1039-00001 · Torchlight Mining Corp · documents

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PRIVILEGED & CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGED COMMUNICATION ATTORNEY WORK PRODUCT

CALDERWOOD & HARKNESS LLP 555 California Street, 40th Floor San Francisco, California 94104

Telephone: (415) 555-7200 Facsimile: (415) 555-7201 www.calderwoodharkness.com

Elaine Forsythe Partner Antitrust & Competition Practice Group Direct: (415) 555-7238 eforsythe@calderwoodharkness.com

March 5, 2023

Via Email and U.S. Mail

Denise Kowalski, Esq. Trial Attorney Antitrust Division United States Department of Justice San Francisco Field Office 450 Golden Gate Avenue, Room 10-0101 San Francisco, California 94102

Re: Proffer Session — Sandra Chu, Director of Pricing Analytics, U.S. Specialty Minerals Division, Torchlight Mining Corp.; Grand Jury Investigation No. GJ-22-0194, United States District Court, Northern District of California, San Francisco Division

Matter No.: Calderwood & Harkness LLP Matter No. 1039-00001

Dear Ms. Kowalski:

I write in connection with our recent discussions regarding Torchlight Mining Corp.'s ("TMC" or the "Company") ongoing cooperation with the Antitrust Division of the United States Department of Justice (the "Division") in its investigation of suspected price-fixing, market allocation, and bid-rigging in the North American specialty-minerals sector, including the markets for high-purity feldspar, industrial talc, and rare-earth concentrates (the "Investigation"). As you know, the Investigation is being conducted pursuant to Grand Jury Investigation No. GJ-22-0194, convened in the United States District Court for the Northern District of California, San Francisco Division (the "Grand Jury"). This letter sets forth the agreed-upon terms and conditions governing the voluntary proffer session (the "Proffer Session") of Sandra Chu, Director of Pricing Analytics, U.S. Specialty Minerals Division, Torchlight Mining Corp. ("Ms. Chu"), which is scheduled to take place on March 10, 2023, at the Division's San Francisco Field Office, 450 Golden Gate Avenue, San Francisco, California 94102.

As we have discussed, Calderwood & Harkness LLP ("Calderwood & Harkness" or "the Firm") represents Torchlight Mining Corp. in connection with the Investigation. Ms. Chu will appear at the Proffer Session with counsel from Calderwood & Harkness; specifically, Aaron Liu, Lead Associate in the Firm's Antitrust & Competition Practice Group, will attend as accompanying counsel. This letter reflects the parties' mutual understanding regarding the terms under which the Proffer Session will be conducted. The Proffer Session is being conducted voluntarily by Ms. Chu as part of TMC's broader cooperation with the Investigation, and Ms. Chu's participation is neither compelled nor coerced.

We respectfully request that the Division confirm its agreement to the terms set forth herein by executing the countersignature block below and returning a signed copy of this letter to the undersigned prior to the commencement of the Proffer Session on March 10, 2023. The terms of the Proffer Session are as follows:

1. Scope and Voluntary Nature of the Proffer

1.1. Ms. Chu is a current employee of Torchlight Mining Corp., where she holds the title of Director, Pricing Analytics, U.S. Specialty Minerals Division. Ms. Chu has been employed by TMC in various capacities within the Pricing Analytics function since approximately June 2016, and has served in her current role since January 2020. Ms. Chu's responsibilities include, among other things, the development, analysis, and implementation of pricing strategies and pricing adjustment recommendations for TMC's specialty minerals product lines within the United States market.

1.2. Ms. Chu agrees to participate voluntarily in the Proffer Session. She is not appearing pursuant to a grand jury subpoena, a trial subpoena, or any other form of legal compulsion. Her participation is entirely voluntary, and she has agreed to appear as part of TMC's cooperative engagement with the Division in the Investigation.

1.3. The Proffer Session will be conducted at the Division's San Francisco Field Office, located at 450 Golden Gate Avenue, Room 10-0101, San Francisco, California 94102, on March 10, 2023, at a time to be mutually agreed upon by the parties in advance of that date.

1.4. The anticipated scope of the Proffer Session encompasses the following subject-matter areas, which have been discussed and agreed upon by the undersigned and Ms. Kowalski in prior communications:

(a) Ms. Chu's knowledge of TMC's internal pricing processes for high-purity feldspar, industrial talc, and rare-earth concentrates, including the methodologies, data sources, and analytical frameworks employed by the Pricing Analytics function in developing pricing recommendations;

(b) Any instructions, directives, or guidance that Ms. Chu received from her supervisors or other TMC personnel regarding pricing adjustments, pricing targets, or pricing strategies for the foregoing product lines, including the identity of the individuals who provided such instructions;

(c) Ms. Chu's understanding of the decision-making authority within the U.S. Specialty Minerals Division with respect to the setting, modification, and approval of prices for TMC's specialty minerals products, including the respective roles of divisional management, corporate headquarters, and the Pricing Analytics function;

(d) Any knowledge Ms. Chu may have regarding communications—whether written, electronic, telephonic, or in-person—between TMC personnel and personnel of competitor companies, including but not limited to Ridgecrest Minerals Inc. ("Ridgecrest") and Pinnacle Earth Resources Ltd. ("Pinnacle"), that relate in any way to pricing, market allocation, bidding, customer assignments, or other competitively sensitive matters; and

(e) Any documents, records, or data within Ms. Chu's knowledge or custody that are relevant to the foregoing subject-matter areas.

