1018-00003 · Client 1018 · Negotiation & Transaction Documents

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VOTING AND RECUSAL AGREEMENT

By and Among

Dr. Marcus Hale,

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

and

Penterra Pharmaceuticals Corp.

Dated as of June 2, 2023

This VOTING AND RECUSAL AGREEMENT (this "Agreement") is entered into as of June 2, 2023 (the "Effective Date"), by and among:

(i) Dr. Marcus Hale, an individual residing in the State of New Jersey, acting in his capacity as Chairman of the Board of Directors and Chief Executive Officer and as a director of Penterra Pharmaceuticals Corp. ("Dr. Hale" or the "Interested Director");

(ii) The Special Committee of the Board of Directors of Penterra Pharmaceuticals Corp., a duly constituted committee of independent directors acting through its Chair, Diane Prescott (the "Special Committee"); and

(iii) Penterra Pharmaceuticals Corp., a corporation organized and existing under the laws of the State of Delaware, with its principal executive offices located at 400 Innovation Drive, Suite 1200, Princeton, New Jersey 08540, and whose shares of common stock are listed on the New York Stock Exchange under the ticker symbol "PPHR" ("Penterra" or the "Company").

Dr. Hale, the Special Committee, and the Company are sometimes referred to herein individually as a "Party" and collectively as the "Parties."

This Agreement is entered into in connection with the proposed acquisition by Penterra of one hundred percent (100%) of the outstanding equity interests of Caliston BioSciences, Inc., a corporation organized and existing under the laws of the State of Delaware, with its principal office located at 88 Harbor Point Road, Cambridge, Massachusetts 02142 ("Caliston"), to be effectuated through a one-step merger of Caliston with and into a wholly owned subsidiary of Penterra, or such other structure as may be agreed upon by the parties to the definitive transaction documentation (the "Proposed Transaction").

RECITALS

WHEREAS:

A. Dr. Hale's Interest in Caliston. Dr. Hale holds a twenty-eight and one-half percent (28.5%) equity interest in Caliston BioSciences, Inc., which interest was acquired through personal investments made by Dr. Hale totaling approximately Forty-Two Million Dollars ($42,000,000) across the Seed financing round, the Series A preferred stock financing round, and the Series B preferred stock financing round of Caliston. In addition to his equity interest, Dr. Hale has served as a board observer (in a non-voting capacity) at Caliston since 2018, during which time he has attended fourteen (14) of sixteen (16) regularly scheduled and special meetings of the board of directors of Caliston.

B. Dr. Hale's Role at Penterra. Dr. Hale co-founded Penterra in 2004 and has served continuously as a member of the Board of Directors since the Company's inception. Dr. Hale currently serves as Chairman of the Board and Chief Executive Officer of Penterra. As of the date hereof, Dr. Hale holds 2,140,000 shares of Penterra common stock, representing approximately 1.8% of the approximately 121,400,000 shares of Penterra common stock issued and outstanding as of the most recent record date.

C. Disclosure and Proposal of the Proposed Transaction. On February 14, 2023, Dr. Hale disclosed his equity interest in Caliston to the full Board of Directors of Penterra and proposed that the Board evaluate the potential acquisition of Caliston as a strategic transaction for the Company, citing the complementary nature of Caliston's pipeline assets and Penterra's existing therapeutic platform.

D. Board Deliberations and Special Committee Formation. On March 8, 2023, the Board of Directors convened a special session to discuss the potential conflicts of interest arising from Dr. Hale's financial interest in Caliston in connection with the Proposed Transaction. On April 12, 2023, the Board retained the law firm of Alcott, Barringer & Cole LLP to advise the Board on appropriate governance processes and fiduciary duty considerations with respect to the Proposed Transaction. On May 15, 2023, following receipt of advice from Alcott, Barringer & Cole LLP, the Board approved the formation of a Special Committee of independent directors, with such formation to become effective upon the engagement of independent legal counsel by the Special Committee. On June 2, 2023, the Special Committee was formally constituted by unanimous vote of the six (6) independent directors of Penterra, with Dr. Hale, Angela Whitmore, and Raymond Tusk each recused from and abstaining from such vote. The Special Committee comprises Diane Prescott (Chair), James Okafor, and Dr. Helen Ng, each of whom is an independent director within the meaning of the NYSE Listed Company Manual and applicable Securities and Exchange Commission rules and has no material financial interest in the Proposed Transaction.

E. Engagement of Independent Advisors. The Special Committee has engaged Calderwood & Harkness LLP, with offices at 1700 Market Street, Suite 3400, Philadelphia, Pennsylvania 19103, as its independent legal counsel in connection with the Proposed Transaction (engagement letter dated June 2, 2023; C&H Matter Number 1025-00006). The Special Committee further intends to retain an independent financial advisor to provide financial advisory services and, if requested, a fairness opinion in connection with the Proposed Transaction (the Special Committee subsequently engaged Thorngate Partners LLC for such purposes).

F. Board Resolution and Special Committee Authority. The Board of Directors adopted a resolution dated June 2, 2023 (the "Board Resolution") granting the Special Committee sole and exclusive authority to: (a) evaluate the Proposed Transaction and make such investigation and analysis as the Special Committee deems appropriate; (b) negotiate the terms and conditions of the Proposed Transaction, including the price, structure, representations and warranties, covenants, conditions to closing, indemnification provisions, and all other terms of any definitive Merger Agreement and ancillary agreements; (c) retain, at the expense of the Company, such independent legal, financial, and other advisors as the Special Committee deems necessary or appropriate; (d) recommend to the full Board of Directors the approval or rejection of the Proposed Transaction; and (e) explore and evaluate alternative transactions, including the full power and authority to decline the Proposed Transaction entirely and to determine that no transaction is in the best interests of Penterra and its stockholders (the "say no" power). The Board Resolution was adopted in accordance with, and the authority of the Special Committee is grounded in, Sections 141(a) and 144 of the Delaware General Corporation Law.

G. Purpose of This Agreement. Dr. Hale acknowledges that his 28.5% equity interest in Caliston and his ongoing role as a board observer at Caliston create an actual conflict of interest with respect to the Proposed Transaction, inasmuch as Dr. Hale stands on both sides of the Proposed Transaction — as a fiduciary of the acquiror (Penterra) and as a significant equity holder of the target (Caliston) who stands to receive substantial personal financial consideration in connection with the consummation of the Proposed Transaction. This Agreement is entered into for the purpose of establishing clear and binding recusal, abstention, confidentiality, and non-interference obligations applicable to Dr. Hale in order to protect the integrity and independence of the Special Committee process and to support the procedural safeguards required under Delaware fiduciary duty standards, including, without limitation, the entire fairness doctrine as articulated in Weinberger v. UOP, Inc., 457 A.2d 701 (Del. 1983), and its progeny.

H. Related Conflicts. Angela Whitmore, a director of Penterra and Executive Vice President, Commercial Operations of the Company, is the spouse of Dr. Evan Whitmore, who serves as Head of Clinical Development and as a member of the board of directors of Caliston. By reason of this relationship, Angela Whitmore has a material interest in the Proposed Transaction and is also excluded from the Special Committee process. Raymond Tusk, a non-independent director of Penterra, is also recused from the Special Committee's deliberations relating to the Proposed Transaction. The information barrier and independence protocol established by the Special Committee (the "Independence Protocol"), adopted on June 2, 2023, governs the separation of Dr. Hale, Angela Whitmore, and Raymond Tusk (collectively, the "Recused Persons") from the Special Committee process and the protection of Special Committee Materials from unauthorized disclosure or access.

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

ARTICLE I — DEFINITIONS

As used in this Agreement, the following terms shall have the meanings set forth below:

Section 1.1 "Board" means the Board of Directors of Penterra Pharmaceuticals Corp., as constituted from time to time.

Section 1.2 "Caliston" means Caliston BioSciences, Inc., a Delaware corporation (EIN: 84-4219063), with its principal office at 88 Harbor Point Road, Cambridge, Massachusetts 02142.

Section 1.3 "Caliston Interest" means Dr. Hale's 28.5% equity interest in Caliston, as described in Recital A and Section 7.2 of this Agreement.

Section 1.4 "Company" or "Penterra" means Penterra Pharmaceuticals Corp., a Delaware corporation (EIN: 22-3847195; CIK: 0001587342; NYSE: PPHR), with its principal executive offices at 400 Innovation Drive, Suite 1200, Princeton, New Jersey 08540.

Section 1.5 "DGCL" means the Delaware General Corporation Law, Title 8 of the Delaware Code, as amended from time to time.

Section 1.6 "Independence Protocol" means the Independence Protocol & Information Barrier Policy for Project Coriander, adopted by the Special Committee on June 2, 2023, as the same may be amended, supplemented, or restated from time to time by the Special Committee.

Section 1.7 "Merger Agreement" means the definitive Agreement and Plan of Merger between Penterra and Caliston relating to the Proposed Transaction, together with all schedules, exhibits, and ancillary agreements thereto, if and when executed by the parties thereto.

Section 1.8 "Project Coriander" means the confidential project code name assigned to the Proposed Transaction and all related evaluation, negotiation, and documentation activities.

Section 1.9 "Proposed Transaction" means the proposed acquisition by Penterra of 100% of the outstanding equity interests of Caliston via a one-step merger, as further described in the Preamble and the Recitals hereto.

Section 1.10 "Recused Persons" means, collectively, Dr. Marcus Hale, Angela Whitmore, and Raymond Tusk, each of whom has been recused from the Special Committee process in connection with the Proposed Transaction.

Section 1.11 "Special Committee" means the Special Committee of the Board of Directors of Penterra, as constituted on June 2, 2023, comprising Diane Prescott (Chair), James Okafor, and Dr. Helen Ng, together with any successor members appointed by the independent directors of the Board.

Section 1.12 "Special Committee Advisors" means, collectively, Calderwood & Harkness LLP, in its capacity as independent legal counsel to the Special Committee, and any independent financial advisor retained by the Special Committee in connection with the Proposed Transaction (subsequently Thorngate Partners LLC), and any other independent advisors retained by the Special Committee from time to time.

Section 1.13 "Special Committee Materials" means all documents, analyses, communications, presentations, memoranda, financial models, term sheets, draft agreements, board books, minutes, notes, and other materials of any kind, whether in written, electronic, or other form, prepared by, for, or at the direction of the Special Committee or any Special Committee Advisor in connection with the evaluation, negotiation, or consideration of the Proposed Transaction, including all materials stored in the segregated Project Coriander workspace on the Penterra document management system.

