1020-00006 · TerraVault BioSciences Inc · Transaction Documents

signed-term-sheet-2022-09-26.docx DOCUMENT Finance & Banking

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NON-BINDING TERM SHEET

Proposed Joint Venture — PrairieSense Technologies LLC

September 26, 2022

This Term Sheet is NON-BINDING and does not constitute a commitment by either party to consummate the proposed joint venture or enter into any definitive agreement, except as expressly provided in Section 11 hereof. This Term Sheet reflects the preliminary term sheet dated August 22, 2022, as submitted by Greenfield Agricultural Partners LLC, and the markup thereof returned by TerraVault BioSciences Inc. on September 9, 2022, together with further negotiations between the parties and their respective counsel through the date hereof.

Section 1: Parties

1.1 Party A

Greenfield Agricultural Partners LLC, an Iowa limited liability company (hereinafter referred to as "Greenfield" or "GAP"), having its principal office at 4100 Grand Prairie Drive, Suite 300, Des Moines, Iowa 50309. Greenfield's authorized representative for purposes of this Term Sheet and the negotiations contemplated hereby is Marcus J. Linden, Founder and Managing Partner.

Greenfield is represented by outside legal counsel in connection with this Term Sheet and the proposed joint venture:

Calderwood & Harkness LLP 800 Walnut Street, Suite 2400 Des Moines, Iowa 50309

Attention: Sandra Tung

1.2 Party B

TerraVault BioSciences Inc., a Delaware corporation qualified to do business in the State of Illinois (hereinafter referred to as "TerraVault" or "TVBS"), having its principal office at 1720 Innovation Parkway, Champaign, Illinois 61820. TerraVault's authorized representative for purposes of this Term Sheet and the negotiations contemplated hereby is Dr. Anand Mehta, Co-Founder and Chief Executive Officer.

TerraVault is represented by outside legal counsel in connection with this Term Sheet and the proposed joint venture:

Whitfield, Carey & Stokes LLP 233 S. Wacker Drive, Suite 5600 Chicago, Illinois 60606

Attention: Jonathan Everett Carey

Greenfield and TerraVault are sometimes referred to herein individually as a "Party" and collectively as the "Parties."

Section 2: Proposed Joint Venture Entity

The Parties propose to form a new joint venture entity with the following characteristics:

Name: PrairieSense Technologies LLC (hereinafter referred to as the "Company" or the "JV Entity").

Entity Type: The Company shall be organized as a limited liability company formed under the Iowa Revised Uniform Limited Liability Company Act, Iowa Code Chapter 489, as amended from time to time.

State of Formation: Iowa.

Registered Agent (Proposed): Capitol Filings Inc., 220 E. Court Avenue, Des Moines, Iowa 50309, or such other registered agent as the Parties may mutually agree upon prior to or at the time of the Company's formation.

Principal Place of Business: To be determined by mutual agreement of the Parties. The Parties anticipate that the Company's principal place of business will be located in either the Des Moines, Iowa metropolitan area or the Champaign, Illinois area. The final determination of the Company's principal place of business shall take into account operational requirements, proximity to target agricultural markets, access to technical talent, and such other factors as the Parties may consider relevant. The selection of the Company's principal place of business shall be addressed in the definitive JV Operating Agreement.

Section 3: Purpose of the Joint Venture

The purpose of the proposed joint venture is the development, manufacturing, and commercialization of integrated soil-health sensor systems for commercial row-crop agriculture in the United States, with an initial focus on the U.S. Midwest region. The joint venture is intended to leverage TerraVault's proprietary SoilPulse™ real-time soil nutrient and moisture sensor technology together with Greenfield's operational expertise, capital resources, and established relationships within the agricultural industry.

The specific activities of the JV Entity are anticipated to include, without limitation, the following:

(a) Further development and enhancement of the SoilPulse™ technology platform for large-scale deployment in commercial row-crop agricultural applications;

(b) Manufacturing of sensor hardware components and assemblies, whether through in-house production capabilities or contract manufacturing arrangements;

(c) Development of proprietary data analytics software and related tools designed to support agronomic decision-making by farmers, agronomists, and agricultural enterprises;

(d) Sales and distribution of integrated soil-health sensor systems, whether directly to end users, through dealer and distributor networks, or through other channels;

(e) Provision of related services, including installation, calibration, maintenance, technical support, data subscription services, and consulting services; and

(f) Such other activities as may be incidental or related to the foregoing and as the Board of Managers of the JV Entity may from time to time authorize.

The precise scope of the JV Entity's business purpose will be set forth in the definitive JV Operating Agreement, and the Parties expect to refine and elaborate upon the foregoing description during the course of negotiating such agreement.

Section 4: Capitalization

4.1 Total Initial Capital Commitment

The aggregate initial capital commitment of the Parties to the JV Entity shall be $12,000,000 (Twelve Million Dollars), allocated between the Parties as set forth below. A summary of the proposed capital structure is set forth in Schedule A attached hereto for informational purposes.

4.2 Greenfield Contribution

Amount: $7,200,000 (Seven Million Two Hundred Thousand Dollars).

Form: One hundred percent (100%) cash.

Equity Interest: In exchange for its capital contribution, Greenfield shall receive a sixty percent (60%) membership interest in the JV Entity, representing sixty percent (60%) of the issued and outstanding membership interests of the Company.

Funding: Greenfield's cash contribution shall be contributed to the JV Entity at or prior to the closing of the transactions contemplated by the definitive JV Operating Agreement, in accordance with a funding schedule to be mutually agreed upon by the Parties and set forth in such agreement. The Parties anticipate that Greenfield's contribution may be funded in one or more installments, with the specific timing and amounts to be determined during the negotiation of the definitive JV Operating Agreement.

4.3 TerraVault Contribution

Total Amount: $4,800,000 (Four Million Eight Hundred Thousand Dollars).

Form: A combination of cash and in-kind contribution, as follows:

(i) Cash Component: $2,400,000 (Two Million Four Hundred Thousand Dollars) in cash.

(ii) In-Kind / IP Component: A contribution of intellectual property rights in the form of an exclusive technology license to the JV Entity with respect to TerraVault's SoilPulse™ technology platform (as further described in Section 5 below), with a value to be mutually agreed upon by the Parties. The proposed value of such IP contribution per Greenfield is $2,400,000 (Two Million Four Hundred Thousand Dollars). The valuation of TerraVault's in-kind IP contribution remains an open item and is subject to further negotiation. See Section 8, Open Item (a).

Equity Interest: In exchange for its capital contribution (cash and in-kind), TerraVault shall receive a forty percent (40%) membership interest in the JV Entity, representing forty percent (40%) of the issued and outstanding membership interests of the Company. The foregoing equity allocation is based upon Greenfield's proposed valuation of the IP contribution and is subject to adjustment depending on the final agreed-upon valuation. See Section 8, Open Item (a).

Funding: TerraVault's cash contribution of $2,400,000 shall be contributed to the JV Entity at or prior to the closing of the transactions contemplated by the definitive JV Operating Agreement. TerraVault's in-kind IP contribution shall be effected through the execution and delivery of a Technology License Agreement between TerraVault and the JV Entity, to be negotiated and executed concurrently with the definitive JV Operating Agreement.

4.4 Additional Capital Contributions

Future capital calls, if any, shall be made pro rata in accordance with the then-existing membership interests of the Members, subject to anti-dilution protections and preemptive rights to be set forth in the definitive JV Operating Agreement. The definitive JV Operating Agreement shall include provisions addressing the consequences of a Member's failure to fund its pro rata share of any approved additional capital call, including customary remedies such as dilution of the non-contributing Member's membership interest, forced transfer rights, conversion of the unfunded amount to a Member loan bearing interest at a rate to be agreed upon, and such other remedies as the Parties may negotiate. The specific mechanics of future capital calls, including the approval thresholds required for the Board of Managers to authorize such calls, shall be addressed in the definitive JV Operating Agreement.

Section 5: Technology License

TerraVault shall grant to the JV Entity an exclusive license within the JV Field (as defined below) to use, modify, enhance, improve, and sublicense TerraVault's SoilPulse™ technology platform, including the following identified intellectual property assets (which are more fully described in Schedule B attached hereto):

(a) U.S. Patent No. 10,842,317, entitled "Real-Time Soil Nutrient and Moisture Sensor Array," issued on March 9, 2021, together with all continuations, continuations-in-part, divisionals, reissues, and foreign counterparts thereof;

(b) U.S. Patent Application No. 17/509,664, filed on October 25, 2021, currently pending before the United States Patent and Trademark Office, together with all patents that may issue therefrom and all continuations, continuations-in-part, divisionals, and reissues thereof;

(c) The SoilPulse™ trademark, U.S. Registration No. 6,318,205, together with any associated goodwill and all related trademark applications or registrations;

(d) All associated trade secrets, know-how, proprietary software (including source code and object code), data, algorithms, technical documentation, specifications, protocols, schematics, designs, formulations, and other proprietary information related to the SoilPulse™ technology platform.

