of the transaction, including coordination of all internal and external workstreams, maintenance of the master timeline, and tracking of open action items;
• Preparation of the initial draft and subsequent mark-ups of the Stock Purchase Agreement, incorporating input from Oliver Mackenzie, Harrison Wexford, and Leonard Cross;
• Drafting and revision of all ancillary transaction documents in coordination with the applicable partner lead;
• Leading the compilation and review of disclosure schedules, ensuring that all schedules are complete, accurate, and consistent with the diligence findings;
• Coordinating due diligence workstreams across the team, managing the due diligence request lists, overseeing data room review, and ensuring that diligence findings are promptly communicated to the relevant team members;
• Drafting board resolutions, officer's certificates, secretary's certificates, and closing certificates for both the buyer and seller sides;
• Managing the closing conditions tracking checklist and ensuring that all conditions precedent are satisfied or waived in a timely manner;
• Serving as the day-to-day counterpart to Jonathan Pratt, the lead associate at Zalcourt Archer & Cole LLP, on all document exchanges, scheduling matters, and working-level negotiations;
• Coordinating with Prescott Whitfield Insurance Brokers, Inc. (Amanda Chen-Kowalski) on the procurement of the representations and warranties insurance policy, including managing the underwriting process with the carrier and ensuring alignment of policy terms with the SPA indemnification provisions;
• Reviewing the financing commitment letter and credit agreement and maintaining the financing conditions checklist;
• Monitoring interim operating covenant compliance during the period between signing and closing; and
• Preparing the funds flow memorandum for signing and closing.
Estimated Hours: 600–750 hours (through closing)
4. Derek Okonkwo — Working Associate, Mergers & Acquisitions.
Hourly Rate: $795
Role and Responsibilities:
Derek Okonkwo will serve as the Working Associate on this transaction, providing substantial support across multiple due diligence workstreams and on transactional documentation. Mr. Okonkwo's specific responsibilities include:
• Conducting due diligence review across multiple workstreams, including corporate organization and capitalization, material contracts, litigation and contingent liabilities, insurance, environmental compliance, and employment and benefits matters;
• Preparing detailed research memoranda on key legal issues, including Delaware case law on material adverse effect definitions, specific performance remedies in acquisition agreements, stockholder consent procedures under DGCL Section 228, and other topics as assigned;
• Supporting Megan Chu in the drafting and revision of the Stock Purchase Agreement and the compilation and review of disclosure schedules;
• Providing drafting support for regulatory filings, including coordination with Stonebridge HSW Antitrust Advisors LLP on the HSR filing narrative and Item 4 document preparation;
• Assisting with the competitive overlap analysis for antitrust purposes and coordinating the collection of Item 4(c) and 4(d) documents from Penterra;
• Preparing individual due diligence memoranda for each assigned workstream, summarizing findings, identifying risks, and recommending appropriate representations, warranties, and indemnification provisions;
• Assisting with closing logistics, including document assembly, execution coordination, and preparation of the closing binder; and
• Conducting the stockholder consent process analysis under DGCL Section 228, including preparation of the form of written consent and analysis of the required approval thresholds.
Estimated Hours: 500–650 hours (through closing)
5. Leonard Cross — Specialist Partner, Tax.
Hourly Rate: $1,650
Role and Responsibilities:
Leonard Cross will serve as the specialist tax partner on this transaction, providing comprehensive tax due diligence and structuring advice. Mr. Cross's specific responsibilities include:
• Conducting tax due diligence, including a thorough review of Veridian's federal and state income tax returns for all open tax years, analysis of the estimated $312 million in federal NOL carryforwards, and assessment of any potential tax exposures;
• Performing a detailed Section 382 ownership change analysis, including an evaluation of the 2020 Series C financing round that is believed to have triggered an ownership change, resulting in a limitation on approximately $148 million of pre-change NOLs at an estimated annual limitation of approximately $5.9 million per year;
• Advising on the optimal transaction structure from a tax perspective, including a comparative analysis of a stock purchase versus an asset purchase and an assessment of whether a Section 338(h)(10) election would be beneficial given the existing NOLs and the Section 382 limitation;
• Drafting and negotiating the tax representations and warranties in the SPA, including representations regarding the Target's tax return filing history, tax payment compliance, NOL carryforward amounts, and the absence of tax liens or pending tax proceedings;
• Structuring and negotiating the tax indemnification provisions in the SPA, including the allocation of liability for pre-closing tax periods and the mechanics for tax contest provisions;
• Conducting a state tax nexus analysis for key jurisdictions, including Massachusetts, California, and Maryland, to assess Veridian's state income tax compliance and any potential exposure;
• Reviewing Veridian's R&D tax credit claims and assessing the availability and supportability of such credits;
• Drafting and negotiating the transfer tax provisions of the SPA (anticipated to be Section 6.8);
