1018-00003 · Client 1018 · Engagement & Independence Protocol

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INDEPENDENCE PROTOCOL & INFORMATION BARRIER POLICY

Project Coriander

CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGED / ATTORNEY WORK PRODUCT

Prepared by:

Calderwood & Harkness LLP 1700 Market Street, Suite 3400 Philadelphia, PA 19103

Prepared for:

The Special Committee of the Board of Directors of Penterra Pharmaceuticals Corp.

June 2, 2023

C&H Matter Number: 1025-00006

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I. PURPOSE AND BACKGROUND

A. Purpose of This Memorandum

This memorandum establishes the independence protocol and information barrier policy (the "Protocol") governing the evaluation by the Special Committee (defined below) of the Board of Directors (the "Board") of Penterra Pharmaceuticals Corp. (NYSE: PPHR), a Delaware corporation headquartered at 400 Innovation Drive, Suite 1200, Princeton, NJ 08540 (the "Company" or "Penterra"), of the proposed acquisition of Caliston BioSciences, Inc., a Delaware corporation with principal offices at 88 Harbor Point Road, Cambridge, MA 02142 (the "Target" or "Caliston") (such proposed acquisition, the "Proposed Transaction").

The Protocol is designed to ensure the integrity and independence of the Special Committee's evaluation process, to preserve the protections afforded by Delaware fiduciary duty law—including, without limitation, those arising under Sections 141(a) and 144 of the Delaware General Corporation Law (the "DGCL")—and to create a robust procedural record that supports the application of business judgment review or, if applicable, demonstrates satisfaction of the entire fairness standard. The Special Committee's adherence to this Protocol is intended to demonstrate that the Special Committee undertook a thorough, informed, and unconflicted evaluation of the Proposed Transaction and that its process was free from undue influence by any interested party.

This Protocol is adopted concurrently with (i) the Board Resolution Establishing the Special Committee dated June 2, 2023 (the "Board Resolution"), and (ii) the Special Committee Charter of the same date (the "Charter"). In the event of any conflict between this Protocol and the Board Resolution or Charter, the Board Resolution shall control. All capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in Section II (Definitions) below.

The Protocol addresses, among other things, the identification and recusal of conflicted persons, the establishment and maintenance of information barriers, communication protocols among the various parties and advisors involved in the Proposed Transaction, the process for reporting and remediating inadvertent disclosures of confidential information, and the procedures for the Special Committee's retention of independent advisors. Each person to whom this Protocol is distributed is expected to familiarize himself or herself with its terms and to comply with its requirements in all respects.

B. Background — The Proposed Transaction and Conflicts of Interest

Penterra Pharmaceuticals Corp. proposes to acquire one hundred percent (100%) of the outstanding equity of Caliston BioSciences, Inc. via a one-step merger in which Caliston would merge with and into a wholly owned subsidiary of Penterra, with Caliston surviving as a wholly owned subsidiary of Penterra (or, alternatively, such other transaction structure as may be agreed upon by the parties). The proposed terms of the Proposed Transaction, as initially presented to the Board by Dr. Marcus Hale on February 14, 2023, and as subsequently refined through preliminary discussions, are summarized as follows:

Proposed Consideration. The proposed aggregate equity value of Caliston is Nine Hundred Twenty-Five Million Dollars ($925,000,000), payable as follows:

• Cash Component: Seventy-five percent (75%) of the aggregate equity value, or Six Hundred Ninety-Three Million Seven Hundred Fifty Thousand Dollars ($693,750,000), payable in cash at closing;

• Stock Component: Twenty-five percent (25%) of the aggregate equity value, or Two Hundred Thirty-One Million Two Hundred Fifty Thousand Dollars ($231,250,000), payable in newly issued shares of Penterra common stock, par value $0.001 per share, valued based on the thirty-day (30-day) volume-weighted average price ("VWAP") of Penterra common stock as of June 1, 2023, of $39.17 per share, implying the issuance of approximately 5,903,497 shares; and

• Contingent Value Rights (CVRs): Additional consideration of up to One Hundred Twenty-Five Million Dollars ($125,000,000) payable upon approval by the United States Food and Drug Administration (the "FDA") of Caliston's lead clinical candidate, CLT-4019, on or before December 31, 2026. If the CVR milestone is achieved, the maximum aggregate transaction value would be One Billion Fifty Million Dollars ($1,050,000,000).

Conflicts of Interest. The Proposed Transaction presents significant conflicts of interest that necessitate the formation of the Special Committee, the adoption of this Protocol, and the establishment of the information barriers described herein. The principal conflicts are as follows:

Dr. Marcus Hale. Dr. Marcus Hale serves as Chairman and Chief Executive Officer of Penterra. Dr. Hale 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. At the proposed aggregate equity value of $925,000,000, Dr. Hale's implied proceeds from the Proposed Transaction would be approximately Two Hundred Sixty-Three Million Six Hundred Twenty-Five Thousand Dollars ($263,625,000), representing an implied gain of approximately Two Hundred Twenty-One Million Six Hundred Twenty-Five Thousand Dollars ($221,625,000). Dr. Hale has served as a board observer (non-voting) at Caliston since 2018 and has attended fourteen (14) of sixteen (16) Caliston board meetings during that period. Dr. Hale did not disclose his equity interest in Caliston to the Penterra Board until February 14, 2023, when he first proposed the acquisition of Caliston to the Board. Dr. Hale is an interested party on both sides of the Proposed Transaction and stands to receive significant personal financial benefit from its consummation.

Angela Whitmore. Angela Whitmore serves as a non-independent director of Penterra and as Executive Vice President, Commercial Operations of the Company. Ms. Whitmore is the spouse of Dr. Evan Whitmore, who serves as Head of Clinical Development at Caliston and as a member of Caliston's board of directors. By reason of this familial relationship, Ms. Whitmore has a material interest in the Proposed Transaction and cannot be considered independent for purposes of the Special Committee's evaluation.

Raymond Tusk. Raymond Tusk serves as a non-independent director of Penterra. Mr. Tusk was appointed to the Board at the recommendation of Dr. Hale and lacks independence for purposes of the Special Committee by reason of his longstanding personal and professional relationship with Dr. Hale. The Board has determined that Mr. Tusk cannot be expected to exercise independent judgment with respect to the Proposed Transaction free from the influence of Dr. Hale.

The foregoing conflicts give rise to a substantial risk that the Proposed Transaction, if not evaluated by independent and disinterested directors acting with the advice of independent counsel and an independent financial advisor, could be challenged as a conflicted-controller or interested-director transaction under Delaware law. The formation of the Special Committee and the adoption of this Protocol are essential procedural safeguards designed to mitigate these risks and to protect the interests of Penterra and its stockholders.

C. Board Action

On June 2, 2023, by unanimous vote of the six (6) independent and disinterested directors (with Dr. Marcus Hale, Angela Whitmore, and Raymond Tusk each recused from the vote), the Penterra Board adopted a resolution establishing the Special Committee of the Board of Directors of Penterra Pharmaceuticals Corp. (the "Special Committee"). The Board Resolution provides for the composition, authority, and governance of the Special Committee as follows:

Composition. The Special Committee comprises the following three (3) independent and disinterested directors:

• Diane Prescott (Chair) — Former Chief Executive Officer of Windbridge Health Systems, Inc.; independent director of Penterra since 2019; member of the Penterra Audit Committee and Nominating and Corporate Governance Committee;

• James Okafor — Retired Managing Director of Fielding Capital Partners, LLC; independent director of Penterra since 2020; member of the Penterra Compensation Committee; and

• Dr. Helen Ng — Professor of Pharmacology, Wexford University; former member of the FDA Cardiovascular and Renal Drugs Advisory Committee; independent director of Penterra since 2021; member of the Penterra Science and Technology Committee.

Each member of the Special Committee has been determined by the Board, upon the advice of Regular Outside Counsel, to be independent and disinterested with respect to the Proposed Transaction, free from any material financial interest in Caliston, free from any material personal or professional relationship with any Excluded Person that would impair the exercise of independent judgment, and qualified to serve on the Special Committee by reason of relevant experience and expertise.

Authority. The Special Committee has been granted sole and exclusive authority to: (i) evaluate the Proposed Transaction and its terms; (ii) negotiate the terms of the Proposed Transaction with Caliston and its representatives; (iii) retain, at the Company's expense, independent legal counsel, independent financial advisors, and such other advisors as the Special Committee deems appropriate; (iv) recommend to the full Board whether to approve, reject, or modify the terms of the Proposed Transaction; (v) consider and explore strategic alternatives to the Proposed Transaction, including the alternative of declining to pursue the transaction; and (vi) take any and all other actions that the Special Committee deems necessary or advisable in connection with its evaluation and the fulfillment of its fiduciary duties. The Special Committee has the express power to decline or reject the Proposed Transaction in its entirety, and no approval or recommendation by the full Board or any officer of the Company is required for the Special Committee to exercise this authority.

II. DEFINITIONS

As used in this Protocol, the following terms shall have the meanings set forth below. Terms defined elsewhere in this Protocol and not listed below shall have the meanings assigned to them where defined.

"Caliston" means Caliston BioSciences, Inc., a Delaware corporation with principal offices at 88 Harbor Point Road, Cambridge, MA 02142.

"Caliston Counsel" means Whitfield Graves LLP, One Federal Street, Suite 2600, Boston, MA 02110 (lead partner: Kenneth Pratt), counsel to Caliston in connection with the Proposed Transaction.

"Caliston Financial Advisor" means Fendowell Sinclair & Co., 200 Clarendon Street, 50th Floor, Boston, MA 02116 (lead banker: Sandra Wu, Managing Director), financial advisor to Caliston in connection with the Proposed Transaction.

"Company" means Penterra Pharmaceuticals Corp. (NYSE: PPHR), a Delaware corporation headquartered at 400 Innovation Drive, Suite 1200, Princeton, NJ 08540.

"Excluded Persons" means, collectively, Dr. Marcus Hale, Angela Whitmore, and Raymond Tusk, each of whom has been identified as having a conflict of interest with respect to the Proposed Transaction and each of whom is subject to the recusal and information barrier obligations set forth in this Protocol.

"Independent Counsel" means Calderwood & Harkness LLP, 1700 Market Street, Suite 3400, Philadelphia, PA 19103, serving as independent legal counsel to the Special Committee. The engagement team comprises: Renata Vasquez, Responsible Partner; Bernard Crawford, Billing Partner; Sophie Tremblay, Lead Associate; and Daniel Obi, Working Associate.

"Independent Financial Advisor" means Thorngate Partners LLC, 590 Madison Avenue, 22nd Floor, New York, NY 10022 (once engaged; engagement anticipated mid-June 2023; engagement reference: 1018-00003; lead banker: Gregory Ashford, Managing Director), to serve as independent financial advisor to the Special Committee.

"Inside Group" means, collectively, the Special Committee Members, the Special Committee Advisors, and any other persons who have been formally wall-crossed into the information barrier and authorized to receive Special Committee materials and participate in the Special Committee's work in connection with the Proposed Transaction.

"Outside Group" means the Excluded Persons and any other persons who are on the opposite side of the information barrier and are not authorized to receive Special Committee materials or participate in the Special Committee's deliberations.

"Penterra Management" means the officers and employees of Penterra other than the Excluded Persons, including, without limitation, Priya Anand (Chief Financial Officer) and Lawrence Whittaker (General Counsel and Corporate Secretary).

"Project Coriander" means the confidential code name assigned to the Proposed Transaction. All references to "Project Coriander" in communications, documents, and records shall be understood to refer to the Proposed Transaction.

"Project Coriander Workspace" means the segregated document management workspace on Penterra's document management system designated for the storage, organization, and access control of all materials created or received in connection with the Special Committee's evaluation of the Proposed Transaction.

"Proposed Transaction" means the proposed acquisition by the Company of one hundred percent (100%) of the outstanding equity of Caliston via a one-step merger, on the terms described in Section I.B above, as such terms may be modified through negotiation.

"Protocol" means this Independence Protocol & Information Barrier Policy, including all exhibits hereto, as the same may be amended or supplemented from time to time by action of the Special Committee.

