Contract analysis

Section 1.1 — Defined Terms As used in this Agreement, the following terms shall have the following meanings: "Business Day" means any day other than a Saturday, Sunday, or a day on which national banking associations in the City of New York are authorized or required by law, regulation, or executive order to close. "Claim Notice" means a written notice from Penterra to the Stockholder Representative and the Escrow A

Section 1.2 — Rules of Construction (a) Unless the context otherwise requires, all references herein to Articles, Sections, Exhibits, and Schedules shall refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement. (b) The words "hereof," "herein," "hereto," "hereby," "hereunder," and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any par

ARTICLE 2 — ESTABLISHMENT OF ESCROW

Section 2.1 — Deposit of Escrow Fund (a) On the Closing Date, Penterra shall deposit, or cause to be deposited, the sum of Forty-Six Million Two Hundred Fifty Thousand Dollars ($46,250,000) in immediately available funds by wire transfer to the Escrow Account in accordance with the wire transfer instructions set forth on Exhibit E hereto. Such amount represents a portion of the Cash Consideration of Six Hundred Ninet

Section 2.2 — Escrow Account (a) Upon execution of this Agreement, and in any event no later than one (1) Business Day prior to the anticipated Closing Date, the Escrow Agent shall establish and maintain a segregated escrow account at Greystone National Bank, N.A. to hold the Escrow Fund. (b) The Escrow Account shall be titled as follows: "Greystone National Bank, N.A., as Escrow Agent under the Escrow Agreement date

Section 2.3 — Ownership; Tax Treatment (a) The Parties agree that, for all federal, state, and local income tax purposes, the Escrow Fund (including all investment income earned thereon) shall be treated as owned by the former stockholders of Caliston, in proportion to each such former stockholder's pro rata share as set forth in Section 2.1(b) hereof, from the date of deposit through the date of distribution or disb

ARTICLE 3 — CLAIMS PROCEDURES AND DISBURSEMENT MECHANICS

Section 3.1 — Indemnification Claims — Claim Notice (a) At any time during the Escrow Period, Penterra may submit a Claim Notice to the Stockholder Representative and the Escrow Agent in accordance with the notice provisions of Article 8 hereof. All claims asserted in a Claim Notice must relate to indemnification obligations of the former Caliston stockholders under Article IX of the Merger Agreement. (b) Each Claim

Section 3.2 — Response Period; Dispute Notice (a) Following receipt of a Claim Notice, the Stockholder Representative shall have thirty (30) Business Days (the "Response Period") to deliver a Dispute Notice to Penterra and the Escrow Agent, in accordance with the notice provisions of Article 8 hereof. (b) Each Dispute Notice shall be in writing, substantially in the form set forth in Exhibit C hereto, and shall set f

Section 3.3 — Disbursement of Undisputed Claims (a) If no Dispute Notice is delivered by the Stockholder Representative within the Response Period with respect to a Claim Notice, the Escrow Agent shall, within five (5) Business Days following the expiration of the Response Period, disburse from the Escrow Account to Penterra (by wire transfer of immediately available funds to the account specified in Exhibit E hereto

Section 3.4 — Resolution of Disputed Claims (a) If a Dispute Notice is timely delivered by the Stockholder Representative with respect to all or any portion of a claim set forth in a Claim Notice, the disputed amount shall remain in the Escrow Account pending resolution of the dispute. (b) Resolution of a disputed claim may occur in one of the following manners: (i) Joint Written Instruction. Penterra and the Stockho

Section 3.5 — Limitations on Claims (a) The Escrow Agent shall not disburse or release from the Escrow Account any amount in excess of the then-available Escrow Fund balance. In no event shall the aggregate disbursements from the Escrow Fund to Penterra exceed the sum of (i) Forty-Six Million Two Hundred Fifty Thousand Dollars ($46,250,000), plus (ii) all accumulated investment earnings thereon. (b) The Escrow Fund s

Section 3.6 — Partial Disbursements (a) In the event that multiple Claim Notices are pending at any time, the Escrow Agent shall process and disburse claims in the chronological order in which the applicable Claim Notices were received by the Escrow Agent, with the earliest received Claim Notice being processed first. (b) If at any time the Escrow Fund is insufficient to satisfy all pending undisputed claims (or undi

