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PRIVILEGED & CONFIDENTIAL ATTORNEY WORK PRODUCT / ATTORNEY-CLIENT COMMUNICATION

CALDERWOOD & HARKNESS LLP 200 Park Avenue, 42nd Floor New York, NY 10166

MATERIAL CONTRACTS DUE DILIGENCE REVIEW MEMORANDUM

TO: Oliver Mackenzie, Partner, Mergers & Acquisitions Harrison Wexford, Partner, Mergers & Acquisitions

FROM: Megan Chu, Associate, Mergers & Acquisitions Derek Okonkwo, Associate, Mergers & Acquisitions

DATE: May 17, 2024

RE: Material Contracts Due Diligence Review — Veridian Biosciences, Inc.

CLIENT: Penterra Pharmaceuticals Corp.

MATTER NO.: 1018-00008

This memorandum is protected by the attorney-client privilege and the work product doctrine. It is prepared at the direction of and for the benefit of Penterra Pharmaceuticals Corp. in connection with the proposed acquisition of Veridian Biosciences, Inc. This memorandum is not intended for distribution to any third party without the prior written consent of Calderwood & Harkness LLP and Penterra Pharmaceuticals Corp.

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I. Executive Summary

This memorandum summarizes the findings of our review of the material contracts of Veridian Biosciences, Inc., a Delaware corporation (EIN 84-2193047) ("Veridian" or the "Company"), with its principal office located at 550 Gateway Drive, Cambridge, MA 02142, and its registered agent at Tidewater Registered Agents LLC, 838 Walker Road, Suite 21-2, Dover, DE 19904. This review has been conducted in connection with the proposed acquisition by Penterra Pharmaceuticals Corp. ("Penterra" or the "Buyer") of one hundred percent (100%) of the outstanding capital stock of Veridian for aggregate cash consideration of Nine Hundred Million Dollars ($900,000,000) (the "Transaction").

Access to the virtual data room was granted on March 11, 2024. The review has been conducted in coordination with Zalcourt Archer & Cole LLP, Veridian's outside counsel, which populated the virtual data room. The principal contacts at Zalcourt Archer & Cole LLP have been Rebecca Whitmore, Partner (lead outside counsel to Veridian) and Jonathan Pratt, Associate. Throughout the due diligence process, our team has engaged in regular correspondence and periodic conference calls with Veridian's legal and management teams to supplement the documentary record and to clarify ambiguities or gaps in the materials produced.

The contracts reviewed in connection with this memorandum encompass the following principal categories:

• Clinical research organization ("CRO") agreements governing the conduct of Veridian's clinical trials, including the pivotal Marlowe Asset Management-2 Phase II trial for lead asset VRD-4187;

• Contract manufacturing organization ("CMO") and supply agreements for the manufacture of drug substance and drug product;

• License and technology agreements, including the foundational exclusive license from Hargrove University for the VeriTCE platform technology;

• The real property lease for Veridian's principal office and laboratory facility at 550 Gateway Drive, Cambridge, MA 02142;

• Investor rights and stockholder agreements with Veridian's principal institutional investors — Crestline Ventures, LP, Boreal Health Partners Fund III, LP, and Apex Growth Equity Fund II, LP — as well as the Company's founders;

• Employment and consulting agreements with key executives and scientific advisory board members; and

• Miscellaneous commercial agreements, including IT and data hosting services, insurance contracts, and government grants.

Overall Assessment. The majority of Veridian's contractual arrangements are consistent with those typically maintained by a clinical-stage biotechnology company of its size and maturity. At the time of this review, Veridian employed approximately 148 full-time employees and maintained a pipeline of three clinical and preclinical programs built upon its proprietary VeriTCE bispecific T-cell engager platform. The Company's contractual profile reflects a focused operational footprint, with substantial outsourcing of clinical trial execution and drug manufacturing to third-party CROs and CMOs, and a relatively streamlined set of commercial vendor relationships.

Key Risk Areas. Notwithstanding the generally satisfactory condition of the Company's contractual portfolio, this review has identified several areas warranting heightened attention in the context of the Transaction:

1. Change-of-Control Provisions. Certain material contracts contain change-of-control provisions that grant counterparties termination rights, consent rights, or other remedies upon consummation of the Transaction. The most significant of these are found in the CRO Master Services Agreement with Meridian Clinical Research Associates LLC and the CMO Drug Substance Manufacturing and Supply Agreement with Celltide Biologics, Inc. These are discussed at length in Sections III and IV below and summarized in Section XI.

2. Anti-Assignment Clauses and Consent Requirements. Several contracts contain anti-assignment clauses that, depending on their precise drafting, may or may not be triggered by the stock purchase structure of the Transaction. Contracts with broadly defined assignment provisions that encompass change-of-control transactions are identified and analyzed in Section XII.

3. Key-Person Dependencies. The CRO Master Services Agreement contains a key-person clause referencing Dr. Priya Chandrasekaran, Veridian's Chief Scientific Officer, as the designated scientific liaison. The departure of Dr. Chandrasekaran would trigger renegotiation rights for the CRO. Given Dr. Chandrasekaran's critical role in the VRD-4187 program and the VeriTCE platform generally, retention of Dr. Chandrasekaran is important not only from a contractual perspective but also from a scientific and operational continuity standpoint.

Cross-References. This memorandum should be read in conjunction with the following companion due diligence memoranda prepared by our team and by subject-matter specialists within the firm:

• IP Due Diligence Memorandum (dated May 14, 2024)

• Environmental Due Diligence Memorandum (dated May 15, 2024)

• Insurance Due Diligence Memorandum (dated May 16, 2024)

• Regulatory and FDA Compliance Due Diligence Memorandum (dated May 20, 2024)

• Employment and Benefits Due Diligence Memorandum (dated May 22, 2024)

Each of these memoranda addresses specific aspects of Veridian's operations and contractual arrangements that fall within the respective subject-matter specialist's purview, and in certain instances the analysis in this memorandum is intentionally abbreviated where a more detailed treatment appears in one of those companion documents.

II. Methodology and Scope

A. Data Room Organization and Review Process

The contracts reviewed in connection with this memorandum were sourced from the virtual data room established and maintained by Zalcourt Archer & Cole LLP on behalf of Veridian. The data room was organized by Veridian's outside counsel into folders corresponding to the categories identified in the Preliminary Due Diligence Request List circulated by our team on March 6, 2024. Access to the data room was granted to Calderwood & Harkness LLP on March 11, 2024, and the data room has been periodically updated throughout the due diligence period as additional documents have been identified and uploaded by Veridian's counsel.

Our review team consisted of Megan Chu and Derek Okonkwo, Associates in the Mergers & Acquisitions practice group, with oversight and guidance from Oliver Mackenzie and Harrison Wexford, Partners. Where contracts implicated specialized subject-matter areas — including intellectual property, real estate, employment and benefits, tax, and environmental matters — relevant documents were referred to the appropriate practice group specialists within Calderwood & Harkness LLP for review, and the findings of those specialists are reflected in the companion memoranda referenced in Section I above.

B. Materiality Threshold

For purposes of this review, we applied the following materiality threshold to identify contracts warranting detailed analysis:

1. Financial Materiality. Any contract or series of related contracts with aggregate consideration or value exceeding Five Hundred Thousand Dollars ($500,000) over the life of the contract or on an annualized basis.

2. Change-of-Control and Assignment. Any contract containing a change-of-control provision, consent requirement, or anti-assignment clause that could be triggered by the Transaction, regardless of the financial value of the contract.

3. Long-Duration Agreements. All agreements with remaining terms exceeding twenty-four (24) months from the date of this review.

4. Program-Critical Agreements. All agreements material to the VRD-4187 program (Veridian's lead clinical asset) or to the VeriTCE platform technology, regardless of financial value or term.

These thresholds were developed in consultation with Penterra's business development team and were designed to capture all contracts that could have a material bearing on the value of the Transaction, the operations of Veridian post-closing, or the risk profile of the acquired business.

C. Supplemental Information

In addition to the documentary review, supplemental information was obtained through the following channels:

• Management Calls. Our team participated in management calls with Steven R. Kessler, Chief Financial Officer of Veridian, and Rachel Stein-Goldberg, General Counsel of Veridian, on April 3, 2024, April 18, 2024, and May 7, 2024, during which we obtained clarifications regarding the status, scope, and commercial context of various contractual relationships.

• Counsel-to-Counsel Correspondence. Ongoing correspondence with Zalcourt Archer & Cole LLP (Rebecca Whitmore and Jonathan Pratt) regarding document production, interpretation of specific contractual provisions, and outstanding items.

• Third-Party Diligence. Coordination with Broadleaf Scientific Consulting LLC (Dr. Raymond Kapoor, engagement lead) regarding alignment between contractual terms and the scientific and operational due diligence findings.

D. Limitations

This memorandum is based solely on the documents and information made available to us through the data room and through the supplemental channels described above. We have not conducted an independent verification of the completeness of the data room, and we have relied on the representations of Veridian's management and counsel that all material contracts have been produced. Certain documents remain outstanding as of the date of this memorandum, as described in Section XV below.

A complete schedule of all contracts reviewed is appended to this memorandum as Appendix A.

III. Clinical Research Organization (CRO) Agreements

Veridian outsources the conduct and management of its clinical trials to third-party CROs, which is standard practice for a clinical-stage biotechnology company of Veridian's size. The CRO agreements constitute a critical component of Veridian's contractual portfolio, particularly given the centrality of the ongoing Marlowe Asset Management-2 Phase II trial for VRD-4187 to the value proposition of the Transaction. We address each of the principal CRO-related agreements below.

A. Master Services Agreement with Meridian Clinical Research Associates LLC

Veridian is party to a Master Services Agreement (the "CRO MSA") with Meridian Clinical Research Associates LLC ("Meridian"), dated as of June 15, 2021, pursuant to which Meridian provides clinical trial management services for Veridian's pipeline programs, including VRD-4187. The CRO MSA serves as the umbrella framework agreement under which individual work orders are issued for specific clinical studies and programs.

Scope of Services. Under the CRO MSA, Meridian provides comprehensive clinical trial management services, including clinical site identification and management, patient recruitment and enrollment support, clinical monitoring and data management, regulatory submission support, adverse event reporting coordination, and related services. Meridian is Veridian's primary CRO partner and manages the conduct of the Marlowe Asset Management-2 Phase II trial, which is the most significant clinical program in Veridian's pipeline.

Term. The CRO MSA has an initial term of five (5) years, commencing on June 15, 2021, and expiring on June 14, 2026, subject to automatic renewal for successive one-year periods unless either party provides written notice of non-renewal at least one hundred eighty (180) days prior to the end of the then-current term. As of the date of this memorandum, the CRO MSA remains in its initial term and has not been amended or restated.

Financial Terms. The estimated annual spend under the CRO MSA, inclusive of all active work orders, is approximately $18 million to $22 million, making Meridian Veridian's single largest vendor relationship. Fees are structured on a combination of fixed-fee and time-and-materials bases, depending on the specific work order. Payment terms are net forty-five (45) days from invoice date.

Relevance to VRD-4187 Marlowe Asset Management-2 Trial. The CRO MSA is the primary vehicle through which Veridian conducts the Marlowe Asset Management-2 Phase II randomized, open-label clinical trial for VRD-4187 in small cell lung cancer (SCLC) (ClinicalTrials.gov Identifier: NCT05837291). The trial is currently active across forty-two (42) clinical sites in the United States and the European Union, with three hundred eighty-seven (387) patients enrolled as of the most recent status update. The Marlowe Asset Management-2 trial represents the most advanced and highest-value clinical program in Veridian's portfolio and is a principal driver of the Transaction valuation.

Change-of-Control Provision. The CRO MSA includes a change-of-control provision at Section 14.3 of the agreement. This provision grants Meridian the right to terminate the CRO MSA upon a "Change of Control" of Veridian, subject to the following conditions:

(i) Meridian must provide written notice to Veridian of its intent to exercise the termination right within ninety (90) days following the date on which Meridian first becomes aware of the Change of Control;

(ii) Following receipt of Meridian's notice, Veridian has a sixty (60)-day cure period during which Veridian may negotiate with Meridian to address any concerns underlying Meridian's decision to exercise the termination right; and

(iii) "Change of Control" is defined broadly to include (a) the acquisition by any person or group of persons of more than fifty percent (50%) of the voting securities of Veridian, (b) a merger or consolidation of Veridian with or into another entity in which the stockholders of Veridian immediately prior to such transaction hold less than fifty percent (50%) of the voting securities of the surviving entity, or (c) a sale of all or substantially all of the assets of Veridian.

