1039-00001 · Torchlight Mining Corp · documents

engagement-letter-tmc.docx DOCUMENT Litigation

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CALDERWOOD & HARKNESS LLP Attorneys at Law

555 California Street, 40th Floor San Francisco, California 94104, USA Telephone: (415) 555-7800 Facsimile: (415) 555-7801

One Liberty Plaza, 50th Floor New York, New York 10006, USA Telephone: (212) 555-3200 Facsimile: (212) 555-3201

www.calderwoodharkness.com

February 18, 2022

VIA ELECTRONIC MAIL AND INTERNATIONAL COURIER

Priya Anand, Esq. General Counsel Torchlight Mining Corp. 200 Bay Street, Suite 3400 Toronto, ON M5J 2J2 Canada

Calderwood & Harkness Matter No. 1039-00001

Re: Engagement of Calderwood & Harkness LLP by Torchlight Mining Corp. in Connection with U.S. Department of Justice Antitrust Division Grand Jury Investigation (Grand Jury No. GJ-22-0194, U.S. District Court, Northern District of California, San Francisco Division)

Dear Ms. Anand:

1. Introduction and Purpose

Calderwood & Harkness LLP ("C&H," the "Firm," "we," or "us") is pleased to confirm its engagement by Torchlight Mining Corp. ("TMC," "Torchlight," or the "Company") to provide legal representation in connection with the above-referenced matter. We appreciate the confidence that Torchlight and its Board of Directors have placed in our Firm, and we are committed to providing the highest quality legal representation throughout the course of this engagement.

The purpose of this letter is to set forth the terms and conditions governing the engagement between C&H and TMC, including the scope of our representation, the staffing of the engagement, our billing arrangements and fee structure, our respective obligations with respect to confidentiality and privilege, and other matters relevant to the attorney-client relationship. We ask that you review this letter carefully and contact us with any questions before executing the acknowledgment and acceptance set forth at the conclusion of this letter.

This engagement is effective as of the date of this letter, February 18, 2022. As you are aware, TMC received Grand Jury Subpoena Duces Tecum No. GJ-22-0194-SD-003 on February 14, 2022, issued by the Antitrust Division of the U.S. Department of Justice ("DOJ"), San Francisco Field Office, returnable to the U.S. District Court for the Northern District of California, San Francisco Division. Given the significance of this matter and the time-sensitive nature of the Company's obligations under the Subpoena, we have already begun preliminary work on the engagement, including an initial review of the Subpoena's specifications and discussions with your office regarding the Company's document-retention practices. This letter formalizes the terms under which that work has been and will continue to be performed.

This engagement letter, together with Attachment A (Standard Terms and Conditions of Engagement) and Attachment B (Firm's Privacy and Data Security Notice), each of which is incorporated herein by reference, constitutes the entire agreement between the Firm and the Company with respect to the engagement described herein.

2. Client Identification

The client in this engagement is Torchlight Mining Corp., a corporation organized and existing under the Canada Business Corporations Act (CBCA Corporation No. 7841526-1), with its registered office at 200 Bay Street, Suite 3400, Toronto, ON M5J 2J2, Canada. For the avoidance of doubt, all references to "TMC," "Torchlight," the "Company," or the "Client" in this letter refer to Torchlight Mining Corp. in its corporate capacity.

This engagement also encompasses, as necessary and appropriate, legal services provided to Torchlight Mining (U.S.) Inc. ("TMC US"), a wholly owned subsidiary of TMC organized under the laws of the State of Nevada (Nevada Secretary of State Entity No. NV20160438721), with its principal office located at 8750 West Sahara Avenue, Suite 210, Reno, Nevada 89117, USA. TMC US operates the Company's U.S. Specialty Minerals Division, which is the business unit at the center of the DOJ investigation. References to "TMC" or the "Company" herein shall be deemed to include TMC US as the context requires, and services rendered on behalf of TMC US shall be governed by the same terms and conditions set forth in this letter.

It is important to clarify that this engagement does not encompass the representation of any individual director, officer, employee, or agent of TMC or TMC US in their personal capacities. Depending on the development of the investigation, individual directors, officers, or employees of the Company — including, without limitation, persons who may be identified as subjects, targets, or witnesses in the grand jury proceedings — may have interests that diverge from those of the Company and may need to retain separate legal counsel to represent their personal interests. The Firm will monitor this issue as the investigation progresses and will advise the Company promptly if circumstances arise in which we believe separate representation for any individual may be necessary or advisable. The Firm's duty of loyalty and obligation of zealous advocacy run solely to TMC (and TMC US as described above) and not to any individual associated with the Company.

3. Scope of Representation

The Firm's representation of TMC in this engagement encompasses the following matters, each of which is described in greater detail below.

3.1 Grand Jury Investigation Defense

C&H will represent TMC in all aspects of the DOJ Antitrust Division grand jury investigation designated as Grand Jury No. GJ-22-0194, pending in the U.S. District Court for the Northern District of California, San Francisco Division. Our representation in this regard will include, but not be limited to, the following:

(a) Subpoena Analysis and Response. Analysis of and response to Grand Jury Subpoena Duces Tecum No. GJ-22-0194-SD-003, which was served upon TMC on February 14, 2022, as well as any subsequent subpoenas, civil investigative demands, or other compulsory process that may be issued to TMC or TMC US in connection with the investigation.

(b) Communications and Negotiations with the DOJ. All communications and negotiations with the DOJ Antitrust Division, including the San Francisco Field Office, the Division's Criminal Enforcement Section (Section I and Section II) in Washington, D.C., and any other DOJ components involved in the investigation. This includes responding to information requests, negotiating the scope and timing of document productions, and advocating on TMC's behalf regarding the direction and resolution of the investigation.

(c) Meetings and Proceedings. Preparation for and representation at any meetings, proffer sessions, presentations, or other proceedings with DOJ personnel, including any meetings at which the Company's legal position, factual presentation, or cooperation efforts are discussed.

(d) Subject Matter of the Investigation. Based on our preliminary review, the investigation concerns suspected violations of Section 1 of the Sherman Antitrust Act (15 U.S.C. § 1), specifically alleged price-fixing, market allocation, and bid-rigging in the North American specialty-minerals sector. The products at issue principally include high-purity feldspar, industrial talc, and rare-earth concentrates. Our representation will address the full scope of the conduct under investigation, as well as any expansion of the investigation's scope that may occur during the pendency of the matter.

3.2 Internal Investigation

C&H will conduct an internal investigation on behalf of TMC to ascertain the relevant facts relating to the subject matter of the DOJ investigation. The internal investigation will be conducted at the direction of, and for the benefit of, TMC's General Counsel and Board of Directors, and is intended to be protected by the attorney-client privilege and the work-product doctrine. The internal investigation will include, but not be limited to, the following:

(a) Document Collection, Review, and Analysis. Comprehensive collection, review, and analysis of documents and electronically stored information ("ESI") in the possession, custody, or control of TMC and TMC US that are relevant to the subject matter of the DOJ investigation, including but not limited to emails, instant messages, calendar entries, pricing records, customer correspondence, sales reports, internal memoranda, trade association materials, and competitor communications.

(b) Witness Interviews. Interviews of current and former TMC and TMC US employees, officers, and directors who may have knowledge of the facts relevant to the investigation. Such interviews will be conducted under Upjohn warnings, making clear that the Firm represents the Company and not the individual, that the communication is privileged, and that the privilege belongs to the Company and may be waived at the Company's discretion.

(c) Expert Engagement and Oversight. Engagement and oversight of forensic accounting professionals, economic experts, and digital forensics specialists to assist with the Firm's legal analysis and investigation, as further described in Section 10 below.

(d) Privileged Reporting. Preparation of privileged memoranda, presentations, and reports summarizing the Firm's findings, legal analysis, and recommendations for the TMC Board of Directors, the Audit Committee, and senior management, as appropriate.

3.3 Document Preservation and Production

C&H will advise and assist TMC in complying with its legal obligations regarding the preservation and production of documents and ESI in connection with the investigation. Our services in this regard will include, but not be limited to:

(a) Litigation Hold. Design and implementation of litigation hold notices and document preservation protocols applicable to TMC and TMC US, including identification of key custodians, relevant data sources, and appropriate preservation measures for both paper and electronic records.

(b) Electronic discovery Management. Management of the electronic discovery process, including engagement and oversight of e-discovery vendors for forensic collection, processing, de-duplication, hosting, and managed review of TMC's ESI, in accordance with applicable legal standards and DOJ requirements.

(c) Privilege Review and Logging. Conduct of privilege review of documents identified as potentially responsive to the Subpoena, and preparation of privilege logs in compliance with applicable rules and DOJ protocols.

(d) Document Productions. Preparation and management of rolling productions of responsive, non-privileged documents to the DOJ in a format and on a schedule to be negotiated with the Antitrust Division.