1.5. Ms. Chu will answer questions truthfully and completely within the scope of the agreed subject matter set forth in Paragraph 1.4 above. Ms. Chu understands that the obligation to provide truthful and complete responses is a condition of the protections afforded by this agreement, and that knowingly providing false, misleading, or materially incomplete information may result in the forfeiture of such protections, as set forth more fully in Section 2 below.

1.6. Calderwood & Harkness reserves the right to consult with Ms. Chu during breaks in the Proffer Session and to advise her regarding the scope and propriety of questions posed by Division attorneys or agents. The parties agree that reasonable breaks will be afforded at appropriate intervals during the Proffer Session, and that Ms. Chu or her counsel may request a break at any time for the purpose of attorney-client consultation.

2. Queen-for-a-Day Protections (Use Restrictions)

2.1. Core Use Restriction. The parties agree that no statements made by Ms. Chu during the Proffer Session, and no information directly derived from such statements, may be used against Ms. Chu individually in any criminal prosecution brought by the Division or any component of the United States Department of Justice. This restriction constitutes the central protection afforded by this proffer agreement and is a material inducement for Ms. Chu's voluntary participation in the Proffer Session (the "Use Restriction").

2.2. Scope of Protection. The Use Restriction set forth in Paragraph 2.1 extends to all oral statements made by Ms. Chu during the Proffer Session on March 10, 2023. In the event that the parties agree to conduct one or more follow-up proffer sessions involving Ms. Chu, the Use Restriction shall extend to all statements made by Ms. Chu during any such follow-up sessions, provided that such follow-up sessions are expressly agreed to be conducted under the same terms as set forth in this letter, and provided further that such agreement is confirmed in writing by both parties prior to the commencement of each such follow-up session.

2.3. Exception — False Statements. Notwithstanding the foregoing, the Use Restriction set forth in Paragraphs 2.1 and 2.2 shall not apply if Ms. Chu knowingly makes false, misleading, or materially incomplete statements during the Proffer Session. In the event that the Division determines, in the exercise of its reasonable judgment, that Ms. Chu has made any such false, misleading, or materially incomplete statement, the Division may:

(a) Use any and all statements made by Ms. Chu during the Proffer Session in a prosecution of Ms. Chu for making false statements in violation of 18 U.S.C. § 1001, obstruction of justice in violation of 18 U.S.C. § 1503 or 18 U.S.C. § 1512, perjury, or any related offense;

(b) Use any and all statements made by Ms. Chu during the Proffer Session for impeachment or rebuttal purposes in any proceeding, including but not limited to grand jury proceedings, pretrial proceedings, trial, and sentencing; and

(c) Introduce any and all statements made by Ms. Chu during the Proffer Session in its case-in-chief in any prosecution arising from the conduct described in subparagraph (a) above.

For the avoidance of doubt, the false-statements exception set forth in this Paragraph 2.3 applies to the entirety of Ms. Chu's proffer statements and is not limited to the specific statement or statements determined to be false, misleading, or materially incomplete.

2.4. Exception — Derivative Use for Investigative Leads. The Division retains the right to pursue investigative leads derived from information provided by Ms. Chu during the Proffer Session. However, any evidence obtained through such investigative leads must be independently sourced and not directly attributable to Ms. Chu's proffer statements. The Division may not introduce Ms. Chu's proffer statements, or the substance thereof, as evidence in any criminal prosecution against Ms. Chu (subject to the exceptions set forth in Paragraphs 2.3 and 2.6 of this letter). Further, the Division may not use Ms. Chu's proffer statements as a basis to compel testimony from Ms. Chu before the Grand Jury or any other grand jury, whether by subpoena or otherwise.

2.5. No Restriction on Use Against TMC. Nothing in this proffer agreement limits, restricts, or otherwise constrains the Division's use of information obtained during the Proffer Session in proceedings against Torchlight Mining Corp. itself, including but not limited to any civil or criminal action, any plea negotiation, any charging decision, or any sentencing proceeding involving TMC. This provision is consistent with TMC's voluntary cooperation with the Investigation, and TMC acknowledges and understands that information provided by Ms. Chu during the Proffer Session may be considered by the Division in the context of the ongoing Investigation and any resolution discussions between TMC and the Division. TMC's agreement to this provision reflects its good-faith commitment to full and transparent cooperation, as previously communicated to the Division.

2.6. Impeachment Exception. If Ms. Chu testifies in any proceeding—including but not limited to grand jury proceedings, trial, sentencing, or any pretrial evidentiary hearing—and her testimony is inconsistent with statements made during the Proffer Session, the Division may use Ms. Chu's proffer statements solely for impeachment and rebuttal purposes. The Division's right to use proffer statements under this Paragraph 2.6 is limited to those specific statements that are inconsistent with Ms. Chu's subsequent testimony and to such additional proffer statements as may be necessary to provide context for the inconsistent statements. This impeachment exception is in addition to, and does not limit, the Division's rights under the false-statements exception set forth in Paragraph 2.3 above.

