Contract analysis

ARTICLE 1 — DEFINITIONS As used in this Agreement, the following terms shall have the meanings set forth below. Capitalized terms used but not otherwise defined in this Agreement shall have the meanings ascribed to them in the Term Sheet.

Section 1.1 "Affiliate" means, with respect to any Party, any entity that directly or indirectly controls, is controlled by, or is under common control with such Party. For purposes of this definition, "control" means the direct or indirect ownership of more than fifty percent (50%) of the outstanding voting securities of an entity, or the right to receive more than fifty percent (50%) of the profits or earnings of a

Section 1.2 "Compound" means PPC-4187 (Penteracitinib), a selective JAK1 inhibitor, including all formulations, salts, hydrates, solvates, polymorphs, co-crystals, enantiomers, racemates, prodrugs, metabolites, and crystalline forms thereof, and any pharmaceutical compositions or dosage forms containing PPC-4187 as an active ingredient.

Section 1.3 "Confidential Information" has the meaning set forth in Section 6.1 of this Agreement.

Section 1.4 "Definitive Agreement" means the proposed Exclusive License Agreement to be negotiated, agreed upon, executed, and delivered by Penterra and Meridian for the exclusive license of the Compound and the Licensed IP in the Territory, together with all exhibits, schedules, and ancillary agreements thereto.

Section 1.5 "Effective Date" means August 4, 2023.

Section 1.6 "Exclusivity Period" means the period commencing on the Effective Date and ending at 11:59 p.m. (Eastern Time) on the date that is sixty (60) days after the Effective Date (i.e., October 3, 2023), unless earlier terminated pursuant to Section 3.3 or extended pursuant to Section 3.2 of this Agreement.

Section 1.7 "Licensed IP" means all patents, patent applications (including provisional and non-provisional applications, continuations, continuations-in-part, divisionals, and reissues), trademarks (including, without limitation, the PENTECLAR mark and any associated trade dress, service marks, and domain names), trade secrets, know-how, inventions (whether or not patentable), clinical data, pre-clinical data, regul

Section 1.8 "Term Sheet" means the Non-Binding Term Sheet dated August 4, 2023, entered into by and between Penterra and Meridian, setting forth the principal commercial terms of the Proposed Transaction.

Section 1.9 "Territory" means the Asia-Pacific Territory as defined in the Term Sheet, comprising: the People's Republic of China (including Hong Kong Special Administrative Region and Macau Special Administrative Region), Japan, the Republic of Korea, Australia, New Zealand, Singapore, the Kingdom of Thailand, Malaysia, the Republic of Indonesia, the Republic of the Philippines, the Socialist Republic of Vietnam, an

Section 1.10 "Proposed Transaction" means the exclusive license of the Compound and the Licensed IP by Penterra to Meridian in the Territory, on the terms and conditions substantially described in the Term Sheet, to be set forth in the Definitive Agreement.

ARTICLE 2 — EXCLUSIVITY OBLIGATIONS

Section 2.1 — Penterra Exclusivity. During the Exclusivity Period, Penterra shall not, and shall cause its Affiliates, officers, directors, employees, agents, and representatives (including, without limitation, Calderwood & Harkness LLP and Prescott Hale & Co. LLC) not to, directly or indirectly: (a) solicit, initiate, encourage, or facilitate any inquiry, proposal, indication of interest, or offer from any third par

Section 2.2 — Meridian Exclusivity. During the Exclusivity Period, Meridian shall not, and shall cause its Affiliates (including, without limitation, Meridian Pharma (Shanghai) Co., Ltd., Meridian Japan K.K., Meridian Korea Inc., and Meridian Bio Australia Pty Ltd), officers, directors, employees, agents, and representatives (including, without limitation, Lam, Cheung & Firth LLP and Eastbridge Partners Limited) not

Section 2.3 — Notification Obligation. Each Party shall promptly (and in any event within two (2) business days) notify the other Party in writing if it or any of its Affiliates, officers, directors, employees, agents, or representatives receives any unsolicited proposal, inquiry, indication of interest, or communication from a third party relating to a transaction that would constitute a breach of such Party's exclu

Section 2.4 — Scope Clarification. Notwithstanding anything in this Article 2 to the contrary, nothing in this Agreement shall restrict or prohibit either Party from: (a) continuing the development, manufacture, or commercialization of the Compound or any other compound, product, or technology outside the scope of the Proposed Transaction, including without limitation the development and commercialization of the Comp

ARTICLE 3 — EXCLUSIVITY PERIOD; EXTENSION; TERMINATION

Section 3.1 — Duration. The Exclusivity Period shall commence on the Effective Date (August 4, 2023) and shall expire at 11:59 p.m. (Eastern Time) on the date that is sixty (60) days after the Effective Date (i.e., October 3, 2023), unless earlier terminated pursuant to Section 3.3 or extended pursuant to Section 3.2 of this Agreement. During the Exclusivity Period, the Parties shall devote commercially reasonable ef