3.4 Witness Preparation

C&H will prepare TMC employees and other Company witnesses for testimony before the grand jury, proffer sessions with DOJ attorneys and agents, voluntary interviews, or any other proceedings in connection with the investigation. Witness preparation will include review of relevant documents, discussion of anticipated topics and questions, and guidance regarding the witness's rights and obligations.

3.5 Negotiation of Resolution

C&H will represent TMC in negotiations with the DOJ regarding the potential resolution of the investigation as to the Company. Such negotiations may involve, depending on the circumstances and the Company's strategic objectives, discussions regarding:

(a) Cooperation agreements or cooperation credit under the DOJ Antitrust Division's Leniency Program or its policies governing cooperation by non-leniency applicants;

(b) Non-prosecution agreements ("NPAs");

(d) Plea agreements, including negotiation of charges, fine calculations under the U.S. Sentencing Guidelines (including the Antitrust Division's framework for calculating fines based on a percentage of affected commerce), restitution, and other terms; and

(e) Any other resolution framework that may be available or proposed by the DOJ.

All resolution-related decisions will be made by TMC, acting through its General Counsel, CEO, and Board of Directors, as appropriate, based on the Firm's legal advice and recommendations.

3.6 Compliance Remediation

C&H will advise TMC regarding the enhancement and strengthening of the Company's antitrust compliance program in light of the DOJ investigation. Such advice may include recommendations regarding the design, implementation, and monitoring of compliance policies, training programs, reporting mechanisms, and internal audit procedures. The Firm will engage and oversee outside compliance consultants as appropriate, subject to TMC's prior approval as set forth in Section 5.3 below.

3.7 Related Matters

In addition to the foregoing, our engagement encompasses the following related services:

(a) Coordination with Auditors and Financial Advisors. Coordination with TMC's independent auditor, Calvert & Associates LLP, and the Company's financial advisor, Ironbridge Capital Markets Inc., regarding potential financial-statement disclosure implications of the investigation, including any loss contingency analysis required under applicable accounting standards (IFRS and/or U.S. GAAP, as applicable) and any notification or disclosure obligations arising under Canadian securities laws, U.S. securities laws, or applicable stock exchange rules.

(b) Insurance Coordination. Advice regarding notification to, and coordination with, TMC's directors-and-officers ("D&O") liability insurance carriers, including review of applicable policy provisions, tender of defense and coverage claims, and compliance with notice requirements under TMC's D&O and corporate liability insurance programs.

Limitations on Scope. TMC acknowledges and agrees that this engagement does not encompass representation of TMC, TMC US, or any other person or entity in any of the following matters, unless separately agreed in writing by the Firm and the Company:

(i) Any civil antitrust litigation, including but not limited to private class action lawsuits, opt-out direct actions, or other civil claims that may be filed against TMC or TMC US in connection with the conduct under investigation;

(ii) Any securities enforcement proceedings, shareholder derivative actions, or securities class action litigation;

(iii) Any regulatory proceedings before the Federal Trade Commission, the Competition Bureau of Canada, the European Commission, or any other domestic or foreign regulatory authority; or

(iv) Any other legal matter not specifically described in this Section 3.

Should TMC require representation in any of the foregoing matters, the Firm would be pleased to discuss the terms of a separate engagement.

4. Staffing

4.1 Responsible Partner

Elaine Forsythe, Partner in the Firm's Antitrust & Competition Practice Group, based in the Firm's San Francisco office, will serve as the Responsible Partner and primary point of contact for this engagement. Ms. Forsythe will have overall responsibility for the strategic direction of the defense, will lead the internal investigation, and will serve as lead negotiator with the DOJ Antitrust Division. Ms. Forsythe has over twenty years of experience defending corporations and individuals in federal antitrust investigations, including grand jury proceedings and criminal trials, and has represented clients in more than a dozen DOJ Antitrust Division investigations across a range of industries.

4.2 Billing Partner

Howard Bellamy, Partner in the Firm's Antitrust & Competition Practice Group, based in the Firm's New York office, will serve as the Billing Partner for this engagement. Mr. Bellamy will manage the engagement economics, budgeting, and billing, and will serve as the primary point of contact for TMC's General Counsel on all financial matters relating to the engagement, including preparation and review of monthly invoices, budget tracking, and cost management. Mr. Bellamy brings extensive experience in the management of complex, high-stakes antitrust defense engagements and will work closely with Ms. Forsythe to ensure that staffing and expenditures are proportionate to the needs of the matter.

4.3 Core Team

In addition to the Responsible Partner and Billing Partner, the following attorneys have been assigned to the core engagement team:

(a) Aaron Liu, Associate, Antitrust & Competition Practice Group, based in the Firm's San Francisco office, will serve as the Lead Associate on the matter. Mr. Liu will be responsible for managing the day-to-day aspects of the engagement, including coordination of document review and production, preparation of responses to the grand jury subpoena, witness interview scheduling and preparation, and regular reporting to the Responsible Partner.

(b) Monica Reyes, Associate, Antitrust & Competition Practice Group, based in the Firm's San Francisco office, will focus on privilege review, preparation of memoranda of law on substantive antitrust and procedural issues, and coordination with forensic consultants and e-discovery vendors retained in connection with the engagement.

Additional attorneys, including partners, senior associates, associates, and professional staff (including paralegals and litigation support professionals), may be assigned to the matter as the needs of the engagement evolve. The Firm will notify the Company's General Counsel of the addition of any new partner or senior associate to the engagement team. The Firm endeavors to staff matters efficiently and to avoid unnecessary duplication of effort.

5. Billing Arrangements

5.1 Hourly Rates

The Firm's professional fees for this engagement will be calculated on the basis of hourly billing at the following standard rates, which are current as of January 1, 2022:

The rates set forth above reflect the rates applicable to the currently assigned team members. Individual attorney rates may vary within each category based on the specific timekeeper's level of experience and seniority, and the Firm will identify each timekeeper and his or her applicable rate on each monthly invoice.

The Firm's standard hourly rates are subject to annual adjustment, which typically becomes effective on January 1 of each calendar year. The Firm will provide the Company with written notice of any rate adjustments at least thirty (30) days before the effective date of such adjustment. In the event that the Company objects to any rate increase, the parties will discuss the matter in good faith and attempt to reach a mutually satisfactory resolution.

5.2 Disbursements and Expenses

In addition to professional fees, TMC will be responsible for reimbursement of all reasonable out-of-pocket expenses and disbursements incurred by the Firm in connection with this engagement. Such expenses and disbursements include, but are not limited to, the following:

(a) Travel expenses, including airfare (coach or business class for flights over four hours), hotel accommodations, ground transportation, and meals, incurred in connection with travel required by the engagement, including travel to DOJ offices, witness interview locations, and the Company's offices;

(b) Court filing fees, service of process fees, and related costs;

(d) Fees and costs of third-party experts and consultants (subject to the prior-approval provisions set forth in Section 5.3 below);

(e) Electronic discovery vendor fees, including fees for forensic data collection, ESI processing, document hosting, and technology-assisted review platforms (subject to the prior-approval provisions set forth in Section 5.3 below);

(f) Messenger, courier, and overnight delivery service charges;

(g) Long-distance telephone charges, conference call services, and videoconference platform fees;

(h) Charges for computerized legal research services, including Westmark Data Systems, Sundial Solutions, and other research databases;

(i) Costs associated with the retention of court reporters and preparation of transcripts; and

(j) Other reasonable and customary out-of-pocket expenses incurred in the ordinary course of providing legal services in a matter of this nature.

The Firm endeavors to manage disbursements and expenses prudently and will seek to utilize cost-effective alternatives where practicable without compromising the quality of the representation.

5.3 Third-Party Vendors and Experts

Based on the Firm's preliminary assessment of this matter, we anticipate that it will be necessary to retain one or more third-party vendors and experts in connection with this engagement. Anticipated engagements include, but may not be limited to, the following:

(a) E-discovery / Digital Forensics Vendor. A specialized e-discovery and digital forensics vendor will be required for forensic collection of ESI from Company systems (including email servers, shared drives, mobile devices, and cloud-based platforms), processing and de-duplication of collected data, hosting of a document review platform, and provision of technology-assisted review and analytics tools. Based on current market rates and our preliminary estimate of data volumes, we anticipate that e-discovery vendor costs for this engagement may range from approximately USD 2.5 million to USD 4.5 million, depending on actual data volumes and the duration of the review.

(b) Forensic Accounting / Economics Expert. A forensic accounting or economics expert will be engaged to analyze pricing patterns, affected commerce calculations, competitive dynamics in the relevant specialty-minerals markets, and other economic issues that may be relevant to the investigation and to any potential resolution discussions with the DOJ.

(c) Compliance Consultant. An antitrust compliance consultant may be engaged to assist with the assessment of TMC's existing antitrust compliance program and the design of enhancements or remediation measures, as discussed in Section 3.6 above.