The proposed Transaction, structured as an acquisition of 100% of Veridian's outstanding capital stock by Penterra, clearly falls within the scope of this definition. Accordingly, consummation of the Transaction would trigger Meridian's right to terminate the CRO MSA.

Consent / Waiver Strategy. Given the critical importance of the CRO MSA to the ongoing Marlowe Asset Management-2 trial and the broader VRD-4187 development program, we strongly recommend that Penterra and Veridian seek to obtain Meridian's written consent or waiver of its termination right prior to the closing of the Transaction. The sixty-day cure period provides some backstop protection, but reliance on the cure period alone introduces unnecessary risk, particularly given the scale of the Marlowe Asset Management-2 trial and the operational disruption that would result from a mid-trial CRO transition. We recommend that the outreach to Meridian be initiated promptly following the signing of the Stock Purchase Agreement ("SPA") and that the outreach be coordinated jointly between Veridian's management, Zalcourt Archer & Cole LLP, and our team.

Key-Person Clause. Section 7.2 of the CRO MSA designates Dr. Priya Chandrasekaran, Veridian's Chief Scientific Officer, as the Company's "Designated Scientific Liaison" for purposes of the CRO relationship. Under this provision, the departure or reassignment of Dr. Chandrasekaran from the Designated Scientific Liaison role triggers a renegotiation right for Meridian with respect to the scope, pricing, and timelines of any active work orders. While this provision does not give Meridian an outright termination right upon Dr. Chandrasekaran's departure, the renegotiation right introduces potential uncertainty and cost escalation risk. This issue is relevant to Penterra's post-closing integration planning and to the retention arrangements being negotiated with Dr. Chandrasekaran, which are addressed in the Employment and Benefits Due Diligence Memorandum.

intellectual Property Ownership. Article 10 of the CRO MSA provides that all clinical data, results, reports, analyses, and deliverables generated under the agreement are the sole and exclusive property of Veridian. Meridian retains no rights to any data, methods, protocols, or compounds, and all work performed by Meridian is treated as work made for hire to the maximum extent permitted by applicable law. Meridian has granted Veridian a broad assignment of any rights that may not qualify as work made for hire. This IP ownership framework is consistent with industry standard and presents no issues for the Transaction.

Insurance. Meridian is required to maintain clinical trial liability insurance with minimum coverage of $10 million per occurrence and $20 million in the aggregate, naming Veridian as an additional insured. Veridian's management has confirmed that certificates of insurance reflecting current coverage have been obtained and are on file.

Governing Law and Dispute Resolution. The CRO MSA is governed by the laws of the State of New York, without regard to principles of conflicts of law. Disputes are subject to binding arbitration administered by JAMS in New York, New York.

B. Work Order — Marlowe Asset Management-2 Phase II Trial

Pursuant to the CRO MSA, Veridian and Meridian executed Work Order No. VB-2022-003 (the "Marlowe Asset Management-2 Work Order"), dated as of March 1, 2022, for the conduct of the Marlowe Asset Management-2 Phase II randomized, open-label clinical trial of VRD-4187 in patients with relapsed or refractory small cell lung cancer (SCLC).

Trial Design and Scope. The Marlowe Asset Management-2 trial is a multi-center, randomized, open-label Phase II study evaluating the safety and efficacy of VRD-4187, a bispecific T-cell engager targeting DLL3 and CD3, in patients with SCLC who have progressed on at least one prior line of platinum-based chemotherapy. The trial is registered on ClinicalTrials.gov under Identifier NCT05837291. The work order covers the full lifecycle of the trial, including site initiation visits, patient screening and enrollment, ongoing clinical monitoring, Data Monitoring Committee ("DMC") administration, adverse event reporting, database lock, and clinical study report preparation.

Budget. The total budget for the Marlowe Asset Management-2 Work Order is approximately $34 million over the projected life of the trial. Costs are allocated across site initiation and management, patient enrollment milestones, clinical monitoring visits, data management, and regulatory submissions. As of the most recent financial reporting period, approximately $16.5 million has been incurred and paid under the work order.

Current Status. As of the date of this review, the Marlowe Asset Management-2 trial is active, with forty-two (42) clinical sites operational across the United States and the European Union. Patient enrollment is ongoing, with three hundred eighty-seven (387) patients enrolled out of a target enrollment of approximately five hundred (500) patients. Veridian management has indicated that enrollment is tracking ahead of the original timeline by approximately two to three months.

Termination Provisions. The Marlowe Asset Management-2 Work Order may be terminated by either party upon sixty (60) days' prior written notice. In the event of early termination by Veridian, Veridian is obligated to pay for all services performed through the effective date of termination, plus documented wind-down costs. Veridian management estimates that early termination wind-down costs would be in the range of $3 million to $5 million, depending on the stage of trial activities at the time of termination and the number of patients requiring transition to alternative care arrangements.

Assignment and Change-of-Control. The Marlowe Asset Management-2 Work Order expressly incorporates the assignment and change-of-control provisions of the CRO MSA. Accordingly, the change-of-control analysis set forth in Section III.A above applies equally to the work order. Any consent or waiver obtained from Meridian in respect of the CRO MSA should expressly extend to all active work orders, including the Marlowe Asset Management-2 Work Order.

C. Central Laboratory Services Agreement with Apex Diagnostics Services, Inc.

Veridian is party to a Central Laboratory Services Agreement (the "Central Lab Agreement") with Apex Diagnostics Services, Inc. ("Apex Diagnostics"), dated as of February 10, 2022, pursuant to which Apex Diagnostics provides central laboratory services supporting the Marlowe Asset Management-2 trial and Veridian's other pipeline programs.

Scope of Services. Under the Central Lab Agreement, Apex Diagnostics performs biomarker analysis, pharmacokinetics sample processing and analysis, immunogenicity testing, and other central laboratory services. The agreement covers sample collection logistics, laboratory testing protocols, data reporting, and regulatory compliance support for clinical laboratory operations conducted in accordance with CLIA and applicable CAP standards.

Term and Termination. The Central Lab Agreement has an initial term of three (3) years, commencing on February 10, 2022, and expiring on February 9, 2025, subject to automatic renewal for successive one-year periods unless either party provides ninety (90) days' prior written notice of non-renewal. Either party may terminate the agreement upon ninety (90) days' written notice for convenience, or immediately upon written notice in the event of a material breach that remains uncured for thirty (30) days following notice.

Financial Terms. The estimated annual spend under the Central Lab Agreement is approximately $4.5 million. Payment terms are net thirty (30) days from invoice date.

Change-of-Control. The Central Lab Agreement does not contain an express change-of-control provision. The agreement does include an anti-assignment clause at Section 12.4, which provides that neither party may assign the agreement without the prior written consent of the other party, "including by operation of law." However, as discussed in greater detail in Section XII below, the stock purchase structure of the Transaction should not constitute an "assignment" of the Central Lab Agreement, since Veridian will remain the contracting entity post-closing and no transfer of contractual rights occurs. We note, however, that the "including by operation of law" language introduces some ambiguity, and the interpretation of such clauses varies by jurisdiction. As a practical matter, we believe the risk of Apex Diagnostics asserting a breach of the anti-assignment clause is low, particularly given the stock purchase structure.

intellectual Property. All data and results generated by Apex Diagnostics under the Central Lab Agreement are the property of Veridian.

Risk Assessment. Low risk. No affirmative consent is required, and the stock purchase structure should not trigger the anti-assignment clause.

D. Safety and Pharmacovigilance Services Agreement with SafeGuard Pharma Services LLC

Veridian is party to a Safety and Pharmacovigilance Services Agreement (the "PV Agreement") with SafeGuard Pharma Services LLC ("SafeGuard"), dated as of August 1, 2021, for the provision of pharmacovigilance and drug safety services.

Scope of Services. SafeGuard provides comprehensive pharmacovigilance services, including adverse event tracking and case processing, serious adverse event ("SAE") reporting and expedited safety reporting, preparation and submission of MedWatch reports to the FDA, Suspected Unexpected Serious Adverse Reaction ("SUSAR") reporting to applicable regulatory authorities in the United States and the European Union, periodic safety update report preparation, and signal detection and risk management activities. These services are particularly relevant to the VRD-4187 program given the safety profile currently being monitored in the Marlowe Asset Management-2 trial, which includes cytokine release syndrome ("CRS") events and treatment-related deaths that require close surveillance and timely regulatory reporting.

Relationship to CRO MSA. SafeGuard is an affiliate of Meridian Clinical Research Associates LLC, and the PV Agreement was negotiated and executed concurrently with the CRO MSA. The PV Agreement is co-terminous with the CRO MSA, such that it expires upon expiration or termination of the CRO MSA.

Term. Co-terminous with the CRO MSA (initial expiration: June 14, 2026, subject to auto-renewal).

Financial Terms. The estimated annual spend under the PV Agreement is approximately $1.8 million.

Change-of-Control. The PV Agreement expressly incorporates the change-of-control provisions of the CRO MSA. Accordingly, any consent or waiver obtained from Meridian in respect of the CRO MSA should be drafted to encompass the PV Agreement as well.

Data Ownership. All pharmacovigilance data, safety databases, case reports, and related materials generated under the PV Agreement are the sole property of Veridian. SafeGuard retains no proprietary rights in any data or deliverables.

Risk Assessment. The risk profile of the PV Agreement mirrors that of the CRO MSA, given the affiliate relationship and the incorporation of the CRO MSA's change-of-control provisions. Consent from Meridian should resolve both agreements simultaneously.

IV. Contract Manufacturing Organization (CMO) and Supply Agreements

As a clinical-stage company, Veridian does not maintain internal manufacturing capabilities and relies entirely on third-party CMOs for the production of VRD-4187 drug substance and drug product. The CMO agreements are critical to the continued supply of clinical-grade material for the Marlowe Asset Management-2 trial and any future registration or commercial manufacturing activities.

A. Manufacturing and Supply Agreement — Drug Substance (Celltide Biologics, Inc.)

Veridian is party to a Manufacturing and Supply Agreement (the "Drug Substance MSA") with Celltide Biologics, Inc. ("Celltide"), dated as of January 15, 2022, for the manufacture of VRD-4187 drug substance. VRD-4187 is a bispecific T-cell engager protein manufactured using Veridian's proprietary VeriTCE platform process, and the Drug Substance MSA governs the production of this active pharmaceutical ingredient at clinical scale.

Manufacturing Facility. Celltide manufactures VRD-4187 drug substance at its biologics manufacturing facility located in Research Triangle Park, North Carolina. The facility is registered with the FDA and has been inspected within the past two years with no Form 483 observations material to Veridian's programs, as confirmed by Veridian's management during the April 18, 2024 management call.

Term. The Drug Substance MSA has an initial term of five (5) years, commencing on January 15, 2022, and expiring on January 14, 2027, with two (2) consecutive two-year renewal options exercisable at Veridian's election upon one hundred eighty (180) days' prior written notice. If both renewal options are exercised, the agreement could extend through January 14, 2031.

Financial Terms. The estimated annual spend under the Drug Substance MSA is approximately $12 million to $15 million for clinical-grade supply, depending on batch volume and scheduling. The agreement provides for batch pricing on a cost-plus basis, with pricing adjustments permitted annually based on changes in raw material costs and manufacturing indices, subject to a cap of five percent (5%) per annum.

Change-of-Control Provision. Section 16.2 of the Drug Substance MSA contains a change-of-control consent requirement. The provision states as follows:

"Veridian shall not undergo a Change of Control without the prior written consent of Celltide, which consent shall not be unreasonably withheld, conditioned, or delayed. For purposes of this Agreement, 'Change of Control' means the acquisition by any person or group of persons, directly or indirectly, of fifty percent (50%) or more of the equity interests or voting power of Veridian, whether by merger, consolidation, stock purchase, tender offer, or otherwise."

The proposed Transaction clearly falls within this definition. Accordingly, Veridian must obtain Celltide's prior written consent before closing. The "not to be unreasonably withheld" standard provides a measure of protection against an arbitrary refusal of consent, but it does not eliminate the need to obtain consent affirmatively. We recommend that outreach to Celltide be initiated promptly following the signing of the SPA.

