1018-00003 · Client 1018 · Engagement & Independence Protocol

engagement-letter-ch-calderwood-harkness.docx DOCUMENT M&A / Corporate

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CALDERWOOD & HARKNESS LLP Attorneys at Law

1700 Market Street, Suite 3400 Philadelphia, PA 19103

Telephone: (215) 864-7000 Facsimile: (215) 864-7001 www.calderwoodharkness.com

June 2, 2023

VIA HAND DELIVERY AND ELECTRONIC MAIL

The Special Committee of the Board of Directors of Penterra Pharmaceuticals Corp. c/o Ms. Diane Prescott, Chair of the Special Committee Penterra Pharmaceuticals Corp. 400 Innovation Drive, Suite 1200 Princeton, NJ 08540

Re: Engagement of Calderwood & Harkness LLP as Independent Legal Counsel to the Special Committee of the Board of Directors of Penterra Pharmaceuticals Corp.

Dear Ms. Prescott, Mr. Okafor, and Dr. Ng:

1. Purpose and Engagement

We are pleased to confirm the engagement of Calderwood & Harkness LLP ("C&H" or the "Firm") as independent legal counsel to the Special Committee (the "Special Committee") of the Board of Directors (the "Board") of Penterra Pharmaceuticals Corp., a Delaware corporation ("Penterra" or the "Company"; NYSE: PPHR). This letter (this "Engagement Letter") sets forth the terms and conditions upon which the Firm will provide legal services to the Special Committee in connection with the matters described herein.

This engagement arises in connection with the Special Committee's evaluation of a proposed acquisition by Penterra of one hundred percent (100%) of the outstanding equity interests of Caliston BioSciences, Inc., a Delaware corporation ("Caliston"), to be structured as a one-step merger pursuant to which Caliston would merge with and into a wholly owned subsidiary of Penterra, with Caliston surviving as a wholly owned subsidiary of the Company (the "Proposed Transaction" or the "Transaction"). The Firm understands that the Proposed Transaction has been identified by Penterra's management as a strategic opportunity to acquire Caliston's proprietary immunology platform and pipeline assets, and that the Transaction, if consummated, would represent a significant acquisition for the Company.

The Proposed Transaction constitutes a related-party transaction requiring heightened scrutiny and an independent evaluation process. Specifically, Dr. Marcus Hale, the Chairman and Chief Executive Officer of Penterra, holds a twenty-eight and one-half percent (28.5%) equity interest in Caliston, acquired through personal investments totaling approximately Forty-Two Million Dollars ($42,000,000) across Caliston's Seed, Series A, and Series B financing rounds. In addition, Dr. Hale holds a board observer seat at Caliston, providing him with access to Caliston's confidential business information and strategic deliberations. By reason of Dr. Hale's material financial interest in Caliston and his dual roles with both Penterra and Caliston, the Proposed Transaction gives rise to conflicts of interest that necessitate the independent evaluation, negotiation, and recommendation process that the Special Committee has been empowered to conduct.

The Firm has been provided with, and has reviewed, the Board Resolution adopted by the Board of Directors of Penterra on June 2, 2023 (the "Board Resolution"), establishing the Special Committee and granting it sole and exclusive authority to: (a) evaluate the Proposed Transaction and all aspects thereof, including the proposed consideration, structure, timing, and terms; (b) negotiate the terms and conditions of the Proposed Transaction and all related agreements on behalf of the Company; (c) retain independent legal counsel, an independent financial advisor, and such other independent advisors as the Special Committee deems necessary or appropriate; (d) recommend to the full Board of Directors whether to approve, reject, or modify the Proposed Transaction, or to explore strategic alternatives (including the unilateral power to decline to proceed with the Transaction if the Special Committee determines, in the exercise of its fiduciary duties, that the Transaction is not in the best interests of Penterra and its unaffiliated stockholders); and (e) take such other actions as the Special Committee deems necessary or advisable in connection with the foregoing. The Board Resolution further provides that the full Board of Directors shall not approve or authorize the Proposed Transaction without a prior favorable recommendation of the Special Committee.

The Firm understands that the Special Committee was constituted by the unanimous vote of the six (6) independent directors of the Board, with Dr. Marcus Hale, Ms. Angela Whitmore, and Mr. Raymond Tusk recusing themselves from the vote establishing the Special Committee and from all deliberations relating to the Proposed Transaction. Ms. Whitmore and Mr. Tusk were recused due to their respective personal and professional relationships with Dr. Hale that could be perceived as impairing their independence with respect to the evaluation of the Transaction.

2. Scope of Engagement

The Firm will provide legal services to the Special Committee in connection with the Proposed Transaction. The scope of the Firm's engagement shall include, but not be limited to, the following:

(a) Fiduciary Duty Advice. Advising the Special Committee on its fiduciary duties under Delaware law, including, without limitation, the duties of care and loyalty, the business judgment rule, the requirements of Sections 141(a), 144, and 251 of the Delaware General Corporation Law (the "DGCL"), the entire fairness doctrine as articulated in Weinberger v. UOP, Inc., 457 A.2d 701 (Del. 1983), and its progeny, and the applicability and procedural requirements of the framework established in Kahn v. M&F Worldwide Corp., 88 A.3d 635 (Del. 2014) (the "MFW Framework"), including the conditions under which the business judgment rule standard of review may be invoked in the context of a conflicted controller transaction. The Firm will advise the Special Committee on best practices for establishing a process that will withstand judicial scrutiny in the event of stockholder litigation challenging the Proposed Transaction.

(b) Independence Protocol and Information Barriers. Designing, implementing, and overseeing the Independence Protocol and Information Barrier Policy (code-named "Project Coriander") to ensure the integrity and independence of the Special Committee process. This shall include establishing procedures governing the flow of information between the Special Committee and recused directors, Penterra management, and Caliston, as well as protocols for the preservation of attorney-client privilege and work product protections.

(c) Director Independence Analysis. Reviewing and analyzing director independence questionnaires completed by each member of the Special Committee (Ms. Prescott, Mr. Okafor, and Dr. Ng) to confirm the independence of each member and to identify and address any potential issues that could be raised in connection with the independence of the Special Committee in any subsequent litigation or regulatory review.

(d) Financial Advisor Coordination. Coordinating with the Special Committee's independent financial advisor, once retained, regarding the fairness opinion process, including reviewing the financial advisor's engagement letter, advising the Special Committee on the scope and limitations of the fairness opinion, and ensuring that the Special Committee's process with respect to the fairness opinion satisfies the requirements of Delaware law and applicable SEC disclosure obligations.

(e) Legal Due Diligence. Conducting or supervising comprehensive legal due diligence of Caliston BioSciences, Inc., including, without limitation, review and analysis of the following areas: (i) corporate organization, capitalization, governance documents, and equity structure; (ii) intellectual property portfolio, including patents, patent applications, trade secrets, licensing agreements, and freedom-to-operate assessments; (iii) regulatory and U.S. Food and Drug Administration ("FDA") matters, including the status of investigational new drug applications, clinical trial protocols, and regulatory correspondence; (iv) material contracts and commercial agreements; (v) pending, threatened, or contemplated litigation, arbitration, or regulatory proceedings; (vi) employment matters, including key employee arrangements, retention agreements, change-of-control provisions, and labor law compliance; (vii) tax matters relevant to the structure of the Transaction; and (viii) compliance matters, including anti-corruption, data privacy, and environmental, health, and safety matters.

(f) Antitrust and HSR Act Analysis. Analyzing the antitrust implications of the Proposed Transaction, including the applicability of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), and the requirement, timing, and preparation of any pre-merger notification filings with the Federal Trade Commission and the United States Department of Justice.