For purposes of this Term Sheet, the "JV Field" shall be defined as the development, manufacturing, marketing, sale, and servicing of soil-health sensor systems and related data analytics products and services for commercial row-crop agriculture in the United States.

The detailed terms and conditions of the technology license, including without limitation the precise scope and definition of the JV Field, the duration of the license, any royalty or ongoing payment obligations (if applicable), sublicensing rights and restrictions, ownership and licensing of improvements and enhancements developed by or on behalf of the JV Entity, the allocation of intellectual property rights as between TerraVault and the JV Entity, prosecution and maintenance obligations with respect to the licensed patents, enforcement rights in the event of third-party infringement, indemnification obligations, and termination and reversion provisions, shall be set forth in a separate Technology License Agreement to be negotiated and executed concurrently with the definitive JV Operating Agreement.

The Parties acknowledge that the valuation of the technology license for purposes of TerraVault's in-kind capital contribution to the JV Entity remains an open item and is subject to further negotiation as described in Section 8, Open Item (a) below.

Section 6: Governance and Management

6.1 Board of Managers

The JV Entity shall be managed by a Board of Managers (the "Board") in accordance with the terms to be set forth in the definitive JV Operating Agreement.

As reflected in this Term Sheet, Greenfield has proposed that the Board consist of five (5) members, allocated as follows:

(a) Three (3) members shall be appointed by Greenfield (the "Greenfield Managers"); and

(b) Two (2) members shall be appointed by TerraVault (the "TerraVault Managers").

The foregoing proposed Board composition is consistent with the Parties' respective sixty percent (60%) and forty percent (40%) equity ownership positions. Each Party shall have the right to remove and replace its appointed managers at any time, with or without cause, subject to such notice requirements as may be set forth in the definitive JV Operating Agreement.

The composition of the Board of Managers, including the total number of seats, the allocation of appointment rights between the Parties, and the related governance and consent rights described in Section 6.3 below, remain subject to further negotiation between the Parties. See Section 8, Open Item (b).

6.2 Officers. The day-to-day management and operations of the JV Entity shall be conducted by officers appointed by the Board of Managers in accordance with the definitive JV Operating Agreement. The initial officer positions and the identity of the individuals to fill such positions shall be agreed upon by the Parties during the negotiation of the definitive JV Operating Agreement and shall be set forth therein or in resolutions adopted by the Board at or promptly following the closing.

The Parties anticipate that the JV Entity's initial officer positions will include, at a minimum:

(a) Chief Executive Officer (CEO): Responsible for overall strategic direction, business development, and management of the JV Entity;

(b) Chief Technology Officer (CTO): Responsible for technology development, product engineering, R&D strategy, and oversight of the SoilPulse™ technology platform; and

(c) Chief Financial Officer (CFO): Responsible for financial management, accounting, reporting, budgeting, and treasury functions.

Additional officer positions may be established by the Board as the Parties may determine to be necessary or advisable for the conduct of the JV Entity's business.

6.3 Major Decisions / Consent Rights

The definitive JV Operating Agreement shall provide that certain major decisions affecting the JV Entity shall require either supermajority approval of the Board (at a threshold to be agreed upon) or the unanimous consent of all members of the Board or all Members of the JV Entity, as applicable.

The categories of decisions that the Parties anticipate will constitute "major decisions" requiring heightened approval thresholds include, at a minimum, the following:

(a) Approval of the JV Entity's annual operating budget and any material deviations therefrom;

(b) Capital expenditures in excess of a dollar threshold to be agreed upon;

(d) Admission of new Members to the JV Entity or issuance of additional membership interests;

(e) Amendment, modification, or restatement of the Operating Agreement or the Certificate of Organization;

(f) Dissolution, liquidation, or winding up of the JV Entity;

(g) Certain related-party transactions between the JV Entity and either Member or their respective affiliates;

(h) Entry into, amendment of, or termination of material contracts, including the Technology License Agreement;

(i) Initiation or settlement of material litigation or claims;

(j) Changes to the JV Entity's line of business or scope of operations outside the JV Field; and

(k) Such other matters as the Parties may agree to include in the definitive JV Operating Agreement.

The scope of TerraVault's consent rights, particularly with respect to decisions relating to the SoilPulse™ technology (including sublicensing decisions, modifications to the technology, and enforcement of intellectual property rights), the R&D budget allocation, and the terms of any sublicensing by the JV Entity, remains subject to further negotiation. See Section 8, Open Item (b).

6.4 Deadlock Resolution

The definitive JV Operating Agreement shall include a deadlock resolution mechanism to address situations in which the Board of Managers is unable to reach agreement on matters requiring Board approval. The Parties intend to negotiate the specific terms of the deadlock resolution mechanism, which may include one or more of the following approaches: escalation of the dispute to the Parties' senior executives; non-binding mediation; binding arbitration; a buy-sell mechanism (such as a "shotgun" or "Russian roulette" provision); or such other mechanisms as the Parties may agree upon. The terms, conditions, and procedural requirements of the deadlock resolution mechanism shall be set forth in the definitive JV Operating Agreement.

Section 7: Non-Competition and Exclusivity

7.1 Non-Competition. As reflected in this Term Sheet, Greenfield has proposed the following non-competition terms:

During the term of the JV and for a period of three (3) years following the formation of the JV Entity, TerraVault shall not, directly or indirectly (whether through affiliates, subsidiaries, licensees, or otherwise), license, sell, distribute, or otherwise make available the SoilPulse™ technology (or any technology that is competitive with or substantially similar to the SoilPulse™ technology for soil-health sensing applications) to any third party within the U.S. Midwest territory. For purposes of this Term Sheet, the "U.S. Midwest territory" is defined as the following eleven (11) states: Iowa, Illinois, Indiana, Minnesota, Wisconsin, Missouri, Nebraska, Kansas, South Dakota, North Dakota, and Ohio.

Greenfield has further proposed that the definitive JV Operating Agreement include a reciprocal restriction on Greenfield with respect to investment in, promotion of, or participation in any competing soil-health sensor technology platform within the same geographic territory and during the same period. The specific terms of any reciprocal restriction applicable to Greenfield are subject to negotiation.

The scope, geographic coverage, duration, and enforceability of the non-competition provisions applicable to each Party remain subject to further negotiation between the Parties. See Section 8, Open Item (c).

7.2 Exclusivity Period

From the date of this Term Sheet through the earlier of (i) the execution and delivery by the Parties of a definitive JV Operating Agreement or (ii) the date that is ninety (90) days after the date hereof (such period, the "Exclusivity Period"), neither Party shall, and each Party shall cause its respective affiliates, officers, directors, managers, employees, agents, and representatives not to, directly or indirectly, solicit, initiate, encourage, facilitate, or engage in discussions or negotiations with any third party regarding any transaction that would be competitive with, duplicative of, or otherwise inconsistent with the proposed JV, including without limitation any joint venture, strategic alliance, technology license, equity investment, merger, or acquisition involving soil-health sensor technology for commercial row-crop agriculture in the United States.

The exclusivity provisions set forth in this Section 7.2 are binding on the Parties as provided in Section 11 below.

Section 8: Open Items

The Parties acknowledge and agree that the following material terms remain subject to further good faith negotiation and have not been resolved as of the date of this Term Sheet. The Parties intend to use commercially reasonable efforts to negotiate and resolve each of the following open items during the course of negotiating the definitive JV Operating Agreement and related transaction documents.

Open Item (a): IP / Technology License Valuation

The Parties have not reached agreement on the fair market value of TerraVault's SoilPulse™ technology license contribution for purposes of determining the amount of TerraVault's in-kind capital contribution to the JV Entity. The current positions of the Parties are as follows:

(i) Greenfield's position: Greenfield proposes a valuation of $2,400,000 (Two Million Four Hundred Thousand Dollars) for TerraVault's IP contribution, which, when combined with TerraVault's cash contribution of $2,400,000, would result in a total TerraVault contribution of $4,800,000 and an equity allocation of sixty percent (60%) for Greenfield and forty percent (40%) for TerraVault, based on a total capitalization of $12,000,000.