Technology Transfer Provisions. Article 8 of the Drug Substance MSA contemplates the possibility of a technology transfer of the VRD-4187 manufacturing process to a second-source CMO at Veridian's election. The agreement provides that if Veridian elects to initiate a technology transfer, Celltide will cooperate in good faith to facilitate the transfer, and Veridian will pay Celltide a technology transfer milestone payment of Two Million Five Hundred Thousand Dollars ($2,500,000) upon completion of the transfer. This provision is relevant to Penterra's post-closing supply chain planning and risk mitigation strategy, as qualification of a second-source manufacturer would reduce single-source dependency.

intellectual Property. Under Article 9 of the Drug Substance MSA, Celltide receives a limited, non-exclusive license to Veridian's manufacturing process intellectual property solely for the purpose of performing its obligations under the agreement. The license is non-transferable and terminates automatically upon expiration or termination of the agreement. All improvements, modifications, or enhancements to the manufacturing process developed by Celltide in the course of performing under the agreement, to the extent such improvements are based on or derived from Veridian's proprietary technology, are assigned to Veridian. Celltide retains ownership of its pre-existing background intellectual property and any improvements thereto that are not derived from Veridian's technology.

Minimum Purchase Obligations. Beginning in Year 3 of the agreement (i.e., the calendar year commencing January 15, 2024), Veridian has minimum annual purchase commitments of Eight Million Dollars ($8,000,000). If Veridian's actual purchases in any contract year fall below the minimum, Veridian is obligated to pay a shortfall payment equal to the difference between the minimum and the actual purchases for that year. As of the date of this review, Veridian's management has represented that the Company's projected spend for 2024 is expected to exceed the minimum commitment, and no shortfall payment has been triggered to date.

Quality Agreement. A separate Quality Agreement between Veridian and Celltide, dated as of February 1, 2022, is incorporated by reference into the Drug Substance MSA. The Quality Agreement governs current Good Manufacturing Practice ("cGMP") standards, batch release criteria, deviation and CAPA procedures, change control, stability testing, regulatory inspection cooperation, and recall procedures. As noted in Section XV below, a complete copy of the Quality Agreement has been requested but has not yet been uploaded to the data room; our review of this agreement is therefore based on the summary provisions incorporated by reference in the Drug Substance MSA.

Risk Assessment. The consent requirement under Section 16.2 is a key closing condition deliverable. We recommend early outreach to Celltide to secure consent, and suggest that the SPA include the delivery of Celltide's written consent as a condition to closing, or alternatively, that the failure to obtain such consent be addressed within the material adverse effect framework of the closing conditions.

B. Manufacturing and Supply Agreement — Drug Product (Fill/Finish) with Lakeshore Pharma Solutions LLC

Veridian is party to a Manufacturing and Supply Agreement (the "Drug Product MSA") with Lakeshore Pharma Solutions LLC ("Lakeshore"), dated as of April 1, 2023, for formulation, fill/finish, labeling, and packaging of VRD-4187 drug product for clinical use.

Scope of Services. Lakeshore performs the following manufacturing activities: final formulation of VRD-4187 drug product from bulk drug substance supplied by Celltide, aseptic fill/finish into single-use vials, visual inspection and release testing, primary and secondary packaging, labeling (including clinical trial labeling in accordance with applicable regulatory requirements), and storage and distribution of finished drug product.

Term. The Drug Product MSA has an initial term of three (3) years, commencing on April 1, 2023, and expiring on March 31, 2026, with automatic one-year renewals unless either party provides ninety (90) days' prior written notice of non-renewal.

Financial Terms. The estimated annual spend under the Drug Product MSA is approximately $5 million to $7 million, depending on batch volume and clinical trial supply requirements. Pricing is on a fixed-fee-per-batch basis, with annual escalators tied to the Producer Price Index for pharmaceutical preparation manufacturing.

Change-of-Control. The Drug Product MSA requires thirty (30) days' advance written notice to Lakeshore of a Change of Control of Veridian. Unlike the Drug Substance MSA with Celltide, the Drug Product MSA does not require Lakeshore's affirmative consent. However, the agreement provides that within sixty (60) days of receiving such notice, Lakeshore may elect to terminate the agreement if the acquirer is a "Competitor" of Lakeshore, as defined in the agreement. "Competitor" is defined as any entity engaged in contract manufacturing, fill/finish, or related pharmaceutical manufacturing services. Penterra, as a pharmaceutical company rather than a contract manufacturer, should not fall within this definition, but we recommend confirming this analysis with Lakeshore's counsel to avoid any ambiguity.

Anti-Assignment. The Drug Product MSA contains a standard anti-assignment clause prohibiting assignment without prior written consent. However, the clause does not expressly address assignment by operation of law or changes in control of the assigning party. The stock purchase structure of the Transaction should not constitute an "assignment" triggering this provision, as Veridian will remain the contracting party post-closing.

Single-Source Dependency Risk. We note that Lakeshore is currently the only qualified fill/finish CMO for VRD-4187 drug product. Veridian has not qualified a backup supplier for fill/finish operations. This represents a supply chain risk that is not unique to the Transaction but is worth flagging in the context of Penterra's post-closing operational planning. Any disruption at Lakeshore's facility could result in significant delays to the Marlowe Asset Management-2 trial and future clinical programs.

Risk Assessment. Moderate risk. The notice requirement should be satisfied prior to or promptly following signing. The Competitor termination right is unlikely to be triggered given Penterra's profile, but should be confirmed. The single-source dependency issue warrants consideration in Penterra's post-closing supply strategy.

C. Raw Materials Supply Agreements

Veridian maintains several agreements with third-party suppliers for specialty reagents, cell culture media, chromatography resins, and other raw materials used in the manufacture of VRD-4187 drug substance. Each of these agreements falls below the individual materiality threshold of $500,000. In the aggregate, annual spend across all raw materials supply agreements is approximately $3.2 million.

Our review of these agreements revealed no change-of-control provisions, and the anti-assignment clauses in these agreements are standard commercial provisions that should not be triggered by the stock purchase structure. Termination notice periods range from thirty (30) to ninety (90) days, and all agreements are on standard commercial terms.

Risk Assessment. Low risk. No issues identified requiring specific attention in the context of the Transaction.

V. License and Technology Agreements

The license and technology agreements are among the most critical contracts in Veridian's portfolio, as they underpin the Company's proprietary VeriTCE platform technology and the intellectual property foundation upon which the VRD-4187 program and the broader pipeline are built.

A. Exclusive License Agreement — Hargrove University

Veridian is party to an Exclusive License Agreement (the "Hargrove License") with Hargrove University ("Hargrove"), dated as of September 12, 2016, pursuant to which Hargrove granted Veridian an exclusive, worldwide, sublicensable license to certain foundational patents and patent applications underlying the VeriTCE T-cell engager platform technology.

Background. The licensed technology originated from research conducted by Dr. Julian Marek and Dr. Priya Chandrasekaran during their academic tenure at Hargrove University. The technology encompasses novel methods for constructing bispecific T-cell engager proteins with enhanced half-life and reduced immunogenicity, which form the basis of the VeriTCE platform. Dr. Marek and Dr. Chandrasekaran subsequently left Hargrove to co-found Veridian in 2016, and the Hargrove License was executed concurrently with the Company's formation as part of the technology spin-out arrangement.

Grant of License. Under Article 2 of the Hargrove License, Hargrove granted Veridian an exclusive, worldwide license, with the right to grant sublicenses, under the licensed patents and related know-how, to research, develop, make, have made, use, sell, offer for sale, import, and otherwise commercialize products and processes in the field of oncology. The field restriction to oncology is notable; the license does not extend to applications of the VeriTCE technology outside of oncology (e.g., autoimmune diseases or infectious diseases). This field limitation has not been a practical constraint to date, as Veridian's pipeline is focused exclusively on oncology indications, but it is a relevant consideration for Penterra's long-term strategic planning.

Financial Terms. The financial terms of the Hargrove License are as follows:

• Upfront License Fee: Three Million Five Hundred Thousand Dollars ($3,500,000), paid at execution in 2016.

• Annual Maintenance Fees: Two Hundred Fifty Thousand Dollars ($250,000) per year, payable on each anniversary of the effective date. Veridian's management has confirmed that all annual maintenance fees have been paid to date and no arrears exist.

• Milestone Payments: The Hargrove License provides for aggregate milestone payments of up to Twenty-Two Million Dollars ($22,000,000) tied to specified regulatory and commercial milestones, including IND acceptance, initiation of Phase II and Phase III clinical trials, NDA/BLA filing, FDA approval, first commercial sale, and cumulative net sales thresholds. Veridian's management has represented that milestone payments totaling approximately $4.5 million have been paid to date, leaving approximately $17.5 million in remaining potential milestone obligations.

• Running Royalty: A low single-digit royalty on aggregate worldwide annual net sales of licensed products, subject to customary reductions for third-party royalty stacking and generic/biosimilar competition.

Change-of-Control / Assignment. Section 13.2 of the Hargrove License addresses assignability. The license is assignable by Veridian in connection with a merger, acquisition, or sale of all or substantially all assets related to the licensed technology, provided that Veridian (or its successor) provides written notice to Hargrove within thirty (30) days following the closing of such transaction. Importantly, no prior consent from Hargrove is required. However, Hargrove retains a right to audit the books and records of the assignee for purposes of verifying royalty payments and milestone compliance. This is a favorable provision from the Buyer's perspective, as it permits the Transaction to proceed without the need for Hargrove's consent, subject only to the post-closing notice requirement.

Diligence Obligations. Article 5 of the Hargrove License imposes an obligation on Veridian to use "commercially reasonable efforts" to develop and commercialize at least one product under the license. If Veridian fails to use commercially reasonable efforts for a continuous period of twenty-four (24) months, Hargrove has the right, upon sixty (60) days' prior written notice, to convert the exclusive license to a non-exclusive license. This conversion right is a significant risk factor, as loss of exclusivity under the Hargrove License would undermine the competitive advantage of the VeriTCE platform and could materially diminish the value of Veridian's pipeline. We recommend confirming with Veridian's management and counsel that the Company is currently in compliance with its diligence obligations and that no notice of non-compliance or default has been received from Hargrove. This item is listed as an outstanding diligence item in Section XV below.

Patent Prosecution and Maintenance. Under Article 6, Veridian has the first right to prosecute, maintain, and defend the licensed patents at its own expense. If Veridian elects not to prosecute or maintain any licensed patent, Hargrove has step-in rights to do so at its own expense, and Veridian's license under such patent would be converted to a non-exclusive license. Veridian's management has confirmed that the Company has been actively prosecuting and maintaining all licensed patents and has not elected to abandon any patent in the licensed portfolio.

Term. The Hargrove License is co-terminous with the last-to-expire licensed patent. Based on the current patent portfolio analysis set forth in the IP Due Diligence Memorandum, the last-to-expire patent is estimated to expire in 2037, subject to any patent term extensions or adjustments.

Risk Assessment. The Hargrove License is foundational to the VeriTCE platform and all three of Veridian's pipeline candidates, including VRD-4187. Loss of exclusivity under this license would be catastrophic to the value of the Transaction. The favorable assignment provisions (no consent required, post-closing notice only) significantly mitigate Transaction-specific risk. However, the ongoing diligence obligation and the conversion-to-non-exclusive remedy require careful monitoring. We recommend that the SPA include a specific representation confirming Veridian's compliance with the diligence obligations under the Hargrove License and that no notice of default or conversion has been delivered or received. Cross-reference to the IP Due Diligence Memorandum (dated May 14, 2024) for detailed analysis of the licensed patent portfolio.

B. Non-Exclusive License Agreement — Kensington Therapeutics, Inc.

Veridian is party to a Non-Exclusive License Agreement (the "Kensington License") with Kensington Therapeutics, Inc. ("Kensington"), dated as of March 8, 2018, pursuant to which Kensington granted Veridian a non-exclusive, worldwide, sublicensable license to certain antibody engineering technology used in the construction of bispecific T-cell engagers.

Grant of License. The Kensington License grants Veridian a non-exclusive, worldwide license, with the right to sublicense, to use Kensington's proprietary antibody engineering methods and related know-how in the development and manufacture of Veridian's proprietary compounds. The license is limited to use in compounds that are proprietary to Veridian and does not extend to the development of compounds for third parties or for sublicensing as a standalone technology platform.

