1039-00001 · Torchlight Mining Corp · documents

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

July 1, 2022

PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGED ATTORNEY WORK PRODUCT

VIA ELECTRONIC MAIL AND OVERNIGHT COURIER

Dr. Vanessa Tremblay Engagement Partner Hargrove Forensic Advisory LLC 233 South Wacker Drive, Suite 4800 Chicago, Illinois 60606

Re: Retention of Hargrove Forensic Advisory LLC in connection with the representation of Torchlight Mining Corp. — 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

C&H Matter No.: 1039-00001

Dear Dr. Tremblay:

1. Opening and Recitals

This letter (the "Engagement Letter") sets forth the terms and conditions upon which Calderwood & Harkness LLP ("C&H" or "the Firm") proposes to retain Hargrove Forensic Advisory LLC ("Hargrove") to provide forensic accounting, economic analysis, and expert consulting services in connection with C&H's representation of Torchlight Mining Corp. ("TMC" or "the Client").

TMC is a corporation organized under the Canada Business Corporations Act, with its registered office located at 200 Bay Street, Suite 3400, Toronto, Ontario M5J 2J2, Canada. TMC is a publicly traded Canadian specialty-minerals mining and chemicals company, whose shares are listed on the Toronto Stock Exchange (TSX: TRCL) and the New York Stock Exchange (NYSE: TMC). TMC's principal U.S. operations are conducted through its wholly owned subsidiary, Torchlight Mining (U.S.) Inc., with offices at 8750 West Sahara Avenue, Suite 210, Reno, Nevada 89117.

C&H has been engaged by TMC since February 18, 2022 to defend TMC in connection with a grand jury investigation conducted by the Antitrust Division of the United States Department of Justice ("DOJ"), San Francisco Field Office, under Grand Jury No. GJ-22-0194, pending in the United States District Court for the Northern District of California, San Francisco Division (the "Investigation"). The Investigation concerns suspected price-fixing, market allocation, and bid-rigging conspiracies in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1, in the North American specialty-minerals sector. The principal product markets at issue are high-purity feldspar, industrial talc, and rare-earth concentrates. The alleged conspiracy period runs from approximately January 2017 through August 2021.

On February 14, 2022, TMC received a grand jury subpoena duces tecum (Subpoena No. GJ-22-0194-SD-003) requiring the production of extensive documentary and electronic records relating to TMC's pricing, sales, customer communications, and competitive intelligence activities in the North American specialty-minerals market. Subsequently, on May 20, 2022, TMC received a target letter from the DOJ, formally identifying TMC as a target of the Investigation. The receipt of the target letter has materially increased the urgency and complexity of C&H's defense of TMC and has given rise to the need for specialized forensic accounting and economic analysis support.

In light of the foregoing, C&H wishes to retain Hargrove to provide the forensic accounting, economic analysis, and expert consulting services described in this Engagement Letter, on the terms and conditions set forth herein. Upon execution of this Engagement Letter by both parties, it shall constitute a binding agreement between C&H and Hargrove governing the provision of such services.

2. Kovel Arrangement and Privilege Protections

This engagement is structured as a "Kovel" arrangement, as recognized by the United States Court of Appeals for the Second Circuit in United States v. Kovel, 296 F.2d 918 (2d Cir. 1961), and as subsequently adopted and applied by courts throughout the United States. The purpose of this arrangement is to enable C&H, as counsel for TMC, to obtain the benefit of Hargrove's specialized expertise in forensic accounting and economic analysis in order to more effectively render legal advice to TMC in connection with the Investigation.

Accordingly, Hargrove is being retained by C&H, acting as counsel for TMC, to assist C&H in understanding complex financial and economic data, in formulating legal strategy, and in rendering legal advice to TMC. Hargrove's services will be performed at the direction of and under the supervision of C&H attorneys. Hargrove's role under this engagement is that of a consulting expert and forensic advisor retained by counsel to facilitate the provision of legal services; Hargrove is not being retained as an independent auditor, nor is Hargrove being engaged to render opinions or reports for public dissemination or for the benefit of any third party, except as may be specifically directed by C&H.

All communications between Hargrove personnel and C&H attorneys relating to this engagement, and all work product prepared by Hargrove in connection with this engagement, are intended to be protected by the attorney-client privilege and the work-product doctrine, including the protection afforded to opinion work product. To preserve and maintain these protections, the parties agree to the following protocols:

(a) Hargrove shall not communicate directly with TMC personnel, representatives of the DOJ or any other governmental authority, counsel for co-subjects or co-targets of the Investigation, or any other third parties regarding the substance of this engagement or any aspect of the Investigation, without prior written authorization from C&H.

(b) All reports, analyses, memoranda, draft documents, working papers, notes, spreadsheets, models, databases, and other materials prepared by Hargrove in connection with this engagement (collectively, "Hargrove Work Product") shall be prominently marked with the following legend: "PRIVILEGED AND CONFIDENTIAL — PREPARED AT THE DIRECTION OF COUNSEL — ATTORNEY WORK PRODUCT." All Hargrove Work Product shall be delivered exclusively to C&H.

(c) Hargrove acknowledges and agrees that the decision to disclose, produce, or otherwise make available any Hargrove Work Product to the DOJ, the Client, any co-defendant or co-subject, or any other third party rests solely and exclusively with C&H, acting in consultation with TMC. Hargrove shall not disclose any Hargrove Work Product or the substance thereof to any person or entity without the prior written consent of C&H.

(d) Hargrove shall maintain all information received from C&H or TMC in connection with this engagement in strict confidence and shall not disclose such information to any person or entity not authorized by C&H. Hargrove shall limit internal access to engagement materials to those Hargrove personnel who have a need to know in connection with the performance of services under this Engagement Letter.

(e) Hargrove acknowledges that the protections described in this Section 2 are essential to the engagement and that any unauthorized disclosure of privileged or confidential information could cause irreparable harm to TMC and could result in the waiver of applicable privileges. Hargrove shall take all reasonable steps to prevent any such unauthorized disclosure.

3. Scope of Services

Hargrove shall provide the following forensic accounting, economic analysis, and expert consulting services in connection with the Investigation, subject in all cases to the direction and supervision of C&H:

3.1 Economic Analysis of Pricing Patterns

Hargrove will conduct a comprehensive analysis of pricing patterns in the North American specialty-minerals market for the three product categories that are the principal focus of the Investigation: (i) high-purity feldspar, (ii) industrial talc, and (iii) rare-earth concentrates. The purpose of this analysis is to assist C&H in evaluating the DOJ's theories of coordinated pricing behavior and in developing potential defenses and alternative explanations for observed pricing patterns.

The analysis will cover the period from January 2015 through December 2022, which encompasses approximately two years before the approximate start of the alleged conspiracy period and approximately one year after its approximate end. This extended analysis window is designed to establish a baseline of competitive pricing behavior in the pre-conspiracy period, to identify and characterize any statistically significant deviations in pricing behavior during the alleged conspiracy period (approximately January 2017 through August 2021), and to assess whether any pricing patterns observed during the conspiracy period can be explained by legitimate market forces, including changes in raw material costs, supply-and-demand dynamics, regulatory developments, or macroeconomic conditions.

As part of this analysis, Hargrove will, to the extent that data is available from public sources and from documents and data produced by TMC in response to the grand jury subpoena:

(a) Compare TMC's price movements for each of the three product categories against the price movements of TMC's principal competitors, including Ridgecrest Minerals Inc. ("Ridgecrest") and Pinnacle Earth Resources Ltd. ("Pinnacle"), as well as any other market participants for whom data is reasonably available.

(b) Analyze the timing, magnitude, and frequency of price changes across market participants to assess whether the data is consistent with competitive, oligopolistic, or coordinated behavior.