The Firm will obtain TMC's prior written approval before engaging any third-party vendor or expert, and will provide the Company with a description of the proposed engagement, the qualifications of the proposed vendor or expert, and an estimate of the anticipated costs. Third-party vendor and expert fees will be invoiced separately from C&H's professional fees; however, such fees will be processed through the Firm's accounts and passed through to the Company at cost, without markup.

5.4 Budget Estimate

Based on the Firm's preliminary assessment of the scope, complexity, and anticipated duration of this matter, our initial budget estimate for the internal investigation and grand jury defense phase of this engagement is USD 12,000,000 (twelve million United States Dollars). This estimate is inclusive of C&H's professional fees and disbursements, but exclusive of third-party vendor and expert fees, which will be estimated separately as described in Section 5.3 above.

This estimate is based on the following current assumptions: (i) the investigation will focus primarily on the conduct of TMC's U.S. Specialty Minerals Division during the period from approximately 2017 to the present; (ii) the volume of potentially relevant documents and ESI will be substantial but manageable with the application of appropriate search methodologies and technology-assisted review; (iii) the Firm will conduct interviews of approximately 20 to 35 current and former TMC employees; and (iv) the grand jury investigation and any resolution negotiations will be concluded within approximately 18 to 24 months of the date of this letter, although we recognize that this timeline is subject to significant uncertainty.

The budget set forth above is an estimate only and does not constitute a fee cap, a guaranteed maximum price, or a fixed fee. Actual fees and expenses may be higher or lower than the estimate depending on the course of the investigation, the actions taken by the DOJ, the volume and complexity of the documents involved, the number and availability of witnesses, and other factors outside the Firm's control. The Firm will provide periodic budget updates to the Company, no less frequently than quarterly, and will promptly advise the General Counsel if actual or projected fees and expenses are expected to materially exceed the initial estimate. In such event, the Firm will seek the General Counsel's approval before incurring costs that would result in a significant overage relative to the estimate. Any material expansion of the scope of the engagement that would be expected to result in fees significantly exceeding the initial estimate will require written approval from TMC's General Counsel before the Firm undertakes such expanded work.

6. Billing and Payment Procedures

6.1 Invoicing. The Firm will issue invoices on a monthly basis for professional fees and disbursements incurred during the preceding calendar month. Invoices will be prepared in accordance with the Firm's standard billing format and will include the following information: (i) a narrative description of the legal services rendered; (ii) the identity of the attorney or professional performing each service; (iii) the time expended on each task, recorded in increments of one-tenth (0.1) of an hour; (iv) the applicable hourly rate for each timekeeper; and (v) an itemized description of disbursements and out-of-pocket expenses incurred during the billing period.

Invoices will be directed to:

Priya Anand, Esq. General Counsel Torchlight Mining Corp. 200 Bay Street, Suite 3400 Toronto, ON M5J 2J2, Canada

Email: panand@torchlightmining.com

or to such other address, email, or billing contact as the Company may designate in writing from time to time. If the Company utilizes an electronic billing system or requires invoices to be submitted in a particular format (e.g., LEDES or UTBMS codes), the Firm will endeavor to accommodate such requirements upon written request.

6.2 Payment Terms

Payment of each invoice is due within thirty (30) days of the date of the invoice. All fees and expenses are denominated in, and payable in, United States Dollars (USD). Payments should be made by wire transfer to the Firm's client trust account or operating account, as specified on each invoice. Past-due amounts may be subject to a late-payment interest charge at the rate of one percent (1.0%) per month (equivalent to an annual rate of 12%), or the maximum rate permitted by applicable law, whichever is less, calculated from the date payment was due until the date payment is received.

The Firm reserves the right to suspend work on the engagement if any invoice remains unpaid for more than sixty (60) days after its due date, provided that the Firm will provide the Company with at least fifteen (15) days' written notice before suspending work and will comply with all applicable ethical obligations regarding continued representation during the notice period.

6.3 Retainer. No retainer or advance payment is required from TMC at the commencement of this engagement. However, the Firm reserves the right to request a retainer or advance payment at any point during the engagement if circumstances warrant, including but not limited to the event that invoices become materially past due or the anticipated scope and cost of the engagement increase substantially. Any retainer received will be deposited into the Firm's client trust account and applied against outstanding invoices as they are rendered, in accordance with applicable rules of professional conduct.

7. Confidentiality and Privilege

7.1 Attorney-Client Privilege

All communications between the Firm and TMC (including its officers, directors, employees, and agents acting on behalf of the Company) in connection with this engagement are intended to be, and shall be treated as, confidential communications protected by the attorney-client privilege and/or the work-product doctrine. The protections of the attorney-client privilege apply to communications made for the purpose of seeking or providing legal advice in connection with this engagement, and the work-product doctrine protects materials prepared by or at the direction of the Firm in anticipation of litigation or in connection with the Firm's legal analysis.

TMC agrees to take reasonable steps to preserve the confidentiality of all privileged communications, including but not limited to: (i) limiting the distribution of privileged communications to those individuals within the Company who have a legitimate need to know the information for the purpose of obtaining or facilitating legal advice; (ii) marking privileged documents and communications as "Privileged and Confidential — Attorney-Client Communication" or "Attorney Work Product" as appropriate; and (iii) refraining from forwarding, copying, or disseminating privileged communications to individuals outside the Company without the Firm's prior knowledge and consent.

7.2 Confidential Information

The Firm will maintain in strict confidence all information provided to it by TMC in connection with this engagement, including but not limited to business information, financial data, trade secrets, proprietary information, personnel information, and all other non-public information. The Firm will not disclose any such information to third parties without TMC's prior written consent, except as may be required by applicable law, court order, or the rules of professional conduct governing the Firm's attorneys. The Firm's obligations of confidentiality are further described in Attachment B (Firm's Privacy and Data Security Notice).

7.3 Privilege Waivers

TMC acknowledges that the disclosure of privileged communications or attorney work product to third parties — including to governmental agencies, co-defendants, adverse parties, or other persons outside the attorney-client relationship — may result in a waiver of the applicable privilege, either as to the specific communication disclosed or as to broader categories of communications relating to the same subject matter. The Firm will advise TMC before any disclosure that could implicate privilege issues and will counsel the Company regarding the potential consequences of any proposed disclosure.

Any decision to make voluntary disclosures of privileged or work-product-protected information to the DOJ or other governmental agencies — including in the context of cooperation discussions, proffer sessions, or presentations to the Antitrust Division — will be made only with the express, informed authorization of the General Counsel or, where the significance of the disclosure warrants, the Chief Executive Officer or the Board of Directors of TMC. The Firm will not make any such disclosure without obtaining the Company's prior authorization.

8. Conflicts of Interest

The Firm has conducted a comprehensive conflicts check in accordance with its standard procedures and the applicable rules of professional conduct. Based on that review, the Firm has determined that it does not currently represent any party adverse to TMC in this matter or in any matter substantially related to this engagement.

Specifically, the Firm confirms that it does not currently represent, and has not in the recent past represented, any of the following entities or individuals in connection with the subject matter of this investigation:

(a) Ridgecrest Minerals Inc., which the Firm understands may be a subject of the DOJ investigation;

(b) Pinnacle Earth Resources Ltd., which the Firm understands may be a subject of the DOJ investigation;

(c) Cascade Chemical Supply Co., which the Firm understands may be a subject of or a witness in the DOJ investigation; or

(d) Any individual who has been identified as a subject or target of the investigation.

The Firm also confirms that it does not represent Gavin Holt, the former Vice President of U.S. Specialty Minerals Sales at TMC, who the Firm understands departed the Company in late 2021. Based on the Firm's preliminary assessment, Mr. Holt may have personal interests that diverge from or are adverse to TMC's interests in this matter. If Mr. Holt retains separate counsel, the Firm will coordinate with Mr. Holt's counsel as appropriate while maintaining its independent obligations of loyalty and zealous advocacy on behalf of TMC.

TMC acknowledges that the Firm represents other clients in the mining, minerals, and chemicals industries, and in other industries, in matters unrelated to this investigation. The Firm confirms that, to the best of its knowledge, no such representation presents an actual or potential conflict of interest with this engagement. TMC consents to the Firm's continued representation of such other clients in matters unrelated to this engagement, provided that such representations do not create an actual conflict of interest as determined under the applicable rules of professional conduct.

If an actual or potential conflict of interest arises during the course of this engagement, the Firm will promptly notify TMC and will take all appropriate steps as required by the applicable rules of professional conduct, including, if necessary, obtaining informed written consent from the affected clients or, in the event that the conflict cannot be waived, withdrawing from the engagement as required.

9. Client Responsibilities

The effectiveness of the Firm's representation depends in significant measure on the full and timely cooperation of the Company. TMC agrees to cooperate fully with the Firm throughout the course of this engagement, including by providing timely access to documents, data, information systems, personnel, and other information requested by the Firm in connection with the defense of the grand jury investigation and the conduct of the internal investigation.