Financial Terms. The financial terms are straightforward: an upfront license fee of One Million Two Hundred Thousand Dollars ($1,200,000), paid at execution in 2018; an annual license fee of One Hundred Fifty Thousand Dollars ($150,000); and no milestone payments or running royalties. The annual license fee has been paid to date, and Veridian's management has confirmed that the Company is in compliance with all payment obligations.

Term. The Kensington License is perpetual and irrevocable, subject to Veridian's ongoing compliance with its payment obligations and confidentiality covenants. The license may be terminated by Kensington only in the event of a material breach by Veridian that remains uncured for sixty (60) days following written notice.

Change-of-Control. The Kensington License does not contain a change-of-control provision. Section 11.3 of the agreement expressly provides that the license is freely assignable by either party in connection with a merger, acquisition, change of control, or sale of all or substantially all assets of the assigning party, without the need for prior consent or notice.

Risk Assessment. Low risk. The Kensington License is a perpetual, irrevocable grant with no consent requirements and no change-of-control restrictions. No issues identified for the Transaction.

C. Research Collaboration Agreement — Northvale Oncology Research Institute

Veridian is party to a Research Collaboration Agreement (the "Northvale Collaboration") with the Northvale Oncology Research Institute ("Northvale"), dated as of January 15, 2024, for the collaborative evaluation of VRD-4187 in combination therapy settings.

Scope. Under the Northvale Collaboration, the parties are conducting joint research to evaluate the safety and efficacy of VRD-4187 in combination with PD-1 checkpoint inhibitors in preclinical models and, potentially, in a Phase I/II combination trial. The collaboration is non-exclusive in nature, meaning that both parties are free to pursue similar research with other collaborators.

intellectual Property. Veridian retains all intellectual property arising from the collaboration. Northvale has no ownership interest in any inventions, data, or results generated under the agreement, and all intellectual property developed by Northvale personnel in the course of the collaboration is assigned to Veridian.

Term. The Northvale Collaboration has a term of two (2) years, commencing on January 15, 2024, and expiring on January 15, 2026. The agreement may be renewed by mutual written agreement of the parties.

Financial Terms. Veridian's total financial commitment under the Northvale Collaboration is Two Million Eight Hundred Thousand Dollars ($2,800,000) over the two-year term, payable in quarterly installments based on achievement of specified research milestones.

Change-of-Control. Section 9.4 of the Northvale Collaboration provides that either party may terminate the agreement upon sixty (60) days' prior written notice following a "Change of Control" of the other party. "Change of Control" is defined to include the acquisition by any person of a majority of the voting power of the other party, or a merger or consolidation resulting in a change in the majority ownership of the other party. The proposed Transaction would trigger Northvale's termination right.

Risk Assessment. Moderate risk. While termination of the Northvale Collaboration would not impact the core VRD-4187 development program (the Marlowe Asset Management-2 trial operates independently of the Northvale research), it could delay the exploration of VRD-4187 in combination therapy settings, which is an area of strategic interest for Penterra. We recommend seeking a waiver or amendment to the Northvale Collaboration to eliminate the change-of-control termination right, or alternatively, to negotiate a standstill period during which Northvale agrees not to exercise its termination right while the parties discuss the continuation of the collaboration post-closing.

VI. Real Property Lease

A. Lease for 550 Gateway Drive, Cambridge, MA 02142

Veridian's sole real property interest is a leasehold at 550 Gateway Drive, Cambridge, Massachusetts 02142, pursuant to a commercial lease agreement (the "Lease") with Gateway Realty Trust, a Massachusetts business trust (the "Landlord"), dated as of March 1, 2019.

Premises. The leased premises comprise approximately 65,000 rentable square feet of laboratory and office space located at 550 Gateway Drive, Cambridge, MA 02142. The premises house Veridian's entire workforce of approximately 148 employees, including all laboratory and research operations, as well as corporate administrative functions. The Cambridge location is situated in the Kendall Square / East Cambridge life sciences corridor, which is one of the premier biotechnology clusters in the United States.

Term. The Lease has an initial term of ten (10) years, commencing on March 1, 2019, and expiring on February 28, 2029. The Lease does not include a renewal option, but does include a right of first offer on adjacent space (discussed below). There are approximately four years and nine months remaining on the initial term as of the date of this memorandum.

Base Rent. Base rent under the Lease is approximately $85.00 per rentable square foot per annum, subject to annual escalations of three percent (3%). Based on the current escalation, the annualized base rent for the current lease year is approximately $5,850,000. In addition to base rent, Veridian is responsible for its proportionate share of operating expenses, real estate taxes, and common area maintenance charges, estimated at approximately $1,200,000 per annum based on prior-year reconciliations.

Security Deposit. Veridian has provided a security deposit in the amount of One Million Seven Hundred Fifty Thousand Dollars ($1,750,000) in the form of a standby letter of credit issued by Harborview Bank, N.A. The letter of credit is subject to annual renewal and must be maintained throughout the Lease term.

Assignment and Subletting. Article 12 of the Lease addresses assignment and subletting. The general rule is that the Lease may not be assigned, and the premises may not be sublet, without the Landlord's prior written consent, which consent shall not be unreasonably withheld, conditioned, or delayed. However, the Lease includes a "Permitted Transfer" exception at Section 12.4, which provides:

"Notwithstanding the foregoing, Tenant may assign this Lease or sublet all or any portion of the Premises without Landlord's consent (but upon prior written notice to Landlord) in connection with (a) a merger or consolidation of Tenant with another entity, (b) an acquisition of Tenant or a sale of all or substantially all of Tenant's assets, or (c) an assignment to an entity controlling, controlled by, or under common control with Tenant; provided, however, that in the case of any assignment pursuant to clauses (a) or (b), the assignee shall have a net worth, as of the date of such assignment or as of the date of execution of this Lease, whichever is greater, at least equal to the net worth of Tenant as of the date of execution of this Lease."

Penterra's net worth substantially exceeds Veridian's net worth both at the time of execution of the Lease and at the present time. Accordingly, the Permitted Transfer exception should apply to the Transaction, and no Landlord consent should be required. Nevertheless, we recommend providing the Landlord with written notice of the Transaction in advance of or promptly following closing, in accordance with the terms of the Permitted Transfer provision. We further recommend confirming this analysis with the Landlord's counsel and, if feasible, obtaining a landlord estoppel certificate confirming that the Lease is in full force and effect and that no defaults exist.

Key Lease Provisions.

• Landlord's Lien. The Lease grants the Landlord a lien on the tenant's personal property located at the premises. This lien may need to be subordinated in connection with any post-closing financing arrangements or credit facilities that Penterra or Veridian may enter into.

• Hazardous Materials. The Lease contains detailed provisions governing the use, storage, handling, and disposal of hazardous materials at the premises, which is standard for laboratory space in the Cambridge market. Veridian's laboratory operations involve biological agents, chemicals, and other materials that are regulated under applicable environmental and safety laws. The Environmental Due Diligence Memorandum (dated May 15, 2024) provides a detailed analysis of Veridian's environmental compliance posture.

• Right of First Offer. Section 14.8 of the Lease grants Veridian a right of first offer on approximately 15,000 square feet of adjacent space at 550 Gateway Drive, should such space become available during the Lease term. This right of first offer is a potentially valuable expansion option for Penterra post-closing.

• Tenant Improvement Allowance. The Landlord provided a tenant improvement allowance at the commencement of the Lease, which has been fully utilized. No further tenant improvement obligations exist on the part of the Landlord.

• Insurance Requirements. Veridian is required to maintain comprehensive general liability insurance (minimum $2 million per occurrence, $5 million aggregate), property insurance covering the full replacement value of the tenant's improvements and personal property, and environmental impairment liability insurance. Veridian's management has confirmed that all required insurance policies are in effect and current.

Risk Assessment. Low risk. The Permitted Transfer exception is well-drafted and should clearly encompass the Transaction. The Lease is a key asset, as it provides Veridian's only operating facility, and continuity of the leasehold is essential to post-closing operations. We recommend obtaining a landlord estoppel certificate and providing the required notice as part of the closing process.

VII. Investor Rights and Stockholder Agreements

Veridian's capitalization and governance are subject to a suite of investor rights and stockholder agreements entered into in connection with the Company's Series C preferred stock financing in the third quarter of 2020. These agreements are standard venture-backed company governance documents and, importantly, contain provisions that facilitate the Transaction and terminate upon closing.

A. Amended and Restated Investors' Rights Agreement

Veridian, its principal institutional investors, and its founders are parties to an Amended and Restated Investors' Rights Agreement (the "IRA"), dated as of the Series C closing in Q3 2020. The parties to the IRA include:

• Crestline Ventures, LP (holding approximately 28.3% of Veridian's outstanding equity);

• Boreal Health Partners Fund III, LP (holding approximately 19.7% of Veridian's outstanding equity);

• Apex Growth Equity Fund II, LP (holding approximately 14.1% of Veridian's outstanding equity);

• Dr. Julian Marek, co-founder and CEO (holding approximately 8.4% of Veridian's outstanding equity);

• Dr. Priya Chandrasekaran, co-founder and CSO (holding approximately 6.2% of Veridian's outstanding equity); and

• Other stockholders holding the remaining equity.

Key Provisions. The IRA contains the following principal provisions:

• Registration Rights. Crestline, Boreal, and Apex hold demand registration rights entitling them to require Veridian to register their shares under the Securities Act of 1933 in connection with a public offering. Other stockholders hold piggyback registration rights. These rights are not relevant to the Transaction, which is structured as a cash stock purchase rather than a transaction involving equity consideration. However, we note that the registration rights provisions survive the termination of the IRA by their terms, as discussed below.

• Information Rights. Investors holding at least five percent (5%) of Veridian's outstanding shares are entitled to receive quarterly unaudited financial statements and annual audited financial statements. Veridian's annual financial statements are audited by Northbridge Accounting Group LLP (engagement partner: Patrick Calloway).

• Board Observation Rights. Boreal Health Partners Fund III, LP and Apex Growth Equity Fund II, LP each have board observer rights, entitling their respective designees to attend and participate in meetings of Veridian's Board of Directors in a non-voting, observer capacity. Neither entity holds a board seat.

• Preemptive Rights / Rights of First Refusal. Major investors (defined as investors holding at least five percent of outstanding shares) have a right of first refusal on new issuances of equity securities by Veridian, subject to customary exceptions. These preemptive rights will terminate upon consummation of the Transaction.

• Co-Sale Rights (Tag-Along). The IRA includes co-sale (tag-along) rights that are triggered upon proposed transfers of shares by the founders. These rights are not applicable in the context of a 100% stock purchase, where all stockholders are selling their entire holdings.

• Drag-Along Rights. Section 4.5 of the IRA provides that holders of a majority of the outstanding shares of preferred stock may compel all stockholders (including holders of common stock) to participate in an acquisition transaction that has been approved by the Board of Directors. This drag-along provision is significant because it facilitates the Transaction by enabling the major preferred stockholders to compel participation by all stockholders, thereby eliminating the risk of holdout stockholders. As of the date of this memorandum, Veridian's management has confirmed that holders of more than ninety percent (90%) of the outstanding capital stock have delivered their written consent to the Transaction, which is expected to be finalized by June 14, 2024.

• Termination Upon Acquisition. The IRA provides that all rights granted thereunder (other than registration rights, which survive by their terms) terminate automatically upon a "Deemed Liquidation Event," which is defined to include a merger, acquisition, or sale of all or substantially all of the outstanding capital stock of the Company. The proposed $900 million stock purchase constitutes a Deemed Liquidation Event. Accordingly, all provisions of the IRA other than the registration rights will terminate upon closing.

Risk Assessment. Low risk. The drag-along provisions facilitate stockholder approval. The agreement terminates upon closing. No consent is needed under the IRA for the Transaction to proceed.

B. Amended and Restated Voting Agreement

The same parties are party to an Amended and Restated Voting Agreement (the "Voting Agreement"), also dated as of the Series C closing in Q3 2020. The Voting Agreement establishes Board composition requirements, providing for two (2) investor-designated board seats (one designated by Crestline Ventures and one by Boreal Health Partners), two (2) founder-designated board seats (Dr. Marek and Dr. Chandrasekaran), and one (1) independent board seat. All parties to the Voting Agreement are obligated to vote their shares in favor of the board nominee designees.