(ii) TerraVault's position: TerraVault has indicated that it believes the fair market value of the SoilPulse™ technology license, taking into account the patent portfolio, pending patent applications, trademark registrations, trade secrets, proprietary software, and associated know-how, exceeds $2,400,000. TerraVault has reserved its position on the final valuation of the IP contribution pending further analysis of comparable technology license transactions, the revenue potential of the SoilPulse™ platform, and such other factors as TerraVault may deem relevant.

The Parties agree to engage in good faith negotiations to resolve this open item. To the extent the Parties are unable to reach agreement on the valuation through direct negotiation, the Parties may, by mutual agreement, commission an independent third-party valuation of the SoilPulse™ technology license by a qualified valuation firm acceptable to both Parties. The costs of any such independent valuation shall be shared equally by the Parties. The Parties acknowledge that resolution of this open item may affect the final equity allocation between the Parties, the total capitalization of the JV Entity, or both.

Open Item (b): Board Composition and Governance Consent Rights

Greenfield has proposed a five-member Board of Managers with three (3) Greenfield-appointed members and two (2) TerraVault-appointed members, which Greenfield views as consistent with the Parties' proposed 60/40 equity ownership allocation. TerraVault has indicated a preference for governance arrangements that provide TerraVault with enhanced representation on the Board and/or enhanced consent rights, particularly with respect to the following categories of decisions:

(i) Decisions relating to the use, modification, sublicensing, enforcement, or disposition of the SoilPulse™ technology and related intellectual property;

(ii) Decisions relating to the allocation of the JV Entity's research and development budget and the strategic direction of the JV Entity's technology development activities; and

(iii) Decisions relating to the sublicensing of SoilPulse™ technology by the JV Entity to third parties, including the terms and conditions of any such sublicenses.

The scope and nature of any enhanced governance rights for TerraVault, including without limitation whether such rights would take the form of additional Board seats, a separate class of consent rights with respect to technology-related decisions, committee-level governance structures, or other mechanisms, remain subject to further negotiation. The Parties intend to address Board composition and governance consent rights comprehensively in the definitive JV Operating Agreement.

Open Item (c): Non-Competition Scope and Duration

Greenfield has proposed a non-competition restriction covering the U.S. Midwest territory (consisting of eleven states: Iowa, Illinois, Indiana, Minnesota, Wisconsin, Missouri, Nebraska, Kansas, South Dakota, North Dakota, and Ohio) and a duration of three (3) years following the formation of the JV Entity, during which TerraVault would be restricted from licensing SoilPulse™ technology (or competing soil-health sensor technology) to third parties within the specified territory.

TerraVault has objected to the proposed non-competition restriction as overbroad in both geographic scope and temporal duration. TerraVault has expressed concern that a restriction covering eleven states for a period of three years from JV formation (in addition to the duration of the JV itself) would unreasonably limit TerraVault's ability to commercialize the SoilPulse™ technology outside the scope of the JV Entity's activities, particularly in geographic markets that the JV Entity may not actively serve during its initial years of operation.

The Parties intend to negotiate mutually acceptable non-competition and non-solicitation terms, including with respect to both geographic scope and duration, in the definitive JV Operating Agreement. The Parties may also consider alternative structures for protecting the competitive position of the JV Entity, such as rights of first offer or first refusal in favor of the JV Entity with respect to opportunities in the broader U.S. market.

Section 9: Due Diligence

The execution and delivery of any definitive agreement with respect to the proposed JV shall be conditioned upon the satisfactory completion of customary due diligence by each Party with respect to the other Party and, where applicable, the assets and intellectual property to be contributed to or licensed to the JV Entity. The due diligence to be conducted by each Party is expected to include, without limitation, the following:

Greenfield's Due Diligence of TerraVault:

(a) Review of TerraVault's intellectual property portfolio, including the patents, patent applications, trademarks, trade secrets, and software identified in Schedule B hereto, as well as any encumbrances, liens, or third-party rights affecting such intellectual property;

(b) Review of TerraVault's audited and unaudited financial statements for the most recent three fiscal years and any interim periods;

(c) Review of TerraVault's material contracts, including customer agreements, supplier agreements, license agreements, and any agreements with existing investors or third parties that could affect the proposed JV or the Technology License Agreement;

(d) Review of any pending or threatened litigation, claims, or regulatory proceedings involving TerraVault or the SoilPulse™ technology; and

(e) Review of TerraVault's regulatory compliance, including compliance with applicable federal, state, and local laws, environmental regulations, data privacy laws, and export control regulations.

TerraVault's Due Diligence of Greenfield:

(a) Review of Greenfield's financial capacity to fund its proposed capital contribution to the JV Entity, including review of Greenfield's most recent financial statements and evidence of available capital;

(b) Review of Greenfield's current portfolio holdings and investment activities, including any investments in or relationships with entities that may be competitive with the proposed JV;

(d) Review of any relevant regulatory matters affecting Greenfield's ability to participate in the proposed JV.

Due diligence activities are expected to be conducted during the Exclusivity Period and may continue thereafter by mutual agreement of the Parties. Each Party shall cooperate with the other Party's reasonable due diligence requests and shall make available such documents, records, personnel, and facilities as may be reasonably necessary to facilitate the due diligence process, subject to the confidentiality obligations set forth in the NDA.

Section 10: Conditions to Definitive Agreement

The consummation of the proposed JV shall be subject to the satisfaction or mutual waiver of the following conditions:

10.1 Definitive Agreements. The Parties shall have negotiated, executed, and delivered the following definitive agreements, in each case in form and substance satisfactory to both Parties and their respective counsel:

(a) A definitive Operating Agreement of PrairieSense Technologies LLC, setting forth the complete terms and conditions governing the formation, capitalization, governance, management, operation, and dissolution of the JV Entity;

(b) A Technology License Agreement between TerraVault and the JV Entity, setting forth the terms and conditions of TerraVault's license of the SoilPulse™ technology to the JV Entity; and

(c) Such ancillary agreements as the Parties may mutually agree are necessary or advisable in connection with the proposed JV, which may include, without limitation, employment agreements or consulting agreements for key personnel, service agreements between the JV Entity and either Party or their affiliates, contribution agreements, and assignment or assumption agreements.

10.2 Additional Conditions. The consummation of the proposed JV may also be subject to the satisfaction of the following additional conditions, to the extent applicable:

(a) Due Diligence. Satisfactory completion of due diligence by each Party, as described in Section 9 above, with the results thereof being satisfactory to each Party in its reasonable discretion;

(b) Investor Consents. To the extent required under TerraVault's organizational documents, stockholders' agreement, or existing investor agreements, TerraVault shall have obtained the consent of its existing investors, including Meridian Venture Partners and Bluestem Capital Group, to the proposed JV, the Technology License Agreement, and the transactions contemplated hereby;

(c) Third-Party Financing. Availability of third-party financing for the JV Entity on terms acceptable to the Parties. The Parties have had preliminary discussions with Heartland National Bank, N.A. regarding a potential revolving credit facility in the amount of $4,000,000 (Four Million Dollars) for the JV Entity; however, no term sheet, commitment letter, or other binding agreement has been executed with Heartland National Bank, N.A. or any other lender as of the date hereof. The Parties shall work together in good faith to secure appropriate financing for the JV Entity, but neither Party shall be obligated to guarantee or otherwise support any indebtedness of the JV Entity except as may be agreed in the definitive JV Operating Agreement;

(d) Regulatory Approvals. Receipt of such regulatory approvals, consents, or filings as may be required by applicable federal, state, or local law in connection with the formation and operation of the JV Entity, the transactions contemplated by the Technology License Agreement, or the conduct of the JV Entity's business; and

(e) Other Conditions. Such other conditions as may be identified by the Parties during the course of due diligence or the negotiation of the definitive agreements and as may be mutually agreed upon.

Section 11: Binding Provisions

This Term Sheet is non-binding and does not constitute a commitment by either Party to enter into the proposed JV, to consummate any transaction described herein, or to enter into any definitive agreement, and neither Party shall have any liability to the other Party with respect to the transactions contemplated hereby unless and until a definitive JV Operating Agreement and related transaction documents have been fully negotiated, executed, and delivered by both Parties, except that the following provisions of this Term Sheet shall be binding and enforceable obligations of the Parties, surviving from the date hereof until the applicable expiration or termination of each such provision:

11.1 Confidentiality. The terms and existence of this Term Sheet, all negotiations related hereto, and all information exchanged between the Parties in connection with the proposed JV shall be treated as confidential information subject to the terms and conditions of the Mutual Non-Disclosure Agreement between Greenfield and TerraVault dated July 11, 2022 (the "NDA"), which NDA remains in full force and effect as of the date hereof. Neither Party shall, without the prior written consent of the other Party, disclose the existence of this Term Sheet or the terms hereof to any third party, except (i) to such Party's officers, directors, managers, employees, attorneys, accountants, financial advisors, and other professional advisors who have a need to know such information in connection with the evaluation or consummation of the proposed JV and who are bound by confidentiality obligations no less restrictive than those contained in the NDA, or (ii) as may be required by applicable law or the rules of any applicable stock exchange or self-regulatory organization.