(c) Employ standard econometric methods, including but not limited to regression analysis, structural break analysis, statistical correlation tests, Granger causality tests, and such other quantitative techniques as may be appropriate, to assess whether the observed pricing data is more consistent with competitive behavior or with coordinated behavior during the alleged conspiracy period.

(d) Prepare a detailed written analysis of findings, including supporting data tables, charts, and statistical output, for C&H's review and use in connection with the defense of TMC.

3.2 Affected-Commerce Volume Assessment

Hargrove will calculate the total volume of affected commerce attributable to TMC during the alleged conspiracy period, which is a critical input to the DOJ's penalty calculation methodology under the United States Sentencing Guidelines. Specifically, Hargrove will undertake the following:

(a) Identify and aggregate TMC's total U.S. sales of high-purity feldspar, industrial talc, and rare-earth concentrates during the period from approximately January 2017 through August 2021, using TMC's internal financial records, sales databases, and such other data as may be provided by C&H. TMC's U.S. Specialty Minerals Division generated total revenue of approximately USD 687 million in fiscal year 2021; Hargrove's analysis will need to disaggregate this total into product-specific revenue streams and account for multi-year trends across the full conspiracy period.

(b) Distinguish between domestic U.S. commerce (which constitutes the relevant affected commerce for purposes of the Sentencing Guidelines) and export sales, intercompany transfers, and other transactions that may not properly be included in the affected-commerce calculation.

(c) To the extent data is available from public filings, industry reports, or documents produced in the Investigation, estimate total affected commerce across all participants in the alleged conspiracy (TMC, Ridgecrest, and Pinnacle), including an assessment of each participant's approximate market share during the conspiracy period.

(d) Independently verify or challenge the DOJ's preliminary estimate of total affected commerce, which the DOJ has estimated at approximately USD 1.34 billion, with TMC's share at approximately USD 478 million (approximately 35.7% of total affected commerce). Hargrove will critically examine the DOJ's methodology, identify any errors, overstated categories, or unsupported assumptions, and develop an independent assessment of affected commerce for C&H's use in negotiations with the DOJ.

3.3 Penalty Calculation Support

Hargrove will assist C&H in analyzing and responding to the DOJ's anticipated penalty calculation methodology for TMC. In antitrust cases involving criminal violations of Section 1 of the Sherman Act, the DOJ typically applies the organizational sentencing provisions of Chapter Eight of the United States Sentencing Guidelines, which use twenty percent (20%) of the volume of affected commerce as the base fine. From this starting point, the Guidelines provide for upward and downward adjustments based on a range of factors, including the culpability score, cooperation, acceptance of responsibility, and the existence of compliance programs.

Hargrove will perform the following work in connection with penalty calculation support:

(a) Model various penalty scenarios for TMC based on a range of affected-commerce volumes (including the DOJ's preliminary estimate and Hargrove's independent estimate), applying the Guidelines' fine-calculation methodology, including the base fine, the culpability score multiplier range, and potential adjustments.

(b) Analyze the impact of cooperation credits and remediation efforts on the final monetary payment, including the potential effects of TMC's cooperation under the DOJ's leniency and cooperation frameworks and any credit for TMC's implementation of enhanced antitrust compliance measures.

(c) Prepare quantitative analyses supporting C&H's arguments for maximum cooperation and remediation credit reductions, including documentation of the scope, timeliness, and value of TMC's cooperation with the Investigation and the cost and scope of TMC's remediation and compliance investments.

(d) Be available to update and refine its penalty analysis throughout the course of the engagement as negotiations with the DOJ progress and as additional information regarding the DOJ's position becomes available.

3.4 Expert Report Preparation

Hargrove will prepare draft expert reports and analyses for C&H's review and comment, to be used in C&H's submissions to the DOJ, including cooperation proffers, penalty-negotiation submissions, sentencing memoranda, and such other filings or presentations as C&H may direct. If directed by C&H, Hargrove will prepare a final affected-commerce and penalty analysis report suitable for submission to the DOJ or the Court.

Hargrove shall not issue, finalize, or distribute any report or analysis in final form without the prior written approval of C&H. All draft reports shall be clearly marked "DRAFT — PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT — NOT FOR DISTRIBUTION" until such time as C&H authorizes finalization.

3.5 Additional Services

In addition to the specific tasks described in Sections 3.1 through 3.4, Hargrove will provide such additional forensic accounting, economic analysis, and consulting services as C&H may reasonably request in connection with the Investigation, including but not limited to the following:

(a) Review and analysis of TMC's financial data, including general ledger records, revenue accounts, cost-of-goods-sold data, and margin analyses for the relevant product categories and time periods.

(b) Review and analysis of TMC's pricing databases, customer contracts, price lists, bid records, and related commercial documentation.

(c) Review and analysis of market data, including industry pricing indices, trade publications, and publicly available data regarding competitor pricing and market conditions.

(d) Preparation of demonstrative exhibits, charts, graphs, and presentation materials for use by C&H in meetings with the DOJ, internal client presentations, or court proceedings.

(e) Attendance at meetings with C&H attorneys (in person or by videoconference) to discuss findings, strategy, and the progress of analytical work.

If the engagement scope expands materially beyond what is contemplated by this Engagement Letter, C&H and Hargrove will discuss and agree upon any revised scope and budget in writing prior to the commencement of any materially expanded services.

4. Hargrove Engagement Team / Key Personnel

The engagement will be led by Dr. Vanessa Tremblay, Engagement Partner, who will have overall responsibility for the quality, accuracy, and timeliness of all Hargrove deliverables under this Engagement Letter. Dr. Tremblay will serve as the primary point of contact between Hargrove and C&H for all matters relating to this engagement.

Hargrove may assign additional professional staff to the engagement as needed to fulfill the scope of services described herein, including senior managing directors, directors, managers, senior associates, associates, and analysts. However, any changes in the lead engagement personnel — specifically, any replacement or reassignment of Dr. Tremblay as Engagement Partner or the addition of any other partner or senior managing director to a leadership role on the engagement — must be approved in advance in writing by C&H. Hargrove shall provide C&H with the names and qualifications of all professional staff assigned to the engagement upon request.

C&H's primary contacts for this engagement are:

Elaine Forsythe, Partner, Antitrust & Competition Practice Group (Responsible Partner) Calderwood & Harkness LLP 555 California Street, 40th Floor San Francisco, California 94104 Telephone: (415) 555-7200

Email: eforsythe@calderwoodharkness.com

Aaron Liu, Associate (Lead Associate) Calderwood & Harkness LLP 555 California Street, 40th Floor San Francisco, California 94104 Telephone: (415) 555-7248

Email: aliu@calderwoodharkness.com

All substantive communications from Hargrove regarding the engagement should be directed to Ms. Forsythe and Mr. Liu, unless otherwise instructed by C&H.

5. C&H Direction and Supervision

All work performed by Hargrove under this Engagement Letter shall be performed at the direction of and under the supervision of C&H. C&H will direct the priorities, sequencing, and focus of Hargrove's analytical work and will review all Hargrove Work Product prior to its use in any submission or presentation.

C&H will provide Hargrove with access to relevant documents, data, and information collected in connection with the TMC representation, as C&H deems necessary and appropriate for Hargrove to perform the services described herein. Such materials may include, without limitation:

(a) Documents and data produced by TMC in response to Grand Jury Subpoena No. GJ-22-0194-SD-003 and, if subsequently issued, any additional subpoenas or document requests served upon TMC in connection with the Investigation.

(b) Electronic data and documents collected, processed, and hosted by Redstone Digital Forensics Inc. ("Redstone"), TMC's e-discovery vendor, to the extent C&H determines that such data is relevant to Hargrove's scope of work. Hargrove shall coordinate with Redstone, at C&H's direction, to obtain access to data sets and search results as needed.

(c) TMC internal financial records, including sales data, pricing records, revenue reports, customer contracts, and related business records.

(d) Publicly available market data, industry reports, and other information relevant to the economic analyses described in Section 3.