Termination. The Voting Agreement terminates upon a Deemed Liq

PRIVILEGED & CONFIDENTIAL ATTORNEY WORK PRODUCT / ATTORNEY-CLIENT COMMUNICATION
CALDERWOOD & HARKNESS LLP 200 Park Avenue, 42nd Floor New York, NY 10166
MATERIAL CONTRACTS DUE DILIGENCE REVIEW MEMORANDUM
TO: Oliver Mackenzie, Partner, Mergers & Acquisitions Harrison Wexford, Partner, Mergers & Acquisitions
FROM: Megan Chu, Associate, Mergers & Acquisitions Derek Okonkwo, Associate, Mergers & Acquisitions
DATE: May 17, 2024
RE: Material Contracts Due Diligence Review — Veridian Biosciences, Inc.
CLIENT: Penterra Pharmaceuticals Corp.
MATTER NO.: 1018-00008
This memorandum is protected by the attorney-client privilege and the work product doctrine. It is prepared at the direction of and for the benefit of Penterra Pharmaceuticals Corp. in connection with the proposed acquisition of Veridian Biosciences, Inc. This memorandum is not intended for distribution to any third party without the prior written consent of Calderwood & Harkness LLP and Penterra Pharmaceuticals Corp.
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I. Executive Summary
This memorandum summarizes the findings of our review of the material contracts of Veridian Biosciences, Inc., a Delaware corporation (EIN 84-2193047) ("Veridian" or the "Company"), with its principal office located at 550 Gateway Drive, Cambridge, MA 02142, and its registered agent at Tidewater Registered Agents LLC, 838 Walker Road, Suite 21-2, Dover, DE 19904. This review has been conducted in connection with the proposed acquisition by Penterra Pharmaceuticals Corp. ("Penterra" or the "Buyer") of one hundred percent (100%) of the outstanding capital stock of Veridian for aggregate cash consideration of Nine Hundred Million Dollars ($900,000,000) (the "Transaction").
Access to the virtual data room was granted on March 11, 2024. The review has been conducted in coordination with Zalcourt Archer & Cole LLP, Veridian's outside counsel, which populated the virtual data room. The principal contacts at Zalcourt Archer & Cole LLP have been Rebecca Whitmore, Partner (lead outside counsel to Veridian) and Jonathan Pratt, Associate. Throughout the due diligence process, our team has engaged in regular correspondence and periodic conference calls with Veridian's legal and management teams to supplement the documentary record and to clarify ambiguities or gaps in the materials produced.
The contracts reviewed in connection with this memorandum encompass the following principal categories:
• Clinical research organization ("CRO") agreements governing the conduct of Veridian's clinical trials, including the pivotal Marlowe Asset Management-2 Phase II trial for lead asset VRD-4187;
• Contract manufacturing organization ("CMO") and supply agreements for the manufacture of drug substance and drug product;
• License and technology agreements, including the foundational exclusive license from Hargrove University for the VeriTCE platform technology;
• The real property lease for Veridian's principal office and laboratory facility at 550 Gateway Drive, Cambridge, MA 02142;
• Investor rights and stockholder agreements with Veridian's principal institutional investors — Crestline Ventures, LP, Boreal Health Partners Fund III, LP, and Apex Growth Equity Fund II, LP — as well as the Company's founders;
• Employment and consulting agreements with key executives and scientific advisory board members; and
• Miscellaneous commercial agreements, including IT and data hosting services, insurance contracts, and government grants.
Overall Assessment. The majority of Veridian's contractual arrangements are consistent with those typically maintained by a clinical-stage biotechnology company of its size and maturity. At the time of this review, Veridian employed approximately 148 full-time employees and maintained a pipeline of three clinical and preclinical programs built upon its proprietary VeriTCE bispecific T-cell engager platform. The Company's contractual profile reflects a focused operational footprint, with substantial outsourcing of clinical trial execution and drug manufacturing to third-party CROs and CMOs, and a relatively streamlined set of commercial vendor relationships.
Key Risk Areas. Notwithstanding the generally satisfactory condition of the Company's contractual portfolio, this review has identified several areas warranting heightened attention in the context of the Transaction:
1. Change-of-Control Provisions. Certain material contracts contain change-of-control provisions that grant counterparties termination rights, consent rights, or other remedies upon consummation of the Transaction. The most significant of these are found in the CRO Master Services Agreement with Meridian Clinical Research Associates LLC and the CMO Drug Substance Manufacturing and Supply Agreement with Celltide Biologics, Inc. These are discussed at length in Sections III and IV below and summarized in Section XI.
2. Anti-Assignment Clauses and Consent Requirements. Several contracts contain anti-assignment clauses that, depending on their precise drafting, may or may not be triggered by the stock purchase structure of the Transaction. Contracts with broadly defined assignment provisions that encompass change-of-control transactions are identified and analyzed in Section XII.
3. Key-Person Dependencies. The CRO Master Services Agreement contains a key-person clause referencing Dr. Priya Chandrasekaran, Veridian's Chief Scientific Officer, as the designated scientific liaison. The departure of Dr. Chandrasekaran would trigger renegotiation rights for the CRO. Given Dr. Chandrasekaran's critical role in the VRD-4187 program and the VeriTCE platform generally, retention of Dr. Chandrasekaran is important not only from a contractual perspective but also from a scientific and operational continuity standpoint.
Cross-References. This memorandum should be read in conjunction with the following companion due diligence memoranda prepared by our team and by subject-matter specialists within the firm:
• IP Due Diligence Memorandum (dated May 14, 2024)
• Environmental Due Diligence Memorandum (dated May 15, 2024)
• Insurance Due Diligence Memorandum (dated May 16, 2024)
• Regulatory and FDA Compliance Due Diligence Memorandum (dated May 20, 2024)
• Employment and Benefits Due Diligence Memorandum (dated May 22, 2024)
Each of these memoranda addresses specific aspects of Veridian's operations and contractual arrangements that fall within the respective subject-matter specialist's purview, and in certain instances the analysis in this memorandum is intentionally abbreviated where a more detailed treatment appears in one of those companion documents.
II. Methodology and Scope
A. Data Room Organization and Review Process
The contracts reviewed in connection with this memorandum were sourced from the virtual data room established and maintained by Zalcourt Archer & Cole LLP on behalf of Veridian. The data room was organized by Veridian's outside counsel into folders corresponding to the categories identified in the Preliminary Due Diligence Request List circulated by our team on March 6, 2024. Access to the data room was granted to Calderwood & Harkness LLP on March 11, 2024, and the data room has been periodically updated throughout the due diligence period as additional documents have been identified and uploaded by Veridian's counsel.
Our review team consisted of Megan Chu and Derek Okonkwo, Associates in the Mergers & Acquisitions practice group, with oversight and guidance from Oliver Mackenzie and Harrison Wexford, Partners. Where contracts implicated specialized subject-matter areas — including intellectual property, real estate, employment and benefits, tax, and environmental matters — relevant documents were referred to the appropriate practice group specialists within Calderwood & Harkness LLP for review, and the findings of those specialists are reflected in the companion memoranda referenced in Section I above.
B. Materiality Threshold
For purposes of this review, we applied the following materiality threshold to identify contracts warranting detailed analysis:
1. Financial Materiality. Any contract or series of related contracts with aggregate consideration or value exceeding Five Hundred Thousand Dollars ($500,000) over the life of the contract or on an annualized basis.
2. Change-of-Control and Assignment. Any contract containing a change-of-control provision, consent requirement, or anti-assignment clause that could be triggered by the Transaction, regardless of the financial value of the contract.
3. Long-Duration Agreements. All agreements with remaining terms exceeding twenty-four (24) months from the date of this review.
4. Program-Critical Agreements. All agreements material to the VRD-4187 program (Veridian's lead clinical asset) or to the VeriTCE platform technology, regardless of financial value or term.
These thresholds were developed in consultation with Penterra's business development team and were designed to capture all contracts that could have a material bearing on the value of the Transaction, the operations of Veridian post-closing, or the risk profile of the acquired business.
C. Supplemental Information
In addition to the documentary review, supplemental information was obtained through the following channels:
• Management Calls. Our team participated in management calls with Steven R. Kessler, Chief Financial Officer of Veridian, and Rachel Stein-Goldberg, General Counsel of Veridian, on April 3, 2024, April 18, 2024, and May 7, 2024, during which we obtained clarifications regarding the status, scope, and commercial context of various contractual relationships.
• Counsel-to-Counsel Correspondence. Ongoing correspondence with Zalcourt Archer & Cole LLP (Rebecca Whitmore and Jonathan Pratt) regarding document production, interpretation of specific contractual provisions, and outstanding items.
• Third-Party Diligence. Coordination with Broadleaf Scientific Consulting LLC (Dr. Raymond Kapoor, engagement lead) regarding alignment between contractual terms and the scientific and operational due diligence findings.
D. Limitations
This memorandum is based solely on the documents and information made available to us through the data room and through the supplemental channels described above. We have not conducted an independent verification of the completeness of the data room, and we have relied on the representations of Veridian's management and counsel that all material contracts have been produced. Certain documents remain outstanding as of the date of this memorandum, as described in Section XV below.
A complete schedule of all contracts reviewed is appended to this memorandum as Appendix A.
III. Clinical Research Organization (CRO) Agreements
Veridian outsources the conduct and management of its clinical trials to third-party CROs, which is standard practice for a clinical-stage biotechnology company of Veridian's size. The CRO agreements constitute a critical component of Veridian's contractual portfolio, particularly given the centrality of the ongoing Marlowe Asset Management-2 Phase II trial for VRD-4187 to the value proposition of the Transaction. We address each of the principal CRO-related agreements below.
A. Master Services Agreement with Meridian Clinical Research Associates LLC
Veridian is party to a Master Services Agreement (the "CRO MSA") with Meridian Clinical Research Associates LLC ("Meridian"), dated as of June 15, 2021, pursuant to which Meridian provides clinical trial management services for Veridian's pipeline programs, including VRD-4187. The CRO MSA serves as the umbrella framework agreement under which individual work orders are issued for specific clinical studies and programs.
Scope of Services. Under the CRO MSA, Meridian provides comprehensive clinical trial management services, including clinical site identification and management, patient recruitment and enrollment support, clinical monitoring and data management, regulatory submission support, adverse event reporting coordination, and related services. Meridian is Veridian's primary CRO partner and manages the conduct of the Marlowe Asset Management-2 Phase II trial, which is the most significant clinical program in Veridian's pipeline.
Term. The CRO MSA has an initial term of five (5) years, commencing on June 15, 2021, and expiring on June 14, 2026, subject to automatic renewal for successive one-year periods unless either party provides written notice of non-renewal at least one hundred eighty (180) days prior to the end of the then-current term. As of the date of this memorandum, the CRO MSA remains in its initial term and has not been amended or restated.
Financial Terms. The estimated annual spend under the CRO MSA, inclusive of all active work orders, is approximately $18 million to $22 million, making Meridian Veridian's single largest vendor relationship. Fees are structured on a combination of fixed-fee and time-and-materials bases, depending on the specific work order. Payment terms are net forty-five (45) days from invoice date.
Relevance to VRD-4187 Marlowe Asset Management-2 Trial. The CRO MSA is the primary vehicle through which Veridian conducts the Marlowe Asset Management-2 Phase II randomized, open-label clinical trial for VRD-4187 in small cell lung cancer (SCLC) (ClinicalTrials.gov Identifier: NCT05837291). The trial is currently active across forty-two (42) clinical sites in the United States and the European Union, with three hundred eighty-seven (387) patients enrolled as of the most recent status update. The Marlowe Asset Management-2 trial represents the most advanced and highest-value clinical program in Veridian's portfolio and is a principal driver of the Transaction valuation.
Change-of-Control Provision. The CRO MSA includes a change-of-control provision at Section 14.3 of the agreement. This provision grants Meridian the right to terminate the CRO MSA upon a "Change of Control" of Veridian, subject to the following conditions:
(i) Meridian must provide written notice to Veridian of its intent to exercise the termination right within ninety (90) days following the date on which Meridian first becomes aware of the Change of Control;
(ii) Following receipt of Meridian's notice, Veridian has a sixty (60)-day cure period during which Veridian may negotiate with Meridian to address any concerns underlying Meridian's decision to exercise the termination right; and
(iii) "Change of Control" is defined broadly to include (a) the acquisition by any person or group of persons of more than fifty percent (50%) of the voting securities of Veridian, (b) a merger or consolidation of Veridian with or into another entity in which the stockholders of Veridian immediately prior to such transaction hold less than fifty percent (50%) of the voting securities of the surviving entity, or (c) a sale of all or substantially all of the assets of Veridian.
