Contract analysis

ARTICLE I — DEFINITIONS As used in this Agreement, the following terms shall have the meanings set forth below:

Section 1.1 "Board" means the Board of Directors of Penterra Pharmaceuticals Corp., as constituted from time to time.

Section 1.2 "Caliston" means Caliston BioSciences, Inc., a Delaware corporation (EIN: 84-4219063), with its principal office at 88 Harbor Point Road, Cambridge, Massachusetts 02142.

Section 1.3 "Caliston Interest" means Dr. Hale's 28.5% equity interest in Caliston, as described in Recital A and Section 7.2 of this Agreement.

Section 1.4 "Company" or "Penterra" means Penterra Pharmaceuticals Corp., a Delaware corporation (EIN: 22-3847195; CIK: 0001587342; NYSE: PPHR), with its principal executive offices at 400 Innovation Drive, Suite 1200, Princeton, New Jersey 08540.

Section 1.5 "DGCL" means the Delaware General Corporation Law, Title 8 of the Delaware Code, as amended from time to time.

Section 1.6 "Independence Protocol" means the Independence Protocol & Information Barrier Policy for Project Coriander, adopted by the Special Committee on June 2, 2023, as the same may be amended, supplemented, or restated from time to time by the Special Committee.

Section 1.7 "Merger Agreement" means the definitive Agreement and Plan of Merger between Penterra and Caliston relating to the Proposed Transaction, together with all schedules, exhibits, and ancillary agreements thereto, if and when executed by the parties thereto.

Section 1.8 "Project Coriander" means the confidential project code name assigned to the Proposed Transaction and all related evaluation, negotiation, and documentation activities.

Section 1.9 "Proposed Transaction" means the proposed acquisition by Penterra of 100% of the outstanding equity interests of Caliston via a one-step merger, as further described in the Preamble and the Recitals hereto.

Section 1.10 "Recused Persons" means, collectively, Dr. Marcus Hale, Angela Whitmore, and Raymond Tusk, each of whom has been recused from the Special Committee process in connection with the Proposed Transaction.

Section 1.11 "Special Committee" means the Special Committee of the Board of Directors of Penterra, as constituted on June 2, 2023, comprising Diane Prescott (Chair), James Okafor, and Dr. Helen Ng, together with any successor members appointed by the independent directors of the Board.

Section 1.12 "Special Committee Advisors" means, collectively, Calderwood & Harkness LLP, in its capacity as independent legal counsel to the Special Committee, and any independent financial advisor retained by the Special Committee in connection with the Proposed Transaction (subsequently Thorngate Partners LLC), and any other independent advisors retained by the Special Committee from time to time.

Section 1.13 "Special Committee Materials" means all documents, analyses, communications, presentations, memoranda, financial models, term sheets, draft agreements, board books, minutes, notes, and other materials of any kind, whether in written, electronic, or other form, prepared by, for, or at the direction of the Special Committee or any Special Committee Advisor in connection with the evaluation, negotiation, or

ARTICLE II — RECUSAL FROM BOARD DELIBERATIONS

Section 2.1 Recusal Obligation. Commencing on the Effective Date and continuing throughout the term of this Agreement as set forth in Article IX, Dr. Hale shall recuse himself from all meetings, deliberations, discussions, and proceedings of the Board of Directors of Penterra relating in whole or in part to the Proposed Transaction. Without limiting the generality of the foregoing, Dr. Hale shall recuse himself from

Section 2.2 Physical and Virtual Absence. Dr. Hale shall not be physically present in any meeting room, and shall not participate via any electronic communication platform (including, without limitation, video conference, teleconference, web-based meeting application, instant messaging, or shared digital workspace), during any portion of any meeting of the Board of Directors or any committee thereof at which the Prop

Section 2.3 Duration. The recusal obligations set forth in this Article II shall remain in full force and effect from the Effective Date until the earliest to occur of the following: (a) the closing of the Proposed Transaction in accordance with the terms of the Merger Agreement; (b) the termination or abandonment of the Proposed Transaction, whether by action of the Board of Directors (upon recommendation of the Spe

ARTICLE III — ABSTENTION FROM VOTING

Section 3.1 Board-Level Voting. Dr. Hale shall abstain from voting on any resolution, motion, consent, or other action of the Board of Directors relating in whole or in part to the Proposed Transaction. Without limiting the generality of the foregoing, Dr. Hale shall abstain from voting on any resolution of the Board of Directors to: (a) approve, adopt, authorize, or ratify the Merger Agreement or any ancillary agree

Section 3.2 Committee Voting. Dr. Hale shall not serve on, attend meetings of, or vote at any committee of the Board of Directors that considers matters relating to the Proposed Transaction. Without limitation of the foregoing, Dr. Hale shall not participate in any proceedings, deliberations, or votes of the Special Committee. This restriction applies to all standing and ad hoc committees of the Board, including, wit