TMC will designate the following individuals as the Company's primary contacts for purposes of this engagement:

(a) Priya Anand, General Counsel, will serve as the primary contact for day-to-day communications with the Firm regarding the engagement, including matters relating to document preservation and production, witness scheduling, billing, and general status updates.

(b) Søren Dalmqvist, Chief Executive Officer, will serve as the authorized decision-maker on behalf of TMC for all matters relating to settlement strategy, resolution discussions with the DOJ, and other strategic decisions of material significance to the Company's interests. The Firm understands that Mr. Dalmqvist may delegate certain decision-making authority to Ms. Anand or to other members of TMC's senior management team; any such delegation should be communicated to the Firm in writing.

TMC will promptly notify the Firm of any developments potentially relevant to the engagement, including but not limited to: (i) any communications from the DOJ, including additional subpoenas, civil investigative demands, or requests for information; (ii) any communications from co-subjects, co-targets, or their counsel; (iii) any communications from third parties (including customers, competitors, or trade association representatives) that may relate to the subject matter of the investigation; (iv) any personnel changes affecting key witnesses or custodians; and (v) any media inquiries or public reporting regarding the investigation.

10. Engagement of Experts and Vendors Under the Firm's Direction

Where third-party experts and consultants are retained through the Firm or at the Firm's direction for the purpose of providing litigation support or assisting with the Firm's legal analysis in connection with this engagement, such engagements may be structured under United States v. Kovel, 296 F.2d 918 (2d Cir. 1961), or similar legal frameworks, in order to preserve the applicability of the attorney-client privilege and work-product doctrine to the communications between the Firm, the expert, and the Company to the maximum extent permitted by applicable law.

Under a Kovel arrangement, the expert or consultant functions as a necessary agent of the Firm, assisting the Firm in rendering legal advice to the Company, and communications made in furtherance of that purpose are treated as privileged attorney-client communications. The Firm will advise TMC regarding the appropriate structure for each vendor or expert engagement and will implement the necessary agreements and protocols (including confidentiality agreements and engagement letters referencing the Kovel framework) to support the privilege claims. TMC acknowledges that the availability and scope of privilege protection under Kovel and analogous doctrines may vary depending on the jurisdiction and the specific facts of each engagement, and the Firm does not guarantee that all such communications will ultimately be protected from disclosure.

11. No Guarantee of Outcome

TMC acknowledges that the Firm has not made, and does not make, any guarantee, warranty, or prediction regarding the outcome of the DOJ investigation, the grand jury proceedings, any potential criminal charges, or any other aspect of this matter. The law and the facts are subject to uncertainty, and the actions of the DOJ, the grand jury, and other parties are beyond the Firm's control. The Firm will exercise its best professional judgment in providing legal services under this engagement, will keep the Company informed of material developments, and will provide candid advice regarding the risks, options, and potential consequences associated with the Company's decisions. However, the ultimate outcome of the matter cannot be assured.

12. Termination

12.1 Termination by the Company

TMC may terminate this engagement at any time and for any reason upon written notice to the Firm. Upon receipt of such notice, the Firm will take reasonable steps to conclude its work in an orderly manner, including, where necessary, seeking leave to withdraw from any pending proceedings in which the Firm has entered an appearance on behalf of TMC. Termination of the engagement will not relieve TMC of its obligation to pay all fees and expenses incurred by the Firm through the effective date of termination, including any fees and expenses reasonably incurred in connection with the transition of the matter to successor counsel.

12.2 Withdrawal by the Firm

The Firm may withdraw from this engagement if permitted or required by the applicable rules of professional conduct. Circumstances that may give rise to the Firm's withdrawal include, but are not limited to: (i) the emergence of a material conflict of interest that cannot be waived; (ii) nonpayment of fees after notice and a reasonable opportunity to cure; (iii) the Company's failure to cooperate with the Firm in a manner that materially impedes the Firm's ability to provide competent and diligent representation; or (iv) other circumstances in which continued representation would violate the Firm's ethical obligations.

In the event that withdrawal becomes necessary, the Firm will provide reasonable advance written notice to TMC and will take all steps reasonably necessary to protect TMC's interests during the transition period, including cooperating with successor counsel, transferring client files and work product, and seeking leave to withdraw from any pending proceedings in an orderly fashion. The Firm will comply with all applicable rules governing withdrawal from representation, including any requirements for court approval.

13. Document Retention

Upon the conclusion of this engagement, the Firm will retain the client files relating to this matter in accordance with the Firm's standard document-retention policies, a copy of which is available upon request. Under the Firm's current policy, closed matter files are retained for a minimum of ten (10) years following the conclusion of the engagement, after which they may be destroyed in accordance with the Firm's procedures, unless the Company requests their return or the Firm determines that continued retention is warranted.

Original documents and materials provided by TMC to the Firm in connection with this engagement will be returned to the Company promptly upon request, at any time during or after the engagement. The Firm may retain copies of such documents for its records and for compliance with its professional obligations, as permitted by the applicable rules of professional conduct.

14. Governing Law and Dispute Resolution

This engagement letter, and the rights and obligations of the parties hereunder, shall be governed by and construed in accordance with the laws of the State of New York, without regard to its principles of conflicts of laws.

Any dispute, controversy, or claim arising out of or relating to this engagement letter, the Firm's representation of TMC, or the Firm's fees and charges in connection with this engagement, shall be resolved through confidential binding arbitration conducted in New York, New York, in accordance with the Commercial Arbitration Rules of the American Arbitration Association then in effect. The arbitration shall be conducted before a single arbitrator mutually agreed upon by the parties or, in the absence of agreement, appointed by the American Arbitration Association. The arbitrator's award shall be final and binding upon the parties and may be entered as a judgment in any court of competent jurisdiction. Each party shall bear its own costs and attorneys' fees incurred in connection with the arbitration, unless the arbitrator determines that a different allocation is appropriate. The parties agree that the existence and results of any arbitration proceeding shall be treated as confidential.

15. Entire Agreement and Amendments

This engagement letter, together with Attachment A (Standard Terms and Conditions of Engagement) and Attachment B (Firm's Privacy and Data Security Notice), constitutes the entire agreement between the Firm and TMC regarding the engagement described herein and supersedes all prior discussions, correspondence, proposals, and understandings, whether oral or written, relating to the subject matter of this letter.

No amendment, modification, or supplement to this engagement letter shall be effective unless made in writing and signed by an authorized representative of each party. No waiver of any provision of this letter shall be effective unless made in writing and signed by the waiving party, and no such waiver shall constitute a waiver of any other provision or a continuing waiver of the same provision.

16. Acceptance

We are confident that Calderwood & Harkness LLP is well positioned to provide Torchlight Mining Corp. with the highest quality legal representation in this important matter. We look forward to working with you and your team throughout the engagement.

If the foregoing terms are acceptable, please indicate TMC's acceptance of this engagement by executing this letter in the space provided below and returning a signed copy to the undersigned. An electronic copy sent via email to eforsythe@calderwoodharkness.com will be sufficient for purposes of confirming acceptance, followed by the original executed copy sent by courier.

Please do not hesitate to contact Elaine Forsythe at (415) 555-7815 or Howard Bellamy at (212) 555-3244 if you have any questions regarding the terms of this engagement.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Name: Elaine Forsythe

Title: Partner, Antitrust & Competition Practice Group

Role: Responsible Partner

Date: February 18, 2022

By: ________

Name: Howard Bellamy

Title: Partner, Antitrust & Competition Practice Group

Role: Billing Partner

Date: February 18, 2022

ACCEPTED AND AGREED

TORCHLIGHT MINING CORP.

By: ________

Name: Priya Anand

Title: General Counsel

Date: ________

ACKNOWLEDGMENT OF AUTHORIZATION (Optional):

By: ________

Name: Søren Dalmqvist

Title: Chief Executive Officer

Date: ________

Enclosures:

Attachment A: Standard Terms and Conditions of Engagement

Attachment B: Firm's Privacy and Data Security Notice

PRIVILEGED AND CONFIDENTIAL — This engagement letter and its attachments constitute a privileged and confidential communication between Calderwood & Harkness LLP and Torchlight Mining Corp. and are not intended for distribution to, or use by, any third party without the prior written consent of both parties. Unauthorized disclosure, copying, or distribution of this letter is strictly prohibited.