3. Presence of Counsel

3.1. Ms. Chu will be accompanied by counsel from Calderwood & Harkness LLP at the Proffer Session. Specifically, Aaron Liu, Lead Associate in the Firm's Antitrust & Competition Practice Group, will attend the Proffer Session as Ms. Chu's accompanying counsel. Mr. Liu is a member in good standing of the State Bar of California and is admitted to practice before the United States District Court for the Northern District of California.

3.2. Counsel will be present throughout the entirety of the Proffer Session and may consult with Ms. Chu at any time, including during breaks, recesses, and pauses in questioning. The parties agree that counsel's presence is a material condition of Ms. Chu's participation in the Proffer Session.

3.3. Counsel may object to questions that are, in counsel's reasonable judgment, beyond the agreed scope of the Proffer Session as set forth in Paragraph 1.4 of this letter, or that call for information protected by the attorney-client privilege, the work-product doctrine, or any other applicable privilege or protection. In the event of such an objection, the parties will confer in good faith to resolve the matter before proceeding. Counsel's assertion of an objection or privilege shall not be construed as a refusal to cooperate and shall not affect the validity or enforceability of any other provision of this agreement.

3.4. If at any point during the Proffer Session Ms. Chu or her counsel determines, in the exercise of their sole discretion, that continuing the session is not in Ms. Chu's interest, Ms. Chu may terminate the Proffer Session. No adverse inference shall be drawn by the Division from Ms. Chu's decision to terminate the Proffer Session, and such termination shall not affect the protections afforded by Section 2 of this letter with respect to any statements made by Ms. Chu prior to the termination. The Division agrees that it will not argue, in any proceeding, that Ms. Chu's decision to terminate the Proffer Session constitutes evidence of consciousness of guilt, non-cooperation, or any similar adverse inference.

4. Attorney-Client Privilege and Work-Product Protection

4.1. The Proffer Session is not intended to waive, and shall not be construed as waiving, any attorney-client privilege, work-product protection, joint defense privilege, common interest privilege, or any other applicable privilege or protection held by Ms. Chu individually or by Torchlight Mining Corp. The parties agree that Ms. Chu's voluntary participation in the Proffer Session, and the provision of information within the agreed scope, does not constitute a waiver of any privilege as to any matter, whether or not addressed during the Proffer Session.

4.2. Ms. Chu shall not be required to disclose the substance of any communications between Ms. Chu and Calderwood & Harkness LLP, or between Ms. Chu and Torchlight Mining Corp.'s General Counsel, Priya Anand, or any other attorney acting on behalf of TMC, to the extent that such communications are protected by the attorney-client privilege. This protection extends to communications made for the purpose of seeking or providing legal advice, whether in connection with the Investigation or otherwise.

4.3. Ms. Chu shall not be required to disclose any materials, memoranda, analyses, or other documents prepared in anticipation of litigation or for trial that constitute attorney work product, whether prepared by Calderwood & Harkness, by TMC's in-house legal department, or by any other counsel acting on behalf of Ms. Chu or TMC.

4.4. If, during the Proffer Session, a question posed by a Division attorney or agent calls for information that is, in counsel's judgment, protected by any applicable privilege or protection, counsel will instruct Ms. Chu not to answer the question. The parties will then confer regarding the scope and applicability of the privilege assertion, and will endeavor to resolve the matter in a manner that permits the Division to obtain the non-privileged information it seeks without requiring the disclosure of privileged communications or materials. If the parties are unable to resolve a privilege dispute during the Proffer Session, the matter will be reserved for further discussion and, if necessary, resolution by the Court.

5. Recording and Memorialization

5.1. The Division may have one or more Division attorneys and/or Special Agents of the Federal Bureau of Investigation present during the Proffer Session. The Division shall identify all individuals who will be present on behalf of the government prior to the commencement of the session.

5.2. The Division may prepare a memorandum memorializing the Proffer Session, including but not limited to an FBI Form FD-302 ("302") or attorney notes summarizing the substance of Ms. Chu's statements. Calderwood & Harkness acknowledges the Division's standard practice of preparing such memorialization and does not object to the preparation of such memoranda, subject to the use restrictions set forth in Section 2 of this letter.

5.3. Ms. Chu and Calderwood & Harkness do not consent to the audio recording, video recording, or any other form of electronic recording of the Proffer Session. The Proffer Session shall not be recorded by any electronic means unless all parties agree in writing in advance of such recording. In the event that the Division wishes to record any portion of the Proffer Session, it shall notify Calderwood & Harkness in advance and obtain written consent before commencing any such recording.

5.4. Calderwood & Harkness reserves the right to prepare its own internal memorandum or notes memorializing the Proffer Session. Any such memorandum or notes prepared by Calderwood & Harkness shall constitute attorney work product and shall be subject to the protections of the work-product doctrine. The Division acknowledges and agrees that any internal memorandum or notes prepared by Calderwood & Harkness in connection with the Proffer Session are protected from disclosure.

6. No Immunity; No Obligation to Enter Further Agreements

6.1. This proffer agreement does not constitute a grant of immunity to Ms. Chu, whether transactional immunity, use immunity, or derivative-use immunity, except to the limited extent of the Use Restriction set forth in Section 2 of this letter. Ms. Chu understands that she remains subject to criminal prosecution based on evidence obtained independently of the Proffer Session, subject to the terms of this agreement.