(g) Negotiation of Transaction Documents. Negotiating the terms and conditions of the Agreement and Plan of Merger and all ancillary transaction documents on behalf of the Special Committee, including representations and warranties, covenants, closing conditions, indemnification provisions, termination rights, and break-up fee provisions, with a view toward protecting the interests of Penterra and its unaffiliated stockholders.

(h) Drafting and Review of Transaction Documents. Preparing or reviewing all transaction documents in connection with the Proposed Transaction, including, without limitation: (i) the Agreement and Plan of Merger; (ii) a Contingent Value Rights Agreement, if applicable; (iii) Stockholder Support Agreements; (iv) a Voting and Recusal Agreement governing Dr. Hale's participation (or non-participation) in the stockholder vote on the Transaction; (v) an Escrow Agreement; and (vi) such other related instruments, certificates, and ancillary documents as may be necessary or appropriate in connection with the consummation of the Transaction.

(i) SEC Disclosure and Proxy Statement. Advising the Special Committee on Securities and Exchange Commission ("SEC") disclosure requirements applicable to the Proposed Transaction, including the preparation and review of proxy statement disclosure relating to the Special Committee process, the background of the Transaction, the reasons for the Special Committee's recommendation, the conflicts of interest of Dr. Hale and other interested parties, and such other disclosures as may be required under the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.

(j) Minutes and Process Memorandum. Preparing minutes of all Special Committee meetings and maintaining a comprehensive process memorandum (the "Process Memorandum") documenting the Special Committee's activities, deliberations, and decision-making process in connection with the Transaction, to support the entire fairness record and to serve as a contemporaneous record of the Special Committee's discharge of its fiduciary duties.

(k) Other Services. Such other legal services as the Special Committee may reasonably request in connection with the Proposed Transaction from time to time during the term of this engagement.

Sole Representation of the Special Committee. The Firm wishes to make clear that it is engaged solely as independent counsel to the Special Committee, and not as counsel to Penterra Pharmaceuticals Corp. as an entity, the full Board of Directors of Penterra, or any individual director or officer of Penterra. The interests of the Special Committee and the Company may diverge during the course of the Transaction, and the Firm's duty of loyalty runs exclusively to the Special Committee.

Recusal of Regular Outside Counsel. The Firm understands that Penterra's regular outside counsel, Alcott, Barringer & Cole LLP ("ABC"), has been recused from advising the Special Committee in connection with the Proposed Transaction in order to preserve the independence of the Special Committee process. ABC will continue to serve as counsel to the Company on non-Transaction corporate matters. The Firm will establish a coordination protocol with ABC to facilitate the efficient handling of non-conflicted corporate matters that may arise during the pendency of the Transaction, while maintaining appropriate information barriers to protect the confidentiality and independence of the Special Committee's deliberations and communications with the Firm.

3. Engagement Team

The Firm has assembled an engagement team with significant experience in special committee representations, conflicted transactions, and pharmaceutical mergers and acquisitions. The following attorneys will serve as the primary members of the engagement team for this matter:

Renata Vasquez, Partner — Responsible Partner. Ms. Vasquez will serve as the primary relationship partner for the Special Committee and will have overall supervisory responsibility for the engagement. Ms. Vasquez will attend all Special Committee meetings (in person or by videoconference), serve as the principal point of contact for the Chair of the Special Committee, and direct the strategic and legal advice provided to the Special Committee throughout the Transaction process.

Bernard Crawford, Partner — Billing Partner. Mr. Crawford will be responsible for billing, fee arrangements, and administrative matters relating to the engagement. Mr. Crawford will oversee the preparation and submission of monthly invoices and will be available to address any billing inquiries from the Special Committee or the Company's payment processing function.

Sophie Tremblay, Associate — Lead Associate. Ms. Tremblay will be responsible for the day-to-day management of the engagement, including the coordination and supervision of legal due diligence, the drafting and negotiation of transaction documents, and the preparation of meeting materials and memoranda for the Special Committee.

Daniel Obi, Associate — Working Associate. Mr. Obi will support the engagement team with legal research, diligence review, preparation of Special Committee meeting minutes, maintenance of the Process Memorandum, and preparation of the closing checklist and related administrative work streams.

The Firm may assign additional attorneys, paralegals, or professional staff to the engagement as necessary to ensure the timely and efficient delivery of legal services. The Special Committee will be notified in advance of the assignment of any additional personnel to the engagement team. All members of the engagement team will be subject to the Information Barrier Policy (Project Coriander) and will execute individual acknowledgments confirming their compliance with the policy.

For administrative purposes, this engagement has been assigned Firm Matter Number 1025-00006. The Special Committee and all parties involved in the payment process are requested to reference this matter number on all correspondence, invoices, and communications directed to the Firm in connection with this engagement.

4. Client Identification

It is important that all parties clearly understand the identity of the client in this engagement. The client is the Special Committee of the Board of Directors of Penterra Pharmaceuticals Corp., acting in its capacity as an independent committee established pursuant to the Board Resolution to evaluate the Proposed Transaction. The Firm's duties of loyalty, confidentiality, and zealous representation run solely to the Special Committee.

The Firm does not represent, and shall not be deemed to represent, any of the following persons or entities in connection with this engagement or the Proposed Transaction:

(a) Penterra Pharmaceuticals Corp. as a corporate entity;

(b) the full Board of Directors of Penterra Pharmaceuticals Corp.;

(c) any individual director of Penterra, including any member of the Special Committee in his or her individual capacity (as distinguished from the Special Committee as a body);

(d) any officer or employee of Penterra, including, without limitation, Dr. Marcus Hale, Lawrence Whittaker, or any other member of Penterra's management team;

(e) Dr. Marcus Hale in his individual capacity or in his capacity as Chairman, Chief Executive Officer, or stockholder of Penterra, or as a stockholder or board observer of Caliston;

(f) Caliston BioSciences, Inc.;

(g) any stockholder of Penterra or Caliston, including, without limitation, Ridgeline Ventures, LP, Meridian Life Sciences Fund III, LP, or any other institutional or individual investor; or

(h) any other person or entity.

No attorney-client relationship is created or shall be implied with any person or entity other than the Special Committee by virtue of this Engagement Letter, the Firm's performance of legal services hereunder, or any communication between the Firm and any person in connection with the Proposed Transaction.

5. Fees and Billing

5.1 Hourly Rates

Legal services rendered by the Firm in connection with this engagement will be billed on an hourly basis at the Firm's standard rates for the professionals assigned to the matter. As of the date of this Engagement Letter, the applicable blended hourly rates are as follows:

The foregoing rates reflect the Firm's standard rates for engagements of this nature and complexity. The Firm's standard rates are subject to annual adjustment, typically effective January 1 of each calendar year. The Special Committee will be notified in writing at least thirty (30) days in advance of any adjustment to the hourly rates applicable to this engagement. Any adjusted rates will apply only to services rendered on or after the effective date of the adjustment.

In the event that paralegal or legal assistant time is required and billed to this engagement, such time will be billed at the Firm's then-current standard rates for paralegal and legal assistant services, which will be disclosed to the Special Committee prior to the incurrence of any such charges. As of the date of this letter, the Firm's standard rate for paralegals is $325.00 per hour.

5.2 Retainer. Upon execution of this Engagement Letter, an evergreen retainer in the amount of Seventy-Five Thousand Dollars ($75,000) (the "Retainer") shall be paid to the Firm. The Retainer will be deposited into and held in the Firm's Interest on Lawyers' Trust Account ("IOLTA") in accordance with the applicable Rules of Professional Conduct of the Commonwealth of Pennsylvania. The Retainer will be applied against outstanding invoices as they become due and payable.

