1018-00001 · Client 1018 · Lock-Up Waiver

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RIDGELINE SECURITIES LLC 383 Madison Avenue New York, NY 10017

September 29, 2023

Penterra Pharmaceuticals Corp. 400 Meridian Parkway, Suite 1200 Princeton, NJ 08540

Attention: David Orenstein, General Counsel & Corporate Secretary

With a copy to:

Calderwood & Harkness LLP One Liberty Plaza, 52nd Floor New York, NY 10006

Attention: Jennifer Kwon

Re: Consent to Early Release of Lock-Up Restrictions — Selling Stockholder Secondary Offering of Common Stock of Penterra Pharmaceuticals Corp.

Dear Mr. Orenstein:

Ridgeline Securities LLC ("Ridgeline") refers to the lock-up agreements (the "Lock-Up Agreements") dated as of April 17, 2023, entered into by certain stockholders of Penterra Pharmaceuticals Corp., a Delaware corporation (the "Company" or "PPC"), in connection with the Company's initial public offering (the "IPO") of 24,000,000 shares of common stock, par value $0.001 per share ("Common Stock"), which priced and closed on April 17, 2023. The Lock-Up Agreements were entered into in favor of Ridgeline Securities LLC, Broadmark Capital Inc. ("Broadmark"), and Morningstar Zanthor & Co. ("Morningstar Zanthor" and, together with Ridgeline and Broadmark, the "Lead Underwriters"), as the lead underwriters of the IPO. Pursuant to their terms, the Lock-Up Agreements impose restrictions on the sale, transfer, pledge, hedging, or other disposition (directly or indirectly) of shares of Common Stock of PPC, or any securities convertible into or exercisable or exchangeable for Common Stock, for a period of 180 days following the closing date of the IPO, with such restricted period scheduled to expire on October 14, 2023 (the "Lock-Up Period"). Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Lock-Up Agreements.

Ridgeline acknowledges receipt of the letter dated September 18, 2023, from PPC (the "Waiver Request"), requesting that Ridgeline, together with Broadmark and Morningstar Zanthor, consent to the early release of the lock-up restrictions applicable to the following selling stockholders (collectively, the "Selling Stockholders"), with respect to the number of shares of Common Stock set forth opposite each such Selling Stockholder's name below:

The early release of the lock-up restrictions described in the Waiver Request is requested to be effective as of October 12, 2023, which is two (2) calendar days prior to the natural expiration of the Lock-Up Period on October 14, 2023, solely to permit the Selling Stockholders to sell shares of Common Stock in a registered selling-stockholder secondary offering (the "Secondary Offering") as described more fully below. The Waiver Request represents that the early release of the lock-up restrictions is necessary to facilitate the pricing, execution of the underwriting agreement, and settlement of the Secondary Offering on the anticipated timetable, which contemplates a pricing date of October 12, 2023 and a closing date of October 17, 2023.

The Secondary Offering is to be conducted as a shelf takedown under the Company's effective Registration Statement on Form S-3 (File No. 333-274851), which was initially filed with the Securities and Exchange Commission (the "SEC") on July 14, 2023, and was declared effective by the SEC on August 22, 2023. A preliminary prospectus supplement relating to the Secondary Offering is expected to be filed with the SEC pursuant to Rule 424(b) under the Securities Act of 1933, as amended (the "Securities Act"), on or about the date hereof or shortly thereafter. The Secondary Offering will be underwritten by Ridgeline Securities LLC, acting as lead left book-running manager, Broadmark Capital Inc., acting as joint book-running manager, and Linden Groves & Co. and Harborview Partners LLC, each acting as co-managers. The Company will receive no proceeds from the Secondary Offering; all net proceeds from the sale of shares of Common Stock in the Secondary Offering, after deducting applicable underwriting discounts, commissions, and offering expenses, will be received solely by the Selling Stockholders.

In consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Ridgeline hereby provides this consent on the terms and subject to the conditions set forth below.

