Contract analysis

I. Executive Summary This memorandum analyzes whether the Notice of Proposed Adjustment ("NOPA") issued by the Internal Revenue Service on October 12, 2023, proposing net adjustments of $380,400,000 across tax years 2017 through 2020, triggers any reporting obligations, event-of-default provisions, or other covenant implications under Penterra Pharmaceuticals Corp.'s ("PPC") $1.5 billion revolving credit facility (th

II. Background A. The Credit Facility PPC is the borrower under a $1.5 billion senior unsecured revolving credit facility entered into with Hargrove National Bank, N.A. as administrative agent and a syndicate of lenders (the "Credit Facility"). Hargrove National Bank, N.A. is headquartered at 100 Federal Street, Boston, Massachusetts 02110. The designated relationship manager for the PPC account is Christine Bellucci

III. Analysis of Credit Agreement Tax Covenants The following analysis examines the principal categories of tax-related provisions typically found in a senior unsecured revolving credit facility of the type maintained by PPC, and assesses the implications of the NOPA for each category. As noted above, this analysis is based on our understanding of the general structure and content of such provisions; specific conclus

IV. Interaction with SEC Disclosure Obligations While a comprehensive analysis of PPC's disclosure obligations under the federal securities laws is beyond the scope of this memorandum and is addressed in a separate SEC Disclosure Analysis Memorandum being prepared concurrently, a brief cross-reference is warranted here because of the potential overlap between PPC's SEC disclosure obligations and its notification obli

V. Recommended Actions Based on the analysis set forth above, I recommend the following actions: A. Immediate Notification to Hargrove PPC should provide written notice to Christine Bellucci, Senior Vice President and Relationship Manager, Hargrove National Bank, N.A., at 100 Federal Street, Boston, Massachusetts 02110, of the NOPA as a Material Tax Event under the Credit Agreement. The notice should be delivered in

VI. Conclusion The IRS's NOPA, proposing net adjustments of $380,400,000 across tax years 2017 through 2020, triggers a notification obligation to Hargrove National Bank, N.A. under the Material Tax Event provision of the Credit Agreement. PPC should provide prompt written notice to Christine Bellucci, Hargrove's relationship manager, describing the NOPA and PPC's response, and should offer to provide additional info

VII. Appendices (Referenced) The following appendices are referenced in this memorandum and will be circulated under separate cover: Appendix A: Summary of IRS Proposed Adjustments — $380.4M Breakdown by Issue and Tax Year Appendix B: Proposed Worst-Case and Expected-Case Financial Impact Scenarios Appendix C: Key Credit Agreement Provisions to Be Reviewed Specific section references will be inserted upon receipt of