Upon application of any portion of the Retainer against an outstanding invoice, the Special Committee shall cause the Retainer to be replenished to the full amount of Seventy-Five Thousand Dollars ($75,000) within fifteen (15) business days following receipt of written notice from the Firm that the Retainer balance has been drawn down. The replenishment obligation shall continue until the earlier of (i) the conclusion of the engagement or (ii) the written agreement of the Firm and the Special Committee to modify or waive the replenishment requirement.

Upon termination of the engagement, any unused portion of the Retainer will be refunded to the Company within thirty (30) days following the issuance of the Firm's final invoice and the application of any remaining Retainer balance against such final invoice.

5.3 Fee Cap

There is no fee cap applicable to this engagement. The Board Resolution authorizes the Special Committee to incur such fees and expenses as are reasonably necessary to fulfill its mandate in connection with the evaluation of the Proposed Transaction, including without limitation the fees and expenses of independent legal counsel and an independent financial advisor. The Firm will endeavor to manage the engagement efficiently and cost-effectively, and will provide the Special Committee with periodic updates regarding the status of fees incurred. However, the Special Committee acknowledges that the scope, complexity, and duration of the Transaction, as well as the adversarial nature of the negotiation process and the potential for stockholder litigation, may result in substantial aggregate fees.

5.4 Invoicing and Payment

The Firm will issue detailed monthly invoices describing the legal services rendered and expenses incurred during the preceding calendar month. Each invoice will include a summary of professional fees by timekeeper, a description of the services performed (in sufficient detail to permit the Special Committee to evaluate the reasonableness of the charges, while preserving the confidentiality of privileged communications), and an itemization of disbursements and out-of-pocket expenses.

Invoices shall be due and payable within thirty (30) days of receipt. All payments shall be made in U.S. dollars by wire transfer or check to the account specified in the Firm's wire transfer instructions (enclosed herewith).

Invoices will be directed to the Chair of the Special Committee, Ms. Diane Prescott, at her address and email address on file with the Firm. For purposes of administrative payment processing only, copies of invoices will also be directed to the attention of Mr. Lawrence Whittaker, General Counsel and Corporate Secretary of Penterra Pharmaceuticals Corp. The parties acknowledge and agree that Mr. Whittaker's role in the invoice processing function is strictly administrative in nature and does not create, and shall not be construed to create, an attorney-client relationship between the Firm and Mr. Whittaker, Penterra, or any other person or entity. Mr. Whittaker will not have access to any privileged communications, work product, or confidential deliberations of the Special Committee by reason of his receipt of invoices, and the Firm's invoices shall be prepared in a manner that preserves the confidentiality of privileged information.

Penterra Pharmaceuticals Corp. shall be responsible for the payment of all fees and expenses incurred by the Firm on behalf of the Special Committee in connection with this engagement, as authorized by the Board Resolution. The Company's payment obligation shall not be contingent upon the consummation of the Proposed Transaction or the Special Committee's recommendation with respect thereto.

5.5 Expenses. In addition to professional fees for legal services, the Special Committee will be responsible for reimbursement of reasonable out-of-pocket expenses incurred by the Firm in connection with this engagement. Such expenses may include, without limitation, the following:

(a) travel expenses (including airfare, ground transportation, hotel, and meals) incurred in connection with meetings, due diligence, negotiations, or closings;

(b) document reproduction, printing, and binding charges;

(c) charges for computerized legal research databases (including Westmark Data Systems, Sundial Solutions, and similar services);

(d) messenger, overnight courier, and delivery service charges;

(e) filing fees, including fees associated with HSR Act filings, SEC filings, or state regulatory filings;

(f) charges for virtual data room access or hosting, if applicable; and

(g) such other reasonable expenses as may be incurred in connection with the engagement.

All expenses will be itemized on the Firm's monthly invoices and will be billed at the Firm's actual cost, without markup. The Firm will exercise reasonable judgment in incurring expenses and will seek the Special Committee's prior approval for any individual expense item expected to exceed Five Thousand Dollars ($5,000).

6. Conflicts of Interest

The Firm has conducted a comprehensive conflicts check in accordance with its internal procedures and the applicable Rules of Professional Conduct. Based on that review, the Firm confirms that, as of the date of this Engagement Letter, it has no existing or prior client relationships with any of the following persons or entities that would create a conflict of interest with respect to this engagement:

(a) Caliston BioSciences, Inc.;

(b) Whitfield Graves LLP, counsel to Caliston;

(d) Ridgeline Ventures, LP, a stockholder of Caliston;

(e) Meridian Life Sciences Fund III, LP, a stockholder of Caliston;

(f) Dr. Marcus Hale, individually or in any capacity;

(g) Ms. Angela Whitmore, individually or in any capacity;

(h) Mr. Raymond Tusk, individually or in any capacity; or

(i) any other stockholder, officer, director, or advisor of Caliston known to the Firm as of the date hereof.

A separate Conflicts Clearance Memorandum dated June 1, 2023 has been prepared by the Firm's General Counsel and is enclosed herewith for the Special Committee's review. The Conflicts Clearance Memorandum documents the scope and results of the Firm's conflicts review in detail.

The Firm will conduct ongoing conflicts monitoring throughout the duration of this engagement and will promptly notify the Special Committee in writing if any potential or actual conflict of interest arises at any time during the course of the engagement. In the event that a conflict is identified, the Firm will work with the Special Committee to determine the appropriate course of action, which may include, depending on the nature and severity of the conflict, the implementation of an ethical screen within the Firm, the engagement of separate counsel for a discrete matter, or, if necessary, the withdrawal of the Firm from the engagement.

7. Confidentiality

All information provided to the Firm by or on behalf of the Special Committee in connection with this engagement, including, without limitation, documents, memoranda, communications (whether oral or written), deliberations, analyses, strategies, and work product (collectively, "Confidential Information"), will be treated by the Firm as strictly confidential and privileged. The Firm will take all reasonable measures to protect the confidentiality of the Confidential Information and to preserve the attorney-client privilege and work product doctrine protections applicable to the Special Committee's communications with the Firm.

The Firm will maintain the confidentiality of all Special Committee deliberations, materials, and communications, including the substance and content of discussions at Special Committee meetings, the Firm's legal advice and recommendations, and any draft or final documents prepared by or for the Special Committee.

Materials related to this engagement will be stored on a segregated and access-restricted document management workspace within the Firm's document management system, designated under the project code name "Project Coriander." Access to the Project Coriander workspace will be limited exclusively to the members of the engagement team identified in Section 3 of this Engagement Letter (and such additional personnel as may be assigned with notice to the Special Committee), the members of the Special Committee, and such other persons as the Special Committee may authorize in writing from time to time. No other attorneys, staff, or personnel of the Firm will have access to the Project Coriander workspace.

The Firm will not disclose Confidential Information to any person outside the engagement team without the prior written consent of the Special Committee, except as may be required by applicable law, regulation, or order of a court of competent jurisdiction, in which case the Firm will provide prompt notice to the Special Committee (to the extent permitted by law) and will cooperate with the Special Committee in seeking a protective order or other appropriate remedy to limit the scope of any required disclosure.

8. Independence and Information Barriers

The Firm acknowledges the critical importance of its independence as counsel to the Special Committee. The independence of the Special Committee and its advisors is a foundational element of the process by which the Special Committee will evaluate the Proposed Transaction, and is essential to establishing the procedural protections necessary to withstand judicial scrutiny under the entire fairness standard and, if applicable, to invoke the protections of the MFW Framework.

