Contract analysis

Section 1.1 — Taxpayer Information The taxpayer that is a party to this Agreement is identified as follows: PPC is a domestic corporation organized under the laws of the State of Delaware and is engaged in the research, development, manufacture, and commercialization of pharmaceutical products, with operations in the United States and internationally. PPC files its federal income tax returns on a calendar-year basis

Section 1.2 — Authorized Representative PPC is represented in this matter by Calderwood & Harkness LLP, a law firm with offices at 1735 Market Street, Suite 3100, Philadelphia, Pennsylvania 19103. The following individuals are authorized representatives of PPC for purposes of this examination and closing agreement, pursuant to IRS Form 2848 (Power of Attorney and Declaration of Representative), filed with the Interna

Section 1.3 — IRS Office The IRS personnel involved in this matter are identified as follows: The examination was conducted by the Large Business & International Division under Examination Team ID LB&I-NE-TP-2022-00641. Following the issuance of the 30-Day Letter and the filing of a formal protest by PPC, the case was referred to the IRS Independent Office of Appeals and assigned to Appeals Officer Noreen Castañeda i

Section 2.1 — Examination History The following sets forth the procedural history of the examination and administrative proceedings that led to this Agreement: (a) On May 16, 2022, the IRS opened an examination of PPC's federal income tax returns for TY 2017, 2018, 2019, and 2020 by issuing IRS Letter 2205-A (Notification of Examination). The examination was assigned to the Large Business & International Division und

Section 2.2 — Related Entities The intercompany transactions that are the subject of this Agreement involve the following related entities of PPC: (a) Penterra Biopharma International DAC ("PBI") — PBI is a Designated Activity Company organized under the laws of Ireland, with its registered office at 4th Floor, Claremont House, Sandyford Business Park, Dublin D18 K7T4, Ireland. PBI's Irish Tax Reference Number is 321

Section 2.3 — Issues Under Examination The examination conducted by the IRS concerned the transfer pricing methodology applied by PPC to intercompany transactions between PPC and PBI under IRC § 482 and the Treasury Regulations promulgated thereunder. Specifically, the IRS challenged the following matters: (a) Cost-Sharing Arrangement ("CSA") — Cost-Sharing Percentages and Platform Contribution Transaction ("PCT") Va

Section 2.4 — IRS Proposed Adjustments (NOPA — October 12, 2023) The Notice of Proposed Adjustment issued by the IRS examination team on October 12, 2023, proposed the following adjustments to PPC's taxable income for TY 2017 through 2020: A. CSA Cost-Sharing Ratio Adjustments The IRS proposed increasing PBI's cost-sharing percentages by approximately eight (8) to twelve (12) percentage points for each Tax Year, resu

Section 2.5 — Taxpayer's Position PPC maintained, and continues to maintain, that its transfer pricing methodologies — including the CSA cost-sharing percentages, the platform contribution transaction payment of $312,000,000, and the legacy intellectual property royalty rate of 4.5% of net sales — satisfied the arm's-length standard under IRC § 482 and the applicable Treasury Regulations, including but not limited to

Section 3.1 — Adjustment to Taxable Income The parties agree that PPC's taxable income as reported on its Forms 1120, U.S. Corporation Income Tax Returns, for TY 2017, 2018, 2019, and 2020, shall be increased by a total aggregate amount of Forty-Seven Million Six Hundred Thousand Dollars ($47,600,000), allocated among the Tax Years as set forth in Section 3.2 below. This aggregate adjustment of $47,600,000 represents

Section 3.2 — Allocation of Adjustment by Tax Year The aggregate adjustment of $47,600,000 shall be allocated among the Tax Years as follows: (a) TY 2017 (taxable year ended December 31, 2017): Increase in taxable income of Eleven Million Two Hundred Thousand Dollars ($11,200,000). (b) TY 2018 (taxable year ended December 31, 2018): Increase in taxable income of Twelve Million Four Hundred Thousand Dollars ($12,400,0

Section 3.3 — Tax Due and Payable The additional federal income tax liability resulting from the agreed adjustments to taxable income is computed as follows: (a) TY 2017: The taxable year ended December 31, 2017, is subject to the corporate income tax rate of thirty-five percent (35%) under IRC § 11, as in effect prior to the enactment of the Tax Cuts and Jobs Act of 2017 (Pub. L. 115-97). The additional tax for TY 2

Section 3.4 — Penalty Abatement The IRS agrees to abate in full the proposed penalty under IRC § 6662(e) (substantial valuation misstatement) in the amount of Fifteen Million Nine Hundred Seventy-Seven Thousand Dollars ($15,977,000). The basis for abatement of the penalty is PPC's establishment of reasonable cause and good faith under IRC § 6664(c)(1), which provides that no penalty shall be imposed under IRC § 6662

Section 3.5 — Characterization of Adjustment The aggregate adjustment of $47,600,000 set forth in Section 3.1 represents a combined resolution of the following issues identified during the examination: (a) The CSA cost-sharing percentage issue described in Section 2.3(a) above; and (b) The legacy intellectual property royalty rate issue described in Section 2.3(b) above. The settlement reflected in this Agreement rep

Section 3.6 — No Precedential Effect This Agreement relates solely to the specific matters described herein for TY 2017, 2018, 2019, and 2020. Neither the existence nor the terms of this Agreement shall constitute an admission by either party — PPC or the IRS — of the correctness or incorrectness of any position taken by either party with respect to the matters addressed herein. This Agreement shall not be cited, ref

