1018-00001 · Client 1018 · Underwriting Agreement & Ancillary

selling-stockholder-poa-custody.docx DOCUMENT Capital Markets

33 / 35 ← → ✕

POWER OF ATTORNEY AND CUSTODY AGREEMENT

In Connection with the Registered Secondary Offering of Shares of Common Stock of Penterra Pharmaceuticals Corp.

Dated as of October 12, 2023

POWER OF ATTORNEY AND CUSTODY AGREEMENT

This POWER OF ATTORNEY AND CUSTODY AGREEMENT (this "Agreement") is made and entered into as of October 12, 2023, by and among:

(1) Each of the undersigned selling stockholders identified on the signature pages hereto (collectively, the "Selling Stockholders" and each individually, a "Selling Stockholder"):

(a) Dr. Elena Castellano, an individual;

(b) Dr. Riccardo Castellano, an individual;

(d) Castellano Family Holdings LLC, a Delaware limited liability company, having an address at c/o Penterra Pharmaceuticals Corp., 400 Meridian Parkway, Suite 1200, Princeton, New Jersey 08540 (Employer Identification Number: 87-2165438) ("CFH LLC" and, together with Dr. Elena Castellano, Dr. Riccardo Castellano, and Dr. Marco Castellano, the "Selling Stockholders");

(2) David Orenstein, General Counsel & Corporate Secretary of Penterra Pharmaceuticals Corp., in his capacity as attorney-in-fact for the Selling Stockholders (the "Attorney-in-Fact"); and

(3) Pinnacle Trust & Transfer Co., a New York corporation, having its principal office at 1 Ashbury Asset Advisors Plaza, 30th Floor, New York, New York 10004 (the "Custodian").

The Selling Stockholders, the Attorney-in-Fact, and the Custodian are referred to herein collectively as the "parties" and individually as a "party."

RECITALS

WHEREAS, Penterra Pharmaceuticals Corp. ("PPC" or the "Company") is a corporation duly organized and existing under the laws of the State of Delaware (Employer Identification Number: 82-4039571), with its principal executive offices located at 400 Meridian Parkway, Suite 1200, Princeton, New Jersey 08540, and with its shares of common stock, par value $0.001 per share (the "Common Stock"), listed and traded on The Nasdaq Global Select Market under the ticker symbol "PNTR";

WHEREAS, PPC has filed with the Securities and Exchange Commission (the "SEC") a shelf registration statement on Form S-3 (File No. 333-274851) (as amended or supplemented, the "Registration Statement"), which Registration Statement was declared effective by the SEC on August 22, 2023, and a prospectus supplement (the "Prospectus Supplement") is being filed by the Company pursuant to Rule 424(b)(5) under the Securities Act of 1933, as amended (the "Securities Act"), in connection with the offering described below;

WHEREAS, the Selling Stockholders desire to sell an aggregate of 6,250,000 shares of Common Stock (the "Base Shares") in a registered selling-stockholder secondary offering (the "Offering") at a public offering price of $41.60 per share, resulting in aggregate gross proceeds of $260,000,000;

WHEREAS, in connection with the Offering, the Selling Stockholders have granted to the underwriters named below a 30-day option (the "Over-Allotment Option") to purchase up to an additional 937,500 shares of Common Stock (the "Option Shares" and, together with the Base Shares, the "Shares") solely to cover over-allotments, if any, which Over-Allotment Option is exercisable on or before November 11, 2023 (being 30 calendar days following the date of the pricing of the Offering);

WHEREAS, the Selling Stockholders have entered into, or will concurrently herewith enter into, an Underwriting Agreement dated as of October 12, 2023 (the "Underwriting Agreement") with Ridgeline Securities LLC, as lead left book-running manager, Broadmark Capital Inc., as joint book-running manager, and Linden Groves & Co. and Harborview Partners LLC, as co-managers (collectively, the "Underwriters"), relating to the purchase by the Underwriters of the Shares from the Selling Stockholders;

WHEREAS, the total underwriting discount applicable to the Offering is 2.50% of the public offering price, or $1.04 per share, yielding net proceeds to the Selling Stockholders of $40.56 per share (or $253,500,000 in the aggregate for the Base Shares, prior to giving effect to any exercise of the Over-Allotment Option);

WHEREAS, the Selling Stockholders desire to appoint David Orenstein as their true and lawful attorney-in-fact with full power of substitution and resubstitution to act on behalf of the Selling Stockholders in connection with the Offering, and to appoint Pinnacle Trust & Transfer Co. as custodian of the Shares to facilitate the delivery and settlement of the Shares in the Offering;

WHEREAS, settlement of the Base Shares is expected to occur on October 17, 2023 (the "Closing Date"), with any over-allotment closing, if the Over-Allotment Option is exercised in whole or in part, expected to occur on or about November 16, 2023 (the "Over-Allotment Closing Date"); and

WHEREAS, the Over-Allotment Option exercise deadline is November 11, 2023, being 30 calendar days following the date of pricing of the Offering.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

INDIVIDUAL SHARE ALLOCATIONS

The number of Shares to be sold by each Selling Stockholder in the Offering, together with each Selling Stockholder's pre-offering and post-offering share ownership of Common Stock, is as set forth in the following table:

The public offering price per Share is $41.60. The underwriting discount is 2.50%, or $1.04 per share, resulting in net proceeds to the Selling Stockholders of $40.56 per share. The aggregate net proceeds to the Selling Stockholders from the sale of the Base Shares are $253,500,000, and if the Over-Allotment Option is exercised in full, aggregate net proceeds from the sale of the Option Shares are an additional $38,025,000 (937,500 shares × $40.56), for total aggregate net proceeds of $291,525,000. All Offering expenses other than the underwriting discount (including SEC registration fees, Nasdaq listing fees, printing expenses, legal fees, accounting fees, and transfer agent fees, estimated in the aggregate at $765,000) shall be borne by the Company.

ARTICLE I — APPOINTMENT OF ATTORNEY-IN-FACT

Section 1.1 — Appointment

Each Selling Stockholder hereby irrevocably constitutes and appoints David Orenstein, General Counsel & Corporate Secretary of Penterra Pharmaceuticals Corp., as such Selling Stockholder's true and lawful attorney-in-fact (the "Attorney-in-Fact"), with full power of substitution and resubstitution, to act in such Selling Stockholder's name, place, and stead in connection with and for the purpose of consummating the Offering and the transactions contemplated by the Underwriting Agreement, as more fully described in Section 1.2 below. This appointment is coupled with an interest and shall be irrevocable during the term of this Agreement, which shall continue until the later of (a) the Closing Date and (b) the date on which the Over-Allotment Option has been fully exercised or has expired without exercise (November 11, 2023), subject to the provisions of Article VI hereof regarding termination.

Section 1.2 — Powers Granted

Each Selling Stockholder hereby grants to the Attorney-in-Fact full power and authority to do and perform, on behalf of and in the name of such Selling Stockholder, each and every act and thing necessary, appropriate, or desirable to consummate the Offering and the transactions contemplated by the Underwriting Agreement, including, without limitation, the power and authority to:

(a) execute, deliver, acknowledge, and perform the Underwriting Agreement and any amendments, supplements, or modifications thereto, in each case on behalf of such Selling Stockholder, in such form and substance as the Attorney-in-Fact shall deem appropriate in his reasonable discretion;

(b) execute, deliver, and file (or authorize the filing of) the Prospectus Supplement and any amendments or supplements thereto, and any free writing prospectus relating to the Offering (including, without limitation, the pricing term sheet filed pursuant to Rule 433 under the Securities Act), in each case to the extent relating to the information concerning the Selling Stockholders or the Shares being sold by the Selling Stockholders;

(c) execute, deliver, and perform any lock-up agreements in connection with the Offering on behalf of such Selling Stockholder, including, without limitation, the 90-day lock-up agreement with respect to retained shares of Common Stock running from the Closing Date (October 17, 2023) through and including January 15, 2024, in favor of Ridgeline Securities LLC and Broadmark Capital Inc., as representatives of the Underwriters, substantially in the form required by the Underwriting Agreement;

(d) execute, deliver, and perform selling stockholder questionnaires, representation letters, opinions, indemnification agreements, certificates, and such other documents and instruments as may be required under or in connection with the Underwriting Agreement;

(e) execute and deliver any directions, instructions, authorizations, or requests to the Custodian, to PPC, or to PPC's transfer agent, Pinnacle Trust & Transfer Co. (in its capacity as transfer agent), as may be necessary or appropriate to effect the delivery of the Shares in book-entry form through the facilities of The Depository Trust Company ("DTC") in connection with the closing of the Offering and any exercise of the Over-Allotment Option;

(f) execute and file (or cause to be filed) on behalf of such Selling Stockholder any reports on Form 4 or other filings required under Section 16 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), with respect to the disposition of the Shares, and to execute and deliver any power of attorney required by the SEC in connection with such filings;

(g) negotiate, agree upon, and settle any claims, disputes, or adjustments arising out of or in connection with the Offering and the transactions contemplated by the Underwriting Agreement, to the extent relating to the Selling Stockholders' obligations thereunder; and

(h) execute, deliver, and perform any other documents, instruments, agreements, certificates, receipts, or papers, and to take any other actions, as the Attorney-in-Fact may deem reasonably necessary, appropriate, or desirable to consummate the Offering and the transactions contemplated by the Underwriting Agreement and this Agreement.

Section 1.3 — Scope and Limitation

Notwithstanding the broad powers granted in Section 1.2, the authority of the Attorney-in-Fact is subject to the following express limitations:

(a) The Attorney-in-Fact shall act solely in connection with the Offering and shall not have authority to bind, commit, or obligate any Selling Stockholder with respect to any matter unrelated to the Offering, the Underwriting Agreement, or the transactions contemplated hereby or thereby.

(b) The Attorney-in-Fact shall not sell or agree to sell, or authorize the sale of, more than the number of Base Shares and Option Shares set forth opposite such Selling Stockholder's name in the table set forth above. Specifically, the Attorney-in-Fact is authorized to sell on behalf of each Selling Stockholder only the number of Base Shares and, if the Over-Allotment Option is exercised, only the number of Option Shares allocated to such Selling Stockholder, in each case as specified in such table.