The Firm confirms that it has not previously represented and does not currently represent Dr. Marcus Hale, Ms. Angela Whitmore, Mr. Raymond Tusk, Caliston BioSciences, Inc., or any stockholder, officer, director, or advisor of Caliston in any matter, and that neither the Firm nor any of its partners, associates, or professional staff has any financial, familial, or personal relationship with any of the foregoing persons or entities that could compromise or be perceived to compromise the Firm's independence.

The Firm will comply in all respects with the Independence Protocol and Information Barrier Policy adopted by the Special Committee on June 2, 2023 (the "Information Barrier Policy"). Without limiting the generality of the foregoing, the Firm will not share any Special Committee information, including Confidential Information, privileged communications, work product, meeting materials, minutes, memoranda, or any other information relating to the Special Committee's deliberations or the Firm's advice, with:

(a) any recused director of Penterra, including Dr. Marcus Hale, Ms. Angela Whitmore, and Mr. Raymond Tusk;

(b) any officer, employee, or agent of Penterra management, except through channels expressly approved by the Special Committee in the Information Barrier Policy; or

(c) Alcott, Barringer & Cole LLP or any other counsel to the Company, except as permitted under the coordination protocol described in Section 2 of this Engagement Letter and in accordance with the Information Barrier Policy.

Any requests from Penterra management, recused directors, or the Company's regular outside counsel for information relating to the Special Committee process or the Firm's engagement will be routed through the Firm to ensure the preservation of the information barrier and the integrity of the Special Committee process. The Firm will not respond to any such request without the express prior authorization of the Chair of the Special Committee.

9. Termination

Either the Special Committee or the Firm may terminate this engagement at any time, with or without cause, upon written notice to the other party. In the case of a termination initiated by the Firm, the Firm will take such steps as are reasonably necessary to protect the Special Committee's interests during the transition period, including facilitating the transfer of the engagement to successor counsel, if any, designated by the Special Committee.

Upon termination of the engagement, the Firm will be entitled to payment for all professional fees earned and out-of-pocket expenses incurred through the effective date of termination. Any outstanding invoices shall be due and payable in accordance with the payment terms set forth in Section 5.4 of this Engagement Letter. The Retainer, or any unused portion thereof, will be handled in accordance with Section 5.2.

The Firm's obligations of confidentiality set forth in Section 7 of this Engagement Letter will survive the termination of the engagement and will continue in full force and effect indefinitely, or for such period as may be required by applicable law and the Rules of Professional Conduct.

The attorney-client privilege applicable to the Special Committee's communications with the Firm will survive the termination of the engagement. The privilege is held by the Special Committee (and, following the conclusion of the Special Committee's mandate, by the Board of Directors of Penterra in its capacity as successor holder of the privilege) and may be waived only by the Special Committee or its authorized successor, and not by any individual member of the Special Committee, any officer or director of Penterra, or the Firm.

10. Document Retention

The Firm will maintain engagement files, including electronic and paper records, in accordance with its standard document retention policies, which provide for the retention of closed-matter files for a period of not less than ten (10) years following the conclusion of the engagement, subject to applicable law and ethical obligations.

Upon the conclusion of the engagement, the Special Committee may request the return or transfer of original documents provided to the Firm by or on behalf of the Special Committee. The Firm will comply with any such request within a reasonable period of time. The Firm may retain copies of such documents for its files in accordance with its document retention policies.

The Special Committee acknowledges that the Firm's work product, including internal memoranda, research files, drafts of documents prepared by the Firm, and the Firm's internal communications and analyses, are the property of the Firm, subject to the Special Committee's right of access to such materials to the extent necessary for the Special Committee's use in connection with the Transaction or any related proceedings.

11. Limitation of Engagement

The Firm's engagement is limited to the matters described in Section 2 (Scope of Engagement) of this Engagement Letter. Without limiting the generality of the foregoing, the Special Committee acknowledges and agrees as follows:

(a) The Firm is not engaged to provide tax advice to the Special Committee, the Company, or any stockholder of the Company or Caliston. The Firm may, in the course of its analysis of the Transaction structure, provide observations or analysis regarding tax structure considerations as they relate to the Proposed Transaction; however, such observations or analysis shall not constitute tax advice, and the Special Committee should consult with independent tax advisors for purposes of obtaining tax advice in connection with the Transaction.

(b) The Firm is not engaged to provide accounting advice or to perform any accounting, auditing, or financial statement review services.

(c) The Firm is not engaged to provide business advice or to make business recommendations regarding the merits of the Proposed Transaction. The Firm's role is to provide legal advice and analysis to assist the Special Committee in its deliberations, and the ultimate business judgment regarding the Transaction rests with the Special Committee.

(d) The Firm is not engaged to render a fairness opinion, any financial valuation, or any opinion regarding the adequacy or fairness of the consideration to be paid or received in connection with the Proposed Transaction. Such services will be provided by the Special Committee's independent financial advisor, once retained by the Special Committee.

(e) The Firm's legal advice in connection with this engagement is limited to the laws of the State of Delaware (including the DGCL and the common law of fiduciary duty) and the federal laws of the United States (including federal securities laws, the HSR Act, and other federal regulatory requirements) to the extent relevant to the Proposed Transaction. The Firm does not undertake to advise the Special Committee on the laws of any other jurisdiction, and the Special Committee should engage local counsel in any jurisdiction where specialized legal advice may be required.

12. Governing Law

This Engagement Letter shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania, without regard to conflict-of-laws principles that would require the application of the laws of any other jurisdiction. Any dispute arising out of or relating to this Engagement Letter or the Firm's engagement hereunder shall be resolved in accordance with the applicable rules and procedures governing attorney-client fee disputes in the Commonwealth of Pennsylvania.

13. Acceptance and Execution

We are grateful for the Special Committee's confidence in retaining Calderwood & Harkness LLP for this important engagement, and we look forward to working with you throughout the evaluation of the Proposed Transaction. We are committed to providing the highest quality legal services and to supporting the Special Committee in the discharge of its fiduciary duties.

Please confirm the Special Committee's acceptance of the terms and conditions of this Engagement Letter by having each member of the Special Committee sign in the spaces provided below and return one fully executed copy of this letter to the Firm. Upon execution by all parties, this Engagement Letter shall constitute the binding agreement between the Firm and the Special Committee with respect to the matters set forth herein.

If you have any questions regarding the terms of this Engagement Letter or any other aspect of the engagement, please do not hesitate to contact Renata Vasquez at (215) 864-7100 or rvasquez@calderwoodharkness.com.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Name: Renata Vasquez

Title: Partner

Date: June 2, 2023

ACKNOWLEDGMENT AND ACCEPTANCE

The undersigned, constituting all members of the Special Committee of the Board of Directors of Penterra Pharmaceuticals Corp., hereby acknowledge receipt of the foregoing Engagement Letter dated June 2, 2023, and hereby confirm the Special Committee's acceptance of the terms and conditions set forth therein. By signing below, the undersigned authorize Calderwood & Harkness LLP to proceed with the engagement described in the Engagement Letter.