11.2 Exclusivity. The exclusivity provisions set forth in Section 7.2 above shall be binding and enforceable obligations of the Parties for the duration of the Exclusivity Period, which shall commence on the date hereof and shall expire on the earlier of (i) the execution and delivery by the Parties of a definitive JV Operating Agreement or (ii) the date that is ninety (90) days after the date hereof (i.e., December 25, 2022). During the Exclusivity Period, each Party shall comply with the restrictions set forth in Section 7.2 in all respects. In the event of a breach or threatened breach of the exclusivity provisions by either Party, the non-breaching Party shall be entitled to seek equitable relief, including injunctive relief and specific performance, in addition to any other remedies available at law or in equity.

11.3 Governing Law

This Term Sheet and any claim, controversy, or dispute arising out of or relating to this Term Sheet, including with respect to the binding provisions set forth in this Section 11, shall be governed by and construed in accordance with the laws of the State of Iowa, without regard to conflict of laws principles that would require the application of the laws of any other jurisdiction.

11.4 Expenses. Each Party shall bear its own costs and expenses (including, without limitation, legal fees, accounting fees, advisory fees, and all other out-of-pocket expenses) incurred in connection with the negotiation, preparation, and execution of this Term Sheet and any definitive agreements contemplated hereby, whether or not the proposed JV is ultimately consummated. Neither Party shall have any right to reimbursement from the other Party for any such costs or expenses.

Section 12: Proposed Timeline and Next Steps

The Parties have discussed the following indicative timeline for the completion of due diligence, the negotiation of definitive agreements, and the closing of the proposed JV:

The foregoing timeline is indicative only and is provided for the Parties' planning purposes. The proposed timeline shall not create any binding obligation on either Party, and the actual timing of each milestone shall depend upon the progress of due diligence, the resolution of the open items described in Section 8, the availability of required third-party consents and financing, and the outcome of the Parties' negotiations with respect to the definitive agreements. Each Party shall use commercially reasonable efforts to cooperate in good faith to achieve the foregoing timeline objectives.

Section 13: Miscellaneous

13.1 No Assignment. Neither Party may assign, transfer, or delegate any of its rights or obligations under this Term Sheet without the prior written consent of the other Party. Any purported assignment in violation of this Section 13.1 shall be null and void.

13.2 Counterparts. This Term Sheet may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Execution of this Term Sheet by electronic signature or by facsimile transmission of a manually executed signature page shall be deemed to have the same legal force and effect as execution by original manual signature.

13.3 Entire Understanding. This Term Sheet, together with the NDA, constitutes the entire understanding between the Parties with respect to the subject matter hereof and supersedes all prior oral or written communications, proposals, representations, understandings, and agreements between the Parties relating to the subject matter hereof, including without limitation the preliminary term sheet dated August 22, 2022 submitted by Greenfield and the markup thereof returned by TerraVault on September 9, 2022.

13.4 Amendments. No amendment, modification, or waiver of any provision of this Term Sheet shall be effective unless set forth in a writing signed by both Parties.

13.5 Notices. All notices, requests, demands, and other communications under this Term Sheet shall be in writing and shall be deemed to have been duly given when delivered personally, sent by registered or certified mail (return receipt requested), or sent by nationally recognized overnight courier service, addressed to the Parties at their respective addresses set forth in Section 1 above, with copies to their respective counsel as identified in Section 1. Either Party may change its address for purposes of this Section 13.5 by providing written notice to the other Party in accordance with this Section.

13.6 No Third-Party Beneficiaries. This Term Sheet is entered into solely for the benefit of the Parties and their respective successors and permitted assigns, and nothing herein, express or implied, is intended to confer upon any other person or entity any rights, benefits, or remedies of any nature whatsoever under or by reason of this Term Sheet.

13.7 Severability. If any provision of this Term Sheet is held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision of this Term Sheet, and this Term Sheet shall be construed as if such invalid, illegal, or unenforceable provision had never been contained herein.

[Remainder of This Page Intentionally Left Blank — Signature Page Follows]

SIGNATURE PAGE TO NON-BINDING TERM SHEET Proposed Joint Venture — PrairieSense Technologies LLC

IN WITNESS WHEREOF, the Parties have caused this Non-Binding Term Sheet to be executed by their duly authorized representatives as of the date first written above, acknowledging that, except for the binding provisions set forth in Section 11, this Term Sheet does not create any legally binding obligations on either Party.

GREENFIELD AGRICULTURAL PARTNERS LLC

By: ________

Name: Marcus J. Linden

Title: Founder and Managing Partner

Date: September 26, 2022

TERRAVAULT BIOSCIENCES INC.

By: ________

Name: Dr. Anand Mehta

Title: Co-Founder and Chief Executive Officer

Date: September 26, 2022

Schedule A — Summary of Proposed Capital Structure (Informational)

This Schedule A is provided for informational and reference purposes only and is subject in all respects to the terms of the Term Sheet to which it is attached, including the open items described in Section 8 thereof.

Note: The IP contribution valuation of $2,400,000 set forth in the table above reflects Greenfield's proposed valuation of TerraVault's SoilPulse™ technology license contribution and has not been agreed to by TerraVault. TerraVault has indicated that it believes the fair market value of the SoilPulse™ technology license exceeds $2,400,000. The final agreed-upon valuation of the IP contribution may result in an adjustment to the equity percentages set forth above, the total capitalization of the JV Entity, or both. Resolution of the IP valuation is identified as Open Item (a) in Section 8 of the Term Sheet.

Schedule B — Identified SoilPulse™ IP Assets (Informational)

This Schedule B is provided for informational and reference purposes only and is based on information provided by TerraVault as of the date of the Term Sheet. The completeness and accuracy of the information set forth herein is subject to verification through the due diligence process described in Section 9 of the Term Sheet to which this Schedule is attached.

The following is a summary of the principal intellectual property assets associated with TerraVault's SoilPulse™ technology platform that are expected to be included in the scope of the Technology License Agreement:

1. Issued Patent

U.S. Patent No. 10,842,317

Title: "Real-Time Soil Nutrient and Moisture Sensor Array"

Date of Issuance: March 9, 2021 Assignee: TerraVault BioSciences Inc. Status: Active; maintenance fees current as of the date hereof

2. Pending Patent Application

U.S. Patent Application No. 17/509,664 Filing Date: October 25, 2021 Applicant: TerraVault BioSciences Inc. Status: Pending before the United States Patent and Trademark Office

3. Trademark Registration

SoilPulse™ U.S. Registration No. 6,318,205 Registrant: TerraVault BioSciences Inc. Status: Active; registered on the Principal Register

4. Associated Trade Secrets, Software, and Know-How

TerraVault's SoilPulse™ technology platform includes associated trade secrets, proprietary software (including sensor firmware, data processing algorithms, and cloud-based analytics software), technical documentation (including engineering specifications, schematics, calibration protocols, and manufacturing process documentation), research data, field trial results, and other proprietary know-how. A detailed description and inventory of these assets will be provided by TerraVault as part of the due diligence materials to be made available to Greenfield in accordance with Section 9 of the Term Sheet.

The foregoing list is not intended to be exhaustive. Additional intellectual property assets may be identified during the due diligence process and, subject to the Parties' agreement, may be included within the scope of the Technology License Agreement.