Hargrove shall conduct its work in close coordination with the C&H engagement team. Hargrove shall provide regular progress updates and interim findings to C&H, at such intervals and in such form as C&H may reasonably direct. Hargrove shall promptly bring to C&H's attention any findings that Hargrove believes are material to the defense of TMC or to C&H's assessment of the case.

Hargrove shall not independently contact any TMC employees, officers, or directors — including, without limitation, Sandra Chu, Director of Pricing Analytics; Thomas Eriksen, Regional Sales Manager; Richard Fong, Chief Financial Officer; or any other TMC personnel — without advance written authorization from C&H. Any interviews, inquiries, or data requests involving TMC personnel must be arranged and supervised by C&H.

6. Fee Structure and Billing

6.1 Hourly Rates

Hargrove will bill for services rendered under this Engagement Letter at the following standard hourly rates, which reflect Hargrove's current rate schedule for litigation support and consulting engagements:

A detailed current rate schedule, setting forth the rates applicable to each professional level, is attached hereto as Exhibit A and incorporated herein by reference. Hargrove's rates may be adjusted annually, effective January 1 of each calendar year, upon not less than thirty (30) days' prior written notice to C&H. Any rate adjustment shall apply only to services rendered after the effective date of the adjustment and shall not apply retroactively to services already performed.

6.2 Expenses. Hargrove will be reimbursed for reasonable out-of-pocket expenses actually incurred in connection with the performance of services under this Engagement Letter. Reimbursable expenses include, without limitation, the following categories:

(a) Travel expenses (airfare, ground transportation, lodging, and meals) incurred in connection with meetings at C&H's San Francisco office, TMC's offices, or other locations as directed by C&H. Air travel shall be at coach or economy class for domestic flights unless otherwise approved by C&H.

(b) Data processing, hosting, and computational costs incurred in connection with the economic and statistical analyses described herein.

(c) Fees for access to specialized software, databases, or data services required for the engagement (e.g., industry pricing indices, market research databases, or econometric software licenses).

(d) Third-party data acquisition costs, including the purchase of market data, industry reports, or public filings.

(e) Reproduction, printing, and delivery costs.

Any single expense item exceeding Five Thousand U.S. Dollars (USD $5,000) must be pre-approved in writing by C&H before Hargrove incurs such expense. Hargrove shall maintain receipts and supporting documentation for all reimbursable expenses and shall make such documentation available to C&H upon request.

6.3 Budget Estimate

The initial budget estimate for Hargrove's services in connection with Phase 1 of the engagement (pricing pattern analysis and preliminary affected-commerce assessment, as described in Sections 3.1 and 3.2) is approximately Four Hundred Twenty-Five Thousand U.S. Dollars (USD $425,000), inclusive of fees and expenses. This estimate is based on Hargrove's preliminary assessment of the scope and complexity of the Phase 1 work and assumes timely access to TMC data and reasonable cooperation from C&H's engagement team.

Total Hargrove fees and expenses through matter close are projected not to exceed approximately One Million Eight Hundred Fifty Thousand U.S. Dollars (USD $1,850,000), though this estimate is subject to revision as the scope of services evolves, additional phases of work are initiated, and the trajectory of negotiations with the DOJ becomes clearer. Hargrove shall promptly notify C&H if, at any point during the engagement, Hargrove's accumulated fees and expenses approach or are reasonably expected to exceed the then-current budget estimate.

Hargrove acknowledges that this engagement is ultimately funded by TMC and that C&H will coordinate billing and payment through TMC's General Counsel, Priya Anand. Hargrove shall cooperate with C&H in providing such billing detail and supporting information as TMC may reasonably require for its internal approval and payment processes.

6.4 Invoicing. Hargrove will submit monthly invoices to C&H for services rendered and expenses incurred during the preceding calendar month. Invoices shall be addressed to:

Howard Bellamy, Billing Partner Calderwood & Harkness LLP One Liberty Plaza, 50th Floor New York, New York 10006

Email: hbellamy@calderwoodharkness.com

Each invoice shall contain reasonable detail regarding the services performed, including a description of the tasks performed, the hours billed by each individual professional (identified by name and professional level), and an itemized listing of expenses incurred with supporting documentation. All invoices shall reference C&H Matter No. 1039-00001.

Payment terms are net thirty (30) days from receipt of invoice by C&H. C&H reserves the right to request additional detail or clarification regarding any invoice prior to payment, and Hargrove shall respond promptly to any such request. In the event of any dispute regarding a particular invoice item, the undisputed portion of the invoice shall be paid in accordance with the foregoing payment terms, and the parties shall work in good faith to resolve any disputed items.

7. Confidentiality

Hargrove acknowledges that all information, documents, data, analyses, and communications provided by C&H or TMC, or otherwise obtained by Hargrove, in connection with this engagement constitute confidential information (collectively, "Confidential Information"). Confidential Information includes, without limitation, all documents and data produced by TMC in response to the grand jury subpoena, all attorney-client privileged communications, all Hargrove Work Product, all C&H legal analyses and strategy materials, and all non-public information regarding TMC's business operations, pricing, customers, finances, and personnel.

Hargrove shall not disclose any Confidential Information to any person or entity without the prior written consent of C&H, except as may be strictly required by applicable law, regulation, or court order. In the event that Hargrove receives a subpoena, court order, or other legal process requiring or purporting to require the disclosure of any Confidential Information, Hargrove shall promptly notify C&H (and in no event later than two (2) business days after receipt of such process) and shall cooperate with C&H in seeking appropriate protective relief before making any disclosure.

Hargrove shall implement and maintain appropriate administrative, technical, and physical security measures to protect all Confidential Information, including electronic data, from unauthorized access, disclosure, loss, alteration, or destruction. Such measures shall include, at a minimum, the use of encryption for electronic transmission and storage of Confidential Information, access controls limiting access to authorized personnel, and secure disposal procedures for Confidential Information that is no longer needed.

Hargrove's confidentiality obligations under this Section 7 shall survive the termination or expiration of this Engagement Letter and shall continue in full force and effect indefinitely.

8. Conflicts of Interest

Hargrove represents and warrants that, prior to the execution of this Engagement Letter, it has conducted a thorough conflicts check in accordance with its standard conflict-clearance procedures. Based on that check, Hargrove represents and warrants that it has no current engagement, business relationship, financial interest, or other relationship with any party adverse to TMC in this matter, or that would otherwise create an actual or potential conflict of interest with respect to this engagement. Without limiting the generality of the foregoing, Hargrove specifically represents and warrants that it does not currently represent, and has not within the past twenty-four (24) months represented, any of the following entities or their affiliates in any matter related to the North American specialty-minerals sector or the subject matter of the Investigation:

(a) Ridgecrest Minerals Inc.;

(b) Pinnacle Earth Resources Ltd.;

(d) The United States Department of Justice, Antitrust Division;

(e) Briarcliff Law Group PLLC (counsel to Gavin Holt, a reported subject of the Investigation);

(f) Davenport, Kline & Archer LLP (counsel to Ridgecrest);

(g) Ashford Whitmore LLP (counsel to Pinnacle); or

(h) Whitfield, Strauss & Tully LLP (counsel to Cascade).

Hargrove shall promptly notify C&H in writing if any actual or potential conflict of interest arises during the course of the engagement, including any new engagement or business relationship that Hargrove proposes to accept involving any of the parties listed above or any other party that Hargrove reasonably believes may be adverse to TMC's interests in connection with the Investigation. Upon receipt of such notice, C&H shall have the right, in its sole discretion, to require Hargrove to decline the conflicting engagement or to terminate this Engagement Letter.

9. Document Retention and Return

Upon the termination or expiration of this engagement, or at any time upon C&H's written request, Hargrove shall promptly return to C&H, or, at C&H's sole direction, securely destroy, all documents, data, and materials (including all electronic copies, backups, and reproductions) received from C&H or TMC, or created by Hargrove for C&H, in connection with this engagement. Such materials include, without limitation, all Confidential Information, all Hargrove Work Product (including drafts), all data sets, spreadsheets, models, databases, and all correspondence relating to the engagement.