Acknowledged and Accepted on behalf of the Special Committee of the Board of Directors of Penterra Pharmaceuticals Corp.:

________________________________________

Diane Prescott Chair of the Special Committee

Date: ________

________________________________________

James Okafor Member of the Special Committee

Date: ________

________________________________________

Dr. Helen Ng Member of the Special Committee

Date: ________

Enclosures:

1. Conflicts Clearance Memorandum (dated June 1, 2023)

2. W-9 and Wire Transfer Instructions for Retainer Payment

cc: Bernard Crawford, Calderwood & Harkness LLP cc: Sophie Tremblay, Calderwood & Harkness LLP cc: Daniel Obi, Calderwood & Harkness LLP

Timekeeper Category	Blended Hourly Rate
Partners	$1,025.00
Associates	$625.00

CALDERWOOD & HARKNESS LLP Attorneys at Law
1700 Market Street, Suite 3400 Philadelphia, PA 19103
Telephone: (215) 864-7000 Facsimile: (215) 864-7001 www.calderwoodharkness.com
June 2, 2023
VIA HAND DELIVERY AND ELECTRONIC MAIL
The Special Committee of the Board of Directors of Penterra Pharmaceuticals Corp. c/o Ms. Diane Prescott, Chair of the Special Committee Penterra Pharmaceuticals Corp. 400 Innovation Drive, Suite 1200 Princeton, NJ 08540
Re: Engagement of Calderwood & Harkness LLP as Independent Legal Counsel to the Special Committee of the Board of Directors of Penterra Pharmaceuticals Corp.
Dear Ms. Prescott, Mr. Okafor, and Dr. Ng:
1. Purpose and Engagement
We are pleased to confirm the engagement of Calderwood & Harkness LLP ("C&H" or the "Firm") as independent legal counsel to the Special Committee (the "Special Committee") of the Board of Directors (the "Board") of Penterra Pharmaceuticals Corp., a Delaware corporation ("Penterra" or the "Company"; NYSE: PPHR). This letter (this "Engagement Letter") sets forth the terms and conditions upon which the Firm will provide legal services to the Special Committee in connection with the matters described herein.
This engagement arises in connection with the Special Committee's evaluation of a proposed acquisition by Penterra of one hundred percent (100%) of the outstanding equity interests of Caliston BioSciences, Inc., a Delaware corporation ("Caliston"), to be structured as a one-step merger pursuant to which Caliston would merge with and into a wholly owned subsidiary of Penterra, with Caliston surviving as a wholly owned subsidiary of the Company (the "Proposed Transaction" or the "Transaction"). The Firm understands that the Proposed Transaction has been identified by Penterra's management as a strategic opportunity to acquire Caliston's proprietary immunology platform and pipeline assets, and that the Transaction, if consummated, would represent a significant acquisition for the Company.
The Proposed Transaction constitutes a related-party transaction requiring heightened scrutiny and an independent evaluation process. Specifically, Dr. Marcus Hale, the Chairman and Chief Executive Officer of Penterra, holds a twenty-eight and one-half percent (28.5%) equity interest in Caliston, acquired through personal investments totaling approximately Forty-Two Million Dollars ($42,000,000) across Caliston's Seed, Series A, and Series B financing rounds. In addition, Dr. Hale holds a board observer seat at Caliston, providing him with access to Caliston's confidential business information and strategic deliberations. By reason of Dr. Hale's material financial interest in Caliston and his dual roles with both Penterra and Caliston, the Proposed Transaction gives rise to conflicts of interest that necessitate the independent evaluation, negotiation, and recommendation process that the Special Committee has been empowered to conduct.
The Firm has been provided with, and has reviewed, the Board Resolution adopted by the Board of Directors of Penterra on June 2, 2023 (the "Board Resolution"), establishing the Special Committee and granting it sole and exclusive authority to: (a) evaluate the Proposed Transaction and all aspects thereof, including the proposed consideration, structure, timing, and terms; (b) negotiate the terms and conditions of the Proposed Transaction and all related agreements on behalf of the Company; (c) retain independent legal counsel, an independent financial advisor, and such other independent advisors as the Special Committee deems necessary or appropriate; (d) recommend to the full Board of Directors whether to approve, reject, or modify the Proposed Transaction, or to explore strategic alternatives (including the unilateral power to decline to proceed with the Transaction if the Special Committee determines, in the exercise of its fiduciary duties, that the Transaction is not in the best interests of Penterra and its unaffiliated stockholders); and (e) take such other actions as the Special Committee deems necessary or advisable in connection with the foregoing. The Board Resolution further provides that the full Board of Directors shall not approve or authorize the Proposed Transaction without a prior favorable recommendation of the Special Committee.
The Firm understands that the Special Committee was constituted by the unanimous vote of the six (6) independent directors of the Board, with Dr. Marcus Hale, Ms. Angela Whitmore, and Mr. Raymond Tusk recusing themselves from the vote establishing the Special Committee and from all deliberations relating to the Proposed Transaction. Ms. Whitmore and Mr. Tusk were recused due to their respective personal and professional relationships with Dr. Hale that could be perceived as impairing their independence with respect to the evaluation of the Transaction.
2. Scope of Engagement
The Firm will provide legal services to the Special Committee in connection with the Proposed Transaction. The scope of the Firm's engagement shall include, but not be limited to, the following:
(a) Fiduciary Duty Advice. Advising the Special Committee on its fiduciary duties under Delaware law, including, without limitation, the duties of care and loyalty, the business judgment rule, the requirements of Sections 141(a), 144, and 251 of the Delaware General Corporation Law (the "DGCL"), the entire fairness doctrine as articulated in Weinberger v. UOP, Inc., 457 A.2d 701 (Del. 1983), and its progeny, and the applicability and procedural requirements of the framework established in Kahn v. M&F Worldwide Corp., 88 A.3d 635 (Del. 2014) (the "MFW Framework"), including the conditions under which the business judgment rule standard of review may be invoked in the context of a conflicted controller transaction. The Firm will advise the Special Committee on best practices for establishing a process that will withstand judicial scrutiny in the event of stockholder litigation challenging the Proposed Transaction.
(b) Independence Protocol and Information Barriers. Designing, implementing, and overseeing the Independence Protocol and Information Barrier Policy (code-named "Project Coriander") to ensure the integrity and independence of the Special Committee process. This shall include establishing procedures governing the flow of information between the Special Committee and recused directors, Penterra management, and Caliston, as well as protocols for the preservation of attorney-client privilege and work product protections.
(c) Director Independence Analysis. Reviewing and analyzing director independence questionnaires completed by each member of the Special Committee (Ms. Prescott, Mr. Okafor, and Dr. Ng) to confirm the independence of each member and to identify and address any potential issues that could be raised in connection with the independence of the Special Committee in any subsequent litigation or regulatory review.
(d) Financial Advisor Coordination. Coordinating with the Special Committee's independent financial advisor, once retained, regarding the fairness opinion process, including reviewing the financial advisor's engagement letter, advising the Special Committee on the scope and limitations of the fairness opinion, and ensuring that the Special Committee's process with respect to the fairness opinion satisfies the requirements of Delaware law and applicable SEC disclosure obligations.
(e) Legal Due Diligence. Conducting or supervising comprehensive legal due diligence of Caliston BioSciences, Inc., including, without limitation, review and analysis of the following areas: (i) corporate organization, capitalization, governance documents, and equity structure; (ii) intellectual property portfolio, including patents, patent applications, trade secrets, licensing agreements, and freedom-to-operate assessments; (iii) regulatory and U.S. Food and Drug Administration ("FDA") matters, including the status of investigational new drug applications, clinical trial protocols, and regulatory correspondence; (iv) material contracts and commercial agreements; (v) pending, threatened, or contemplated litigation, arbitration, or regulatory proceedings; (vi) employment matters, including key employee arrangements, retention agreements, change-of-control provisions, and labor law compliance; (vii) tax matters relevant to the structure of the Transaction; and (viii) compliance matters, including anti-corruption, data privacy, and environmental, health, and safety matters.
(f) Antitrust and HSR Act Analysis. Analyzing the antitrust implications of the Proposed Transaction, including the applicability of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), and the requirement, timing, and preparation of any pre-merger notification filings with the Federal Trade Commission and the United States Department of Justice.
