Contract analysis

I. Introduction and Purpose Calderwood & Harkness LLP ("Calderwood & Harkness" or "C&H") writes on behalf of the Special Committee (the "Special Committee") of the Board of Directors (the "Board") of Penterra Pharmaceuticals Corp. ("Penterra" or the "Company"), a corporation organized and existing under the laws of the State of Delaware, with its principal executive offices located at 400 Innovation Drive, Suite 1200

II. Background of the Proposed Transaction and Related-Party Context To ensure that Thorngate has a complete understanding of the factual context in which its engagement arises, we set forth below a summary of the Proposed Transaction and, importantly, the related-party circumstances that give rise to heightened fiduciary obligations and the need for rigorous procedural safeguards. The Proposed Transaction. Penterra

III. Scope of Engagement and Role of Thorngate Thorngate is engaged to serve as the independent financial advisor solely to the Special Committee. Thorngate does not serve as an advisor to Penterra's management, to the full Board, to Dr. Hale, or to any other party. The Special Committee expects Thorngate to approach its assignment with objectivity and independence, free from the influence of Penterra's management or

IV. Required Valuation Methodologies The Special Committee expects that Thorngate will employ multiple valuation methodologies in order to develop a comprehensive and well-supported view of the value of Caliston. At a minimum, the following methodologies shall be utilized. Thorngate retains discretion to employ additional or supplemental approaches as it deems appropriate, subject to the provisions of Section IV.D be

V. Assumptions, Data Sources, and Management Projections In the course of conducting its valuation analyses, Thorngate will necessarily rely on range data sources, including financial projections and other forward-looking information provided by the parties. The Special Committee sets forth the following expectations regarding Thorngate's treatment of such information. Management Projections. Thorngate may rely upon

VI. Contingent Value Rights Analysis The Special Committee understands that the consideration payable in the Proposed Transaction may include a contingent value rights ("CVR") component, the terms of which are currently under discussion between the parties. Because the inclusion of a CVR introduces additional complexity into the valuation and fairness analysis, the Special Committee requests that Thorngate give parti

VII. Consideration Structure Analysis The proposed consideration for the Merger is expected to comprise a combination of cash and Penterra common stock, with the precise mix and amounts still under negotiation. The Special Committee expects Thorngate to evaluate the consideration structure comprehensively, including the following elements: (a) Implied Value of Stock Component. An analysis of the implied value of the

VIII. Independence Confirmations The independence of the Special Committee's financial advisor is of paramount importance in the context of this related-party transaction. Thorngate's independence is a necessary predicate for the fairness opinion to serve its intended function as a procedural safeguard under Delaware law. Accordingly, Thorngate shall confirm in writing the following, both at the time of this letter a

IX. Format and Content of the Fairness Opinion The fairness opinion to be rendered by Thorngate shall conform to the following requirements regarding format, content, and addressees. Addressee. The fairness opinion shall be a formal written opinion addressed to the Special Committee of the Board of Directors of Penterra Pharmaceuticals Corp. The opinion shall not be addressed to the full Board, to Penterra's manageme

X. Preliminary Analyses and Interim Reporting The Special Committee anticipates that the evaluation of the Proposed Transaction will require multiple meetings and iterative analysis. Accordingly, prior to the delivery of the final fairness opinion, Thorngate shall present preliminary valuation analyses and findings to the Special Committee at one or more meetings, as directed by the Special Committee Chair. These pre

XI. Market Check Process In the event that the Special Committee determines, in its sole discretion, that a market check is appropriate as part of its evaluation of the Proposed Transaction, Thorngate shall, upon direction from the Special Committee, conduct a market check process. Such process may take the form of a targeted outreach to a limited number of potentially interested parties, or a broader canvass of the

XII. Coordination with Calderwood & Harkness LLP To ensure that the Special Committee receives fully integrated legal and financial advice, and to facilitate the preparation of disclosure documents that meet the requirements of Delaware law and the federal securities laws, Thorngate and Calderwood & Harkness LLP shall coordinate their work as follows: (a) All draft fairness opinion materials, preliminary presentation

XIII. Confidentiality All materials, data, analyses, presentations, and other information provided to or generated by Thorngate in connection with this engagement are strictly confidential and are subject to the confidentiality provisions set forth in Section 8 of the Engagement Letter and the information barrier policy established for Project Coriander. Thorngate shall not disclose any non-public information regardi

XIV. Fee Arrangement Confirmation For the avoidance of doubt, the fee arrangement for this engagement is as set forth in the Engagement Letter dated June 16, 2023, and is summarized below: (a) Advisory Fee. Two Million Five Hundred Thousand Dollars ($2,500,000), payable as follows: fifty percent (50%), or $1,250,000, payable upon delivery of the fairness opinion to the Special Committee; and fifty percent (50%), or $

XV. Miscellaneous This Scope Letter does not amend, modify, or supersede the terms of the Engagement Letter dated June 16, 2023. In the event of any conflict or inconsistency between this Scope Letter and the Engagement Letter, the Engagement Letter shall govern and control. The expectations set forth in this letter are intended to guide Thorngate in the performance of its engagement and to ensure that the Special Co

XVI. Closing We look forward to working with Thorngate in connection with this important engagement. The Special Committee is confident in Thorngate's qualifications and independence, and values the role that Thorngate will play in ensuring the rigor and integrity of the Special Committee's process. We request that Thorngate acknowledge receipt and acceptance of this Scope Letter by countersigning where indicated bel

XVII. Acknowledgment ACKNOWLEDGED AND ACCEPTED: THORNGATE PARTNERS LLC By: ________ Name: Gregory Ashford Title: Managing Director Date: ________