• Structuring the pre-closing tax period indemnification provisions, including the proration methodology and straddle period allocation; and
• Coordinating directly with Elaine Sato, the tax partner at Zalcourt Archer & Cole LLP representing the sellers, on all tax-related provisions of the SPA and ancillary documents.
Estimated Hours: 80–120 hours (through closing)
B. External Counsel Coordination
1. Stonebridge HSW Antitrust Advisors LLP.
Office: 1440 New York Avenue NW, Suite 700, Washington, DC 20005
Lead Partner: Martin Prumvane
Role: Stonebridge HSW Antitrust Advisors LLP ("Stonebridge HSW") serves as antitrust counsel to Penterra on this transaction. Stonebridge HSW is responsible for all aspects of the antitrust workstream, including the preparation and filing of the HSR Act pre-merger notification, preparation of Item 4 documentary submissions, serving as the primary liaison with the Federal Trade Commission and the Department of Justice Antitrust Division, and providing a comprehensive antitrust risk assessment.
Coordination Protocol: Oliver Mackenzie and Derek Okonkwo will serve as the primary C&H contacts for Stonebridge HSW. Derek Okonkwo will be responsible for day-to-day coordination with Martin Prumvane and his team, including the preparation of the competitive overlap analysis, the collection of Item 4(c) and 4(d) documents from Penterra, and the review of the HSR filing narrative. Oliver Mackenzie will be consulted on all strategic antitrust matters and will participate in any substantive discussions with the reviewing agency.
Anticipated Timing: The HSR filing is targeted for mid- to late April 2024. The initial thirty (30) day waiting period under the HSR Act will commence upon filing. Given the clinical-stage nature of the Target and the limited competitive overlap between Penterra's existing product portfolio and Veridian's pipeline candidates in the immuno-oncology space, we anticipate a low level of antitrust risk and believe there is a reasonable basis to expect early termination of the waiting period. However, the team should remain prepared for the possibility of substantive engagement with the reviewing agency.
Budget: Stonebridge HSW's fees for this engagement are estimated at $250,000 to $400,000. This estimate is based on Stonebridge HSW's separate engagement with Penterra and is not included within the C&H fee budget. The estimate assumes a standard HSR filing process without a second request.
C. Other Advisors (Non-Legal, Engaged by Client)
In addition to legal counsel, Penterra has engaged or is expected to engage several non-legal advisors in connection with this transaction. The C&H deal team will coordinate with each of these advisors as described below.
1. Garrison Zanthor & Co., LLC — Kevin Driscoll, Managing Director, 383 Madison Avenue, New York, New York 10179. Garrison Zanthor serves as Penterra's financial advisor for the transaction and is responsible for valuation analysis, the preparation and delivery of a fairness opinion to the Penterra Board of Directors, and negotiation support. C&H will coordinate closely with Garrison Zanthor on transaction structure, board presentation materials, and the timing and content of the fairness opinion. Oliver Mackenzie and Megan Chu will serve as the primary C&H contacts for Garrison Zanthor.
2. Broadleaf Scientific Consulting LLC — Dr. Raymond Kapoor, Managing Director, 225 Franklin Street, Suite 1900, Boston, Massachusetts 02110. Broadleaf has been engaged by Penterra as a clinical and scientific due diligence advisor, with the engagement commencing on March 18, 2024. Broadleaf will conduct an independent assessment of Veridian's clinical pipeline, including the VRD-4187 Phase II trial data and the VeriTCE platform technology. C&H will coordinate with Broadleaf to integrate scientific diligence findings into the legal risk assessment, with particular attention to the implications for the MAE definition, closing conditions, and interim operating covenants. Megan Chu will serve as the primary C&H contact for Broadleaf, with Derek Okonkwo providing supporting coordination on regulatory matters.
3. Prescott Whitfield Insurance Brokers, Inc. — Amanda Chen-Kowalski, Managing Director. Prescott Whitfield has been engaged as the representations and warranties insurance broker for this transaction. Megan Chu will coordinate with Prescott Whitfield on the procurement of a buyer-side R&W insurance policy, the management of the underwriting process with the selected carrier, and the alignment of the policy terms and conditions with the indemnification provisions of the SPA.
4. Northbridge Accounting Group LLP — Patrick Calloway, Engagement Partner. Northbridge serves as Veridian's independent auditor and has audited Veridian's financial statements for fiscal years 2021 through 2023. Leonard Cross will review the audited financial statements and will coordinate any accounting-related diligence questions through Zalcourt Archer & Cole, as appropriate.
5. Tarrant & Co. — Diana Rourke, Engagement Partner. Clearwater serves as Penterra's independent registered public accounting firm. C&H will coordinate with Clearwater as necessary regarding any financial disclosures that Penterra may be required to make in connection with the transaction, including any required current report filings on Form 8-K.
III. WORKSTREAM BREAKDOWN AND RESPONSIBILITY MATRIX
This Section sets forth the detailed workstream breakdown for each phase of the transaction, identifying the lead and supporting team members for each task and the key deliverables associated with each workstream. The deal team should use this Section as a working reference throughout the engagement.
A. Phase 1: Due Diligence (March–May 2024)