ARTICLE II — RECUSAL FROM BOARD DELIBERATIONS

Section 2.1 Recusal Obligation. Commencing on the Effective Date and continuing throughout the term of this Agreement as set forth in Article IX, Dr. Hale shall recuse himself from all meetings, deliberations, discussions, and proceedings of the Board of Directors of Penterra relating in whole or in part to the Proposed Transaction. Without limiting the generality of the foregoing, Dr. Hale shall recuse himself from any discussion, consideration, or review of:

(a) the evaluation, analysis, or assessment of the Proposed Transaction, including the strategic rationale, risks, and benefits thereof;

(b) the terms and conditions of any Merger Agreement or any ancillary agreement, side letter, employment agreement, voting agreement, or other agreement related to the Proposed Transaction;

(c) the valuation of Caliston, including any analysis of Caliston's assets, liabilities, intellectual property, pipeline, clinical data, revenue projections, or other financial or operational characteristics;

(d) the fairness of the Proposed Transaction to Penterra and its stockholders, including any fairness opinion or financial analysis provided by the Special Committee's independent financial advisor;

(e) the engagement, retention, compensation, direction, or termination of the Special Committee Advisors, or any communication with or report from the Special Committee Advisors;

(f) the market check or exploration of alternative transactions, including any identification, evaluation, or solicitation of potential alternative acquirors, merger partners, or strategic alternatives;

(g) any recommendation by the Special Committee to the Board of Directors regarding the Proposed Transaction, whether favorable, unfavorable, or neutral; and

(h) any other matter that the Special Committee or its independent counsel determines to be within the scope of the Special Committee's authority under the Board Resolution.

The recusal obligation set forth in this Section 2.1 extends to all formal meetings of the Board of Directors, all informal discussions among two or more Board members, all telephonic or video conferences, all exchanges of electronic mail or other electronic communications, all written communications, and any other form of communication or deliberation among Board members, in each case to the extent such meeting, discussion, conference, exchange, or communication relates in whole or in part to the Proposed Transaction.

Section 2.2 Physical and Virtual Absence. Dr. Hale shall not be physically present in any meeting room, and shall not participate via any electronic communication platform (including, without limitation, video conference, teleconference, web-based meeting application, instant messaging, or shared digital workspace), during any portion of any meeting of the Board of Directors or any committee thereof at which the Proposed Transaction is discussed, considered, or acted upon. If the Proposed Transaction arises as a topic of discussion during a meeting of the Board of Directors at which Dr. Hale is present for the consideration of other business unrelated to the Proposed Transaction, Dr. Hale shall excuse himself from the meeting room (or, in the case of a virtual meeting, disconnect from the electronic communication platform) before such discussion commences and shall not return to or rejoin the meeting until he has been notified by the Corporate Secretary of Penterra, Lawrence Whittaker, or his designee, that the discussion of the Proposed Transaction has concluded and the meeting has proceeded to other business. The minutes of any such meeting shall reflect Dr. Hale's departure and return, and the Corporate Secretary shall maintain a log of all such instances.

Section 2.3 Duration. The recusal obligations set forth in this Article II shall remain in full force and effect from the Effective Date until the earliest to occur of the following:

(a) the closing of the Proposed Transaction in accordance with the terms of the Merger Agreement;

(b) the termination or abandonment of the Proposed Transaction, whether by action of the Board of Directors (upon recommendation of the Special Committee or otherwise), by mutual agreement of Penterra and Caliston, or by operation of the terms of the Merger Agreement or any other applicable agreement; or

(c) the written release of Dr. Hale from these recusal obligations by the Special Committee, acting by majority vote of its members and with the concurrence of its independent counsel.

ARTICLE III — ABSTENTION FROM VOTING

Section 3.1 Board-Level Voting. Dr. Hale shall abstain from voting on any resolution, motion, consent, or other action of the Board of Directors relating in whole or in part to the Proposed Transaction. Without limiting the generality of the foregoing, Dr. Hale shall abstain from voting on any resolution of the Board of Directors to:

(a) approve, adopt, authorize, or ratify the Merger Agreement or any ancillary agreement, amendment, supplement, or modification thereto;

(b) recommend the Proposed Transaction to the stockholders of Penterra for their approval or adoption;

(c) submit the Proposed Transaction, any related issuance of shares of Penterra common stock, or any other matter related to the Proposed Transaction to a vote of the stockholders of Penterra;

(d) terminate, amend, modify, or waive any provision of the Merger Agreement or any ancillary agreement; or

(e) take any other action relating to the Proposed Transaction that requires or is submitted for a vote of the Board of Directors.

Dr. Hale's abstention from any vote described in this Section 3.1 shall not be counted as a vote cast either for or against any such resolution, and the abstention shall not affect the determination of whether the requisite number of votes has been obtained for approval of such resolution. Quorum for any meeting of the Board of Directors at which the Proposed Transaction is considered shall be determined in accordance with the Company's Amended and Restated Bylaws and the applicable provisions of the DGCL, and Dr. Hale's presence at any portion of such meeting for the purpose of other business shall not constitute participation in any vote on the Proposed Transaction.

Section 3.2 Committee Voting. Dr. Hale shall not serve on, attend meetings of, or vote at any committee of the Board of Directors that considers matters relating to the Proposed Transaction. Without limitation of the foregoing, Dr. Hale shall not participate in any proceedings, deliberations, or votes of the Special Committee. This restriction applies to all standing and ad hoc committees of the Board, including, without limitation, any audit committee, compensation committee, nominating and governance committee, or executive committee, to the extent any such committee considers matters relating to the Proposed Transaction.

Section 3.3 Stockholder Voting. Nothing in this Agreement shall restrict, limit, or impair Dr. Hale's right to vote his 2,140,000 shares of Penterra common stock (representing approximately 1.8% of the approximately 121,400,000 shares of Penterra common stock outstanding as of the date hereof) at any annual or special meeting of stockholders, or by written consent in lieu of a meeting, with respect to any matter related to the Proposed Transaction submitted to a vote of the stockholders of Penterra, including, without limitation, any vote on the issuance of shares of Penterra common stock in connection with the Proposed Transaction as may be required under the applicable listing rules of the New York Stock Exchange. Dr. Hale's stockholder voting rights are preserved in their entirety under this Agreement, and any separate obligations with respect to such voting rights, including any commitment to vote in favor of or against the Proposed Transaction, shall be addressed exclusively in a Stockholder Support Agreement, if any, to be separately negotiated and entered into by Dr. Hale.

ARTICLE IV — CONFIDENTIALITY

Section 4.1 Obligation of Confidentiality. Dr. Hale shall maintain in strict confidence, and shall not directly or indirectly disclose, disseminate, publish, or communicate to any person or entity (including, without limitation, to Caliston or any of its directors, officers, employees, stockholders, agents, representatives, or advisors), any information relating to:

(a) the Special Committee's deliberations, analyses, conclusions, discussions, or recommendations, whether preliminary, interim, or final;

(b) any Special Committee Materials, or the existence, substance, or content thereof;

(c) the substance of any advice, opinion, analysis, or recommendation provided to the Special Committee by any Special Committee Advisor, including any legal advice from Calderwood & Harkness LLP or any financial analysis or fairness opinion from the Special Committee's independent financial advisor;

(d) the Special Committee's negotiating positions, strategies, counterproposals, reservation prices, or priorities with respect to the Proposed Transaction;

(e) the status, progress, substance, scope, or results of any market check or exploration of alternative transactions conducted by or on behalf of the Special Committee, including the identity of any parties contacted or the substance of any discussions held in connection therewith; and

(f) any other non-public information concerning the Special Committee's activities, proceedings, or decision-making in connection with the Proposed Transaction.

Dr. Hale acknowledges that all Special Committee Materials are stored on the segregated Project Coriander workspace within the Penterra document management system, and that Dr. Hale's access credentials have been revoked with respect to such workspace. Dr. Hale shall not attempt to access, view, copy, download, or otherwise obtain any Special Committee Materials from the Project Coriander workspace or from any other source.

Section 4.2 No Solicitation of Confidential Information. Dr. Hale shall not, directly or indirectly, seek, solicit, request, encourage, or induce any Recused Person, any member of the Special Committee, any Special Committee Advisor, any officer, employee, or agent of Penterra, or any other person or entity to disclose, reveal, or communicate to Dr. Hale, or to any person acting on Dr. Hale's behalf or at Dr. Hale's direction, any information described in Section 4.1 of this Agreement. Dr. Hale shall not direct or authorize any person to take any action that Dr. Hale is prohibited from taking under this Section 4.2.

Section 4.3 Inadvertent Disclosure. In the event that Dr. Hale inadvertently receives any Special Committee Material or any confidential information described in Section 4.1, whether through misdirected email, inadvertent inclusion in a board package, accidental access to the Project Coriander workspace, or any other means, Dr. Hale shall:

(a) immediately cease any review, reading, or examination of such material and refrain from any further use of the information contained therein;

(b) promptly, and in any event within twenty-four (24) hours of such receipt, notify Renata Vasquez, Partner, Calderwood & Harkness LLP, at 1700 Market Street, Suite 3400, Philadelphia, Pennsylvania 19103 (telephone: (215) 555-8400; email: rvasquez@calderwoodharkness.com), of the inadvertent receipt, providing a description of the nature and circumstances of the disclosure; and

(c) return or destroy all copies of such material (whether in paper, electronic, or other form) as directed by Calderwood & Harkness LLP, and certify such return or destruction in writing.

The procedures set forth in the Independence Protocol shall govern the investigation and remediation of any inadvertent disclosure, including any determination as to whether additional protective measures are required.