(c) The Attorney-in-Fact shall not modify, amend, or agree to any modification or amendment of the per-share public offering price of $41.60 per share or the per-share underwriting discount of $1.04 per share (being 2.50% of the public offering price) without the prior written consent of each Selling Stockholder affected by such modification or amendment. For the avoidance of doubt, the Attorney-in-Fact is not authorized to agree to any reduction in the net proceeds per share payable to any Selling Stockholder below $40.56 without such Selling Stockholder's prior written consent.

(d) Nothing herein shall authorize the Attorney-in-Fact to make any representation or warranty on behalf of any Selling Stockholder that is materially different from the representations and warranties set forth in Article III of this Agreement or in the Underwriting Agreement.

Section 1.4 — Ratification

Each Selling Stockholder hereby ratifies and confirms, and agrees to ratify and confirm, all acts and things that the Attorney-in-Fact may lawfully do or cause to be done by virtue of this power of attorney. Each Selling Stockholder acknowledges that third parties dealing with the Attorney-in-Fact are entitled to rely on this power of attorney as conferring the authority set forth herein without the need to make further inquiry or obtain additional confirmation from any Selling Stockholder.

ARTICLE II — APPOINTMENT OF CUSTODIAN

Section 2.1 — Appointment of Custodian

Each Selling Stockholder hereby appoints Pinnacle Trust & Transfer Co. as custodian (the "Custodian") of the Shares to be sold by such Selling Stockholder in the Offering. The Custodian hereby accepts such appointment on the terms and conditions set forth in this Agreement. The Custodian shall hold the Shares (in book-entry form through DTC or its nominee, Cede & Co.) for the account of the Selling Stockholders pending delivery of the Shares to the Underwriters at the Closing and, if applicable, at the Over-Allotment Closing. The Custodian shall segregate and maintain the Shares in a separate custodial account or accounts for the benefit of the Selling Stockholders and shall not commingle the Shares with any other securities held by the Custodian for its own account or for the account of any other person.

Section 2.2 — Delivery of Shares to Custodian

Each Selling Stockholder shall cause such Selling Stockholder's respective Shares (being the number of Base Shares set forth opposite such Selling Stockholder's name in the table above and, to the extent the Over-Allotment Option is exercised, the applicable number of Option Shares) to be delivered or made available in book-entry form to the Custodian through DTC no later than one (1) business day prior to the Closing Date (i.e., no later than October 16, 2023). The Common Stock of PPC is identified by CUSIP Number 70831X 10 5. Each Selling Stockholder shall take all actions and execute all documents as may be necessary to ensure that the Shares are in proper form for delivery through the facilities of DTC and that the Shares are eligible for book-entry transfer through DTC. The Custodian shall, promptly upon receipt of the Shares, confirm DTC eligibility of the Shares and shall notify the Attorney-in-Fact of such confirmation. If any Shares are not DTC-eligible or are subject to any stop-transfer order, legend, or other restriction that would impair delivery through DTC, the Custodian shall promptly notify the Attorney-in-Fact and the affected Selling Stockholder, and such Selling Stockholder shall take immediate corrective action to remove any such impediment.

Section 2.3 — Custodian's Duties

The Custodian shall perform the following duties in connection with the Offering:

(a) Delivery of Base Shares. Upon receipt of written instructions from the Attorney-in-Fact (or upon receipt of instructions delivered in accordance with the Underwriting Agreement and the direction letter to the transfer agent in the form attached hereto as Exhibit B), the Custodian shall deliver the Base Shares through DTC to or for the account of the several Underwriters on the Closing Date (October 17, 2023) against payment by the Underwriters of the aggregate net purchase price for the Base Shares in immediately available funds.

(b) Delivery of Option Shares. If the Over-Allotment Option is exercised by the Underwriters, in whole or in part, on or before November 11, 2023, the Custodian shall, upon receipt of written instructions from the Attorney-in-Fact, deliver the applicable number of Option Shares through DTC to or for the account of the several Underwriters on the Over-Allotment Closing Date (expected to be November 16, 2023, or such other date as specified in the Underwriting Agreement) against payment of the aggregate net purchase price for the Option Shares in immediately available funds. In the event the Over-Allotment Option is exercised in part, the Option Shares to be delivered shall be allocated among the Selling Stockholders in proportion to the number of Option Shares allocated to each Selling Stockholder in the table set forth above, or as otherwise specified in the written instructions of the Attorney-in-Fact.

(c) Receipt and Disbursement of Net Proceeds. The Custodian shall receive the aggregate net proceeds from the sale of the Shares on behalf of each Selling Stockholder and shall disburse such net proceeds to each Selling Stockholder in accordance with the wire transfer instructions provided by each Selling Stockholder as set forth in Exhibit A hereto, or as otherwise delivered in writing to the Custodian by the respective Selling Stockholder or by the Attorney-in-Fact on behalf of such Selling Stockholder.

Section 2.4 — Disbursement of Net Proceeds

The net proceeds per share payable to the Selling Stockholders shall be $40.56 (being the public offering price of $41.60 per share less the underwriting discount of $1.04 per share). The aggregate net proceeds from the sale of the Base Shares shall total $253,500,000, to be allocated and disbursed to the Selling Stockholders as follows:

In the event the Over-Allotment Option is exercised in full, the additional net proceeds of $38,025,000 from the sale of 937,500 Option Shares shall be allocated among the Selling Stockholders as follows: Dr. Elena Castellano — $18,252,000 (450,000 shares × $40.56); Dr. Riccardo Castellano — $15,210,000 (375,000 shares × $40.56); Dr. Marco Castellano — $3,042,000 (75,000 shares × $40.56); and Castellano Family Holdings LLC — $1,521,000 (37,500 shares × $40.56).

The Custodian shall disburse the net proceeds to each Selling Stockholder by wire transfer of immediately available funds to the bank accounts designated by each Selling Stockholder in the wire transfer instructions set forth in Exhibit A hereto. Such wire instructions shall be provided separately by each Selling Stockholder and shall be held by the Custodian on a confidential basis. The Custodian shall effect each wire transfer promptly upon receipt of the net proceeds from the Underwriters, and in any event no later than one (1) business day following receipt. The Custodian shall provide written confirmation of each wire transfer to the Attorney-in-Fact and to the applicable Selling Stockholder.

Section 2.5 — Custodian Compensation and Expenses

The Custodian shall be entitled to reasonable compensation for its services hereunder in accordance with its standard fee schedule as in effect from time to time, a copy of which has been provided to the Selling Stockholders. Such compensation shall be borne by the Selling Stockholders, allocated among them in proportion to their respective Base Shares sold in the Offering unless otherwise agreed in writing among the Selling Stockholders. The Company shall bear all Offering expenses other than the underwriting discount (which shall be borne by the Selling Stockholders), including, without limitation, SEC registration fees, Financial Industry Regulatory Authority fees, Nasdaq listing fees, printing and distribution expenses, fees and expenses of legal counsel and accountants, transfer agent fees, and other customary offering expenses, which Offering expenses are estimated in the aggregate at approximately $765,000.

Section 2.6 — Standard of Care; Limitation of Liability

The Custodian shall exercise reasonable care in the custody, safekeeping, and delivery of the Shares and in the receipt and disbursement of the net proceeds, applying the same degree of care as it would exercise with respect to its own property of a similar nature. The Custodian shall not be liable for any action taken or omitted to be taken in good faith in the performance of its duties hereunder, except to the extent that any loss, damage, or liability directly results from the Custodian's own gross negligence or willful misconduct. Without limiting the generality of the foregoing, the Custodian shall have no liability for (a) any delays in the delivery of the Shares or the disbursement of net proceeds caused by DTC, the Federal Reserve wire system, or any other third-party system or intermediary, (b) any action taken by the Custodian in reliance upon instructions delivered by the Attorney-in-Fact that are within the scope of the Attorney-in-Fact's authority under this Agreement, or (c) the genuineness or validity of any document, certificate, or instrument provided to the Custodian in connection herewith. The Custodian may rely upon instructions delivered by the Attorney-in-Fact without independent verification, provided that such instructions are received in writing (including by electronic mail or facsimile) and appear on their face to have been executed or transmitted by or on behalf of the Attorney-in-Fact.

ARTICLE III — REPRESENTATIONS AND WARRANTIES OF SELLING STOCKHOLDERS

Each Selling Stockholder, severally and not jointly, hereby represents and warrants to the Attorney-in-Fact and the Custodian as of the date hereof and as of the Closing Date (and, if applicable, as of the Over-Allotment Closing Date) as follows:

Section 3.1 — Ownership

Each Selling Stockholder is the sole beneficial and record owner of the number of shares of Common Stock of PPC set forth opposite such Selling Stockholder's name in the table set forth above under the heading "Pre-Offering Shares Held," free and clear of all liens, pledges, charges, security interests, encumbrances, equities, options, preemptive rights, rights of first refusal, claims, restrictions on transfer, and adverse claims of any kind or nature whatsoever (collectively, "Liens"), other than (a) restrictions on transfer under applicable federal and state securities laws, (b) the lock-up agreements described in Section 3.4 below (which are being waived with respect to the Shares as described therein), and (c) the new lock-up agreement described in Section 3.5 below. Upon delivery of the Shares to the Underwriters through DTC in accordance with the Underwriting Agreement and this Agreement, the Underwriters will acquire good and valid title to the Shares, free and clear of all Liens. As of the date hereof, the combined pre-offering holdings of the Castellano family (including shares held by each of the individual Selling Stockholders and CFH LLC) aggregate 40,100,000 shares, representing approximately 33.4% of the 120,000,000 shares of Common Stock currently outstanding.