Section 3.2 — Extension. The Exclusivity Period may be extended for one (1) additional period of thirty (30) days (i.e., through and including November 2, 2023) upon the written agreement of both Parties, which agreement shall be in the form of a written amendment to this Agreement executed by duly authorized officers of each Party. The consent of a Party to such extension shall not be unreasonably withheld, conditio

Section 3.3 — Early Termination. Notwithstanding Section 3.1, either Party may terminate this Agreement upon written notice to the other Party if: (a) the Parties mutually agree in writing that they do not intend to pursue the Proposed Transaction and desire to terminate this Agreement; (b) the other Party materially breaches any provision of this Agreement (including, without limitation, any breach of the exclusivit

Section 3.4 — Effect of Expiration or Termination. Upon the expiration or termination of the Exclusivity Period (whether by lapse of time, early termination, or otherwise), the exclusivity obligations set forth in Article 2 shall automatically terminate and be of no further force or effect. Notwithstanding the foregoing, the following provisions shall survive the expiration or termination of this Agreement in accorda

ARTICLE 4 — GOOD FAITH NEGOTIATION

Section 4.1 — Obligation to Negotiate in Good Faith. During the Exclusivity Period, each Party shall use commercially reasonable efforts to negotiate in good faith with the other Party to agree upon the terms and conditions of the Definitive Agreement, which shall be consistent in all material respects with the Term Sheet. The Parties shall endeavor to cause their respective internal teams, legal counsel, financial a

Section 4.2 — Due Diligence Access. During the Exclusivity Period, Penterra shall provide Meridian and its authorized representatives (including, without limitation, Lam, Cheung & Firth LLP and Eastbridge Partners Limited) with reasonable access to information, documentation, data, records, and personnel relating to the Compound and the Licensed IP for purposes of conducting due diligence in connection with the evalu

Section 4.3 — No Binding Obligation to Consummate. Notwithstanding anything in this Agreement to the contrary, neither Party shall be obligated to enter into the Definitive Agreement or to consummate the Proposed Transaction. Each Party retains the right, in its sole and absolute discretion, to determine whether to proceed with or withdraw from the Proposed Transaction at any time; provided, however, that each Party

ARTICLE 5 — REPRESENTATIONS AND WARRANTIES

Section 5.1 — Mutual Representations and Warranties. Each Party hereby represents and warrants to the other Party that, as of the Effective Date: (a) Organization and Good Standing. It is a corporation or company, as applicable, duly organized, validly existing, and in good standing (or the equivalent thereof) under the laws of its jurisdiction of organization (the State of Delaware, in the case of Penterra, and Hong

Section 5.2 — Penterra Representations and Warranties. Penterra hereby represents and warrants to Meridian that, as of the Effective Date: (a) Ownership of Compound and Licensed IP. Penterra is the sole and exclusive owner of the Compound and the Licensed IP, free and clear of all liens, encumbrances, security interests, claims, and restrictions (other than licenses granted in territories outside the Territory that d

Section 6.1 — Definition of Confidential Information. As used in this Agreement, "Confidential Information" means all non-public, confidential, or proprietary information disclosed by one Party (the "Disclosing Party") to the other Party (the "Receiving Party") in connection with this Agreement, the Term Sheet, or the Proposed Transaction, including, without limitation, all scientific, technical, clinical, pre-clinic

Section 6.2 — Exclusions. Notwithstanding Section 6.1, Confidential Information shall not include any information that the Receiving Party can demonstrate by competent evidence: (a) was or becomes generally available to the public or within the relevant industry other than as a result of a disclosure by the Receiving Party or its representatives in violation of this Agreement; (b) was independently developed by the R

Section 6.3 — Confidentiality Obligations. The Receiving Party shall: (a) use the Disclosing Party's Confidential Information solely for the purpose of evaluating, negotiating, and consummating the Proposed Transaction, and for no other purpose whatsoever; (b) maintain the confidentiality of the Disclosing Party's Confidential Information using at least the same degree of care as it uses to protect its own confidenti

Section 6.4 — Permitted Disclosures. Notwithstanding Section 6.3, a Receiving Party may disclose Confidential Information of the Disclosing Party to the extent required by applicable law, regulation, or rule (including, without limitation, the rules and regulations of the U.S. Securities and Exchange Commission, the Nasdaq Stock Market, the Stock Exchange of Hong Kong, or any other applicable securities exchange or r

Section 6.5 — Return or Destruction of Confidential Information. Upon the expiration or termination of this Agreement without the execution of the Definitive Agreement, and at the written request of the Disclosing Party, the Receiving Party shall promptly (and in any event within fifteen (15) business days following such request): (a) return to the Disclosing Party all originals and copies of documents, materials, an