ARTICLE 4 — INVESTMENT OF ESCROW FUND

Section 4.1 — Permitted Investments (a) The Escrow Agent shall invest and reinvest the Escrow Fund, and any investment earnings thereon, in one or more of the following investments (collectively, "Permitted Investments") as directed by Joint Written Instruction: (i) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America (including U

Section 4.2 — Investment Risk All investment risk associated with the Escrow Fund, including, without limitation, the risk of loss of principal, fluctuations in interest rates, and changes in the market value of Permitted Investments, shall be borne solely by the former stockholders of Caliston (as the owners of the Escrow Fund for all tax purposes). The Escrow Agent shall not be liable for any decline in the value o

Section 4.3 — Investment Earnings (a) All investment earnings (net of investment losses, if any) on the Escrow Fund shall be added to and become part of the Escrow Fund and shall be subject to the terms and conditions of this Agreement in all respects. (b) Upon the termination of this Agreement and the final distribution of the Escrow Fund in accordance with Article 5 hereof, all accumulated net investment earnings r

ARTICLE 5 — TERMINATION AND FINAL DISTRIBUTION

Section 5.1 — Escrow Termination Date (a) The Escrow Period shall terminate on the date that is eighteen (18) months following the Closing Date (the "Escrow Termination Date"), subject to extension in accordance with Section 5.2 hereof with respect to Pending Claims. (b) On the Escrow Termination Date (or, if such date is not a Business Day, on the next succeeding Business Day), the Escrow Agent shall distribute the

Section 5.2 — Reservation for Pending Claims (a) If any Claim Notices remain outstanding and unresolved (i.e., constitute Pending Claims) as of the Escrow Termination Date, the Escrow Agent shall retain in the Escrow Account an amount equal to the aggregate claimed amounts (or good-faith estimates thereof) of all such Pending Claims (the "Reserve Amount"). (b) The Reserve Amount shall remain in the Escrow Account, in

Section 5.3 — Final Distribution (a) Upon the resolution of all Pending Claims and the disbursement or release of all amounts reserved pursuant to Section 5.2 hereof, the remaining balance of the Escrow Fund (if any), including all net accumulated investment earnings thereon, shall be promptly distributed by the Escrow Agent to the Stockholder Representative by wire transfer of immediately available funds to the acco

Section 6.1 — Duties and Responsibilities (a) The Escrow Agent hereby agrees to hold, invest, and disburse the Escrow Fund in accordance with the terms and conditions of this Agreement. The Escrow Agent acts solely as a stakeholder and in a ministerial capacity hereunder and shall have no duties, responsibilities, or obligations other than those expressly set forth in this Agreement. (b) No implied duties, covenants,

Section 6.2 — Reliance (a) The Escrow Agent shall be entitled to rely, and shall be fully protected in relying, upon any written notice, instruction, certificate, statement, request, consent, agreement, or other document or instrument that the Escrow Agent in good faith believes to be genuine and to have been signed, executed, or delivered by a duly authorized representative of the applicable Party. (b) The Escrow Ag

Section 6.3 — Limitation of Liability (a) The Escrow Agent shall not be liable for any loss, cost, expense, claim, damage, or liability of any kind ("Escrow Agent Losses") arising out of or in connection with the performance of its duties hereunder, except to the extent that such Escrow Agent Losses are directly caused by the Escrow Agent's own gross negligence, fraud, or willful misconduct, as determined by a Final

Section 6.4 — Indemnification of Escrow Agent (a) Penterra and the Stockholder Representative (on behalf of the former stockholders of Caliston, with recourse to the Escrow Fund) shall jointly and severally indemnify, defend, and hold harmless the Escrow Agent and its directors, officers, employees, agents, and affiliates (collectively, the "Escrow Agent Indemnified Parties") from and against any and all losses, liab

Section 6.5 — Resignation and Removal (a) The Escrow Agent may resign from its duties hereunder at any time upon not less than thirty (30) days' prior written notice to both Penterra and the Stockholder Representative. Such resignation shall be effective on the date specified in the notice of resignation or, if no date is specified, on the thirtieth (30th) day following delivery of such notice. (b) The Escrow Agent m

Section 6.6 — Escrow Agent Fees and Expenses (a) The Escrow Agent shall be entitled to compensation for its services hereunder as set forth in the fee schedule attached hereto as Exhibit A (the "Fee Schedule"), which Fee Schedule includes, without limitation: (i) an annual escrow administration fee; (ii) per-transaction processing fees for wire transfers and other disbursements; and (iii) per-claim processing fees fo