Section 3.2 — Authority

Each individual Selling Stockholder has full legal capacity and all requisite right, power, and authority to execute and deliver this Agreement, to sell, transfer, and deliver the Shares in the Offering, and to perform all of such Selling Stockholder's obligations hereunder and under the Underwriting Agreement. CFH LLC has been duly formed and is validly existing and in good standing as a limited liability company under the laws of the State of Delaware, and has full limited liability company power and authority to execute and deliver this Agreement, to sell, transfer, and deliver the Shares in the Offering, and to perform all of its obligations hereunder and under the Underwriting Agreement. The execution and delivery of this Agreement and the sale of the Shares have been duly authorized by all necessary action on the part of CFH LLC, including the approval of its managing member. This Agreement, when executed and delivered by each Selling Stockholder, constitutes a valid and binding obligation of such Selling Stockholder, enforceable against such Selling Stockholder in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and similar laws affecting creditors' rights and remedies generally and to general principles of equity.

Section 3.3 — No Conflicts

The execution and delivery of this Agreement by each Selling Stockholder, the sale and delivery of the Shares by each Selling Stockholder in the Offering, and the consummation of the transactions contemplated hereby and by the Underwriting Agreement do not and will not (a) conflict with, result in a breach or violation of, or constitute a default (or an event that with notice or lapse of time, or both, would constitute a default) under any law, statute, rule, regulation, order, judgment, injunction, or decree of any court, governmental authority, or regulatory body applicable to such Selling Stockholder or by which any of such Selling Stockholder's properties or assets (including the Shares) are bound, (b) conflict with, result in a breach or violation of, or constitute a default under the organizational documents of CFH LLC (in the case of CFH LLC) or any agreement, indenture, lease, license, contract, or other instrument to which such Selling Stockholder is a party or by which such Selling Stockholder's Shares are bound, or (c) result in the creation or imposition of any Lien upon any of the Shares.

Section 3.4 — Lock-Up Waiver

Each Selling Stockholder acknowledges that the shares of Common Stock held by such Selling Stockholder were subject to lock-up agreements (the "IPO Lock-Up Agreements") entered into in connection with the initial public offering of the Common Stock on April 17, 2023, pursuant to which each Selling Stockholder agreed not to offer, sell, contract to sell, pledge, grant any option to purchase, make any short sale, or otherwise dispose of, directly or indirectly, any shares of Common Stock (or any securities convertible into or exercisable or exchangeable for Common Stock) for a period of 180 days following April 17, 2023. The lock-up period under the IPO Lock-Up Agreements expires on October 14, 2023. Each Selling Stockholder represents and warrants that lock-up waivers have been obtained from all three underwriters of the Company's initial public offering — Ridgeline Securities LLC, Broadmark Capital Inc., and Morningstar Zanthor & Co. — each effective as of October 12, 2023, solely with respect to the Shares being sold in the Offering and the execution and delivery of this Agreement and the Underwriting Agreement. Each Selling Stockholder further represents and warrants that such Selling Stockholder is not in violation of any IPO Lock-Up Agreement and that the sale of the Shares hereunder is permissible following the effectiveness of such lock-up waivers.

Section 3.5 — New Lock-Up

Each Selling Stockholder acknowledges and agrees that, in connection with the Offering, such Selling Stockholder will enter into, or has concurrently herewith entered into, a new lock-up agreement (the "New Lock-Up Agreement") with Ridgeline Securities LLC and Broadmark Capital Inc., as representatives of the Underwriters, restricting the offer, sale, contract to sell, pledge, grant of any option to purchase, or other disposition, directly or indirectly, of any shares of Common Stock (or any securities convertible into or exercisable or exchangeable for Common Stock) retained by such Selling Stockholder after the Offering (other than the Shares sold in the Offering and customary exceptions specified therein), for the period commencing on the Closing Date (October 17, 2023) and ending on January 15, 2024 (a period of 90 days) (the "New Lock-Up Period"). Each Selling Stockholder agrees to comply fully with the terms and conditions of the New Lock-Up Agreement.

Section 3.6 — Accuracy of Information

Each Selling Stockholder represents and warrants that all information furnished or to be furnished by such Selling Stockholder (or on such Selling Stockholder's behalf) expressly for inclusion or incorporation by reference in the Registration Statement, the Prospectus Supplement, any free writing prospectus, or any other offering document relating to the Offering is true, correct, and complete in all material respects and does not and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

ARTICLE IV — REPRESENTATIONS AND WARRANTIES OF ATTORNEY-IN-FACT

Section 4.1 — Acceptance

David Orenstein hereby accepts his appointment as Attorney-in-Fact under this Agreement and agrees to act in accordance with the terms and conditions of this Agreement and to exercise the powers granted herein solely for the purposes and within the limitations set forth herein. The Attorney-in-Fact acknowledges that he has read and understands the terms of this Agreement and the Underwriting Agreement, and that he is familiar with the Offering and the transactions contemplated hereby and thereby.

Section 4.2 — Fiduciary Duty

The Attorney-in-Fact shall act in good faith and in the best interests of the Selling Stockholders in carrying out his duties and exercising the powers granted to him under this Agreement. The Attorney-in-Fact shall exercise the degree of care, diligence, and skill that a reasonably prudent person would exercise in comparable circumstances. The Attorney-in-Fact shall promptly communicate to each Selling Stockholder any material information or developments relating to the Offering that come to his attention in the performance of his duties hereunder.

Section 4.3 — No Personal Liability

The Attorney-in-Fact shall not be personally liable for any loss, damage, liability, cost, or expense suffered or incurred by any Selling Stockholder as a result of any action taken or omitted to be taken in good faith in the performance of his duties hereunder, except to the extent that such loss, damage, liability, cost, or expense directly results from the Attorney-in-Fact's own gross negligence, willful misconduct, or fraud. The Attorney-in-Fact shall not be required to take any action that he reasonably believes to be unlawful or contrary to the terms of this Agreement, the Underwriting Agreement, or applicable law.

ARTICLE V — INDEMNIFICATION

Section 5.1 — Indemnification of Attorney-in-Fact

Each Selling Stockholder, severally and not jointly (in proportion to such Selling Stockholder's respective Base Shares as a percentage of the total Base Shares), agrees to indemnify, defend, and hold harmless the Attorney-in-Fact from and against any and all losses, claims, damages, liabilities, costs, and expenses (including, without limitation, reasonable attorneys' fees and expenses incurred in connection with any action, suit, proceeding, or investigation, whether or not resulting in any liability) (collectively, "Losses") arising out of, relating to, or resulting from the performance or non-performance of the Attorney-in-Fact's duties under this Agreement, except to the extent that such Losses are determined by a court of competent jurisdiction in a final, non-appealable judgment to have resulted from the Attorney-in-Fact's own gross negligence, willful misconduct, or fraud. The obligations of the Selling Stockholders under this Section 5.1 shall survive termination of this Agreement and shall be in addition to any other rights of indemnification to which the Attorney-in-Fact may be entitled under any other agreement, the organizational documents of the Company, applicable law, or otherwise.

Section 5.2 — Indemnification of Custodian

Each Selling Stockholder, severally and not jointly (in proportion to such Selling Stockholder's respective Base Shares as a percentage of the total Base Shares), agrees to indemnify, defend, and hold harmless the Custodian and its officers, directors, employees, and agents from and against any and all Losses arising out of, relating to, or resulting from the Custodian's performance or non-performance of its duties under this Agreement, except to the extent that such Losses are determined by a court of competent jurisdiction in a final, non-appealable judgment to have resulted from the Custodian's own gross negligence or willful misconduct. The obligations of the Selling Stockholders under this Section 5.2 shall survive termination of this Agreement.

ARTICLE VI — TERM AND TERMINATION

Section 6.1 — Effective Date

This Agreement shall become effective immediately upon execution and delivery by all parties hereto on October 12, 2023.

Section 6.2 — Termination

This Agreement shall terminate automatically, without any action required on the part of any party, upon the latest to occur of:

(a) the completion of the Closing, including the delivery of all Base Shares to the Underwriters and the receipt and full disbursement of all net proceeds to the Selling Stockholders in accordance with Section 2.4;

(b) the expiration of the Over-Allotment Option (November 11, 2023) without exercise, or, if the Over-Allotment Option is exercised in whole or in part, the completion of the Over-Allotment Closing (expected on or about November 16, 2023), including the delivery of all Option Shares to the Underwriters and the receipt and full disbursement of all net proceeds from the sale of such Option Shares to the Selling Stockholders; and

(c) the resolution of any pending matters relating to the Offering that require action by the Attorney-in-Fact or the Custodian under this Agreement, including, without limitation, the filing of any Section 16 reports, the delivery of any post-closing certificates or documents, and the settlement of any post-closing adjustments.

Notwithstanding the foregoing, the indemnification provisions of Article V, the limitation of liability provisions of Section 2.6 and Section 4.3, and the miscellaneous provisions of Article VII shall survive the termination of this Agreement and shall continue in full force and effect thereafter.

Section 6.3 — Revocability

This power of attorney and custody agreement is irrevocable during its term. No Selling Stockholder may revoke, rescind, or terminate this Agreement, or any of the powers granted herein, without the prior written consent of the Underwriters (acting through Ridgeline Securities LLC as representative of the Underwriters). Any attempted revocation in violation of this Section 6.3 shall be null, void, and of no force or effect.

ARTICLE VII — MISCELLANEOUS

Section 7.1 — Governing Law

This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to principles of conflicts of law that would require the application of the laws of any other jurisdiction. Each party hereby irrevocably submits to the exclusive jurisdiction of the courts of the State of Delaware and the United States District Court for the District of Delaware for the purpose of any action, suit, or proceeding arising out of or relating to this Agreement, and each party hereby waives, and agrees not to assert in any such action, suit, or proceeding, any claim that it is not personally subject to the jurisdiction of such courts, that such action, suit, or proceeding is brought in an inconvenient forum, or that the venue of such action, suit, or proceeding is improper.