The due diligence phase is expected to be intensive given the clinical-stage nature of the Target, the complexity of its capitalization, and the significance of its intellectual property portfolio. The following table sets forth the principal due diligence workstreams, lead assignments, supporting personnel, and key deliverables.
Due Diligence Focus Areas. Given that Veridian is a clinical-stage company with $0 in fiscal year 2023 revenue and a net loss of ($87.3 million), the due diligence effort will focus heavily on the following areas:
Pipeline Assets. The VRD-4187 lead candidate and the proprietary VeriTCE platform represent the core value drivers for this acquisition. Megan Chu will lead the intellectual property and regulatory due diligence workstreams and will work closely with Broadleaf Scientific Consulting to ensure that the legal analysis is informed by the scientific assessment. Key focus areas will include patent coverage and freedom-to-operate analysis, the status and terms of any third-party license agreements, regulatory exclusivity and data protection periods, and the status of the Marlowe Asset Management-2 trial (IND 154832, NCT05837291, with 387 enrolled patients across 42 clinical sites).
intellectual Property Portfolio. Given that the Target's value is substantially dependent on its proprietary technology, the IP due diligence workstream will be one of the most critical components of the overall diligence effort. Megan Chu will conduct a comprehensive review of Veridian's patent portfolio, pending patent applications, trade secrets, know-how, and any IP-related agreements, including in-license and out-license agreements, collaboration agreements, and material transfer agreements.
Capitalization Complexity. Veridian's capital structure includes Series A through Series D preferred stock, representing approximately $420 million in aggregate venture capital financing. Derek Okonkwo will lead the corporate organization and capitalization workstream, which will involve a detailed review of the Target's certificate of incorporation (including all amendments and certificates of designation), equity incentive plans, outstanding option and warrant grants, the ESOP structure, and any anti-dilution or other protective provisions that may affect the mechanics of the purchase price allocation.
148-Employee Workforce. Derek Okonkwo will lead the employment and benefits due diligence workstream, which will include a review of all employment agreements, offer letters, severance arrangements, change-of-control provisions, non-competition and non-solicitation agreements, employee benefit plans, and compliance with applicable labor and employment laws.
Each due diligence memorandum should follow the standard C&H format, including an executive summary, a description of the documents reviewed, key findings and observations, identified risks, and recommended representations, warranties, and indemnification provisions for the SPA. All workstream memoranda are to be completed no later than May 31, 2024, with preliminary findings communicated to Oliver Mackenzie on a rolling basis as they become available.
B. Phase 2: Transaction Documentation (April–June 2024)
The preparation, negotiation, and finalization of the definitive transaction documents will constitute the most substantive legal workstream of this engagement. The following table sets forth the key documents, lead drafters, reviewers, and target completion dates.
Key Negotiation Points. Based on our experience with comparable clinical-stage biotechnology acquisitions and our preliminary discussions with opposing counsel, we anticipate that the following issues will be among the most heavily negotiated provisions of the SPA:
Material Adverse Effect Definition and Carve-Outs. Given the clinical-stage nature of the Target, the MAE definition will be a critical provision. We expect the sellers to seek broad carve-outs, including for pandemic-related effects, general economic and industry conditions, and changes in law or accounting standards. We will seek a "disproportionate impact" exception to any general industry conditions carve-out, such that industry-wide developments that disproportionately affect Veridian relative to similarly situated companies would not be excluded from the MAE definition.
No-Shop Provision and Fiduciary Out Mechanics. We expect to include a standard no-shop provision restricting the Target from soliciting or engaging with competing acquisition proposals during the interim period. The sellers will likely seek a fiduciary out provision permitting the Target's Board to consider unsolicited superior proposals, subject to matching rights and termination fee obligations.
Indemnification Structure. Our target negotiating position on the key indemnification parameters is as follows: (i) an aggregate indemnification cap of twenty percent (20%) of the purchase price, which at a $900 million midpoint purchase price would equal $180 million; (ii) a tipping basket of one percent (1%) of the purchase price, or $9 million, below which no claims may be made; (iii) fundamental representations (including capitalization, organization, authority, and tax) to be subject to indemnification at one hundred percent (100%) of the purchase price, uncapped; and (iv) survival periods of eighteen (18) months for general representations and warranties, with fundamental representations and tax representations surviving until the expiration of the applicable statute of limitations plus sixty (60) days.
Termination Rights and Fees. We anticipate negotiation of a reverse termination fee payable by Penterra in the event of a buyer financing failure, as well as a Target termination fee payable in connection with any breach of the no-shop provision or exercise of a fiduciary out. The specific dollar amounts and trigger conditions will be negotiated in the context of the overall deal terms.
