VELTHORN NATIONAL BANK, N.A. 383 Madison Avenue New York, NY 10179
Escrow Services Division
October 6, 2023
Penterra Pharmaceuticals Corp.
Attn: Anita M. Fremont, Esq., General Counsel
400 Pharma Drive, Suite 800 Princeton, NJ 08540
Meridian Bio Therapeutics Limited
Attn: David R. Cheung, Esq., General Counsel
18/F, Blossom Tower 88 Queen's Road Central Hong Kong SAR
Calderwood & Harkness LLP Counsel to Penterra Pharmaceuticals Corp.
Attn: Marcus Delgado, Esq.
600 Lexington Avenue, 30th Floor New York, NY 10022
Lam, Cheung & Firth LLP Counsel to Meridian Bio Therapeutics Limited
Attn: Jonathan M. Firth, Esq.
25/F, Jardine House 1 Connaught Place Central, Hong Kong SAR
Re: Escrow Funding Confirmation — Escrow Agreement dated October 2, 2023 (the "Escrow Agreement"), among Penterra Pharmaceuticals Corp. ("Licensor"), Meridian Bio Therapeutics Limited ("Licensee"), and Velthorn National Bank, N.A. ("Escrow Agent"); in connection with the Exclusive License Agreement dated October 2, 2023, between Penterra Pharmaceuticals Corp. and Meridian Bio Therapeutics Limited, relating to the compound designated PPC-4187 (Penteracitinib)
Dear Ms. Fremont, Mr. Cheung, Mr. Delgado, and Mr. Firth:
1. Confirmation of Receipt of Escrow Funds
Velthorn National Bank, N.A., a national banking association organized and existing under the laws of the United States of America, in its capacity as Escrow Agent under that certain Escrow Agreement dated as of October 2, 2023 (the "Escrow Agreement"), among Penterra Pharmaceuticals Corp., a corporation organized and existing under the laws of the State of Delaware ("Licensor"), Meridian Bio Therapeutics Limited, a limited company incorporated under the laws of Hong Kong (Company Registration No. 2847631) ("Licensee"), and Velthorn National Bank, N.A. ("Escrow Agent"), hereby confirms the receipt and deposit of the Escrow Deposit (as defined below) in accordance with the terms and conditions of the Escrow Agreement.
Specifically, Escrow Agent confirms that on October 6, 2023, Escrow Agent received, via wire transfer through the Fedwire Funds Service, the amount of Eighteen Million United States Dollars (US $18,000,000.00) (the "Escrow Deposit") from Meridian Bio Therapeutics Limited. The wire transfer was received by Escrow Agent at approximately 10:47 a.m. Eastern Time and was verified and reconciled in accordance with Escrow Agent's standard internal procedures for the receipt of escrow funds. The originating bank for the wire transfer was Halcyon Trust Bank, SWIFT code Harborline Savings BankHKHHHKH, with reference to Fedwire confirmation number FW-20231006-089437.
The Escrow Deposit has been credited to and deposited into the segregated escrow account established and maintained by Escrow Agent in accordance with Section 2.1 of the Escrow Agreement, designated as follows:
Escrow Account No.: 1015-00002-PNTR Account Title: Velthorn National Bank, N.A., as Escrow Agent for Penterra Pharmaceuticals Corp. and Meridian Bio Therapeutics Limited Bank: Velthorn National Bank, N.A., New York, New York ABA Routing Number: 021-084-773
The Escrow Deposit represents the upfront licensing payment due from Licensee to Licensor under Article IV, Section 4.1(a) of the Exclusive License Agreement dated October 2, 2023 (the "License Agreement") between Licensor and Licensee, relating to the exclusive worldwide license to develop, manufacture, and commercialize the pharmaceutical compound designated PPC-4187 (Penteracitinib), which upfront payment is required to be held in escrow pending the satisfaction of certain closing conditions as more fully described in the Escrow Agreement and the License Agreement.
2. Escrow Account Details
The Escrow Deposit is held at Velthorn National Bank, N.A., located at 383 Madison Avenue, New York, New York 10179, in Escrow Account No. 1015-00002-PNTR (the "Escrow Account"). The Escrow Account is a segregated, non-interest-bearing demand deposit account, as specified in Section 2.2 of the Escrow Agreement, established and maintained by Escrow Agent solely for the purpose of holding the Escrow Deposit. The Escrow Account is maintained separately from the general funds and other accounts of Escrow Agent, and the funds contained therein are not subject to any lien, charge, encumbrance, or right of set-off by Escrow Agent, except as may be expressly set forth in the Escrow Agreement with respect to Escrow Agent's right to deduct fees and expenses as provided in Section 5 of the Escrow Agreement.
