Contract analysis

Section 1.1 Defined Terms As used in this Agreement, the following terms shall have the meanings set forth below: "Agreement" has the meaning set forth in the Preamble. "Buyer" means Penterra Pharmaceuticals Corp., a Delaware corporation, and its successors and permitted assigns. "Caliston" or "Company" means Caliston BioSciences, Inc., a Delaware corporation, with its principal office located at 88 Harbor Point Road

Section 1.2 Interpretation and Cross-References (a) Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Merger Agreement. (b) Unless the context otherwise requires: (i) the headings, captions, and titles of the articles, sections, and subsections of this Agreement are inserted for convenience of reference only and shall not affect the meaning or interpretation

ARTICLE II — APPOINTMENT AND ACCEPTANCE

Section 2.1 Appointment of Stockholder Representative (a) Effective as of the Closing, each of the Former Stockholders hereby irrevocably constitutes and appoints Ridgeline Ventures, LP as such Former Stockholder's true and lawful agent, attorney-in-fact, and representative, with full power of substitution and resubstitution, and with full power and authority to act on behalf of, and in the name, place, and stead of,

Section 2.2 Acceptance (a) Ridgeline Ventures, LP hereby accepts the appointment as Stockholder Representative and agrees to perform the duties and exercise the powers conferred upon it by this Agreement, in each case subject to and in accordance with the terms and conditions of this Agreement. (b) Notwithstanding anything to the contrary contained herein, the Representative shall have no obligation to take any actio

Section 2.3 Binding Effect on Former Stockholders (a) All actions taken by the Representative within the scope of the authority granted herein, and all decisions, determinations, elections, consents, waivers, agreements, compromises, settlements, and other actions of the Representative made or taken in accordance with this Agreement, shall be binding on each and all of the Former Stockholders as if taken by such Form

ARTICLE III — POWERS AND AUTHORITY OF THE REPRESENTATIVE

Section 3.1 Indemnification Claims The Representative shall have full power and authority, acting on behalf of the Former Stockholders, to: (a) receive, review, evaluate, and respond to any claim for indemnification or other claim made by Penterra or any Buyer Indemnified Party (as defined in the Merger Agreement) pursuant to Article IX of the Merger Agreement or otherwise under the Transaction Documents, including a

Section 3.2 Escrow Administration The Representative shall have full power and authority, acting on behalf of the Former Stockholders, to: (a) act as the counterparty to Penterra under the Escrow Agreement and to exercise all rights and perform all obligations of the "Stockholder Representative" thereunder; (b) deliver joint written instructions to Greystone National Bank, N.A. (as Escrow Agent) regarding the release

Section 3.3 CVR Administration The Representative shall have full power and authority, acting on behalf of the Former Stockholders, to: (a) act on behalf of the Former Stockholders in connection with all matters arising under or in connection with the CVR Agreement, and to exercise all rights and remedies of the Former Stockholders (or the holders of contingent value rights) thereunder; (b) communicate with Columnar

Section 3.4 Post-Closing Purchase Price Adjustments The Representative shall have full power and authority, acting on behalf of the Former Stockholders, to: (a) participate in and resolve any post-closing working capital adjustment, net cash adjustment, net debt adjustment, or any other purchase price adjustment contemplated by the Merger Agreement, including the review and evaluation of Penterra's closing date balan

Section 3.5 Tax Matters The Representative shall have full power and authority, acting on behalf of the Former Stockholders, to: (a) act on behalf of the Former Stockholders with respect to any and all tax matters relating to Caliston or the Company for any pre-closing tax period or any straddle period, including any tax matters arising under the Merger Agreement; (b) review and consent to (or object to) any federal,

Section 3.6 General Authority In addition to and without limiting the specific powers set forth in Sections 3.1 through 3.5, the Representative shall have the following general authority, acting on behalf of the Former Stockholders: (a) to execute and deliver any and all agreements, certificates, instruments, receipts, acknowledgments, releases, settlement agreements, or other documents on behalf of the Former Stockh

ARTICLE IV — LIMITATIONS ON AUTHORITY

Section 4.1 Scope Limitations (a) Notwithstanding anything to the contrary contained in this Agreement, the authority of the Representative is limited strictly to post-closing matters arising under or in connection with the Merger Agreement, the Escrow Agreement, the CVR Agreement, and this Agreement. The Representative shall have no authority to act on behalf of, or to bind, any Former Stockholder with respect to an