Milestone	Target Date
Completion of due diligence (IP, financial, legal)	November 2022
Circulation of initial drafts of JV Operating Agreement and Technology License Agreement	November 2022
Negotiation and finalization of definitive agreements	November 2022 – January 2023
Execution of definitive agreements and closing	Q1 2023
Member	Cash Contribution	IP Contribution	Total Contribution	Equity %
Greenfield Agricultural Partners LLC	$7,200,000	—	$7,200,000	60%
TerraVault BioSciences Inc.	$2,400,000	$2,400,000 (proposed; subject to Open Item (a))	$4,800,000	40%
Total	$9,600,000	$2,400,000	$12,000,000	100%

NON-BINDING TERM SHEET
Proposed Joint Venture — PrairieSense Technologies LLC
September 26, 2022
This Term Sheet is NON-BINDING and does not constitute a commitment by either party to consummate the proposed joint venture or enter into any definitive agreement, except as expressly provided in Section 11 hereof. This Term Sheet reflects the preliminary term sheet dated August 22, 2022, as submitted by Greenfield Agricultural Partners LLC, and the markup thereof returned by TerraVault BioSciences Inc. on September 9, 2022, together with further negotiations between the parties and their respective counsel through the date hereof.
Section 1: Parties
1.1 Party A
Greenfield Agricultural Partners LLC, an Iowa limited liability company (hereinafter referred to as "Greenfield" or "GAP"), having its principal office at 4100 Grand Prairie Drive, Suite 300, Des Moines, Iowa 50309. Greenfield's authorized representative for purposes of this Term Sheet and the negotiations contemplated hereby is Marcus J. Linden, Founder and Managing Partner.
Greenfield is represented by outside legal counsel in connection with this Term Sheet and the proposed joint venture:
Calderwood & Harkness LLP 800 Walnut Street, Suite 2400 Des Moines, Iowa 50309
Attention: Sandra Tung
1.2 Party B
TerraVault BioSciences Inc., a Delaware corporation qualified to do business in the State of Illinois (hereinafter referred to as "TerraVault" or "TVBS"), having its principal office at 1720 Innovation Parkway, Champaign, Illinois 61820. TerraVault's authorized representative for purposes of this Term Sheet and the negotiations contemplated hereby is Dr. Anand Mehta, Co-Founder and Chief Executive Officer.
TerraVault is represented by outside legal counsel in connection with this Term Sheet and the proposed joint venture:
Whitfield, Carey & Stokes LLP 233 S. Wacker Drive, Suite 5600 Chicago, Illinois 60606
Attention: Jonathan Everett Carey
Greenfield and TerraVault are sometimes referred to herein individually as a "Party" and collectively as the "Parties."
Section 2: Proposed Joint Venture Entity
The Parties propose to form a new joint venture entity with the following characteristics:
Name: PrairieSense Technologies LLC (hereinafter referred to as the "Company" or the "JV Entity").
Entity Type: The Company shall be organized as a limited liability company formed under the Iowa Revised Uniform Limited Liability Company Act, Iowa Code Chapter 489, as amended from time to time.
State of Formation: Iowa.
Registered Agent (Proposed): Capitol Filings Inc., 220 E. Court Avenue, Des Moines, Iowa 50309, or such other registered agent as the Parties may mutually agree upon prior to or at the time of the Company's formation.
Principal Place of Business: To be determined by mutual agreement of the Parties. The Parties anticipate that the Company's principal place of business will be located in either the Des Moines, Iowa metropolitan area or the Champaign, Illinois area. The final determination of the Company's principal place of business shall take into account operational requirements, proximity to target agricultural markets, access to technical talent, and such other factors as the Parties may consider relevant. The selection of the Company's principal place of business shall be addressed in the definitive JV Operating Agreement.
Section 3: Purpose of the Joint Venture
The purpose of the proposed joint venture is the development, manufacturing, and commercialization of integrated soil-health sensor systems for commercial row-crop agriculture in the United States, with an initial focus on the U.S. Midwest region. The joint venture is intended to leverage TerraVault's proprietary SoilPulse™ real-time soil nutrient and moisture sensor technology together with Greenfield's operational expertise, capital resources, and established relationships within the agricultural industry.
The specific activities of the JV Entity are anticipated to include, without limitation, the following:
(a) Further development and enhancement of the SoilPulse™ technology platform for large-scale deployment in commercial row-crop agricultural applications;
(b) Manufacturing of sensor hardware components and assemblies, whether through in-house production capabilities or contract manufacturing arrangements;
(c) Development of proprietary data analytics software and related tools designed to support agronomic decision-making by farmers, agronomists, and agricultural enterprises;
(d) Sales and distribution of integrated soil-health sensor systems, whether directly to end users, through dealer and distributor networks, or through other channels;
(e) Provision of related services, including installation, calibration, maintenance, technical support, data subscription services, and consulting services; and
(f) Such other activities as may be incidental or related to the foregoing and as the Board of Managers of the JV Entity may from time to time authorize.
The precise scope of the JV Entity's business purpose will be set forth in the definitive JV Operating Agreement, and the Parties expect to refine and elaborate upon the foregoing description during the course of negotiating such agreement.
Section 4: Capitalization
4.1 Total Initial Capital Commitment
The aggregate initial capital commitment of the Parties to the JV Entity shall be $12,000,000 (Twelve Million Dollars), allocated between the Parties as set forth below. A summary of the proposed capital structure is set forth in Schedule A attached hereto for informational purposes.
4.2 Greenfield Contribution
Amount: $7,200,000 (Seven Million Two Hundred Thousand Dollars).
Form: One hundred percent (100%) cash.
Equity Interest: In exchange for its capital contribution, Greenfield shall receive a sixty percent (60%) membership interest in the JV Entity, representing sixty percent (60%) of the issued and outstanding membership interests of the Company.
Funding: Greenfield's cash contribution shall be contributed to the JV Entity at or prior to the closing of the transactions contemplated by the definitive JV Operating Agreement, in accordance with a funding schedule to be mutually agreed upon by the Parties and set forth in such agreement. The Parties anticipate that Greenfield's contribution may be funded in one or more installments, with the specific timing and amounts to be determined during the negotiation of the definitive JV Operating Agreement.
4.3 TerraVault Contribution
Total Amount: $4,800,000 (Four Million Eight Hundred Thousand Dollars).
Form: A combination of cash and in-kind contribution, as follows:
(i) Cash Component: $2,400,000 (Two Million Four Hundred Thousand Dollars) in cash.
(ii) In-Kind / IP Component: A contribution of intellectual property rights in the form of an exclusive technology license to the JV Entity with respect to TerraVault's SoilPulse™ technology platform (as further described in Section 5 below), with a value to be mutually agreed upon by the Parties. The proposed value of such IP contribution per Greenfield is $2,400,000 (Two Million Four Hundred Thousand Dollars). The valuation of TerraVault's in-kind IP contribution remains an open item and is subject to further negotiation. See Section 8, Open Item (a).
Equity Interest: In exchange for its capital contribution (cash and in-kind), TerraVault shall receive a forty percent (40%) membership interest in the JV Entity, representing forty percent (40%) of the issued and outstanding membership interests of the Company. The foregoing equity allocation is based upon Greenfield's proposed valuation of the IP contribution and is subject to adjustment depending on the final agreed-upon valuation. See Section 8, Open Item (a).
Funding: TerraVault's cash contribution of $2,400,000 shall be contributed to the JV Entity at or prior to the closing of the transactions contemplated by the definitive JV Operating Agreement. TerraVault's in-kind IP contribution shall be effected through the execution and delivery of a Technology License Agreement between TerraVault and the JV Entity, to be negotiated and executed concurrently with the definitive JV Operating Agreement.
4.4 Additional Capital Contributions
Future capital calls, if any, shall be made pro rata in accordance with the then-existing membership interests of the Members, subject to anti-dilution protections and preemptive rights to be set forth in the definitive JV Operating Agreement. The definitive JV Operating Agreement shall include provisions addressing the consequences of a Member's failure to fund its pro rata share of any approved additional capital call, including customary remedies such as dilution of the non-contributing Member's membership interest, forced transfer rights, conversion of the unfunded amount to a Member loan bearing interest at a rate to be agreed upon, and such other remedies as the Parties may negotiate. The specific mechanics of future capital calls, including the approval thresholds required for the Board of Managers to authorize such calls, shall be addressed in the definitive JV Operating Agreement.
Section 5: Technology License
TerraVault shall grant to the JV Entity an exclusive license within the JV Field (as defined below) to use, modify, enhance, improve, and sublicense TerraVault's SoilPulse™ technology platform, including the following identified intellectual property assets (which are more fully described in Schedule B attached hereto):
(a) U.S. Patent No. 10,842,317, entitled "Real-Time Soil Nutrient and Moisture Sensor Array," issued on March 9, 2021, together with all continuations, continuations-in-part, divisionals, reissues, and foreign counterparts thereof;
(b) U.S. Patent Application No. 17/509,664, filed on October 25, 2021, currently pending before the United States Patent and Trademark Office, together with all patents that may issue therefrom and all continuations, continuations-in-part, divisionals, and reissues thereof;