Within fifteen (15) business days of completing any such return or destruction, Hargrove shall provide C&H with a written certification, signed by Dr. Tremblay or another authorized Hargrove officer, confirming that all such documents and materials have been returned or destroyed in accordance with this Section 9, and specifying in reasonable detail the categories and quantities of materials returned or destroyed, as applicable.

Notwithstanding the foregoing, Hargrove may retain one (1) archival copy of its internal work papers (but not copies of documents or data received from C&H or TMC) solely for purposes of complying with applicable professional and regulatory standards, including the standards of the American Institute of Certified Public Accountants and any applicable state board of accountancy. Any such retained archival copy shall remain subject to the confidentiality obligations set forth in Section 7 and the privilege protections set forth in Section 2 of this Engagement Letter and shall be maintained in a secure manner consistent with those obligations.

10. Term and Termination

This engagement shall commence as of July 1, 2022 (the "Effective Date") and shall continue until the earliest to occur of the following:

(a) Completion of all services described in this Engagement Letter, as mutually agreed by C&H and Hargrove;

(b) Written termination by either party upon not less than thirty (30) days' prior written notice to the other party; or

(c) Resolution of the Investigation and the underlying matter, whether by plea agreement, declination, acquittal, or other final disposition.

In the event of termination for any reason, Hargrove shall be entitled to payment for all services rendered and expenses properly incurred through the effective date of termination, in accordance with the fee structure set forth in Section 6. Upon termination, Hargrove shall cooperate fully with C&H to ensure an orderly transition, including the prompt delivery of all Hargrove Work Product (in whatever stage of completion) and all Confidential Information in Hargrove's possession.

Hargrove's obligations regarding confidentiality (Section 7), privilege protections (Section 2), document retention and return (Section 9), and conflicts of interest (Section 8) shall survive the termination or expiration of this Engagement Letter.

11. Limitation of Liability and Indemnification

Limitation of Liability. To the maximum extent permitted by applicable law, Hargrove's aggregate liability to C&H and TMC for any and all claims arising out of or relating to this Engagement Letter or the services performed hereunder, whether in contract, tort, strict liability, or otherwise, shall not exceed the total amount of fees actually paid to Hargrove under this Engagement Letter. In no event shall Hargrove be liable for any indirect, incidental, consequential, special, or punitive damages, including lost profits, regardless of whether Hargrove was advised of the possibility of such damages.

Indemnification. C&H, on behalf of TMC, agrees to indemnify, defend, and hold harmless Hargrove, its partners, principals, officers, directors, employees, and agents from and against any and all third-party claims, demands, actions, liabilities, damages, losses, costs, and expenses (including reasonable attorneys' fees) arising out of or relating to Hargrove's good-faith performance of services under this Engagement Letter, except to the extent that such claims, damages, or losses are caused by or result from Hargrove's gross negligence, willful misconduct, or fraud. Hargrove shall promptly notify C&H of any claim for which indemnification may be sought and shall cooperate with C&H in the defense of any such claim.

12. Governing Law and Dispute Resolution

This Engagement Letter shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflicts-of-law principles thereof.

Any dispute, controversy, or claim arising out of or relating to this Engagement Letter, or the breach, termination, or validity thereof, shall be resolved by binding arbitration administered by JAMS in New York, New York, in accordance with JAMS' Comprehensive Arbitration Rules and Procedures then in effect. The arbitration shall be conducted by a single arbitrator selected in accordance with such rules. The arbitrator's award shall be final and binding and may be entered as a judgment in any court of competent jurisdiction. Each party shall bear its own costs and attorneys' fees in connection with any arbitration, unless the arbitrator determines that an award of costs and fees to the prevailing party is warranted.

13. Entire Agreement / Amendments

This Engagement Letter, including any exhibits and attachments hereto, constitutes the entire agreement between C&H and Hargrove with respect to the engagement described herein and supersedes all prior and contemporaneous discussions, negotiations, understandings, and agreements, whether oral or written, relating to the subject matter hereof.

No amendment, modification, supplement, or waiver of any provision of this Engagement Letter shall be effective unless set forth in a written instrument signed by authorized representatives of both C&H and Hargrove.

14. Counterparts / Execution

This Engagement Letter may be executed in one or more counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Execution and delivery of this Engagement Letter by facsimile or by electronic transmission in portable document format (PDF) shall be valid and effective for all purposes and shall have the same force and effect as execution and delivery of an original ink-signed counterpart.

We believe that this engagement will be of significant value to C&H and to TMC in connection with the defense of the Investigation. We look forward to working with you and the Hargrove team on this important matter. If the foregoing terms are acceptable, please indicate your agreement by signing and returning a copy of this Engagement Letter to the undersigned.

Please do not hesitate to contact me or Aaron Liu if you have any questions.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Name: Elaine Forsythe

Title: Partner, Antitrust & Competition Practice Group

Date: ________

ACKNOWLEDGED AND AGREED

The undersigned, on behalf of Hargrove Forensic Advisory LLC, hereby acknowledges receipt of this Engagement Letter, confirms that Hargrove has read and understands its terms, and agrees to be bound by the terms and conditions set forth herein.

HARGROVE FORENSIC ADVISORY LLC

By: ________

Name: Dr. Vanessa Tremblay

Title: Engagement Partner

Date: ________

EXHIBIT A

HARGROVE FORENSIC ADVISORY LLC CURRENT PROFESSIONAL FEE SCHEDULE

Effective January 1, 2022

The following standard hourly rates apply to professional services rendered by Hargrove Forensic Advisory LLC personnel in connection with the engagement described in the Engagement Letter to which this Exhibit A is attached:

Notes:

1. The rates set forth above are Hargrove's standard rates as of January 1, 2022. Rates may be adjusted annually, effective January 1 of each calendar year, upon not less than thirty (30) days' prior written notice to Calderwood & Harkness LLP.

2. Overtime, weekend, and holiday work will be billed at the applicable standard hourly rate unless otherwise agreed in writing.

3. Administrative and clerical support time is not billed separately and is included in the professional rates set forth above.

4. All rates are quoted in United States Dollars (USD).

PRIVILEGED AND CONFIDENTIAL — PREPARED AT THE DIRECTION OF COUNSEL — ATTORNEY WORK PRODUCT

Professional Level	Standard Hourly Rate (USD)
Engagement Partners	$850
Senior Managing Directors / Directors	$650
Managers / Senior Associates	$475
Associates / Analysts	$325
Professional Level	Description	Standard Hourly Rate (USD)
Engagement Partner	Partners responsible for overall engagement oversight, quality assurance, and client relations. Minimum 15 years of relevant experience.	$850
Senior Managing Director	Senior professionals with significant subject-matter expertise, responsible for directing major workstreams. Minimum 12 years of relevant experience.	$725
Director	Professionals with substantial experience in forensic accounting and/or economic analysis, responsible for managing discrete workstreams. Minimum 8 years of relevant experience.	$650
Manager	Mid-level professionals responsible for supervising day-to-day analytical work and managing project components. Minimum 5 years of relevant experience.	$525
Senior Associate	Professionals with developing expertise, responsible for performing complex analytical tasks under direction. Minimum 3 years of relevant experience.	$475
Associate	Early-career professionals assisting with data analysis, research, and report preparation. Minimum 1 year of relevant experience.	$375
Analyst	Entry-level professionals and support staff performing data collection, processing, and preliminary analytical work.	$325