"Regular Outside Counsel" means Alcott, Barringer & Cole LLP, 1221 Avenue of the Americas, 40th Floor, New York, NY 10020 (lead partner: Victoria Shen), regular outside corporate counsel to the Company and the Board.

"Special Committee" means the Special Committee of the Board of Directors of Penterra Pharmaceuticals Corp., established by the Board Resolution dated June 2, 2023, comprising Diane Prescott (Chair), James Okafor, and Dr. Helen Ng.

"Special Committee Advisors" means, collectively, Independent Counsel and the Independent Financial Advisor, and such other advisors as may be retained by the Special Committee from time to time in accordance with this Protocol.

"Special Committee Members" means Diane Prescott, James Okafor, and Dr. Helen Ng, the three independent and disinterested directors who comprise the Special Committee.

"Target" means Caliston BioSciences, Inc.

"Wall" means the information barrier established pursuant to Section IV of this Protocol, separating the Inside Group from the Outside Group.

III. EXCLUDED PERSONS — IDENTIFICATION AND RECUSAL REQUIREMENTS

A. Identification of Excluded Persons

The following individuals have been identified as Excluded Persons by reason of the conflicts of interest described in Section I.B above. Each Excluded Person is subject to the recusal and information barrier obligations set forth in this Section III and in Section IV below.

1. Dr. Marcus Hale — Chairman and Chief Executive Officer of Penterra Pharmaceuticals Corp. Dr. Hale holds a twenty-eight and one-half percent (28.5%) equity interest in Caliston BioSciences, Inc., acquired through personal investment of approximately $42 million across Caliston's Seed, Series A, and Series B financing rounds. Dr. Hale has served as a board observer (non-voting) at Caliston since 2018, attending fourteen (14) of sixteen (16) Caliston board meetings. Dr. Hale is an interested party on both sides of the Proposed Transaction and stands to receive implied proceeds of approximately $263,625,000 (an implied gain of approximately $221,625,000) upon consummation of the Proposed Transaction at the proposed aggregate equity value.

2. Angela Whitmore — Non-independent director of Penterra and Executive Vice President, Commercial Operations. Ms. Whitmore is the spouse of Dr. Evan Whitmore, who serves as Head of Clinical Development at Caliston and as a member of Caliston's board of directors. By reason of this spousal relationship, Ms. Whitmore has a material interest in the outcome of the Proposed Transaction and lacks independence for purposes of the Special Committee's evaluation.

3. Raymond Tusk — Non-independent director of Penterra. Mr. Tusk was appointed to the Board at the recommendation of Dr. Hale. Mr. Tusk lacks independence for purposes of the Special Committee by reason of his longstanding personal and professional relationship with Dr. Hale, which the Board has determined would impair Mr. Tusk's ability to exercise independent judgment with respect to the Proposed Transaction.

The identification of the foregoing persons as Excluded Persons is based on the information presently available to the Board and Independent Counsel. If additional conflicts of interest or relationships are identified during the course of the Special Committee's evaluation, the Special Committee, in consultation with Independent Counsel, may designate additional persons as Excluded Persons and extend the recusal and information barrier obligations of this Protocol to such persons.

B. Scope of Recusal

The recusal obligations applicable to the Excluded Persons are comprehensive and are intended to ensure that no Excluded Person exerts any influence, direct or indirect, over the Special Committee's evaluation, deliberations, negotiation, or decision-making with respect to the Proposed Transaction. Specifically:

1. No Attendance or Participation. Excluded Persons shall not attend, participate in, or observe any meeting or deliberation of the Special Committee, whether held in person, by telephone, by videoconference, or by any other means of communication. This prohibition applies to formal meetings, informal discussions, and any other gathering at which the Special Committee's work in connection with the Proposed Transaction is discussed.

2. No Access to Materials. Excluded Persons shall not receive, review, or have access to any materials, memoranda, analyses, correspondence, presentations, draft agreements, term sheets, valuation models, due diligence reports, board books, or other documents prepared for, by, or at the direction of the Special Committee or the Special Committee Advisors in connection with the Proposed Transaction. This prohibition extends to all documents stored in the Project Coriander Workspace and all physical copies of Special Committee materials.

3. No Summaries or Updates. Excluded Persons shall not receive or be provided any oral or written summaries, reports, briefings, or updates regarding the substance of the Special Committee's deliberations, analyses, findings, or conclusions, except as expressly authorized in Section VI below (Board Reporting Protocol). Permissible communications under the Board Reporting Protocol are limited to procedural and ministerial updates and shall not include substantive information.

4. No Communications Regarding Substance. Excluded Persons shall not communicate with any Special Committee Member, any member of the Special Committee Advisors, or any Penterra employee or agent acting at the direction of the Special Committee regarding the substance of the Special Committee's evaluation, negotiation strategy, valuation analysis, legal advice received, or deliberations. This prohibition applies to all forms of communication, including in-person conversations, telephone calls, text messages, emails, messaging applications, and social media communications.

5. No Influence. Excluded Persons shall not attempt to influence, directly or indirectly, the Special Committee's evaluation, recommendation, or decision-making with respect to the Proposed Transaction. This prohibition encompasses, without limitation, any effort to pressure, persuade, lobby, threaten, incentivize, or otherwise attempt to shape the outcome of the Special Committee's process, whether through communications with Special Committee Members, communications with Penterra employees who interact with the Special Committee, communications with Caliston or its representatives, or any other means.

6. Voting and Recusal Agreement. Dr. Hale has executed a separate Voting and Recusal Agreement dated June 2, 2023, formalizing the foregoing obligations and providing that Dr. Hale shall abstain from voting on any matter related to the Proposed Transaction when the matter comes before the full Board. Ms. Whitmore and Mr. Tusk are required to recuse themselves from voting on the Proposed Transaction pursuant to the Board Resolution.

C. Obligation of Excluded Persons to Cooperate

Notwithstanding the recusal obligations set forth above, the Special Committee recognizes that the Excluded Persons—and in particular Dr. Hale, in his capacity as Chief Executive Officer of Penterra and by reason of his extensive knowledge of Caliston's operations, clinical programs, and personnel—may possess factual information that is relevant and necessary for the Special Committee's thorough evaluation of the Proposed Transaction.

Accordingly, each Excluded Person is expected to cooperate with the Special Committee's evaluation by providing truthful, complete, and timely responses to requests for factual information, subject to the Information Request Protocol set forth in Section VII below. All such requests shall be initiated by and routed exclusively through Independent Counsel. The provision of factual information by an Excluded Person in response to a request under Section VII shall not constitute a breach of the Excluded Person's recusal obligations, provided that the Excluded Person does not use the occasion of such communication to seek information about, or attempt to influence, the Special Committee's deliberations, strategy, or conclusions.

IV. INFORMATION BARRIER POLICY

A. Establishment of Information Barrier

An information barrier (the "Wall") is hereby established, effective as of June 2, 2023, separating the Inside Group from the Outside Group. The Wall is designed to prevent the flow of confidential information relating to the Special Committee's work—including its analyses, strategy, deliberations, and conclusions—from the Inside Group to the Outside Group, and to prevent the flow of information from the Outside Group that could compromise the independence or integrity of the Special Committee's process.

The Inside Group comprises: (1) the Special Committee Members (Diane Prescott, James Okafor, and Dr. Helen Ng); (2) the Special Committee Advisors, including the engagement teams at Calderwood & Harkness LLP and Thorngate Partners LLC (once engaged); and (3) any other persons who have been formally wall-crossed into the information barrier pursuant to the procedures set forth herein and authorized to participate in the Special Committee's work.

The Outside Group comprises: (1) the Excluded Persons (Dr. Marcus Hale, Angela Whitmore, and Raymond Tusk); and (2) any other persons who are not members of the Inside Group and are not authorized to receive Special Committee materials or participate in the Special Committee's deliberations.

The following principles govern the operation of the Wall:

• No information relating to the Special Committee's work, analysis, strategy, deliberations, negotiation positions, legal advice received, valuation conclusions, or recommendations shall cross the Wall from the Inside Group to the Outside Group, except as specifically provided in the Board Reporting Protocol set forth in Section VI below.

• No information from the Outside Group that could compromise the independence or integrity of the Special Committee process—including, without limitation, communications from Dr. Hale or other Excluded Persons advocating for a particular outcome, conveying Caliston's negotiation positions outside of authorized channels, or otherwise seeking to influence the Special Committee's evaluation—shall be communicated to the Inside Group except through the Information Request Protocol set forth in Section VII below.

• Any person who is uncertain whether a particular communication or disclosure would violate the Wall shall refrain from making the communication or disclosure and shall consult with Independent Counsel before proceeding.

B. Physical and Electronic Segregation

1. Project Coriander Workspace

All documents, memoranda, analyses, correspondence, draft agreements, term sheets, presentations, meeting materials, minutes, notes, and other records created, received, or maintained in connection with the Special Committee's evaluation of the Proposed Transaction (collectively, "Special Committee Materials") shall be stored exclusively in the Project Coriander Workspace on Penterra's document management system. The Project Coriander Workspace shall serve as the single, centralized, and controlled repository for all Special Committee Materials, and no Special Committee Materials shall be stored outside of the Project Coriander Workspace except as expressly provided in Section IV.B.2 below (physical documents maintained by Calderwood & Harkness LLP).

Access to the Project Coriander Workspace shall be strictly restricted to the following authorized persons:

(a) Special Committee Members: Diane Prescott, James Okafor, and Dr. Helen Ng;

(b) Calderwood & Harkness LLP Engagement Team: Renata Vasquez, Bernard Crawford, Sophie Tremblay, and Daniel Obi; and

(c) Thorngate Partners LLC Representatives: Authorized personnel at Thorngate Partners LLC, as identified following engagement of Thorngate Partners as Independent Financial Advisor (anticipated mid-June 2023).

The Company's IT department shall configure the access controls for the Project Coriander Workspace to ensure that only the persons listed above (and any additional persons subsequently authorized by the Special Committee) are granted access. The IT department shall maintain a detailed access log reflecting: (i) all persons who have been granted access permissions to the Project Coriander Workspace; (ii) the date on which access was granted; (iii) the date on which access was revoked (if applicable); and (iv) all access events (i.e., each instance in which an authorized person accessed the Project Coriander Workspace), including the date, time, and identity of the person accessing the workspace.

No Excluded Person shall be granted access to the Project Coriander Workspace under any circumstances. No member of Penterra Management who has not been specifically authorized by the Special Committee shall be granted access to the Project Coriander Workspace.

Lawrence Whittaker, General Counsel and Corporate Secretary of Penterra, shall not have access to the Project Coriander Workspace unless the Special Committee expressly authorizes such access. If Mr. Whittaker is authorized to access the Project Coriander Workspace for administrative or other purposes, he shall be formally wall-crossed and shall thereupon become a member of the Inside Group, subject to all of the information barrier obligations set forth in this Protocol. Mr. Whittaker shall execute a written acknowledgment of these obligations prior to being granted access, which acknowledgment shall be maintained in the Project Coriander Workspace.

2. Physical Documents

Physical copies of Special Committee Materials shall be maintained under the custody of Calderwood & Harkness LLP at its offices at 1700 Market Street, Suite 3400, Philadelphia, PA 19103. Calderwood & Harkness LLP shall maintain such physical materials in a secure location within its offices, with access limited to the members of the Calderwood & Harkness LLP engagement team identified herein.

To the extent any physical materials—including printed copies of presentations, board books, memoranda, or other documents—are provided to Special Committee Members in connection with meetings or other proceedings, such materials shall be collected and returned to Calderwood & Harkness LLP at the conclusion of each meeting, or, if Calderwood & Harkness LLP determines it is appropriate, securely destroyed at the conclusion of the meeting using cross-cut shredding or another method of destruction that renders the materials unreadable and irrecoverable. Calderwood & Harkness LLP shall maintain a record of all physical materials distributed to and returned by Special Committee Members at each meeting.

No physical copies of Special Committee Materials shall be stored at Penterra's headquarters at 400 Innovation Drive, Suite 1200, Princeton, NJ 08540, or at any other Penterra office or location that is accessible to any Excluded Person. Special Committee Members shall not retain physical copies of Special Committee Materials at their homes or offices except with the prior authorization of Independent Counsel, and any such retained copies shall be secured and returned to Calderwood & Harkness LLP or destroyed upon completion of the Special Committee's work.