Section 4.2 Standard of Care (a) The Representative shall act in good faith in the performance of its duties and the exercise of its powers under this Agreement. The Representative shall not be liable to any Former Stockholder for any action taken, or any omission to act, in good faith, including any action taken or omitted in reliance upon the advice of legal counsel, accountants, financial advisors, or other profes

Section 5.1 Establishment of Expense Reserve (a) At the Closing, a portion of the Merger Consideration otherwise distributable to the Former Stockholders in the aggregate amount of One Million Five Hundred Thousand Dollars ($1,500,000) (the "Expense Reserve") shall be withheld from the Former Stockholders' respective portions of the Merger Consideration and deposited in a segregated interest-bearing account maintaine

Section 5.2 Permitted Uses (a) The Representative shall be entitled to use the Expense Reserve to pay or reimburse the following costs, fees, and expenses incurred by the Representative in connection with the performance of its duties and the exercise of its authority under this Agreement and the Transaction Documents: (i) legal fees and expenses incurred by the Representative in connection with the review, evaluatio

Section 5.3 Distribution of Remaining Balance Upon the later to occur of (a) the expiration of the eighteen (18)-month Escrow Period and the release of all remaining funds held in the Escrow Fund to the Former Stockholders (or the final resolution of all pending and unresolved indemnification claims, if any claims remain pending at the expiration of the Escrow Period), (b) the final resolution of all pending indemnif

Section 5.4 Additional Funding (a) If the Representative determines in good faith that the Expense Reserve is or will be insufficient to cover the costs and expenses that are or may reasonably be expected to be incurred by the Representative in connection with the performance of its duties and the exercise of its authority under this Agreement and the Transaction Documents, the Representative may deliver written noti

ARTICLE VI — EXCULPATION OF THE REPRESENTATIVE

Section 6.1 No Liability for Good Faith Actions (a) The Representative shall not be liable to any Former Stockholder, or to any other Person, for any action taken, or any omission to act, in good faith in the performance of its duties or the exercise of its authority under this Agreement or the Transaction Documents, including, without limitation, any action taken or omitted upon the advice of legal counsel, accounta

Section 6.2 Reliance (a) The Representative shall be entitled to rely, and shall be fully protected in relying, on any document, notice, instruction, direction, communication, resolution, certification, affidavit, letter, facsimile, email, or other instrument or communication believed by the Representative in good faith to be genuine and correct and to have been signed, sent, or delivered by the appropriate party or

Section 6.3 No Duty to Investigate The Representative shall not be required to independently verify, investigate, audit, or confirm the accuracy, completeness, or authenticity of any information, statement, representation, warranty, certificate, notice, or other communication provided to the Representative by Penterra, the Escrow Agent, the CVR Trustee, any Former Stockholder, or any other Person. The Representative

ARTICLE VII — INDEMNIFICATION OF THE REPRESENTATIVE

Section 7.1 Indemnification by Former Stockholders (a) Each of the Former Stockholders, severally (and not jointly) in accordance with its respective Pro Rata Share, shall indemnify, defend, and hold harmless the Representative and its partners, members, managers, officers, directors, employees, agents, advisors, and representatives (each, an "Indemnified Representative Party") from and against any and all losses, li

Section 7.2 Source of Indemnification (a) Any indemnification obligations of the Former Stockholders under this Article VII may be satisfied first from the Expense Reserve (to the extent funds are available therein) and, if the Expense Reserve is insufficient to satisfy such obligations, from amounts otherwise distributable to the Former Stockholders from the Escrow Fund or otherwise in connection with the Transactio

Section 7.3 Survival The indemnification obligations of the Former Stockholders under this Article VII shall survive the termination of this Agreement, the resignation or removal of the Representative, the expiration of the Escrow Period, the achievement or non-achievement of the CVR Milestone, and the distribution of the Expense Reserve, and shall continue in full force and effect until the expiration of the applica

ARTICLE VIII — RESIGNATION AND REMOVAL; SUCCESSOR REPRESENTATIVE

Section 8.1 Resignation (a) The Representative may resign from its appointment hereunder at any time by delivering written notice of resignation to Penterra and to each of the Former Stockholders (at the addresses set forth on Exhibit C or such other addresses as may be provided in accordance with Article IX) at least thirty (30) days prior to the effective date of such resignation. (b) No resignation of the Represen