6.2. This proffer agreement does not constitute a cooperation agreement, plea agreement, non-prosecution agreement, or deferred prosecution agreement as to Ms. Chu individually, nor does it constitute any such agreement as to Torchlight Mining Corp. The execution of this proffer agreement does not create any binding commitment on the part of the Division to enter into any cooperation agreement, plea agreement, non-prosecution agreement, or other disposition with Ms. Chu or TMC. Similarly, this agreement does not create any obligation on the part of Ms. Chu or TMC to enter into any such agreement with the Division.

6.3. The Proffer Session is without prejudice to any future negotiations between Calderwood & Harkness (on behalf of TMC or Ms. Chu) and the Division regarding the resolution of the Investigation, whether by plea agreement, non-prosecution agreement, deferred prosecution agreement, civil resolution, or otherwise. Neither the conduct of the Proffer Session nor the substance of Ms. Chu's statements during the session shall be used by the Division to prejudice any such future negotiations.

6.4. The Division retains full prosecutorial discretion as to any charging decisions relating to Ms. Chu, TMC, or any other individual or entity, subject only to the Use Restriction and related protections set forth in Section 2 of this letter. Nothing in this agreement limits the Division's authority to present evidence to the Grand Jury, seek indictments, or pursue criminal charges against any person or entity, provided that such actions are consistent with the terms of this agreement.

6.5. Neither Ms. Chu nor TMC is obligated to participate in further proffer sessions beyond the session scheduled for March 10, 2023. However, both Ms. Chu and TMC remain willing to continue their cooperative engagement with the Division, consistent with TMC's prior representations to the Division, including as set forth in Calderwood & Harkness's cooperation proffer letter submitted to the Division on February 15, 2023. Any future proffer sessions involving Ms. Chu shall be conducted under terms to be separately agreed upon by the parties, and any such agreement shall be confirmed in writing prior to the commencement of any such session.

7. Modification and Integration

7.1. This letter constitutes the entire agreement between the parties with respect to the terms and conditions governing Ms. Chu's Proffer Session on March 10, 2023, and supersedes all prior or contemporaneous oral or written communications, proposals, representations, and understandings relating to the subject matter hereof.

7.2. No modification, amendment, supplement, or waiver of any provision of this letter shall be effective unless set forth in a writing signed by all parties hereto. No failure or delay by any party in exercising any right, power, or remedy under this agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power, or remedy preclude any other or further exercise thereof.

7.3. This agreement is binding upon the Antitrust Division, United States Department of Justice, San Francisco Field Office, and upon the supervisory authority of Deputy Assistant Attorney General Julia Stafford-Hayes, who oversees the Investigation. This agreement is likewise binding upon Ms. Chu and upon Calderwood & Harkness LLP in its capacity as counsel for Torchlight Mining Corp. and as counsel advising Ms. Chu in connection with the Proffer Session.

7.4. This agreement does not bind any other federal prosecutorial authority (including other divisions or sections of the Department of Justice), any state attorney general's office, any local prosecutorial authority, or any regulatory agency. However, the Division agrees that, upon request by Calderwood & Harkness, the Division will bring the existence and terms of this agreement to the attention of any such authority, and will inform such authority of the circumstances of Ms. Chu's voluntary cooperation. The Division further agrees that it will not affirmatively provide Ms. Chu's proffer statements to any such authority except as required by law or as otherwise agreed in writing by the parties.

We appreciate the Division's willingness to work cooperatively with Torchlight Mining Corp. and its personnel in the conduct of the Investigation. TMC remains committed to full and transparent cooperation, and we believe that the Proffer Session will be a productive step in that ongoing process.

We respectfully request that you countersign the enclosed copy of this letter and return it to the undersigned at the address below, or by email to eforsythe@calderwoodharkness.com, to confirm the Division's agreement to the foregoing terms prior to the scheduled Proffer Session on March 10, 2023. If you have any questions or wish to discuss any aspect of this letter prior to execution, please do not hesitate to contact me at the number or email address listed below.

Thank you for your attention to this matter.

Respectfully submitted,

CALDERWOOD & HARKNESS LLP

By: ________

Elaine Forsythe Partner, Antitrust & Competition Practice Group 555 California Street, 40th Floor San Francisco, California 94104 Direct: (415) 555-7238

Email: eforsythe@calderwoodharkness.com

Date: March 5, 2023

On behalf of Torchlight Mining Corp. and Sandra Chu

AGREED AND ACCEPTED on behalf of the United States Department of Justice, Antitrust Division

UNITED STATES DEPARTMENT OF JUSTICE ANTITRUST DIVISION, SAN FRANCISCO FIELD OFFICE

By: ________

Denise Kowalski Trial Attorney 450 Golden Gate Avenue, Room 10-0101 San Francisco, California 94102

Date: ________

Enclosures: Duplicate original for countersignature and return

cc: Marcus Reeves, Senior Trial Attorney, Antitrust Division, U.S. Department of Justice, San Francisco Field Office, 450 Golden Gate Avenue, Room 10-0101, San Francisco, CA 94102

cc: Aaron Liu, Lead Associate, Calderwood & Harkness LLP (internal distribution)

cc: Priya Anand, General Counsel, Torchlight Mining Corp. (via separate cover, subject to attorney-client privilege)