Section 3.3 Stockholder Voting. Nothing in this Agreement shall restrict, limit, or impair Dr. Hale's right to vote his 2,140,000 shares of Penterra common stock (representing approximately 1.8% of the approximately 121,400,000 shares of Penterra common stock outstanding as of the date hereof) at any annual or special meeting of stockholders, or by written consent in lieu of a meeting, with respect to any matter rela

Section 4.1 Obligation of Confidentiality. Dr. Hale shall maintain in strict confidence, and shall not directly or indirectly disclose, disseminate, publish, or communicate to any person or entity (including, without limitation, to Caliston or any of its directors, officers, employees, stockholders, agents, representatives, or advisors), any information relating to: (a) the Special Committee's deliberations, analyses

Section 4.2 No Solicitation of Confidential Information. Dr. Hale shall not, directly or indirectly, seek, solicit, request, encourage, or induce any Recused Person, any member of the Special Committee, any Special Committee Advisor, any officer, employee, or agent of Penterra, or any other person or entity to disclose, reveal, or communicate to Dr. Hale, or to any person acting on Dr. Hale's behalf or at Dr. Hale's

Section 4.3 Inadvertent Disclosure. In the event that Dr. Hale inadvertently receives any Special Committee Material or any confidential information described in Section 4.1, whether through misdirected email, inadvertent inclusion in a board package, accidental access to the Project Coriander workspace, or any other means, Dr. Hale shall: (a) immediately cease any review, reading, or examination of such material and

Section 4.4 Caliston-Side Communications. Dr. Hale shall not, directly or indirectly, communicate with any director, officer, employee, stockholder, agent, representative, or advisor of Caliston regarding the Special Committee's activities, deliberations, positions, strategies, analyses, recommendations, or any other matter within the scope of Section 4.1. Dr. Hale acknowledges that Caliston's legal counsel in connec

Section 4.5 Survival. The confidentiality obligations set forth in this Article IV shall survive the termination of this Agreement, regardless of the reason for such termination, and shall remain in full force and effect for a period of two (2) years following the date of termination. For the avoidance of doubt, the survival of confidentiality obligations shall apply whether the Proposed Transaction is consummated, t

Section 5.1 Non-Interference with Special Committee Process. Dr. Hale shall not, directly or indirectly, by himself or through any agent, representative, affiliate, or other intermediary: (a) attempt to influence, direct, control, or interfere with the Special Committee's evaluation, analysis, negotiation, or decision-making process with respect to the Proposed Transaction; (b) attempt to influence, pressure, persuad

Section 5.2 Non-Interference with Market Check. Dr. Hale shall not, directly or indirectly, take any action to discourage, impede, delay, frustrate, or interfere with the Special Committee's market check of potential alternative transactions, including, without limitation, any action to discourage any third party from participating in the market check process, to provide misleading information to any potential altern

Section 5.3 Cooperation. Notwithstanding the restrictions set forth in Sections 5.1 and 5.2, Dr. Hale shall reasonably cooperate with the Special Committee and the Special Committee Advisors by providing factual information reasonably requested by the Special Committee in connection with its evaluation of the Proposed Transaction. Such cooperation shall include, without limitation, the provision of information regard

Section 6.1 Acknowledgment of Conflict of Interest. Dr. Hale acknowledges that his 28.5% equity interest in Caliston, acquired through personal investments totaling approximately Forty-Two Million Dollars ($42,000,000) across the Seed, Series A, and Series B financing rounds, constitutes a material financial interest in the Proposed Transaction that is separate from, and potentially adverse to, the interests of Pente

Section 6.2 Acknowledgment of Delaware Fiduciary Duties. Dr. Hale acknowledges that, as a director and officer of Penterra, he owes fiduciary duties of care and loyalty to the Company and its stockholders under the DGCL and the common law of the State of Delaware, as interpreted by the Court of Chancery and the Delaware Supreme Court. Dr. Hale acknowledges that the Proposed Transaction constitutes an interested direc

Section 6.3 Acknowledgment of Other Recused Persons. Dr. Hale acknowledges that Angela Whitmore, a director and Executive Vice President, Commercial Operations of Penterra, is also a Recused Person by reason of her spousal relationship with Dr. Evan Whitmore, who serves as Head of Clinical Development and a member of the board of directors of Caliston. Dr. Hale further acknowledges that Raymond Tusk, a non-independen

Section 6.4 Acknowledgment of Information Barrier. Dr. Hale acknowledges and consents to the Independence Protocol established by the Special Committee on June 2, 2023, a copy of which has been provided to Dr. Hale. Dr. Hale specifically acknowledges and consents to the establishment of a segregated document management workspace designated as Project Coriander within the Penterra document management system, and the r

Section 6.5 Voluntary Agreement. Dr. Hale represents and warrants that he enters into this Agreement voluntarily, with full knowledge and understanding of its terms, conditions, and consequences, and after having had the opportunity to consult with his own personal legal counsel. Dr. Hale confirms that he has not been coerced, threatened, or improperly influenced to enter into this Agreement and that he has had adequ