Specific Performance. We expect to seek a specific performance provision entitling Penterra to obtain specific performance of the Target's obligations under the SPA, including the obligation to consummate the closing, subject to satisfaction of all conditions precedent.
Closing Conditions. The closing conditions will include the bring-down of representations and warranties to a negotiated standard (we will seek an MAE-qualified bring-down for general representations), the absence of any material adverse effect, the receipt of HSR clearance, the delivery of all required closing certificates and other deliverables, and the satisfaction of any other conditions to be negotiated.
C. Phase 3: Financing (May–June 2024)
Penterra intends to finance the acquisition through a combination of a committed term loan facility and cash on hand. The anticipated financing structure is summarized below.
Financing Terms. The anticipated financing arrangement consists of a $500 million committed term loan facility provided by Summit Ridge Capital Partners (Philip Ostrander, lead) and Ironclad Trust Company, N.A. (Samantha Hwang), referenced under commitment letter CL-2024-PPCA-0607. Key terms of the facility are expected to include an interest rate of SOFR plus 225 basis points, a commitment fee of 0.35% per annum (approximately $1,750,000 per annum), and a ticking fee of 0.175% per annum commencing ninety (90) days after the execution of the SPA. The balance of the purchase price, estimated at approximately $400 million, will be funded from Penterra's cash on hand, which stood at approximately $2.1 billion as of the second quarter of 2024.
Megan Chu will take the lead on reviewing the commitment letter and credit agreement, marking up the financing documents, maintaining the financing conditions checklist, and coordinating with Summit Ridge and Ironclad. Oliver Mackenzie will be involved in any strategic discussions regarding the interplay between the financing conditions and the SPA closing conditions.
D. Phase 4: Regulatory (April–May 2024)
The HSR filing will be prepared and submitted by Stonebridge HSW, with C&H providing supporting coordination and document collection from Penterra. The applicable HSR filing fee, based on the anticipated deal value of approximately $900 million and the 2024 fee schedule, is $280,500. Derek Okonkwo will monitor the thirty-day waiting period and coordinate with Stonebridge HSW on any requests or communications from the reviewing agency. As noted above, we anticipate a low level of antitrust risk given the clinical-stage nature of the Target.
E. Phase 5: Representations and Warranties Insurance (May–June 2024)
Anticipated R&W Policy Terms. We expect to procure a buyer-side representations and warranties insurance policy with a policy limit of $180 million, matching the anticipated aggregate indemnification cap in the SPA. The self-insured retention under the policy is expected to be $9 million, consistent with the basket threshold. Based on current market conditions for comparable clinical-stage biotechnology acquisitions, we estimate a policy premium in the range of 2.0% to 2.5% of the policy limit, which would result in an estimated premium of approximately $3,500,000 to $4,500,000. The R&W underwriting process will be managed by Prescott Whitfield, with Atlas Indemnity (Graham Fielding, contact) identified as a potential lead carrier. Megan Chu will be responsible for ensuring that the policy terms are aligned with the indemnification provisions of the SPA.
F. Phase 6: Board Approvals and Signing (June 2024)
Oliver Mackenzie will lead the preparation and delivery of board presentation materials, working jointly with Garrison Zanthor (Kevin Driscoll) on valuation and strategic rationale. The board presentation will include a summary of the transaction terms, a discussion of the key legal risks and mitigants identified during due diligence, an overview of the indemnification structure and R&W insurance program, and the recommendation of Penterra's management and outside advisors. Megan Chu will prepare the board resolutions authorizing the execution of the SPA and the consummation of the transactions contemplated thereby. Derek Okonkwo will prepare a memorandum analyzing the stockholder consent process under DGCL Section 228, including the required approval thresholds and the mechanics for obtaining written consent from Veridian's stockholders.
G. Phase 7: Interim Period / Pre-Closing (June–Closing)
During the interim period between signing and closing, Megan Chu will be responsible for monitoring Veridian's compliance with the interim operating covenants set forth in the SPA. This will include regular communication with Jonathan Pratt at Zalcourt Archer & Cole to ensure that any actions by the Target that require Penterra's consent are identified and addressed in a timely manner. Derek Okonkwo will assist in maintaining the pre-closing conditions checklist and preparing the closing deliverables. Any requests by Veridian for consent to take actions outside the ordinary course of business during the interim period will be escalated to Oliver Mackenzie for review and decision in consultation with the Client.
H. Phase 8: Closing
Target Closing Date: Within 90 to 120 days of signing, with a target of September to October 2024. The Outside Date, as defined in the SPA, is anticipated to be December 10, 2024.
Megan Chu will prepare the final funds flow memorandum, which will set forth the wire transfer instructions, the allocation of the purchase price among the various classes and series of Veridian stock, the escrow deposit amount, and the net amounts payable to each stockholder. Harrison Wexford will review and approve the funds flow memorandum prior to distribution to the parties. Escrow funding will be coordinated with Fidelis National Escrow Corp. (Brian Mulcahy, contact). Following closing, Derek Okonkwo will be responsible for assembling the closing binder, including executed copies of all transaction documents, closing certificates, and other deliverables.