Consent and Early Release

Ridgeline hereby consents to the early release of the lock-up restrictions set forth in the Lock-Up Agreements with respect to, and solely with respect to, the shares of Common Stock of PPC to be sold by the Selling Stockholders in the Secondary Offering, including any shares of Common Stock that may be sold by the Selling Stockholders pursuant to the exercise by the underwriters of the over-allotment option granted to them in connection with the Secondary Offering (up to an aggregate of 937,500 additional shares of Common Stock). This consent shall be effective as of October 12, 2023 (the "Effective Date"), which is the anticipated pricing date and the date on which the underwriting agreement for the Secondary Offering (the "Underwriting Agreement") is expected to be signed by the parties thereto. For the avoidance of doubt, the maximum aggregate number of shares of Common Stock released from lock-up restrictions pursuant to this consent shall not exceed 7,187,500 shares (consisting of 6,250,000 base shares plus 937,500 over-allotment shares), allocated among the Selling Stockholders in the respective amounts set forth in the table above.

Scope Limitation

This consent applies solely to the shares of Common Stock identified herein and solely in connection with the Secondary Offering as described above. Except as expressly set forth in this consent letter, the lock-up restrictions under the Lock-Up Agreements remain in full force and effect with respect to (a) all other shares of Common Stock and other securities held by each of the Selling Stockholders and (b) all shares of Common Stock and other securities held by all other persons and entities that are parties to Lock-Up Agreements entered into in connection with the IPO. Without limiting the generality of the foregoing, any shares of Common Stock that are subject to the underwriters' over-allotment option in connection with the Secondary Offering but are not ultimately purchased by the underwriters upon exercise (in whole or in part) of such over-allotment option, and any shares of Common Stock that are otherwise not sold in the Secondary Offering for any reason, shall remain subject to the Lock-Up Agreements and the restrictions contained therein until the natural expiration of the Lock-Up Period on October 14, 2023. Nothing in this consent shall be construed to release, modify, or waive any lock-up restrictions with respect to any shares of Common Stock or other securities other than those specifically identified herein.

Waiver of Advance Notice Requirement

Ridgeline acknowledges that Section 4(b) of each Lock-Up Agreement contains a customary provision requiring that, in the event the Lead Underwriters determine to grant a waiver or early release of the lock-up restrictions with respect to any stockholder, no fewer than fourteen (14) calendar days' advance written notice shall be provided to the Company and to the affected stockholder(s) prior to the effectiveness of such waiver or early release (the "Advance Notice Requirement"). Ridgeline hereby waives the Advance Notice Requirement with respect to this consent, given that (i) the Effective Date of October 12, 2023 falls only two (2) calendar days prior to the natural expiration of the Lock-Up Period on October 14, 2023, thereby rendering the customary fourteen (14)-day advance notice period impracticable, (ii) the Company itself has requested this waiver as set forth in the Waiver Request, (iii) each of the Selling Stockholders has been informed of and has affirmatively requested this early release, and (iv) the purpose of the early release is to facilitate the orderly execution and settlement of the Secondary Offering on the contemplated timetable.

Condition — New Lock-Up Agreements

This consent is expressly conditioned upon each of the Selling Stockholders entering into a new lock-up agreement (each, a "New Lock-Up Agreement"), in form and substance satisfactory to Ridgeline and Broadmark, in connection with the Secondary Offering. Each New Lock-Up Agreement shall restrict the sale, transfer, pledge, hedging, or other disposition (directly or indirectly) of any shares of Common Stock retained by the applicable Selling Stockholder following the closing of the Secondary Offering (including any shares that were subject to the Lock-Up Agreements but were not sold in the Secondary Offering) for a period of ninety (90) days following the closing of the Secondary Offering. Based on the anticipated closing date of October 17, 2023, such new lock-up period is expected to expire on January 15, 2024. The New Lock-Up Agreements shall be entered into in favor of Ridgeline Securities LLC and Broadmark Capital Inc., as representatives of the several underwriters in the Secondary Offering. This consent shall be null and void ab initio in the event that any Selling Stockholder fails to execute and deliver its respective New Lock-Up Agreement on or prior to the execution and delivery of the Underwriting Agreement.

No Other Waivers or Modifications

Except as expressly set forth in this consent letter, the Lock-Up Agreements remain unmodified and in full force and effect in accordance with their respective terms. Nothing contained herein shall constitute, or be deemed to constitute, a waiver, release, or modification of any other term, provision, condition, covenant, or restriction of the Lock-Up Agreements, whether with respect to the Selling Stockholders or any other person or entity subject to Lock-Up Agreements entered into in connection with the IPO. This consent shall not be construed as establishing a custom, course of dealing, or precedent with respect to any future request for the waiver, release, or modification of the Lock-Up Agreements or any similar agreements, and Ridgeline expressly reserves all of its rights under the Lock-Up Agreements in all other respects.

