Contract analysis

I. PURPOSE AND SCOPE OF THIS MEMORANDUM This memorandum establishes binding protocols for all members of the Calderwood & Harkness LLP ("C&H") engagement team working on the defense of Penterra Pharmaceuticals Corp. ("PPC"), Employer Identification Number 22-3741856, in connection with the IRS Large Business & International Division ("LB&I") examination opened on May 16, 2022, covering tax years 2017, 2018, 2019, and

II. ENGAGEMENT STRUCTURE AND KEY PERSONNEL A. Client Identification The client in this engagement is Penterra Pharmaceuticals Corp., a Delaware corporation headquartered at 2200 Independence Boulevard, Princeton Junction, New Jersey 08550. PPC is publicly traded on the Nasdaq Stock Market under the ticker symbol "PPCA." PPC is a global specialty pharmaceutical company engaged in the research, development, manufacture

1. Whitmore Valuation Group LLC (Kovel Engagement) Whitmore Valuation Group LLC ("WVG") is an economic consulting firm with offices at 200 Ashbury Asset Advisors, Suite 700, Boston, Massachusetts 02109. WVG has been retained by C&H — not by PPC directly — under a Kovel arrangement to perform independent economic analyses, benchmarking studies, and expert reports supporting PPC's transfer pricing positions. The retent

2. Crestfield & Associates LLP (Independent Auditor / Tax Return Preparer) Crestfield & Associates LLP ("Crestfield") is a national accounting firm with offices at 1200 Avenue of the Americas, New York, New York 10036. Crestfield serves as PPC's independent auditor and prepared PPC's consolidated federal income tax returns (Forms 1120) and contemporaneous transfer pricing documentation reports for tax years 2017 thro

3. Thornbury & Keogh (Irish Tax Advisors) Thornbury & Keogh ("T&K") is an Irish tax advisory firm located at 22 Fitzwilliam Square, Dublin 2, D02 YH68, Ireland. T&K serves as the tax advisor to PBI and PMI, retained directly by PBI. The lead partner at T&K is Ciarán Thornbury. T&K is not retained by C&H or by PPC (the U.S. parent). T&K's engagement is with the Irish entities. Irish legal privilege — referred to as "l

III. ATTORNEY-CLIENT PRIVILEGE — GENERAL PROTOCOLS A. Foundational Principles The attorney-client privilege is the oldest recognized privilege for confidential communications in Anglo-American jurisprudence. In the context of this engagement, the privilege protects confidential communications between PPC (the client) and C&H (its attorneys) made for the purpose of obtaining or providing legal advice in connection wit

1. Email Communications. All emails relating to the matter must include the following legend in the subject line and at the top of the email body: PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION In addition, the matter number 1018-00009 must be included in the subject line for all correspondence related to the engagement. For example, a subject line should read: "1018-00009 — PRIVILEGED AND CONFIDENTIAL —

2. Recipient Controls. Email distribution must be limited to those individuals who have a need to know and who fall within the privilege circle. On the PPC side, the privilege circle for this engagement includes the following individuals: • Marcus Whitfield, VP of Global Tax • Deborah Staines, General Counsel • Rajesh Iyer, CFO Team members must not copy or forward C&H communications to other PPC employees (including

3. Written Memoranda and Analyses. All C&H memoranda, legal analyses, strategy documents, and other written materials relating to the engagement must bear the following header on each page: PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGED / ATTORNEY WORK PRODUCT Each document must also include the matter number 1018-00009. Documents should be stored in C&H's secure document management system under the designa

4. Oral Communications. For telephone conferences and in-person meetings with PPC personnel, the C&H attorney leading the communication should confirm at the outset that (a) the communication is for the purpose of obtaining or providing legal advice, (b) only privilege-circle participants are present or on the call, and (c) the communication is intended to be confidential. If any non-privileged individuals are presen

5. Inadvertent Disclosure. Any inadvertent disclosure of privileged material to non-privileged parties — whether through misdirected email, accidental production in an IDR response, or any other means — must be reported immediately to Cross. Time is of the essence in asserting protections against inadvertent waiver. Upon notification, C&H will invoke protections under Federal Rule of Evidence 502(b), which provides t

IV. KOVEL ARRANGEMENT — WHITMORE VALUATION LLC A. Background and Legal Basis The Kovel doctrine derives from the decision of the United States Court of Appeals for the Second Circuit in United States v. Kovel, 296 F.2d 918 (2d Cir. 1961). In Kovel, the court held that the attorney-client privilege may extend to communications between an attorney's client and a non-attorney expert retained by the attorney, where the e

1. Attorney involvement in all substantive communications. All substantive communications with WVG personnel regarding the engagement must be initiated by, or conducted through, an C&H attorney (Cross, Hartwell, Simmons, or Nazari). PPC personnel — including Whitfield, Staines, and Iyer — should not communicate directly with WVG regarding the substance of the transfer pricing issues, C&H's legal strategy, or the IRS