The proposed Transaction, structured as an acquisition of 100% of Veridian's outstanding capital stock by Penterra, clearly falls within the scope of this definition. Accordingly, consummation of the Transaction would trigger Meridian's right to terminate the CRO MSA.
Consent / Waiver Strategy. Given the critical importance of the CRO MSA to the ongoing Marlowe Asset Management-2 trial and the broader VRD-4187 development program, we strongly recommend that Penterra and Veridian seek to obtain Meridian's written consent or waiver of its termination right prior to the closing of the Transaction. The sixty-day cure period provides some backstop protection, but reliance on the cure period alone introduces unnecessary risk, particularly given the scale of the Marlowe Asset Management-2 trial and the operational disruption that would result from a mid-trial CRO transition. We recommend that the outreach to Meridian be initiated promptly following the signing of the Stock Purchase Agreement ("SPA") and that the outreach be coordinated jointly between Veridian's management, Zalcourt Archer & Cole LLP, and our team.
Key-Person Clause. Section 7.2 of the CRO MSA designates Dr. Priya Chandrasekaran, Veridian's Chief Scientific Officer, as the Company's "Designated Scientific Liaison" for purposes of the CRO relationship. Under this provision, the departure or reassignment of Dr. Chandrasekaran from the Designated Scientific Liaison role triggers a renegotiation right for Meridian with respect to the scope, pricing, and timelines of any active work orders. While this provision does not give Meridian an outright termination right upon Dr. Chandrasekaran's departure, the renegotiation right introduces potential uncertainty and cost escalation risk. This issue is relevant to Penterra's post-closing integration planning and to the retention arrangements being negotiated with Dr. Chandrasekaran, which are addressed in the Employment and Benefits Due Diligence Memorandum.
intellectual Property Ownership. Article 10 of the CRO MSA provides that all clinical data, results, reports, analyses, and deliverables generated under the agreement are the sole and exclusive property of Veridian. Meridian retains no rights to any data, methods, protocols, or compounds, and all work performed by Meridian is treated as work made for hire to the maximum extent permitted by applicable law. Meridian has granted Veridian a broad assignment of any rights that may not qualify as work made for hire. This IP ownership framework is consistent with industry standard and presents no issues for the Transaction.
Insurance. Meridian is required to maintain clinical trial liability insurance with minimum coverage of $10 million per occurrence and $20 million in the aggregate, naming Veridian as an additional insured. Veridian's management has confirmed that certificates of insurance reflecting current coverage have been obtained and are on file.
Governing Law and Dispute Resolution. The CRO MSA is governed by the laws of the State of New York, without regard to principles of conflicts of law. Disputes are subject to binding arbitration administered by JAMS in New York, New York.
B. Work Order — Marlowe Asset Management-2 Phase II Trial
Pursuant to the CRO MSA, Veridian and Meridian executed Work Order No. VB-2022-003 (the "Marlowe Asset Management-2 Work Order"), dated as of March 1, 2022, for the conduct of the Marlowe Asset Management-2 Phase II randomized, open-label clinical trial of VRD-4187 in patients with relapsed or refractory small cell lung cancer (SCLC).
Trial Design and Scope. The Marlowe Asset Management-2 trial is a multi-center, randomized, open-label Phase II study evaluating the safety and efficacy of VRD-4187, a bispecific T-cell engager targeting DLL3 and CD3, in patients with SCLC who have progressed on at least one prior line of platinum-based chemotherapy. The trial is registered on ClinicalTrials.gov under Identifier NCT05837291. The work order covers the full lifecycle of the trial, including site initiation visits, patient screening and enrollment, ongoing clinical monitoring, Data Monitoring Committee ("DMC") administration, adverse event reporting, database lock, and clinical study report preparation.
Budget. The total budget for the Marlowe Asset Management-2 Work Order is approximately $34 million over the projected life of the trial. Costs are allocated across site initiation and management, patient enrollment milestones, clinical monitoring visits, data management, and regulatory submissions. As of the most recent financial reporting period, approximately $16.5 million has been incurred and paid under the work order.
Current Status. As of the date of this review, the Marlowe Asset Management-2 trial is active, with forty-two (42) clinical sites operational across the United States and the European Union. Patient enrollment is ongoing, with three hundred eighty-seven (387) patients enrolled out of a target enrollment of approximately five hundred (500) patients. Veridian management has indicated that enrollment is tracking ahead of the original timeline by approximately two to three months.
Termination Provisions. The Marlowe Asset Management-2 Work Order may be terminated by either party upon sixty (60) days' prior written notice. In the event of early termination by Veridian, Veridian is obligated to pay for all services performed through the effective date of termination, plus documented wind-down costs. Veridian management estimates that early termination wind-down costs would be in the range of $3 million to $5 million, depending on the stage of trial activities at the time of termination and the number of patients requiring transition to alternative care arrangements.
Assignment and Change-of-Control. The Marlowe Asset Management-2 Work Order expressly incorporates the assignment and change-of-control provisions of the CRO MSA. Accordingly, the change-of-control analysis set forth in Section III.A above applies equally to the work order. Any consent or waiver obtained from Meridian in respect of the CRO MSA should expressly extend to all active work orders, including the Marlowe Asset Management-2 Work Order.
C. Central Laboratory Services Agreement with Apex Diagnostics Services, Inc.
Veridian is party to a Central Laboratory Services Agreement (the "Central Lab Agreement") with Apex Diagnostics Services, Inc. ("Apex Diagnostics"), dated as of February 10, 2022, pursuant to which Apex Diagnostics provides central laboratory services supporting the Marlowe Asset Management-2 trial and Veridian's other pipeline programs.
Scope of Services. Under the Central Lab Agreement, Apex Diagnostics performs biomarker analysis, pharmacokinetics sample processing and analysis, immunogenicity testing, and other central laboratory services. The agreement covers sample collection logistics, laboratory testing protocols, data reporting, and regulatory compliance support for clinical laboratory operations conducted in accordance with CLIA and applicable CAP standards.
Term and Termination. The Central Lab Agreement has an initial term of three (3) years, commencing on February 10, 2022, and expiring on February 9, 2025, subject to automatic renewal for successive one-year periods unless either party provides ninety (90) days' prior written notice of non-renewal. Either party may terminate the agreement upon ninety (90) days' written notice for convenience, or immediately upon written notice in the event of a material breach that remains uncured for thirty (30) days following notice.
Financial Terms. The estimated annual spend under the Central Lab Agreement is approximately $4.5 million. Payment terms are net thirty (30) days from invoice date.
Change-of-Control. The Central Lab Agreement does not contain an express change-of-control provision. The agreement does include an anti-assignment clause at Section 12.4, which provides that neither party may assign the agreement without the prior written consent of the other party, "including by operation of law." However, as discussed in greater detail in Section XII below, the stock purchase structure of the Transaction should not constitute an "assignment" of the Central Lab Agreement, since Veridian will remain the contracting entity post-closing and no transfer of contractual rights occurs. We note, however, that the "including by operation of law" language introduces some ambiguity, and the interpretation of such clauses varies by jurisdiction. As a practical matter, we believe the risk of Apex Diagnostics asserting a breach of the anti-assignment clause is low, particularly given the stock purchase structure.
intellectual Property. All data and results generated by Apex Diagnostics under the Central Lab Agreement are the property of Veridian.
Risk Assessment. Low risk. No affirmative consent is required, and the stock purchase structure should not trigger the anti-assignment clause.
D. Safety and Pharmacovigilance Services Agreement with SafeGuard Pharma Services LLC
Veridian is party to a Safety and Pharmacovigilance Services Agreement (the "PV Agreement") with SafeGuard Pharma Services LLC ("SafeGuard"), dated as of August 1, 2021, for the provision of pharmacovigilance and drug safety services.
Scope of Services. SafeGuard provides comprehensive pharmacovigilance services, including adverse event tracking and case processing, serious adverse event ("SAE") reporting and expedited safety reporting, preparation and submission of MedWatch reports to the FDA, Suspected Unexpected Serious Adverse Reaction ("SUSAR") reporting to applicable regulatory authorities in the United States and the European Union, periodic safety update report preparation, and signal detection and risk management activities. These services are particularly relevant to the VRD-4187 program given the safety profile currently being monitored in the Marlowe Asset Management-2 trial, which includes cytokine release syndrome ("CRS") events and treatment-related deaths that require close surveillance and timely regulatory reporting.
Relationship to CRO MSA. SafeGuard is an affiliate of Meridian Clinical Research Associates LLC, and the PV Agreement was negotiated and executed concurrently with the CRO MSA. The PV Agreement is co-terminous with the CRO MSA, such that it expires upon expiration or termination of the CRO MSA.
Term. Co-terminous with the CRO MSA (initial expiration: June 14, 2026, subject to auto-renewal).
Financial Terms. The estimated annual spend under the PV Agreement is approximately $1.8 million.
Change-of-Control. The PV Agreement expressly incorporates the change-of-control provisions of the CRO MSA. Accordingly, any consent or waiver obtained from Meridian in respect of the CRO MSA should be drafted to encompass the PV Agreement as well.
Data Ownership. All pharmacovigilance data, safety databases, case reports, and related materials generated under the PV Agreement are the sole property of Veridian. SafeGuard retains no proprietary rights in any data or deliverables.
Risk Assessment. The risk profile of the PV Agreement mirrors that of the CRO MSA, given the affiliate relationship and the incorporation of the CRO MSA's change-of-control provisions. Consent from Meridian should resolve both agreements simultaneously.
IV. Contract Manufacturing Organization (CMO) and Supply Agreements
As a clinical-stage company, Veridian does not maintain internal manufacturing capabilities and relies entirely on third-party CMOs for the production of VRD-4187 drug substance and drug product. The CMO agreements are critical to the continued supply of clinical-grade material for the Marlowe Asset Management-2 trial and any future registration or commercial manufacturing activities.
A. Manufacturing and Supply Agreement — Drug Substance (Celltide Biologics, Inc.)
Veridian is party to a Manufacturing and Supply Agreement (the "Drug Substance MSA") with Celltide Biologics, Inc. ("Celltide"), dated as of January 15, 2022, for the manufacture of VRD-4187 drug substance. VRD-4187 is a bispecific T-cell engager protein manufactured using Veridian's proprietary VeriTCE platform process, and the Drug Substance MSA governs the production of this active pharmaceutical ingredient at clinical scale.
Manufacturing Facility. Celltide manufactures VRD-4187 drug substance at its biologics manufacturing facility located in Research Triangle Park, North Carolina. The facility is registered with the FDA and has been inspected within the past two years with no Form 483 observations material to Veridian's programs, as confirmed by Veridian's management during the April 18, 2024 management call.
Term. The Drug Substance MSA has an initial term of five (5) years, commencing on January 15, 2022, and expiring on January 14, 2027, with two (2) consecutive two-year renewal options exercisable at Veridian's election upon one hundred eighty (180) days' prior written notice. If both renewal options are exercised, the agreement could extend through January 14, 2031.
Financial Terms. The estimated annual spend under the Drug Substance MSA is approximately $12 million to $15 million for clinical-grade supply, depending on batch volume and scheduling. The agreement provides for batch pricing on a cost-plus basis, with pricing adjustments permitted annually based on changes in raw material costs and manufacturing indices, subject to a cap of five percent (5%) per annum.
Change-of-Control Provision. Section 16.2 of the Drug Substance MSA contains a change-of-control consent requirement. The provision states as follows:
"Veridian shall not undergo a Change of Control without the prior written consent of Celltide, which consent shall not be unreasonably withheld, conditioned, or delayed. For purposes of this Agreement, 'Change of Control' means the acquisition by any person or group of persons, directly or indirectly, of fifty percent (50%) or more of the equity interests or voting power of Veridian, whether by merger, consolidation, stock purchase, tender offer, or otherwise."
The proposed Transaction clearly falls within this definition. Accordingly, Veridian must obtain Celltide's prior written consent before closing. The "not to be unreasonably withheld" standard provides a measure of protection against an arbitrary refusal of consent, but it does not eliminate the need to obtain consent affirmatively. We recommend that outreach to Celltide be initiated promptly following the signing of the SPA.
Technology Transfer Provisions. Article 8 of the Drug Substance MSA contemplates the possibility of a technology transfer of the VRD-4187 manufacturing process to a second-source CMO at Veridian's election. The agreement provides that if Veridian elects to initiate a technology transfer, Celltide will cooperate in good faith to facilitate the transfer, and Veridian will pay Celltide a technology transfer milestone payment of Two Million Five Hundred Thousand Dollars ($2,500,000) upon completion of the transfer. This provision is relevant to Penterra's post-closing supply chain planning and risk mitigation strategy, as qualification of a second-source manufacturer would reduce single-source dependency.
