Contract analysis

I. Executive Summary The purpose of this memorandum is to outline Calderwood & Harkness LLP's recommended negotiating positions for the Special Committee's consideration in advance of the anticipated negotiation sessions with Caliston BioSciences, Inc. ("Caliston") and its professional advisors. Caliston is represented by Whitfield Graves LLP (lead partner: Kenneth Pratt) as legal counsel and Fendowell Sinclair & Co.

1. Achieve a Fair Price Substantially Below Caliston's Opening Ask. Caliston's $1.1 billion opening valuation ask sits at the high end of the applicable valuation ranges and is not justified by the current risk profile of Caliston's pipeline. The Special Committee should counter at $850 million and target a final price in the range of $900 million to $950 million, with an internal walk-away ceiling of $975 million (e

2. Structure Consideration to Protect Penterra Stockholders. We recommend a consideration mix of 75% cash and 25% Penterra common stock, which preserves Penterra's balance sheet capacity while aligning former Caliston stockholders with Penterra's post-closing performance.

3. Shift Contingent Pipeline Value into a CVR Mechanism. Given that Phase 2b topline data for CLT-4019 — the primary value driver of the transaction — has not yet been reported, a material portion of the purchase premium should be structured as a contingent value right ("CVR") payable upon FDA approval of CLT-4019, with a recommended CVR amount of $125 million.

4. Secure Robust Protective Provisions Given the Conflict of Interest. The merger agreement and ancillary documents must contain comprehensive safeguards addressing the conflicts arising from Dr. Hale's dual role and the Whitmore/Whitmore spousal relationship, including information barrier covenants, recusal provisions, and equal treatment of Dr. Hale's merger consideration.

5. Build a Strong Entire Fairness Record Under Delaware Law. Every element of the negotiation process, the terms ultimately agreed upon, and the procedural safeguards should be designed to withstand scrutiny under the entire fairness standard of review applicable to interested-party transactions under Delaware law, including DGCL §§ 141(a), 144, and 251. To the extent the Special Committee can demonstrate that the tr

II. Overview of Current Positions A. Caliston's Opening Position Caliston, acting through its financial advisor Fendowell Sinclair & Co. (Sandra Wu, Managing Director), communicated an opening valuation ask of $1.1 billion in aggregate equity value for all of the outstanding equity interests of Caliston. This opening position was conveyed during a preliminary meeting between the parties' financial advisors on August

III. Consideration Structure A. Cash/Stock Mix As noted above, Caliston has expressed a preference for all-cash or predominantly cash consideration. While we understand Caliston's desire for immediate liquidity — driven in large part by the liquidity needs of its venture capital investors — an all-cash transaction is not in Penterra's best interest. We recommend a consideration mix of 75% cash and 25% Penterra common

IV. Termination Fee Provisions Termination fees are a standard feature of negotiated mergers and serve important functions: for Penterra (the buyer), a company termination fee compensates for the opportunity cost and expenses incurred if Caliston abandons the transaction; for Caliston (the target), a reverse termination fee provides assurance that Penterra is committed to completing the deal and compensates Caliston

V. Representations and Warranties The representations and warranties contained in the merger agreement serve a dual function: they are the mechanism by which the parties exchange information and allocate risk with respect to the state of their respective businesses, and they establish the factual predicates for the indemnification provisions and the closing conditions. Given the magnitude of this transaction and the

VI. Indemnification and Escrow A. Indemnification Framework Because Caliston is a private company and its stockholders will receive the merger consideration and disperse, the indemnification provisions and escrow arrangement are critical mechanisms for Penterra to obtain recourse in the event of post-closing discovery of breaches of representations or other losses. We recommend the following indemnification framework

VII. Key Protective Provisions — Related-Party Safeguards This section addresses the provisions that are necessary to manage the conflicts of interest inherent in this transaction. Given that the proposed acquisition is a related-party transaction subject to heightened judicial scrutiny under the entire fairness standard of Delaware law, the protective provisions discussed below are not merely "nice to have" — they a