3. Separate Email and Communication Channels

Special Committee-related communications shall be conducted through dedicated, segregated communication channels to prevent inadvertent disclosure of Special Committee Materials or deliberation content to Excluded Persons or other unauthorized persons. The following protocols shall govern electronic communications:

(a) Calderwood & Harkness LLP shall establish a dedicated email distribution group (the "Project Coriander Distribution Group") for the purpose of facilitating secure communications among the members of the Inside Group. All substantive communications among Special Committee Members, between Special Committee Members and Special Committee Advisors, and among Special Committee Advisors regarding the Proposed Transaction shall be conducted through this distribution group or through Calderwood & Harkness LLP's secure communication systems.

(b) Special Committee Members shall not use their regular Penterra email accounts (i.e., their @penterra.com email addresses) for substantive communications regarding the Proposed Transaction. Instead, a separate Project Coriander email alias shall be established for each Special Committee Member, or, alternatively, Special Committee Members may designate personal email addresses known to Calderwood & Harkness LLP for the purpose of receiving Special Committee communications. Calderwood & Harkness LLP shall coordinate with each Special Committee Member to establish the appropriate communication channel.

(c) No Special Committee-related communication—whether email, text message, instant message, or other electronic communication—shall be copied to, forwarded to, or shared with any Excluded Person or any other person outside the Inside Group, except as specifically authorized under the Board Reporting Protocol (Section VI) or the Information Request Protocol (Section VII).

(d) Special Committee Members and Special Committee Advisors shall exercise caution when discussing the Proposed Transaction by telephone or in person and shall take reasonable steps to ensure that such discussions are not overheard by Excluded Persons or other unauthorized persons.

C. Meetings and Deliberations

All meetings of the Special Committee shall be convened by the Chair, Diane Prescott, or at her direction, in consultation with Independent Counsel. The following protocols shall govern the scheduling, location, attendance, and documentation of Special Committee meetings:

1. Scheduling. Meetings shall be scheduled by Independent Counsel in coordination with the Chair. Notice of each meeting shall be provided to all Special Committee Members and Special Committee Advisors through the Project Coriander Distribution Group or another secure communication channel. Meeting notices shall not be distributed through Penterra's regular board portal or administrative systems if such systems are accessible to Excluded Persons.

2. Location. Meetings shall be held at Calderwood & Harkness LLP's offices at 1700 Market Street, Suite 3400, Philadelphia, PA 19103; by secure videoconference using a platform designated by Calderwood & Harkness LLP; or at other locations outside Penterra's headquarters as determined by the Chair in consultation with Independent Counsel. If, for logistical reasons, a meeting must be held at Penterra's offices, the meeting shall be held in a conference room or other location to which Excluded Persons do not have access during the meeting, and appropriate measures shall be taken to ensure that Excluded Persons are not present on the floor or in the vicinity of the meeting room.

3. Attendance. No Excluded Person shall be present at any Special Committee meeting, whether in person or by telephone, videoconference, or any other means. No Excluded Person shall join any call or videoconference of the Special Committee. Attendance at Special Committee meetings shall be limited to: (a) Special Committee Members; (b) members of the Calderwood & Harkness LLP engagement team; (c) representatives of Thorngate Partners LLC (once engaged); and (d) such other persons as the Special Committee may specifically invite for discrete agenda items (e.g., members of Penterra Management for factual presentations, subject to the protocols set forth in Section VII below, or Caliston representatives for management presentations). Persons invited for discrete agenda items shall be excused from the meeting before the Special Committee's deliberations and any discussion of negotiation strategy, valuation, or legal analysis.

4. Minutes. Formal minutes of all Special Committee meetings shall be prepared by Calderwood & Harkness LLP (Daniel Obi, Working Associate) and maintained in the Project Coriander Workspace. Minutes shall document the date, time, location, and attendees of each meeting; the matters discussed and actions taken; any resolutions adopted; and any other matters that Independent Counsel determines should be documented to preserve the Special Committee's procedural record. Draft minutes shall be circulated to the Special Committee Members for review and approval at or prior to the next meeting of the Special Committee. Approved minutes shall be filed in the Project Coriander Workspace and shall not be distributed to Excluded Persons or any other person outside the Inside Group.

V. COMMUNICATION PROTOCOLS

A. Communications Among Inside Group Members

Special Committee Members may communicate freely with each other and with Special Committee Advisors regarding any aspect of the Proposed Transaction, including valuation, due diligence findings, negotiation strategy, legal analysis, and the Special Committee's preliminary or final conclusions. There is no restriction on the frequency, subject matter, or medium of communication among members of the Inside Group, provided that such communications are conducted through the secure channels established pursuant to Section IV.B.3 above and are not accessible to Excluded Persons or other members of the Outside Group.

All substantive communications among Inside Group Members—whether oral or written—should, to the extent practicable, be documented in writing or reflected in the minutes of the applicable Special Committee meeting. This documentation is important for the preservation of the Special Committee's procedural record and to demonstrate the thoroughness and independence of the Special Committee's evaluation process in the event of any subsequent challenge or inquiry.

B. Communications with Caliston and Its Advisors

All communications with Caliston BioSciences, Inc., its management (including, without limitation, Dr. Nadia Sorensen, Chief Executive Officer; Dr. Raj Malhotra, Chief Scientific Officer; and Dr. Evan Whitmore, Head of Clinical Development), its legal counsel (Whitfield Graves LLP, Kenneth Pratt), or its financial advisor (Fendowell Sinclair & Co., Sandra Wu, Managing Director) regarding the Proposed Transaction shall be conducted by or through Calderwood & Harkness LLP and/or Thorngate Partners LLC (once engaged), as appropriate.

No Special Committee Member shall communicate directly with Caliston or any representative of Caliston regarding the Proposed Transaction without prior coordination with Independent Counsel. If a Special Committee Member receives an unsolicited communication from any representative of Caliston regarding the Proposed Transaction, the Special Committee Member shall promptly notify Independent Counsel and shall not respond to the communication without Independent Counsel's guidance.

Dr. Hale, as an Excluded Person and as a board observer of Caliston, shall not serve as a channel of communication between Caliston and the Special Committee. Any information that Dr. Hale possesses regarding Caliston—including information regarding Caliston's operations, clinical programs, financial condition, business prospects, or negotiation positions—shall be obtained by the Special Committee through the Information Request Protocol set forth in Section VII below, if and as the Special Committee determines that such information is needed. The Special Committee and its advisors shall exercise caution in relying upon information provided by Dr. Hale and shall independently verify material information through due diligence and other sources to the extent practicable.

C. Communications with Regular Outside Counsel

Alcott, Barringer & Cole LLP (Victoria Shen, lead partner) serves as regular outside corporate counsel to the Company and the Board and has represented Penterra in range corporate, securities, and transactional matters. However, in order to preserve the independence of the Special Committee's evaluation of the Proposed Transaction, Alcott, Barringer & Cole LLP is recused from advising the Special Committee in connection with the Proposed Transaction. The Special Committee has retained Calderwood & Harkness LLP as Independent Counsel for this purpose.

A separate letter dated June 5, 2023, from Calderwood & Harkness LLP to Alcott, Barringer & Cole LLP (the "Coordination Letter"), establishes the coordination and recusal protocol between Regular Outside Counsel and Independent Counsel with respect to the Proposed Transaction. The Coordination Letter provides, among other things, that:

(a) Alcott, Barringer & Cole LLP shall not receive, review, or have access to Special Committee Materials;

(b) Alcott, Barringer & Cole LLP shall not attend Special Committee meetings or participate in Special Committee deliberations;

(c) Alcott, Barringer & Cole LLP shall not advise the Special Committee, the Special Committee Members, or the Special Committee Advisors on any matter relating to the Proposed Transaction; and

(d) Alcott, Barringer & Cole LLP shall not communicate with Caliston or its advisors regarding the Proposed Transaction on behalf of the Company without the prior authorization of Independent Counsel.

On non-conflicted corporate matters unrelated to the Proposed Transaction—including, without limitation, routine SEC filings, other board matters, employment matters, intellectual property matters, and litigation unrelated to the Proposed Transaction—Penterra may continue to engage Alcott, Barringer & Cole LLP without restriction, provided that no Project Coriander information is shared with Alcott, Barringer & Cole LLP in connection with such engagements. If Alcott, Barringer & Cole LLP becomes aware of any Project Coriander information, it shall promptly notify Calderwood & Harkness LLP and take appropriate steps to screen the information within its firm.

D. Communications with Penterra's Auditor

If the Special Committee requires financial information from Penterra's independent registered public accounting firm, Harwick & Tolliver LLP, 30 Rockefeller Plaza, New York, NY 10112 (the "Company Auditor"), such requests shall be routed through Calderwood & Harkness LLP or Thorngate Partners LLC (once engaged) to ensure that no Excluded Person is made aware of the specific information requested, the purpose of the request, or the analyses being conducted by the Special Committee or its advisors.

The Company Auditor may be asked to provide historical financial statements, audit workpapers, accounting analyses, or other financial information of Penterra that the Special Committee deems relevant to its evaluation. If the Company Auditor requires authorization from Penterra management to release such information, such authorization shall be obtained through a process that does not reveal the substance of the Special Committee's inquiries to any Excluded Person. Calderwood & Harkness LLP shall coordinate with Priya Anand, Chief Financial Officer, to the extent necessary to facilitate such requests, subject to the obligations set forth in Section VII.D below.

E. Communications with Caliston's Auditor

If the Special Committee or its advisors require financial information from Caliston's independent auditor, Brentmoor Advisors LLP, 125 Summer Street, Suite 800, Boston, MA 02110 (the "Target Auditor"), such requests shall be coordinated through Whitfield Graves LLP (Kenneth Pratt) as part of the due diligence process. Calderwood & Harkness LLP and/or Thorngate Partners LLC shall communicate any such requests to Whitfield Graves LLP, and the Target Auditor's responses shall be directed to the Special Committee Advisors for review and analysis. All information received from the Target Auditor shall be stored in the Project Coriander Workspace and treated as Special Committee Material.

VI. BOARD REPORTING PROTOCOL

A. Permissible Reporting to the Full Board

The Special Committee may, at its discretion and in consultation with Independent Counsel, provide periodic status updates to the full Penterra Board, including the Excluded Persons, regarding the progress of the Special Committee's work. Such status updates are intended to keep the full Board apprised of the general status of the evaluation at a high level, consistent with the Board's fiduciary oversight responsibilities, while preserving the confidentiality and independence of the Special Committee's process.

Permissible status updates shall be limited to the following categories of information:

(1) Confirmation that the Special Committee is proceeding with its evaluation of the Proposed Transaction in accordance with the Board Resolution, the Charter, and this Protocol;

(2) The anticipated timeline for the Special Committee's work, including the expected dates of key milestones (e.g., completion of due diligence, engagement of the Independent Financial Advisor, anticipated date for the Special Committee's recommendation);

(3) Whether the Special Committee has retained advisors (i.e., confirmation that Independent Counsel and/or the Independent Financial Advisor have been engaged), without disclosing the substance of any advice received from such advisors; and

(4) Such other procedural or ministerial information as the Special Committee, in consultation with Independent Counsel, determines may be shared without compromising the independence or integrity of the Special Committee's process.

Status updates shall be delivered orally by the Chair of the Special Committee or by Independent Counsel at regular or special meetings of the full Board, or in writing if the Special Committee deems it appropriate. The content and timing of each status update shall be determined by the Special Committee in advance, with the advice of Independent Counsel.

Status updates shall not include any of the following:

• The substance of any valuation analyses conducted by the Special Committee or the Independent Financial Advisor;

• The Special Committee's negotiation positions or strategy;

• Legal advice received from Independent Counsel;

• The Special Committee's preliminary views, impressions, or conclusions regarding the merits of the Proposed Transaction or the adequacy of the proposed consideration;

• The content of communications between the Special Committee (or its advisors) and Caliston or its advisors;

• The substance of any due diligence findings;

• Any alternative transactions or strategies being considered by the Special Committee; or

• Any other information that could, in the judgment of Independent Counsel, compromise the independence, integrity, or confidentiality of the Special Committee's process if disclosed to the Excluded Persons.