PRIVILEGED & CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGED COMMUNICATION ATTORNEY WORK PRODUCT
CALDERWOOD & HARKNESS LLP 555 California Street, 40th Floor San Francisco, California 94104
Telephone: (415) 555-7200 Facsimile: (415) 555-7201 www.calderwoodharkness.com
Elaine Forsythe Partner Antitrust & Competition Practice Group Direct: (415) 555-7238 eforsythe@calderwoodharkness.com
March 5, 2023
Via Email and U.S. Mail
Denise Kowalski, Esq. Trial Attorney Antitrust Division United States Department of Justice San Francisco Field Office 450 Golden Gate Avenue, Room 10-0101 San Francisco, California 94102
Re: Proffer Session — Sandra Chu, Director of Pricing Analytics, U.S. Specialty Minerals Division, Torchlight Mining Corp.; Grand Jury Investigation No. GJ-22-0194, United States District Court, Northern District of California, San Francisco Division
Matter No.: Calderwood & Harkness LLP Matter No. 1039-00001
Dear Ms. Kowalski:
I write in connection with our recent discussions regarding Torchlight Mining Corp.'s ("TMC" or the "Company") ongoing cooperation with the Antitrust Division of the United States Department of Justice (the "Division") in its investigation of suspected price-fixing, market allocation, and bid-rigging in the North American specialty-minerals sector, including the markets for high-purity feldspar, industrial talc, and rare-earth concentrates (the "Investigation"). As you know, the Investigation is being conducted pursuant to Grand Jury Investigation No. GJ-22-0194, convened in the United States District Court for the Northern District of California, San Francisco Division (the "Grand Jury"). This letter sets forth the agreed-upon terms and conditions governing the voluntary proffer session (the "Proffer Session") of Sandra Chu, Director of Pricing Analytics, U.S. Specialty Minerals Division, Torchlight Mining Corp. ("Ms. Chu"), which is scheduled to take place on March 10, 2023, at the Division's San Francisco Field Office, 450 Golden Gate Avenue, San Francisco, California 94102.
As we have discussed, Calderwood & Harkness LLP ("Calderwood & Harkness" or "the Firm") represents Torchlight Mining Corp. in connection with the Investigation. Ms. Chu will appear at the Proffer Session with counsel from Calderwood & Harkness; specifically, Aaron Liu, Lead Associate in the Firm's Antitrust & Competition Practice Group, will attend as accompanying counsel. This letter reflects the parties' mutual understanding regarding the terms under which the Proffer Session will be conducted. The Proffer Session is being conducted voluntarily by Ms. Chu as part of TMC's broader cooperation with the Investigation, and Ms. Chu's participation is neither compelled nor coerced.
We respectfully request that the Division confirm its agreement to the terms set forth herein by executing the countersignature block below and returning a signed copy of this letter to the undersigned prior to the commencement of the Proffer Session on March 10, 2023. The terms of the Proffer Session are as follows:
1. Scope and Voluntary Nature of the Proffer
1.1. Ms. Chu is a current employee of Torchlight Mining Corp., where she holds the title of Director, Pricing Analytics, U.S. Specialty Minerals Division. Ms. Chu has been employed by TMC in various capacities within the Pricing Analytics function since approximately June 2016, and has served in her current role since January 2020. Ms. Chu's responsibilities include, among other things, the development, analysis, and implementation of pricing strategies and pricing adjustment recommendations for TMC's specialty minerals product lines within the United States market.
1.2. Ms. Chu agrees to participate voluntarily in the Proffer Session. She is not appearing pursuant to a grand jury subpoena, a trial subpoena, or any other form of legal compulsion. Her participation is entirely voluntary, and she has agreed to appear as part of TMC's cooperative engagement with the Division in the Investigation.
1.3. The Proffer Session will be conducted at the Division's San Francisco Field Office, located at 450 Golden Gate Avenue, Room 10-0101, San Francisco, California 94102, on March 10, 2023, at a time to be mutually agreed upon by the parties in advance of that date.
1.4. The anticipated scope of the Proffer Session encompasses the following subject-matter areas, which have been discussed and agreed upon by the undersigned and Ms. Kowalski in prior communications:
(a) Ms. Chu's knowledge of TMC's internal pricing processes for high-purity feldspar, industrial talc, and rare-earth concentrates, including the methodologies, data sources, and analytical frameworks employed by the Pricing Analytics function in developing pricing recommendations;
(b) Any instructions, directives, or guidance that Ms. Chu received from her supervisors or other TMC personnel regarding pricing adjustments, pricing targets, or pricing strategies for the foregoing product lines, including the identity of the individuals who provided such instructions;
(c) Ms. Chu's understanding of the decision-making authority within the U.S. Specialty Minerals Division with respect to the setting, modification, and approval of prices for TMC's specialty minerals products, including the respective roles of divisional management, corporate headquarters, and the Pricing Analytics function;
(d) Any knowledge Ms. Chu may have regarding communications—whether written, electronic, telephonic, or in-person—between TMC personnel and personnel of competitor companies, including but not limited to Ridgecrest Minerals Inc. ("Ridgecrest") and Pinnacle Earth Resources Ltd. ("Pinnacle"), that relate in any way to pricing, market allocation, bidding, customer assignments, or other competitively sensitive matters; and
(e) Any documents, records, or data within Ms. Chu's knowledge or custody that are relevant to the foregoing subject-matter areas.