(g) Negotiation of Transaction Documents. Negotiating the terms and conditions of the Agreement and Plan of Merger and all ancillary transaction documents on behalf of the Special Committee, including representations and warranties, covenants, closing conditions, indemnification provisions, termination rights, and break-up fee provisions, with a view toward protecting the interests of Penterra and its unaffiliated stockholders.
(h) Drafting and Review of Transaction Documents. Preparing or reviewing all transaction documents in connection with the Proposed Transaction, including, without limitation: (i) the Agreement and Plan of Merger; (ii) a Contingent Value Rights Agreement, if applicable; (iii) Stockholder Support Agreements; (iv) a Voting and Recusal Agreement governing Dr. Hale's participation (or non-participation) in the stockholder vote on the Transaction; (v) an Escrow Agreement; and (vi) such other related instruments, certificates, and ancillary documents as may be necessary or appropriate in connection with the consummation of the Transaction.
(i) SEC Disclosure and Proxy Statement. Advising the Special Committee on Securities and Exchange Commission ("SEC") disclosure requirements applicable to the Proposed Transaction, including the preparation and review of proxy statement disclosure relating to the Special Committee process, the background of the Transaction, the reasons for the Special Committee's recommendation, the conflicts of interest of Dr. Hale and other interested parties, and such other disclosures as may be required under the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.
(j) Minutes and Process Memorandum. Preparing minutes of all Special Committee meetings and maintaining a comprehensive process memorandum (the "Process Memorandum") documenting the Special Committee's activities, deliberations, and decision-making process in connection with the Transaction, to support the entire fairness record and to serve as a contemporaneous record of the Special Committee's discharge of its fiduciary duties.
(k) Other Services. Such other legal services as the Special Committee may reasonably request in connection with the Proposed Transaction from time to time during the term of this engagement.
Sole Representation of the Special Committee. The Firm wishes to make clear that it is engaged solely as independent counsel to the Special Committee, and not as counsel to Penterra Pharmaceuticals Corp. as an entity, the full Board of Directors of Penterra, or any individual director or officer of Penterra. The interests of the Special Committee and the Company may diverge during the course of the Transaction, and the Firm's duty of loyalty runs exclusively to the Special Committee.
Recusal of Regular Outside Counsel. The Firm understands that Penterra's regular outside counsel, Alcott, Barringer & Cole LLP ("ABC"), has been recused from advising the Special Committee in connection with the Proposed Transaction in order to preserve the independence of the Special Committee process. ABC will continue to serve as counsel to the Company on non-Transaction corporate matters. The Firm will establish a coordination protocol with ABC to facilitate the efficient handling of non-conflicted corporate matters that may arise during the pendency of the Transaction, while maintaining appropriate information barriers to protect the confidentiality and independence of the Special Committee's deliberations and communications with the Firm.
3. Engagement Team
The Firm has assembled an engagement team with significant experience in special committee representations, conflicted transactions, and pharmaceutical mergers and acquisitions. The following attorneys will serve as the primary members of the engagement team for this matter:
Renata Vasquez, Partner — Responsible Partner. Ms. Vasquez will serve as the primary relationship partner for the Special Committee and will have overall supervisory responsibility for the engagement. Ms. Vasquez will attend all Special Committee meetings (in person or by videoconference), serve as the principal point of contact for the Chair of the Special Committee, and direct the strategic and legal advice provided to the Special Committee throughout the Transaction process.
Bernard Crawford, Partner — Billing Partner. Mr. Crawford will be responsible for billing, fee arrangements, and administrative matters relating to the engagement. Mr. Crawford will oversee the preparation and submission of monthly invoices and will be available to address any billing inquiries from the Special Committee or the Company's payment processing function.
Sophie Tremblay, Associate — Lead Associate. Ms. Tremblay will be responsible for the day-to-day management of the engagement, including the coordination and supervision of legal due diligence, the drafting and negotiation of transaction documents, and the preparation of meeting materials and memoranda for the Special Committee.
Daniel Obi, Associate — Working Associate. Mr. Obi will support the engagement team with legal research, diligence review, preparation of Special Committee meeting minutes, maintenance of the Process Memorandum, and preparation of the closing checklist and related administrative work streams.
The Firm may assign additional attorneys, paralegals, or professional staff to the engagement as necessary to ensure the timely and efficient delivery of legal services. The Special Committee will be notified in advance of the assignment of any additional personnel to the engagement team. All members of the engagement team will be subject to the Information Barrier Policy (Project Coriander) and will execute individual acknowledgments confirming their compliance with the policy.
For administrative purposes, this engagement has been assigned Firm Matter Number 1025-00006. The Special Committee and all parties involved in the payment process are requested to reference this matter number on all correspondence, invoices, and communications directed to the Firm in connection with this engagement.
4. Client Identification
It is important that all parties clearly understand the identity of the client in this engagement. The client is the Special Committee of the Board of Directors of Penterra Pharmaceuticals Corp., acting in its capacity as an independent committee established pursuant to the Board Resolution to evaluate the Proposed Transaction. The Firm's duties of loyalty, confidentiality, and zealous representation run solely to the Special Committee.
The Firm does not represent, and shall not be deemed to represent, any of the following persons or entities in connection with this engagement or the Proposed Transaction:
(a) Penterra Pharmaceuticals Corp. as a corporate entity;
(b) the full Board of Directors of Penterra Pharmaceuticals Corp.;
(c) any individual director of Penterra, including any member of the Special Committee in his or her individual capacity (as distinguished from the Special Committee as a body);
(d) any officer or employee of Penterra, including, without limitation, Dr. Marcus Hale, Lawrence Whittaker, or any other member of Penterra's management team;
(e) Dr. Marcus Hale in his individual capacity or in his capacity as Chairman, Chief Executive Officer, or stockholder of Penterra, or as a stockholder or board observer of Caliston;
(f) Caliston BioSciences, Inc.;
(g) any stockholder of Penterra or Caliston, including, without limitation, Ridgeline Ventures, LP, Meridian Life Sciences Fund III, LP, or any other institutional or individual investor; or
(h) any other person or entity.
No attorney-client relationship is created or shall be implied with any person or entity other than the Special Committee by virtue of this Engagement Letter, the Firm's performance of legal services hereunder, or any communication between the Firm and any person in connection with the Proposed Transaction.
5. Fees and Billing
5.1 Hourly Rates
Legal services rendered by the Firm in connection with this engagement will be billed on an hourly basis at the Firm's standard rates for the professionals assigned to the matter. As of the date of this Engagement Letter, the applicable blended hourly rates are as follows:
The foregoing rates reflect the Firm's standard rates for engagements of this nature and complexity. The Firm's standard rates are subject to annual adjustment, typically effective January 1 of each calendar year. The Special Committee will be notified in writing at least thirty (30) days in advance of any adjustment to the hourly rates applicable to this engagement. Any adjusted rates will apply only to services rendered on or after the effective date of the adjustment.
In the event that paralegal or legal assistant time is required and billed to this engagement, such time will be billed at the Firm's then-current standard rates for paralegal and legal assistant services, which will be disclosed to the Special Committee prior to the incurrence of any such charges. As of the date of this letter, the Firm's standard rate for paralegals is $325.00 per hour.
5.2 Retainer.  Upon execution of this Engagement Letter, an evergreen retainer in the amount of Seventy-Five Thousand Dollars ($75,000) (the "Retainer") shall be paid to the Firm. The Retainer will be deposited into and held in the Firm's Interest on Lawyers' Trust Account ("IOLTA") in accordance with the applicable Rules of Professional Conduct of the Commonwealth of Pennsylvania. The Retainer will be applied against outstanding invoices as they become due and payable.