B. Final Recommendation

The Special Committee's final recommendation regarding the Proposed Transaction—whether approval, rejection, or any alternative recommendation—shall be communicated to the full Board at a meeting of the Board convened for that purpose. The Excluded Persons may be present at such Board meeting for the purpose of receiving the Special Committee's recommendation, but the communication shall occur only after the Special Committee has finalized its recommendation and Independent Counsel has confirmed that the Special Committee's process record is complete and supports the recommendation.

At such Board meeting:

(a) The Chair of the Special Committee, with the assistance of Independent Counsel and the Independent Financial Advisor (once engaged), shall present the Special Committee's recommendation, the basis for the recommendation, and a summary of the Special Committee's process, findings, and conclusions.

(b) If the Special Committee recommends approval of the Proposed Transaction, the Independent Financial Advisor shall present its fairness opinion (if one has been rendered) to the full Board.

(c) The Excluded Persons shall recuse themselves from voting on the Proposed Transaction. Dr. Hale shall abstain from voting pursuant to his Voting and Recusal Agreement dated June 2, 2023. Angela Whitmore and Raymond Tusk shall recuse themselves from voting as required by the Board Resolution. The vote on the Proposed Transaction shall be taken by the independent and disinterested directors only.

(d) Independent Counsel shall advise the Board on the appropriate procedures for documenting the Board's action and any conditions to be imposed on the Board's approval.

C. SEC Disclosure

The Special Committee acknowledges that certain information regarding the Special Committee's process, findings, and recommendation will need to be disclosed publicly in any proxy statement, information statement, Form 8-K, or other filing made by Penterra with the United States Securities and Exchange Commission (the "SEC") in connection with the Proposed Transaction. Such disclosure is required by applicable SEC rules and regulations, including Regulation 14A and the rules governing going-private transactions (if applicable), and by Penterra's obligations under the Securities Exchange Act of 1934, as amended.

Calderwood & Harkness LLP will advise the Special Committee and the Board on the appropriate scope and content of such disclosure, with the objectives of satisfying SEC requirements, providing stockholders with the material information necessary to make an informed voting decision, and preserving the attorney-client privilege and work product protection to the greatest extent permitted by law. The Special Committee, in consultation with Independent Counsel, shall review and approve all public disclosures relating to the Special Committee's process and recommendation prior to filing.

VII. INFORMATION REQUEST PROTOCOL — INTERACTIONS WITH PENTERRA MANAGEMENT

A. General Principle

The Special Committee recognizes that it may require factual information, data, and operational context from Penterra Management—including, in certain instances, from the Excluded Persons—to conduct a thorough and informed evaluation of the Proposed Transaction. Penterra Management possesses institutional knowledge regarding the Company's operations, financial performance, strategic plans, clinical programs, and commercial capabilities that is relevant to the Special Committee's assessment of the merits and risks of the Proposed Transaction and the adequacy of the proposed consideration.

In particular, Dr. Hale, in his capacity as Chief Executive Officer and by reason of his extensive involvement with Caliston as a board observer and equity holder, possesses information regarding Caliston's operations, clinical pipeline, competitive positioning, organizational capabilities, and business prospects that may be relevant to the Special Committee's evaluation. The Special Committee must be able to access this information as needed, while maintaining the integrity of the information barrier and the independence of the Special Committee's process.

The Information Request Protocol set forth in this Section VII is designed to balance these objectives by establishing a structured and documented process for information requests and responses that preserves the Wall and prevents any Excluded Person from using the information request process as a vehicle for obtaining information about, or exerting influence over, the Special Committee's deliberations, strategy, or conclusions.

B. Routing Through Independent Counsel

All requests for information from Penterra Management—including, without limitation, requests directed to Excluded Persons—in connection with the Special Committee's evaluation of the Proposed Transaction shall be initiated by Calderwood & Harkness LLP on behalf of the Special Committee. The following procedures shall apply:

(a) Initiation. Information requests shall be initiated by the Special Committee, by individual Special Committee Members, or by Thorngate Partners LLC (once engaged) through Calderwood & Harkness LLP. Special Committee Members and Thorngate Partners LLC shall communicate their information needs to Calderwood & Harkness LLP, and Calderwood & Harkness LLP shall formulate and transmit the request.

(b) Form and Documentation. Requests shall be made in writing (by email or letter) to the relevant officer or employee, with a copy maintained in the Project Coriander Workspace. Each request shall identify the specific information sought, the purpose for which the information is needed (at a general level, without disclosing the substance of the Special Committee's analysis or strategy), and the deadline for the response.

(c) Responses. Responses to information requests shall be directed to Calderwood & Harkness LLP (Sophie Tremblay, Lead Associate, or Daniel Obi, Working Associate, as primary contacts), not directly to Special Committee Members. Calderwood & Harkness LLP shall review all responses for completeness and relevance and shall forward the responses to the Special Committee Members and, as applicable, to Thorngate Partners LLC through the secure communication channels established pursuant to this Protocol. If a response is incomplete or requires follow-up, Calderwood & Harkness LLP shall coordinate additional requests.

(d) Direct Presentations. If the Special Committee determines that a direct presentation or meeting with a member of Penterra Management is necessary, Independent Counsel shall arrange such presentation in accordance with the procedures set forth in Section VII.C below.

C. Management Presentations to the Special Committee

From time to time, the Special Committee may invite members of Penterra Management or Caliston management to present factual information at Special Committee meetings. Such presentations are an important component of the Special Committee's due diligence and evaluation process. The following protocols shall govern management presentations:

(a) Invitations. Invitations to present to the Special Committee shall be extended by Calderwood & Harkness LLP on behalf of the Special Committee. The invitation shall specify the topic of the presentation, the expected duration, the attendees, and the scope of the information to be covered. Presenters shall be informed that their attendance is limited to the factual presentation portion of the meeting and that they will be excused prior to the Special Committee's deliberations.

(b) Scope Limitation. The scope of each management presentation shall be defined in advance by the Special Committee, in consultation with Independent Counsel. Presentations shall be limited to factual information, data, and operational context and shall not extend to the presenter's views on the merits of the Proposed Transaction, the adequacy of the proposed consideration, or the Special Committee's negotiation strategy (unless the Special Committee specifically determines that such input is relevant and appropriate).

(c) Excusal Before Deliberations. Presenters other than Special Committee Members and Special Committee Advisors shall be excused from the meeting before the Special Committee commences any deliberation, discussion of negotiation strategy, discussion of valuation analysis, or discussion of legal advice. Calderwood & Harkness LLP shall ensure that presenters are excused at the appropriate time and that the meeting transitions to a closed session.

(d) Dr. Hale Presentations. If Dr. Hale is invited to provide information to the Special Committee—for example, regarding his personal knowledge of Caliston's operations, clinical programs, technology platform, key personnel, or commercial prospects—the invitation shall be limited to specific topics defined in advance, and Dr. Hale shall be excused from the meeting before any deliberative discussion. The Special Committee and Independent Counsel shall exercise particular caution in managing Dr. Hale's interactions with the Special Committee to ensure that he does not use the occasion to advocate for the Proposed Transaction or to seek information about the Special Committee's process or conclusions.

(e) Caliston Management Presentations. Presentations by Caliston management—for example, by Dr. Nadia Sorensen (CEO) and Dr. Raj Malhotra (CSO)—shall be coordinated with Whitfield Graves LLP (Kenneth Pratt), Caliston's counsel. The Special Committee shall determine the scope and format of such presentations in advance, and Caliston's counsel shall be afforded the opportunity to attend. Any information provided by Caliston management shall be stored in the Project Coriander Workspace and treated as Special Committee Material.

D. CFO and General Counsel Interactions

Priya Anand, Chief Financial Officer of Penterra, and Lawrence Whittaker, General Counsel and Corporate Secretary of Penterra, are not Excluded Persons and may be called upon by the Special Committee to provide financial data, corporate records, administrative support, or other assistance in connection with the Special Committee's evaluation of the Proposed Transaction. The following protocols shall govern the Special Committee's interactions with Ms. Anand and Mr. Whittaker:

(a) Ms. Anand and Mr. Whittaker may respond to information requests from the Special Committee routed through Calderwood & Harkness LLP and may provide factual presentations to the Special Committee as described in Section VII.C above.

(b) Ms. Anand and Mr. Whittaker shall not share any information received from or regarding the Special Committee's work—including, without limitation, the nature of the information requests received, the substance of any presentations made, or any other information about the Special Committee's process, analysis, or conclusions—with any Excluded Person. This obligation applies regardless of whether the Excluded Person is a supervisor, colleague, or board member.

(c) If either Ms. Anand or Mr. Whittaker is wall-crossed into the Project Coriander Workspace by authorization of the Special Committee, he or she shall execute a written acknowledgment of the information barrier obligations set forth in this Protocol prior to being granted access. Upon wall-crossing, Ms. Anand or Mr. Whittaker (as applicable) shall become a member of the Inside Group and shall be subject to all of the obligations applicable to Inside Group members, including the obligation not to disclose Special Committee Materials or deliberation content to any Excluded Person or other member of the Outside Group.

(d) Calderwood & Harkness LLP shall brief Ms. Anand and Mr. Whittaker on their obligations under this Protocol and shall provide them with copies of the relevant provisions prior to any substantive interaction with the Special Committee.

VIII. PROCEDURES FOR HANDLING INADVERTENT DISCLOSURES

A. Definition of Inadvertent Disclosure

An "Inadvertent Disclosure" occurs when any Special Committee Material, deliberation content, negotiation strategy, legal advice, valuation analysis, or other confidential information that is subject to the Wall is disclosed to an Excluded Person or another member of the Outside Group, whether orally, in writing, electronically, or otherwise, without the prior authorization of the Special Committee. An Inadvertent Disclosure may occur as a result of, among other things:

• An email or other electronic communication being inadvertently sent to, copied to, or forwarded to an Excluded Person;

• A physical document being left in a location accessible to an Excluded Person;

• An oral discussion regarding the Special Committee's work being overheard by an Excluded Person;

• A breach of the Project Coriander Workspace access controls;

• A third party (e.g., a Penterra employee who is not an Inside Group member) inadvertently relaying information about the Special Committee's work to an Excluded Person; or

• Any other circumstance in which confidential information crosses the Wall without authorization.

The procedures set forth in this Section VIII apply to both actual Inadvertent Disclosures and suspected Inadvertent Disclosures (i.e., situations in which there is reason to believe that an Inadvertent Disclosure may have occurred but the facts have not been fully determined).

B. Immediate Notification

Any person—whether a Special Committee Member, a member of the Special Committee Advisors, a member of Penterra Management, or any other person—who becomes aware of an actual or suspected Inadvertent Disclosure shall immediately notify Calderwood & Harkness LLP by contacting Renata Vasquez, Responsible Partner, by telephone. The notification shall include a brief description of the information believed to have been disclosed, the identity of the person(s) to whom the information was disclosed, and the circumstances of the disclosure.

Following the initial telephone notification, the reporting person shall provide a written report of the actual or suspected Inadvertent Disclosure to Calderwood & Harkness LLP within twenty-four (24) hours of the initial notification. The written report may be submitted by email to Renata Vasquez and Sophie Tremblay and should include all available details regarding the disclosure. A template Inadvertent Disclosure Report Form is attached hereto as Exhibit C.

Calderwood & Harkness LLP shall promptly notify the Special Committee Chair, Diane Prescott, of the actual or suspected Inadvertent Disclosure and shall assess the scope and potential impact of the disclosure in consultation with the Chair.