1.5. Ms. Chu will answer questions truthfully and completely within the scope of the agreed subject matter set forth in Paragraph 1.4 above. Ms. Chu understands that the obligation to provide truthful and complete responses is a condition of the protections afforded by this agreement, and that knowingly providing false, misleading, or materially incomplete information may result in the forfeiture of such protections, as set forth more fully in Section 2 below.
1.6. Calderwood & Harkness reserves the right to consult with Ms. Chu during breaks in the Proffer Session and to advise her regarding the scope and propriety of questions posed by Division attorneys or agents. The parties agree that reasonable breaks will be afforded at appropriate intervals during the Proffer Session, and that Ms. Chu or her counsel may request a break at any time for the purpose of attorney-client consultation.
2. Queen-for-a-Day Protections (Use Restrictions)
2.1. Core Use Restriction. The parties agree that no statements made by Ms. Chu during the Proffer Session, and no information directly derived from such statements, may be used against Ms. Chu individually in any criminal prosecution brought by the Division or any component of the United States Department of Justice. This restriction constitutes the central protection afforded by this proffer agreement and is a material inducement for Ms. Chu's voluntary participation in the Proffer Session (the "Use Restriction").
2.2. Scope of Protection. The Use Restriction set forth in Paragraph 2.1 extends to all oral statements made by Ms. Chu during the Proffer Session on March 10, 2023. In the event that the parties agree to conduct one or more follow-up proffer sessions involving Ms. Chu, the Use Restriction shall extend to all statements made by Ms. Chu during any such follow-up sessions, provided that such follow-up sessions are expressly agreed to be conducted under the same terms as set forth in this letter, and provided further that such agreement is confirmed in writing by both parties prior to the commencement of each such follow-up session.
2.3. Exception — False Statements. Notwithstanding the foregoing, the Use Restriction set forth in Paragraphs 2.1 and 2.2 shall not apply if Ms. Chu knowingly makes false, misleading, or materially incomplete statements during the Proffer Session. In the event that the Division determines, in the exercise of its reasonable judgment, that Ms. Chu has made any such false, misleading, or materially incomplete statement, the Division may:
(a) Use any and all statements made by Ms. Chu during the Proffer Session in a prosecution of Ms. Chu for making false statements in violation of 18 U.S.C. § 1001, obstruction of justice in violation of 18 U.S.C. § 1503 or 18 U.S.C. § 1512, perjury, or any related offense;
(b) Use any and all statements made by Ms. Chu during the Proffer Session for impeachment or rebuttal purposes in any proceeding, including but not limited to grand jury proceedings, pretrial proceedings, trial, and sentencing; and
(c) Introduce any and all statements made by Ms. Chu during the Proffer Session in its case-in-chief in any prosecution arising from the conduct described in subparagraph (a) above.
For the avoidance of doubt, the false-statements exception set forth in this Paragraph 2.3 applies to the entirety of Ms. Chu's proffer statements and is not limited to the specific statement or statements determined to be false, misleading, or materially incomplete.
2.4. Exception — Derivative Use for Investigative Leads. The Division retains the right to pursue investigative leads derived from information provided by Ms. Chu during the Proffer Session. However, any evidence obtained through such investigative leads must be independently sourced and not directly attributable to Ms. Chu's proffer statements. The Division may not introduce Ms. Chu's proffer statements, or the substance thereof, as evidence in any criminal prosecution against Ms. Chu (subject to the exceptions set forth in Paragraphs 2.3 and 2.6 of this letter). Further, the Division may not use Ms. Chu's proffer statements as a basis to compel testimony from Ms. Chu before the Grand Jury or any other grand jury, whether by subpoena or otherwise.
2.5. No Restriction on Use Against TMC. Nothing in this proffer agreement limits, restricts, or otherwise constrains the Division's use of information obtained during the Proffer Session in proceedings against Torchlight Mining Corp. itself, including but not limited to any civil or criminal action, any plea negotiation, any charging decision, or any sentencing proceeding involving TMC. This provision is consistent with TMC's voluntary cooperation with the Investigation, and TMC acknowledges and understands that information provided by Ms. Chu during the Proffer Session may be considered by the Division in the context of the ongoing Investigation and any resolution discussions between TMC and the Division. TMC's agreement to this provision reflects its good-faith commitment to full and transparent cooperation, as previously communicated to the Division.
2.6. Impeachment Exception. If Ms. Chu testifies in any proceeding—including but not limited to grand jury proceedings, trial, sentencing, or any pretrial evidentiary hearing—and her testimony is inconsistent with statements made during the Proffer Session, the Division may use Ms. Chu's proffer statements solely for impeachment and rebuttal purposes. The Division's right to use proffer statements under this Paragraph 2.6 is limited to those specific statements that are inconsistent with Ms. Chu's subsequent testimony and to such additional proffer statements as may be necessary to provide context for the inconsistent statements. This impeachment exception is in addition to, and does not limit, the Division's rights under the false-statements exception set forth in Paragraph 2.3 above.
3. Presence of Counsel
3.1. Ms. Chu will be accompanied by counsel from Calderwood & Harkness LLP at the Proffer Session. Specifically, Aaron Liu, Lead Associate in the Firm's Antitrust & Competition Practice Group, will attend the Proffer Session as Ms. Chu's accompanying counsel. Mr. Liu is a member in good standing of the State Bar of California and is admitted to practice before the United States District Court for the Northern District of California.