Governing Law

This consent letter shall be governed by and construed 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. The foregoing is consistent with the governing law provisions set forth in Section 7 of each of the Lock-Up Agreements.

Counterparts

This consent letter may be executed in one or more counterparts (including by facsimile or portable document format (PDF) transmission), each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page of this consent letter by facsimile or electronic transmission (including PDF) shall be effective as delivery of a manually executed counterpart hereof.

Please indicate PPC's acknowledgment of the terms and conditions set forth in this consent letter by countersigning a copy of this letter in the space provided below and returning it to the undersigned at your earliest convenience.

We appreciate PPC's cooperation in this matter and look forward to a successful execution of the Secondary Offering.

Very truly yours,

RIDGELINE SECURITIES LLC

By: ________

Name: Jonathan Pryce-Hall

Title: Managing Director

Date: September 29, 2023

ACKNOWLEDGED AND AGREED:

PENTERRA PHARMACEUTICALS CORP.

By: ________

Name: David Orenstein

Title: General Counsel & Corporate Secretary

Date: ________

cc (via electronic mail and overnight courier):

Broadmark Capital Inc. 200 Park Avenue New York, NY 10166

Attention: Samuel Okonkwo

Morningstar Zanthor & Co. 600 Lexington Avenue New York, NY 10022

Attention: Diane Chaudhary

Caldwell, Pearce & Strauss LLP 1251 Avenue of the Americas, 40th Floor New York, NY 10020

Attention: Margaret Hui

Whitfield & Garza LLP 590 Madison Avenue, 28th Floor New York, NY 10022

Attention: Patricia Velázquez

Selling Stockholder	Base Offering Shares	Over-Allotment Option Shares	Maximum Total Shares
Dr. Elena Castellano	3,000,000	450,000	3,450,000
Dr. Riccardo Castellano	2,500,000	375,000	2,875,000
Dr. Marco Castellano	500,000	75,000	575,000
Castellano Family Holdings LLC	250,000	37,500	287,500
Total	6,250,000	937,500	7,187,500