IV. BUDGET ESTIMATE
A. Calderwood & Harkness Fee Estimate
The following table sets forth the estimated professional fees for each C&H timekeeper through a successful closing of the transaction. These estimates are based on our experience with comparable transactions and reflect our current assessment of the complexity and anticipated timeline of this engagement.
Important Note: This estimate reflects anticipated fees through a successful closing of the transaction. If the negotiation process involves significant additional complexity — for example, contested MAE issues, protracted negotiation of indemnification terms, or unexpected post-signing complications — fees could exceed the high end of this estimate. The fee range set forth above does not include any fees associated with post-closing indemnification claims, post-closing integration matters, or litigation of any nature.
Disbursements. In addition to professional fees, we estimate disbursements (including travel, printing, data room access fees, legal research database charges, courier services, and related expenses) of approximately $100,000 to $200,000 over the course of the engagement. We will endeavor to manage disbursements efficiently and will flag any significant expense items to the Client in advance.
B. External Counsel and Advisor Budget (Penterra's Account, Not C&H Fees)
For the Client's reference and planning purposes, the following table summarizes the estimated costs for external counsel and advisors engaged by Penterra in connection with this transaction. These costs are not included within the C&H fee budget and are billed directly to Penterra by the respective service providers.
The above estimates are based on our current understanding of the advisor engagements and fee arrangements. Actual costs may vary depending on the complexity of the work performed, the duration of the engagement, and the ultimate outcome of the transaction.
C. Budget Assumptions and Caveats
The fee estimates set forth in this memorandum are based on the following assumptions and are subject to the following caveats:
1. Cooperative Bilateral Negotiation. The budget assumes a cooperative, bilateral negotiation process between Penterra and Veridian (and their respective advisors) without contested auction dynamics. If the process becomes competitive or if the sellers engage in parallel negotiations with other potential acquirors, additional legal work may be required.
2. HSR Clearance Without Second Request. The budget assumes that HSR clearance will be obtained within the initial thirty-day waiting period, potentially through early termination, and that the reviewing agency will not issue a second request for additional information. A second request would significantly increase both the C&H and Stonebridge HSW budgets.
3. No Material Litigation or Government Investigation. The budget assumes that no material litigation, regulatory enforcement action, or government investigation arises with respect to either party during the pre-closing period that would require significant additional legal work.
4. Stockholder Consent Obtained Without Difficulty. The budget assumes that Veridian's stockholders will deliver written consent to the transaction without material delay or opposition. Given the concentrated ownership structure (Crestline Ventures at 28.3%, Boreal Health Partners Fund III at 19.7%, and Apex Growth Equity Fund II at 14.1% represent more than 60% of the outstanding equity), we expect that the requisite stockholder approval will be obtained promptly following signing.
5. Post-Closing Matters Excluded. The budget does not account for post-closing integration, indemnification disputes, earnout calculations (if any), or any litigation that may arise following the closing of the transaction. A separate staffing plan and budget will be prepared for any such matters as needed.
6. Clinical Trial Risk. Clinical trial developments during the interim period between signing and closing could introduce unanticipated complexity and additional legal work. For example, adverse clinical results from the Marlowe Asset Management-2 trial, an FDA clinical hold, or other regulatory action could require detailed analysis of whether such developments constitute a material adverse effect, the impact on closing conditions, the potential exercise of termination rights, and related matters. Such contingencies could result in significant additional partner and associate hours beyond the estimates provided herein.
7. Budget Review at Key Milestones. The budget will be formally reviewed and updated at the following key milestones: (i) completion of the due diligence phase (target: late May 2024); (ii) execution of the SPA; and (iii) the occurrence of any material interim period development that has a significant impact on the scope of work required.
V. COMMUNICATION AND REPORTING PROTOCOL
Effective communication among the C&H deal team, the Client, and the various external advisors is essential to the efficient execution of this transaction. The following protocols will govern communications throughout the engagement.
Weekly Status Calls with Penterra Deal Team. Oliver Mackenzie and Megan Chu will lead weekly status calls with the Penterra deal team, including Thomas F. Holbrook (General Counsel) and Natalie Reiner (SVP, Corporate Development). These calls will cover the status of all workstreams, upcoming milestones, open issues requiring Client input or decision, and any other matters of significance. Additional participants will be included on these calls as appropriate depending on the topics to be discussed.