C. Remedial Measures

Upon receiving notification of an actual or suspected Inadvertent Disclosure, Calderwood & Harkness LLP shall take the following steps:

(1) Determine Nature and Scope. Calderwood & Harkness LLP shall determine the nature and scope of the information disclosed, including the specific documents, analyses, strategies, or other information that was com

INDEPENDENCE PROTOCOL & INFORMATION BARRIER POLICY
Project Coriander
CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGED / ATTORNEY WORK PRODUCT
Prepared by:
Calderwood & Harkness LLP 1700 Market Street, Suite 3400 Philadelphia, PA 19103
Prepared for:
The Special Committee of the Board of Directors of Penterra Pharmaceuticals Corp.
June 2, 2023
C&H Matter Number: 1025-00006
Right-click to update Table of Contents
I. PURPOSE AND BACKGROUND
A. Purpose of This Memorandum
This memorandum establishes the independence protocol and information barrier policy (the "Protocol") governing the evaluation by the Special Committee (defined below) of the Board of Directors (the "Board") of Penterra Pharmaceuticals Corp. (NYSE: PPHR), a Delaware corporation headquartered at 400 Innovation Drive, Suite 1200, Princeton, NJ 08540 (the "Company" or "Penterra"), of the proposed acquisition of Caliston BioSciences, Inc., a Delaware corporation with principal offices at 88 Harbor Point Road, Cambridge, MA 02142 (the "Target" or "Caliston") (such proposed acquisition, the "Proposed Transaction").
The Protocol is designed to ensure the integrity and independence of the Special Committee's evaluation process, to preserve the protections afforded by Delaware fiduciary duty law—including, without limitation, those arising under Sections 141(a) and 144 of the Delaware General Corporation Law (the "DGCL")—and to create a robust procedural record that supports the application of business judgment review or, if applicable, demonstrates satisfaction of the entire fairness standard. The Special Committee's adherence to this Protocol is intended to demonstrate that the Special Committee undertook a thorough, informed, and unconflicted evaluation of the Proposed Transaction and that its process was free from undue influence by any interested party.
This Protocol is adopted concurrently with (i) the Board Resolution Establishing the Special Committee dated June 2, 2023 (the "Board Resolution"), and (ii) the Special Committee Charter of the same date (the "Charter"). In the event of any conflict between this Protocol and the Board Resolution or Charter, the Board Resolution shall control. All capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in Section II (Definitions) below.
The Protocol addresses, among other things, the identification and recusal of conflicted persons, the establishment and maintenance of information barriers, communication protocols among the various parties and advisors involved in the Proposed Transaction, the process for reporting and remediating inadvertent disclosures of confidential information, and the procedures for the Special Committee's retention of independent advisors. Each person to whom this Protocol is distributed is expected to familiarize himself or herself with its terms and to comply with its requirements in all respects.
B. Background — The Proposed Transaction and Conflicts of Interest
Penterra Pharmaceuticals Corp. proposes to acquire one hundred percent (100%) of the outstanding equity of Caliston BioSciences, Inc. via a one-step merger in which Caliston would merge with and into a wholly owned subsidiary of Penterra, with Caliston surviving as a wholly owned subsidiary of Penterra (or, alternatively, such other transaction structure as may be agreed upon by the parties). The proposed terms of the Proposed Transaction, as initially presented to the Board by Dr. Marcus Hale on February 14, 2023, and as subsequently refined through preliminary discussions, are summarized as follows:
Proposed Consideration. The proposed aggregate equity value of Caliston is Nine Hundred Twenty-Five Million Dollars ($925,000,000), payable as follows:
• Cash Component: Seventy-five percent (75%) of the aggregate equity value, or Six Hundred Ninety-Three Million Seven Hundred Fifty Thousand Dollars ($693,750,000), payable in cash at closing;
• Stock Component: Twenty-five percent (25%) of the aggregate equity value, or Two Hundred Thirty-One Million Two Hundred Fifty Thousand Dollars ($231,250,000), payable in newly issued shares of Penterra common stock, par value $0.001 per share, valued based on the thirty-day (30-day) volume-weighted average price ("VWAP") of Penterra common stock as of June 1, 2023, of $39.17 per share, implying the issuance of approximately 5,903,497 shares; and
• Contingent Value Rights (CVRs): Additional consideration of up to One Hundred Twenty-Five Million Dollars ($125,000,000) payable upon approval by the United States Food and Drug Administration (the "FDA") of Caliston's lead clinical candidate, CLT-4019, on or before December 31, 2026. If the CVR milestone is achieved, the maximum aggregate transaction value would be One Billion Fifty Million Dollars ($1,050,000,000).
Conflicts of Interest. The Proposed Transaction presents significant conflicts of interest that necessitate the formation of the Special Committee, the adoption of this Protocol, and the establishment of the information barriers described herein. The principal conflicts are as follows:
Dr. Marcus Hale. Dr. Marcus Hale serves as Chairman and Chief Executive Officer of Penterra. Dr. Hale 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. At the proposed aggregate equity value of $925,000,000, Dr. Hale's implied proceeds from the Proposed Transaction would be approximately Two Hundred Sixty-Three Million Six Hundred Twenty-Five Thousand Dollars ($263,625,000), representing an implied gain of approximately Two Hundred Twenty-One Million Six Hundred Twenty-Five Thousand Dollars ($221,625,000). Dr. Hale has served as a board observer (non-voting) at Caliston since 2018 and has attended fourteen (14) of sixteen (16) Caliston board meetings during that period. Dr. Hale did not disclose his equity interest in Caliston to the Penterra Board until February 14, 2023, when he first proposed the acquisition of Caliston to the Board. Dr. Hale is an interested party on both sides of the Proposed Transaction and stands to receive significant personal financial benefit from its consummation.
Angela Whitmore. Angela Whitmore serves as a non-independent director of Penterra and as Executive Vice President, Commercial Operations of the Company. Ms. Whitmore is the spouse of Dr. Evan Whitmore, who serves as Head of Clinical Development at Caliston and as a member of Caliston's board of directors. By reason of this familial relationship, Ms. Whitmore has a material interest in the Proposed Transaction and cannot be considered independent for purposes of the Special Committee's evaluation.
Raymond Tusk. Raymond Tusk serves as a non-independent director of Penterra. Mr. Tusk was appointed to the Board at the recommendation of Dr. Hale and lacks independence for purposes of the Special Committee by reason of his longstanding personal and professional relationship with Dr. Hale. The Board has determined that Mr. Tusk cannot be expected to exercise independent judgment with respect to the Proposed Transaction free from the influence of Dr. Hale.
The foregoing conflicts give rise to a substantial risk that the Proposed Transaction, if not evaluated by independent and disinterested directors acting with the advice of independent counsel and an independent financial advisor, could be challenged as a conflicted-controller or interested-director transaction under Delaware law. The formation of the Special Committee and the adoption of this Protocol are essential procedural safeguards designed to mitigate these risks and to protect the interests of Penterra and its stockholders.
C. Board Action
On June 2, 2023, by unanimous vote of the six (6) independent and disinterested directors (with Dr. Marcus Hale, Angela Whitmore, and Raymond Tusk each recused from the vote), the Penterra Board adopted a resolution establishing the Special Committee of the Board of Directors of Penterra Pharmaceuticals Corp. (the "Special Committee"). The Board Resolution provides for the composition, authority, and governance of the Special Committee as follows:
Composition. The Special Committee comprises the following three (3) independent and disinterested directors:
• Diane Prescott (Chair) — Former Chief Executive Officer of Windbridge Health Systems, Inc.; independent director of Penterra since 2019; member of the Penterra Audit Committee and Nominating and Corporate Governance Committee;
• James Okafor — Retired Managing Director of Fielding Capital Partners, LLC; independent director of Penterra since 2020; member of the Penterra Compensation Committee; and
• Dr. Helen Ng — Professor of Pharmacology, Wexford University; former member of the FDA Cardiovascular and Renal Drugs Advisory Committee; independent director of Penterra since 2021; member of the Penterra Science and Technology Committee.
Each member of the Special Committee has been determined by the Board, upon the advice of Regular Outside Counsel, to be independent and disinterested with respect to the Proposed Transaction, free from any material financial interest in Caliston, free from any material personal or professional relationship with any Excluded Person that would impair the exercise of independent judgment, and qualified to serve on the Special Committee by reason of relevant experience and expertise.
Authority. The Special Committee has been granted sole and exclusive authority to: (i) evaluate the Proposed Transaction and its terms; (ii) negotiate the terms of the Proposed Transaction with Caliston and its representatives; (iii) retain, at the Company's expense, independent legal counsel, independent financial advisors, and such other advisors as the Special Committee deems appropriate; (iv) recommend to the full Board whether to approve, reject, or modify the terms of the Proposed Transaction; (v) consider and explore strategic alternatives to the Proposed Transaction, including the alternative of declining to pursue the transaction; and (vi) take any and all other actions that the Special Committee deems necessary or advisable in connection with its evaluation and the fulfillment of its fiduciary duties. The Special Committee has the express power to decline or reject the Proposed Transaction in its entirety, and no approval or recommendation by the full Board or any officer of the Company is required for the Special Committee to exercise this authority.
II. DEFINITIONS
As used in this Protocol, the following terms shall have the meanings set forth below. Terms defined elsewhere in this Protocol and not listed below shall have the meanings assigned to them where defined.
"Caliston" means Caliston BioSciences, Inc., a Delaware corporation with principal offices at 88 Harbor Point Road, Cambridge, MA 02142.
"Caliston Counsel" means Whitfield Graves LLP, One Federal Street, Suite 2600, Boston, MA 02110 (lead partner: Kenneth Pratt), counsel to Caliston in connection with the Proposed Transaction.
"Caliston Financial Advisor" means Fendowell Sinclair & Co., 200 Clarendon Street, 50th Floor, Boston, MA 02116 (lead banker: Sandra Wu, Managing Director), financial advisor to Caliston in connection with the Proposed Transaction.
"Company" means Penterra Pharmaceuticals Corp. (NYSE: PPHR), a Delaware corporation headquartered at 400 Innovation Drive, Suite 1200, Princeton, NJ 08540.
"Excluded Persons" means, collectively, Dr. Marcus Hale, Angela Whitmore, and Raymond Tusk, each of whom has been identified as having a conflict of interest with respect to the Proposed Transaction and each of whom is subject to the recusal and information barrier obligations set forth in this Protocol.
"Independent Counsel" means Calderwood & Harkness LLP, 1700 Market Street, Suite 3400, Philadelphia, PA 19103, serving as independent legal counsel to the Special Committee. The engagement team comprises: Renata Vasquez, Responsible Partner; Bernard Crawford, Billing Partner; Sophie Tremblay, Lead Associate; and Daniel Obi, Working Associate.
"Independent Financial Advisor" means Thorngate Partners LLC, 590 Madison Avenue, 22nd Floor, New York, NY 10022 (once engaged; engagement anticipated mid-June 2023; engagement reference: 1018-00003; lead banker: Gregory Ashford, Managing Director), to serve as independent financial advisor to the Special Committee.
"Inside Group" means, collectively, the Special Committee Members, the Special Committee Advisors, and any other persons who have been formally wall-crossed into the information barrier and authorized to receive Special Committee materials and participate in the Special Committee's work in connection with the Proposed Transaction.
"Outside Group" means the Excluded Persons and any other persons who are on the opposite side of the information barrier and are not authorized to receive Special Committee materials or participate in the Special Committee's deliberations.
"Penterra Management" means the officers and employees of Penterra other than the Excluded Persons, including, without limitation, Priya Anand (Chief Financial Officer) and Lawrence Whittaker (General Counsel and Corporate Secretary).
"Project Coriander" means the confidential code name assigned to the Proposed Transaction. All references to "Project Coriander" in communications, documents, and records shall be understood to refer to the Proposed Transaction.
"Project Coriander Workspace" means the segregated document management workspace on Penterra's document management system designated for the storage, organization, and access control of all materials created or received in connection with the Special Committee's evaluation of the Proposed Transaction.
"Proposed Transaction" means the proposed acquisition by the Company of one hundred percent (100%) of the outstanding equity of Caliston via a one-step merger, on the terms described in Section I.B above, as such terms may be modified through negotiation.
"Protocol" means this Independence Protocol & Information Barrier Policy, including all exhibits hereto, as the same may be amended or supplemented from time to time by action of the Special Committee.
"Regular Outside Counsel" means Alcott, Barringer & Cole LLP, 1221 Avenue of the Americas, 40th Floor, New York, NY 10020 (lead partner: Victoria Shen), regular outside corporate counsel to the Company and the Board.
"Special Committee" means the Special Committee of the Board of Directors of Penterra Pharmaceuticals Corp., established by the Board Resolution dated June 2, 2023, comprising Diane Prescott (Chair), James Okafor, and Dr. Helen Ng.
"Special Committee Advisors" means, collectively, Independent Counsel and the Independent Financial Advisor, and such other advisors as may be retained by the Special Committee from time to time in accordance with this Protocol.