Section 4.4 Caliston-Side Communications. Dr. Hale shall not, directly or indirectly, communicate with any director, officer, employee, stockholder, agent, representative, or advisor of Caliston regarding the Special Committee's activities, deliberations, positions, strategies, analyses, recommendations, or any other matter within the scope of Section 4.1. Dr. Hale acknowledges that Caliston's legal counsel in connection with the Proposed Transaction is Whitfield Graves LLP (Kenneth Pratt, Lead Partner; One Federal Street, Suite 2600, Boston, Massachusetts 02110) and that Caliston's financial advisor is Fendowell Sinclair & Co. (Sandra Wu, Managing Director; 200 Clarendon Street, 50th Floor, Boston, Massachusetts 02116). Dr. Hale acknowledges and agrees that all communications with Caliston's counsel and financial advisor regarding the Proposed Transaction are to be conducted exclusively through the Special Committee and the Special Committee Advisors, and that Dr. Hale shall not independently contact or communicate with Whitfield Graves LLP, Fendowell Sinclair & Co., or any other advisor to Caliston regarding any aspect of the Proposed Transaction. For the avoidance of doubt, this Section 4.4 does not prohibit Dr. Hale from engaging in communications with Caliston personnel in the ordinary course of his duties as CEO of Penterra that do not relate to the Proposed Transaction, the Special Committee's activities, or the terms of any potential Merger Agreement; provided, however, that Dr. Hale shall exercise reasonable care to avoid any discussion of the Proposed Transaction in any such communication and shall promptly report to Calderwood & Harkness LLP any instance in which the Proposed Transaction is raised in any such communication.

Section 4.5 Survival. The confidentiality obligations set forth in this Article IV shall survive the termination of this Agreement, regardless of the reason for such termination, and shall remain in full force and effect for a period of two (2) years following the date of termination. For the avoidance of doubt, the survival of confidentiality obligations shall apply whether the Proposed Transaction is consummated, terminated, or abandoned, and regardless of whether this Agreement is terminated by mutual agreement of the Parties.

ARTICLE V — NON-INTERFERENCE

Section 5.1 Non-Interference with Special Committee Process. Dr. Hale shall not, directly or indirectly, by himself or through any agent, representative, affiliate, or other intermediary:

(a) attempt to influence, direct, control, or interfere with the Special Committee's evaluation, analysis, negotiation, or decision-making process with respect to the Proposed Transaction;

(b) attempt to influence, pressure, persuade, or direct any member of the Special Committee or any Special Committee Advisor regarding any aspect of the Proposed Transaction, including, without limitation, the terms, price, structure, timing, or advisability of the Proposed Transaction;

(c) take any action to circumvent, undermine, or render ineffective the Special Committee's sole and exclusive authority over the Proposed Transaction as established by the Board Resolution, including any attempt to present the Proposed Transaction directly to the full Board of Directors for consideration without the prior approval or recommendation of the Special Committee; or

(d) take any action in his capacity as Chairman of the Board or Chief Executive Officer of Penterra that is inconsistent with, contrary to, or that could reasonably be expected to undermine, the Special Committee's authority, independence, or ability to discharge its responsibilities with respect to the Proposed Transaction.

Section 5.2 Non-Interference with Market Check. Dr. Hale shall not, directly or indirectly, take any action to discourage, impede, delay, frustrate, or interfere with the Special Committee's market check of potential alternative transactions, including, without limitation, any action to discourage any third party from participating in the market check process, to provide misleading information to any potential alternative bidder, or to condition any future business relationship on such third party's non-participation in the market check process. Dr. Hale acknowledges that the Special Committee has full authority to solicit, evaluate, and pursue alternative transactions and that any interference with the market check process would be inconsistent with the Board Resolution and Dr. Hale's fiduciary duties.

Section 5.3 Cooperation. Notwithstanding the restrictions set forth in Sections 5.1 and 5.2, Dr. Hale shall reasonably cooperate with the Special Committee and the Special Committee Advisors by providing factual information reasonably requested by the Special Committee in connection with its evaluation of the Proposed Transaction. Such cooperation shall include, without limitation, the provision of information regarding:

(a) Dr. Hale's Caliston Interest, including the history, dates, amounts, and terms of his investments in the Seed, Series A, and Series B financing rounds, the nature and extent of his equity interest, any transfer restrictions, rights of first refusal, drag-along or tag-along rights, or other provisions applicable to his equity interest, and any side letters or other agreements between Dr. Hale and Caliston or its stockholders;

(b) Dr. Hale's board observer activities at Caliston, including the nature and extent of information received in his capacity as board observer, the frequency of his attendance at Caliston board meetings, and any non-public information regarding Caliston's business, operations, pipeline, financial condition, or prospects of which he became aware through such service; and

(c) any other factual matters within Dr. Hale's knowledge that are relevant to the Special Committee's evaluation of the Proposed Transaction, including, without limitation, any relationships between Dr. Hale and Caliston's founders, key employees, or major stockholders.

All requests for information under this Section 5.3 shall be routed through Calderwood & Harkness LLP, and all information provided by Dr. Hale in response to such requests shall be made available to the full Special Committee. Dr. Hale shall have the right to have his personal legal counsel present during any interview or meeting conducted pursuant to this Section 5.3. Dr. Hale's obligation to cooperate under this Section 5.3 shall not require him to provide any legal advice, strategic recommendations, personal opinions, or assessments regarding the fairness, advisability, or desirability of the Proposed Transaction or any alternative transaction.

ARTICLE VI — ACKNOWLEDGMENTS

Section 6.1 Acknowledgment of Conflict of Interest. Dr. Hale acknowledges that his 28.5% equity interest in Caliston, acquired through personal investments totaling approximately Forty-Two Million Dollars ($42,000,000) across the Seed, Series A, and Series B financing rounds, constitutes a material financial interest in the Proposed Transaction that is separate from, and potentially adverse to, the interests of Penterra and its public stockholders. Dr. Hale further acknowledges that, based on the proposed aggregate equity value of the Proposed Transaction of approximately Nine Hundred Twenty-Five Million Dollars ($925,000,000), his Caliston Interest would yield implied proceeds of approximately Two Hundred Sixty-Three Million Six Hundred Twenty-Five Thousand Dollars ($263,625,000) (calculated as 28.5% multiplied by $925,000,000) and an implied gain of approximately Two Hundred Twenty-One Million Six Hundred Twenty-Five Thousand Dollars ($221,625,000) (calculated as $263,625,000 in implied proceeds minus $42,000,000 in aggregate invested capital). Dr. Hale acknowledges that this material financial interest creates a direct and actual conflict between his personal financial interest as a Caliston equityholder and his fiduciary duties as a director and officer of Penterra. Dr. Hale further acknowledges that his service as a board observer at Caliston since 2018 has provided him with access to material non-public information about Caliston's business, operations, clinical programs, financial condition, and prospects that is not available to the independent directors of Penterra.

Section 6.2 Acknowledgment of Delaware Fiduciary Duties. Dr. Hale acknowledges that, as a director and officer of Penterra, he owes fiduciary duties of care and loyalty to the Company and its stockholders under the DGCL and the common law of the State of Delaware, as interpreted by the Court of Chancery and the Delaware Supreme Court. Dr. Hale acknowledges that the Proposed Transaction constitutes an interested director transaction within the meaning of Section 144 of the DGCL, by reason of Dr. Hale's material financial interest in Caliston. Dr. Hale further acknowledges that, because he stands on both sides of the Proposed Transaction, the entire fairness standard of judicial review — encompassing both fair dealing and fair price — may apply to the Proposed Transaction, and that the burden of establishing entire fairness may rest with Dr. Hale and the Company absent the deployment of appropriate procedural safeguards. Dr. Hale acknowledges that the Special Committee process, including the engagement of independent legal counsel and an independent financial advisor, the delegation of sole and exclusive authority over the Proposed Transaction to the Special Committee, the conduct of a market check, and the observance of the recusal and non-interference obligations set forth in this Agreement, is designed to satisfy the procedural protections recognized by Delaware courts for the approval of interested director transactions and to support a shifting of the burden of proof or the application of a more deferential standard of judicial review.

Section 6.3 Acknowledgment of Other Recused Persons. Dr. Hale acknowledges that Angela Whitmore, a director and Executive Vice President, Commercial Operations of Penterra, is also a Recused Person by reason of her spousal relationship with Dr. Evan Whitmore, who serves as Head of Clinical Development and a member of the board of directors of Caliston. Dr. Hale further acknowledges that Raymond Tusk, a non-independent director of Penterra, is also a Recused Person excluded from the Special Committee process. Dr. Hale shall not communicate with Angela Whitmore or Raymond Tusk regarding the Special Committee's deliberations, activities, positions, recommendations, or any other matter within the scope of Section 4.1 of this Agreement. Dr. Hale shall not share, exchange, or discuss with any other Recused Person any information regarding the Proposed Transaction that he would be prohibited from disclosing under Article IV.

Section 6.4 Acknowledgment of Information Barrier. Dr. Hale acknowledges and consents to the Independence Protocol established by the Special Committee on June 2, 2023, a copy of which has been provided to Dr. Hale. Dr. Hale specifically acknowledges and consents to the establishment of a segregated document management workspace designated as Project Coriander within the Penterra document management system, and the restriction of Dr. Hale's access credentials such that he is unable to access, view, or retrieve any documents, files, or communications stored within the Project Coriander workspace. Dr. Hale agrees to abide by all provisions of the Independence Protocol applicable to Recused Persons and to cooperate with the reasonable implementation of any additional information barrier procedures adopted by the Special Committee from time to time.

Section 6.5 Voluntary Agreement. Dr. Hale represents and warrants that he enters into this Agreement voluntarily, with full knowledge and understanding of its terms, conditions, and consequences, and after having had the opportunity to consult with his own personal legal counsel. Dr. Hale confirms that he has not been coerced, threatened, or improperly influenced to enter into this Agreement and that he has had adequate time to review and consider the provisions hereof.

ARTICLE VII — REPRESENTATIONS AND WARRANTIES OF DR. HALE

Section 7.1 Authority. Dr. Hale represents and warrants that he has full power, legal capacity, and authority to execute and deliver this Agreement and to perform each of his obligations hereunder. The execution, delivery, and performance of this Agreement by Dr. Hale does not and will not conflict with, result in a breach of, or constitute a default under, any agreement, instrument, order, judgment, decree, or other obligation to which Dr. Hale is a party or by which he is bound.

Section 7.2 Accuracy of Disclosed Interest. Dr. Hale represents and warrants that his equity interest in Caliston is 28.5% of the outstanding equity of Caliston, as calculated on a fully diluted basis (or, if not on a fully diluted basis, on such basis as was disclosed to the Board and the Special Committee), acquired through aggregate personal investments of approximately Forty-Two Million Dollars ($42,000,000) made across the Seed, Series A, and Series B financing rounds of Caliston. Dr. Hale further represents and warrants that, other than his equity interest and his service as a non-voting board observer, he has no other financial interest in, employment relationship with, consulting arrangement with, or contractual obligation to Caliston or any of its affiliates, subsidiaries, directors, officers, founders, employees, or stockholders, other than any indirect relationships that may exist through Penterra in the ordinary course of Penterra's business.