3.2. Counsel will be present throughout the entirety of the Proffer Session and may consult with Ms. Chu at any time, including during breaks, recesses, and pauses in questioning. The parties agree that counsel's presence is a material condition of Ms. Chu's participation in the Proffer Session.
3.3. Counsel may object to questions that are, in counsel's reasonable judgment, beyond the agreed scope of the Proffer Session as set forth in Paragraph 1.4 of this letter, or that call for information protected by the attorney-client privilege, the work-product doctrine, or any other applicable privilege or protection. In the event of such an objection, the parties will confer in good faith to resolve the matter before proceeding. Counsel's assertion of an objection or privilege shall not be construed as a refusal to cooperate and shall not affect the validity or enforceability of any other provision of this agreement.
3.4. If at any point during the Proffer Session Ms. Chu or her counsel determines, in the exercise of their sole discretion, that continuing the session is not in Ms. Chu's interest, Ms. Chu may terminate the Proffer Session. No adverse inference shall be drawn by the Division from Ms. Chu's decision to terminate the Proffer Session, and such termination shall not affect the protections afforded by Section 2 of this letter with respect to any statements made by Ms. Chu prior to the termination. The Division agrees that it will not argue, in any proceeding, that Ms. Chu's decision to terminate the Proffer Session constitutes evidence of consciousness of guilt, non-cooperation, or any similar adverse inference.
4. Attorney-Client Privilege and Work-Product Protection
4.1. The Proffer Session is not intended to waive, and shall not be construed as waiving, any attorney-client privilege, work-product protection, joint defense privilege, common interest privilege, or any other applicable privilege or protection held by Ms. Chu individually or by Torchlight Mining Corp. The parties agree that Ms. Chu's voluntary participation in the Proffer Session, and the provision of information within the agreed scope, does not constitute a waiver of any privilege as to any matter, whether or not addressed during the Proffer Session.
4.2. Ms. Chu shall not be required to disclose the substance of any communications between Ms. Chu and Calderwood & Harkness LLP, or between Ms. Chu and Torchlight Mining Corp.'s General Counsel, Priya Anand, or any other attorney acting on behalf of TMC, to the extent that such communications are protected by the attorney-client privilege. This protection extends to communications made for the purpose of seeking or providing legal advice, whether in connection with the Investigation or otherwise.
4.3. Ms. Chu shall not be required to disclose any materials, memoranda, analyses, or other documents prepared in anticipation of litigation or for trial that constitute attorney work product, whether prepared by Calderwood & Harkness, by TMC's in-house legal department, or by any other counsel acting on behalf of Ms. Chu or TMC.
4.4. If, during the Proffer Session, a question posed by a Division attorney or agent calls for information that is, in counsel's judgment, protected by any applicable privilege or protection, counsel will instruct Ms. Chu not to answer the question. The parties will then confer regarding the scope and applicability of the privilege assertion, and will endeavor to resolve the matter in a manner that permits the Division to obtain the non-privileged information it seeks without requiring the disclosure of privileged communications or materials. If the parties are unable to resolve a privilege dispute during the Proffer Session, the matter will be reserved for further discussion and, if necessary, resolution by the Court.
5. Recording and Memorialization
5.1. The Division may have one or more Division attorneys and/or Special Agents of the Federal Bureau of Investigation present during the Proffer Session. The Division shall identify all individuals who will be present on behalf of the government prior to the commencement of the session.
5.2. The Division may prepare a memorandum memorializing the Proffer Session, including but not limited to an FBI Form FD-302 ("302") or attorney notes summarizing the substance of Ms. Chu's statements. Calderwood & Harkness acknowledges the Division's standard practice of preparing such memorialization and does not object to the preparation of such memoranda, subject to the use restrictions set forth in Section 2 of this letter.
5.3. Ms. Chu and Calderwood & Harkness do not consent to the audio recording, video recording, or any other form of electronic recording of the Proffer Session. The Proffer Session shall not be recorded by any electronic means unless all parties agree in writing in advance of such recording. In the event that the Division wishes to record any portion of the Proffer Session, it shall notify Calderwood & Harkness in advance and obtain written consent before commencing any such recording.
5.4. Calderwood & Harkness reserves the right to prepare its own internal memorandum or notes memorializing the Proffer Session. Any such memorandum or notes prepared by Calderwood & Harkness shall constitute attorney work product and shall be subject to the protections of the work-product doctrine. The Division acknowledges and agrees that any internal memorandum or notes prepared by Calderwood & Harkness in connection with the Proffer Session are protected from disclosure.
6. No Immunity; No Obligation to Enter Further Agreements
6.1. This proffer agreement does not constitute a grant of immunity to Ms. Chu, whether transactional immunity, use immunity, or derivative-use immunity, except to the limited extent of the Use Restriction set forth in Section 2 of this letter. Ms. Chu understands that she remains subject to criminal prosecution based on evidence obtained independently of the Proffer Session, subject to the terms of this agreement.