2. Factual data transmissions. There will be occasions when PPC personnel need to provide factual data to WVG for use in its economic analyses — for example, financial records, revenue data, cost pool breakdowns, intercompany agreements, comparable licensing arrangements, and similar materials. For logistical efficiency, it may be appropriate for PPC to transmit such data directly to WVG rather than routing it throug

3. WVG deliverables. WVG's deliverables in connection with this engagement are expected to include the following: (a) Functional analysis — a detailed analysis of the functions performed, assets employed, and risks assumed by PPC and PBI in connection with their respective roles in the development, manufacture, and commercialization of PPC's pharmaceutical products. (b) Comparable Uncontrolled Transaction ("CUT") ana

4. Draft WVG reports. Draft WVG reports circulated to the C&H team for review and comment are attorney work product. The iterative process of drafting, revising, and refining WVG's reports — including C&H's comments, suggestions, and edits — reflects the mental impressions and strategic judgments of C&H attorneys and constitutes opinion work product entitled to heightened protection. Draft reports should never be sha

V. COMMUNICATIONS WITH CRESTFIELD & ASSOCIATES LLP A. Nature of Relationship Crestfield & Associates LLP ("Crestfield") is PPC's independent auditor and prepared PPC's consolidated federal income tax returns (Forms 1120) and contemporaneous transfer pricing documentation reports for tax years 2017 through 2020. The audit engagement partner is Martin Ogilvy, CPA, and the transfer pricing partner is Susan Lam, CPA. Cre

1. Treat all communications as potentially discoverable. All communications with Crestfield — whether by email, telephone, letter, or in person — should be treated as potentially discoverable by the IRS. The IRS has the authority under IRC § 7602 to issue summonses to PPC's accountants and to compel the production of accountant workpapers. The IRS may also request, through IDRs or informal channels, copies of communi

2. Frame requests as factual data requests. Requests to Crestfield for information — such as return data, audit workpapers, research and development cost pool breakdowns, transfer pricing benchmarking data, or comparable company data — should be framed as factual data requests, not as requests for legal advice or analysis. The team should not ask Crestfield to provide opinions on the defensibility of PPC's positions,

3. FIN 48 / ASC 740-10 opinion letters. C&H may be asked to provide legal opinions to Crestfield for specific limited purposes, most notably to support PPC's FIN 48 (ASC 740-10) uncertain tax position reserves relating to the transfer pricing issues under examination. PPC currently maintains uncertain tax position reserves of approximately $62.4 million in connection with the transfer pricing positions at issue. Cres

4. Primary point of contact. Simmons is the primary C&H point of contact for routine data requests to Susan Lam at Crestfield. All requests to Crestfield should be documented in the matter file, and responses from Crestfield should be reviewed for any content that might inadvertently reveal C&H legal strategy before being filed.

VI. DUAL-JURISDICTION PRIVILEGE — THORNBURY & KEOGH COORDINATION A. Nature of Relationship Thornbury & Keogh ("T&K") is an Irish tax advisory firm retained directly by PBI (and PMI) as Irish tax advisors. T&K is not retained by C&H or by PPC. The lead partner at T&K, Ciarán Thornbury, has extensive experience advising multinational pharmaceutical companies on Irish corporation tax matters, including the Knowledge Dev

1. Primary C&H contact. Leila Nazari is the primary C&H contact for coordination with T&K on Irish tax aspects of the defense. Nazari will serve as the liaison between the C&H team and T&K for all matters relating to PBI's and PMI's Irish operations, including PBI's Irish Revenue filings, Knowledge Development box claims (which provide an effective tax rate of 6.25% on qualifying intellectual property income), PBI ec

2. Common-interest or joint-defense framework. Communications between C&H and T&K concerning legal strategy should be routed through a common-interest or joint-defense framework where possible. A common-interest agreement would provide a basis for sharing certain privileged communications between the parties without waiver, on the theory that C&H (representing PPC) and T&K (representing PBI and PMI) share a common le

3. Restrictions on sharing C&H strategy. Team members must not share C&H's U.S. legal strategy memoranda, hazards-of-litigation analyses, settlement posture assessments, or other privileged work product with T&K unless specifically approved by Cross. The approval will take into account the specific content to be shared, the common-interest framework (if any), and the risk that disclosure may result in waiver of privi

4. Factual information sharing. Factual information about PBI's operations — including personnel, facilities, regulatory activities, and governance — may be shared freely with T&K, as underlying facts are not privileged. Relevant facts that may be shared include, without limitation: • PBI's headcount: 185 employees as of December 31, 2020, including Managing Director Aidan Naughton. • PBI's office presence: approxima

5. Competent authority and mutual agreement procedure. T&K may be asked to provide analysis of potential competent authority relief under Article 25 (Mutual Agreement Procedure) of the U.S.-Ireland Income Tax Treaty, including the procedures for initiating a competent authority request with the Irish Revenue Commissioners and the coordination required between the U.S. and Irish competent authorities. Any such request

6. Billing. T&K's Irish advisory fees — approximately €312,500 for the engagement period to date — are billed directly to PBI/PPC, not through C&H. C&H does not control T&K's billing or engagement terms. T&K's fees are not included in C&H's invoices to PPC.