CALDERWOOD & HARKNESS LLP 555 California Street, 40th Floor San Francisco, California 94104
July 1, 2022
PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGED ATTORNEY WORK PRODUCT
VIA ELECTRONIC MAIL AND OVERNIGHT COURIER
Dr. Vanessa Tremblay Engagement Partner Hargrove Forensic Advisory LLC 233 South Wacker Drive, Suite 4800 Chicago, Illinois 60606
Re: Retention of Hargrove Forensic Advisory LLC in connection with the representation of Torchlight Mining Corp. — 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
C&H Matter No.: 1039-00001
Dear Dr. Tremblay:
1. Opening and Recitals
This letter (the "Engagement Letter") sets forth the terms and conditions upon which Calderwood & Harkness LLP ("C&H" or "the Firm") proposes to retain Hargrove Forensic Advisory LLC ("Hargrove") to provide forensic accounting, economic analysis, and expert consulting services in connection with C&H's representation of Torchlight Mining Corp. ("TMC" or "the Client").
TMC is a corporation organized under the Canada Business Corporations Act, with its registered office located at 200 Bay Street, Suite 3400, Toronto, Ontario M5J 2J2, Canada. TMC is a publicly traded Canadian specialty-minerals mining and chemicals company, whose shares are listed on the Toronto Stock Exchange (TSX: TRCL) and the New York Stock Exchange (NYSE: TMC). TMC's principal U.S. operations are conducted through its wholly owned subsidiary, Torchlight Mining (U.S.) Inc., with offices at 8750 West Sahara Avenue, Suite 210, Reno, Nevada 89117.
C&H has been engaged by TMC since February 18, 2022 to defend TMC in connection with a grand jury investigation conducted by the Antitrust Division of the United States Department of Justice ("DOJ"), San Francisco Field Office, under Grand Jury No. GJ-22-0194, pending in the United States District Court for the Northern District of California, San Francisco Division (the "Investigation"). The Investigation concerns suspected price-fixing, market allocation, and bid-rigging conspiracies in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1, in the North American specialty-minerals sector. The principal product markets at issue are high-purity feldspar, industrial talc, and rare-earth concentrates. The alleged conspiracy period runs from approximately January 2017 through August 2021.
On February 14, 2022, TMC received a grand jury subpoena duces tecum (Subpoena No. GJ-22-0194-SD-003) requiring the production of extensive documentary and electronic records relating to TMC's pricing, sales, customer communications, and competitive intelligence activities in the North American specialty-minerals market. Subsequently, on May 20, 2022, TMC received a target letter from the DOJ, formally identifying TMC as a target of the Investigation. The receipt of the target letter has materially increased the urgency and complexity of C&H's defense of TMC and has given rise to the need for specialized forensic accounting and economic analysis support.
In light of the foregoing, C&H wishes to retain Hargrove to provide the forensic accounting, economic analysis, and expert consulting services described in this Engagement Letter, on the terms and conditions set forth herein. Upon execution of this Engagement Letter by both parties, it shall constitute a binding agreement between C&H and Hargrove governing the provision of such services.
2. Kovel Arrangement and Privilege Protections
This engagement is structured as a "Kovel" arrangement, as recognized by the United States Court of Appeals for the Second Circuit in United States v. Kovel, 296 F.2d 918 (2d Cir. 1961), and as subsequently adopted and applied by courts throughout the United States. The purpose of this arrangement is to enable C&H, as counsel for TMC, to obtain the benefit of Hargrove's specialized expertise in forensic accounting and economic analysis in order to more effectively render legal advice to TMC in connection with the Investigation.
Accordingly, Hargrove is being retained by C&H, acting as counsel for TMC, to assist C&H in understanding complex financial and economic data, in formulating legal strategy, and in rendering legal advice to TMC. Hargrove's services will be performed at the direction of and under the supervision of C&H attorneys. Hargrove's role under this engagement is that of a consulting expert and forensic advisor retained by counsel to facilitate the provision of legal services; Hargrove is not being retained as an independent auditor, nor is Hargrove being engaged to render opinions or reports for public dissemination or for the benefit of any third party, except as may be specifically directed by C&H.
All communications between Hargrove personnel and C&H attorneys relating to this engagement, and all work product prepared by Hargrove in connection with this engagement, are intended to be protected by the attorney-client privilege and the work-product doctrine, including the protection afforded to opinion work product. To preserve and maintain these protections, the parties agree to the following protocols:
(a) Hargrove shall not communicate directly with TMC personnel, representatives of the DOJ or any other governmental authority, counsel for co-subjects or co-targets of the Investigation, or any other third parties regarding the substance of this engagement or any aspect of the Investigation, without prior written authorization from C&H.
(b) All reports, analyses, memoranda, draft documents, working papers, notes, spreadsheets, models, databases, and other materials prepared by Hargrove in connection with this engagement (collectively, "Hargrove Work Product") shall be prominently marked with the following legend: "PRIVILEGED AND CONFIDENTIAL — PREPARED AT THE DIRECTION OF COUNSEL — ATTORNEY WORK PRODUCT." All Hargrove Work Product shall be delivered exclusively to C&H.
(c) Hargrove acknowledges and agrees that the decision to disclose, produce, or otherwise make available any Hargrove Work Product to the DOJ, the Client, any co-defendant or co-subject, or any other third party rests solely and exclusively with C&H, acting in consultation with TMC. Hargrove shall not disclose any Hargrove Work Product or the substance thereof to any person or entity without the prior written consent of C&H.
(d) Hargrove shall maintain all information received from C&H or TMC in connection with this engagement in strict confidence and shall not disclose such information to any person or entity not authorized by C&H. Hargrove shall limit internal access to engagement materials to those Hargrove personnel who have a need to know in connection with the performance of services under this Engagement Letter.
(e) Hargrove acknowledges that the protections described in this Section 2 are essential to the engagement and that any unauthorized disclosure of privileged or confidential information could cause irreparable harm to TMC and could result in the waiver of applicable privileges. Hargrove shall take all reasonable steps to prevent any such unauthorized disclosure.
3. Scope of Services
Hargrove shall provide the following forensic accounting, economic analysis, and expert consulting services in connection with the Investigation, subject in all cases to the direction and supervision of C&H:
3.1 Economic Analysis of Pricing Patterns
Hargrove will conduct a comprehensive analysis of pricing patterns in the North American specialty-minerals market for the three product categories that are the principal focus of the Investigation: (i) high-purity feldspar, (ii) industrial talc, and (iii) rare-earth concentrates. The purpose of this analysis is to assist C&H in evaluating the DOJ's theories of coordinated pricing behavior and in developing potential defenses and alternative explanations for observed pricing patterns.
The analysis will cover the period from January 2015 through December 2022, which encompasses approximately two years before the approximate start of the alleged conspiracy period and approximately one year after its approximate end. This extended analysis window is designed to establish a baseline of competitive pricing behavior in the pre-conspiracy period, to identify and characterize any statistically significant deviations in pricing behavior during the alleged conspiracy period (approximately January 2017 through August 2021), and to assess whether any pricing patterns observed during the conspiracy period can be explained by legitimate market forces, including changes in raw material costs, supply-and-demand dynamics, regulatory developments, or macroeconomic conditions.
As part of this analysis, Hargrove will, to the extent that data is available from public sources and from documents and data produced by TMC in response to the grand jury subpoena:
(a) Compare TMC's price movements for each of the three product categories against the price movements of TMC's principal competitors, including Ridgecrest Minerals Inc. ("Ridgecrest") and Pinnacle Earth Resources Ltd. ("Pinnacle"), as well as any other market participants for whom data is reasonably available.
(b) Analyze the timing, magnitude, and frequency of price changes across market participants to assess whether the data is consistent with competitive, oligopolistic, or coordinated behavior.
(c) Employ standard econometric methods, including but not limited to regression analysis, structural break analysis, statistical correlation tests, Granger causality tests, and such other quantitative techniques as may be appropriate, to assess whether the observed pricing data is more consistent with competitive behavior or with coordinated behavior during the alleged conspiracy period.