Upon application of any portion of the Retainer against an outstanding invoice, the Special Committee shall cause the Retainer to be replenished to the full amount of Seventy-Five Thousand Dollars ($75,000) within fifteen (15) business days following receipt of written notice from the Firm that the Retainer balance has been drawn down. The replenishment obligation shall continue until the earlier of (i) the conclusion of the engagement or (ii) the written agreement of the Firm and the Special Committee to modify or waive the replenishment requirement.
Upon termination of the engagement, any unused portion of the Retainer will be refunded to the Company within thirty (30) days following the issuance of the Firm's final invoice and the application of any remaining Retainer balance against such final invoice.
5.3 Fee Cap
There is no fee cap applicable to this engagement. The Board Resolution authorizes the Special Committee to incur such fees and expenses as are reasonably necessary to fulfill its mandate in connection with the evaluation of the Proposed Transaction, including without limitation the fees and expenses of independent legal counsel and an independent financial advisor. The Firm will endeavor to manage the engagement efficiently and cost-effectively, and will provide the Special Committee with periodic updates regarding the status of fees incurred. However, the Special Committee acknowledges that the scope, complexity, and duration of the Transaction, as well as the adversarial nature of the negotiation process and the potential for stockholder litigation, may result in substantial aggregate fees.
5.4 Invoicing and Payment
The Firm will issue detailed monthly invoices describing the legal services rendered and expenses incurred during the preceding calendar month. Each invoice will include a summary of professional fees by timekeeper, a description of the services performed (in sufficient detail to permit the Special Committee to evaluate the reasonableness of the charges, while preserving the confidentiality of privileged communications), and an itemization of disbursements and out-of-pocket expenses.
Invoices shall be due and payable within thirty (30) days of receipt. All payments shall be made in U.S. dollars by wire transfer or check to the account specified in the Firm's wire transfer instructions (enclosed herewith).
Invoices will be directed to the Chair of the Special Committee, Ms. Diane Prescott, at her address and email address on file with the Firm. For purposes of administrative payment processing only, copies of invoices will also be directed to the attention of Mr. Lawrence Whittaker, General Counsel and Corporate Secretary of Penterra Pharmaceuticals Corp. The parties acknowledge and agree that Mr. Whittaker's role in the invoice processing function is strictly administrative in nature and does not create, and shall not be construed to create, an attorney-client relationship between the Firm and Mr. Whittaker, Penterra, or any other person or entity. Mr. Whittaker will not have access to any privileged communications, work product, or confidential deliberations of the Special Committee by reason of his receipt of invoices, and the Firm's invoices shall be prepared in a manner that preserves the confidentiality of privileged information.
Penterra Pharmaceuticals Corp. shall be responsible for the payment of all fees and expenses incurred by the Firm on behalf of the Special Committee in connection with this engagement, as authorized by the Board Resolution. The Company's payment obligation shall not be contingent upon the consummation of the Proposed Transaction or the Special Committee's recommendation with respect thereto.
5.5 Expenses.  In addition to professional fees for legal services, the Special Committee will be responsible for reimbursement of reasonable out-of-pocket expenses incurred by the Firm in connection with this engagement. Such expenses may include, without limitation, the following:
(a) travel expenses (including airfare, ground transportation, hotel, and meals) incurred in connection with meetings, due diligence, negotiations, or closings;
(b) document reproduction, printing, and binding charges;
(c) charges for computerized legal research databases (including Westmark Data Systems, Sundial Solutions, and similar services);
(d) messenger, overnight courier, and delivery service charges;
(e) filing fees, including fees associated with HSR Act filings, SEC filings, or state regulatory filings;
(f) charges for virtual data room access or hosting, if applicable; and
(g) such other reasonable expenses as may be incurred in connection with the engagement.
All expenses will be itemized on the Firm's monthly invoices and will be billed at the Firm's actual cost, without markup. The Firm will exercise reasonable judgment in incurring expenses and will seek the Special Committee's prior approval for any individual expense item expected to exceed Five Thousand Dollars ($5,000).
6. Conflicts of Interest
The Firm has conducted a comprehensive conflicts check in accordance with its internal procedures and the applicable Rules of Professional Conduct. Based on that review, the Firm confirms that, as of the date of this Engagement Letter, it has no existing or prior client relationships with any of the following persons or entities that would create a conflict of interest with respect to this engagement:
(a) Caliston BioSciences, Inc.;
(b) Whitfield Graves LLP, counsel to Caliston;
(c) Fendowell Sinclair & Co., financial advisor to Caliston;
(d) Ridgeline Ventures, LP, a stockholder of Caliston;
(e) Meridian Life Sciences Fund III, LP, a stockholder of Caliston;
(f) Dr. Marcus Hale, individually or in any capacity;
(g) Ms. Angela Whitmore, individually or in any capacity;
(h) Mr. Raymond Tusk, individually or in any capacity; or
(i) any other stockholder, officer, director, or advisor of Caliston known to the Firm as of the date hereof.
A separate Conflicts Clearance Memorandum dated June 1, 2023 has been prepared by the Firm's General Counsel and is enclosed herewith for the Special Committee's review. The Conflicts Clearance Memorandum documents the scope and results of the Firm's conflicts review in detail.
The Firm will conduct ongoing conflicts monitoring throughout the duration of this engagement and will promptly notify the Special Committee in writing if any potential or actual conflict of interest arises at any time during the course of the engagement. In the event that a conflict is identified, the Firm will work with the Special Committee to determine the appropriate course of action, which may include, depending on the nature and severity of the conflict, the implementation of an ethical screen within the Firm, the engagement of separate counsel for a discrete matter, or, if necessary, the withdrawal of the Firm from the engagement.
7. Confidentiality
All information provided to the Firm by or on behalf of the Special Committee in connection with this engagement, including, without limitation, documents, memoranda, communications (whether oral or written), deliberations, analyses, strategies, and work product (collectively, "Confidential Information"), will be treated by the Firm as strictly confidential and privileged. The Firm will take all reasonable measures to protect the confidentiality of the Confidential Information and to preserve the attorney-client privilege and work product doctrine protections applicable to the Special Committee's communications with the Firm.
The Firm will maintain the confidentiality of all Special Committee deliberations, materials, and communications, including the substance and content of discussions at Special Committee meetings, the Firm's legal advice and recommendations, and any draft or final documents prepared by or for the Special Committee.
Materials related to this engagement will be stored on a segregated and access-restricted document management workspace within the Firm's document management system, designated under the project code name "Project Coriander." Access to the Project Coriander workspace will be limited exclusively to the members of the engagement team identified in Section 3 of this Engagement Letter (and such additional personnel as may be assigned with notice to the Special Committee), the members of the Special Committee, and such other persons as the Special Committee may authorize in writing from time to time. No other attorneys, staff, or personnel of the Firm will have access to the Project Coriander workspace.
The Firm will not disclose Confidential Information to any person outside the engagement team without the prior written consent of the Special Committee, except as may be required by applicable law, regulation, or order of a court of competent jurisdiction, in which case the Firm will provide prompt notice to the Special Committee (to the extent permitted by law) and will cooperate with the Special Committee in seeking a protective order or other appropriate remedy to limit the scope of any required disclosure.
8. Independence and Information Barriers
The Firm acknowledges the critical importance of its independence as counsel to the Special Committee. The independence of the Special Committee and its advisors is a foundational element of the process by which the Special Committee will evaluate the Proposed Transaction, and is essential to establishing the procedural protections necessary to withstand judicial scrutiny under the entire fairness standard and, if applicable, to invoke the protections of the MFW Framework.
The Firm confirms that it has not previously represented and does not currently represent Dr. Marcus Hale, Ms. Angela Whitmore, Mr. Raymond Tusk, Caliston BioSciences, Inc., or any stockholder, officer, director, or advisor of Caliston in any matter, and that neither the Firm nor any of its partners, associates, or professional staff has any financial, familial, or personal relationship with any of the foregoing persons or entities that could compromise or be perceived to compromise the Firm's independence.