6.2. This proffer agreement does not constitute a cooperation agreement, plea agreement, non-prosecution agreement, or deferred prosecution agreement as to Ms. Chu individually, nor does it constitute any such agreement as to Torchlight Mining Corp. The execution of this proffer agreement does not create any binding commitment on the part of the Division to enter into any cooperation agreement, plea agreement, non-prosecution agreement, or other disposition with Ms. Chu or TMC. Similarly, this agreement does not create any obligation on the part of Ms. Chu or TMC to enter into any such agreement with the Division.
6.3. The Proffer Session is without prejudice to any future negotiations between Calderwood & Harkness (on behalf of TMC or Ms. Chu) and the Division regarding the resolution of the Investigation, whether by plea agreement, non-prosecution agreement, deferred prosecution agreement, civil resolution, or otherwise. Neither the conduct of the Proffer Session nor the substance of Ms. Chu's statements during the session shall be used by the Division to prejudice any such future negotiations.
6.4. The Division retains full prosecutorial discretion as to any charging decisions relating to Ms. Chu, TMC, or any other individual or entity, subject only to the Use Restriction and related protections set forth in Section 2 of this letter. Nothing in this agreement limits the Division's authority to present evidence to the Grand Jury, seek indictments, or pursue criminal charges against any person or entity, provided that such actions are consistent with the terms of this agreement.
6.5. Neither Ms. Chu nor TMC is obligated to participate in further proffer sessions beyond the session scheduled for March 10, 2023. However, both Ms. Chu and TMC remain willing to continue their cooperative engagement with the Division, consistent with TMC's prior representations to the Division, including as set forth in Calderwood & Harkness's cooperation proffer letter submitted to the Division on February 15, 2023. Any future proffer sessions involving Ms. Chu shall be conducted under terms to be separately agreed upon by the parties, and any such agreement shall be confirmed in writing prior to the commencement of any such session.
7. Modification and Integration
7.1. This letter constitutes the entire agreement between the parties with respect to the terms and conditions governing Ms. Chu's Proffer Session on March 10, 2023, and supersedes all prior or contemporaneous oral or written communications, proposals, representations, and understandings relating to the subject matter hereof.
7.2. No modification, amendment, supplement, or waiver of any provision of this letter shall be effective unless set forth in a writing signed by all parties hereto. No failure or delay by any party in exercising any right, power, or remedy under this agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power, or remedy preclude any other or further exercise thereof.
7.3. This agreement is binding upon the Antitrust Division, United States Department of Justice, San Francisco Field Office, and upon the supervisory authority of Deputy Assistant Attorney General Julia Stafford-Hayes, who oversees the Investigation. This agreement is likewise binding upon Ms. Chu and upon Calderwood & Harkness LLP in its capacity as counsel for Torchlight Mining Corp. and as counsel advising Ms. Chu in connection with the Proffer Session.
7.4. This agreement does not bind any other federal prosecutorial authority (including other divisions or sections of the Department of Justice), any state attorney general's office, any local prosecutorial authority, or any regulatory agency. However, the Division agrees that, upon request by Calderwood & Harkness, the Division will bring the existence and terms of this agreement to the attention of any such authority, and will inform such authority of the circumstances of Ms. Chu's voluntary cooperation. The Division further agrees that it will not affirmatively provide Ms. Chu's proffer statements to any such authority except as required by law or as otherwise agreed in writing by the parties.
We appreciate the Division's willingness to work cooperatively with Torchlight Mining Corp. and its personnel in the conduct of the Investigation. TMC remains committed to full and transparent cooperation, and we believe that the Proffer Session will be a productive step in that ongoing process.
We respectfully request that you countersign the enclosed copy of this letter and return it to the undersigned at the address below, or by email to eforsythe@calderwoodharkness.com, to confirm the Division's agreement to the foregoing terms prior to the scheduled Proffer Session on March 10, 2023. If you have any questions or wish to discuss any aspect of this letter prior to execution, please do not hesitate to contact me at the number or email address listed below.
Thank you for your attention to this matter.
Respectfully submitted,
CALDERWOOD & HARKNESS LLP
By: ________
Elaine Forsythe Partner, Antitrust & Competition Practice Group 555 California Street, 40th Floor San Francisco, California 94104 Direct: (415) 555-7238
Email: eforsythe@calderwoodharkness.com
Date: March 5, 2023
On behalf of Torchlight Mining Corp. and Sandra Chu
AGREED AND ACCEPTED on behalf of the United States Department of Justice, Antitrust Division
UNITED STATES DEPARTMENT OF JUSTICE ANTITRUST DIVISION, SAN FRANCISCO FIELD OFFICE
By: ________
Denise Kowalski Trial Attorney 450 Golden Gate Avenue, Room 10-0101 San Francisco, California 94102
Date: ________
Enclosures: Duplicate original for countersignature and return
cc: Marcus Reeves, Senior Trial Attorney, Antitrust Division, U.S. Department of Justice, San Francisco Field Office, 450 Golden Gate Avenue, Room 10-0101, San Francisco, CA 94102
cc: Aaron Liu, Lead Associate, Calderwood & Harkness LLP (internal distribution)
cc: Priya Anand, General Counsel, Torchlight Mining Corp. (via separate cover, subject to attorney-client privilege)

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