(d) Prepare a detailed written analysis of findings, including supporting data tables, charts, and statistical output, for C&H's review and use in connection with the defense of TMC.
3.2 Affected-Commerce Volume Assessment
Hargrove will calculate the total volume of affected commerce attributable to TMC during the alleged conspiracy period, which is a critical input to the DOJ's penalty calculation methodology under the United States Sentencing Guidelines. Specifically, Hargrove will undertake the following:
(a) Identify and aggregate TMC's total U.S. sales of high-purity feldspar, industrial talc, and rare-earth concentrates during the period from approximately January 2017 through August 2021, using TMC's internal financial records, sales databases, and such other data as may be provided by C&H. TMC's U.S. Specialty Minerals Division generated total revenue of approximately USD 687 million in fiscal year 2021; Hargrove's analysis will need to disaggregate this total into product-specific revenue streams and account for multi-year trends across the full conspiracy period.
(b) Distinguish between domestic U.S. commerce (which constitutes the relevant affected commerce for purposes of the Sentencing Guidelines) and export sales, intercompany transfers, and other transactions that may not properly be included in the affected-commerce calculation.
(c) To the extent data is available from public filings, industry reports, or documents produced in the Investigation, estimate total affected commerce across all participants in the alleged conspiracy (TMC, Ridgecrest, and Pinnacle), including an assessment of each participant's approximate market share during the conspiracy period.
(d) Independently verify or challenge the DOJ's preliminary estimate of total affected commerce, which the DOJ has estimated at approximately USD 1.34 billion, with TMC's share at approximately USD 478 million (approximately 35.7% of total affected commerce). Hargrove will critically examine the DOJ's methodology, identify any errors, overstated categories, or unsupported assumptions, and develop an independent assessment of affected commerce for C&H's use in negotiations with the DOJ.
3.3 Penalty Calculation Support
Hargrove will assist C&H in analyzing and responding to the DOJ's anticipated penalty calculation methodology for TMC. In antitrust cases involving criminal violations of Section 1 of the Sherman Act, the DOJ typically applies the organizational sentencing provisions of Chapter Eight of the United States Sentencing Guidelines, which use twenty percent (20%) of the volume of affected commerce as the base fine. From this starting point, the Guidelines provide for upward and downward adjustments based on a range of factors, including the culpability score, cooperation, acceptance of responsibility, and the existence of compliance programs.
Hargrove will perform the following work in connection with penalty calculation support:
(a) Model various penalty scenarios for TMC based on a range of affected-commerce volumes (including the DOJ's preliminary estimate and Hargrove's independent estimate), applying the Guidelines' fine-calculation methodology, including the base fine, the culpability score multiplier range, and potential adjustments.
(b) Analyze the impact of cooperation credits and remediation efforts on the final monetary payment, including the potential effects of TMC's cooperation under the DOJ's leniency and cooperation frameworks and any credit for TMC's implementation of enhanced antitrust compliance measures.
(c) Prepare quantitative analyses supporting C&H's arguments for maximum cooperation and remediation credit reductions, including documentation of the scope, timeliness, and value of TMC's cooperation with the Investigation and the cost and scope of TMC's remediation and compliance investments.
(d) Be available to update and refine its penalty analysis throughout the course of the engagement as negotiations with the DOJ progress and as additional information regarding the DOJ's position becomes available.
3.4 Expert Report Preparation
Hargrove will prepare draft expert reports and analyses for C&H's review and comment, to be used in C&H's submissions to the DOJ, including cooperation proffers, penalty-negotiation submissions, sentencing memoranda, and such other filings or presentations as C&H may direct. If directed by C&H, Hargrove will prepare a final affected-commerce and penalty analysis report suitable for submission to the DOJ or the Court.
Hargrove shall not issue, finalize, or distribute any report or analysis in final form without the prior written approval of C&H. All draft reports shall be clearly marked "DRAFT — PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT — NOT FOR DISTRIBUTION" until such time as C&H authorizes finalization.
3.5 Additional Services
In addition to the specific tasks described in Sections 3.1 through 3.4, Hargrove will provide such additional forensic accounting, economic analysis, and consulting services as C&H may reasonably request in connection with the Investigation, including but not limited to the following:
(a) Review and analysis of TMC's financial data, including general ledger records, revenue accounts, cost-of-goods-sold data, and margin analyses for the relevant product categories and time periods.
(b) Review and analysis of TMC's pricing databases, customer contracts, price lists, bid records, and related commercial documentation.
(c) Review and analysis of market data, including industry pricing indices, trade publications, and publicly available data regarding competitor pricing and market conditions.
(d) Preparation of demonstrative exhibits, charts, graphs, and presentation materials for use by C&H in meetings with the DOJ, internal client presentations, or court proceedings.
(e) Attendance at meetings with C&H attorneys (in person or by videoconference) to discuss findings, strategy, and the progress of analytical work.
If the engagement scope expands materially beyond what is contemplated by this Engagement Letter, C&H and Hargrove will discuss and agree upon any revised scope and budget in writing prior to the commencement of any materially expanded services.
4. Hargrove Engagement Team / Key Personnel
The engagement will be led by Dr. Vanessa Tremblay, Engagement Partner, who will have overall responsibility for the quality, accuracy, and timeliness of all Hargrove deliverables under this Engagement Letter. Dr. Tremblay will serve as the primary point of contact between Hargrove and C&H for all matters relating to this engagement.
Hargrove may assign additional professional staff to the engagement as needed to fulfill the scope of services described herein, including senior managing directors, directors, managers, senior associates, associates, and analysts. However, any changes in the lead engagement personnel — specifically, any replacement or reassignment of Dr. Tremblay as Engagement Partner or the addition of any other partner or senior managing director to a leadership role on the engagement — must be approved in advance in writing by C&H. Hargrove shall provide C&H with the names and qualifications of all professional staff assigned to the engagement upon request.
C&H's primary contacts for this engagement are:
Elaine Forsythe, Partner, Antitrust & Competition Practice Group (Responsible Partner) Calderwood & Harkness LLP 555 California Street, 40th Floor San Francisco, California 94104 Telephone: (415) 555-7200
Email: eforsythe@calderwoodharkness.com
Aaron Liu, Associate (Lead Associate) Calderwood & Harkness LLP 555 California Street, 40th Floor San Francisco, California 94104 Telephone: (415) 555-7248
Email: aliu@calderwoodharkness.com
All substantive communications from Hargrove regarding the engagement should be directed to Ms. Forsythe and Mr. Liu, unless otherwise instructed by C&H.
5. C&H Direction and Supervision
All work performed by Hargrove under this Engagement Letter shall be performed at the direction of and under the supervision of C&H. C&H will direct the priorities, sequencing, and focus of Hargrove's analytical work and will review all Hargrove Work Product prior to its use in any submission or presentation.
C&H will provide Hargrove with access to relevant documents, data, and information collected in connection with the TMC representation, as C&H deems necessary and appropriate for Hargrove to perform the services described herein. Such materials may include, without limitation:
(a) Documents and data produced by TMC in response to Grand Jury Subpoena No. GJ-22-0194-SD-003 and, if subsequently issued, any additional subpoenas or document requests served upon TMC in connection with the Investigation.
(b) Electronic data and documents collected, processed, and hosted by Redstone Digital Forensics Inc. ("Redstone"), TMC's e-discovery vendor, to the extent C&H determines that such data is relevant to Hargrove's scope of work. Hargrove shall coordinate with Redstone, at C&H's direction, to obtain access to data sets and search results as needed.
(c) TMC internal financial records, including sales data, pricing records, revenue reports, customer contracts, and related business records.
(d) Publicly available market data, industry reports, and other information relevant to the economic analyses described in Section 3.