Section 7.3 No Undisclosed Relationships. Dr. Hale represents and warrants that he has disclosed to the Board of Directors of Penterra and to the Special Committee all material relationships between Dr. Hale and (a) Caliston; (b) the co-founders of Caliston, Dr. Nadia Sorensen and Dr. Raj Malhotra; (c) the key stockholders of Caliston, including Ridgeline Ventures, LP and Meridian Life Sciences Fund III, LP; and (d) the professional advisors of Caliston, including Whitfield Graves LLP (legal counsel) and Fendowell Sinclair & Co. (financial advisor). Dr. Hale is not aware of any material relationship, interest, or arrangement that has not been so disclosed and that would be relevant to the Special Committee's evaluation of the Proposed Transaction or Dr. Hale's conflicts of interest.

Section 7.4 No Prior Commitments. Dr. Hale represents and warrants that he has not made, and is not a party to, any commitment, agreement, understanding, arrangement, or promise, whether written or oral, express or implied, with any stockholder, officer, director, founder, employee, agent, or advisor of Caliston, or with any other person, regarding the terms, price, structure, timing, conditions, or any other aspect of the Proposed Transaction or any alternative transaction involving Caliston and Penterra. Dr. Hale has not made any representation or assurance to any person that the Proposed Transaction will be consummated at any particular price or on any particular terms.

ARTICLE VIII — REMEDIES

Section 8.1 Specific Performance. Dr. Hale acknowledges and agrees that a breach by Dr. Hale of any of the covenants, agreements, or obligations set forth in this Agreement would cause irreparable harm and continuing injury to the Special Committee and to Penterra and its stockholders, the extent of which would be difficult or impossible to ascertain and for which monetary damages alone would be an inadequate and insufficient remedy. Accordingly, Dr. Hale agrees that, in the event of any actual or threatened breach of this Agreement by Dr. Hale, the Special Committee and/or Penterra shall be entitled to seek and obtain, from any court of competent jurisdiction, an order of specific performance and/or temporary, preliminary, or permanent injunctive relief to enforce the terms of this Agreement and to prevent or restrain any such breach, without the necessity of proving actual damages, posting any bond, or providing other security, to the fullest extent permitted by applicable law. The right to specific performance and injunctive relief shall be in addition to, and not in limitation of, any other rights or remedies available to the Special Committee or Penterra at law or in equity, including, without limitation, the right to seek monetary damages for any breach of this Agreement.

Section 8.2 No Limitation on Fiduciary Duties. Nothing in this Agreement shall be construed to limit, diminish, modify, or waive any fiduciary duties that Dr. Hale owes to Penterra or to its stockholders under the DGCL, the common law of the State of Delaware, or any other applicable law. This Agreement is intended to supplement, and not to replace, the fiduciary obligations to which Dr. Hale is subject. In the event of any conflict between the provisions of this Agreement and Dr. Hale's fiduciary duties under applicable law, Dr. Hale's fiduciary duties shall control; provided, however, that this Section 8.2 shall not be invoked to excuse Dr. Hale from compliance with the specific recusal, abstention, confidentiality, and non-interference obligations set forth herein, which obligations are consistent with, and in furtherance of, Dr. Hale's fiduciary duties to Penterra.

ARTICLE IX — TERM AND TERMINATION

Section 9.1 Effective Date. This Agreement shall be effective as of June 2, 2023, the date first written above.

Section 9.2 Termination. This Agreement shall terminate upon the earliest to occur of the following:

(a) the closing of the Proposed Transaction in accordance with the terms and conditions of the Merger Agreement;

(b) the termination or abandonment of the Proposed Transaction, whether by action of the Board of Directors of Penterra (upon recommendation of the Special Committee or otherwise), by mutual agreement of Penterra and Caliston, by the exercise of any termination right under the Merger Agreement, or by any other means that results in the definitive termination of efforts to consummate the Proposed Transaction; or

(c) the mutual written agreement of Dr. Hale and the Special Committee (acting by majority vote of its members) to terminate this Agreement.

Upon termination of this Agreement, all rights and obligations of the Parties hereunder shall cease, except that (i) any rights or obligations that have accrued prior to the date of termination shall survive such termination, (ii) the confidentiality obligations set forth in Article IV shall survive termination as provided in Section 4.5, and (iii) the representations and warranties set forth in Article VII shall survive termination to the extent they relate to facts and circumstances existing as of the date of this Agreement.

ARTICLE X — MISCELLANEOUS

Section 10.1 Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without giving effect to any choice-of-law or conflict-of-law rules or provisions (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.

Section 10.2 Jurisdiction. Each of the Parties hereby irrevocably and unconditionally submits to the exclusive jurisdiction of the Court of Chancery of the State of Delaware (or, if the Court of Chancery declines to accept jurisdiction over a particular matter, the Superior Court of the State of Delaware, or, if neither the Court of Chancery nor the Superior Court accepts jurisdiction, the United States District Court for the District of Delaware) for the purpose of any action, suit, or proceeding arising out of or relating to this Agreement, and each Party hereby irrevocably and unconditionally waives, and agrees not to assert, by way of motion, as a defense, counterclaim, or otherwise, in any such action, suit, or proceeding, any claim that it is not subject to the jurisdiction of any such court, that any such action, suit, or proceeding is brought in an inconvenient forum, or that the venue of any such action, suit, or proceeding is improper.

Section 10.3 Notices. All notices, requests, demands, consents, waivers, and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given when (a) delivered by hand, (b) sent by nationally recognized overnight courier service (with tracking and proof of delivery), (c) sent by registered or certified mail, return receipt requested, postage prepaid, or (d) sent by electronic mail (with confirmation of receipt by the recipient), in each case addressed as follows:

If to Dr. Marcus Hale:

Dr. Marcus Hale c/o Penterra Pharmaceuticals Corp. 400 Innovation Drive, Suite 1200 Princeton, New Jersey 08540

If to the Special Committee:

The Special Committee of the Board of Directors of Penterra Pharmaceuticals Corp. c/o Calderwood & Harkness LLP 1700 Market Street, Suite 3400 Philadelphia, Pennsylvania 19103

Attn: Renata Vasquez

If to Penterra Pharmaceuticals Corp.:

Penterra Pharmaceuticals Corp. 400 Innovation Drive, Suite 1200 Princeton, New Jersey 08540

Attn: Lawrence Whittaker, General Counsel and Corporate Secretary

Any Party may change its address for the purpose of this Section 10.3 by giving written notice of such change to the other Parties in the manner provided herein.

Section 10.4 Entire Agreement. This Agreement, together with the Independence Protocol and the Board Resolution dated June 2, 2023, constitutes the entire agreement among the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations, and discussions, whether written or oral, among the Parties relating to such subject matter. No representation, warranty, inducement, promise, or agreement has been made by any Party that is not expressly set forth in this Agreement, the Independence Protocol, or the Board Resolution.

Section 10.5 Amendment and Waiver. This Agreement may not be amended, modified, supplemented, or restated except by a written instrument executed by Dr. Hale and duly authorized by the Special Committee (acting by majority vote of its members). No waiver of any provision of this Agreement shall be effective unless made in writing and signed by the Party granting such waiver. No failure or delay by any Party in exercising any right, power, or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power, or privilege preclude any other or further exercise thereof or the exercise of any other right, power, or privilege.

Section 10.6 Severability. If any provision of this Agreement, or the application of any such provision to any person or circumstance, is held by a court of competent jurisdiction to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement, and the remaining provisions shall continue in full force and effect. To the extent permitted by applicable law, the Parties hereby waive any provision of law that renders any provision of this Agreement invalid, illegal, or unenforceable in any respect. If any provision is held to be invalid, illegal, or unenforceable, the Parties shall negotiate in good faith to modify such provision to the minimum extent necessary to make it valid, legal, and enforceable while preserving its original intent.

Section 10.7 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which, taken together, shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or by electronic transmission in portable document format (.pdf) shall be as effective as delivery of a manually executed counterpart.

Section 10.8 Assignment. This Agreement shall not be assignable by any Party without the prior written consent of each of the other Parties hereto. Any attempted assignment in violation of this Section 10.8 shall be null and void and of no force or effect. Subject to the foregoing, this Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective heirs, executors, administrators, legal representatives, successors, and permitted assigns.

Section 10.9 No Third-Party Beneficiaries. Except as expressly provided in Section 4.3 of this Agreement with respect to Calderwood & Harkness LLP's rights to receive notice of inadvertent disclosure and to direct the return or destruction of Special Committee Materials, this Agreement is not intended to, and shall not, confer upon any person or entity other than the Parties hereto any rights, benefits, remedies, obligations, or liabilities of any nature whatsoever, and no person or entity other than the Parties hereto (and Calderwood & Harkness LLP, solely to the extent set forth in Section 4.3) shall be entitled to enforce any provision of this Agreement.

[Remainder of this page intentionally left blank; signature pages follow.]

IN WITNESS WHEREOF, the Parties have executed this Voting and Recusal Agreement as of the date first written above.

DR. MARCUS HALE, Individually

By: ________

Name: Dr. Marcus Hale

Title: Chairman and Chief Executive Officer, Penterra Pharmaceuticals Corp.

Date: June 2, 2023

THE SPECIAL COMMITTEE OF THE BOARD OF DIRECTORS OF PENTERRA PHARMACEUTICALS CORP.

By: ________

Name: Diane Prescott

Title: Chair of the Special Committee

Date: June 2, 2023

PENTERRA PHARMACEUTICALS CORP.

By: ________

Name: Lawrence Whittaker

Title: General Counsel and Corporate Secretary

Date: June 2, 2023

ACKNOWLEDGMENT BY INDEPENDENT COUNSEL TO THE SPECIAL COMMITTEE

The undersigned, as independent counsel to the Special Committee of the Board of Directors of Penterra Pharmaceuticals Corp., hereby acknowledges receipt of this Voting and Recusal Agreement and confirms that the procedures set forth in Section 4.3 (Inadvertent Disclosure) are consistent with the Independence Protocol & Information Barrier Policy for Project Coriander adopted on June 2, 2023.