RIDGELINE SECURITIES LLC 383 Madison Avenue New York, NY 10017
September 29, 2023
Penterra Pharmaceuticals Corp. 400 Meridian Parkway, Suite 1200 Princeton, NJ 08540
Attention: David Orenstein, General Counsel & Corporate Secretary
With a copy to:
Calderwood & Harkness LLP One Liberty Plaza, 52nd Floor New York, NY 10006
Attention: Jennifer Kwon
Re: Consent to Early Release of Lock-Up Restrictions — Selling Stockholder Secondary Offering of Common Stock of Penterra Pharmaceuticals Corp.
Dear Mr. Orenstein:
Ridgeline Securities LLC ("Ridgeline") refers to the lock-up agreements (the "Lock-Up Agreements") dated as of April 17, 2023, entered into by certain stockholders of Penterra Pharmaceuticals Corp., a Delaware corporation (the "Company" or "PPC"), in connection with the Company's initial public offering (the "IPO") of 24,000,000 shares of common stock, par value $0.001 per share ("Common Stock"), which priced and closed on April 17, 2023. The Lock-Up Agreements were entered into in favor of Ridgeline Securities LLC, Broadmark Capital Inc. ("Broadmark"), and Morningstar Zanthor & Co. ("Morningstar Zanthor" and, together with Ridgeline and Broadmark, the "Lead Underwriters"), as the lead underwriters of the IPO. Pursuant to their terms, the Lock-Up Agreements impose restrictions on the sale, transfer, pledge, hedging, or other disposition (directly or indirectly) of shares of Common Stock of PPC, or any securities convertible into or exercisable or exchangeable for Common Stock, for a period of 180 days following the closing date of the IPO, with such restricted period scheduled to expire on October 14, 2023 (the "Lock-Up Period"). Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Lock-Up Agreements.
Ridgeline acknowledges receipt of the letter dated September 18, 2023, from PPC (the "Waiver Request"), requesting that Ridgeline, together with Broadmark and Morningstar Zanthor, consent to the early release of the lock-up restrictions applicable to the following selling stockholders (collectively, the "Selling Stockholders"), with respect to the number of shares of Common Stock set forth opposite each such Selling Stockholder's name below:
The early release of the lock-up restrictions described in the Waiver Request is requested to be effective as of October 12, 2023, which is two (2) calendar days prior to the natural expiration of the Lock-Up Period on October 14, 2023, solely to permit the Selling Stockholders to sell shares of Common Stock in a registered selling-stockholder secondary offering (the "Secondary Offering") as described more fully below. The Waiver Request represents that the early release of the lock-up restrictions is necessary to facilitate the pricing, execution of the underwriting agreement, and settlement of the Secondary Offering on the anticipated timetable, which contemplates a pricing date of October 12, 2023 and a closing date of October 17, 2023.
The Secondary Offering is to be conducted as a shelf takedown under the Company's effective Registration Statement on Form S-3 (File No. 333-274851), which was initially filed with the Securities and Exchange Commission (the "SEC") on July 14, 2023, and was declared effective by the SEC on August 22, 2023. A preliminary prospectus supplement relating to the Secondary Offering is expected to be filed with the SEC pursuant to Rule 424(b) under the Securities Act of 1933, as amended (the "Securities Act"), on or about the date hereof or shortly thereafter. The Secondary Offering will be underwritten by Ridgeline Securities LLC, acting as lead left book-running manager, Broadmark Capital Inc., acting as joint book-running manager, and Linden Groves & Co. and Harborview Partners LLC, each acting as co-managers. The Company will receive no proceeds from the Secondary Offering; all net proceeds from the sale of shares of Common Stock in the Secondary Offering, after deducting applicable underwriting discounts, commissions, and offering expenses, will be received solely by the Selling Stockholders.
In consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Ridgeline hereby provides this consent on the terms and subject to the conditions set forth below.
Consent and Early Release
Ridgeline hereby consents to the early release of the lock-up restrictions set forth in the Lock-Up Agreements with respect to, and solely with respect to, the shares of Common Stock of PPC to be sold by the Selling Stockholders in the Secondary Offering, including any shares of Common Stock that may be sold by the Selling Stockholders pursuant to the exercise by the underwriters of the over-allotment option granted to them in connection with the Secondary Offering (up to an aggregate of 937,500 additional shares of Common Stock). This consent shall be effective as of October 12, 2023 (the "Effective Date"), which is the anticipated pricing date and the date on which the underwriting agreement for the Secondary Offering (the "Underwriting Agreement") is expected to be signed by the parties thereto. For the avoidance of doubt, the maximum aggregate number of shares of Common Stock released from lock-up restrictions pursuant to this consent shall not exceed 7,187,500 shares (consisting of 6,250,000 base shares plus 937,500 over-allotment shares), allocated among the Selling Stockholders in the respective amounts set forth in the table above.
Scope Limitation
This consent applies solely to the shares of Common Stock identified herein and solely in connection with the Secondary Offering as described above. Except as expressly set forth in this consent letter, the lock-up restrictions under the Lock-Up Agreements remain in full force and effect with respect to (a) all other shares of Common Stock and other securities held by each of the Selling Stockholders and (b) all shares of Common Stock and other securities held by all other persons and entities that are parties to Lock-Up Agreements entered into in connection with the IPO. Without limiting the generality of the foregoing, any shares of Common Stock that are subject to the underwriters' over-allotment option in connection with the Secondary Offering but are not ultimately purchased by the underwriters upon exercise (in whole or in part) of such over-allotment option, and any shares of Common Stock that are otherwise not sold in the Secondary Offering for any reason, shall remain subject to the Lock-Up Agreements and the restrictions contained therein until the natural expiration of the Lock-Up Period on October 14, 2023. Nothing in this consent shall be construed to release, modify, or waive any lock-up restrictions with respect to any shares of Common Stock or other securities other than those specifically identified herein.