Timekeeper Category	Hourly Rate (USD)
Partners	$1,450.00
Senior Associates	$950.00
Associates	$725.00
Paralegals / Litigation Support Professionals	$275.00 – $450.00

CALDERWOOD & HARKNESS LLP Attorneys at Law
555 California Street, 40th Floor San Francisco, California 94104, USA Telephone: (415) 555-7800 Facsimile: (415) 555-7801
One Liberty Plaza, 50th Floor New York, New York 10006, USA Telephone: (212) 555-3200 Facsimile: (212) 555-3201
www.calderwoodharkness.com
February 18, 2022
VIA ELECTRONIC MAIL AND INTERNATIONAL COURIER
Priya Anand, Esq. General Counsel Torchlight Mining Corp. 200 Bay Street, Suite 3400 Toronto, ON M5J 2J2 Canada
Calderwood & Harkness Matter No. 1039-00001
Re: Engagement of Calderwood & Harkness LLP by Torchlight Mining Corp. in Connection with U.S. Department of Justice Antitrust Division Grand Jury Investigation (Grand Jury No. GJ-22-0194, U.S. District Court, Northern District of California, San Francisco Division)
Dear Ms. Anand:
1. Introduction and Purpose
Calderwood & Harkness LLP ("C&H," the "Firm," "we," or "us") is pleased to confirm its engagement by Torchlight Mining Corp. ("TMC," "Torchlight," or the "Company") to provide legal representation in connection with the above-referenced matter. We appreciate the confidence that Torchlight and its Board of Directors have placed in our Firm, and we are committed to providing the highest quality legal representation throughout the course of this engagement.
The purpose of this letter is to set forth the terms and conditions governing the engagement between C&H and TMC, including the scope of our representation, the staffing of the engagement, our billing arrangements and fee structure, our respective obligations with respect to confidentiality and privilege, and other matters relevant to the attorney-client relationship. We ask that you review this letter carefully and contact us with any questions before executing the acknowledgment and acceptance set forth at the conclusion of this letter.
This engagement is effective as of the date of this letter, February 18, 2022. As you are aware, TMC received Grand Jury Subpoena Duces Tecum No. GJ-22-0194-SD-003 on February 14, 2022, issued by the Antitrust Division of the U.S. Department of Justice ("DOJ"), San Francisco Field Office, returnable to the U.S. District Court for the Northern District of California, San Francisco Division. Given the significance of this matter and the time-sensitive nature of the Company's obligations under the Subpoena, we have already begun preliminary work on the engagement, including an initial review of the Subpoena's specifications and discussions with your office regarding the Company's document-retention practices. This letter formalizes the terms under which that work has been and will continue to be performed.
This engagement letter, together with Attachment A (Standard Terms and Conditions of Engagement) and Attachment B (Firm's Privacy and Data Security Notice), each of which is incorporated herein by reference, constitutes the entire agreement between the Firm and the Company with respect to the engagement described herein.
2. Client Identification
The client in this engagement is Torchlight Mining Corp., a corporation organized and existing under the Canada Business Corporations Act (CBCA Corporation No. 7841526-1), with its registered office at 200 Bay Street, Suite 3400, Toronto, ON M5J 2J2, Canada. For the avoidance of doubt, all references to "TMC," "Torchlight," the "Company," or the "Client" in this letter refer to Torchlight Mining Corp. in its corporate capacity.
This engagement also encompasses, as necessary and appropriate, legal services provided to Torchlight Mining (U.S.) Inc. ("TMC US"), a wholly owned subsidiary of TMC organized under the laws of the State of Nevada (Nevada Secretary of State Entity No. NV20160438721), with its principal office located at 8750 West Sahara Avenue, Suite 210, Reno, Nevada 89117, USA. TMC US operates the Company's U.S. Specialty Minerals Division, which is the business unit at the center of the DOJ investigation. References to "TMC" or the "Company" herein shall be deemed to include TMC US as the context requires, and services rendered on behalf of TMC US shall be governed by the same terms and conditions set forth in this letter.
It is important to clarify that this engagement does not encompass the representation of any individual director, officer, employee, or agent of TMC or TMC US in their personal capacities. Depending on the development of the investigation, individual directors, officers, or employees of the Company — including, without limitation, persons who may be identified as subjects, targets, or witnesses in the grand jury proceedings — may have interests that diverge from those of the Company and may need to retain separate legal counsel to represent their personal interests. The Firm will monitor this issue as the investigation progresses and will advise the Company promptly if circumstances arise in which we believe separate representation for any individual may be necessary or advisable. The Firm's duty of loyalty and obligation of zealous advocacy run solely to TMC (and TMC US as described above) and not to any individual associated with the Company.
3. Scope of Representation
The Firm's representation of TMC in this engagement encompasses the following matters, each of which is described in greater detail below.
3.1 Grand Jury Investigation Defense
C&H will represent TMC in all aspects of the DOJ Antitrust Division grand jury investigation designated as Grand Jury No. GJ-22-0194, pending in the U.S. District Court for the Northern District of California, San Francisco Division. Our representation in this regard will include, but not be limited to, the following:
(a) Subpoena Analysis and Response. Analysis of and response to Grand Jury Subpoena Duces Tecum No. GJ-22-0194-SD-003, which was served upon TMC on February 14, 2022, as well as any subsequent subpoenas, civil investigative demands, or other compulsory process that may be issued to TMC or TMC US in connection with the investigation.
(b) Communications and Negotiations with the DOJ. All communications and negotiations with the DOJ Antitrust Division, including the San Francisco Field Office, the Division's Criminal Enforcement Section (Section I and Section II) in Washington, D.C., and any other DOJ components involved in the investigation. This includes responding to information requests, negotiating the scope and timing of document productions, and advocating on TMC's behalf regarding the direction and resolution of the investigation.
(c) Meetings and Proceedings. Preparation for and representation at any meetings, proffer sessions, presentations, or other proceedings with DOJ personnel, including any meetings at which the Company's legal position, factual presentation, or cooperation efforts are discussed.
(d) Subject Matter of the Investigation. Based on our preliminary review, the investigation concerns suspected violations of Section 1 of the Sherman Antitrust Act (15 U.S.C. § 1), specifically alleged price-fixing, market allocation, and bid-rigging in the North American specialty-minerals sector. The products at issue principally include high-purity feldspar, industrial talc, and rare-earth concentrates. Our representation will address the full scope of the conduct under investigation, as well as any expansion of the investigation's scope that may occur during the pendency of the matter.
3.2 Internal Investigation
C&H will conduct an internal investigation on behalf of TMC to ascertain the relevant facts relating to the subject matter of the DOJ investigation. The internal investigation will be conducted at the direction of, and for the benefit of, TMC's General Counsel and Board of Directors, and is intended to be protected by the attorney-client privilege and the work-product doctrine. The internal investigation will include, but not be limited to, the following:
(a) Document Collection, Review, and Analysis. Comprehensive collection, review, and analysis of documents and electronically stored information ("ESI") in the possession, custody, or control of TMC and TMC US that are relevant to the subject matter of the DOJ investigation, including but not limited to emails, instant messages, calendar entries, pricing records, customer correspondence, sales reports, internal memoranda, trade association materials, and competitor communications.
(b) Witness Interviews. Interviews of current and former TMC and TMC US employees, officers, and directors who may have knowledge of the facts relevant to the investigation. Such interviews will be conducted under Upjohn warnings, making clear that the Firm represents the Company and not the individual, that the communication is privileged, and that the privilege belongs to the Company and may be waived at the Company's discretion.
(c) Expert Engagement and Oversight. Engagement and oversight of forensic accounting professionals, economic experts, and digital forensics specialists to assist with the Firm's legal analysis and investigation, as further described in Section 10 below.
(d) Privileged Reporting. Preparation of privileged memoranda, presentations, and reports summarizing the Firm's findings, legal analysis, and recommendations for the TMC Board of Directors, the Audit Committee, and senior management, as appropriate.
3.3 Document Preservation and Production
C&H will advise and assist TMC in complying with its legal obligations regarding the preservation and production of documents and ESI in connection with the investigation. Our services in this regard will include, but not be limited to:
(a) Litigation Hold. Design and implementation of litigation hold notices and document preservation protocols applicable to TMC and TMC US, including identification of key custodians, relevant data sources, and appropriate preservation measures for both paper and electronic records.
(b) Electronic discovery Management. Management of the electronic discovery process, including engagement and oversight of e-discovery vendors for forensic collection, processing, de-duplication, hosting, and managed review of TMC's ESI, in accordance with applicable legal standards and DOJ requirements.
(c) Privilege Review and Logging. Conduct of privilege review of documents identified as potentially responsive to the Subpoena, and preparation of privilege logs in compliance with applicable rules and DOJ protocols.
(d) Document Productions. Preparation and management of rolling productions of responsive, non-privileged documents to the DOJ in a format and on a schedule to be negotiated with the Antitrust Division.
3.4 Witness Preparation
C&H will prepare TMC employees and other Company witnesses for testimony before the grand jury, proffer sessions with DOJ attorneys and agents, voluntary interviews, or any other proceedings in connection with the investigation. Witness preparation will include review of relevant documents, discussion of anticipated topics and questions, and guidance regarding the witness's rights and obligations.
3.5 Negotiation of Resolution