intellectual Property. Under Article 9 of the Drug Substance MSA, Celltide receives a limited, non-exclusive license to Veridian's manufacturing process intellectual property solely for the purpose of performing its obligations under the agreement. The license is non-transferable and terminates automatically upon expiration or termination of the agreement. All improvements, modifications, or enhancements to the manufacturing process developed by Celltide in the course of performing under the agreement, to the extent such improvements are based on or derived from Veridian's proprietary technology, are assigned to Veridian. Celltide retains ownership of its pre-existing background intellectual property and any improvements thereto that are not derived from Veridian's technology.
Minimum Purchase Obligations. Beginning in Year 3 of the agreement (i.e., the calendar year commencing January 15, 2024), Veridian has minimum annual purchase commitments of Eight Million Dollars ($8,000,000). If Veridian's actual purchases in any contract year fall below the minimum, Veridian is obligated to pay a shortfall payment equal to the difference between the minimum and the actual purchases for that year. As of the date of this review, Veridian's management has represented that the Company's projected spend for 2024 is expected to exceed the minimum commitment, and no shortfall payment has been triggered to date.
Quality Agreement. A separate Quality Agreement between Veridian and Celltide, dated as of February 1, 2022, is incorporated by reference into the Drug Substance MSA. The Quality Agreement governs current Good Manufacturing Practice ("cGMP") standards, batch release criteria, deviation and CAPA procedures, change control, stability testing, regulatory inspection cooperation, and recall procedures. As noted in Section XV below, a complete copy of the Quality Agreement has been requested but has not yet been uploaded to the data room; our review of this agreement is therefore based on the summary provisions incorporated by reference in the Drug Substance MSA.
Risk Assessment. The consent requirement under Section 16.2 is a key closing condition deliverable. We recommend early outreach to Celltide to secure consent, and suggest that the SPA include the delivery of Celltide's written consent as a condition to closing, or alternatively, that the failure to obtain such consent be addressed within the material adverse effect framework of the closing conditions.
B. Manufacturing and Supply Agreement — Drug Product (Fill/Finish) with Lakeshore Pharma Solutions LLC
Veridian is party to a Manufacturing and Supply Agreement (the "Drug Product MSA") with Lakeshore Pharma Solutions LLC ("Lakeshore"), dated as of April 1, 2023, for formulation, fill/finish, labeling, and packaging of VRD-4187 drug product for clinical use.
Scope of Services. Lakeshore performs the following manufacturing activities: final formulation of VRD-4187 drug product from bulk drug substance supplied by Celltide, aseptic fill/finish into single-use vials, visual inspection and release testing, primary and secondary packaging, labeling (including clinical trial labeling in accordance with applicable regulatory requirements), and storage and distribution of finished drug product.
Term. The Drug Product MSA has an initial term of three (3) years, commencing on April 1, 2023, and expiring on March 31, 2026, with automatic one-year renewals unless either party provides ninety (90) days' prior written notice of non-renewal.
Financial Terms. The estimated annual spend under the Drug Product MSA is approximately $5 million to $7 million, depending on batch volume and clinical trial supply requirements. Pricing is on a fixed-fee-per-batch basis, with annual escalators tied to the Producer Price Index for pharmaceutical preparation manufacturing.
Change-of-Control. The Drug Product MSA requires thirty (30) days' advance written notice to Lakeshore of a Change of Control of Veridian. Unlike the Drug Substance MSA with Celltide, the Drug Product MSA does not require Lakeshore's affirmative consent. However, the agreement provides that within sixty (60) days of receiving such notice, Lakeshore may elect to terminate the agreement if the acquirer is a "Competitor" of Lakeshore, as defined in the agreement. "Competitor" is defined as any entity engaged in contract manufacturing, fill/finish, or related pharmaceutical manufacturing services. Penterra, as a pharmaceutical company rather than a contract manufacturer, should not fall within this definition, but we recommend confirming this analysis with Lakeshore's counsel to avoid any ambiguity.
Anti-Assignment. The Drug Product MSA contains a standard anti-assignment clause prohibiting assignment without prior written consent. However, the clause does not expressly address assignment by operation of law or changes in control of the assigning party. The stock purchase structure of the Transaction should not constitute an "assignment" triggering this provision, as Veridian will remain the contracting party post-closing.
Single-Source Dependency Risk. We note that Lakeshore is currently the only qualified fill/finish CMO for VRD-4187 drug product. Veridian has not qualified a backup supplier for fill/finish operations. This represents a supply chain risk that is not unique to the Transaction but is worth flagging in the context of Penterra's post-closing operational planning. Any disruption at Lakeshore's facility could result in significant delays to the Marlowe Asset Management-2 trial and future clinical programs.
Risk Assessment. Moderate risk. The notice requirement should be satisfied prior to or promptly following signing. The Competitor termination right is unlikely to be triggered given Penterra's profile, but should be confirmed. The single-source dependency issue warrants consideration in Penterra's post-closing supply strategy.
C. Raw Materials Supply Agreements
Veridian maintains several agreements with third-party suppliers for specialty reagents, cell culture media, chromatography resins, and other raw materials used in the manufacture of VRD-4187 drug substance. Each of these agreements falls below the individual materiality threshold of $500,000. In the aggregate, annual spend across all raw materials supply agreements is approximately $3.2 million.
Our review of these agreements revealed no change-of-control provisions, and the anti-assignment clauses in these agreements are standard commercial provisions that should not be triggered by the stock purchase structure. Termination notice periods range from thirty (30) to ninety (90) days, and all agreements are on standard commercial terms.
Risk Assessment. Low risk. No issues identified requiring specific attention in the context of the Transaction.
V. License and Technology Agreements
The license and technology agreements are among the most critical contracts in Veridian's portfolio, as they underpin the Company's proprietary VeriTCE platform technology and the intellectual property foundation upon which the VRD-4187 program and the broader pipeline are built.
A. Exclusive License Agreement — Hargrove University
Veridian is party to an Exclusive License Agreement (the "Hargrove License") with Hargrove University ("Hargrove"), dated as of September 12, 2016, pursuant to which Hargrove granted Veridian an exclusive, worldwide, sublicensable license to certain foundational patents and patent applications underlying the VeriTCE T-cell engager platform technology.
Background. The licensed technology originated from research conducted by Dr. Julian Marek and Dr. Priya Chandrasekaran during their academic tenure at Hargrove University. The technology encompasses novel methods for constructing bispecific T-cell engager proteins with enhanced half-life and reduced immunogenicity, which form the basis of the VeriTCE platform. Dr. Marek and Dr. Chandrasekaran subsequently left Hargrove to co-found Veridian in 2016, and the Hargrove License was executed concurrently with the Company's formation as part of the technology spin-out arrangement.
Grant of License. Under Article 2 of the Hargrove License, Hargrove granted Veridian an exclusive, worldwide license, with the right to grant sublicenses, under the licensed patents and related know-how, to research, develop, make, have made, use, sell, offer for sale, import, and otherwise commercialize products and processes in the field of oncology. The field restriction to oncology is notable; the license does not extend to applications of the VeriTCE technology outside of oncology (e.g., autoimmune diseases or infectious diseases). This field limitation has not been a practical constraint to date, as Veridian's pipeline is focused exclusively on oncology indications, but it is a relevant consideration for Penterra's long-term strategic planning.
Financial Terms. The financial terms of the Hargrove License are as follows:
• Upfront License Fee: Three Million Five Hundred Thousand Dollars ($3,500,000), paid at execution in 2016.
• Annual Maintenance Fees: Two Hundred Fifty Thousand Dollars ($250,000) per year, payable on each anniversary of the effective date. Veridian's management has confirmed that all annual maintenance fees have been paid to date and no arrears exist.
• Milestone Payments: The Hargrove License provides for aggregate milestone payments of up to Twenty-Two Million Dollars ($22,000,000) tied to specified regulatory and commercial milestones, including IND acceptance, initiation of Phase II and Phase III clinical trials, NDA/BLA filing, FDA approval, first commercial sale, and cumulative net sales thresholds. Veridian's management has represented that milestone payments totaling approximately $4.5 million have been paid to date, leaving approximately $17.5 million in remaining potential milestone obligations.
• Running Royalty: A low single-digit royalty on aggregate worldwide annual net sales of licensed products, subject to customary reductions for third-party royalty stacking and generic/biosimilar competition.
Change-of-Control / Assignment. Section 13.2 of the Hargrove License addresses assignability. The license is assignable by Veridian in connection with a merger, acquisition, or sale of all or substantially all assets related to the licensed technology, provided that Veridian (or its successor) provides written notice to Hargrove within thirty (30) days following the closing of such transaction. Importantly, no prior consent from Hargrove is required. However, Hargrove retains a right to audit the books and records of the assignee for purposes of verifying royalty payments and milestone compliance. This is a favorable provision from the Buyer's perspective, as it permits the Transaction to proceed without the need for Hargrove's consent, subject only to the post-closing notice requirement.
Diligence Obligations. Article 5 of the Hargrove License imposes an obligation on Veridian to use "commercially reasonable efforts" to develop and commercialize at least one product under the license. If Veridian fails to use commercially reasonable efforts for a continuous period of twenty-four (24) months, Hargrove has the right, upon sixty (60) days' prior written notice, to convert the exclusive license to a non-exclusive license. This conversion right is a significant risk factor, as loss of exclusivity under the Hargrove License would undermine the competitive advantage of the VeriTCE platform and could materially diminish the value of Veridian's pipeline. We recommend confirming with Veridian's management and counsel that the Company is currently in compliance with its diligence obligations and that no notice of non-compliance or default has been received from Hargrove. This item is listed as an outstanding diligence item in Section XV below.
Patent Prosecution and Maintenance. Under Article 6, Veridian has the first right to prosecute, maintain, and defend the licensed patents at its own expense. If Veridian elects not to prosecute or maintain any licensed patent, Hargrove has step-in rights to do so at its own expense, and Veridian's license under such patent would be converted to a non-exclusive license. Veridian's management has confirmed that the Company has been actively prosecuting and maintaining all licensed patents and has not elected to abandon any patent in the licensed portfolio.
Term. The Hargrove License is co-terminous with the last-to-expire licensed patent. Based on the current patent portfolio analysis set forth in the IP Due Diligence Memorandum, the last-to-expire patent is estimated to expire in 2037, subject to any patent term extensions or adjustments.
Risk Assessment. The Hargrove License is foundational to the VeriTCE platform and all three of Veridian's pipeline candidates, including VRD-4187. Loss of exclusivity under this license would be catastrophic to the value of the Transaction. The favorable assignment provisions (no consent required, post-closing notice only) significantly mitigate Transaction-specific risk. However, the ongoing diligence obligation and the conversion-to-non-exclusive remedy require careful monitoring. We recommend that the SPA include a specific representation confirming Veridian's compliance with the diligence obligations under the Hargrove License and that no notice of default or conversion has been delivered or received. Cross-reference to the IP Due Diligence Memorandum (dated May 14, 2024) for detailed analysis of the licensed patent portfolio.
B. Non-Exclusive License Agreement — Kensington Therapeutics, Inc.
Veridian is party to a Non-Exclusive License Agreement (the "Kensington License") with Kensington Therapeutics, Inc. ("Kensington"), dated as of March 8, 2018, pursuant to which Kensington granted Veridian a non-exclusive, worldwide, sublicensable license to certain antibody engineering technology used in the construction of bispecific T-cell engagers.
Grant of License. The Kensington License grants Veridian a non-exclusive, worldwide license, with the right to sublicense, to use Kensington's proprietary antibody engineering methods and related know-how in the development and manufacture of Veridian's proprietary compounds. The license is limited to use in compounds that are proprietary to Veridian and does not extend to the development of compounds for third parties or for sublicensing as a standalone technology platform.
Financial Terms. The financial terms are straightforward: an upfront license fee of One Million Two Hundred Thousand Dollars ($1,200,000), paid at execution in 2018; an annual license fee of One Hundred Fifty Thousand Dollars ($150,000); and no milestone payments or running royalties. The annual license fee has been paid to date, and Veridian's management has confirmed that the Company is in compliance with all payment obligations.