Hargrove shall conduct its work in close coordination with the C&H engagement team. Hargrove shall provide regular progress updates and interim findings to C&H, at such intervals and in such form as C&H may reasonably direct. Hargrove shall promptly bring to C&H's attention any findings that Hargrove believes are material to the defense of TMC or to C&H's assessment of the case.
Hargrove shall not independently contact any TMC employees, officers, or directors — including, without limitation, Sandra Chu, Director of Pricing Analytics; Thomas Eriksen, Regional Sales Manager; Richard Fong, Chief Financial Officer; or any other TMC personnel — without advance written authorization from C&H. Any interviews, inquiries, or data requests involving TMC personnel must be arranged and supervised by C&H.
6. Fee Structure and Billing
6.1 Hourly Rates
Hargrove will bill for services rendered under this Engagement Letter at the following standard hourly rates, which reflect Hargrove's current rate schedule for litigation support and consulting engagements:
A detailed current rate schedule, setting forth the rates applicable to each professional level, is attached hereto as Exhibit A and incorporated herein by reference. Hargrove's rates may be adjusted annually, effective January 1 of each calendar year, upon not less than thirty (30) days' prior written notice to C&H. Any rate adjustment shall apply only to services rendered after the effective date of the adjustment and shall not apply retroactively to services already performed.
6.2 Expenses.  Hargrove will be reimbursed for reasonable out-of-pocket expenses actually incurred in connection with the performance of services under this Engagement Letter. Reimbursable expenses include, without limitation, the following categories:
(a) Travel expenses (airfare, ground transportation, lodging, and meals) incurred in connection with meetings at C&H's San Francisco office, TMC's offices, or other locations as directed by C&H. Air travel shall be at coach or economy class for domestic flights unless otherwise approved by C&H.
(b) Data processing, hosting, and computational costs incurred in connection with the economic and statistical analyses described herein.
(c) Fees for access to specialized software, databases, or data services required for the engagement (e.g., industry pricing indices, market research databases, or econometric software licenses).
(d) Third-party data acquisition costs, including the purchase of market data, industry reports, or public filings.
(e) Reproduction, printing, and delivery costs.
Any single expense item exceeding Five Thousand U.S. Dollars (USD $5,000) must be pre-approved in writing by C&H before Hargrove incurs such expense. Hargrove shall maintain receipts and supporting documentation for all reimbursable expenses and shall make such documentation available to C&H upon request.
6.3 Budget Estimate
The initial budget estimate for Hargrove's services in connection with Phase 1 of the engagement (pricing pattern analysis and preliminary affected-commerce assessment, as described in Sections 3.1 and 3.2) is approximately Four Hundred Twenty-Five Thousand U.S. Dollars (USD $425,000), inclusive of fees and expenses. This estimate is based on Hargrove's preliminary assessment of the scope and complexity of the Phase 1 work and assumes timely access to TMC data and reasonable cooperation from C&H's engagement team.
Total Hargrove fees and expenses through matter close are projected not to exceed approximately One Million Eight Hundred Fifty Thousand U.S. Dollars (USD $1,850,000), though this estimate is subject to revision as the scope of services evolves, additional phases of work are initiated, and the trajectory of negotiations with the DOJ becomes clearer. Hargrove shall promptly notify C&H if, at any point during the engagement, Hargrove's accumulated fees and expenses approach or are reasonably expected to exceed the then-current budget estimate.
Hargrove acknowledges that this engagement is ultimately funded by TMC and that C&H will coordinate billing and payment through TMC's General Counsel, Priya Anand. Hargrove shall cooperate with C&H in providing such billing detail and supporting information as TMC may reasonably require for its internal approval and payment processes.
6.4 Invoicing.  Hargrove will submit monthly invoices to C&H for services rendered and expenses incurred during the preceding calendar month. Invoices shall be addressed to:
Howard Bellamy, Billing Partner Calderwood & Harkness LLP One Liberty Plaza, 50th Floor New York, New York 10006
Email: hbellamy@calderwoodharkness.com
Each invoice shall contain reasonable detail regarding the services performed, including a description of the tasks performed, the hours billed by each individual professional (identified by name and professional level), and an itemized listing of expenses incurred with supporting documentation. All invoices shall reference C&H Matter No. 1039-00001.
Payment terms are net thirty (30) days from receipt of invoice by C&H. C&H reserves the right to request additional detail or clarification regarding any invoice prior to payment, and Hargrove shall respond promptly to any such request. In the event of any dispute regarding a particular invoice item, the undisputed portion of the invoice shall be paid in accordance with the foregoing payment terms, and the parties shall work in good faith to resolve any disputed items.
7. Confidentiality
Hargrove acknowledges that all information, documents, data, analyses, and communications provided by C&H or TMC, or otherwise obtained by Hargrove, in connection with this engagement constitute confidential information (collectively, "Confidential Information"). Confidential Information includes, without limitation, all documents and data produced by TMC in response to the grand jury subpoena, all attorney-client privileged communications, all Hargrove Work Product, all C&H legal analyses and strategy materials, and all non-public information regarding TMC's business operations, pricing, customers, finances, and personnel.
Hargrove shall not disclose any Confidential Information to any person or entity without the prior written consent of C&H, except as may be strictly required by applicable law, regulation, or court order. In the event that Hargrove receives a subpoena, court order, or other legal process requiring or purporting to require the disclosure of any Confidential Information, Hargrove shall promptly notify C&H (and in no event later than two (2) business days after receipt of such process) and shall cooperate with C&H in seeking appropriate protective relief before making any disclosure.
Hargrove shall implement and maintain appropriate administrative, technical, and physical security measures to protect all Confidential Information, including electronic data, from unauthorized access, disclosure, loss, alteration, or destruction. Such measures shall include, at a minimum, the use of encryption for electronic transmission and storage of Confidential Information, access controls limiting access to authorized personnel, and secure disposal procedures for Confidential Information that is no longer needed.
Hargrove's confidentiality obligations under this Section 7 shall survive the termination or expiration of this Engagement Letter and shall continue in full force and effect indefinitely.
8. Conflicts of Interest
Hargrove represents and warrants that, prior to the execution of this Engagement Letter, it has conducted a thorough conflicts check in accordance with its standard conflict-clearance procedures. Based on that check, Hargrove represents and warrants that it has no current engagement, business relationship, financial interest, or other relationship with any party adverse to TMC in this matter, or that would otherwise create an actual or potential conflict of interest with respect to this engagement. Without limiting the generality of the foregoing, Hargrove specifically represents and warrants that it does not currently represent, and has not within the past twenty-four (24) months represented, any of the following entities or their affiliates in any matter related to the North American specialty-minerals sector or the subject matter of the Investigation:
(a) Ridgecrest Minerals Inc.;
(b) Pinnacle Earth Resources Ltd.;
(c) Cascade Chemical Supply Co.;
(d) The United States Department of Justice, Antitrust Division;
(e) Briarcliff Law Group PLLC (counsel to Gavin Holt, a reported subject of the Investigation);
(f) Davenport, Kline & Archer LLP (counsel to Ridgecrest);
(g) Ashford Whitmore LLP (counsel to Pinnacle); or
(h) Whitfield, Strauss & Tully LLP (counsel to Cascade).
Hargrove shall promptly notify C&H in writing if any actual or potential conflict of interest arises during the course of the engagement, including any new engagement or business relationship that Hargrove proposes to accept involving any of the parties listed above or any other party that Hargrove reasonably believes may be adverse to TMC's interests in connection with the Investigation. Upon receipt of such notice, C&H shall have the right, in its sole discretion, to require Hargrove to decline the conflicting engagement or to terminate this Engagement Letter.
9. Document Retention and Return
Upon the termination or expiration of this engagement, or at any time upon C&H's written request, Hargrove shall promptly return to C&H, or, at C&H's sole direction, securely destroy, all documents, data, and materials (including all electronic copies, backups, and reproductions) received from C&H or TMC, or created by Hargrove for C&H, in connection with this engagement. Such materials include, without limitation, all Confidential Information, all Hargrove Work Product (including drafts), all data sets, spreadsheets, models, databases, and all correspondence relating to the engagement.