CALDERWOOD & HARKNESS LLP

By: ________

Name: Renata Vasquez

Title: Partner

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

Date: June 2, 2023

VOTING AND RECUSAL AGREEMENT
By and Among
Dr. Marcus Hale,
the Special Committee of the Board of Directors of Penterra Pharmaceuticals Corp.,
and
Penterra Pharmaceuticals Corp.
Dated as of June 2, 2023
This VOTING AND RECUSAL AGREEMENT (this "Agreement") is entered into as of June 2, 2023 (the "Effective Date"), by and among:
(i) Dr. Marcus Hale, an individual residing in the State of New Jersey, acting in his capacity as Chairman of the Board of Directors and Chief Executive Officer and as a director of Penterra Pharmaceuticals Corp. ("Dr. Hale" or the "Interested Director");
(ii) The Special Committee of the Board of Directors of Penterra Pharmaceuticals Corp., a duly constituted committee of independent directors acting through its Chair, Diane Prescott (the "Special Committee"); and
(iii) Penterra Pharmaceuticals Corp., a corporation organized and existing under the laws of the State of Delaware, with its principal executive offices located at 400 Innovation Drive, Suite 1200, Princeton, New Jersey 08540, and whose shares of common stock are listed on the New York Stock Exchange under the ticker symbol "PPHR" ("Penterra" or the "Company").
Dr. Hale, the Special Committee, and the Company are sometimes referred to herein individually as a "Party" and collectively as the "Parties."
This Agreement is entered into in connection with the proposed acquisition by Penterra of one hundred percent (100%) of the outstanding equity interests of Caliston BioSciences, Inc., a corporation organized and existing under the laws of the State of Delaware, with its principal office located at 88 Harbor Point Road, Cambridge, Massachusetts 02142 ("Caliston"), to be effectuated through a one-step merger of Caliston with and into a wholly owned subsidiary of Penterra, or such other structure as may be agreed upon by the parties to the definitive transaction documentation (the "Proposed Transaction").
RECITALS
WHEREAS:
A. Dr. Hale's Interest in Caliston. Dr. Hale holds a twenty-eight and one-half percent (28.5%) equity interest in Caliston BioSciences, Inc., which interest was acquired through personal investments made by Dr. Hale totaling approximately Forty-Two Million Dollars ($42,000,000) across the Seed financing round, the Series A preferred stock financing round, and the Series B preferred stock financing round of Caliston. In addition to his equity interest, Dr. Hale has served as a board observer (in a non-voting capacity) at Caliston since 2018, during which time he has attended fourteen (14) of sixteen (16) regularly scheduled and special meetings of the board of directors of Caliston.
B. Dr. Hale's Role at Penterra. Dr. Hale co-founded Penterra in 2004 and has served continuously as a member of the Board of Directors since the Company's inception. Dr. Hale currently serves as Chairman of the Board and Chief Executive Officer of Penterra. As of the date hereof, Dr. Hale holds 2,140,000 shares of Penterra common stock, representing approximately 1.8% of the approximately 121,400,000 shares of Penterra common stock issued and outstanding as of the most recent record date.
C. Disclosure and Proposal of the Proposed Transaction. On February 14, 2023, Dr. Hale disclosed his equity interest in Caliston to the full Board of Directors of Penterra and proposed that the Board evaluate the potential acquisition of Caliston as a strategic transaction for the Company, citing the complementary nature of Caliston's pipeline assets and Penterra's existing therapeutic platform.
D. Board Deliberations and Special Committee Formation. On March 8, 2023, the Board of Directors convened a special session to discuss the potential conflicts of interest arising from Dr. Hale's financial interest in Caliston in connection with the Proposed Transaction. On April 12, 2023, the Board retained the law firm of Alcott, Barringer & Cole LLP to advise the Board on appropriate governance processes and fiduciary duty considerations with respect to the Proposed Transaction. On May 15, 2023, following receipt of advice from Alcott, Barringer & Cole LLP, the Board approved the formation of a Special Committee of independent directors, with such formation to become effective upon the engagement of independent legal counsel by the Special Committee. On June 2, 2023, the Special Committee was formally constituted by unanimous vote of the six (6) independent directors of Penterra, with Dr. Hale, Angela Whitmore, and Raymond Tusk each recused from and abstaining from such vote. The Special Committee comprises Diane Prescott (Chair), James Okafor, and Dr. Helen Ng, each of whom is an independent director within the meaning of the NYSE Listed Company Manual and applicable Securities and Exchange Commission rules and has no material financial interest in the Proposed Transaction.
E. Engagement of Independent Advisors. The Special Committee has engaged Calderwood & Harkness LLP, with offices at 1700 Market Street, Suite 3400, Philadelphia, Pennsylvania 19103, as its independent legal counsel in connection with the Proposed Transaction (engagement letter dated June 2, 2023; C&H Matter Number 1025-00006). The Special Committee further intends to retain an independent financial advisor to provide financial advisory services and, if requested, a fairness opinion in connection with the Proposed Transaction (the Special Committee subsequently engaged Thorngate Partners LLC for such purposes).
F. Board Resolution and Special Committee Authority. The Board of Directors adopted a resolution dated June 2, 2023 (the "Board Resolution") granting the Special Committee sole and exclusive authority to: (a) evaluate the Proposed Transaction and make such investigation and analysis as the Special Committee deems appropriate; (b) negotiate the terms and conditions of the Proposed Transaction, including the price, structure, representations and warranties, covenants, conditions to closing, indemnification provisions, and all other terms of any definitive Merger Agreement and ancillary agreements; (c) retain, at the expense of the Company, such independent legal, financial, and other advisors as the Special Committee deems necessary or appropriate; (d) recommend to the full Board of Directors the approval or rejection of the Proposed Transaction; and (e) explore and evaluate alternative transactions, including the full power and authority to decline the Proposed Transaction entirely and to determine that no transaction is in the best interests of Penterra and its stockholders (the "say no" power). The Board Resolution was adopted in accordance with, and the authority of the Special Committee is grounded in, Sections 141(a) and 144 of the Delaware General Corporation Law.
G. Purpose of This Agreement. Dr. Hale acknowledges that his 28.5% equity interest in Caliston and his ongoing role as a board observer at Caliston create an actual conflict of interest with respect to the Proposed Transaction, inasmuch as Dr. Hale stands on both sides of the Proposed Transaction — as a fiduciary of the acquiror (Penterra) and as a significant equity holder of the target (Caliston) who stands to receive substantial personal financial consideration in connection with the consummation of the Proposed Transaction. This Agreement is entered into for the purpose of establishing clear and binding recusal, abstention, confidentiality, and non-interference obligations applicable to Dr. Hale in order to protect the integrity and independence of the Special Committee process and to support the procedural safeguards required under Delaware fiduciary duty standards, including, without limitation, the entire fairness doctrine as articulated in Weinberger v. UOP, Inc., 457 A.2d 701 (Del. 1983), and its progeny.
H. Related Conflicts. Angela Whitmore, a director of Penterra and Executive Vice President, Commercial Operations of the Company, is the spouse of Dr. Evan Whitmore, who serves as Head of Clinical Development and as a member of the board of directors of Caliston. By reason of this relationship, Angela Whitmore has a material interest in the Proposed Transaction and is also excluded from the Special Committee process. Raymond Tusk, a non-independent director of Penterra, is also recused from the Special Committee's deliberations relating to the Proposed Transaction. The information barrier and independence protocol established by the Special Committee (the "Independence Protocol"), adopted on June 2, 2023, governs the separation of Dr. Hale, Angela Whitmore, and Raymond Tusk (collectively, the "Recused Persons") from the Special Committee process and the protection of Special Committee Materials from unauthorized disclosure or access.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
ARTICLE I — DEFINITIONS
As used in this Agreement, the following terms shall have the meanings set forth below:
Section 1.1 "Board" means the Board of Directors of Penterra Pharmaceuticals Corp., as constituted from time to time.
Section 1.2 "Caliston" means Caliston BioSciences, Inc., a Delaware corporation (EIN: 84-4219063), with its principal office at 88 Harbor Point Road, Cambridge, Massachusetts 02142.
Section 1.3 "Caliston Interest" means Dr. Hale's 28.5% equity interest in Caliston, as described in Recital A and Section 7.2 of this Agreement.
Section 1.4 "Company" or "Penterra" means Penterra Pharmaceuticals Corp., a Delaware corporation (EIN: 22-3847195; CIK: 0001587342; NYSE: PPHR), with its principal executive offices at 400 Innovation Drive, Suite 1200, Princeton, New Jersey 08540.
Section 1.5 "DGCL" means the Delaware General Corporation Law, Title 8 of the Delaware Code, as amended from time to time.
Section 1.6 "Independence Protocol" means the Independence Protocol & Information Barrier Policy for Project Coriander, adopted by the Special Committee on June 2, 2023, as the same may be amended, supplemented, or restated from time to time by the Special Committee.
Section 1.7 "Merger Agreement" means the definitive Agreement and Plan of Merger between Penterra and Caliston relating to the Proposed Transaction, together with all schedules, exhibits, and ancillary agreements thereto, if and when executed by the parties thereto.
Section 1.8 "Project Coriander" means the confidential project code name assigned to the Proposed Transaction and all related evaluation, negotiation, and documentation activities.
Section 1.9 "Proposed Transaction" means the proposed acquisition by Penterra of 100% of the outstanding equity interests of Caliston via a one-step merger, as further described in the Preamble and the Recitals hereto.
Section 1.10 "Recused Persons" means, collectively, Dr. Marcus Hale, Angela Whitmore, and Raymond Tusk, each of whom has been recused from the Special Committee process in connection with the Proposed Transaction.
Section 1.11 "Special Committee" means the Special Committee of the Board of Directors of Penterra, as constituted on June 2, 2023, comprising Diane Prescott (Chair), James Okafor, and Dr. Helen Ng, together with any successor members appointed by the independent directors of the Board.
Section 1.12 "Special Committee Advisors" means, collectively, Calderwood & Harkness LLP, in its capacity as independent legal counsel to the Special Committee, and any independent financial advisor retained by the Special Committee in connection with the Proposed Transaction (subsequently Thorngate Partners LLC), and any other independent advisors retained by the Special Committee from time to time.
Section 1.13 "Special Committee Materials" means all documents, analyses, communications, presentations, memoranda, financial models, term sheets, draft agreements, board books, minutes, notes, and other materials of any kind, whether in written, electronic, or other form, prepared by, for, or at the direction of the Special Committee or any Special Committee Advisor in connection with the evaluation, negotiation, or consideration of the Proposed Transaction, including all materials stored in the segregated Project Coriander workspace on the Penterra document management system.
ARTICLE II — RECUSAL FROM BOARD DELIBERATIONS