Term. The Kensington License is perpetual and irrevocable, subject to Veridian's ongoing compliance with its payment obligations and confidentiality covenants. The license may be terminated by Kensington only in the event of a material breach by Veridian that remains uncured for sixty (60) days following written notice.
Change-of-Control. The Kensington License does not contain a change-of-control provision. Section 11.3 of the agreement expressly provides that the license is freely assignable by either party in connection with a merger, acquisition, change of control, or sale of all or substantially all assets of the assigning party, without the need for prior consent or notice.
Risk Assessment. Low risk. The Kensington License is a perpetual, irrevocable grant with no consent requirements and no change-of-control restrictions. No issues identified for the Transaction.
C. Research Collaboration Agreement — Northvale Oncology Research Institute
Veridian is party to a Research Collaboration Agreement (the "Northvale Collaboration") with the Northvale Oncology Research Institute ("Northvale"), dated as of January 15, 2024, for the collaborative evaluation of VRD-4187 in combination therapy settings.
Scope. Under the Northvale Collaboration, the parties are conducting joint research to evaluate the safety and efficacy of VRD-4187 in combination with PD-1 checkpoint inhibitors in preclinical models and, potentially, in a Phase I/II combination trial. The collaboration is non-exclusive in nature, meaning that both parties are free to pursue similar research with other collaborators.
intellectual Property. Veridian retains all intellectual property arising from the collaboration. Northvale has no ownership interest in any inventions, data, or results generated under the agreement, and all intellectual property developed by Northvale personnel in the course of the collaboration is assigned to Veridian.
Term. The Northvale Collaboration has a term of two (2) years, commencing on January 15, 2024, and expiring on January 15, 2026. The agreement may be renewed by mutual written agreement of the parties.
Financial Terms. Veridian's total financial commitment under the Northvale Collaboration is Two Million Eight Hundred Thousand Dollars ($2,800,000) over the two-year term, payable in quarterly installments based on achievement of specified research milestones.
Change-of-Control. Section 9.4 of the Northvale Collaboration provides that either party may terminate the agreement upon sixty (60) days' prior written notice following a "Change of Control" of the other party. "Change of Control" is defined to include the acquisition by any person of a majority of the voting power of the other party, or a merger or consolidation resulting in a change in the majority ownership of the other party. The proposed Transaction would trigger Northvale's termination right.
Risk Assessment. Moderate risk. While termination of the Northvale Collaboration would not impact the core VRD-4187 development program (the Marlowe Asset Management-2 trial operates independently of the Northvale research), it could delay the exploration of VRD-4187 in combination therapy settings, which is an area of strategic interest for Penterra. We recommend seeking a waiver or amendment to the Northvale Collaboration to eliminate the change-of-control termination right, or alternatively, to negotiate a standstill period during which Northvale agrees not to exercise its termination right while the parties discuss the continuation of the collaboration post-closing.
VI. Real Property Lease
A. Lease for 550 Gateway Drive, Cambridge, MA 02142
Veridian's sole real property interest is a leasehold at 550 Gateway Drive, Cambridge, Massachusetts 02142, pursuant to a commercial lease agreement (the "Lease") with Gateway Realty Trust, a Massachusetts business trust (the "Landlord"), dated as of March 1, 2019.
Premises. The leased premises comprise approximately 65,000 rentable square feet of laboratory and office space located at 550 Gateway Drive, Cambridge, MA 02142. The premises house Veridian's entire workforce of approximately 148 employees, including all laboratory and research operations, as well as corporate administrative functions. The Cambridge location is situated in the Kendall Square / East Cambridge life sciences corridor, which is one of the premier biotechnology clusters in the United States.
Term. The Lease has an initial term of ten (10) years, commencing on March 1, 2019, and expiring on February 28, 2029. The Lease does not include a renewal option, but does include a right of first offer on adjacent space (discussed below). There are approximately four years and nine months remaining on the initial term as of the date of this memorandum.
Base Rent. Base rent under the Lease is approximately $85.00 per rentable square foot per annum, subject to annual escalations of three percent (3%). Based on the current escalation, the annualized base rent for the current lease year is approximately $5,850,000. In addition to base rent, Veridian is responsible for its proportionate share of operating expenses, real estate taxes, and common area maintenance charges, estimated at approximately $1,200,000 per annum based on prior-year reconciliations.
Security Deposit. Veridian has provided a security deposit in the amount of One Million Seven Hundred Fifty Thousand Dollars ($1,750,000) in the form of a standby letter of credit issued by Harborview Bank, N.A. The letter of credit is subject to annual renewal and must be maintained throughout the Lease term.
Assignment and Subletting. Article 12 of the Lease addresses assignment and subletting. The general rule is that the Lease may not be assigned, and the premises may not be sublet, without the Landlord's prior written consent, which consent shall not be unreasonably withheld, conditioned, or delayed. However, the Lease includes a "Permitted Transfer" exception at Section 12.4, which provides:
"Notwithstanding the foregoing, Tenant may assign this Lease or sublet all or any portion of the Premises without Landlord's consent (but upon prior written notice to Landlord) in connection with (a) a merger or consolidation of Tenant with another entity, (b) an acquisition of Tenant or a sale of all or substantially all of Tenant's assets, or (c) an assignment to an entity controlling, controlled by, or under common control with Tenant; provided, however, that in the case of any assignment pursuant to clauses (a) or (b), the assignee shall have a net worth, as of the date of such assignment or as of the date of execution of this Lease, whichever is greater, at least equal to the net worth of Tenant as of the date of execution of this Lease."
Penterra's net worth substantially exceeds Veridian's net worth both at the time of execution of the Lease and at the present time. Accordingly, the Permitted Transfer exception should apply to the Transaction, and no Landlord consent should be required. Nevertheless, we recommend providing the Landlord with written notice of the Transaction in advance of or promptly following closing, in accordance with the terms of the Permitted Transfer provision. We further recommend confirming this analysis with the Landlord's counsel and, if feasible, obtaining a landlord estoppel certificate confirming that the Lease is in full force and effect and that no defaults exist.
Key Lease Provisions.
• Landlord's Lien. The Lease grants the Landlord a lien on the tenant's personal property located at the premises. This lien may need to be subordinated in connection with any post-closing financing arrangements or credit facilities that Penterra or Veridian may enter into.
• Hazardous Materials. The Lease contains detailed provisions governing the use, storage, handling, and disposal of hazardous materials at the premises, which is standard for laboratory space in the Cambridge market. Veridian's laboratory operations involve biological agents, chemicals, and other materials that are regulated under applicable environmental and safety laws. The Environmental Due Diligence Memorandum (dated May 15, 2024) provides a detailed analysis of Veridian's environmental compliance posture.
• Right of First Offer. Section 14.8 of the Lease grants Veridian a right of first offer on approximately 15,000 square feet of adjacent space at 550 Gateway Drive, should such space become available during the Lease term. This right of first offer is a potentially valuable expansion option for Penterra post-closing.
• Tenant Improvement Allowance. The Landlord provided a tenant improvement allowance at the commencement of the Lease, which has been fully utilized. No further tenant improvement obligations exist on the part of the Landlord.
• Insurance Requirements. Veridian is required to maintain comprehensive general liability insurance (minimum $2 million per occurrence, $5 million aggregate), property insurance covering the full replacement value of the tenant's improvements and personal property, and environmental impairment liability insurance. Veridian's management has confirmed that all required insurance policies are in effect and current.
Risk Assessment. Low risk. The Permitted Transfer exception is well-drafted and should clearly encompass the Transaction. The Lease is a key asset, as it provides Veridian's only operating facility, and continuity of the leasehold is essential to post-closing operations. We recommend obtaining a landlord estoppel certificate and providing the required notice as part of the closing process.
VII. Investor Rights and Stockholder Agreements
Veridian's capitalization and governance are subject to a suite of investor rights and stockholder agreements entered into in connection with the Company's Series C preferred stock financing in the third quarter of 2020. These agreements are standard venture-backed company governance documents and, importantly, contain provisions that facilitate the Transaction and terminate upon closing.
A. Amended and Restated Investors' Rights Agreement
Veridian, its principal institutional investors, and its founders are parties to an Amended and Restated Investors' Rights Agreement (the "IRA"), dated as of the Series C closing in Q3 2020. The parties to the IRA include:
• Crestline Ventures, LP (holding approximately 28.3% of Veridian's outstanding equity);
• Boreal Health Partners Fund III, LP (holding approximately 19.7% of Veridian's outstanding equity);
• Apex Growth Equity Fund II, LP (holding approximately 14.1% of Veridian's outstanding equity);
• Dr. Julian Marek, co-founder and CEO (holding approximately 8.4% of Veridian's outstanding equity);
• Dr. Priya Chandrasekaran, co-founder and CSO (holding approximately 6.2% of Veridian's outstanding equity); and
• Other stockholders holding the remaining equity.
Key Provisions. The IRA contains the following principal provisions:
• Registration Rights. Crestline, Boreal, and Apex hold demand registration rights entitling them to require Veridian to register their shares under the Securities Act of 1933 in connection with a public offering. Other stockholders hold piggyback registration rights. These rights are not relevant to the Transaction, which is structured as a cash stock purchase rather than a transaction involving equity consideration. However, we note that the registration rights provisions survive the termination of the IRA by their terms, as discussed below.
• Information Rights. Investors holding at least five percent (5%) of Veridian's outstanding shares are entitled to receive quarterly unaudited financial statements and annual audited financial statements. Veridian's annual financial statements are audited by Northbridge Accounting Group LLP (engagement partner: Patrick Calloway).
• Board Observation Rights. Boreal Health Partners Fund III, LP and Apex Growth Equity Fund II, LP each have board observer rights, entitling their respective designees to attend and participate in meetings of Veridian's Board of Directors in a non-voting, observer capacity. Neither entity holds a board seat.
• Preemptive Rights / Rights of First Refusal. Major investors (defined as investors holding at least five percent of outstanding shares) have a right of first refusal on new issuances of equity securities by Veridian, subject to customary exceptions. These preemptive rights will terminate upon consummation of the Transaction.
• Co-Sale Rights (Tag-Along). The IRA includes co-sale (tag-along) rights that are triggered upon proposed transfers of shares by the founders. These rights are not applicable in the context of a 100% stock purchase, where all stockholders are selling their entire holdings.
• Drag-Along Rights. Section 4.5 of the IRA provides that holders of a majority of the outstanding shares of preferred stock may compel all stockholders (including holders of common stock) to participate in an acquisition transaction that has been approved by the Board of Directors. This drag-along provision is significant because it facilitates the Transaction by enabling the major preferred stockholders to compel participation by all stockholders, thereby eliminating the risk of holdout stockholders. As of the date of this memorandum, Veridian's management has confirmed that holders of more than ninety percent (90%) of the outstanding capital stock have delivered their written consent to the Transaction, which is expected to be finalized by June 14, 2024.
• Termination Upon Acquisition. The IRA provides that all rights granted thereunder (other than registration rights, which survive by their terms) terminate automatically upon a "Deemed Liquidation Event," which is defined to include a merger, acquisition, or sale of all or substantially all of the outstanding capital stock of the Company. The proposed $900 million stock purchase constitutes a Deemed Liquidation Event. Accordingly, all provisions of the IRA other than the registration rights will terminate upon closing.
Risk Assessment. Low risk. The drag-along provisions facilitate stockholder approval. The agreement terminates upon closing. No consent is needed under the IRA for the Transaction to proceed.
B. Amended and Restated Voting Agreement
The same parties are party to an Amended and Restated Voting Agreement (the "Voting Agreement"), also dated as of the Series C closing in Q3 2020. The Voting Agreement establishes Board composition requirements, providing for two (2) investor-designated board seats (one designated by Crestline Ventures and one by Boreal Health Partners), two (2) founder-designated board seats (Dr. Marek and Dr. Chandrasekaran), and one (1) independent board seat. All parties to the Voting Agreement are obligated to vote their shares in favor of the board nominee designees.
Termination. The Voting Agreement terminates upon a Deemed Liq

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