"Special Committee Members" means Diane Prescott, James Okafor, and Dr. Helen Ng, the three independent and disinterested directors who comprise the Special Committee.
"Target" means Caliston BioSciences, Inc.
"Wall" means the information barrier established pursuant to Section IV of this Protocol, separating the Inside Group from the Outside Group.
III. EXCLUDED PERSONS — IDENTIFICATION AND RECUSAL REQUIREMENTS
A. Identification of Excluded Persons
The following individuals have been identified as Excluded Persons by reason of the conflicts of interest described in Section I.B above. Each Excluded Person is subject to the recusal and information barrier obligations set forth in this Section III and in Section IV below.
1. Dr. Marcus Hale — Chairman and Chief Executive Officer of Penterra Pharmaceuticals Corp. Dr. Hale holds a twenty-eight and one-half percent (28.5%) equity interest in Caliston BioSciences, Inc., acquired through personal investment of approximately $42 million across Caliston's Seed, Series A, and Series B financing rounds. Dr. Hale has served as a board observer (non-voting) at Caliston since 2018, attending fourteen (14) of sixteen (16) Caliston board meetings. Dr. Hale is an interested party on both sides of the Proposed Transaction and stands to receive implied proceeds of approximately $263,625,000 (an implied gain of approximately $221,625,000) upon consummation of the Proposed Transaction at the proposed aggregate equity value.
2. Angela Whitmore — Non-independent director of Penterra and Executive Vice President, Commercial Operations. Ms. Whitmore is the spouse of Dr. Evan Whitmore, who serves as Head of Clinical Development at Caliston and as a member of Caliston's board of directors. By reason of this spousal relationship, Ms. Whitmore has a material interest in the outcome of the Proposed Transaction and lacks independence for purposes of the Special Committee's evaluation.
3. Raymond Tusk — Non-independent director of Penterra. Mr. Tusk was appointed to the Board at the recommendation of Dr. Hale. Mr. Tusk lacks independence for purposes of the Special Committee by reason of his longstanding personal and professional relationship with Dr. Hale, which the Board has determined would impair Mr. Tusk's ability to exercise independent judgment with respect to the Proposed Transaction.
The identification of the foregoing persons as Excluded Persons is based on the information presently available to the Board and Independent Counsel. If additional conflicts of interest or relationships are identified during the course of the Special Committee's evaluation, the Special Committee, in consultation with Independent Counsel, may designate additional persons as Excluded Persons and extend the recusal and information barrier obligations of this Protocol to such persons.
B. Scope of Recusal
The recusal obligations applicable to the Excluded Persons are comprehensive and are intended to ensure that no Excluded Person exerts any influence, direct or indirect, over the Special Committee's evaluation, deliberations, negotiation, or decision-making with respect to the Proposed Transaction. Specifically:
1. No Attendance or Participation. Excluded Persons shall not attend, participate in, or observe any meeting or deliberation of the Special Committee, whether held in person, by telephone, by videoconference, or by any other means of communication. This prohibition applies to formal meetings, informal discussions, and any other gathering at which the Special Committee's work in connection with the Proposed Transaction is discussed.
2. No Access to Materials. Excluded Persons shall not receive, review, or have access to any materials, memoranda, analyses, correspondence, presentations, draft agreements, term sheets, valuation models, due diligence reports, board books, or other documents prepared for, by, or at the direction of the Special Committee or the Special Committee Advisors in connection with the Proposed Transaction. This prohibition extends to all documents stored in the Project Coriander Workspace and all physical copies of Special Committee materials.
3. No Summaries or Updates. Excluded Persons shall not receive or be provided any oral or written summaries, reports, briefings, or updates regarding the substance of the Special Committee's deliberations, analyses, findings, or conclusions, except as expressly authorized in Section VI below (Board Reporting Protocol). Permissible communications under the Board Reporting Protocol are limited to procedural and ministerial updates and shall not include substantive information.
4. No Communications Regarding Substance. Excluded Persons shall not communicate with any Special Committee Member, any member of the Special Committee Advisors, or any Penterra employee or agent acting at the direction of the Special Committee regarding the substance of the Special Committee's evaluation, negotiation strategy, valuation analysis, legal advice received, or deliberations. This prohibition applies to all forms of communication, including in-person conversations, telephone calls, text messages, emails, messaging applications, and social media communications.
5. No Influence. Excluded Persons shall not attempt to influence, directly or indirectly, the Special Committee's evaluation, recommendation, or decision-making with respect to the Proposed Transaction. This prohibition encompasses, without limitation, any effort to pressure, persuade, lobby, threaten, incentivize, or otherwise attempt to shape the outcome of the Special Committee's process, whether through communications with Special Committee Members, communications with Penterra employees who interact with the Special Committee, communications with Caliston or its representatives, or any other means.
6. Voting and Recusal Agreement. Dr. Hale has executed a separate Voting and Recusal Agreement dated June 2, 2023, formalizing the foregoing obligations and providing that Dr. Hale shall abstain from voting on any matter related to the Proposed Transaction when the matter comes before the full Board. Ms. Whitmore and Mr. Tusk are required to recuse themselves from voting on the Proposed Transaction pursuant to the Board Resolution.
C. Obligation of Excluded Persons to Cooperate
Notwithstanding the recusal obligations set forth above, the Special Committee recognizes that the Excluded Persons—and in particular Dr. Hale, in his capacity as Chief Executive Officer of Penterra and by reason of his extensive knowledge of Caliston's operations, clinical programs, and personnel—may possess factual information that is relevant and necessary for the Special Committee's thorough evaluation of the Proposed Transaction.
Accordingly, each Excluded Person is expected to cooperate with the Special Committee's evaluation by providing truthful, complete, and timely responses to requests for factual information, subject to the Information Request Protocol set forth in Section VII below. All such requests shall be initiated by and routed exclusively through Independent Counsel. The provision of factual information by an Excluded Person in response to a request under Section VII shall not constitute a breach of the Excluded Person's recusal obligations, provided that the Excluded Person does not use the occasion of such communication to seek information about, or attempt to influence, the Special Committee's deliberations, strategy, or conclusions.
IV. INFORMATION BARRIER POLICY
A. Establishment of Information Barrier
An information barrier (the "Wall") is hereby established, effective as of June 2, 2023, separating the Inside Group from the Outside Group. The Wall is designed to prevent the flow of confidential information relating to the Special Committee's work—including its analyses, strategy, deliberations, and conclusions—from the Inside Group to the Outside Group, and to prevent the flow of information from the Outside Group that could compromise the independence or integrity of the Special Committee's process.
The Inside Group comprises: (1) the Special Committee Members (Diane Prescott, James Okafor, and Dr. Helen Ng); (2) the Special Committee Advisors, including the engagement teams at Calderwood & Harkness LLP and Thorngate Partners LLC (once engaged); and (3) any other persons who have been formally wall-crossed into the information barrier pursuant to the procedures set forth herein and authorized to participate in the Special Committee's work.
The Outside Group comprises: (1) the Excluded Persons (Dr. Marcus Hale, Angela Whitmore, and Raymond Tusk); and (2) any other persons who are not members of the Inside Group and are not authorized to receive Special Committee materials or participate in the Special Committee's deliberations.
The following principles govern the operation of the Wall:
• No information relating to the Special Committee's work, analysis, strategy, deliberations, negotiation positions, legal advice received, valuation conclusions, or recommendations shall cross the Wall from the Inside Group to the Outside Group, except as specifically provided in the Board Reporting Protocol set forth in Section VI below.
• No information from the Outside Group that could compromise the independence or integrity of the Special Committee process—including, without limitation, communications from Dr. Hale or other Excluded Persons advocating for a particular outcome, conveying Caliston's negotiation positions outside of authorized channels, or otherwise seeking to influence the Special Committee's evaluation—shall be communicated to the Inside Group except through the Information Request Protocol set forth in Section VII below.
• Any person who is uncertain whether a particular communication or disclosure would violate the Wall shall refrain from making the communication or disclosure and shall consult with Independent Counsel before proceeding.
B. Physical and Electronic Segregation
1. Project Coriander Workspace
All documents, memoranda, analyses, correspondence, draft agreements, term sheets, presentations, meeting materials, minutes, notes, and other records created, received, or maintained in connection with the Special Committee's evaluation of the Proposed Transaction (collectively, "Special Committee Materials") shall be stored exclusively in the Project Coriander Workspace on Penterra's document management system. The Project Coriander Workspace shall serve as the single, centralized, and controlled repository for all Special Committee Materials, and no Special Committee Materials shall be stored outside of the Project Coriander Workspace except as expressly provided in Section IV.B.2 below (physical documents maintained by Calderwood & Harkness LLP).
Access to the Project Coriander Workspace shall be strictly restricted to the following authorized persons:
(a) Special Committee Members: Diane Prescott, James Okafor, and Dr. Helen Ng;
(b) Calderwood & Harkness LLP Engagement Team: Renata Vasquez, Bernard Crawford, Sophie Tremblay, and Daniel Obi; and
(c) Thorngate Partners LLC Representatives: Authorized personnel at Thorngate Partners LLC, as identified following engagement of Thorngate Partners as Independent Financial Advisor (anticipated mid-June 2023).
The Company's IT department shall configure the access controls for the Project Coriander Workspace to ensure that only the persons listed above (and any additional persons subsequently authorized by the Special Committee) are granted access. The IT department shall maintain a detailed access log reflecting: (i) all persons who have been granted access permissions to the Project Coriander Workspace; (ii) the date on which access was granted; (iii) the date on which access was revoked (if applicable); and (iv) all access events (i.e., each instance in which an authorized person accessed the Project Coriander Workspace), including the date, time, and identity of the person accessing the workspace.
No Excluded Person shall be granted access to the Project Coriander Workspace under any circumstances. No member of Penterra Management who has not been specifically authorized by the Special Committee shall be granted access to the Project Coriander Workspace.
Lawrence Whittaker, General Counsel and Corporate Secretary of Penterra, shall not have access to the Project Coriander Workspace unless the Special Committee expressly authorizes such access. If Mr. Whittaker is authorized to access the Project Coriander Workspace for administrative or other purposes, he shall be formally wall-crossed and shall thereupon become a member of the Inside Group, subject to all of the information barrier obligations set forth in this Protocol. Mr. Whittaker shall execute a written acknowledgment of these obligations prior to being granted access, which acknowledgment shall be maintained in the Project Coriander Workspace.
2. Physical Documents
Physical copies of Special Committee Materials shall be maintained under the custody of Calderwood & Harkness LLP at its offices at 1700 Market Street, Suite 3400, Philadelphia, PA 19103. Calderwood & Harkness LLP shall maintain such physical materials in a secure location within its offices, with access limited to the members of the Calderwood & Harkness LLP engagement team identified herein.
To the extent any physical materials—including printed copies of presentations, board books, memoranda, or other documents—are provided to Special Committee Members in connection with meetings or other proceedings, such materials shall be collected and returned to Calderwood & Harkness LLP at the conclusion of each meeting, or, if Calderwood & Harkness LLP determines it is appropriate, securely destroyed at the conclusion of the meeting using cross-cut shredding or another method of destruction that renders the materials unreadable and irrecoverable. Calderwood & Harkness LLP shall maintain a record of all physical materials distributed to and returned by Special Committee Members at each meeting.
No physical copies of Special Committee Materials shall be stored at Penterra's headquarters at 400 Innovation Drive, Suite 1200, Princeton, NJ 08540, or at any other Penterra office or location that is accessible to any Excluded Person. Special Committee Members shall not retain physical copies of Special Committee Materials at their homes or offices except with the prior authorization of Independent Counsel, and any such retained copies shall be secured and returned to Calderwood & Harkness LLP or destroyed upon completion of the Special Committee's work.
3. Separate Email and Communication Channels
Special Committee-related communications shall be conducted through dedicated, segregated communication channels to prevent inadvertent disclosure of Special Committee Materials or deliberation content to Excluded Persons or other unauthorized persons. The following protocols shall govern electronic communications:
(a) Calderwood & Harkness LLP shall establish a dedicated email distribution group (the "Project Coriander Distribution Group") for the purpose of facilitating secure communications among the members of the Inside Group. All substantive communications among Special Committee Members, between Special Committee Members and Special Committee Advisors, and among Special Committee Advisors regarding the Proposed Transaction shall be conducted through this distribution group or through Calderwood & Harkness LLP's secure communication systems.
(b) Special Committee Members shall not use their regular Penterra email accounts (i.e., their @penterra.com email addresses) for substantive communications regarding the Proposed Transaction. Instead, a separate Project Coriander email alias shall be established for each Special Committee Member, or, alternatively, Special Committee Members may designate personal email addresses known to Calderwood & Harkness LLP for the purpose of receiving Special Committee communications. Calderwood & Harkness LLP shall coordinate with each Special Committee Member to establish the appropriate communication channel.
(c) No Special Committee-related communication—whether email, text message, instant message, or other electronic communication—shall be copied to, forwarded to, or shared with any Excluded Person or any other person outside the Inside Group, except as specifically authorized under the Board Reporting Protocol (Section VI) or the Information Request Protocol (Section VII).
(d) Special Committee Members and Special Committee Advisors shall exercise caution when discussing the Proposed Transaction by telephone or in person and shall take reasonable steps to ensure that such discussions are not overheard by Excluded Persons or other unauthorized persons.
C. Meetings and Deliberations
All meetings of the Special Committee shall be convened by the Chair, Diane Prescott, or at her direction, in consultation with Independent Counsel. The following protocols shall govern the scheduling, location, attendance, and documentation of Special Committee meetings:
1. Scheduling. Meetings shall be scheduled by Independent Counsel in coordination with the Chair. Notice of each meeting shall be provided to all Special Committee Members and Special Committee Advisors through the Project Coriander Distribution Group or another secure communication channel. Meeting notices shall not be distributed through Penterra's regular board portal or administrative systems if such systems are accessible to Excluded Persons.
2. Location. Meetings shall be held at Calderwood & Harkness LLP's offices at 1700 Market Street, Suite 3400, Philadelphia, PA 19103; by secure videoconference using a platform designated by Calderwood & Harkness LLP; or at other locations outside Penterra's headquarters as determined by the Chair in consultation with Independent Counsel. If, for logistical reasons, a meeting must be held at Penterra's offices, the meeting shall be held in a conference room or other location to which Excluded Persons do not have access during the meeting, and appropriate measures shall be taken to ensure that Excluded Persons are not present on the floor or in the vicinity of the meeting room.
3. Attendance. No Excluded Person shall be present at any Special Committee meeting, whether in person or by telephone, videoconference, or any other means. No Excluded Person shall join any call or videoconference of the Special Committee. Attendance at Special Committee meetings shall be limited to: (a) Special Committee Members; (b) members of the Calderwood & Harkness LLP engagement team; (c) representatives of Thorngate Partners LLC (once engaged); and (d) such other persons as the Special Committee may specifically invite for discrete agenda items (e.g., members of Penterra Management for factual presentations, subject to the protocols set forth in Section VII below, or Caliston representatives for management presentations). Persons invited for discrete agenda items shall be excused from the meeting before the Special Committee's deliberations and any discussion of negotiation strategy, valuation, or legal analysis.
4. Minutes. Formal minutes of all Special Committee meetings shall be prepared by Calderwood & Harkness LLP (Daniel Obi, Working Associate) and maintained in the Project Coriander Workspace. Minutes shall document the date, time, location, and attendees of each meeting; the matters discussed and actions taken; any resolutions adopted; and any other matters that Independent Counsel determines should be documented to preserve the Special Committee's procedural record. Draft minutes shall be circulated to the Special Committee Members for review and approval at or prior to the next meeting of the Special Committee. Approved minutes shall be filed in the Project Coriander Workspace and shall not be distributed to Excluded Persons or any other person outside the Inside Group.
V. COMMUNICATION PROTOCOLS
A. Communications Among Inside Group Members
Special Committee Members may communicate freely with each other and with Special Committee Advisors regarding any aspect of the Proposed Transaction, including valuation, due diligence findings, negotiation strategy, legal analysis, and the Special Committee's preliminary or final conclusions. There is no restriction on the frequency, subject matter, or medium of communication among members of the Inside Group, provided that such communications are conducted through the secure channels established pursuant to Section IV.B.3 above and are not accessible to Excluded Persons or other members of the Outside Group.
All substantive communications among Inside Group Members—whether oral or written—should, to the extent practicable, be documented in writing or reflected in the minutes of the applicable Special Committee meeting. This documentation is important for the preservation of the Special Committee's procedural record and to demonstrate the thoroughness and independence of the Special Committee's evaluation process in the event of any subsequent challenge or inquiry.
B. Communications with Caliston and Its Advisors
All communications with Caliston BioSciences, Inc., its management (including, without limitation, Dr. Nadia Sorensen, Chief Executive Officer; Dr. Raj Malhotra, Chief Scientific Officer; and Dr. Evan Whitmore, Head of Clinical Development), its legal counsel (Whitfield Graves LLP, Kenneth Pratt), or its financial advisor (Fendowell Sinclair & Co., Sandra Wu, Managing Director) regarding the Proposed Transaction shall be conducted by or through Calderwood & Harkness LLP and/or Thorngate Partners LLC (once engaged), as appropriate.
No Special Committee Member shall communicate directly with Caliston or any representative of Caliston regarding the Proposed Transaction without prior coordination with Independent Counsel. If a Special Committee Member receives an unsolicited communication from any representative of Caliston regarding the Proposed Transaction, the Special Committee Member shall promptly notify Independent Counsel and shall not respond to the communication without Independent Counsel's guidance.
Dr. Hale, as an Excluded Person and as a board observer of Caliston, shall not serve as a channel of communication between Caliston and the Special Committee. Any information that Dr. Hale possesses regarding Caliston—including information regarding Caliston's operations, clinical programs, financial condition, business prospects, or negotiation positions—shall be obtained by the Special Committee through the Information Request Protocol set forth in Section VII below, if and as the Special Committee determines that such information is needed. The Special Committee and its advisors shall exercise caution in relying upon information provided by Dr. Hale and shall independently verify material information through due diligence and other sources to the extent practicable.
C. Communications with Regular Outside Counsel
Alcott, Barringer & Cole LLP (Victoria Shen, lead partner) serves as regular outside corporate counsel to the Company and the Board and has represented Penterra in range corporate, securities, and transactional matters. However, in order to preserve the independence of the Special Committee's evaluation of the Proposed Transaction, Alcott, Barringer & Cole LLP is recused from advising the Special Committee in connection with the Proposed Transaction. The Special Committee has retained Calderwood & Harkness LLP as Independent Counsel for this purpose.
A separate letter dated June 5, 2023, from Calderwood & Harkness LLP to Alcott, Barringer & Cole LLP (the "Coordination Letter"), establishes the coordination and recusal protocol between Regular Outside Counsel and Independent Counsel with respect to the Proposed Transaction. The Coordination Letter provides, among other things, that:
(a) Alcott, Barringer & Cole LLP shall not receive, review, or have access to Special Committee Materials;
(b) Alcott, Barringer & Cole LLP shall not attend Special Committee meetings or participate in Special Committee deliberations;
(c) Alcott, Barringer & Cole LLP shall not advise the Special Committee, the Special Committee Members, or the Special Committee Advisors on any matter relating to the Proposed Transaction; and
(d) Alcott, Barringer & Cole LLP shall not communicate with Caliston or its advisors regarding the Proposed Transaction on behalf of the Company without the prior authorization of Independent Counsel.
On non-conflicted corporate matters unrelated to the Proposed Transaction—including, without limitation, routine SEC filings, other board matters, employment matters, intellectual property matters, and litigation unrelated to the Proposed Transaction—Penterra may continue to engage Alcott, Barringer & Cole LLP without restriction, provided that no Project Coriander information is shared with Alcott, Barringer & Cole LLP in connection with such engagements. If Alcott, Barringer & Cole LLP becomes aware of any Project Coriander information, it shall promptly notify Calderwood & Harkness LLP and take appropriate steps to screen the information within its firm.
D. Communications with Penterra's Auditor
If the Special Committee requires financial information from Penterra's independent registered public accounting firm, Harwick & Tolliver LLP, 30 Rockefeller Plaza, New York, NY 10112 (the "Company Auditor"), such requests shall be routed through Calderwood & Harkness LLP or Thorngate Partners LLC (once engaged) to ensure that no Excluded Person is made aware of the specific information requested, the purpose of the request, or the analyses being conducted by the Special Committee or its advisors.
The Company Auditor may be asked to provide historical financial statements, audit workpapers, accounting analyses, or other financial information of Penterra that the Special Committee deems relevant to its evaluation. If the Company Auditor requires authorization from Penterra management to release such information, such authorization shall be obtained through a process that does not reveal the substance of the Special Committee's inquiries to any Excluded Person. Calderwood & Harkness LLP shall coordinate with Priya Anand, Chief Financial Officer, to the extent necessary to facilitate such requests, subject to the obligations set forth in Section VII.D below.
E. Communications with Caliston's Auditor
If the Special Committee or its advisors require financial information from Caliston's independent auditor, Brentmoor Advisors LLP, 125 Summer Street, Suite 800, Boston, MA 02110 (the "Target Auditor"), such requests shall be coordinated through Whitfield Graves LLP (Kenneth Pratt) as part of the due diligence process. Calderwood & Harkness LLP and/or Thorngate Partners LLC shall communicate any such requests to Whitfield Graves LLP, and the Target Auditor's responses shall be directed to the Special Committee Advisors for review and analysis. All information received from the Target Auditor shall be stored in the Project Coriander Workspace and treated as Special Committee Material.
VI. BOARD REPORTING PROTOCOL
A. Permissible Reporting to the Full Board
The Special Committee may, at its discretion and in consultation with Independent Counsel, provide periodic status updates to the full Penterra Board, including the Excluded Persons, regarding the progress of the Special Committee's work. Such status updates are intended to keep the full Board apprised of the general status of the evaluation at a high level, consistent with the Board's fiduciary oversight responsibilities, while preserving the confidentiality and independence of the Special Committee's process.
Permissible status updates shall be limited to the following categories of information:
(1) Confirmation that the Special Committee is proceeding with its evaluation of the Proposed Transaction in accordance with the Board Resolution, the Charter, and this Protocol;
(2) The anticipated timeline for the Special Committee's work, including the expected dates of key milestones (e.g., completion of due diligence, engagement of the Independent Financial Advisor, anticipated date for the Special Committee's recommendation);
(3) Whether the Special Committee has retained advisors (i.e., confirmation that Independent Counsel and/or the Independent Financial Advisor have been engaged), without disclosing the substance of any advice received from such advisors; and
(4) Such other procedural or ministerial information as the Special Committee, in consultation with Independent Counsel, determines may be shared without compromising the independence or integrity of the Special Committee's process.
Status updates shall be delivered orally by the Chair of the Special Committee or by Independent Counsel at regular or special meetings of the full Board, or in writing if the Special Committee deems it appropriate. The content and timing of each status update shall be determined by the Special Committee in advance, with the advice of Independent Counsel.
Status updates shall not include any of the following:
• The substance of any valuation analyses conducted by the Special Committee or the Independent Financial Advisor;
• The Special Committee's negotiation positions or strategy;
• Legal advice received from Independent Counsel;
• The Special Committee's preliminary views, impressions, or conclusions regarding the merits of the Proposed Transaction or the adequacy of the proposed consideration;
• The content of communications between the Special Committee (or its advisors) and Caliston or its advisors;
• The substance of any due diligence findings;
• Any alternative transactions or strategies being considered by the Special Committee; or
• Any other information that could, in the judgment of Independent Counsel, compromise the independence, integrity, or confidentiality of the Special Committee's process if disclosed to the Excluded Persons.
B. Final Recommendation