(c) The SoilPulse™ trademark, U.S. Registration No. 6,318,205, together with any associated goodwill and all related trademark applications or registrations;
(d) All associated trade secrets, know-how, proprietary software (including source code and object code), data, algorithms, technical documentation, specifications, protocols, schematics, designs, formulations, and other proprietary information related to the SoilPulse™ technology platform.
For purposes of this Term Sheet, the "JV Field" shall be defined as the development, manufacturing, marketing, sale, and servicing of soil-health sensor systems and related data analytics products and services for commercial row-crop agriculture in the United States.
The detailed terms and conditions of the technology license, including without limitation the precise scope and definition of the JV Field, the duration of the license, any royalty or ongoing payment obligations (if applicable), sublicensing rights and restrictions, ownership and licensing of improvements and enhancements developed by or on behalf of the JV Entity, the allocation of intellectual property rights as between TerraVault and the JV Entity, prosecution and maintenance obligations with respect to the licensed patents, enforcement rights in the event of third-party infringement, indemnification obligations, and termination and reversion provisions, shall be set forth in a separate Technology License Agreement to be negotiated and executed concurrently with the definitive JV Operating Agreement.
The Parties acknowledge that the valuation of the technology license for purposes of TerraVault's in-kind capital contribution to the JV Entity remains an open item and is subject to further negotiation as described in Section 8, Open Item (a) below.
Section 6: Governance and Management
6.1 Board of Managers
The JV Entity shall be managed by a Board of Managers (the "Board") in accordance with the terms to be set forth in the definitive JV Operating Agreement.
As reflected in this Term Sheet, Greenfield has proposed that the Board consist of five (5) members, allocated as follows:
(a) Three (3) members shall be appointed by Greenfield (the "Greenfield Managers"); and
(b) Two (2) members shall be appointed by TerraVault (the "TerraVault Managers").
The foregoing proposed Board composition is consistent with the Parties' respective sixty percent (60%) and forty percent (40%) equity ownership positions. Each Party shall have the right to remove and replace its appointed managers at any time, with or without cause, subject to such notice requirements as may be set forth in the definitive JV Operating Agreement.
The composition of the Board of Managers, including the total number of seats, the allocation of appointment rights between the Parties, and the related governance and consent rights described in Section 6.3 below, remain subject to further negotiation between the Parties. See Section 8, Open Item (b).
6.2 Officers.  The day-to-day management and operations of the JV Entity shall be conducted by officers appointed by the Board of Managers in accordance with the definitive JV Operating Agreement. The initial officer positions and the identity of the individuals to fill such positions shall be agreed upon by the Parties during the negotiation of the definitive JV Operating Agreement and shall be set forth therein or in resolutions adopted by the Board at or promptly following the closing.
The Parties anticipate that the JV Entity's initial officer positions will include, at a minimum:
(a) Chief Executive Officer (CEO): Responsible for overall strategic direction, business development, and management of the JV Entity;
(b) Chief Technology Officer (CTO): Responsible for technology development, product engineering, R&D strategy, and oversight of the SoilPulse™ technology platform; and
(c) Chief Financial Officer (CFO): Responsible for financial management, accounting, reporting, budgeting, and treasury functions.
Additional officer positions may be established by the Board as the Parties may determine to be necessary or advisable for the conduct of the JV Entity's business.
6.3 Major Decisions / Consent Rights
The definitive JV Operating Agreement shall provide that certain major decisions affecting the JV Entity shall require either supermajority approval of the Board (at a threshold to be agreed upon) or the unanimous consent of all members of the Board or all Members of the JV Entity, as applicable.
The categories of decisions that the Parties anticipate will constitute "major decisions" requiring heightened approval thresholds include, at a minimum, the following:
(a) Approval of the JV Entity's annual operating budget and any material deviations therefrom;
(b) Capital expenditures in excess of a dollar threshold to be agreed upon;
(c) Incurrence, assumption, or guarantee of indebtedness in excess of a dollar threshold to be agreed upon;
(d) Admission of new Members to the JV Entity or issuance of additional membership interests;
(e) Amendment, modification, or restatement of the Operating Agreement or the Certificate of Organization;
(f) Dissolution, liquidation, or winding up of the JV Entity;
(g) Certain related-party transactions between the JV Entity and either Member or their respective affiliates;
(h) Entry into, amendment of, or termination of material contracts, including the Technology License Agreement;
(i) Initiation or settlement of material litigation or claims;
(j) Changes to the JV Entity's line of business or scope of operations outside the JV Field; and
(k) Such other matters as the Parties may agree to include in the definitive JV Operating Agreement.
The scope of TerraVault's consent rights, particularly with respect to decisions relating to the SoilPulse™ technology (including sublicensing decisions, modifications to the technology, and enforcement of intellectual property rights), the R&D budget allocation, and the terms of any sublicensing by the JV Entity, remains subject to further negotiation. See Section 8, Open Item (b).
6.4 Deadlock Resolution
The definitive JV Operating Agreement shall include a deadlock resolution mechanism to address situations in which the Board of Managers is unable to reach agreement on matters requiring Board approval. The Parties intend to negotiate the specific terms of the deadlock resolution mechanism, which may include one or more of the following approaches: escalation of the dispute to the Parties' senior executives; non-binding mediation; binding arbitration; a buy-sell mechanism (such as a "shotgun" or "Russian roulette" provision); or such other mechanisms as the Parties may agree upon. The terms, conditions, and procedural requirements of the deadlock resolution mechanism shall be set forth in the definitive JV Operating Agreement.
Section 7: Non-Competition and Exclusivity
7.1 Non-Competition.  As reflected in this Term Sheet, Greenfield has proposed the following non-competition terms:
During the term of the JV and for a period of three (3) years following the formation of the JV Entity, TerraVault shall not, directly or indirectly (whether through affiliates, subsidiaries, licensees, or otherwise), license, sell, distribute, or otherwise make available the SoilPulse™ technology (or any technology that is competitive with or substantially similar to the SoilPulse™ technology for soil-health sensing applications) to any third party within the U.S. Midwest territory. For purposes of this Term Sheet, the "U.S. Midwest territory" is defined as the following eleven (11) states: Iowa, Illinois, Indiana, Minnesota, Wisconsin, Missouri, Nebraska, Kansas, South Dakota, North Dakota, and Ohio.
Greenfield has further proposed that the definitive JV Operating Agreement include a reciprocal restriction on Greenfield with respect to investment in, promotion of, or participation in any competing soil-health sensor technology platform within the same geographic territory and during the same period. The specific terms of any reciprocal restriction applicable to Greenfield are subject to negotiation.
The scope, geographic coverage, duration, and enforceability of the non-competition provisions applicable to each Party remain subject to further negotiation between the Parties. See Section 8, Open Item (c).
7.2 Exclusivity Period
From the date of this Term Sheet through the earlier of (i) the execution and delivery by the Parties of a definitive JV Operating Agreement or (ii) the date that is ninety (90) days after the date hereof (such period, the "Exclusivity Period"), neither Party shall, and each Party shall cause its respective affiliates, officers, directors, managers, employees, agents, and representatives not to, directly or indirectly, solicit, initiate, encourage, facilitate, or engage in discussions or negotiations with any third party regarding any transaction that would be competitive with, duplicative of, or otherwise inconsistent with the proposed JV, including without limitation any joint venture, strategic alliance, technology license, equity investment, merger, or acquisition involving soil-health sensor technology for commercial row-crop agriculture in the United States.
The exclusivity provisions set forth in this Section 7.2 are binding on the Parties as provided in Section 11 below.
Section 8: Open Items
The Parties acknowledge and agree that the following material terms remain subject to further good faith negotiation and have not been resolved as of the date of this Term Sheet. The Parties intend to use commercially reasonable efforts to negotiate and resolve each of the following open items during the course of negotiating the definitive JV Operating Agreement and related transaction documents.
Open Item (a): IP / Technology License Valuation
The Parties have not reached agreement on the fair market value of TerraVault's SoilPulse™ technology license contribution for purposes of determining the amount of TerraVault's in-kind capital contribution to the JV Entity. The current positions of the Parties are as follows:
(i) Greenfield's position: Greenfield proposes a valuation of $2,400,000 (Two Million Four Hundred Thousand Dollars) for TerraVault's IP contribution, which, when combined with TerraVault's cash contribution of $2,400,000, would result in a total TerraVault contribution of $4,800,000 and an equity allocation of sixty percent (60%) for Greenfield and forty percent (40%) for TerraVault, based on a total capitalization of $12,000,000.