Section 6.7 — Interpleader (a) In the event of any dispute between Penterra and the Stockholder Representative (or among any parties claiming an interest in the Escrow Fund) as to the proper disposition of the Escrow Fund or any portion thereof, and the Escrow Agent is unable to determine the proper disposition of the Escrow Fund based on the express terms of this Agreement, the Escrow Agent may, in its sole discreti

Section 6.8 — No Duty to Investigate The Escrow Agent shall have no duty or obligation to inquire into, determine, or investigate the validity, accuracy, completeness, or sufficiency of any document, instrument, notice, instruction, certificate, or other communication delivered to it under this Agreement. The Escrow Agent shall act solely in accordance with the express provisions of this Agreement and shall not be re

ARTICLE 7 — STOCKHOLDER REPRESENTATIVE

Section 7.1 — Authority (a) Ridgeline Ventures, LP, acting through Ava Lindström, Managing Partner, or such other duly authorized persons as may be designated from time to time in writing by Ridgeline Ventures, LP to the Escrow Agent and Penterra, is hereby irrevocably appointed as the Stockholder Representative for all purposes of this Agreement. The Stockholder Representative is authorized and empowered to act on b

Section 7.2 — Binding Effect (a) All actions taken, decisions made, and agreements entered into by the Stockholder Representative pursuant to this Agreement shall be final and binding upon all former stockholders of Caliston, and no former Caliston stockholder shall have any right to object to, dissent from, or otherwise challenge any such action, decision, or agreement. (b) No former Caliston stockholder shall have

Section 7.3 — Successor Stockholder Representative (a) In the event that Ridgeline Ventures, LP is unable or unwilling to continue to serve as Stockholder Representative (whether due to dissolution, incapacity, resignation, or any other cause), a successor Stockholder Representative may be designated by the affirmative vote or written consent of former Caliston stockholders holding a majority in interest of the merge

Section 8.1 — Manner of Delivery All notices, requests, demands, consents, waivers, and other communications required or permitted to be given under this Agreement shall be in writing and shall be delivered by one of the following methods: (a) personal delivery, in which case notice shall be deemed given upon actual receipt by the intended recipient; (b) delivery by nationally recognized overnight courier service (wi

Section 8.2 — Addresses for Notices All notices hereunder shall be directed to the applicable Party at the following addresses (or to such other address as such Party may designate in writing from time to time): If to Penterra Pharmaceuticals Corp.: Penterra Pharmaceuticals Corp. 400 Innovation Drive, Suite 1200 Princeton, New Jersey 08540 Attention: Lawrence Whittaker, General Counsel and Corporate Secretary Email:

Section 8.3 — Change of Address Any Party may change its address or other contact information for purposes of notices hereunder by giving written notice thereof to each of the other Parties in accordance with this Article 8. No change of address shall be effective until actually received by the Party to whom such notice is addressed.

ARTICLE 9 — GENERAL PROVISIONS

Section 9.1 — Governing Law This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without giving effect to any choice-of-law or conflict-of-laws rules or provisions (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware. The foregoing choice of law is

Section 9.2 — Jurisdiction; Venue (a) Each Party irrevocably and unconditionally submits to the exclusive jurisdiction of (i) the Court of Chancery of the State of Delaware, or (ii) if the Court of Chancery of the State of Delaware declines to exercise jurisdiction, any state court of the State of Delaware or any federal court of the United States of America sitting in the State of Delaware, for the purposes of any a

Section 9.3 — Waiver of Jury Trial EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING, OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE ESCROW FUND, OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY (A) CERTIFIES THAT NO

Section 9.4 — Amendments and Waivers (a) This Agreement may not be amended, modified, or supplemented except by a written instrument executed by each of Penterra, the Stockholder Representative, and the Escrow Agent. No amendment shall be effective unless it is in writing and signed by all three Parties. (b) No waiver of any provision of this Agreement shall be effective unless set forth in a written instrument signe

Section 9.5 — Assignment (a) This Agreement shall be binding upon, and shall inure to the benefit of, the Parties and their respective successors and permitted assigns. (b) No Party may assign or transfer this Agreement or any of its rights or obligations hereunder without the prior written consent of each of the other Parties; provided, however, that Penterra may, without the consent of t