Section 2.1 Recusal Obligation. Commencing on the Effective Date and continuing throughout the term of this Agreement as set forth in Article IX, Dr. Hale shall recuse himself from all meetings, deliberations, discussions, and proceedings of the Board of Directors of Penterra relating in whole or in part to the Proposed Transaction. Without limiting the generality of the foregoing, Dr. Hale shall recuse himself from any discussion, consideration, or review of:
(a) the evaluation, analysis, or assessment of the Proposed Transaction, including the strategic rationale, risks, and benefits thereof;
(b) the terms and conditions of any Merger Agreement or any ancillary agreement, side letter, employment agreement, voting agreement, or other agreement related to the Proposed Transaction;
(c) the valuation of Caliston, including any analysis of Caliston's assets, liabilities, intellectual property, pipeline, clinical data, revenue projections, or other financial or operational characteristics;
(d) the fairness of the Proposed Transaction to Penterra and its stockholders, including any fairness opinion or financial analysis provided by the Special Committee's independent financial advisor;
(e) the engagement, retention, compensation, direction, or termination of the Special Committee Advisors, or any communication with or report from the Special Committee Advisors;
(f) the market check or exploration of alternative transactions, including any identification, evaluation, or solicitation of potential alternative acquirors, merger partners, or strategic alternatives;
(g) any recommendation by the Special Committee to the Board of Directors regarding the Proposed Transaction, whether favorable, unfavorable, or neutral; and
(h) any other matter that the Special Committee or its independent counsel determines to be within the scope of the Special Committee's authority under the Board Resolution.
The recusal obligation set forth in this Section 2.1 extends to all formal meetings of the Board of Directors, all informal discussions among two or more Board members, all telephonic or video conferences, all exchanges of electronic mail or other electronic communications, all written communications, and any other form of communication or deliberation among Board members, in each case to the extent such meeting, discussion, conference, exchange, or communication relates in whole or in part to the Proposed Transaction.
Section 2.2 Physical and Virtual Absence. Dr. Hale shall not be physically present in any meeting room, and shall not participate via any electronic communication platform (including, without limitation, video conference, teleconference, web-based meeting application, instant messaging, or shared digital workspace), during any portion of any meeting of the Board of Directors or any committee thereof at which the Proposed Transaction is discussed, considered, or acted upon. If the Proposed Transaction arises as a topic of discussion during a meeting of the Board of Directors at which Dr. Hale is present for the consideration of other business unrelated to the Proposed Transaction, Dr. Hale shall excuse himself from the meeting room (or, in the case of a virtual meeting, disconnect from the electronic communication platform) before such discussion commences and shall not return to or rejoin the meeting until he has been notified by the Corporate Secretary of Penterra, Lawrence Whittaker, or his designee, that the discussion of the Proposed Transaction has concluded and the meeting has proceeded to other business. The minutes of any such meeting shall reflect Dr. Hale's departure and return, and the Corporate Secretary shall maintain a log of all such instances.
Section 2.3 Duration. The recusal obligations set forth in this Article II shall remain in full force and effect from the Effective Date until the earliest to occur of the following:
(a) the closing of the Proposed Transaction in accordance with the terms of the Merger Agreement;
(b) the termination or abandonment of the Proposed Transaction, whether by action of the Board of Directors (upon recommendation of the Special Committee or otherwise), by mutual agreement of Penterra and Caliston, or by operation of the terms of the Merger Agreement or any other applicable agreement; or
(c) the written release of Dr. Hale from these recusal obligations by the Special Committee, acting by majority vote of its members and with the concurrence of its independent counsel.
ARTICLE III — ABSTENTION FROM VOTING
Section 3.1 Board-Level Voting. Dr. Hale shall abstain from voting on any resolution, motion, consent, or other action of the Board of Directors relating in whole or in part to the Proposed Transaction. Without limiting the generality of the foregoing, Dr. Hale shall abstain from voting on any resolution of the Board of Directors to:
(a) approve, adopt, authorize, or ratify the Merger Agreement or any ancillary agreement, amendment, supplement, or modification thereto;
(b) recommend the Proposed Transaction to the stockholders of Penterra for their approval or adoption;
(c) submit the Proposed Transaction, any related issuance of shares of Penterra common stock, or any other matter related to the Proposed Transaction to a vote of the stockholders of Penterra;
(d) terminate, amend, modify, or waive any provision of the Merger Agreement or any ancillary agreement; or
(e) take any other action relating to the Proposed Transaction that requires or is submitted for a vote of the Board of Directors.
Dr. Hale's abstention from any vote described in this Section 3.1 shall not be counted as a vote cast either for or against any such resolution, and the abstention shall not affect the determination of whether the requisite number of votes has been obtained for approval of such resolution. Quorum for any meeting of the Board of Directors at which the Proposed Transaction is considered shall be determined in accordance with the Company's Amended and Restated Bylaws and the applicable provisions of the DGCL, and Dr. Hale's presence at any portion of such meeting for the purpose of other business shall not constitute participation in any vote on the Proposed Transaction.
Section 3.2 Committee Voting. Dr. Hale shall not serve on, attend meetings of, or vote at any committee of the Board of Directors that considers matters relating to the Proposed Transaction. Without limitation of the foregoing, Dr. Hale shall not participate in any proceedings, deliberations, or votes of the Special Committee. This restriction applies to all standing and ad hoc committees of the Board, including, without limitation, any audit committee, compensation committee, nominating and governance committee, or executive committee, to the extent any such committee considers matters relating to the Proposed Transaction.
Section 3.3 Stockholder Voting. Nothing in this Agreement shall restrict, limit, or impair Dr. Hale's right to vote his 2,140,000 shares of Penterra common stock (representing approximately 1.8% of the approximately 121,400,000 shares of Penterra common stock outstanding as of the date hereof) at any annual or special meeting of stockholders, or by written consent in lieu of a meeting, with respect to any matter related to the Proposed Transaction submitted to a vote of the stockholders of Penterra, including, without limitation, any vote on the issuance of shares of Penterra common stock in connection with the Proposed Transaction as may be required under the applicable listing rules of the New York Stock Exchange. Dr. Hale's stockholder voting rights are preserved in their entirety under this Agreement, and any separate obligations with respect to such voting rights, including any commitment to vote in favor of or against the Proposed Transaction, shall be addressed exclusively in a Stockholder Support Agreement, if any, to be separately negotiated and entered into by Dr. Hale.
ARTICLE IV — CONFIDENTIALITY
Section 4.1 Obligation of Confidentiality. Dr. Hale shall maintain in strict confidence, and shall not directly or indirectly disclose, disseminate, publish, or communicate to any person or entity (including, without limitation, to Caliston or any of its directors, officers, employees, stockholders, agents, representatives, or advisors), any information relating to:
(a) the Special Committee's deliberations, analyses, conclusions, discussions, or recommendations, whether preliminary, interim, or final;
(b) any Special Committee Materials, or the existence, substance, or content thereof;
(c) the substance of any advice, opinion, analysis, or recommendation provided to the Special Committee by any Special Committee Advisor, including any legal advice from Calderwood & Harkness LLP or any financial analysis or fairness opinion from the Special Committee's independent financial advisor;
(d) the Special Committee's negotiating positions, strategies, counterproposals, reservation prices, or priorities with respect to the Proposed Transaction;
(e) the status, progress, substance, scope, or results of any market check or exploration of alternative transactions conducted by or on behalf of the Special Committee, including the identity of any parties contacted or the substance of any discussions held in connection therewith; and
(f) any other non-public information concerning the Special Committee's activities, proceedings, or decision-making in connection with the Proposed Transaction.
Dr. Hale acknowledges that all Special Committee Materials are stored on the segregated Project Coriander workspace within the Penterra document management system, and that Dr. Hale's access credentials have been revoked with respect to such workspace. Dr. Hale shall not attempt to access, view, copy, download, or otherwise obtain any Special Committee Materials from the Project Coriander workspace or from any other source.
Section 4.2 No Solicitation of Confidential Information. Dr. Hale shall not, directly or indirectly, seek, solicit, request, encourage, or induce any Recused Person, any member of the Special Committee, any Special Committee Advisor, any officer, employee, or agent of Penterra, or any other person or entity to disclose, reveal, or communicate to Dr. Hale, or to any person acting on Dr. Hale's behalf or at Dr. Hale's direction, any information described in Section 4.1 of this Agreement. Dr. Hale shall not direct or authorize any person to take any action that Dr. Hale is prohibited from taking under this Section 4.2.
Section 4.3 Inadvertent Disclosure. In the event that Dr. Hale inadvertently receives any Special Committee Material or any confidential information described in Section 4.1, whether through misdirected email, inadvertent inclusion in a board package, accidental access to the Project Coriander workspace, or any other means, Dr. Hale shall:
(a) immediately cease any review, reading, or examination of such material and refrain from any further use of the information contained therein;
(b) promptly, and in any event within twenty-four (24) hours of such receipt, notify Renata Vasquez, Partner, Calderwood & Harkness LLP, at 1700 Market Street, Suite 3400, Philadelphia, Pennsylvania 19103 (telephone: (215) 555-8400; email: rvasquez@calderwoodharkness.com), of the inadvertent receipt, providing a description of the nature and circumstances of the disclosure; and
(c) return or destroy all copies of such material (whether in paper, electronic, or other form) as directed by Calderwood & Harkness LLP, and certify such return or destruction in writing.
The procedures set forth in the Independence Protocol shall govern the investigation and remediation of any inadvertent disclosure, including any determination as to whether additional protective measures are required.
Section 4.4 Caliston-Side Communications. Dr. Hale shall not, directly or indirectly, communicate with any director, officer, employee, stockholder, agent, representative, or advisor of Caliston regarding the Special Committee's activities, deliberations, positions, strategies, analyses, recommendations, or any other matter within the scope of Section 4.1. Dr. Hale acknowledges that Caliston's legal counsel in connection with the Proposed Transaction is Whitfield Graves LLP (Kenneth Pratt, Lead Partner; One Federal Street, Suite 2600, Boston, Massachusetts 02110) and that Caliston's financial advisor is Fendowell Sinclair & Co. (Sandra Wu, Managing Director; 200 Clarendon Street, 50th Floor, Boston, Massachusetts 02116). Dr. Hale acknowledges and agrees that all communications with Caliston's counsel and financial advisor regarding the Proposed Transaction are to be conducted exclusively through the Special Committee and the Special Committee Advisors, and that Dr. Hale shall not independently contact or communicate with Whitfield Graves LLP, Fendowell Sinclair & Co., or any other advisor to Caliston regarding any aspect of the Proposed Transaction. For the avoidance of doubt, this Section 4.4 does not prohibit Dr. Hale from engaging in communications with Caliston personnel in the ordinary course of his duties as CEO of Penterra that do not relate to the Proposed Transaction, the Special Committee's activities, or the terms of any potential Merger Agreement; provided, however, that Dr. Hale shall exercise reasonable care to avoid any discussion of the Proposed Transaction in any such communication and shall promptly report to Calderwood & Harkness LLP any instance in which the Proposed Transaction is raised in any such communication.