Section 6.6 — Survival. The confidentiality obligations set forth in this Article 6 shall survive the expiration or termination of this Agreement for a period of three (3) years from the date of such expiration or termination; provided, however, that the confidentiality obligations with respect to any Confidential Information that constitutes a trade secret under applicable law (including, without limitation, the Def

Section 7.1 — Injunctive Relief. Each Party acknowledges and agrees that: (a) the covenants and agreements set forth in Article 2 (Exclusivity Obligations) and Article 6 (Confidentiality) are an essential element of this Agreement and a material inducement for the other Party to enter into this Agreement; (b) a breach or threatened breach of any provision of Article 2 or Article 6 would cause the non-breaching Party

Section 7.2 — Cumulative Remedies. All remedies available to the Parties under this Agreement, whether at law, in equity, or otherwise, are cumulative and not exclusive of any other remedies to which a Party may be entitled. The exercise of any one remedy by a Party shall not preclude the exercise of any other remedy available to such Party under this Agreement, at law, or in equity. No failure or delay by any Party

Section 8.1 — Own Expenses. Except as otherwise expressly provided in this Agreement, each Party shall bear and be solely responsible for all costs and expenses incurred by it in connection with this Agreement, the Term Sheet, the Proposed Transaction, and the negotiation, preparation, and execution of the Definitive Agreement and any ancillary agreements, including, without limitation, all fees, costs, and expenses

Section 8.2 — No Break-Up Fee. No break-up fee, termination fee, reverse termination fee, expense reimbursement obligation, or other similar payment shall be payable by either Party to the other Party upon the expiration or termination of this Agreement, regardless of the reason for such expiration or termination. Each Party acknowledges that it is entering into this Agreement with the understanding that neither Part

Section 9.1 — Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of New York, United States of America, without regard to any conflicts of law principles thereof that would require or permit the application of the laws of any other jurisdiction. The application of the United Nations Convention on Contracts for the International Sale of Goods is exp

Section 9.2 — Dispute Resolution. Any dispute, controversy, or claim arising out of or relating to this Agreement, or the breach, termination, or validity hereof, that is not resolved by good-faith negotiation between the Parties within thirty (30) days after one Party delivers written notice to the other Party of such dispute (a "Dispute Notice"), shall be finally resolved by binding arbitration administered by the

Section 9.3 — 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: (a) when delivered personally; (b) when sent by confirmed electronic mail (with a copy sent by overnight courier on the following business day); (c) one (1) business day after deposit with a nationally

Section 9.4 — Entire Agreement. This Agreement, together with the Term Sheet (to the extent referenced herein), constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations, discussions, representations, warranties, and communications, whether oral or written, between the Parties relating to such su

Section 9.5 — Amendment and Waiver. No amendment, modification, supplement, or waiver of any provision of this Agreement shall be effective unless set forth in a written instrument duly executed by authorized representatives of both Parties. No waiver by either Party of any breach of or default under this Agreement shall be deemed a waiver of any other or subsequent breach or default, and no waiver shall be effective

Section 9.6 — Assignment. Neither Party may assign, transfer, delegate, or otherwise dispose of any of its rights or obligations under this Agreement without the prior written consent of the other Party, which consent may be withheld in such other Party's sole discretion; provided, however, that either Party may assign this Agreement, in whole or in part, to any of its Affiliates without such consent, so long as: (a)

Section 9.7 — No Third-Party Beneficiaries. This Agreement is entered into for the sole benefit of the Parties and their respective permitted successors and assigns. Nothing in this Agreement, express or implied, is intended to or shall confer upon any person or entity other than the Parties and their permitted successors and assigns any right, remedy, claim, benefit, or cause of action of any nature whatsoever under

Section 9.8 — Severability. If any provision of this Agreement (or any portion thereof) is held to be invalid, illegal, or unenforceable by a court of competent jurisdiction or arbitral tribunal, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement, and this Agreement shall be construed and enforced as if such invalid, illegal, or unenforceable provision (or portion

Section 9.9 — Counterparts; Electronic Execution. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. This Agreement may be executed and delivered by electronic transmission, including by means of portable document format (.pdf) files transmitted via electronic mail or by electronic signature

Section 9.10 — Relationship of the Parties. The Parties are independent contractors, and nothing in this Agreement shall be construed to create or imply any relationship of partnership, joint venture, agency, fiduciary duty, franchisor-franchisee, employer-employee, or principal-agent between the Parties. Neither Party shall have any authority to bind or commit the other Party, or to create any obligation or liabilit

Section 9.11 — Non-Binding Nature of Term Sheet. The Parties hereby acknowledge and agree that the Term Sheet is non-binding in its entirety, except for the confidentiality, exclusivity, and governing law provisions thereof (which are binding and enforceable in accordance with their terms), and that neither Party shall have any obligation to enter into the Definitive Agreement or to consummate the Proposed Transactio