Within fifteen (15) business days of completing any such return or destruction, Hargrove shall provide C&H with a written certification, signed by Dr. Tremblay or another authorized Hargrove officer, confirming that all such documents and materials have been returned or destroyed in accordance with this Section 9, and specifying in reasonable detail the categories and quantities of materials returned or destroyed, as applicable.
Notwithstanding the foregoing, Hargrove may retain one (1) archival copy of its internal work papers (but not copies of documents or data received from C&H or TMC) solely for purposes of complying with applicable professional and regulatory standards, including the standards of the American Institute of Certified Public Accountants and any applicable state board of accountancy. Any such retained archival copy shall remain subject to the confidentiality obligations set forth in Section 7 and the privilege protections set forth in Section 2 of this Engagement Letter and shall be maintained in a secure manner consistent with those obligations.
10. Term and Termination
This engagement shall commence as of July 1, 2022 (the "Effective Date") and shall continue until the earliest to occur of the following:
(a) Completion of all services described in this Engagement Letter, as mutually agreed by C&H and Hargrove;
(b) Written termination by either party upon not less than thirty (30) days' prior written notice to the other party; or
(c) Resolution of the Investigation and the underlying matter, whether by plea agreement, declination, acquittal, or other final disposition.
In the event of termination for any reason, Hargrove shall be entitled to payment for all services rendered and expenses properly incurred through the effective date of termination, in accordance with the fee structure set forth in Section 6. Upon termination, Hargrove shall cooperate fully with C&H to ensure an orderly transition, including the prompt delivery of all Hargrove Work Product (in whatever stage of completion) and all Confidential Information in Hargrove's possession.
Hargrove's obligations regarding confidentiality (Section 7), privilege protections (Section 2), document retention and return (Section 9), and conflicts of interest (Section 8) shall survive the termination or expiration of this Engagement Letter.
11. Limitation of Liability and Indemnification
Limitation of Liability. To the maximum extent permitted by applicable law, Hargrove's aggregate liability to C&H and TMC for any and all claims arising out of or relating to this Engagement Letter or the services performed hereunder, whether in contract, tort, strict liability, or otherwise, shall not exceed the total amount of fees actually paid to Hargrove under this Engagement Letter. In no event shall Hargrove be liable for any indirect, incidental, consequential, special, or punitive damages, including lost profits, regardless of whether Hargrove was advised of the possibility of such damages.
Indemnification. C&H, on behalf of TMC, agrees to indemnify, defend, and hold harmless Hargrove, its partners, principals, officers, directors, employees, and agents from and against any and all third-party claims, demands, actions, liabilities, damages, losses, costs, and expenses (including reasonable attorneys' fees) arising out of or relating to Hargrove's good-faith performance of services under this Engagement Letter, except to the extent that such claims, damages, or losses are caused by or result from Hargrove's gross negligence, willful misconduct, or fraud. Hargrove shall promptly notify C&H of any claim for which indemnification may be sought and shall cooperate with C&H in the defense of any such claim.
12. Governing Law and Dispute Resolution
This Engagement Letter shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflicts-of-law principles thereof.
Any dispute, controversy, or claim arising out of or relating to this Engagement Letter, or the breach, termination, or validity thereof, shall be resolved by binding arbitration administered by JAMS in New York, New York, in accordance with JAMS' Comprehensive Arbitration Rules and Procedures then in effect. The arbitration shall be conducted by a single arbitrator selected in accordance with such rules. The arbitrator's award shall be final and binding and may be entered as a judgment in any court of competent jurisdiction. Each party shall bear its own costs and attorneys' fees in connection with any arbitration, unless the arbitrator determines that an award of costs and fees to the prevailing party is warranted.
13. Entire Agreement / Amendments
This Engagement Letter, including any exhibits and attachments hereto, constitutes the entire agreement between C&H and Hargrove with respect to the engagement described herein and supersedes all prior and contemporaneous discussions, negotiations, understandings, and agreements, whether oral or written, relating to the subject matter hereof.
No amendment, modification, supplement, or waiver of any provision of this Engagement Letter shall be effective unless set forth in a written instrument signed by authorized representatives of both C&H and Hargrove.
14. Counterparts / Execution
This Engagement Letter may be executed in one or more counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Execution and delivery of this Engagement Letter by facsimile or by electronic transmission in portable document format (PDF) shall be valid and effective for all purposes and shall have the same force and effect as execution and delivery of an original ink-signed counterpart.
We believe that this engagement will be of significant value to C&H and to TMC in connection with the defense of the Investigation. We look forward to working with you and the Hargrove team on this important matter. If the foregoing terms are acceptable, please indicate your agreement by signing and returning a copy of this Engagement Letter to the undersigned.
Please do not hesitate to contact me or Aaron Liu if you have any questions.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Name: Elaine Forsythe
Title: Partner, Antitrust & Competition Practice Group
Date: ________
ACKNOWLEDGED AND AGREED
The undersigned, on behalf of Hargrove Forensic Advisory LLC, hereby acknowledges receipt of this Engagement Letter, confirms that Hargrove has read and understands its terms, and agrees to be bound by the terms and conditions set forth herein.
HARGROVE FORENSIC ADVISORY LLC
By: ________
Name: Dr. Vanessa Tremblay
Title: Engagement Partner
Date: ________
EXHIBIT A
HARGROVE FORENSIC ADVISORY LLC CURRENT PROFESSIONAL FEE SCHEDULE
Effective January 1, 2022
The following standard hourly rates apply to professional services rendered by Hargrove Forensic Advisory LLC personnel in connection with the engagement described in the Engagement Letter to which this Exhibit A is attached:
Notes:
1.  The rates set forth above are Hargrove's standard rates as of January 1, 2022. Rates may be adjusted annually, effective January 1 of each calendar year, upon not less than thirty (30) days' prior written notice to Calderwood & Harkness LLP.
2.  Overtime, weekend, and holiday work will be billed at the applicable standard hourly rate unless otherwise agreed in writing.
3.  Administrative and clerical support time is not billed separately and is included in the professional rates set forth above.
4.  All rates are quoted in United States Dollars (USD).
PRIVILEGED AND CONFIDENTIAL — PREPARED AT THE DIRECTION OF COUNSEL — ATTORNEY WORK PRODUCT
Professional Level | Standard Hourly Rate (USD)
Engagement Partners | $850
Senior Managing Directors / Directors | $650
Managers / Senior Associates | $475
Associates / Analysts | $325
Professional Level | Description | Standard Hourly Rate (USD)
Engagement Partner | Partners responsible for overall engagement oversight, quality assurance, and client relations. Minimum 15 years of relevant experience. | $850
Senior Managing Director | Senior professionals with significant subject-matter expertise, responsible for directing major workstreams. Minimum 12 years of relevant experience. | $725
Director | Professionals with substantial experience in forensic accounting and/or economic analysis, responsible for managing discrete workstreams. Minimum 8 years of relevant experience. | $650
Manager | Mid-level professionals responsible for supervising day-to-day analytical work and managing project components. Minimum 5 years of relevant experience. | $525
Senior Associate | Professionals with developing expertise, responsible for performing complex analytical tasks under direction. Minimum 3 years of relevant experience. | $475
Associate | Early-career professionals assisting with data analysis, research, and report preparation. Minimum 1 year of relevant experience. | $375
Analyst | Entry-level professionals and support staff performing data collection, processing, and preliminary analytical work. | $325

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

PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGED ATTORNEY WORK PRODUCT

VIA ELECTRONIC MAIL AND OVERNIGHT COURIER

CALDERWOOD & HARKNESS LLP

ACKNOWLEDGED AND AGREED

HARGROVE FORENSIC ADVISORY LLC

EXHIBIT A

HARGROVE FORENSIC ADVISORY LLC CURRENT PROFESSIONAL FEE SCHEDULE

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Parties

Dates

Amounts