Section 7.2 — 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 when (a) delivered personally, (b) sent by registered or certified mail, return receipt requested, postage prepaid, (c) sent by nationally recognized overnight courier service, or (d) transmitted by electronic mail (with confirmation of receipt), to the parties at the following addresses (or at such other addresses as the parties may designate from time to time by written notice given in accordance with this Section):

To the Attorney-in-Fact:

David Orenstein General Counsel & Corporate Secretary Penterra Pharmaceuticals Corp. 400 Meridian Parkway, Suite 1200 Princeton, New Jersey 08540

To the Custodian:

Pinnacle Trust & Transfer Co. 1 Ashbury Asset Advisors Plaza, 30th Floor New York, New York 10004

Attention: Corporate Trust Department

To the Individual Selling Stockholders:

At the addresses currently on file with the Company (which addresses are incorporated herein by reference and shall be treated as confidential).

To Castellano Family Holdings LLC:

c/o Penterra Pharmaceuticals Corp. 400 Meridian Parkway, Suite 1200 Princeton, New Jersey 08540

Attention: Dr. Marco Castellano, Managing Member

With a copy (which shall not constitute notice) to counsel for the Selling Stockholders:

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

Attention: Patricia Velázquez, Esq.

With a copy (which shall not constitute notice) to counsel for the Company:

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

Attention: Jennifer Kwon, Esq.

Section 7.3 — Successors and Assigns

This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors, heirs, executors, administrators, legal representatives, and permitted assigns. No party may assign any of its rights or delegate any of its obligations under this Agreement without the prior written consent of the other parties hereto, and any attempted assignment or delegation without such consent shall be null, void, and of no force or effect.

Section 7.4 — Entire Agreement

This Agreement, together with the Underwriting Agreement, the New Lock-Up Agreements, and the other documents and instruments executed and delivered in connection with the Offering, constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations, representations, and warranties, whether written or oral, with respect to such subject matter.

Section 7.5 — Amendments and Waivers

This Agreement may not be amended, modified, supplemented, or waived except by a written instrument duly executed by all parties hereto. No waiver of any provision of this Agreement shall operate as a waiver of any other provision, and no single or partial exercise of any right or remedy under this Agreement shall preclude any other or further exercise of such right or remedy or the exercise of any other right or remedy.

Section 7.6 — Counterparts

This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which, when taken together, shall constitute one and the same instrument. Signatures delivered by facsimile transmission or by electronic transmission in portable document format (PDF) or other electronic imaging means shall be deemed to be original signatures for all purposes and shall have the same force and effect as original signatures.

Section 7.7 — Severability

If any provision of this Agreement is held to be invalid, illegal, or unenforceable by any court of competent jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement, and this Agreement shall be construed as if such invalid, illegal, or unenforceable provision had never been contained herein, provided that the remaining provisions of this Agreement, as so construed, shall continue to effectuate the fundamental purposes of this Agreement to the fullest extent permitted by applicable law.

Section 7.8 — Headings

The article and section headings contained in this Agreement are inserted for convenience of reference only and shall not in any way affect the meaning, construction, or interpretation of this Agreement.

[Signature Pages Follow]

SIGNATURE PAGES TO POWER OF ATTORNEY AND CUSTODY AGREEMENT

IN WITNESS WHEREOF, the undersigned have duly executed this Power of Attorney and Custody Agreement as of the date first written above.

SELLING STOCKHOLDERS — INDIVIDUAL SIGNATURES

SELLING STOCKHOLDER:

DR. ELENA CASTELLANO

________________________________________

Dr. Elena Castellano, individually

Date: October 12, 2023

Number of Base Shares to be Sold: 3,000,000 Number of Option Shares: 450,000

SELLING STOCKHOLDER:

DR. RICCARDO CASTELLANO

________________________________________

Dr. Riccardo Castellano, individually

Date: October 12, 2023

Number of Base Shares to be Sold: 2,500,000 Number of Option Shares: 375,000

SELLING STOCKHOLDER:

DR. MARCO CASTELLANO

________________________________________

Dr. Marco Castellano, individually

Date: October 12, 2023

Number of Base Shares to be Sold: 500,000 Number of Option Shares: 75,000

SELLING STOCKHOLDER — ENTITY SIGNATURE

CASTELLANO FAMILY HOLDINGS LLC, a Delaware limited liability company

By: ________

Name: Dr. Marco Castellano

Title: Managing Member

Date: October 12, 2023

Number of Base Shares to be Sold: 250,000 Number of Option Shares: 37,500

ATTORNEY-IN-FACT ACCEPTANCE

ATTORNEY-IN-FACT:

________________________________________

David Orenstein General Counsel & Corporate Secretary Penterra Pharmaceuticals Corp.

Accepted and agreed to in his capacity as Attorney-in-Fact

Date: October 12, 2023

CUSTODIAN ACCEPTANCE

PINNACLE TRUST & TRANSFER CO., a New York corporation

By: ________

Name: ________

Title: ________

Date: October 12, 2023

EXHIBIT A

WIRE TRANSFER INSTRUCTIONS

(Confidential)

The following wire transfer instructions are provided by each Selling Stockholder for the purpose of disbursement of net proceeds from the Offering by the Custodian. These instructions shall be held by the Custodian on a strictly confidential basis and shall not be disclosed to any person other than the Attorney-in-Fact without the prior written consent of the applicable Selling Stockholder, except as may be required by applicable law or regulation.

1. Dr. Elena Castellano

Bank Name: [To be provided separately] ABA/Routing Number: [To be provided separately] Account Number: [To be provided separately] Account Name: [To be provided separately] Reference: Penterra Pharmaceuticals Corp. — Secondary Offering Proceeds Contact: [To be provided separately]

2. Dr. Riccardo Castellano

3. Dr. Marco Castellano

4. Castellano Family Holdings LLC

Note: Each Selling Stockholder shall provide complete wire transfer instructions to the Custodian no later than two (2) business days prior to the Closing Date. Wire instructions may be updated by written notice (including electronic mail) from the applicable Selling Stockholder or the Attorney-in-Fact on behalf of such Selling Stockholder, provided that any such updated instructions shall be accompanied by a callback verification to a pre-designated telephone number for the applicable Selling Stockholder.

EXHIBIT B

FORM OF DIRECTION LETTER TO CUSTODIAN

[Date]

Pinnacle Trust & Transfer Co. 1 Ashbury Asset Advisors Plaza, 30th Floor New York, New York 10004

Attention: Corporate Trust Department

Re: Direction Letter — Delivery of Shares and Disbursement of Proceeds in Connection with the Secondary Offering of Common Stock of Penterra Pharmaceuticals Corp.

Ladies and Gentlemen:

Reference is made to the Power of Attorney and Custody Agreement dated as of October 12, 2023 (the "POA/Custody Agreement"), by and among the Selling Stockholders named therein, the undersigned as Attorney-in-Fact, and Pinnacle Trust & Transfer Co. as Custodian, and the Underwriting Agreement dated as of October 12, 2023 (the "Underwriting Agreement"), by and among the Selling Stockholders and the Underwriters named therein. Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the POA/Custody Agreement.

Pursuant to Section 2.3 of the POA/Custody Agreement and acting in my capacity as the Attorney-in-Fact for the Selling Stockholders, I hereby direct you as follows:

1. Delivery of Base Shares. Please deliver, on October 17, 2023 (the Closing Date), through the facilities of The Depository Trust Company ("DTC"), the following number of shares of common stock of Penterra Pharmaceuticals Corp. (CUSIP: 70831X 10 5) to or for the accounts of the several Underwriters, against payment of the aggregate net purchase price in immediately available funds:

POWER OF ATTORNEY AND CUSTODY AGREEMENT
In Connection with the Registered Secondary Offering of Shares of Common Stock of Penterra Pharmaceuticals Corp.
Dated as of October 12, 2023
POWER OF ATTORNEY AND CUSTODY AGREEMENT
This POWER OF ATTORNEY AND CUSTODY AGREEMENT (this "Agreement") is made and entered into as of October 12, 2023, by and among:
(1) Each of the undersigned selling stockholders identified on the signature pages hereto (collectively, the "Selling Stockholders" and each individually, a "Selling Stockholder"):
(a) Dr. Elena Castellano, an individual;
(b) Dr. Riccardo Castellano, an individual;
(c) Dr. Marco Castellano, an individual; and
(d) Castellano Family Holdings LLC, a Delaware limited liability company, having an address at c/o Penterra Pharmaceuticals Corp., 400 Meridian Parkway, Suite 1200, Princeton, New Jersey 08540 (Employer Identification Number: 87-2165438) ("CFH LLC" and, together with Dr. Elena Castellano, Dr. Riccardo Castellano, and Dr. Marco Castellano, the "Selling Stockholders");
(2) David Orenstein, General Counsel & Corporate Secretary of Penterra Pharmaceuticals Corp., in his capacity as attorney-in-fact for the Selling Stockholders (the "Attorney-in-Fact"); and
(3) Pinnacle Trust & Transfer Co., a New York corporation, having its principal office at 1 Ashbury Asset Advisors Plaza, 30th Floor, New York, New York 10004 (the "Custodian").
The Selling Stockholders, the Attorney-in-Fact, and the Custodian are referred to herein collectively as the "parties" and individually as a "party."
RECITALS
WHEREAS, Penterra Pharmaceuticals Corp. ("PPC" or the "Company") is a corporation duly organized and existing under the laws of the State of Delaware (Employer Identification Number: 82-4039571), with its principal executive offices located at 400 Meridian Parkway, Suite 1200, Princeton, New Jersey 08540, and with its shares of common stock, par value $0.001 per share (the "Common Stock"), listed and traded on The Nasdaq Global Select Market under the ticker symbol "PNTR";
WHEREAS, PPC has filed with the Securities and Exchange Commission (the "SEC") a shelf registration statement on Form S-3 (File No. 333-274851) (as amended or supplemented, the "Registration Statement"), which Registration Statement was declared effective by the SEC on August 22, 2023, and a prospectus supplement (the "Prospectus Supplement") is being filed by the Company pursuant to Rule 424(b)(5) under the Securities Act of 1933, as amended (the "Securities Act"), in connection with the offering described below;
WHEREAS, the Selling Stockholders desire to sell an aggregate of 6,250,000 shares of Common Stock (the "Base Shares") in a registered selling-stockholder secondary offering (the "Offering") at a public offering price of $41.60 per share, resulting in aggregate gross proceeds of $260,000,000;
WHEREAS, in connection with the Offering, the Selling Stockholders have granted to the underwriters named below a 30-day option (the "Over-Allotment Option") to purchase up to an additional 937,500 shares of Common Stock (the "Option Shares" and, together with the Base Shares, the "Shares") solely to cover over-allotments, if any, which Over-Allotment Option is exercisable on or before November 11, 2023 (being 30 calendar days following the date of the pricing of the Offering);
WHEREAS, the Selling Stockholders have entered into, or will concurrently herewith enter into, an Underwriting Agreement dated as of October 12, 2023 (the "Underwriting Agreement") with Ridgeline Securities LLC, as lead left book-running manager, Broadmark Capital Inc., as joint book-running manager, and Linden Groves & Co. and Harborview Partners LLC, as co-managers (collectively, the "Underwriters"), relating to the purchase by the Underwriters of the Shares from the Selling Stockholders;
WHEREAS, the total underwriting discount applicable to the Offering is 2.50% of the public offering price, or $1.04 per share, yielding net proceeds to the Selling Stockholders of $40.56 per share (or $253,500,000 in the aggregate for the Base Shares, prior to giving effect to any exercise of the Over-Allotment Option);
WHEREAS, the Selling Stockholders desire to appoint David Orenstein as their true and lawful attorney-in-fact with full power of substitution and resubstitution to act on behalf of the Selling Stockholders in connection with the Offering, and to appoint Pinnacle Trust & Transfer Co. as custodian of the Shares to facilitate the delivery and settlement of the Shares in the Offering;
WHEREAS, settlement of the Base Shares is expected to occur on October 17, 2023 (the "Closing Date"), with any over-allotment closing, if the Over-Allotment Option is exercised in whole or in part, expected to occur on or about November 16, 2023 (the "Over-Allotment Closing Date"); and
WHEREAS, the Over-Allotment Option exercise deadline is November 11, 2023, being 30 calendar days following the date of pricing of the Offering.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:
INDIVIDUAL SHARE ALLOCATIONS
The number of Shares to be sold by each Selling Stockholder in the Offering, together with each Selling Stockholder's pre-offering and post-offering share ownership of Common Stock, is as set forth in the following table:
The public offering price per Share is $41.60. The underwriting discount is 2.50%, or $1.04 per share, resulting in net proceeds to the Selling Stockholders of $40.56 per share. The aggregate net proceeds to the Selling Stockholders from the sale of the Base Shares are $253,500,000, and if the Over-Allotment Option is exercised in full, aggregate net proceeds from the sale of the Option Shares are an additional $38,025,000 (937,500 shares × $40.56), for total aggregate net proceeds of $291,525,000. All Offering expenses other than the underwriting discount (including SEC registration fees, Nasdaq listing fees, printing expenses, legal fees, accounting fees, and transfer agent fees, estimated in the aggregate at $765,000) shall be borne by the Company.
ARTICLE I — APPOINTMENT OF ATTORNEY-IN-FACT
Section 1.1 — Appointment
Each Selling Stockholder hereby irrevocably constitutes and appoints David Orenstein, General Counsel & Corporate Secretary of Penterra Pharmaceuticals Corp., as such Selling Stockholder's true and lawful attorney-in-fact (the "Attorney-in-Fact"), with full power of substitution and resubstitution, to act in such Selling Stockholder's name, place, and stead in connection with and for the purpose of consummating the Offering and the transactions contemplated by the Underwriting Agreement, as more fully described in Section 1.2 below. This appointment is coupled with an interest and shall be irrevocable during the term of this Agreement, which shall continue until the later of (a) the Closing Date and (b) the date on which the Over-Allotment Option has been fully exercised or has expired without exercise (November 11, 2023), subject to the provisions of Article VI hereof regarding termination.
Section 1.2 — Powers Granted
Each Selling Stockholder hereby grants to the Attorney-in-Fact full power and authority to do and perform, on behalf of and in the name of such Selling Stockholder, each and every act and thing necessary, appropriate, or desirable to consummate the Offering and the transactions contemplated by the Underwriting Agreement, including, without limitation, the power and authority to:
(a) execute, deliver, acknowledge, and perform the Underwriting Agreement and any amendments, supplements, or modifications thereto, in each case on behalf of such Selling Stockholder, in such form and substance as the Attorney-in-Fact shall deem appropriate in his reasonable discretion;
(b) execute, deliver, and file (or authorize the filing of) the Prospectus Supplement and any amendments or supplements thereto, and any free writing prospectus relating to the Offering (including, without limitation, the pricing term sheet filed pursuant to Rule 433 under the Securities Act), in each case to the extent relating to the information concerning the Selling Stockholders or the Shares being sold by the Selling Stockholders;
(c) execute, deliver, and perform any lock-up agreements in connection with the Offering on behalf of such Selling Stockholder, including, without limitation, the 90-day lock-up agreement with respect to retained shares of Common Stock running from the Closing Date (October 17, 2023) through and including January 15, 2024, in favor of Ridgeline Securities LLC and Broadmark Capital Inc., as representatives of the Underwriters, substantially in the form required by the Underwriting Agreement;
(d) execute, deliver, and perform selling stockholder questionnaires, representation letters, opinions, indemnification agreements, certificates, and such other documents and instruments as may be required under or in connection with the Underwriting Agreement;
(e) execute and deliver any directions, instructions, authorizations, or requests to the Custodian, to PPC, or to PPC's transfer agent, Pinnacle Trust & Transfer Co. (in its capacity as transfer agent), as may be necessary or appropriate to effect the delivery of the Shares in book-entry form through the facilities of The Depository Trust Company ("DTC") in connection with the closing of the Offering and any exercise of the Over-Allotment Option;
(f) execute and file (or cause to be filed) on behalf of such Selling Stockholder any reports on Form 4 or other filings required under Section 16 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), with respect to the disposition of the Shares, and to execute and deliver any power of attorney required by the SEC in connection with such filings;
(g) negotiate, agree upon, and settle any claims, disputes, or adjustments arising out of or in connection with the Offering and the transactions contemplated by the Underwriting Agreement, to the extent relating to the Selling Stockholders' obligations thereunder; and
(h) execute, deliver, and perform any other documents, instruments, agreements, certificates, receipts, or papers, and to take any other actions, as the Attorney-in-Fact may deem reasonably necessary, appropriate, or desirable to consummate the Offering and the transactions contemplated by the Underwriting Agreement and this Agreement.
Section 1.3 — Scope and Limitation
Notwithstanding the broad powers granted in Section 1.2, the authority of the Attorney-in-Fact is subject to the following express limitations:
(a) The Attorney-in-Fact shall act solely in connection with the Offering and shall not have authority to bind, commit, or obligate any Selling Stockholder with respect to any matter unrelated to the Offering, the Underwriting Agreement, or the transactions contemplated hereby or thereby.
(b) The Attorney-in-Fact shall not sell or agree to sell, or authorize the sale of, more than the number of Base Shares and Option Shares set forth opposite such Selling Stockholder's name in the table set forth above. Specifically, the Attorney-in-Fact is authorized to sell on behalf of each Selling Stockholder only the number of Base Shares and, if the Over-Allotment Option is exercised, only the number of Option Shares allocated to such Selling Stockholder, in each case as specified in such table.
(c) The Attorney-in-Fact shall not modify, amend, or agree to any modification or amendment of the per-share public offering price of $41.60 per share or the per-share underwriting discount of $1.04 per share (being 2.50% of the public offering price) without the prior written consent of each Selling Stockholder affected by such modification or amendment. For the avoidance of doubt, the Attorney-in-Fact is not authorized to agree to any reduction in the net proceeds per share payable to any Selling Stockholder below $40.56 without such Selling Stockholder's prior written consent.
(d) Nothing herein shall authorize the Attorney-in-Fact to make any representation or warranty on behalf of any Selling Stockholder that is materially different from the representations and warranties set forth in Article III of this Agreement or in the Underwriting Agreement.