Section 4.1 — Taxpayer's Covenants PPC hereby covenants and agrees as follows: (a) Amended Returns. PPC shall file amended federal income tax returns on Form 1120X (Amended U.S. Corporation Income Tax Return) for TY 2017, 2018, 2019, and 2020, reflecting the adjustments to taxable income set forth in Part III of this Agreement. Such amended returns shall be filed with the Internal Revenue Service within ninety (90) d

Section 4.2 — IRS Covenants The IRS hereby covenants and agrees as follows: (a) Finality. The specific matters determined in this Agreement are final and conclusive for TY 2017, 2018, 2019, and 2020, subject to the provisions of IRC § 7121 and the terms of this Agreement. The IRS shall not propose, assess, or collect any additional tax, penalty, or interest with respect to the specific matters determined herein for t

Section 4.3 — Statute of Limitations The parties acknowledge and confirm the following with respect to the applicable statutes of limitations: (a) PPC and the IRS have executed IRS Forms 872 (Consent to Extend the Time to Assess Tax) extending the statute of limitations on assessment for TY 2017 through December 31, 2024, and for TY 2018 through December 31, 2024. The normal three-year period of limitations under IRC

Section 4.4 — Competent Authority Reservation PPC expressly reserves the right to seek relief under the mutual agreement procedure ("MAP") of the Convention between the Government of the United States of America and the Government of Ireland for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and Capital Gains (the "U.S.-Ireland Income Tax Treaty"), Article 25, wi

Section 5.1 — Binding Nature This Agreement shall be final and conclusive with respect to the specific matters determined herein, pursuant to IRC § 7121 and the regulations promulgated thereunder. The agreement, upon execution by all parties, shall be binding upon PPC, its successors and assigns (whether by merger, consolidation, reorganization, or otherwise), and upon the IRS, and shall not be subject to reopening,

Section 5.2 — Severability If any provision of this Agreement, or the application thereof to any circumstance, is held invalid, illegal, or unenforceable by any court of competent jurisdiction or other governmental authority, 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. In such event, the

Section 5.3 — Entire Agreement This Agreement, including Exhibits A and B attached hereto and incorporated herein by reference, constitutes the entire agreement between PPC and the IRS with respect to the specific matters determined herein for TY 2017, 2018, 2019, and 2020. No oral statements, representations, understandings, or prior written communications — whether made during the examination, the Appeals conferenc

Section 5.4 — Governing Law This Agreement is made pursuant to, and shall be governed by and construed in accordance with, the Internal Revenue Code of 1986, as amended, the Treasury Regulations promulgated thereunder, and other applicable federal tax law. To the extent that any question of interpretation arises, such question shall be resolved by reference to the provisions of the Code, applicable regulations, and p

Section 5.5 — Amendments This Agreement may not be amended, modified, or supplemented except by a written instrument duly executed by both PPC (through an authorized officer or representative) and the IRS (through an authorized delegate of the Commissioner). No waiver of any provision of this Agreement shall be effective unless in writing and signed by the party granting such waiver.

Section 5.6 — Counterparts This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Execution and delivery of this Agreement by facsimile or electronic means (including PDF) shall be deemed valid and effective for all purposes. PART VI — SIGNATURE BLOCKS IN WITNESS WHEREOF, the undersigned have execut

Section 6.1 — Taxpayer PENTERRA PHARMACEUTICALS CORP. By: ________ Name: Marcus Whitfield Title: Vice President, Global Tax Date: ________ Address: 2200 Independence Boulevard Princeton Junction, NJ 08550 EIN: 22-3741856

Section 6.2 — Internal Revenue Service INTERNAL REVENUE SERVICE — INDEPENDENT OFFICE OF APPEALS By: ________ Name: Noreen Castañeda Title: Appeals Officer Date: ________ INTERNAL REVENUE SERVICE — COMMISSIONER'S DELEGATE By: ________ Name: ________ Title: Area Director, IRS Independent Office of Appeals (or other authorized delegate of the Commissioner pursuant to IRC § 7121 and Delegation Order 8-5) Date: ________

Section 6.3 — Attestation of Authorized Representative The undersigned, as authorized representative of Penterra Pharmaceuticals Corp. pursuant to IRS Form 2848 (Power of Attorney and Declaration of Representative) filed with the Internal Revenue Service on June 8, 2022, hereby attests that this Agreement has been reviewed and approved by the Taxpayer, and that the signatory identified in Section 6.1 above is duly au

1. The applicable corporate tax rate for TY 2017 is 35%, reflecting the rate in effect under IRC § 11 prior to the enactment of the Tax Cuts and Jobs Act of 2017 (Pub. L. 115-97). The applicable corporate tax rate for TY 2018, TY 2019, and TY 2020 is 21%, reflecting the rate in effect under IRC § 11 as amended by the Tax Cuts and Jobs Act.

2. The aggregate additional federal income tax of $11,564,000 represents the sum of the individual year computations set forth above. The parties will confirm the exact aggregate amount prior to finalization, taking into account any applicable tax rate nuances, credits, or other items that may affect the final computation.

3. Interest on underpayment shall be computed by the IRS at the applicable federal underpayment rate under IRC § 6621, compounded daily, from the original due date of each return (April 15 of the year following the close of each Tax Year, or such other date as applicable) to the date of payment. The estimated aggregate interest of approximately $2,840,000 is preliminary and subject to adjustment based on the actual d

4. The proposed penalty under IRC § 6662(e) of $15,977,000 has been abated in full pursuant to Section 3.4 of this Agreement. No penalty is assessed or payable with respect to any Tax Year covered by this Agreement. EXHIBIT B — SUMMARY OF RESOLVED ISSUES The following is a summary of the issues that were under examination and that have been resolved by this Agreement: Issue 1: CSA Cost-Sharing Percentages Description