Section 4.5 Survival. The confidentiality obligations set forth in this Article IV shall survive the termination of this Agreement, regardless of the reason for such termination, and shall remain in full force and effect for a period of two (2) years following the date of termination. For the avoidance of doubt, the survival of confidentiality obligations shall apply whether the Proposed Transaction is consummated, terminated, or abandoned, and regardless of whether this Agreement is terminated by mutual agreement of the Parties.
ARTICLE V — NON-INTERFERENCE
Section 5.1 Non-Interference with Special Committee Process. Dr. Hale shall not, directly or indirectly, by himself or through any agent, representative, affiliate, or other intermediary:
(a) attempt to influence, direct, control, or interfere with the Special Committee's evaluation, analysis, negotiation, or decision-making process with respect to the Proposed Transaction;
(b) attempt to influence, pressure, persuade, or direct any member of the Special Committee or any Special Committee Advisor regarding any aspect of the Proposed Transaction, including, without limitation, the terms, price, structure, timing, or advisability of the Proposed Transaction;
(c) take any action to circumvent, undermine, or render ineffective the Special Committee's sole and exclusive authority over the Proposed Transaction as established by the Board Resolution, including any attempt to present the Proposed Transaction directly to the full Board of Directors for consideration without the prior approval or recommendation of the Special Committee; or
(d) take any action in his capacity as Chairman of the Board or Chief Executive Officer of Penterra that is inconsistent with, contrary to, or that could reasonably be expected to undermine, the Special Committee's authority, independence, or ability to discharge its responsibilities with respect to the Proposed Transaction.
Section 5.2 Non-Interference with Market Check. Dr. Hale shall not, directly or indirectly, take any action to discourage, impede, delay, frustrate, or interfere with the Special Committee's market check of potential alternative transactions, including, without limitation, any action to discourage any third party from participating in the market check process, to provide misleading information to any potential alternative bidder, or to condition any future business relationship on such third party's non-participation in the market check process. Dr. Hale acknowledges that the Special Committee has full authority to solicit, evaluate, and pursue alternative transactions and that any interference with the market check process would be inconsistent with the Board Resolution and Dr. Hale's fiduciary duties.
Section 5.3 Cooperation. Notwithstanding the restrictions set forth in Sections 5.1 and 5.2, Dr. Hale shall reasonably cooperate with the Special Committee and the Special Committee Advisors by providing factual information reasonably requested by the Special Committee in connection with its evaluation of the Proposed Transaction. Such cooperation shall include, without limitation, the provision of information regarding:
(a) Dr. Hale's Caliston Interest, including the history, dates, amounts, and terms of his investments in the Seed, Series A, and Series B financing rounds, the nature and extent of his equity interest, any transfer restrictions, rights of first refusal, drag-along or tag-along rights, or other provisions applicable to his equity interest, and any side letters or other agreements between Dr. Hale and Caliston or its stockholders;
(b) Dr. Hale's board observer activities at Caliston, including the nature and extent of information received in his capacity as board observer, the frequency of his attendance at Caliston board meetings, and any non-public information regarding Caliston's business, operations, pipeline, financial condition, or prospects of which he became aware through such service; and
(c) any other factual matters within Dr. Hale's knowledge that are relevant to the Special Committee's evaluation of the Proposed Transaction, including, without limitation, any relationships between Dr. Hale and Caliston's founders, key employees, or major stockholders.
All requests for information under this Section 5.3 shall be routed through Calderwood & Harkness LLP, and all information provided by Dr. Hale in response to such requests shall be made available to the full Special Committee. Dr. Hale shall have the right to have his personal legal counsel present during any interview or meeting conducted pursuant to this Section 5.3. Dr. Hale's obligation to cooperate under this Section 5.3 shall not require him to provide any legal advice, strategic recommendations, personal opinions, or assessments regarding the fairness, advisability, or desirability of the Proposed Transaction or any alternative transaction.
ARTICLE VI — ACKNOWLEDGMENTS
Section 6.1 Acknowledgment of Conflict of Interest. Dr. Hale acknowledges that his 28.5% equity interest in Caliston, acquired through personal investments totaling approximately Forty-Two Million Dollars ($42,000,000) across the Seed, Series A, and Series B financing rounds, constitutes a material financial interest in the Proposed Transaction that is separate from, and potentially adverse to, the interests of Penterra and its public stockholders. Dr. Hale further acknowledges that, based on the proposed aggregate equity value of the Proposed Transaction of approximately Nine Hundred Twenty-Five Million Dollars ($925,000,000), his Caliston Interest would yield implied proceeds of approximately Two Hundred Sixty-Three Million Six Hundred Twenty-Five Thousand Dollars ($263,625,000) (calculated as 28.5% multiplied by $925,000,000) and an implied gain of approximately Two Hundred Twenty-One Million Six Hundred Twenty-Five Thousand Dollars ($221,625,000) (calculated as $263,625,000 in implied proceeds minus $42,000,000 in aggregate invested capital). Dr. Hale acknowledges that this material financial interest creates a direct and actual conflict between his personal financial interest as a Caliston equityholder and his fiduciary duties as a director and officer of Penterra. Dr. Hale further acknowledges that his service as a board observer at Caliston since 2018 has provided him with access to material non-public information about Caliston's business, operations, clinical programs, financial condition, and prospects that is not available to the independent directors of Penterra.
Section 6.2 Acknowledgment of Delaware Fiduciary Duties. Dr. Hale acknowledges that, as a director and officer of Penterra, he owes fiduciary duties of care and loyalty to the Company and its stockholders under the DGCL and the common law of the State of Delaware, as interpreted by the Court of Chancery and the Delaware Supreme Court. Dr. Hale acknowledges that the Proposed Transaction constitutes an interested director transaction within the meaning of Section 144 of the DGCL, by reason of Dr. Hale's material financial interest in Caliston. Dr. Hale further acknowledges that, because he stands on both sides of the Proposed Transaction, the entire fairness standard of judicial review — encompassing both fair dealing and fair price — may apply to the Proposed Transaction, and that the burden of establishing entire fairness may rest with Dr. Hale and the Company absent the deployment of appropriate procedural safeguards. Dr. Hale acknowledges that the Special Committee process, including the engagement of independent legal counsel and an independent financial advisor, the delegation of sole and exclusive authority over the Proposed Transaction to the Special Committee, the conduct of a market check, and the observance of the recusal and non-interference obligations set forth in this Agreement, is designed to satisfy the procedural protections recognized by Delaware courts for the approval of interested director transactions and to support a shifting of the burden of proof or the application of a more deferential standard of judicial review.
Section 6.3 Acknowledgment of Other Recused Persons. Dr. Hale acknowledges that Angela Whitmore, a director and Executive Vice President, Commercial Operations of Penterra, is also a Recused Person by reason of her spousal relationship with Dr. Evan Whitmore, who serves as Head of Clinical Development and a member of the board of directors of Caliston. Dr. Hale further acknowledges that Raymond Tusk, a non-independent director of Penterra, is also a Recused Person excluded from the Special Committee process. Dr. Hale shall not communicate with Angela Whitmore or Raymond Tusk regarding the Special Committee's deliberations, activities, positions, recommendations, or any other matter within the scope of Section 4.1 of this Agreement. Dr. Hale shall not share, exchange, or discuss with any other Recused Person any information regarding the Proposed Transaction that he would be prohibited from disclosing under Article IV.
Section 6.4 Acknowledgment of Information Barrier. Dr. Hale acknowledges and consents to the Independence Protocol established by the Special Committee on June 2, 2023, a copy of which has been provided to Dr. Hale. Dr. Hale specifically acknowledges and consents to the establishment of a segregated document management workspace designated as Project Coriander within the Penterra document management system, and the restriction of Dr. Hale's access credentials such that he is unable to access, view, or retrieve any documents, files, or communications stored within the Project Coriander workspace. Dr. Hale agrees to abide by all provisions of the Independence Protocol applicable to Recused Persons and to cooperate with the reasonable implementation of any additional information barrier procedures adopted by the Special Committee from time to time.
Section 6.5 Voluntary Agreement. Dr. Hale represents and warrants that he enters into this Agreement voluntarily, with full knowledge and understanding of its terms, conditions, and consequences, and after having had the opportunity to consult with his own personal legal counsel. Dr. Hale confirms that he has not been coerced, threatened, or improperly influenced to enter into this Agreement and that he has had adequate time to review and consider the provisions hereof.
ARTICLE VII — REPRESENTATIONS AND WARRANTIES OF DR. HALE
Section 7.1 Authority. Dr. Hale represents and warrants that he has full power, legal capacity, and authority to execute and deliver this Agreement and to perform each of his obligations hereunder. The execution, delivery, and performance of this Agreement by Dr. Hale does not and will not conflict with, result in a breach of, or constitute a default under, any agreement, instrument, order, judgment, decree, or other obligation to which Dr. Hale is a party or by which he is bound.
Section 7.2 Accuracy of Disclosed Interest. Dr. Hale represents and warrants that his equity interest in Caliston is 28.5% of the outstanding equity of Caliston, as calculated on a fully diluted basis (or, if not on a fully diluted basis, on such basis as was disclosed to the Board and the Special Committee), acquired through aggregate personal investments of approximately Forty-Two Million Dollars ($42,000,000) made across the Seed, Series A, and Series B financing rounds of Caliston. Dr. Hale further represents and warrants that, other than his equity interest and his service as a non-voting board observer, he has no other financial interest in, employment relationship with, consulting arrangement with, or contractual obligation to Caliston or any of its affiliates, subsidiaries, directors, officers, founders, employees, or stockholders, other than any indirect relationships that may exist through Penterra in the ordinary course of Penterra's business.