Section 1.4 — Ratification
Each Selling Stockholder hereby ratifies and confirms, and agrees to ratify and confirm, all acts and things that the Attorney-in-Fact may lawfully do or cause to be done by virtue of this power of attorney. Each Selling Stockholder acknowledges that third parties dealing with the Attorney-in-Fact are entitled to rely on this power of attorney as conferring the authority set forth herein without the need to make further inquiry or obtain additional confirmation from any Selling Stockholder.
ARTICLE II — APPOINTMENT OF CUSTODIAN
Section 2.1 — Appointment of Custodian
Each Selling Stockholder hereby appoints Pinnacle Trust & Transfer Co. as custodian (the "Custodian") of the Shares to be sold by such Selling Stockholder in the Offering. The Custodian hereby accepts such appointment on the terms and conditions set forth in this Agreement. The Custodian shall hold the Shares (in book-entry form through DTC or its nominee, Cede & Co.) for the account of the Selling Stockholders pending delivery of the Shares to the Underwriters at the Closing and, if applicable, at the Over-Allotment Closing. The Custodian shall segregate and maintain the Shares in a separate custodial account or accounts for the benefit of the Selling Stockholders and shall not commingle the Shares with any other securities held by the Custodian for its own account or for the account of any other person.
Section 2.2 — Delivery of Shares to Custodian
Each Selling Stockholder shall cause such Selling Stockholder's respective Shares (being the number of Base Shares set forth opposite such Selling Stockholder's name in the table above and, to the extent the Over-Allotment Option is exercised, the applicable number of Option Shares) to be delivered or made available in book-entry form to the Custodian through DTC no later than one (1) business day prior to the Closing Date (i.e., no later than October 16, 2023). The Common Stock of PPC is identified by CUSIP Number 70831X 10 5. Each Selling Stockholder shall take all actions and execute all documents as may be necessary to ensure that the Shares are in proper form for delivery through the facilities of DTC and that the Shares are eligible for book-entry transfer through DTC. The Custodian shall, promptly upon receipt of the Shares, confirm DTC eligibility of the Shares and shall notify the Attorney-in-Fact of such confirmation. If any Shares are not DTC-eligible or are subject to any stop-transfer order, legend, or other restriction that would impair delivery through DTC, the Custodian shall promptly notify the Attorney-in-Fact and the affected Selling Stockholder, and such Selling Stockholder shall take immediate corrective action to remove any such impediment.
Section 2.3 — Custodian's Duties
The Custodian shall perform the following duties in connection with the Offering:
(a) Delivery of Base Shares. Upon receipt of written instructions from the Attorney-in-Fact (or upon receipt of instructions delivered in accordance with the Underwriting Agreement and the direction letter to the transfer agent in the form attached hereto as Exhibit B), the Custodian shall deliver the Base Shares through DTC to or for the account of the several Underwriters on the Closing Date (October 17, 2023) against payment by the Underwriters of the aggregate net purchase price for the Base Shares in immediately available funds.
(b) Delivery of Option Shares. If the Over-Allotment Option is exercised by the Underwriters, in whole or in part, on or before November 11, 2023, the Custodian shall, upon receipt of written instructions from the Attorney-in-Fact, deliver the applicable number of Option Shares through DTC to or for the account of the several Underwriters on the Over-Allotment Closing Date (expected to be November 16, 2023, or such other date as specified in the Underwriting Agreement) against payment of the aggregate net purchase price for the Option Shares in immediately available funds. In the event the Over-Allotment Option is exercised in part, the Option Shares to be delivered shall be allocated among the Selling Stockholders in proportion to the number of Option Shares allocated to each Selling Stockholder in the table set forth above, or as otherwise specified in the written instructions of the Attorney-in-Fact.
(c) Receipt and Disbursement of Net Proceeds. The Custodian shall receive the aggregate net proceeds from the sale of the Shares on behalf of each Selling Stockholder and shall disburse such net proceeds to each Selling Stockholder in accordance with the wire transfer instructions provided by each Selling Stockholder as set forth in Exhibit A hereto, or as otherwise delivered in writing to the Custodian by the respective Selling Stockholder or by the Attorney-in-Fact on behalf of such Selling Stockholder.
Section 2.4 — Disbursement of Net Proceeds
The net proceeds per share payable to the Selling Stockholders shall be $40.56 (being the public offering price of $41.60 per share less the underwriting discount of $1.04 per share). The aggregate net proceeds from the sale of the Base Shares shall total $253,500,000, to be allocated and disbursed to the Selling Stockholders as follows:
In the event the Over-Allotment Option is exercised in full, the additional net proceeds of $38,025,000 from the sale of 937,500 Option Shares shall be allocated among the Selling Stockholders as follows: Dr. Elena Castellano — $18,252,000 (450,000 shares × $40.56); Dr. Riccardo Castellano — $15,210,000 (375,000 shares × $40.56); Dr. Marco Castellano — $3,042,000 (75,000 shares × $40.56); and Castellano Family Holdings LLC — $1,521,000 (37,500 shares × $40.56).
The Custodian shall disburse the net proceeds to each Selling Stockholder by wire transfer of immediately available funds to the bank accounts designated by each Selling Stockholder in the wire transfer instructions set forth in Exhibit A hereto. Such wire instructions shall be provided separately by each Selling Stockholder and shall be held by the Custodian on a confidential basis. The Custodian shall effect each wire transfer promptly upon receipt of the net proceeds from the Underwriters, and in any event no later than one (1) business day following receipt. The Custodian shall provide written confirmation of each wire transfer to the Attorney-in-Fact and to the applicable Selling Stockholder.
Section 2.5 — Custodian Compensation and Expenses
The Custodian shall be entitled to reasonable compensation for its services hereunder in accordance with its standard fee schedule as in effect from time to time, a copy of which has been provided to the Selling Stockholders. Such compensation shall be borne by the Selling Stockholders, allocated among them in proportion to their respective Base Shares sold in the Offering unless otherwise agreed in writing among the Selling Stockholders. The Company shall bear all Offering expenses other than the underwriting discount (which shall be borne by the Selling Stockholders), including, without limitation, SEC registration fees, Financial Industry Regulatory Authority fees, Nasdaq listing fees, printing and distribution expenses, fees and expenses of legal counsel and accountants, transfer agent fees, and other customary offering expenses, which Offering expenses are estimated in the aggregate at approximately $765,000.
Section 2.6 — Standard of Care; Limitation of Liability
The Custodian shall exercise reasonable care in the custody, safekeeping, and delivery of the Shares and in the receipt and disbursement of the net proceeds, applying the same degree of care as it would exercise with respect to its own property of a similar nature. The Custodian shall not be liable for any action taken or omitted to be taken in good faith in the performance of its duties hereunder, except to the extent that any loss, damage, or liability directly results from the Custodian's own gross negligence or willful misconduct. Without limiting the generality of the foregoing, the Custodian shall have no liability for (a) any delays in the delivery of the Shares or the disbursement of net proceeds caused by DTC, the Federal Reserve wire system, or any other third-party system or intermediary, (b) any action taken by the Custodian in reliance upon instructions delivered by the Attorney-in-Fact that are within the scope of the Attorney-in-Fact's authority under this Agreement, or (c) the genuineness or validity of any document, certificate, or instrument provided to the Custodian in connection herewith. The Custodian may rely upon instructions delivered by the Attorney-in-Fact without independent verification, provided that such instructions are received in writing (including by electronic mail or facsimile) and appear on their face to have been executed or transmitted by or on behalf of the Attorney-in-Fact.
ARTICLE III — REPRESENTATIONS AND WARRANTIES OF SELLING STOCKHOLDERS
Each Selling Stockholder, severally and not jointly, hereby represents and warrants to the Attorney-in-Fact and the Custodian as of the date hereof and as of the Closing Date (and, if applicable, as of the Over-Allotment Closing Date) as follows:
Section 3.1 — Ownership
Each Selling Stockholder is the sole beneficial and record owner of the number of shares of Common Stock of PPC set forth opposite such Selling Stockholder's name in the table set forth above under the heading "Pre-Offering Shares Held," free and clear of all liens, pledges, charges, security interests, encumbrances, equities, options, preemptive rights, rights of first refusal, claims, restrictions on transfer, and adverse claims of any kind or nature whatsoever (collectively, "Liens"), other than (a) restrictions on transfer under applicable federal and state securities laws, (b) the lock-up agreements described in Section 3.4 below (which are being waived with respect to the Shares as described therein), and (c) the new lock-up agreement described in Section 3.5 below. Upon delivery of the Shares to the Underwriters through DTC in accordance with the Underwriting Agreement and this Agreement, the Underwriters will acquire good and valid title to the Shares, free and clear of all Liens. As of the date hereof, the combined pre-offering holdings of the Castellano family (including shares held by each of the individual Selling Stockholders and CFH LLC) aggregate 40,100,000 shares, representing approximately 33.4% of the 120,000,000 shares of Common Stock currently outstanding.
Section 3.2 — Authority
Each individual Selling Stockholder has full legal capacity and all requisite right, power, and authority to execute and deliver this Agreement, to sell, transfer, and deliver the Shares in the Offering, and to perform all of such Selling Stockholder's obligations hereunder and under the Underwriting Agreement. CFH LLC has been duly formed and is validly existing and in good standing as a limited liability company under the laws of the State of Delaware, and has full limited liability company power and authority to execute and deliver this Agreement, to sell, transfer, and deliver the Shares in the Offering, and to perform all of its obligations hereunder and under the Underwriting Agreement. The execution and delivery of this Agreement and the sale of the Shares have been duly authorized by all necessary action on the part of CFH LLC, including the approval of its managing member. This Agreement, when executed and delivered by each Selling Stockholder, constitutes a valid and binding obligation of such Selling Stockholder, enforceable against such Selling Stockholder in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and similar laws affecting creditors' rights and remedies generally and to general principles of equity.
Section 3.3 — No Conflicts