Bi-Weekly Written Status Updates. Megan Chu will prepare bi-weekly written status updates to Thomas F. Holbrook summarizing the progress of the engagement, key developments, and anticipated next steps. These updates will be reviewed by Oliver Mackenzie prior to distribution.
Real-Time Escalation. Any material developments or counterparty disputes should be escalated to Oliver Mackenzie in real time, without waiting for the next scheduled status call or written update. This includes, without limitation, any material diligence findings, disputed negotiation positions, communications from regulatory agencies, adverse clinical trial developments, and any other matters that may affect the strategic direction or risk profile of the transaction.
Coordination with Garrison Zanthor. Oliver Mackenzie and Megan Chu will coordinate regularly with Kevin Driscoll at Garrison Zanthor & Co. on valuation matters, the timing and delivery of the fairness opinion, and the preparation of board presentation materials. The frequency and format of these interactions will be determined as the transaction progresses and will be adapted to the needs of each phase.
Counterparty Counsel Coordination. Megan Chu will serve as the day-to-day counterpart to Jonathan Pratt, the lead associate at Zalcourt Archer & Cole LLP, on all document exchanges, scheduling matters, and working-level negotiations. Oliver Mackenzie will engage directly with Rebecca Whitmore, lead partner at Zalcourt Archer & Cole, on all senior-level negotiations and strategic discussions. These channels of communication should be observed consistently; team members should avoid ad hoc communications with opposing counsel that have not been coordinated through the designated points of contact.
Tax Coordination. Leonard Cross will coordinate directly with Elaine Sato, the tax partner at Zalcourt Archer & Cole, on all tax-related provisions of the SPA and ancillary documents. Mr. Cross will keep Oliver Mackenzie and Megan Chu informed of the progress of tax negotiations and will flag any issues that may have implications for the broader SPA negotiation.
Antitrust Coordination. Derek Okonkwo will serve as the primary C&H contact for Martin Prumvane at Stonebridge HSW on all HSR-related deliverables and day-to-day coordination. Oliver Mackenzie will be consulted on strategic antitrust matters.
Monthly Billing. Monthly billing statements will be prepared by Harrison Wexford and submitted to Catherine M. Burgess (CFO) and Thomas F. Holbrook (General Counsel) at Penterra in accordance with the billing terms of the engagement letter. Harrison Wexford will monitor fee accruals against the budget and will promptly notify Oliver Mackenzie if actual fees are trending materially above or below the budgeted range.
VI. ANTICIPATED TIMELINE AND KEY MILESTONES
The following table sets forth the anticipated timeline for the transaction, including key milestones, target dates, and lead team members. This timeline is subject to change as the transaction progresses and will be updated at key milestones.
The timeline above reflects our current best estimate based on the information available to date. Actual timing may be affected by the pace of negotiations, the duration of the due diligence process, the HSR review timeline, the availability of Penterra's Board for the approval meeting, and other factors outside of C&H's control. Megan Chu will maintain a detailed project management timeline with specific task-level deadlines and will circulate updates to the deal team on a regular basis.
VII. POTENTIAL CONTINGENCIES AND ADDITIONAL STAFFING NEEDS
While the staffing plan and budget set forth in this memorandum are designed to cover the anticipated scope of work for this transaction, a number of potential contingencies could require additional staffing and incremental budget. The deal team should be aware of these contingencies and should alert Oliver Mackenzie promptly if any of them appear likely to materialize.
HSR Second Request. If the HSR review process results in the issuance of a second request for additional information by the FTC or DOJ — which we consider unlikely given Veridian's clinical-stage status and the limited competitive overlap with Penterra's existing portfolio — the antitrust workstream would become significantly more resource-intensive. Additional staffing from Stonebridge HSW would be required, and C&H associate time (primarily Derek Okonkwo and potentially additional associates) would increase substantially. The incremental budget impact of a second request is estimated at $500,000 to $1,000,000, inclusive of both Stonebridge HSW and C&H incremental fees.
Adverse Clinical Developments. If material adverse developments occur with respect to Veridian's clinical programs during the pre-closing period — for example, adverse trial data for VRD-4187, an FDA clinical hold on IND 154832, serious adverse event reports, or other regulatory actions — C&H may need to conduct detailed analysis of the MAE provisions of the SPA, the implications for closing conditions, and Penterra's termination rights. Depending on the nature and severity of such developments, this analysis could require significant additional partner and associate hours and could involve engagement of specialist FDA regulatory counsel.
Post-Closing Matters. Post-closing indemnification claims, purchase price adjustments, escrow disputes, and integration matters are not covered by this staffing plan. If and when the transaction closes, a separate staffing plan and budget will be prepared for any post-closing workstreams, including any claims against the escrow fund, R&W insurance claims, and integration-related legal work.