C&H will represent TMC in negotiations with the DOJ regarding the potential resolution of the investigation as to the Company. Such negotiations may involve, depending on the circumstances and the Company's strategic objectives, discussions regarding:
(a) Cooperation agreements or cooperation credit under the DOJ Antitrust Division's Leniency Program or its policies governing cooperation by non-leniency applicants;
(b) Non-prosecution agreements ("NPAs");
(c) Deferred prosecution agreements ("DPAs");
(d) Plea agreements, including negotiation of charges, fine calculations under the U.S. Sentencing Guidelines (including the Antitrust Division's framework for calculating fines based on a percentage of affected commerce), restitution, and other terms; and
(e) Any other resolution framework that may be available or proposed by the DOJ.
All resolution-related decisions will be made by TMC, acting through its General Counsel, CEO, and Board of Directors, as appropriate, based on the Firm's legal advice and recommendations.
3.6 Compliance Remediation
C&H will advise TMC regarding the enhancement and strengthening of the Company's antitrust compliance program in light of the DOJ investigation. Such advice may include recommendations regarding the design, implementation, and monitoring of compliance policies, training programs, reporting mechanisms, and internal audit procedures. The Firm will engage and oversee outside compliance consultants as appropriate, subject to TMC's prior approval as set forth in Section 5.3 below.
3.7 Related Matters
In addition to the foregoing, our engagement encompasses the following related services:
(a) Coordination with Auditors and Financial Advisors. Coordination with TMC's independent auditor, Calvert & Associates LLP, and the Company's financial advisor, Ironbridge Capital Markets Inc., regarding potential financial-statement disclosure implications of the investigation, including any loss contingency analysis required under applicable accounting standards (IFRS and/or U.S. GAAP, as applicable) and any notification or disclosure obligations arising under Canadian securities laws, U.S. securities laws, or applicable stock exchange rules.
(b) Insurance Coordination. Advice regarding notification to, and coordination with, TMC's directors-and-officers ("D&O") liability insurance carriers, including review of applicable policy provisions, tender of defense and coverage claims, and compliance with notice requirements under TMC's D&O and corporate liability insurance programs.
Limitations on Scope. TMC acknowledges and agrees that this engagement does not encompass representation of TMC, TMC US, or any other person or entity in any of the following matters, unless separately agreed in writing by the Firm and the Company:
(i) Any civil antitrust litigation, including but not limited to private class action lawsuits, opt-out direct actions, or other civil claims that may be filed against TMC or TMC US in connection with the conduct under investigation;
(ii) Any securities enforcement proceedings, shareholder derivative actions, or securities class action litigation;
(iii) Any regulatory proceedings before the Federal Trade Commission, the Competition Bureau of Canada, the European Commission, or any other domestic or foreign regulatory authority; or
(iv) Any other legal matter not specifically described in this Section 3.
Should TMC require representation in any of the foregoing matters, the Firm would be pleased to discuss the terms of a separate engagement.
4. Staffing
4.1 Responsible Partner
Elaine Forsythe, Partner in the Firm's Antitrust & Competition Practice Group, based in the Firm's San Francisco office, will serve as the Responsible Partner and primary point of contact for this engagement. Ms. Forsythe will have overall responsibility for the strategic direction of the defense, will lead the internal investigation, and will serve as lead negotiator with the DOJ Antitrust Division. Ms. Forsythe has over twenty years of experience defending corporations and individuals in federal antitrust investigations, including grand jury proceedings and criminal trials, and has represented clients in more than a dozen DOJ Antitrust Division investigations across a range of industries.
4.2 Billing Partner
Howard Bellamy, Partner in the Firm's Antitrust & Competition Practice Group, based in the Firm's New York office, will serve as the Billing Partner for this engagement. Mr. Bellamy will manage the engagement economics, budgeting, and billing, and will serve as the primary point of contact for TMC's General Counsel on all financial matters relating to the engagement, including preparation and review of monthly invoices, budget tracking, and cost management. Mr. Bellamy brings extensive experience in the management of complex, high-stakes antitrust defense engagements and will work closely with Ms. Forsythe to ensure that staffing and expenditures are proportionate to the needs of the matter.
4.3 Core Team
In addition to the Responsible Partner and Billing Partner, the following attorneys have been assigned to the core engagement team:
(a) Aaron Liu, Associate, Antitrust & Competition Practice Group, based in the Firm's San Francisco office, will serve as the Lead Associate on the matter. Mr. Liu will be responsible for managing the day-to-day aspects of the engagement, including coordination of document review and production, preparation of responses to the grand jury subpoena, witness interview scheduling and preparation, and regular reporting to the Responsible Partner.
(b) Monica Reyes, Associate, Antitrust & Competition Practice Group, based in the Firm's San Francisco office, will focus on privilege review, preparation of memoranda of law on substantive antitrust and procedural issues, and coordination with forensic consultants and e-discovery vendors retained in connection with the engagement.
Additional attorneys, including partners, senior associates, associates, and professional staff (including paralegals and litigation support professionals), may be assigned to the matter as the needs of the engagement evolve. The Firm will notify the Company's General Counsel of the addition of any new partner or senior associate to the engagement team. The Firm endeavors to staff matters efficiently and to avoid unnecessary duplication of effort.
5. Billing Arrangements
5.1 Hourly Rates
The Firm's professional fees for this engagement will be calculated on the basis of hourly billing at the following standard rates, which are current as of January 1, 2022:
The rates set forth above reflect the rates applicable to the currently assigned team members. Individual attorney rates may vary within each category based on the specific timekeeper's level of experience and seniority, and the Firm will identify each timekeeper and his or her applicable rate on each monthly invoice.
The Firm's standard hourly rates are subject to annual adjustment, which typically becomes effective on January 1 of each calendar year. The Firm will provide the Company with written notice of any rate adjustments at least thirty (30) days before the effective date of such adjustment. In the event that the Company objects to any rate increase, the parties will discuss the matter in good faith and attempt to reach a mutually satisfactory resolution.
5.2 Disbursements and Expenses
In addition to professional fees, TMC will be responsible for reimbursement of all reasonable out-of-pocket expenses and disbursements incurred by the Firm in connection with this engagement. Such expenses and disbursements include, but are not limited to, the following:
(a) Travel expenses, including airfare (coach or business class for flights over four hours), hotel accommodations, ground transportation, and meals, incurred in connection with travel required by the engagement, including travel to DOJ offices, witness interview locations, and the Company's offices;
(b) Court filing fees, service of process fees, and related costs;
(c) Document reproduction, printing, scanning, and production costs;
(d) Fees and costs of third-party experts and consultants (subject to the prior-approval provisions set forth in Section 5.3 below);
(e) Electronic discovery vendor fees, including fees for forensic data collection, ESI processing, document hosting, and technology-assisted review platforms (subject to the prior-approval provisions set forth in Section 5.3 below);
(f) Messenger, courier, and overnight delivery service charges;
(g) Long-distance telephone charges, conference call services, and videoconference platform fees;
(h) Charges for computerized legal research services, including Westmark Data Systems, Sundial Solutions, and other research databases;
(i) Costs associated with the retention of court reporters and preparation of transcripts; and
(j) Other reasonable and customary out-of-pocket expenses incurred in the ordinary course of providing legal services in a matter of this nature.
The Firm endeavors to manage disbursements and expenses prudently and will seek to utilize cost-effective alternatives where practicable without compromising the quality of the representation.
5.3 Third-Party Vendors and Experts
Based on the Firm's preliminary assessment of this matter, we anticipate that it will be necessary to retain one or more third-party vendors and experts in connection with this engagement. Anticipated engagements include, but may not be limited to, the following:
(a) E-discovery / Digital Forensics Vendor. A specialized e-discovery and digital forensics vendor will be required for forensic collection of ESI from Company systems (including email servers, shared drives, mobile devices, and cloud-based platforms), processing and de-duplication of collected data, hosting of a document review platform, and provision of technology-assisted review and analytics tools. Based on current market rates and our preliminary estimate of data volumes, we anticipate that e-discovery vendor costs for this engagement may range from approximately USD 2.5 million to USD 4.5 million, depending on actual data volumes and the duration of the review.
(b) Forensic Accounting / Economics Expert. A forensic accounting or economics expert will be engaged to analyze pricing patterns, affected commerce calculations, competitive dynamics in the relevant specialty-minerals markets, and other economic issues that may be relevant to the investigation and to any potential resolution discussions with the DOJ.
(c) Compliance Consultant. An antitrust compliance consultant may be engaged to assist with the assessment of TMC's existing antitrust compliance program and the design of enhancements or remediation measures, as discussed in Section 3.6 above.
The Firm will obtain TMC's prior written approval before engaging any third-party vendor or expert, and will provide the Company with a description of the proposed engagement, the qualifications of the proposed vendor or expert, and an estimate of the anticipated costs. Third-party vendor and expert fees will be invoiced separately from C&H's professional fees; however, such fees will be processed through the Firm's accounts and passed through to the Company at cost, without markup.