(ii) TerraVault's position: TerraVault has indicated that it believes the fair market value of the SoilPulse™ technology license, taking into account the patent portfolio, pending patent applications, trademark registrations, trade secrets, proprietary software, and associated know-how, exceeds $2,400,000. TerraVault has reserved its position on the final valuation of the IP contribution pending further analysis of comparable technology license transactions, the revenue potential of the SoilPulse™ platform, and such other factors as TerraVault may deem relevant.
The Parties agree to engage in good faith negotiations to resolve this open item. To the extent the Parties are unable to reach agreement on the valuation through direct negotiation, the Parties may, by mutual agreement, commission an independent third-party valuation of the SoilPulse™ technology license by a qualified valuation firm acceptable to both Parties. The costs of any such independent valuation shall be shared equally by the Parties. The Parties acknowledge that resolution of this open item may affect the final equity allocation between the Parties, the total capitalization of the JV Entity, or both.
Open Item (b): Board Composition and Governance Consent Rights
Greenfield has proposed a five-member Board of Managers with three (3) Greenfield-appointed members and two (2) TerraVault-appointed members, which Greenfield views as consistent with the Parties' proposed 60/40 equity ownership allocation. TerraVault has indicated a preference for governance arrangements that provide TerraVault with enhanced representation on the Board and/or enhanced consent rights, particularly with respect to the following categories of decisions:
(i) Decisions relating to the use, modification, sublicensing, enforcement, or disposition of the SoilPulse™ technology and related intellectual property;
(ii) Decisions relating to the allocation of the JV Entity's research and development budget and the strategic direction of the JV Entity's technology development activities; and
(iii) Decisions relating to the sublicensing of SoilPulse™ technology by the JV Entity to third parties, including the terms and conditions of any such sublicenses.
The scope and nature of any enhanced governance rights for TerraVault, including without limitation whether such rights would take the form of additional Board seats, a separate class of consent rights with respect to technology-related decisions, committee-level governance structures, or other mechanisms, remain subject to further negotiation. The Parties intend to address Board composition and governance consent rights comprehensively in the definitive JV Operating Agreement.
Open Item (c): Non-Competition Scope and Duration
Greenfield has proposed a non-competition restriction covering the U.S. Midwest territory (consisting of eleven states: Iowa, Illinois, Indiana, Minnesota, Wisconsin, Missouri, Nebraska, Kansas, South Dakota, North Dakota, and Ohio) and a duration of three (3) years following the formation of the JV Entity, during which TerraVault would be restricted from licensing SoilPulse™ technology (or competing soil-health sensor technology) to third parties within the specified territory.
TerraVault has objected to the proposed non-competition restriction as overbroad in both geographic scope and temporal duration. TerraVault has expressed concern that a restriction covering eleven states for a period of three years from JV formation (in addition to the duration of the JV itself) would unreasonably limit TerraVault's ability to commercialize the SoilPulse™ technology outside the scope of the JV Entity's activities, particularly in geographic markets that the JV Entity may not actively serve during its initial years of operation.
The Parties intend to negotiate mutually acceptable non-competition and non-solicitation terms, including with respect to both geographic scope and duration, in the definitive JV Operating Agreement. The Parties may also consider alternative structures for protecting the competitive position of the JV Entity, such as rights of first offer or first refusal in favor of the JV Entity with respect to opportunities in the broader U.S. market.
Section 9: Due Diligence
The execution and delivery of any definitive agreement with respect to the proposed JV shall be conditioned upon the satisfactory completion of customary due diligence by each Party with respect to the other Party and, where applicable, the assets and intellectual property to be contributed to or licensed to the JV Entity. The due diligence to be conducted by each Party is expected to include, without limitation, the following:
Greenfield's Due Diligence of TerraVault:
(a) Review of TerraVault's intellectual property portfolio, including the patents, patent applications, trademarks, trade secrets, and software identified in Schedule B hereto, as well as any encumbrances, liens, or third-party rights affecting such intellectual property;
(b) Review of TerraVault's audited and unaudited financial statements for the most recent three fiscal years and any interim periods;
(c) Review of TerraVault's material contracts, including customer agreements, supplier agreements, license agreements, and any agreements with existing investors or third parties that could affect the proposed JV or the Technology License Agreement;
(d) Review of any pending or threatened litigation, claims, or regulatory proceedings involving TerraVault or the SoilPulse™ technology; and
(e) Review of TerraVault's regulatory compliance, including compliance with applicable federal, state, and local laws, environmental regulations, data privacy laws, and export control regulations.
TerraVault's Due Diligence of Greenfield:
(a) Review of Greenfield's financial capacity to fund its proposed capital contribution to the JV Entity, including review of Greenfield's most recent financial statements and evidence of available capital;
(b) Review of Greenfield's current portfolio holdings and investment activities, including any investments in or relationships with entities that may be competitive with the proposed JV;
(c) Review of any pending or threatened litigation, claims, or regulatory proceedings involving Greenfield; and
(d) Review of any relevant regulatory matters affecting Greenfield's ability to participate in the proposed JV.
Due diligence activities are expected to be conducted during the Exclusivity Period and may continue thereafter by mutual agreement of the Parties. Each Party shall cooperate with the other Party's reasonable due diligence requests and shall make available such documents, records, personnel, and facilities as may be reasonably necessary to facilitate the due diligence process, subject to the confidentiality obligations set forth in the NDA.
Section 10: Conditions to Definitive Agreement
The consummation of the proposed JV shall be subject to the satisfaction or mutual waiver of the following conditions:
10.1 Definitive Agreements. The Parties shall have negotiated, executed, and delivered the following definitive agreements, in each case in form and substance satisfactory to both Parties and their respective counsel:
(a) A definitive Operating Agreement of PrairieSense Technologies LLC, setting forth the complete terms and conditions governing the formation, capitalization, governance, management, operation, and dissolution of the JV Entity;
(b) A Technology License Agreement between TerraVault and the JV Entity, setting forth the terms and conditions of TerraVault's license of the SoilPulse™ technology to the JV Entity; and
(c) Such ancillary agreements as the Parties may mutually agree are necessary or advisable in connection with the proposed JV, which may include, without limitation, employment agreements or consulting agreements for key personnel, service agreements between the JV Entity and either Party or their affiliates, contribution agreements, and assignment or assumption agreements.
10.2 Additional Conditions. The consummation of the proposed JV may also be subject to the satisfaction of the following additional conditions, to the extent applicable:
(a) Due Diligence. Satisfactory completion of due diligence by each Party, as described in Section 9 above, with the results thereof being satisfactory to each Party in its reasonable discretion;
(b) Investor Consents. To the extent required under TerraVault's organizational documents, stockholders' agreement, or existing investor agreements, TerraVault shall have obtained the consent of its existing investors, including Meridian Venture Partners and Bluestem Capital Group, to the proposed JV, the Technology License Agreement, and the transactions contemplated hereby;
(c) Third-Party Financing. Availability of third-party financing for the JV Entity on terms acceptable to the Parties. The Parties have had preliminary discussions with Heartland National Bank, N.A. regarding a potential revolving credit facility in the amount of $4,000,000 (Four Million Dollars) for the JV Entity; however, no term sheet, commitment letter, or other binding agreement has been executed with Heartland National Bank, N.A. or any other lender as of the date hereof. The Parties shall work together in good faith to secure appropriate financing for the JV Entity, but neither Party shall be obligated to guarantee or otherwise support any indebtedness of the JV Entity except as may be agreed in the definitive JV Operating Agreement;
(d) Regulatory Approvals. Receipt of such regulatory approvals, consents, or filings as may be required by applicable federal, state, or local law in connection with the formation and operation of the JV Entity, the transactions contemplated by the Technology License Agreement, or the conduct of the JV Entity's business; and
(e) Other Conditions. Such other conditions as may be identified by the Parties during the course of due diligence or the negotiation of the definitive agreements and as may be mutually agreed upon.
Section 11: Binding Provisions
This Term Sheet is non-binding and does not constitute a commitment by either Party to enter into the proposed JV, to consummate any transaction described herein, or to enter into any definitive agreement, and neither Party shall have any liability to the other Party with respect to the transactions contemplated hereby unless and until a definitive JV Operating Agreement and related transaction documents have been fully negotiated, executed, and delivered by both Parties, except that the following provisions of this Term Sheet shall be binding and enforceable obligations of the Parties, surviving from the date hereof until the applicable expiration or termination of each such provision:
11.1 Confidentiality.  The terms and existence of this Term Sheet, all negotiations related hereto, and all information exchanged between the Parties in connection with the proposed JV shall be treated as confidential information subject to the terms and conditions of the Mutual Non-Disclosure Agreement between Greenfield and TerraVault dated July 11, 2022 (the "NDA"), which NDA remains in full force and effect as of the date hereof. Neither Party shall, without the prior written consent of the other Party, disclose the existence of this Term Sheet or the terms hereof to any third party, except (i) to such Party's officers, directors, managers, employees, attorneys, accountants, financial advisors, and other professional advisors who have a need to know such information in connection with the evaluation or consummation of the proposed JV and who are bound by confidentiality obligations no less restrictive than those contained in the NDA, or (ii) as may be required by applicable law or the rules of any applicable stock exchange or self-regulatory organization.
11.2 Exclusivity.  The exclusivity provisions set forth in Section 7.2 above shall be binding and enforceable obligations of the Parties for the duration of the Exclusivity Period, which shall commence on the date hereof and shall expire on the earlier of (i) the execution and delivery by the Parties of a definitive JV Operating Agreement or (ii) the date that is ninety (90) days after the date hereof (i.e., December 25, 2022). During the Exclusivity Period, each Party shall comply with the restrictions set forth in Section 7.2 in all respects. In the event of a breach or threatened breach of the exclusivity provisions by either Party, the non-breaching Party shall be entitled to seek equitable relief, including injunctive relief and specific performance, in addition to any other remedies available at law or in equity.
11.3 Governing Law
This Term Sheet and any claim, controversy, or dispute arising out of or relating to this Term Sheet, including with respect to the binding provisions set forth in this Section 11, shall be governed by and construed in accordance with the laws of the State of Iowa, without regard to conflict of laws principles that would require the application of the laws of any other jurisdiction.
11.4 Expenses.  Each Party shall bear its own costs and expenses (including, without limitation, legal fees, accounting fees, advisory fees, and all other out-of-pocket expenses) incurred in connection with the negotiation, preparation, and execution of this Term Sheet and any definitive agreements contemplated hereby, whether or not the proposed JV is ultimately consummated. Neither Party shall have any right to reimbursement from the other Party for any such costs or expenses.
Section 12: Proposed Timeline and Next Steps
The Parties have discussed the following indicative timeline for the completion of due diligence, the negotiation of definitive agreements, and the closing of the proposed JV:
The foregoing timeline is indicative only and is provided for the Parties' planning purposes. The proposed timeline shall not create any binding obligation on either Party, and the actual timing of each milestone shall depend upon the progress of due diligence, the resolution of the open items described in Section 8, the availability of required third-party consents and financing, and the outcome of the Parties' negotiations with respect to the definitive agreements. Each Party shall use commercially reasonable efforts to cooperate in good faith to achieve the foregoing timeline objectives.
Section 13: Miscellaneous
13.1 No Assignment. Neither Party may assign, transfer, or delegate any of its rights or obligations under this Term Sheet without the prior written consent of the other Party. Any purported assignment in violation of this Section 13.1 shall be null and void.
13.2 Counterparts. This Term Sheet may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Execution of this Term Sheet by electronic signature or by facsimile transmission of a manually executed signature page shall be deemed to have the same legal force and effect as execution by original manual signature.
13.3 Entire Understanding. This Term Sheet, together with the NDA, constitutes the entire understanding between the Parties with respect to the subject matter hereof and supersedes all prior oral or written communications, proposals, representations, understandings, and agreements between the Parties relating to the subject matter hereof, including without limitation the preliminary term sheet dated August 22, 2022 submitted by Greenfield and the markup thereof returned by TerraVault on September 9, 2022.
13.4 Amendments. No amendment, modification, or waiver of any provision of this Term Sheet shall be effective unless set forth in a writing signed by both Parties.
13.5 Notices. All notices, requests, demands, and other communications under this Term Sheet shall be in writing and shall be deemed to have been duly given when delivered personally, sent by registered or certified mail (return receipt requested), or sent by nationally recognized overnight courier service, addressed to the Parties at their respective addresses set forth in Section 1 above, with copies to their respective counsel as identified in Section 1. Either Party may change its address for purposes of this Section 13.5 by providing written notice to the other Party in accordance with this Section.
13.6 No Third-Party Beneficiaries. This Term Sheet is entered into solely for the benefit of the Parties and their respective successors and permitted assigns, and nothing herein, express or implied, is intended to confer upon any other person or entity any rights, benefits, or remedies of any nature whatsoever under or by reason of this Term Sheet.
13.7 Severability. If any provision of this Term Sheet is held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision of this Term Sheet, and this Term Sheet shall be construed as if such invalid, illegal, or unenforceable provision had never been contained herein.
[Remainder of This Page Intentionally Left Blank — Signature Page Follows]
SIGNATURE PAGE TO NON-BINDING TERM SHEET Proposed Joint Venture — PrairieSense Technologies LLC
IN WITNESS WHEREOF, the Parties have caused this Non-Binding Term Sheet to be executed by their duly authorized representatives as of the date first written above, acknowledging that, except for the binding provisions set forth in Section 11, this Term Sheet does not create any legally binding obligations on either Party.
GREENFIELD AGRICULTURAL PARTNERS LLC
By: ________
Name: Marcus J. Linden
Title: Founder and Managing Partner
Date: September 26, 2022
TERRAVAULT BIOSCIENCES INC.
By: ________
Name: Dr. Anand Mehta
Title: Co-Founder and Chief Executive Officer
Date: September 26, 2022
Schedule A — Summary of Proposed Capital Structure (Informational)
This Schedule A is provided for informational and reference purposes only and is subject in all respects to the terms of the Term Sheet to which it is attached, including the open items described in Section 8 thereof.
Note: The IP contribution valuation of $2,400,000 set forth in the table above reflects Greenfield's proposed valuation of TerraVault's SoilPulse™ technology license contribution and has not been agreed to by TerraVault. TerraVault has indicated that it believes the fair market value of the SoilPulse™ technology license exceeds $2,400,000. The final agreed-upon valuation of the IP contribution may result in an adjustment to the equity percentages set forth above, the total capitalization of the JV Entity, or both. Resolution of the IP valuation is identified as Open Item (a) in Section 8 of the Term Sheet.
Schedule B — Identified SoilPulse™ IP Assets (Informational)
This Schedule B is provided for informational and reference purposes only and is based on information provided by TerraVault as of the date of the Term Sheet. The completeness and accuracy of the information set forth herein is subject to verification through the due diligence process described in Section 9 of the Term Sheet to which this Schedule is attached.
The following is a summary of the principal intellectual property assets associated with TerraVault's SoilPulse™ technology platform that are expected to be included in the scope of the Technology License Agreement:
1. Issued Patent
U.S. Patent No. 10,842,317
Title: "Real-Time Soil Nutrient and Moisture Sensor Array"
Date of Issuance: March 9, 2021 Assignee: TerraVault BioSciences Inc. Status: Active; maintenance fees current as of the date hereof
2. Pending Patent Application
U.S. Patent Application No. 17/509,664 Filing Date: October 25, 2021 Applicant: TerraVault BioSciences Inc. Status: Pending before the United States Patent and Trademark Office
3. Trademark Registration
SoilPulse™ U.S. Registration No. 6,318,205 Registrant: TerraVault BioSciences Inc. Status: Active; registered on the Principal Register
4. Associated Trade Secrets, Software, and Know-How
TerraVault's SoilPulse™ technology platform includes associated trade secrets, proprietary software (including sensor firmware, data processing algorithms, and cloud-based analytics software), technical documentation (including engineering specifications, schematics, calibration protocols, and manufacturing process documentation), research data, field trial results, and other proprietary know-how. A detailed description and inventory of these assets will be provided by TerraVault as part of the due diligence materials to be made available to Greenfield in accordance with Section 9 of the Term Sheet.
The foregoing list is not intended to be exhaustive. Additional intellectual property assets may be identified during the due diligence process and, subject to the Parties' agreement, may be included within the scope of the Technology License Agreement.
Milestone | Target Date
Completion of due diligence (IP, financial, legal) | November 2022
Circulation of initial drafts of JV Operating Agreement and Technology License Agreement | November 2022
Negotiation and finalization of definitive agreements | November 2022 – January 2023
Execution of definitive agreements and closing | Q1 2023
Member | Cash Contribution | IP Contribution | Total Contribution | Equity %
Greenfield Agricultural Partners LLC | $7,200,000 | — | $7,200,000 | 60%
TerraVault BioSciences Inc. | $2,400,000 | $2,400,000 (proposed; subject to Open Item (a)) | $4,800,000 | 40%
Total | $9,600,000 | $2,400,000 | $12,000,000 | 100%

NON-BINDING TERM SHEET

GREENFIELD AGRICULTURAL PARTNERS LLC

TERRAVAULT BIOSCIENCES INC.

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