The execution and delivery of this Agreement by each Selling Stockholder, the sale and delivery of the Shares by each Selling Stockholder in the Offering, and the consummation of the transactions contemplated hereby and by the Underwriting Agreement do not and will not (a) conflict with, result in a breach or violation of, or constitute a default (or an event that with notice or lapse of time, or both, would constitute a default) under any law, statute, rule, regulation, order, judgment, injunction, or decree of any court, governmental authority, or regulatory body applicable to such Selling Stockholder or by which any of such Selling Stockholder's properties or assets (including the Shares) are bound, (b) conflict with, result in a breach or violation of, or constitute a default under the organizational documents of CFH LLC (in the case of CFH LLC) or any agreement, indenture, lease, license, contract, or other instrument to which such Selling Stockholder is a party or by which such Selling Stockholder's Shares are bound, or (c) result in the creation or imposition of any Lien upon any of the Shares.
Section 3.4 — Lock-Up Waiver
Each Selling Stockholder acknowledges that the shares of Common Stock held by such Selling Stockholder were subject to lock-up agreements (the "IPO Lock-Up Agreements") entered into in connection with the initial public offering of the Common Stock on April 17, 2023, pursuant to which each Selling Stockholder agreed not to offer, sell, contract to sell, pledge, grant any option to purchase, make any short sale, or otherwise dispose of, directly or indirectly, any shares of Common Stock (or any securities convertible into or exercisable or exchangeable for Common Stock) for a period of 180 days following April 17, 2023. The lock-up period under the IPO Lock-Up Agreements expires on October 14, 2023. Each Selling Stockholder represents and warrants that lock-up waivers have been obtained from all three underwriters of the Company's initial public offering — Ridgeline Securities LLC, Broadmark Capital Inc., and Morningstar Zanthor & Co. — each effective as of October 12, 2023, solely with respect to the Shares being sold in the Offering and the execution and delivery of this Agreement and the Underwriting Agreement. Each Selling Stockholder further represents and warrants that such Selling Stockholder is not in violation of any IPO Lock-Up Agreement and that the sale of the Shares hereunder is permissible following the effectiveness of such lock-up waivers.
Section 3.5 — New Lock-Up
Each Selling Stockholder acknowledges and agrees that, in connection with the Offering, such Selling Stockholder will enter into, or has concurrently herewith entered into, a new lock-up agreement (the "New Lock-Up Agreement") with Ridgeline Securities LLC and Broadmark Capital Inc., as representatives of the Underwriters, restricting the offer, sale, contract to sell, pledge, grant of any option to purchase, or other disposition, directly or indirectly, of any shares of Common Stock (or any securities convertible into or exercisable or exchangeable for Common Stock) retained by such Selling Stockholder after the Offering (other than the Shares sold in the Offering and customary exceptions specified therein), for the period commencing on the Closing Date (October 17, 2023) and ending on January 15, 2024 (a period of 90 days) (the "New Lock-Up Period"). Each Selling Stockholder agrees to comply fully with the terms and conditions of the New Lock-Up Agreement.
Section 3.6 — Accuracy of Information
Each Selling Stockholder represents and warrants that all information furnished or to be furnished by such Selling Stockholder (or on such Selling Stockholder's behalf) expressly for inclusion or incorporation by reference in the Registration Statement, the Prospectus Supplement, any free writing prospectus, or any other offering document relating to the Offering is true, correct, and complete in all material respects and does not and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.
ARTICLE IV — REPRESENTATIONS AND WARRANTIES OF ATTORNEY-IN-FACT
Section 4.1 — Acceptance
David Orenstein hereby accepts his appointment as Attorney-in-Fact under this Agreement and agrees to act in accordance with the terms and conditions of this Agreement and to exercise the powers granted herein solely for the purposes and within the limitations set forth herein. The Attorney-in-Fact acknowledges that he has read and understands the terms of this Agreement and the Underwriting Agreement, and that he is familiar with the Offering and the transactions contemplated hereby and thereby.
Section 4.2 — Fiduciary Duty
The Attorney-in-Fact shall act in good faith and in the best interests of the Selling Stockholders in carrying out his duties and exercising the powers granted to him under this Agreement. The Attorney-in-Fact shall exercise the degree of care, diligence, and skill that a reasonably prudent person would exercise in comparable circumstances. The Attorney-in-Fact shall promptly communicate to each Selling Stockholder any material information or developments relating to the Offering that come to his attention in the performance of his duties hereunder.
Section 4.3 — No Personal Liability
The Attorney-in-Fact shall not be personally liable for any loss, damage, liability, cost, or expense suffered or incurred by any Selling Stockholder as a result of any action taken or omitted to be taken in good faith in the performance of his duties hereunder, except to the extent that such loss, damage, liability, cost, or expense directly results from the Attorney-in-Fact's own gross negligence, willful misconduct, or fraud. The Attorney-in-Fact shall not be required to take any action that he reasonably believes to be unlawful or contrary to the terms of this Agreement, the Underwriting Agreement, or applicable law.
ARTICLE V — INDEMNIFICATION
Section 5.1 — Indemnification of Attorney-in-Fact
Each Selling Stockholder, severally and not jointly (in proportion to such Selling Stockholder's respective Base Shares as a percentage of the total Base Shares), agrees to indemnify, defend, and hold harmless the Attorney-in-Fact from and against any and all losses, claims, damages, liabilities, costs, and expenses (including, without limitation, reasonable attorneys' fees and expenses incurred in connection with any action, suit, proceeding, or investigation, whether or not resulting in any liability) (collectively, "Losses") arising out of, relating to, or resulting from the performance or non-performance of the Attorney-in-Fact's duties under this Agreement, except to the extent that such Losses are determined by a court of competent jurisdiction in a final, non-appealable judgment to have resulted from the Attorney-in-Fact's own gross negligence, willful misconduct, or fraud. The obligations of the Selling Stockholders under this Section 5.1 shall survive termination of this Agreement and shall be in addition to any other rights of indemnification to which the Attorney-in-Fact may be entitled under any other agreement, the organizational documents of the Company, applicable law, or otherwise.
Section 5.2 — Indemnification of Custodian
Each Selling Stockholder, severally and not jointly (in proportion to such Selling Stockholder's respective Base Shares as a percentage of the total Base Shares), agrees to indemnify, defend, and hold harmless the Custodian and its officers, directors, employees, and agents from and against any and all Losses arising out of, relating to, or resulting from the Custodian's performance or non-performance of its duties under this Agreement, except to the extent that such Losses are determined by a court of competent jurisdiction in a final, non-appealable judgment to have resulted from the Custodian's own gross negligence or willful misconduct. The obligations of the Selling Stockholders under this Section 5.2 shall survive termination of this Agreement.
ARTICLE VI — TERM AND TERMINATION
Section 6.1 — Effective Date
This Agreement shall become effective immediately upon execution and delivery by all parties hereto on October 12, 2023.
Section 6.2 — Termination
This Agreement shall terminate automatically, without any action required on the part of any party, upon the latest to occur of:
(a) the completion of the Closing, including the delivery of all Base Shares to the Underwriters and the receipt and full disbursement of all net proceeds to the Selling Stockholders in accordance with Section 2.4;
(b) the expiration of the Over-Allotment Option (November 11, 2023) without exercise, or, if the Over-Allotment Option is exercised in whole or in part, the completion of the Over-Allotment Closing (expected on or about November 16, 2023), including the delivery of all Option Shares to the Underwriters and the receipt and full disbursement of all net proceeds from the sale of such Option Shares to the Selling Stockholders; and
(c) the resolution of any pending matters relating to the Offering that require action by the Attorney-in-Fact or the Custodian under this Agreement, including, without limitation, the filing of any Section 16 reports, the delivery of any post-closing certificates or documents, and the settlement of any post-closing adjustments.
Notwithstanding the foregoing, the indemnification provisions of Article V, the limitation of liability provisions of Section 2.6 and Section 4.3, and the miscellaneous provisions of Article VII shall survive the termination of this Agreement and shall continue in full force and effect thereafter.
Section 6.3 — Revocability
This power of attorney and custody agreement is irrevocable during its term. No Selling Stockholder may revoke, rescind, or terminate this Agreement, or any of the powers granted herein, without the prior written consent of the Underwriters (acting through Ridgeline Securities LLC as representative of the Underwriters). Any attempted revocation in violation of this Section 6.3 shall be null, void, and of no force or effect.
ARTICLE VII — MISCELLANEOUS
Section 7.1 — Governing Law
This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to principles of conflicts of law that would require the application of the laws of any other jurisdiction. Each party hereby irrevocably submits to the exclusive jurisdiction of the courts of the State of Delaware and the United States District Court for the District of Delaware for the purpose of any action, suit, or proceeding arising out of or relating to this Agreement, and each party hereby waives, and agrees not to assert in any such action, suit, or proceeding, any claim that it is not personally subject to the jurisdiction of such courts, that such action, suit, or proceeding is brought in an inconvenient forum, or that the venue of such action, suit, or proceeding is improper.
Section 7.2 — 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 when (a) delivered personally, (b) sent by registered or certified mail, return receipt requested, postage prepaid, (c) sent by nationally recognized overnight courier service, or (d) transmitted by electronic mail (with confirmation of receipt), to the parties at the following addresses (or at such other addresses as the parties may designate from time to time by written notice given in accordance with this Section):
To the Attorney-in-Fact:
David Orenstein General Counsel & Corporate Secretary Penterra Pharmaceuticals Corp. 400 Meridian Parkway, Suite 1200 Princeton, New Jersey 08540
To the Custodian:
Pinnacle Trust & Transfer Co. 1 Ashbury Asset Advisors Plaza, 30th Floor New York, New York 10004
Attention: Corporate Trust Department
To the Individual Selling Stockholders:
At the addresses currently on file with the Company (which addresses are incorporated herein by reference and shall be treated as confidential).
To Castellano Family Holdings LLC:
c/o Penterra Pharmaceuticals Corp. 400 Meridian Parkway, Suite 1200 Princeton, New Jersey 08540
Attention: Dr. Marco Castellano, Managing Member
With a copy (which shall not constitute notice) to counsel for the Selling Stockholders:
Whitfield & Garza LLP 590 Madison Avenue, 28th Floor New York, New York 10022