5.4 Budget Estimate
Based on the Firm's preliminary assessment of the scope, complexity, and anticipated duration of this matter, our initial budget estimate for the internal investigation and grand jury defense phase of this engagement is USD 12,000,000 (twelve million United States Dollars). This estimate is inclusive of C&H's professional fees and disbursements, but exclusive of third-party vendor and expert fees, which will be estimated separately as described in Section 5.3 above.
This estimate is based on the following current assumptions: (i) the investigation will focus primarily on the conduct of TMC's U.S. Specialty Minerals Division during the period from approximately 2017 to the present; (ii) the volume of potentially relevant documents and ESI will be substantial but manageable with the application of appropriate search methodologies and technology-assisted review; (iii) the Firm will conduct interviews of approximately 20 to 35 current and former TMC employees; and (iv) the grand jury investigation and any resolution negotiations will be concluded within approximately 18 to 24 months of the date of this letter, although we recognize that this timeline is subject to significant uncertainty.
The budget set forth above is an estimate only and does not constitute a fee cap, a guaranteed maximum price, or a fixed fee. Actual fees and expenses may be higher or lower than the estimate depending on the course of the investigation, the actions taken by the DOJ, the volume and complexity of the documents involved, the number and availability of witnesses, and other factors outside the Firm's control. The Firm will provide periodic budget updates to the Company, no less frequently than quarterly, and will promptly advise the General Counsel if actual or projected fees and expenses are expected to materially exceed the initial estimate. In such event, the Firm will seek the General Counsel's approval before incurring costs that would result in a significant overage relative to the estimate. Any material expansion of the scope of the engagement that would be expected to result in fees significantly exceeding the initial estimate will require written approval from TMC's General Counsel before the Firm undertakes such expanded work.
6. Billing and Payment Procedures
6.1 Invoicing.  The Firm will issue invoices on a monthly basis for professional fees and disbursements incurred during the preceding calendar month. Invoices will be prepared in accordance with the Firm's standard billing format and will include the following information: (i) a narrative description of the legal services rendered; (ii) the identity of the attorney or professional performing each service; (iii) the time expended on each task, recorded in increments of one-tenth (0.1) of an hour; (iv) the applicable hourly rate for each timekeeper; and (v) an itemized description of disbursements and out-of-pocket expenses incurred during the billing period.
Invoices will be directed to:
Priya Anand, Esq. General Counsel Torchlight Mining Corp. 200 Bay Street, Suite 3400 Toronto, ON M5J 2J2, Canada
Email: panand@torchlightmining.com
or to such other address, email, or billing contact as the Company may designate in writing from time to time. If the Company utilizes an electronic billing system or requires invoices to be submitted in a particular format (e.g., LEDES or UTBMS codes), the Firm will endeavor to accommodate such requirements upon written request.
6.2 Payment Terms
Payment of each invoice is due within thirty (30) days of the date of the invoice. All fees and expenses are denominated in, and payable in, United States Dollars (USD). Payments should be made by wire transfer to the Firm's client trust account or operating account, as specified on each invoice. Past-due amounts may be subject to a late-payment interest charge at the rate of one percent (1.0%) per month (equivalent to an annual rate of 12%), or the maximum rate permitted by applicable law, whichever is less, calculated from the date payment was due until the date payment is received.
The Firm reserves the right to suspend work on the engagement if any invoice remains unpaid for more than sixty (60) days after its due date, provided that the Firm will provide the Company with at least fifteen (15) days' written notice before suspending work and will comply with all applicable ethical obligations regarding continued representation during the notice period.
6.3 Retainer.  No retainer or advance payment is required from TMC at the commencement of this engagement. However, the Firm reserves the right to request a retainer or advance payment at any point during the engagement if circumstances warrant, including but not limited to the event that invoices become materially past due or the anticipated scope and cost of the engagement increase substantially. Any retainer received will be deposited into the Firm's client trust account and applied against outstanding invoices as they are rendered, in accordance with applicable rules of professional conduct.
7. Confidentiality and Privilege
7.1 Attorney-Client Privilege
All communications between the Firm and TMC (including its officers, directors, employees, and agents acting on behalf of the Company) in connection with this engagement are intended to be, and shall be treated as, confidential communications protected by the attorney-client privilege and/or the work-product doctrine. The protections of the attorney-client privilege apply to communications made for the purpose of seeking or providing legal advice in connection with this engagement, and the work-product doctrine protects materials prepared by or at the direction of the Firm in anticipation of litigation or in connection with the Firm's legal analysis.
TMC agrees to take reasonable steps to preserve the confidentiality of all privileged communications, including but not limited to: (i) limiting the distribution of privileged communications to those individuals within the Company who have a legitimate need to know the information for the purpose of obtaining or facilitating legal advice; (ii) marking privileged documents and communications as "Privileged and Confidential — Attorney-Client Communication" or "Attorney Work Product" as appropriate; and (iii) refraining from forwarding, copying, or disseminating privileged communications to individuals outside the Company without the Firm's prior knowledge and consent.
7.2 Confidential Information
The Firm will maintain in strict confidence all information provided to it by TMC in connection with this engagement, including but not limited to business information, financial data, trade secrets, proprietary information, personnel information, and all other non-public information. The Firm will not disclose any such information to third parties without TMC's prior written consent, except as may be required by applicable law, court order, or the rules of professional conduct governing the Firm's attorneys. The Firm's obligations of confidentiality are further described in Attachment B (Firm's Privacy and Data Security Notice).
7.3 Privilege Waivers
TMC acknowledges that the disclosure of privileged communications or attorney work product to third parties — including to governmental agencies, co-defendants, adverse parties, or other persons outside the attorney-client relationship — may result in a waiver of the applicable privilege, either as to the specific communication disclosed or as to broader categories of communications relating to the same subject matter. The Firm will advise TMC before any disclosure that could implicate privilege issues and will counsel the Company regarding the potential consequences of any proposed disclosure.
Any decision to make voluntary disclosures of privileged or work-product-protected information to the DOJ or other governmental agencies — including in the context of cooperation discussions, proffer sessions, or presentations to the Antitrust Division — will be made only with the express, informed authorization of the General Counsel or, where the significance of the disclosure warrants, the Chief Executive Officer or the Board of Directors of TMC. The Firm will not make any such disclosure without obtaining the Company's prior authorization.
8. Conflicts of Interest
The Firm has conducted a comprehensive conflicts check in accordance with its standard procedures and the applicable rules of professional conduct. Based on that review, the Firm has determined that it does not currently represent any party adverse to TMC in this matter or in any matter substantially related to this engagement.
Specifically, the Firm confirms that it does not currently represent, and has not in the recent past represented, any of the following entities or individuals in connection with the subject matter of this investigation:
(a) Ridgecrest Minerals Inc., which the Firm understands may be a subject of the DOJ investigation;
(b) Pinnacle Earth Resources Ltd., which the Firm understands may be a subject of the DOJ investigation;
(c) Cascade Chemical Supply Co., which the Firm understands may be a subject of or a witness in the DOJ investigation; or
(d) Any individual who has been identified as a subject or target of the investigation.
The Firm also confirms that it does not represent Gavin Holt, the former Vice President of U.S. Specialty Minerals Sales at TMC, who the Firm understands departed the Company in late 2021. Based on the Firm's preliminary assessment, Mr. Holt may have personal interests that diverge from or are adverse to TMC's interests in this matter. If Mr. Holt retains separate counsel, the Firm will coordinate with Mr. Holt's counsel as appropriate while maintaining its independent obligations of loyalty and zealous advocacy on behalf of TMC.
TMC acknowledges that the Firm represents other clients in the mining, minerals, and chemicals industries, and in other industries, in matters unrelated to this investigation. The Firm confirms that, to the best of its knowledge, no such representation presents an actual or potential conflict of interest with this engagement. TMC consents to the Firm's continued representation of such other clients in matters unrelated to this engagement, provided that such representations do not create an actual conflict of interest as determined under the applicable rules of professional conduct.
If an actual or potential conflict of interest arises during the course of this engagement, the Firm will promptly notify TMC and will take all appropriate steps as required by the applicable rules of professional conduct, including, if necessary, obtaining informed written consent from the affected clients or, in the event that the conflict cannot be waived, withdrawing from the engagement as required.
9. Client Responsibilities
The effectiveness of the Firm's representation depends in significant measure on the full and timely cooperation of the Company. TMC agrees to cooperate fully with the Firm throughout the course of this engagement, including by providing timely access to documents, data, information systems, personnel, and other information requested by the Firm in connection with the defense of the grand jury investigation and the conduct of the internal investigation.