Litigation Contingency. If the transaction becomes contested — for example, if a competing bidder emerges and Veridian's Board exercises a fiduciary out, if either party threatens litigation during the interim period, or if a stockholder brings a challenge to the transaction — the C&H litigation group may need to be engaged. Any such engagement would be subject to a separate staffing plan and budget and would be coordinated between Oliver Mackenzie and the relevant litigation partner.
Additional Specialist Counsel. If additional specialist counsel is needed in the course of the engagement — for example, FDA regulatory counsel to advise on specific regulatory matters, California employment law counsel to address state-specific employment issues arising from Veridian's operations, or foreign counsel for any international aspects of the clinical trial program — such engagements will be coordinated through Megan Chu with Oliver Mackenzie's approval. The costs of any such engagements would be in addition to the fee estimates set forth in this memorandum.
VIII. ADMINISTRATIVE MATTERS
The following administrative details govern the management of this engagement:
Matter Number: 1018-00008
Responsible Partner: Oliver Mackenzie
Billing Partner: Harrison Wexford
Client Billing Contact: Catherine M. Burgess, Chief Financial Officer, and Thomas F. Holbrook, General Counsel, Penterra Pharmaceuticals Corp.
Billing Terms: Net thirty (30) days; monthly invoicing in accordance with the terms of the engagement letter.
Engagement Letter: The engagement letter was executed on February 14, 2024, between Calderwood & Harkness LLP and Penterra Pharmaceuticals Corp.
Conflicts Clearance: Conflicts clearance was completed on February 13, 2024. No conflicts were identified with respect to Veridian Biosciences, Inc., Crestline Ventures, Boreal Health Partners Fund III, Apex Growth Equity Fund II, or Zalcourt Archer & Cole LLP. If any conflicts issues arise during the course of the engagement (for example, through the identification of new counterparties or interested parties), they should be reported to Oliver Mackenzie and the C&H conflicts department immediately.
Document Management: All matter documents are to be maintained on Calderwood & Harkness's secure document management system. Data room review notes are to be organized by diligence workstream, with a consistent filing convention to be established by Megan Chu at the outset of the diligence phase. All team members should ensure that documents are filed promptly and accurately to facilitate efficient access by the entire deal team.
Time Entry: All timekeepers assigned to this matter are required to record their time on a daily basis with detailed narrative descriptions referencing the specific workstream(s) to which the time relates. Detailed time narratives facilitate accurate billing, enable effective budget monitoring, and ensure compliance with client billing guidelines. Harrison Wexford will review time entries periodically to ensure consistency and completeness.
IX. APPROVAL AND DISTRIBUTION
This memorandum is prepared for the internal use of Calderwood & Harkness LLP and is not intended for distribution to the Client or any third party. Distribution is limited to the deal team members named in the header of this memorandum: Harrison Wexford, Megan Chu, Derek Okonkwo, and Leonard Cross.
Oliver Mackenzie will share the budget range with Thomas F. Holbrook upon request, consistent with our obligation to provide the Client with a reasonable estimate of anticipated legal fees. However, the detailed staffing plan, role assignments, and internal hourly rate information contained in this memorandum are to remain internal to Calderwood & Harkness LLP.
The budget and staffing allocations set forth herein will be formally reviewed and updated following the completion of the due diligence phase (target: late May 2024). Additional interim updates may be provided if material changes in the scope or complexity of the engagement warrant revision prior to that date.
All deal team members should acknowledge receipt of this memorandum and confirm their availability to meet the estimated time commitments described herein. Please direct any questions regarding your assigned responsibilities, the budget, or the coordination protocols to me directly.
OLIVER MACKENZIE Partner, Mergers & Acquisitions Calderwood & Harkness LLP 200 Park Avenue, 42nd Floor New York, New York 10166
Telephone: (212) 555-4100
Email: omackenzie@calderwoodharkness.com
PRIVILEGED & CONFIDENTIAL — ATTORNEY WORK PRODUCT This memorandum is intended solely for the internal use of the Calderwood & Harkness LLP deal team members identified herein. Do not copy, distribute, or disclose without the prior written consent of Oliver Mackenzie.
FROM: | Oliver Mackenzie, Partner, Mergers & Acquisitions
TO: | Harrison Wexford, Partner, Mergers & Acquisitions; Megan Chu, Associate, Mergers & Acquisitions; Derek Okonkwo, Associate, Mergers & Acquisitions; Leonard Cross, Partner, Tax
DATE: | February 16, 2024
RE: | Staffing Plan and Budget — Proposed Acquisition of Veridian Biosciences, Inc. by Penterra Pharmaceuticals Corp.
MATTER NO.: | 1018-00008
Workstream | Lead | Support | Key Deliverable
Corporate Organization / Capitalization | Derek Okonkwo | Megan Chu | Corporate DD Memorandum
Intellectual Property | Megan Chu | Derek Okonkwo | IP DD Memorandum
Material Contracts | Megan Chu | Derek Okonkwo | Material Contracts Review Memo
Regulatory / FDA Compliance | Megan Chu | Derek Okonkwo; coordinate with Broadleaf | Regulatory DD Memorandum
Employment & Benefits | Derek Okonkwo | Megan Chu | Employment DD Memorandum
Environmental | Derek Okonkwo | — | Environmental DD Memorandum
Tax | Leonard Cross | Derek Okonkwo (support) | Tax DD Memorandum
Litigation / Contingent Liabilities | Derek Okonkwo | — | Litigation DD Memorandum