The Special Committee's final recommendation regarding the Proposed Transaction—whether approval, rejection, or any alternative recommendation—shall be communicated to the full Board at a meeting of the Board convened for that purpose. The Excluded Persons may be present at such Board meeting for the purpose of receiving the Special Committee's recommendation, but the communication shall occur only after the Special Committee has finalized its recommendation and Independent Counsel has confirmed that the Special Committee's process record is complete and supports the recommendation.
At such Board meeting:
(a) The Chair of the Special Committee, with the assistance of Independent Counsel and the Independent Financial Advisor (once engaged), shall present the Special Committee's recommendation, the basis for the recommendation, and a summary of the Special Committee's process, findings, and conclusions.
(b) If the Special Committee recommends approval of the Proposed Transaction, the Independent Financial Advisor shall present its fairness opinion (if one has been rendered) to the full Board.
(c) The Excluded Persons shall recuse themselves from voting on the Proposed Transaction. Dr. Hale shall abstain from voting pursuant to his Voting and Recusal Agreement dated June 2, 2023. Angela Whitmore and Raymond Tusk shall recuse themselves from voting as required by the Board Resolution. The vote on the Proposed Transaction shall be taken by the independent and disinterested directors only.
(d) Independent Counsel shall advise the Board on the appropriate procedures for documenting the Board's action and any conditions to be imposed on the Board's approval.
C. SEC Disclosure
The Special Committee acknowledges that certain information regarding the Special Committee's process, findings, and recommendation will need to be disclosed publicly in any proxy statement, information statement, Form 8-K, or other filing made by Penterra with the United States Securities and Exchange Commission (the "SEC") in connection with the Proposed Transaction. Such disclosure is required by applicable SEC rules and regulations, including Regulation 14A and the rules governing going-private transactions (if applicable), and by Penterra's obligations under the Securities Exchange Act of 1934, as amended.
Calderwood & Harkness LLP will advise the Special Committee and the Board on the appropriate scope and content of such disclosure, with the objectives of satisfying SEC requirements, providing stockholders with the material information necessary to make an informed voting decision, and preserving the attorney-client privilege and work product protection to the greatest extent permitted by law. The Special Committee, in consultation with Independent Counsel, shall review and approve all public disclosures relating to the Special Committee's process and recommendation prior to filing.
VII. INFORMATION REQUEST PROTOCOL — INTERACTIONS WITH PENTERRA MANAGEMENT
A. General Principle
The Special Committee recognizes that it may require factual information, data, and operational context from Penterra Management—including, in certain instances, from the Excluded Persons—to conduct a thorough and informed evaluation of the Proposed Transaction. Penterra Management possesses institutional knowledge regarding the Company's operations, financial performance, strategic plans, clinical programs, and commercial capabilities that is relevant to the Special Committee's assessment of the merits and risks of the Proposed Transaction and the adequacy of the proposed consideration.
In particular, Dr. Hale, in his capacity as Chief Executive Officer and by reason of his extensive involvement with Caliston as a board observer and equity holder, possesses information regarding Caliston's operations, clinical pipeline, competitive positioning, organizational capabilities, and business prospects that may be relevant to the Special Committee's evaluation. The Special Committee must be able to access this information as needed, while maintaining the integrity of the information barrier and the independence of the Special Committee's process.
The Information Request Protocol set forth in this Section VII is designed to balance these objectives by establishing a structured and documented process for information requests and responses that preserves the Wall and prevents any Excluded Person from using the information request process as a vehicle for obtaining information about, or exerting influence over, the Special Committee's deliberations, strategy, or conclusions.
B. Routing Through Independent Counsel
All requests for information from Penterra Management—including, without limitation, requests directed to Excluded Persons—in connection with the Special Committee's evaluation of the Proposed Transaction shall be initiated by Calderwood & Harkness LLP on behalf of the Special Committee. The following procedures shall apply:
(a) Initiation. Information requests shall be initiated by the Special Committee, by individual Special Committee Members, or by Thorngate Partners LLC (once engaged) through Calderwood & Harkness LLP. Special Committee Members and Thorngate Partners LLC shall communicate their information needs to Calderwood & Harkness LLP, and Calderwood & Harkness LLP shall formulate and transmit the request.
(b) Form and Documentation. Requests shall be made in writing (by email or letter) to the relevant officer or employee, with a copy maintained in the Project Coriander Workspace. Each request shall identify the specific information sought, the purpose for which the information is needed (at a general level, without disclosing the substance of the Special Committee's analysis or strategy), and the deadline for the response.
(c) Responses. Responses to information requests shall be directed to Calderwood & Harkness LLP (Sophie Tremblay, Lead Associate, or Daniel Obi, Working Associate, as primary contacts), not directly to Special Committee Members. Calderwood & Harkness LLP shall review all responses for completeness and relevance and shall forward the responses to the Special Committee Members and, as applicable, to Thorngate Partners LLC through the secure communication channels established pursuant to this Protocol. If a response is incomplete or requires follow-up, Calderwood & Harkness LLP shall coordinate additional requests.
(d) Direct Presentations. If the Special Committee determines that a direct presentation or meeting with a member of Penterra Management is necessary, Independent Counsel shall arrange such presentation in accordance with the procedures set forth in Section VII.C below.
C. Management Presentations to the Special Committee
From time to time, the Special Committee may invite members of Penterra Management or Caliston management to present factual information at Special Committee meetings. Such presentations are an important component of the Special Committee's due diligence and evaluation process. The following protocols shall govern management presentations:
(a) Invitations. Invitations to present to the Special Committee shall be extended by Calderwood & Harkness LLP on behalf of the Special Committee. The invitation shall specify the topic of the presentation, the expected duration, the attendees, and the scope of the information to be covered. Presenters shall be informed that their attendance is limited to the factual presentation portion of the meeting and that they will be excused prior to the Special Committee's deliberations.
(b) Scope Limitation. The scope of each management presentation shall be defined in advance by the Special Committee, in consultation with Independent Counsel. Presentations shall be limited to factual information, data, and operational context and shall not extend to the presenter's views on the merits of the Proposed Transaction, the adequacy of the proposed consideration, or the Special Committee's negotiation strategy (unless the Special Committee specifically determines that such input is relevant and appropriate).
(c) Excusal Before Deliberations. Presenters other than Special Committee Members and Special Committee Advisors shall be excused from the meeting before the Special Committee commences any deliberation, discussion of negotiation strategy, discussion of valuation analysis, or discussion of legal advice. Calderwood & Harkness LLP shall ensure that presenters are excused at the appropriate time and that the meeting transitions to a closed session.
(d) Dr. Hale Presentations. If Dr. Hale is invited to provide information to the Special Committee—for example, regarding his personal knowledge of Caliston's operations, clinical programs, technology platform, key personnel, or commercial prospects—the invitation shall be limited to specific topics defined in advance, and Dr. Hale shall be excused from the meeting before any deliberative discussion. The Special Committee and Independent Counsel shall exercise particular caution in managing Dr. Hale's interactions with the Special Committee to ensure that he does not use the occasion to advocate for the Proposed Transaction or to seek information about the Special Committee's process or conclusions.
(e) Caliston Management Presentations. Presentations by Caliston management—for example, by Dr. Nadia Sorensen (CEO) and Dr. Raj Malhotra (CSO)—shall be coordinated with Whitfield Graves LLP (Kenneth Pratt), Caliston's counsel. The Special Committee shall determine the scope and format of such presentations in advance, and Caliston's counsel shall be afforded the opportunity to attend. Any information provided by Caliston management shall be stored in the Project Coriander Workspace and treated as Special Committee Material.
D. CFO and General Counsel Interactions
Priya Anand, Chief Financial Officer of Penterra, and Lawrence Whittaker, General Counsel and Corporate Secretary of Penterra, are not Excluded Persons and may be called upon by the Special Committee to provide financial data, corporate records, administrative support, or other assistance in connection with the Special Committee's evaluation of the Proposed Transaction. The following protocols shall govern the Special Committee's interactions with Ms. Anand and Mr. Whittaker:
(a) Ms. Anand and Mr. Whittaker may respond to information requests from the Special Committee routed through Calderwood & Harkness LLP and may provide factual presentations to the Special Committee as described in Section VII.C above.
(b) Ms. Anand and Mr. Whittaker shall not share any information received from or regarding the Special Committee's work—including, without limitation, the nature of the information requests received, the substance of any presentations made, or any other information about the Special Committee's process, analysis, or conclusions—with any Excluded Person. This obligation applies regardless of whether the Excluded Person is a supervisor, colleague, or board member.
(c) If either Ms. Anand or Mr. Whittaker is wall-crossed into the Project Coriander Workspace by authorization of the Special Committee, he or she shall execute a written acknowledgment of the information barrier obligations set forth in this Protocol prior to being granted access. Upon wall-crossing, Ms. Anand or Mr. Whittaker (as applicable) shall become a member of the Inside Group and shall be subject to all of the obligations applicable to Inside Group members, including the obligation not to disclose Special Committee Materials or deliberation content to any Excluded Person or other member of the Outside Group.
(d) Calderwood & Harkness LLP shall brief Ms. Anand and Mr. Whittaker on their obligations under this Protocol and shall provide them with copies of the relevant provisions prior to any substantive interaction with the Special Committee.
VIII. PROCEDURES FOR HANDLING INADVERTENT DISCLOSURES
A. Definition of Inadvertent Disclosure
An "Inadvertent Disclosure" occurs when any Special Committee Material, deliberation content, negotiation strategy, legal advice, valuation analysis, or other confidential information that is subject to the Wall is disclosed to an Excluded Person or another member of the Outside Group, whether orally, in writing, electronically, or otherwise, without the prior authorization of the Special Committee. An Inadvertent Disclosure may occur as a result of, among other things:
• An email or other electronic communication being inadvertently sent to, copied to, or forwarded to an Excluded Person;
• A physical document being left in a location accessible to an Excluded Person;
• An oral discussion regarding the Special Committee's work being overheard by an Excluded Person;
• A breach of the Project Coriander Workspace access controls;
• A third party (e.g., a Penterra employee who is not an Inside Group member) inadvertently relaying information about the Special Committee's work to an Excluded Person; or
• Any other circumstance in which confidential information crosses the Wall without authorization.
The procedures set forth in this Section VIII apply to both actual Inadvertent Disclosures and suspected Inadvertent Disclosures (i.e., situations in which there is reason to believe that an Inadvertent Disclosure may have occurred but the facts have not been fully determined).
B. Immediate Notification
Any person—whether a Special Committee Member, a member of the Special Committee Advisors, a member of Penterra Management, or any other person—who becomes aware of an actual or suspected Inadvertent Disclosure shall immediately notify Calderwood & Harkness LLP by contacting Renata Vasquez, Responsible Partner, by telephone. The notification shall include a brief description of the information believed to have been disclosed, the identity of the person(s) to whom the information was disclosed, and the circumstances of the disclosure.
Following the initial telephone notification, the reporting person shall provide a written report of the actual or suspected Inadvertent Disclosure to Calderwood & Harkness LLP within twenty-four (24) hours of the initial notification. The written report may be submitted by email to Renata Vasquez and Sophie Tremblay and should include all available details regarding the disclosure. A template Inadvertent Disclosure Report Form is attached hereto as Exhibit C.
Calderwood & Harkness LLP shall promptly notify the Special Committee Chair, Diane Prescott, of the actual or suspected Inadvertent Disclosure and shall assess the scope and potential impact of the disclosure in consultation with the Chair.
C. Remedial Measures
Upon receiving notification of an actual or suspected Inadvertent Disclosure, Calderwood & Harkness LLP shall take the following steps:
(1) Determine Nature and Scope. Calderwood & Harkness LLP shall determine the nature and scope of the information disclosed, including the specific documents, analyses, strategies, or other information that was com

INDEPENDENCE PROTOCOL & INFORMATION BARRIER POLICY

I. PURPOSE AND BACKGROUND

II. DEFINITIONS

IV. INFORMATION BARRIER POLICY

V. COMMUNICATION PROTOCOLS

VI. BOARD REPORTING PROTOCOL

VIII. PROCEDURES FOR HANDLING INADVERTENT DISCLOSURES

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