Section 7.3 No Undisclosed Relationships. Dr. Hale represents and warrants that he has disclosed to the Board of Directors of Penterra and to the Special Committee all material relationships between Dr. Hale and (a) Caliston; (b) the co-founders of Caliston, Dr. Nadia Sorensen and Dr. Raj Malhotra; (c) the key stockholders of Caliston, including Ridgeline Ventures, LP and Meridian Life Sciences Fund III, LP; and (d) the professional advisors of Caliston, including Whitfield Graves LLP (legal counsel) and Fendowell Sinclair & Co. (financial advisor). Dr. Hale is not aware of any material relationship, interest, or arrangement that has not been so disclosed and that would be relevant to the Special Committee's evaluation of the Proposed Transaction or Dr. Hale's conflicts of interest.
Section 7.4 No Prior Commitments. Dr. Hale represents and warrants that he has not made, and is not a party to, any commitment, agreement, understanding, arrangement, or promise, whether written or oral, express or implied, with any stockholder, officer, director, founder, employee, agent, or advisor of Caliston, or with any other person, regarding the terms, price, structure, timing, conditions, or any other aspect of the Proposed Transaction or any alternative transaction involving Caliston and Penterra. Dr. Hale has not made any representation or assurance to any person that the Proposed Transaction will be consummated at any particular price or on any particular terms.
ARTICLE VIII — REMEDIES
Section 8.1 Specific Performance. Dr. Hale acknowledges and agrees that a breach by Dr. Hale of any of the covenants, agreements, or obligations set forth in this Agreement would cause irreparable harm and continuing injury to the Special Committee and to Penterra and its stockholders, the extent of which would be difficult or impossible to ascertain and for which monetary damages alone would be an inadequate and insufficient remedy. Accordingly, Dr. Hale agrees that, in the event of any actual or threatened breach of this Agreement by Dr. Hale, the Special Committee and/or Penterra shall be entitled to seek and obtain, from any court of competent jurisdiction, an order of specific performance and/or temporary, preliminary, or permanent injunctive relief to enforce the terms of this Agreement and to prevent or restrain any such breach, without the necessity of proving actual damages, posting any bond, or providing other security, to the fullest extent permitted by applicable law. The right to specific performance and injunctive relief shall be in addition to, and not in limitation of, any other rights or remedies available to the Special Committee or Penterra at law or in equity, including, without limitation, the right to seek monetary damages for any breach of this Agreement.
Section 8.2 No Limitation on Fiduciary Duties. Nothing in this Agreement shall be construed to limit, diminish, modify, or waive any fiduciary duties that Dr. Hale owes to Penterra or to its stockholders under the DGCL, the common law of the State of Delaware, or any other applicable law. This Agreement is intended to supplement, and not to replace, the fiduciary obligations to which Dr. Hale is subject. In the event of any conflict between the provisions of this Agreement and Dr. Hale's fiduciary duties under applicable law, Dr. Hale's fiduciary duties shall control; provided, however, that this Section 8.2 shall not be invoked to excuse Dr. Hale from compliance with the specific recusal, abstention, confidentiality, and non-interference obligations set forth herein, which obligations are consistent with, and in furtherance of, Dr. Hale's fiduciary duties to Penterra.
ARTICLE IX — TERM AND TERMINATION
Section 9.1 Effective Date. This Agreement shall be effective as of June 2, 2023, the date first written above.
Section 9.2 Termination. This Agreement shall terminate upon the earliest to occur of the following:
(a) the closing of the Proposed Transaction in accordance with the terms and conditions of the Merger Agreement;
(b) the termination or abandonment of the Proposed Transaction, whether by action of the Board of Directors of Penterra (upon recommendation of the Special Committee or otherwise), by mutual agreement of Penterra and Caliston, by the exercise of any termination right under the Merger Agreement, or by any other means that results in the definitive termination of efforts to consummate the Proposed Transaction; or
(c) the mutual written agreement of Dr. Hale and the Special Committee (acting by majority vote of its members) to terminate this Agreement.
Upon termination of this Agreement, all rights and obligations of the Parties hereunder shall cease, except that (i) any rights or obligations that have accrued prior to the date of termination shall survive such termination, (ii) the confidentiality obligations set forth in Article IV shall survive termination as provided in Section 4.5, and (iii) the representations and warranties set forth in Article VII shall survive termination to the extent they relate to facts and circumstances existing as of the date of this Agreement.
ARTICLE X — MISCELLANEOUS
Section 10.1 Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without giving effect to any choice-of-law or conflict-of-law rules or provisions (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.
Section 10.2 Jurisdiction. Each of the Parties hereby irrevocably and unconditionally submits to the exclusive jurisdiction of the Court of Chancery of the State of Delaware (or, if the Court of Chancery declines to accept jurisdiction over a particular matter, the Superior Court of the State of Delaware, or, if neither the Court of Chancery nor the Superior Court accepts jurisdiction, the United States District Court for the District of Delaware) for the purpose of any action, suit, or proceeding arising out of or relating to this Agreement, and each Party hereby irrevocably and unconditionally waives, and agrees not to assert, by way of motion, as a defense, counterclaim, or otherwise, in any such action, suit, or proceeding, any claim that it is not subject to the jurisdiction of any such court, that any such action, suit, or proceeding is brought in an inconvenient forum, or that the venue of any such action, suit, or proceeding is improper.
Section 10.3 Notices. All notices, requests, demands, consents, waivers, and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given when (a) delivered by hand, (b) sent by nationally recognized overnight courier service (with tracking and proof of delivery), (c) sent by registered or certified mail, return receipt requested, postage prepaid, or (d) sent by electronic mail (with confirmation of receipt by the recipient), in each case addressed as follows:
If to Dr. Marcus Hale:
Dr. Marcus Hale c/o Penterra Pharmaceuticals Corp. 400 Innovation Drive, Suite 1200 Princeton, New Jersey 08540
If to the Special Committee:
The Special Committee of the Board of Directors of Penterra Pharmaceuticals Corp. c/o Calderwood & Harkness LLP 1700 Market Street, Suite 3400 Philadelphia, Pennsylvania 19103
Attn: Renata Vasquez
If to Penterra Pharmaceuticals Corp.:
Penterra Pharmaceuticals Corp. 400 Innovation Drive, Suite 1200 Princeton, New Jersey 08540
Attn: Lawrence Whittaker, General Counsel and Corporate Secretary
Any Party may change its address for the purpose of this Section 10.3 by giving written notice of such change to the other Parties in the manner provided herein.
Section 10.4 Entire Agreement. This Agreement, together with the Independence Protocol and the Board Resolution dated June 2, 2023, constitutes the entire agreement among the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations, and discussions, whether written or oral, among the Parties relating to such subject matter. No representation, warranty, inducement, promise, or agreement has been made by any Party that is not expressly set forth in this Agreement, the Independence Protocol, or the Board Resolution.
Section 10.5 Amendment and Waiver. This Agreement may not be amended, modified, supplemented, or restated except by a written instrument executed by Dr. Hale and duly authorized by the Special Committee (acting by majority vote of its members). No waiver of any provision of this Agreement shall be effective unless made in writing and signed by the Party granting such waiver. No failure or delay by any Party in exercising any right, power, or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power, or privilege preclude any other or further exercise thereof or the exercise of any other right, power, or privilege.
Section 10.6 Severability. If any provision of this Agreement, or the application of any such provision to any person or circumstance, is held by a court of competent jurisdiction to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement, and the remaining provisions shall continue in full force and effect. To the extent permitted by applicable law, the Parties hereby waive any provision of law that renders any provision of this Agreement invalid, illegal, or unenforceable in any respect. If any provision is held to be invalid, illegal, or unenforceable, the Parties shall negotiate in good faith to modify such provision to the minimum extent necessary to make it valid, legal, and enforceable while preserving its original intent.
Section 10.7 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which, taken together, shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or by electronic transmission in portable document format (.pdf) shall be as effective as delivery of a manually executed counterpart.
Section 10.8 Assignment. This Agreement shall not be assignable by any Party without the prior written consent of each of the other Parties hereto. Any attempted assignment in violation of this Section 10.8 shall be null and void and of no force or effect. Subject to the foregoing, this Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective heirs, executors, administrators, legal representatives, successors, and permitted assigns.
Section 10.9 No Third-Party Beneficiaries. Except as expressly provided in Section 4.3 of this Agreement with respect to Calderwood & Harkness LLP's rights to receive notice of inadvertent disclosure and to direct the return or destruction of Special Committee Materials, this Agreement is not intended to, and shall not, confer upon any person or entity other than the Parties hereto any rights, benefits, remedies, obligations, or liabilities of any nature whatsoever, and no person or entity other than the Parties hereto (and Calderwood & Harkness LLP, solely to the extent set forth in Section 4.3) shall be entitled to enforce any provision of this Agreement.
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IN WITNESS WHEREOF, the Parties have executed this Voting and Recusal Agreement as of the date first written above.
DR. MARCUS HALE, Individually
By: ________
Name: Dr. Marcus Hale
Title: Chairman and Chief Executive Officer, Penterra Pharmaceuticals Corp.
Date: June 2, 2023
THE SPECIAL COMMITTEE OF THE BOARD OF DIRECTORS OF PENTERRA PHARMACEUTICALS CORP.
By: ________
Name: Diane Prescott
Title: Chair of the Special Committee
Date: June 2, 2023
PENTERRA PHARMACEUTICALS CORP.
By: ________
Name: Lawrence Whittaker
Title: General Counsel and Corporate Secretary
Date: June 2, 2023
ACKNOWLEDGMENT BY INDEPENDENT COUNSEL TO THE SPECIAL COMMITTEE
The undersigned, as independent counsel to the Special Committee of the Board of Directors of Penterra Pharmaceuticals Corp., hereby acknowledges receipt of this Voting and Recusal Agreement and confirms that the procedures set forth in Section 4.3 (Inadvertent Disclosure) are consistent with the Independence Protocol & Information Barrier Policy for Project Coriander adopted on June 2, 2023.
CALDERWOOD & HARKNESS LLP
By: ________
Name: Renata Vasquez
Title: Partner
Calderwood & Harkness LLP 1700 Market Street, Suite 3400 Philadelphia, Pennsylvania 19103
Date: June 2, 2023

VOTING AND RECUSAL AGREEMENT

RECITALS

WHEREAS:

THE SPECIAL COMMITTEE OF THE BOARD OF DIRECTORS OF PENTERRA PHARMACEUTICALS CORP.

PENTERRA PHARMACEUTICALS CORP.

ACKNOWLEDGMENT BY INDEPENDENT COUNSEL TO THE SPECIAL COMMITTEE

CALDERWOOD & HARKNESS LLP

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