VII. ATTORNEY WORK-PRODUCT DOCTRINE A. Scope of Protection The work-product doctrine, first recognized by the Supreme Court in Hickman v. Taylor, 329 U.S. 495 (1947), and codified in Federal Rule of Civil Procedure 26(b)(3), protects documents and tangible things prepared in anticipation of litigation or for trial by or for a party or its representative (including its attorney, consultant, surety, indemnitor, insurer

1. Fact work product. Fact work product includes document compilations, summaries of factual data prepared for litigation or defense purposes, IDR response strategy documents, document production indices, and other materials that reflect the assembling and organizing of factual information for defense purposes. Fact work product is subject to a qualified privilege: an opposing party may obtain discovery of fact work

2. Opinion work product (heightened protection). Opinion work product includes legal memoranda, strategy assessments, hazards-of-litigation analyses, mental impressions, conclusions, opinions, and legal theories of C&H attorneys. Opinion work product receives near-absolute protection under the work-product doctrine. Courts have consistently held that opinion work product is virtually undiscoverable, and the IRS canno

3. Economic analyses by WVG. WVG's economic analyses prepared at the direction of C&H counsel in anticipation of litigation are protected as work product. The analyses reflect the collaborative process between C&H attorneys and WVG economists in developing PPC's defense, and they are prepared for the purpose of enabling C&H to render informed legal advice. WVG's work product is additionally protected under the Kovel

1. Labeling. All work-product documents must be labeled with the following legend: ATTORNEY WORK PRODUCT — PREPARED IN ANTICIPATION OF LITIGATION Where a document also qualifies as an attorney-client privileged communication, it should bear both the work-product legend and the attorney-client privilege legend.

2. Storage and access controls. Draft documents — including draft Protests, draft IDR response letters, internal strategy memoranda, hazards-of-litigation analyses, and all other work-product materials — must be maintained in C&H's secure document management system under the matter number 1018-00009. Access to the matter folder should be restricted to members of the C&H engagement team. Drafts should not be circulate

3. No disclosure of drafts to the IRS. Under no circumstances should draft documents be shared with the IRS. Only final versions of documents intended for IRS production — such as final IDR response letters and final Protests — should be transmitted to the IRS. The production of a draft document to the IRS would not only waive work-product protection for the draft itself but could also provide the IRS with insight in

VIII. DOCUMENT HANDLING FOR IRS INFORMATION DOCUMENT REQUESTS (IDRs) A. General Framework The IRS examination team — led by Supervisory Revenue Agent Gerald Meskill and Lead Revenue Agent Patricia Dunleavy — will issue Information Document Requests ("IDRs") throughout the examination period. Based on the scope of the Examination (transfer pricing methodology for the CSA, royalty, and PCT across four tax years, 2017 t

1. Collection. PPC will collect responsive documents from its internal systems, files, and personnel and forward them to C&H. Marcus Whitfield serves as the primary coordinator for PPC's internal document collection efforts, and he may designate other PPC personnel to assist with collection on specific topics. Documents should be transmitted to C&H via secure file transfer (the firm's secure portal) or, for physical

2. First-level privilege review. Simmons and Nazari will conduct a first-level review of all documents collected by PPC before production to the IRS. The first-level review will identify documents that are (a) potentially privileged (attorney-client privilege, work-product doctrine, or both), (b) potentially subject to Kovel protection, (c) outside the scope of the IDR request, or (d) raise other strategic concerns.

3. Second-level review. Cross or Hartwell will conduct a second-level review of documents that implicate significant privilege or strategic concerns. This includes documents involving communications with C&H or other outside counsel, documents reflecting legal advice or strategy, documents containing mental impressions or opinion work product, and documents that may be especially sensitive from a factual perspective

4. Privilege log. A privilege log will be maintained for all documents withheld from production on privilege grounds (attorney-client privilege, work-product doctrine, or both). The privilege log will include the following information for each withheld document: • Document description (type of document, e.g., email, memorandum, spreadsheet) • Date of the document • Author(s) • Recipient(s) and, where applicable, pers

IX. COMMUNICATIONS WITH THE IRS A. General Protocol All substantive communications with the IRS — whether with Revenue Agents Gerald Meskill and Patricia Dunleavy, IRS Economist Dr. Alan Washburne, IRS Chief Counsel attorneys Franklin Rosario and Donna Hirabayashi, or any Appeals Officer assigned to the matter in the future — must be conducted by or with an C&H attorney present. This protocol applies to all forms of