ARTICLE VII — REPRESENTATIONS AND WARRANTIES OF DR. HALE

Section 7.1 Authority. Dr. Hale represents and warrants that he has full power, legal capacity, and authority to execute and deliver this Agreement and to perform each of his obligations hereunder. The execution, delivery, and performance of this Agreement by Dr. Hale does not and will not conflict with, result in a breach of, or constitute a default under, any agreement, instrument, order, judgment, decree, or other

Section 7.2 Accuracy of Disclosed Interest. Dr. Hale represents and warrants that his equity interest in Caliston is 28.5% of the outstanding equity of Caliston, as calculated on a fully diluted basis (or, if not on a fully diluted basis, on such basis as was disclosed to the Board and the Special Committee), acquired through aggregate personal investments of approximately Forty-Two Million Dollars ($42,000,000) made

Section 7.3 No Undisclosed Relationships. Dr. Hale represents and warrants that he has disclosed to the Board of Directors of Penterra and to the Special Committee all material relationships between Dr. Hale and (a) Caliston; (b) the co-founders of Caliston, Dr. Nadia Sorensen and Dr. Raj Malhotra; (c) the key stockholders of Caliston, including Ridgeline Ventures, LP and Meridian Life Sciences Fund III, LP; and (d)

Section 7.4 No Prior Commitments. Dr. Hale represents and warrants that he has not made, and is not a party to, any commitment, agreement, understanding, arrangement, or promise, whether written or oral, express or implied, with any stockholder, officer, director, founder, employee, agent, or advisor of Caliston, or with any other person, regarding the terms, price, structure, timing, conditions, or any other aspect

Section 8.1 Specific Performance. Dr. Hale acknowledges and agrees that a breach by Dr. Hale of any of the covenants, agreements, or obligations set forth in this Agreement would cause irreparable harm and continuing injury to the Special Committee and to Penterra and its stockholders, the extent of which would be difficult or impossible to ascertain and for which monetary damages alone would be an inadequate and ins

Section 8.2 No Limitation on Fiduciary Duties. Nothing in this Agreement shall be construed to limit, diminish, modify, or waive any fiduciary duties that Dr. Hale owes to Penterra or to its stockholders under the DGCL, the common law of the State of Delaware, or any other applicable law. This Agreement is intended to supplement, and not to replace, the fiduciary obligations to which Dr. Hale is subject. In the event

ARTICLE IX — TERM AND TERMINATION

Section 9.1 Effective Date. This Agreement shall be effective as of June 2, 2023, the date first written above.

Section 9.2 Termination. This Agreement shall terminate upon the earliest to occur of the following: (a) the closing of the Proposed Transaction in accordance with the terms and conditions of the Merger Agreement; (b) the termination or abandonment of the Proposed Transaction, whether by action of the Board of Directors of Penterra (upon recommendation of the Special Committee or otherwise), by mutual agreement of Pe

Section 10.1 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-law 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.

Section 10.2 Jurisdiction. Each of the Parties hereby irrevocably and unconditionally submits to the exclusive jurisdiction of the Court of Chancery of the State of Delaware (or, if the Court of Chancery declines to accept jurisdiction over a particular matter, the Superior Court of the State of Delaware, or, if neither the Court of Chancery nor the Superior Court accepts jurisdiction, the United States District Cour

Section 10.3 Notices. 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 deemed to have been duly given when (a) delivered by hand, (b) sent by nationally recognized overnight courier service (with tracking and proof of delivery), (c) sent by registered or certified mail, return receipt requested, postage

Section 10.4 Entire Agreement. This Agreement, together with the Independence Protocol and the Board Resolution dated June 2, 2023, constitutes the entire agreement among the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations, and discussions, whether written or oral, among the Parties relating to such subject matter. No representati

Section 10.5 Amendment and Waiver. This Agreement may not be amended, modified, supplemented, or restated except by a written instrument executed by Dr. Hale and duly authorized by the Special Committee (acting by majority vote of its members). No waiver of any provision of this Agreement shall be effective unless made in writing and signed by the Party granting such waiver. No failure or delay by any Party in exerci

Section 10.6 Severability. If any provision of this Agreement, or the application of any such provision to any person or circumstance, is held by a court of competent jurisdiction to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement, and the remaining provisions shall continue in full force and effect. To the e

Section 10.7 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which, taken together, shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or by electronic transmission in portable document format (.pdf) shall be as effective as delivery of a manually executed co

Section 10.8 Assignment. This Agreement shall not be assignable by any Party without the prior written consent of each of the other Parties hereto. Any attempted assignment in violation of this Section 10.8 shall be null and void and of no force or effect. Subject to the foregoing, this Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective heirs, executors, administrators,

Section 10.9 No Third-Party Beneficiaries. Except as expressly provided in Section 4.3 of this Agreement with respect to Calderwood & Harkness LLP's rights to receive notice of inadvertent disclosure and to direct the return or destruction of Special Committee Materials, this Agreement is not intended to, and shall not, confer upon any person or entity other than the Parties hereto any rights, benefits, remedies, obl