The Firm will comply in all respects with the Independence Protocol and Information Barrier Policy adopted by the Special Committee on June 2, 2023 (the "Information Barrier Policy"). Without limiting the generality of the foregoing, the Firm will not share any Special Committee information, including Confidential Information, privileged communications, work product, meeting materials, minutes, memoranda, or any other information relating to the Special Committee's deliberations or the Firm's advice, with:
(a) any recused director of Penterra, including Dr. Marcus Hale, Ms. Angela Whitmore, and Mr. Raymond Tusk;
(b) any officer, employee, or agent of Penterra management, except through channels expressly approved by the Special Committee in the Information Barrier Policy; or
(c) Alcott, Barringer & Cole LLP or any other counsel to the Company, except as permitted under the coordination protocol described in Section 2 of this Engagement Letter and in accordance with the Information Barrier Policy.
Any requests from Penterra management, recused directors, or the Company's regular outside counsel for information relating to the Special Committee process or the Firm's engagement will be routed through the Firm to ensure the preservation of the information barrier and the integrity of the Special Committee process. The Firm will not respond to any such request without the express prior authorization of the Chair of the Special Committee.
9. Termination
Either the Special Committee or the Firm may terminate this engagement at any time, with or without cause, upon written notice to the other party. In the case of a termination initiated by the Firm, the Firm will take such steps as are reasonably necessary to protect the Special Committee's interests during the transition period, including facilitating the transfer of the engagement to successor counsel, if any, designated by the Special Committee.
Upon termination of the engagement, the Firm will be entitled to payment for all professional fees earned and out-of-pocket expenses incurred through the effective date of termination. Any outstanding invoices shall be due and payable in accordance with the payment terms set forth in Section 5.4 of this Engagement Letter. The Retainer, or any unused portion thereof, will be handled in accordance with Section 5.2.
The Firm's obligations of confidentiality set forth in Section 7 of this Engagement Letter will survive the termination of the engagement and will continue in full force and effect indefinitely, or for such period as may be required by applicable law and the Rules of Professional Conduct.
The attorney-client privilege applicable to the Special Committee's communications with the Firm will survive the termination of the engagement. The privilege is held by the Special Committee (and, following the conclusion of the Special Committee's mandate, by the Board of Directors of Penterra in its capacity as successor holder of the privilege) and may be waived only by the Special Committee or its authorized successor, and not by any individual member of the Special Committee, any officer or director of Penterra, or the Firm.
10. Document Retention
The Firm will maintain engagement files, including electronic and paper records, in accordance with its standard document retention policies, which provide for the retention of closed-matter files for a period of not less than ten (10) years following the conclusion of the engagement, subject to applicable law and ethical obligations.
Upon the conclusion of the engagement, the Special Committee may request the return or transfer of original documents provided to the Firm by or on behalf of the Special Committee. The Firm will comply with any such request within a reasonable period of time. The Firm may retain copies of such documents for its files in accordance with its document retention policies.
The Special Committee acknowledges that the Firm's work product, including internal memoranda, research files, drafts of documents prepared by the Firm, and the Firm's internal communications and analyses, are the property of the Firm, subject to the Special Committee's right of access to such materials to the extent necessary for the Special Committee's use in connection with the Transaction or any related proceedings.
11. Limitation of Engagement
The Firm's engagement is limited to the matters described in Section 2 (Scope of Engagement) of this Engagement Letter. Without limiting the generality of the foregoing, the Special Committee acknowledges and agrees as follows:
(a) The Firm is not engaged to provide tax advice to the Special Committee, the Company, or any stockholder of the Company or Caliston. The Firm may, in the course of its analysis of the Transaction structure, provide observations or analysis regarding tax structure considerations as they relate to the Proposed Transaction; however, such observations or analysis shall not constitute tax advice, and the Special Committee should consult with independent tax advisors for purposes of obtaining tax advice in connection with the Transaction.
(b) The Firm is not engaged to provide accounting advice or to perform any accounting, auditing, or financial statement review services.
(c) The Firm is not engaged to provide business advice or to make business recommendations regarding the merits of the Proposed Transaction. The Firm's role is to provide legal advice and analysis to assist the Special Committee in its deliberations, and the ultimate business judgment regarding the Transaction rests with the Special Committee.
(d) The Firm is not engaged to render a fairness opinion, any financial valuation, or any opinion regarding the adequacy or fairness of the consideration to be paid or received in connection with the Proposed Transaction. Such services will be provided by the Special Committee's independent financial advisor, once retained by the Special Committee.
(e) The Firm's legal advice in connection with this engagement is limited to the laws of the State of Delaware (including the DGCL and the common law of fiduciary duty) and the federal laws of the United States (including federal securities laws, the HSR Act, and other federal regulatory requirements) to the extent relevant to the Proposed Transaction. The Firm does not undertake to advise the Special Committee on the laws of any other jurisdiction, and the Special Committee should engage local counsel in any jurisdiction where specialized legal advice may be required.
12. Governing Law
This Engagement Letter shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania, without regard to conflict-of-laws principles that would require the application of the laws of any other jurisdiction. Any dispute arising out of or relating to this Engagement Letter or the Firm's engagement hereunder shall be resolved in accordance with the applicable rules and procedures governing attorney-client fee disputes in the Commonwealth of Pennsylvania.
13. Acceptance and Execution
We are grateful for the Special Committee's confidence in retaining Calderwood & Harkness LLP for this important engagement, and we look forward to working with you throughout the evaluation of the Proposed Transaction. We are committed to providing the highest quality legal services and to supporting the Special Committee in the discharge of its fiduciary duties.
Please confirm the Special Committee's acceptance of the terms and conditions of this Engagement Letter by having each member of the Special Committee sign in the spaces provided below and return one fully executed copy of this letter to the Firm. Upon execution by all parties, this Engagement Letter shall constitute the binding agreement between the Firm and the Special Committee with respect to the matters set forth herein.
If you have any questions regarding the terms of this Engagement Letter or any other aspect of the engagement, please do not hesitate to contact Renata Vasquez at (215) 864-7100 or rvasquez@calderwoodharkness.com.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Name: Renata Vasquez
Title: Partner
Date: June 2, 2023
ACKNOWLEDGMENT AND ACCEPTANCE
The undersigned, constituting all members of the Special Committee of the Board of Directors of Penterra Pharmaceuticals Corp., hereby acknowledge receipt of the foregoing Engagement Letter dated June 2, 2023, and hereby confirm the Special Committee's acceptance of the terms and conditions set forth therein. By signing below, the undersigned authorize Calderwood & Harkness LLP to proceed with the engagement described in the Engagement Letter.
Acknowledged and Accepted on behalf of the Special Committee of the Board of Directors of Penterra Pharmaceuticals Corp.:
________________________________________
Diane Prescott Chair of the Special Committee
Date: ________
________________________________________
James Okafor Member of the Special Committee
Date: ________
________________________________________
Dr. Helen Ng Member of the Special Committee
Date: ________
Enclosures:
1.  Conflicts Clearance Memorandum (dated June 1, 2023)
2.  W-9 and Wire Transfer Instructions for Retainer Payment
cc: Bernard Crawford, Calderwood & Harkness LLP cc: Sophie Tremblay, Calderwood & Harkness LLP cc: Daniel Obi, Calderwood & Harkness LLP
Timekeeper Category | Blended Hourly Rate
Partners | $1,025.00
Associates | $625.00

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