TMC will designate the following individuals as the Company's primary contacts for purposes of this engagement:
(a) Priya Anand, General Counsel, will serve as the primary contact for day-to-day communications with the Firm regarding the engagement, including matters relating to document preservation and production, witness scheduling, billing, and general status updates.
(b) Søren Dalmqvist, Chief Executive Officer, will serve as the authorized decision-maker on behalf of TMC for all matters relating to settlement strategy, resolution discussions with the DOJ, and other strategic decisions of material significance to the Company's interests. The Firm understands that Mr. Dalmqvist may delegate certain decision-making authority to Ms. Anand or to other members of TMC's senior management team; any such delegation should be communicated to the Firm in writing.
TMC will promptly notify the Firm of any developments potentially relevant to the engagement, including but not limited to: (i) any communications from the DOJ, including additional subpoenas, civil investigative demands, or requests for information; (ii) any communications from co-subjects, co-targets, or their counsel; (iii) any communications from third parties (including customers, competitors, or trade association representatives) that may relate to the subject matter of the investigation; (iv) any personnel changes affecting key witnesses or custodians; and (v) any media inquiries or public reporting regarding the investigation.
10. Engagement of Experts and Vendors Under the Firm's Direction
Where third-party experts and consultants are retained through the Firm or at the Firm's direction for the purpose of providing litigation support or assisting with the Firm's legal analysis in connection with this engagement, such engagements may be structured under United States v. Kovel, 296 F.2d 918 (2d Cir. 1961), or similar legal frameworks, in order to preserve the applicability of the attorney-client privilege and work-product doctrine to the communications between the Firm, the expert, and the Company to the maximum extent permitted by applicable law.
Under a Kovel arrangement, the expert or consultant functions as a necessary agent of the Firm, assisting the Firm in rendering legal advice to the Company, and communications made in furtherance of that purpose are treated as privileged attorney-client communications. The Firm will advise TMC regarding the appropriate structure for each vendor or expert engagement and will implement the necessary agreements and protocols (including confidentiality agreements and engagement letters referencing the Kovel framework) to support the privilege claims. TMC acknowledges that the availability and scope of privilege protection under Kovel and analogous doctrines may vary depending on the jurisdiction and the specific facts of each engagement, and the Firm does not guarantee that all such communications will ultimately be protected from disclosure.
11. No Guarantee of Outcome
TMC acknowledges that the Firm has not made, and does not make, any guarantee, warranty, or prediction regarding the outcome of the DOJ investigation, the grand jury proceedings, any potential criminal charges, or any other aspect of this matter. The law and the facts are subject to uncertainty, and the actions of the DOJ, the grand jury, and other parties are beyond the Firm's control. The Firm will exercise its best professional judgment in providing legal services under this engagement, will keep the Company informed of material developments, and will provide candid advice regarding the risks, options, and potential consequences associated with the Company's decisions. However, the ultimate outcome of the matter cannot be assured.
12. Termination
12.1 Termination by the Company
TMC may terminate this engagement at any time and for any reason upon written notice to the Firm. Upon receipt of such notice, the Firm will take reasonable steps to conclude its work in an orderly manner, including, where necessary, seeking leave to withdraw from any pending proceedings in which the Firm has entered an appearance on behalf of TMC. Termination of the engagement will not relieve TMC of its obligation to pay all fees and expenses incurred by the Firm through the effective date of termination, including any fees and expenses reasonably incurred in connection with the transition of the matter to successor counsel.
12.2 Withdrawal by the Firm
The Firm may withdraw from this engagement if permitted or required by the applicable rules of professional conduct. Circumstances that may give rise to the Firm's withdrawal include, but are not limited to: (i) the emergence of a material conflict of interest that cannot be waived; (ii) nonpayment of fees after notice and a reasonable opportunity to cure; (iii) the Company's failure to cooperate with the Firm in a manner that materially impedes the Firm's ability to provide competent and diligent representation; or (iv) other circumstances in which continued representation would violate the Firm's ethical obligations.
In the event that withdrawal becomes necessary, the Firm will provide reasonable advance written notice to TMC and will take all steps reasonably necessary to protect TMC's interests during the transition period, including cooperating with successor counsel, transferring client files and work product, and seeking leave to withdraw from any pending proceedings in an orderly fashion. The Firm will comply with all applicable rules governing withdrawal from representation, including any requirements for court approval.
13. Document Retention
Upon the conclusion of this engagement, the Firm will retain the client files relating to this matter in accordance with the Firm's standard document-retention policies, a copy of which is available upon request. Under the Firm's current policy, closed matter files are retained for a minimum of ten (10) years following the conclusion of the engagement, after which they may be destroyed in accordance with the Firm's procedures, unless the Company requests their return or the Firm determines that continued retention is warranted.
Original documents and materials provided by TMC to the Firm in connection with this engagement will be returned to the Company promptly upon request, at any time during or after the engagement. The Firm may retain copies of such documents for its records and for compliance with its professional obligations, as permitted by the applicable rules of professional conduct.
14. Governing Law and Dispute Resolution
This engagement letter, and the rights and obligations of the parties hereunder, shall be governed by and construed in accordance with the laws of the State of New York, without regard to its principles of conflicts of laws.
Any dispute, controversy, or claim arising out of or relating to this engagement letter, the Firm's representation of TMC, or the Firm's fees and charges in connection with this engagement, shall be resolved through confidential binding arbitration conducted in New York, New York, in accordance with the Commercial Arbitration Rules of the American Arbitration Association then in effect. The arbitration shall be conducted before a single arbitrator mutually agreed upon by the parties or, in the absence of agreement, appointed by the American Arbitration Association. The arbitrator's award shall be final and binding upon the parties and may be entered as a judgment in any court of competent jurisdiction. Each party shall bear its own costs and attorneys' fees incurred in connection with the arbitration, unless the arbitrator determines that a different allocation is appropriate. The parties agree that the existence and results of any arbitration proceeding shall be treated as confidential.
15. Entire Agreement and Amendments
This engagement letter, together with Attachment A (Standard Terms and Conditions of Engagement) and Attachment B (Firm's Privacy and Data Security Notice), constitutes the entire agreement between the Firm and TMC regarding the engagement described herein and supersedes all prior discussions, correspondence, proposals, and understandings, whether oral or written, relating to the subject matter of this letter.
No amendment, modification, or supplement to this engagement letter shall be effective unless made in writing and signed by an authorized representative of each party. No waiver of any provision of this letter shall be effective unless made in writing and signed by the waiving party, and no such waiver shall constitute a waiver of any other provision or a continuing waiver of the same provision.
16. Acceptance
We are confident that Calderwood & Harkness LLP is well positioned to provide Torchlight Mining Corp. with the highest quality legal representation in this important matter. We look forward to working with you and your team throughout the engagement.
If the foregoing terms are acceptable, please indicate TMC's acceptance of this engagement by executing this letter in the space provided below and returning a signed copy to the undersigned. An electronic copy sent via email to eforsythe@calderwoodharkness.com will be sufficient for purposes of confirming acceptance, followed by the original executed copy sent by courier.
Please do not hesitate to contact Elaine Forsythe at (415) 555-7815 or Howard Bellamy at (212) 555-3244 if you have any questions regarding the terms of this engagement.
Very truly yours,
CALDERWOOD & HARKNESS LLP
CALDERWOOD & HARKNESS LLP
By: ________
Name: Elaine Forsythe
Title: Partner, Antitrust & Competition Practice Group
Role: Responsible Partner
Date: February 18, 2022
By: ________
Name: Howard Bellamy
Title: Partner, Antitrust & Competition Practice Group
Role: Billing Partner
Date: February 18, 2022
ACCEPTED AND AGREED
TORCHLIGHT MINING CORP.
By: ________
Name: Priya Anand
Title: General Counsel
Date: ________
ACKNOWLEDGMENT OF AUTHORIZATION (Optional):
By: ________
Name: Søren Dalmqvist
Title: Chief Executive Officer
Date: ________
Enclosures:
Attachment A: Standard Terms and Conditions of Engagement
Attachment B: Firm's Privacy and Data Security Notice
PRIVILEGED AND CONFIDENTIAL — This engagement letter and its attachments constitute a privileged and confidential communication between Calderwood & Harkness LLP and Torchlight Mining Corp. and are not intended for distribution to, or use by, any third party without the prior written consent of both parties. Unauthorized disclosure, copying, or distribution of this letter is strictly prohibited.
Timekeeper Category | Hourly Rate (USD)
Partners | $1,450.00
Senior Associates | $950.00
Associates | $725.00
Paralegals / Litigation Support Professionals | $275.00 – $450.00

CALDERWOOD & HARKNESS LLP Attorneys at Law

VIA ELECTRONIC MAIL AND INTERNATIONAL COURIER

CALDERWOOD & HARKNESS LLP

CALDERWOOD & HARKNESS LLP

ACCEPTED AND AGREED

TORCHLIGHT MINING CORP.

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