Section 8.2 Removal (a) The Representative may be removed from its appointment hereunder, with or without cause, by the written consent of Former Stockholders holding more than fifty percent (50%) of the aggregate Pro Rata Shares (for purposes of this calculation, excluding any Pro Rata Shares held by the Representative or its Affiliates). (b) No removal of the Representative shall be effective until a successor Repr

Section 8.3 Appointment of Successor (a) In the event of the resignation or removal of the Representative pursuant to Section 8.1 or Section 8.2, a successor Representative shall be appointed by the written consent of Former Stockholders holding more than fifty percent (50%) of the aggregate Pro Rata Shares. The successor Representative shall accept its appointment by executing and delivering a written instrument of

Section 9.1 Notices (a) All notices, demands, requests, claims, consents, waivers, approvals, instructions, and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given or made (i) when delivered personally; (ii) one (1) Business Day after being sent by a nationally recognized overnight courier service (with tracking capability); (iii)

ARTICLE X — GENERAL PROVISIONS

Section 10.1 Term and Termination (a) This Agreement shall become effective as of the Closing Date (as defined in the Merger Agreement) and shall continue in full force and effect until the latest to occur of: (i) the final resolution of all indemnification claims, escrow disbursements, purchase price adjustments, tax matters, and other post-closing matters arising under or in connection with the Transaction Document

Section 10.2 Amendments This Agreement may not be amended, modified, or supplemented except by a written instrument signed by (a) Penterra and (b) the Representative, acting with the prior written consent of Former Stockholders holding more than fifty percent (50%) of the aggregate Pro Rata Shares. No amendment, modification, or supplement shall be effective unless it is set forth in a written instrument that express

Section 10.3 Waiver (a) No waiver of any provision of this Agreement, or consent to any departure therefrom, shall be effective unless set forth in a written instrument signed by the Party against whom enforcement of such waiver or consent is sought. (b) No failure or delay by any Party in exercising any right, power, or remedy under this Agreement shall operate as a waiver thereof, nor shall any single or partial ex

Section 10.4 Governing Law This Agreement, and all claims, controversies, and causes of action arising out of or relating to this Agreement (whether sounding in contract, tort, or otherwise), shall be governed by, and construed and enforced in accordance with, the internal laws of the State of Delaware, without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any o

Section 10.5 Jurisdiction and Venue (a) Each Party hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the Court of Chancery of the State of Delaware (or, if the Court of Chancery declines to accept jurisdiction, the Superior Court of the State of Delaware or the United States District Court for the District of Delaware) in any action, suit, or proceeding aris

Section 10.6 WAIVER OF JURY TRIAL EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING, CLAIM, OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OF THE TRANSACTION DOCUMENTS, OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A)

Section 10.7 Assignment (a) The Representative may not assign, delegate, or transfer any of its rights or obligations under this Agreement, except to a successor Representative duly appointed in accordance with Article VIII of this Agreement. Any purported assignment, delegation, or transfer in violation of this Section 10.7 shall be null and void and of no force or effect. (b) This Agreement shall be binding upon an

Section 10.8 Severability If any provision of this Agreement, or the application of any such provision to any Person or circumstance, shall be held invalid, illegal, or unenforceable in any respect by a court of competent jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other provision hereof, and the remaining provisions of this Agreement shall remain in full force and effect and s

Section 10.9 Entire Agreement This Agreement, together with the Merger Agreement, the Escrow Agreement, the CVR Agreement, and the other Transaction Documents (including the exhibits, schedules, and annexes thereto), constitutes the entire agreement of the Parties with respect to the subject matter hereof and supersedes all prior negotiations, representations, warranties, commitments, offers, and agreements (whether

Section 10.10 Third-Party Beneficiaries (a) The Former Stockholders are intended third-party beneficiaries of this Agreement and shall be entitled to enforce the provisions hereof that are intended for their benefit, including, without limitation, the provisions of Article III (Powers and Authority of the Representative), Section 5.3 (Distribution of Remaining Balance of Expense Reserve), and Section 10.10 (Third-Par