Insurance | Derek Okonkwo | — | Insurance DD Memorandum
Board Summary / Diligence Report | Oliver Mackenzie | Megan Chu; all workstream leads | Diligence Summary Memo to Board
Document | Lead Drafter | Reviewer / Negotiator | Target Completion
Stock Purchase Agreement (initial draft) | Megan Chu | Oliver Mackenzie, Harrison Wexford | Mid-April 2024
SPA mark-ups and negotiations | Megan Chu | Oliver Mackenzie (lead negotiator) | April–June 2024
Disclosure Schedules (review/compilation) | Megan Chu, Derek Okonkwo | Oliver Mackenzie | Concurrent with SPA finalization
Escrow Agreement | Harrison Wexford | Oliver Mackenzie | Late May 2024
Stockholder Representative Agreement | Harrison Wexford | Oliver Mackenzie | Late May 2024
Stockholder Written Consent Form | Megan Chu | Harrison Wexford | Early June 2024
Non-Competition Agreements (Marek, Chandrasekaran) | Harrison Wexford | Oliver Mackenzie | Late May 2024
Transition Services Agreement | Harrison Wexford | Megan Chu | Early June 2024
Closing Certificates (Buyer & Seller forms) | Megan Chu | Harrison Wexford | Early June 2024
Board Resolutions | Megan Chu | Oliver Mackenzie | Early June 2024
Secretary's / Officer's Certificates | Derek Okonkwo | Megan Chu | Early June 2024
Side Letter (Financing Cooperation) | Megan Chu | Oliver Mackenzie | Concurrent with SPA signing
Funds Flow Memorandum | Megan Chu | Harrison Wexford | Pre-signing / pre-closing
Task | Lead | Support
Review commitment letter (Summit Ridge / Ironclad, Ref. CL-2024-PPCA-0607) | Megan Chu | Oliver Mackenzie
Mark-up credit agreement | Megan Chu | Oliver Mackenzie, Harrison Wexford
Fee letter review | Megan Chu | Harrison Wexford
Financing conditions checklist | Megan Chu | Derek Okonkwo
Coordination with Summit Ridge Capital Partners (Philip Ostrander) and Ironclad Trust Company, N.A. (Samantha Hwang) | Megan Chu | Oliver Mackenzie
Task | Lead | Support
HSR narrative / Item 4 documents | Stonebridge HSW (Martin Prumvane) | Derek Okonkwo, Megan Chu
HSR filing transmittal | Megan Chu | Derek Okonkwo
Antitrust risk assessment | Stonebridge HSW | Oliver Mackenzie
HSR waiting period monitoring | Derek Okonkwo | —
Task | Lead | Support
Coordinate with Prescott Whitfield (Amanda Chen-Kowalski) on broker submissions | Megan Chu | Derek Okonkwo
Review R&W policy terms / negotiate with Atlas Indemnity (Graham Fielding) | Megan Chu | Oliver Mackenzie
Align SPA indemnification provisions with R&W policy | Megan Chu | Oliver Mackenzie
Task | Lead | Support
Board presentation materials (joint with Garrison Zanthor) | Oliver Mackenzie | Megan Chu
Board resolutions (authorizing SPA execution) | Megan Chu | Derek Okonkwo
Signing logistics and execution | Megan Chu | Derek Okonkwo
Stockholder consent process analysis (DGCL § 228) | Derek Okonkwo | Megan Chu
Task | Lead | Support
Interim operating covenant compliance monitoring | Megan Chu | Derek Okonkwo
Pre-closing conditions checklist | Megan Chu | Derek Okonkwo
Closing deliverable preparation | Megan Chu | Derek Okonkwo
Consent requests (if any material actions by Veridian) | Megan Chu | Oliver Mackenzie
Task | Lead | Support
Final funds flow memorandum | Megan Chu | Harrison Wexford
Closing certificate finalization | Megan Chu | Derek Okonkwo
Escrow funding coordination with Fidelis National Escrow Corp. (Brian Mulcahy) | Megan Chu | Harrison Wexford
Closing binder assembly | Derek Okonkwo | Megan Chu
Timekeeper | Rate ($/hr) | Est. Hours (Low) | Est. Hours (High) | Fee Est. (Low) | Fee Est. (High)
Oliver Mackenzie (Partner) | $1,850 | 250 | 325 | $462,500 | $601,250
Harrison Wexford (Partner) | $1,750 | 175 | 225 | $306,250 | $393,750
Megan Chu (Associate) | $985 | 600 | 750 | $591,000 | $738,750
Derek Okonkwo (Associate) | $795 | 500 | 650 | $397,500 | $516,750
Leonard Cross (Partner, Tax) | $1,650 | 80 | 120 | $132,000 | $198,000
Total C&H Fees | 1,605 | 2,070 | $1,889,250 | $2,448,500
Advisor | Estimated Cost
Stonebridge HSW Antitrust Advisors LLP (antitrust/HSR) | $250,000–$400,000
Broadleaf Scientific Consulting LLC (clinical DD) | $700,000–$1,000,000
Garrison Zanthor & Co. (advisory fee, payable regardless) | $2,500,000
Garrison Zanthor & Co. (success fee, contingent on closing) | $9,000,000
HSR filing fee | $280,500
R&W insurance premium (estimated) | $3,500,000–$4,500,000
R&W underwriting fee | $75,000
Financing commitment fee (annual; pro-rated through closing) | ~$1,750,000/yr
Total estimated third-party costs (excluding contingent fees) | ~$9,055,500–$10,705,500
Phase / Milestone | Target Date | Lead
Engagement and conflicts clearance | Completed Feb 13–14, 2024 | Mackenzie
NDA execution | Completed Mar 4, 2024 | Chu
IOI submission | Completed Mar 1, 2024 | Mackenzie
Data room access | Mar 11, 2024 | Chu / Okonkwo
Due diligence request list to Zalcourt Archer & Cole | Mar 6, 2024 (completed) | Chu
Broadleaf Scientific engagement | Mar 18, 2024 | Penterra (Reiner)
Due diligence review period | Mar 11 – May 31, 2024 | Chu / Okonkwo / Cross
SPA initial draft circulation | Mid-April 2024 | Chu / Mackenzie
Antitrust risk assessment | Early to mid-April 2024 | Stonebridge HSW / Okonkwo
HSR filing | Late April 2024 | Stonebridge HSW / Chu
SPA negotiations and mark-ups | April – early June 2024 | Mackenzie / Chu
HSR clearance (target: early termination) | Late May 2024 | Stonebridge HSW
Financing commitment letter execution | Earl

PRIVILEGED & CONFIDENTIAL ATTORNEY WORK PRODUCT

CALDERWOOD & HARKNESS LLP

INTERNAL MEMORANDUM

I. INTRODUCTION AND TRANSACTION OVERVIEW

II. DEAL TEAM COMPOSITION AND ROLE ASSIGNMENTS

III. WORKSTREAM BREAKDOWN AND RESPONSIBILITY MATRIX

IV. BUDGET ESTIMATE

V. COMMUNICATION AND REPORTING PROTOCOL

VI. ANTICIPATED TIMELINE AND KEY MILESTONES

VII. POTENTIAL CONTINGENCIES AND ADDITIONAL STAFFING NEEDS

VIII. ADMINISTRATIVE MATTERS

Record

Parties

Dates

Amounts