Attention: Patricia Velázquez, Esq.
With a copy (which shall not constitute notice) to counsel for the Company:
Calderwood & Harkness LLP One Liberty Plaza, 52nd Floor New York, New York 10006
Attention: Jennifer Kwon, Esq.
Section 7.3 — Successors and Assigns
This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors, heirs, executors, administrators, legal representatives, and permitted assigns. No party may assign any of its rights or delegate any of its obligations under this Agreement without the prior written consent of the other parties hereto, and any attempted assignment or delegation without such consent shall be null, void, and of no force or effect.
Section 7.4 — Entire Agreement
This Agreement, together with the Underwriting Agreement, the New Lock-Up Agreements, and the other documents and instruments executed and delivered in connection with the Offering, constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations, representations, and warranties, whether written or oral, with respect to such subject matter.
Section 7.5 — Amendments and Waivers
This Agreement may not be amended, modified, supplemented, or waived except by a written instrument duly executed by all parties hereto. No waiver of any provision of this Agreement shall operate as a waiver of any other provision, and no single or partial exercise of any right or remedy under this Agreement shall preclude any other or further exercise of such right or remedy or the exercise of any other right or remedy.
Section 7.6 — Counterparts
This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which, when taken together, shall constitute one and the same instrument. Signatures delivered by facsimile transmission or by electronic transmission in portable document format (PDF) or other electronic imaging means shall be deemed to be original signatures for all purposes and shall have the same force and effect as original signatures.
Section 7.7 — Severability
If any provision of this Agreement is held to be invalid, illegal, or unenforceable by any court of competent jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement, and this Agreement shall be construed as if such invalid, illegal, or unenforceable provision had never been contained herein, provided that the remaining provisions of this Agreement, as so construed, shall continue to effectuate the fundamental purposes of this Agreement to the fullest extent permitted by applicable law.
Section 7.8 — Headings
The article and section headings contained in this Agreement are inserted for convenience of reference only and shall not in any way affect the meaning, construction, or interpretation of this Agreement.
[Signature Pages Follow]
SIGNATURE PAGES TO POWER OF ATTORNEY AND CUSTODY AGREEMENT
IN WITNESS WHEREOF, the undersigned have duly executed this Power of Attorney and Custody Agreement as of the date first written above.
SELLING STOCKHOLDERS — INDIVIDUAL SIGNATURES
SELLING STOCKHOLDER:
DR. ELENA CASTELLANO
________________________________________
Dr. Elena Castellano, individually
Date: October 12, 2023
Number of Base Shares to be Sold: 3,000,000 Number of Option Shares: 450,000
SELLING STOCKHOLDER:
DR. RICCARDO CASTELLANO
________________________________________
Dr. Riccardo Castellano, individually
Date: October 12, 2023
Number of Base Shares to be Sold: 2,500,000 Number of Option Shares: 375,000
SELLING STOCKHOLDER:
DR. MARCO CASTELLANO
________________________________________
Dr. Marco Castellano, individually
Date: October 12, 2023
Number of Base Shares to be Sold: 500,000 Number of Option Shares: 75,000
SELLING STOCKHOLDER — ENTITY SIGNATURE
CASTELLANO FAMILY HOLDINGS LLC, a Delaware limited liability company
By: ________
Name: Dr. Marco Castellano
Title: Managing Member
Date: October 12, 2023
Number of Base Shares to be Sold: 250,000 Number of Option Shares: 37,500
ATTORNEY-IN-FACT ACCEPTANCE
ATTORNEY-IN-FACT:
________________________________________
David Orenstein General Counsel & Corporate Secretary Penterra Pharmaceuticals Corp.
Accepted and agreed to in his capacity as Attorney-in-Fact
Date: October 12, 2023
CUSTODIAN ACCEPTANCE
PINNACLE TRUST & TRANSFER CO., a New York corporation
By: ________
Name: ________
Title: ________
Date: October 12, 2023
EXHIBIT A
WIRE TRANSFER INSTRUCTIONS
(Confidential)
The following wire transfer instructions are provided by each Selling Stockholder for the purpose of disbursement of net proceeds from the Offering by the Custodian. These instructions shall be held by the Custodian on a strictly confidential basis and shall not be disclosed to any person other than the Attorney-in-Fact without the prior written consent of the applicable Selling Stockholder, except as may be required by applicable law or regulation.
1. Dr. Elena Castellano
Bank Name: [To be provided separately] ABA/Routing Number: [To be provided separately] Account Number: [To be provided separately] Account Name: [To be provided separately] Reference: Penterra Pharmaceuticals Corp. — Secondary Offering Proceeds Contact: [To be provided separately]
2. Dr. Riccardo Castellano
Bank Name: [To be provided separately] ABA/Routing Number: [To be provided separately] Account Number: [To be provided separately] Account Name: [To be provided separately] Reference: Penterra Pharmaceuticals Corp. — Secondary Offering Proceeds Contact: [To be provided separately]
3. Dr. Marco Castellano
Bank Name: [To be provided separately] ABA/Routing Number: [To be provided separately] Account Number: [To be provided separately] Account Name: [To be provided separately] Reference: Penterra Pharmaceuticals Corp. — Secondary Offering Proceeds Contact: [To be provided separately]
4. Castellano Family Holdings LLC
Bank Name: [To be provided separately] ABA/Routing Number: [To be provided separately] Account Number: [To be provided separately] Account Name: [To be provided separately] Reference: Penterra Pharmaceuticals Corp. — Secondary Offering Proceeds Contact: [To be provided separately]
Note: Each Selling Stockholder shall provide complete wire transfer instructions to the Custodian no later than two (2) business days prior to the Closing Date. Wire instructions may be updated by written notice (including electronic mail) from the applicable Selling Stockholder or the Attorney-in-Fact on behalf of such Selling Stockholder, provided that any such updated instructions shall be accompanied by a callback verification to a pre-designated telephone number for the applicable Selling Stockholder.
EXHIBIT B
FORM OF DIRECTION LETTER TO CUSTODIAN
[Date]
Pinnacle Trust & Transfer Co. 1 Ashbury Asset Advisors Plaza, 30th Floor New York, New York 10004
Attention: Corporate Trust Department
Re: Direction Letter — Delivery of Shares and Disbursement of Proceeds in Connection with the Secondary Offering of Common Stock of Penterra Pharmaceuticals Corp.
Ladies and Gentlemen:
Reference is made to the Power of Attorney and Custody Agreement dated as of October 12, 2023 (the "POA/Custody Agreement"), by and among the Selling Stockholders named therein, the undersigned as Attorney-in-Fact, and Pinnacle Trust & Transfer Co. as Custodian, and the Underwriting Agreement dated as of October 12, 2023 (the "Underwriting Agreement"), by and among the Selling Stockholders and the Underwriters named therein. Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the POA/Custody Agreement.
Pursuant to Section 2.3 of the POA/Custody Agreement and acting in my capacity as the Attorney-in-Fact for the Selling Stockholders, I hereby direct you as follows:
1. Delivery of Base Shares. Please deliver, on October 17, 2023 (the Closing Date), through the facilities of The Depository Trust Company ("DTC"), the following number of shares of common stock of Penterra Pharmaceuticals Corp. (CUSIP: 70831X 10 5) to or for the accounts of the several Underwriters, against payment of the aggregate net purchase price in immediately available funds:
DTC delivery instructions for the Underwriters are as follows:
DTC Participant: Ridgeline Securities LLC (as representative of the several Underwriters) DTC Participant Number: [To be provided by Ridgeline Securities LLC]
2. Delivery of Option Shares (If Applicable). [To be completed upon exercise of the Over-Allotment Option, if applicable.] If the Over-Allotment Option is exercised by the Underwriters, in whole or in part, on or before November 11, 2023, please deliver, on the Over-Allotment Closing Date (expected to be on or about November 16, 2023), through the facilities of DTC, the following number of Option Shares (CUSIP: 70831X 10 5) to or for the accounts of the several Underwriters, against payment of the aggregate net purchase price in immediately available funds:
The actual number of Option Shares to be delivered by each Selling Stockholder will be specified in a supplemental direction letter to be provided upon exercise of the Over-Allotment Option.
3. Disbursement of Net Proceeds. Upon receipt of the aggregate net purchase price from the Underwriters, please disburse the net proceeds to each Selling Stockholder by wire transfer of immediately available funds in accordance with the wire transfer instructions on file with you as provided in Exhibit A to the POA/Custody Agreement. The net proceeds per share are $40.56 (being the public offering price of $41.60 per share less the underwriting discount of $1.04 per share).
4. Confirmation. Please provide written confirmation to the undersigned upon (a) completion of the delivery of the Base Shares (and, if applicable, the Option Shares) through DTC and (b) completion of the wire transfers of net proceeds to each Selling Stockholder.
If you have any questions regarding this direction letter, please contact the undersigned at the offices of Penterra Pharmaceuticals Corp. at 400 Meridian Parkway, Suite 1200, Princeton, New Jersey 08540.
Very truly yours,
________________________________________
David Orenstein General Counsel & Corporate Secretary Penterra Pharmaceuticals Corp. Acting as Attorney-in-Fact for the Selling Stockholders
cc: Whitfield & Garza LLP (Attention: Patricia Velázquez, Esq.) Calderwood & Harkness LLP (Attention: Jennifer Kwon, Esq.) Ridgeline Securities LLC
Selling Stockholder | Pre-Offering Shares Held | Base Shares to be Sold | Over-Allotment Shares | Post-Offering Shares (Full Exercise)
Dr. Elena Castellano | 14,200,000 | 3,000,000 | 450,000 | 10,750,000
Dr. Riccardo Castellano | 12,800,000 | 2,500,000 | 375,000 | 9,925,000
Dr. Marco Castellano | 4,500,000 | 500,000 | 75,000 | 3,925,000
Castellano Family Holdings LLC | 8,600,000 | 250,000 | 37,500 | 8,312,500
Total | 40,100,000 | 6,250,000 | 937,500 | 32,912,500
Selling Stockholder | Base Shares Sold | Net Proceeds per Share | Aggregate Base Net Proceeds
Dr. Elena Castellano | 3,000,000 | $40.56 | $121,680,000
Dr. Riccardo Castellano | 2,500,000 | $40.56 | $101,400,000
Dr. Marco Castellano | 500,000 | $40.56 | $20,280,000
Castellano Family Holdings LLC | 250,000 | $40.56 | $10,140,000
Total | 6,250,000 | $253,500,000
Selling Stockholder | Base Shares to be Delivered
Dr. Elena Castellano | 3,000,000
Dr. Riccardo Castellano | 2,500,000
Dr. Marco Castellano | 500,000
Castellano Family Holdings LLC | 250,000
Total | 6,250,000
Selling Stockholder | Option Shares to be Delivered
Dr. Elena Castellano | [Up to 450,000]
Dr. Riccardo Castellano | [Up to 375,000]
Dr. Marco Castellano | [Up to 75,000]
Castellano Family Holdings LLC | [Up to 37,500]
Total | [Up to 937,500]

POWER OF ATTORNEY AND CUSTODY AGREEMENT

POWER OF ATTORNEY AND CUSTODY AGREEMENT

RECITALS

INDIVIDUAL SHARE ALLOCATIONS

SIGNATURE PAGES TO POWER OF ATTORNEY AND CUSTODY AGREEMENT

SELLING STOCKHOLDER:

DR. ELENA CASTELLANO

SELLING STOCKHOLDER:

DR. RICCARDO CASTELLANO

SELLING STOCKHOLDER:

DR. MARCO CASTELLANO

ATTORNEY-IN-FACT ACCEPTANCE

ATTORNEY-IN-FACT:

CUSTODIAN ACCEPTANCE

EXHIBIT A

WIRE TRANSFER INSTRUCTIONS

EXHIBIT B

FORM OF DIRECTION LETTER TO CUSTODIAN

Record

Parties

Dates

Amounts