Waiver of Advance Notice Requirement
Ridgeline acknowledges that Section 4(b) of each Lock-Up Agreement contains a customary provision requiring that, in the event the Lead Underwriters determine to grant a waiver or early release of the lock-up restrictions with respect to any stockholder, no fewer than fourteen (14) calendar days' advance written notice shall be provided to the Company and to the affected stockholder(s) prior to the effectiveness of such waiver or early release (the "Advance Notice Requirement"). Ridgeline hereby waives the Advance Notice Requirement with respect to this consent, given that (i) the Effective Date of October 12, 2023 falls only two (2) calendar days prior to the natural expiration of the Lock-Up Period on October 14, 2023, thereby rendering the customary fourteen (14)-day advance notice period impracticable, (ii) the Company itself has requested this waiver as set forth in the Waiver Request, (iii) each of the Selling Stockholders has been informed of and has affirmatively requested this early release, and (iv) the purpose of the early release is to facilitate the orderly execution and settlement of the Secondary Offering on the contemplated timetable.
Condition — New Lock-Up Agreements
This consent is expressly conditioned upon each of the Selling Stockholders entering into a new lock-up agreement (each, a "New Lock-Up Agreement"), in form and substance satisfactory to Ridgeline and Broadmark, in connection with the Secondary Offering. Each New Lock-Up Agreement shall restrict the sale, transfer, pledge, hedging, or other disposition (directly or indirectly) of any shares of Common Stock retained by the applicable Selling Stockholder following the closing of the Secondary Offering (including any shares that were subject to the Lock-Up Agreements but were not sold in the Secondary Offering) for a period of ninety (90) days following the closing of the Secondary Offering. Based on the anticipated closing date of October 17, 2023, such new lock-up period is expected to expire on January 15, 2024. The New Lock-Up Agreements shall be entered into in favor of Ridgeline Securities LLC and Broadmark Capital Inc., as representatives of the several underwriters in the Secondary Offering. This consent shall be null and void ab initio in the event that any Selling Stockholder fails to execute and deliver its respective New Lock-Up Agreement on or prior to the execution and delivery of the Underwriting Agreement.
No Other Waivers or Modifications
Except as expressly set forth in this consent letter, the Lock-Up Agreements remain unmodified and in full force and effect in accordance with their respective terms. Nothing contained herein shall constitute, or be deemed to constitute, a waiver, release, or modification of any other term, provision, condition, covenant, or restriction of the Lock-Up Agreements, whether with respect to the Selling Stockholders or any other person or entity subject to Lock-Up Agreements entered into in connection with the IPO. This consent shall not be construed as establishing a custom, course of dealing, or precedent with respect to any future request for the waiver, release, or modification of the Lock-Up Agreements or any similar agreements, and Ridgeline expressly reserves all of its rights under the Lock-Up Agreements in all other respects.
Governing Law
This consent letter shall be governed by and construed 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. The foregoing is consistent with the governing law provisions set forth in Section 7 of each of the Lock-Up Agreements.
Counterparts
This consent letter may be executed in one or more counterparts (including by facsimile or portable document format (PDF) transmission), each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page of this consent letter by facsimile or electronic transmission (including PDF) shall be effective as delivery of a manually executed counterpart hereof.
Please indicate PPC's acknowledgment of the terms and conditions set forth in this consent letter by countersigning a copy of this letter in the space provided below and returning it to the undersigned at your earliest convenience.
We appreciate PPC's cooperation in this matter and look forward to a successful execution of the Secondary Offering.
Very truly yours,
RIDGELINE SECURITIES LLC
By: ________
Name: Jonathan Pryce-Hall
Title: Managing Director
Date: September 29, 2023
ACKNOWLEDGED AND AGREED:
PENTERRA PHARMACEUTICALS CORP.
By: ________
Name: David Orenstein
Title: General Counsel & Corporate Secretary
Date: ________
cc (via electronic mail and overnight courier):
Broadmark Capital Inc. 200 Park Avenue New York, NY 10166
Attention: Samuel Okonkwo
Morningstar Zanthor & Co. 600 Lexington Avenue New York, NY 10022
Attention: Diane Chaudhary
Caldwell, Pearce & Strauss LLP 1251 Avenue of the Americas, 40th Floor New York, NY 10020
Attention: Margaret Hui
Whitfield & Garza LLP 590 Madison Avenue, 28th Floor New York, NY 10022
Attention: Patricia Velázquez
Selling Stockholder | Base Offering Shares | Over-Allotment Option Shares | Maximum Total Shares
Dr. Elena Castellano | 3,000,000 | 450,000 | 3,450,000
Dr. Riccardo Castellano | 2,500,000 | 375,000 | 2,875,000
Dr. Marco Castellano | 500,000 | 75,000 | 575,000
Castellano Family Holdings LLC | 250,000 | 37,500 | 287,500
Total | 6,250,000 | 937,500 | 7,187,500

RIDGELINE SECURITIES LLC 383 Madison Avenue New York, NY 10017

RIDGELINE SECURITIES LLC

ACKNOWLEDGED AND AGREED:

PENTERRA PHARMACEUTICALS CORP.

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