In accordance with Section 2.3 of the Escrow Agreement, and at the direction of Licensor and Licensee as set forth therein, the Escrow Account has been designated as a non-interest-bearing account. Neither Licensor nor Licensee has provided joint written instructions requesting that the Escrow Deposit be invested in any permitted investment, and accordingly, the Escrow Deposit remains uninvested in the Escrow Account as of the date hereof.
As of the close of business on October 6, 2023, the current balance of the Escrow Account is as follows:
Escrow Agent shall continue to hold the Escrow Deposit in the Escrow Account pending receipt of instructions for the release or disposition of the Escrow Deposit in accordance with the terms and conditions of the Escrow Agreement.
3. Conditions for Release
The Escrow Deposit shall be released from the Escrow Account to Penterra Pharmaceuticals Corp. (Licensor) upon the satisfaction of the closing conditions set forth in Section 3.1 of the Escrow Agreement, including, without limitation: (a) the verification by Licensor and Licensee of the completion of the assignment and transfer of the intellectual property rights contemplated by the License Agreement, including the execution and delivery of all patent assignment documents, trademark assignment documents, and regulatory file transfer letters relating to PPC-4187 (Penteracitinib); (b) the delivery by each party of all closing deliverables specified in Section 3.1(b) of the Escrow Agreement, including executed officer's certificates, legal opinions of counsel, and evidence of all required governmental and regulatory approvals; and (c) the satisfaction or waiver of any other conditions precedent to the closing of the transactions contemplated by the License Agreement, as specified in Article VII thereof.
Release of the Escrow Deposit shall occur upon the earliest of: (i) Escrow Agent's receipt of joint written instructions signed by both Licensor and Licensee (or their respective authorized representatives) in the form attached as Exhibit A to the Escrow Agreement, directing Escrow Agent to disburse the Escrow Deposit to Licensor; (ii) Escrow Agent's receipt of a final, non-appealable order of a court of competent jurisdiction directing the disbursement of the Escrow Deposit; or (iii) the automatic release of the Escrow Deposit upon the satisfaction of the conditions specified in Section 3.2 of the Escrow Agreement, provided that Escrow Agent has received the certifications and documentation required thereunder.
The parties are reminded that the Scheduled Closing Date under Section 3.3 of the Escrow Agreement is October 9, 2023, subject to extension for a period not to exceed ten (10) business days upon the mutual written agreement of Licensor and Licensee, as provided in Section 3.3(b) of the Escrow Agreement. In the event that the closing conditions are not satisfied, and the Escrow Deposit is not released, on or prior to the Scheduled Closing Date (as may be extended), the Escrow Deposit shall be returned to Licensee in accordance with Section 3.4 of the Escrow Agreement, subject to the terms and conditions set forth therein.
Escrow Agent shall not release, disburse, or otherwise dispose of any portion of the Escrow Deposit except in strict accordance with the terms and conditions of the Escrow Agreement, and Escrow Agent shall have no obligation to independently verify the satisfaction of any closing condition or the accuracy of any certification or document delivered to Escrow Agent in connection with a request for release.
4. Escrow Agent Fees
Escrow Agent confirms that its fees for the services rendered under the Escrow Agreement are as follows:
(a) Initial Acceptance Fee: A one-time flat fee of Fifteen Thousand United States Dollars (US $15,000.00), which fee is due and payable upon the establishment of the Escrow Account and the initial funding thereof; and
(b) Quarterly Maintenance Fee: An ongoing fee of Two Thousand Five Hundred United States Dollars (US $2,500.00) per calendar quarter (or portion thereof), for the administration and maintenance of the Escrow Account, commencing on the first full calendar quarter following the date of this letter and continuing until the termination of the Escrow Agreement and the final disbursement of all funds held in the Escrow Account.
Such fees shall be payable in accordance with the terms set forth in Section 5.1 of the Escrow Agreement. As specified therein, the initial acceptance fee and the first quarterly maintenance fee shall be borne equally by Licensor and Licensee, with each party responsible for one-half of such amounts. Escrow Agent reserves all rights set forth in Section 5.2 of the Escrow Agreement with respect to the deduction of accrued and unpaid fees and reimbursable expenses from the Escrow Account in the event that the parties fail to remit payment of such fees within the time periods specified therein. Escrow Agent's fee schedule is subject to adjustment in accordance with Section 5.3 of the Escrow Agreement in the event of extraordinary services or the occurrence of any dispute regarding the Escrow Deposit.
5. Governing Terms and Definitions
All capitalized terms used but not otherwise defined in this letter shall have the respective meanings ascribed to such terms in the Escrow Agreement. In the event of any conflict or inconsistency between the terms of this letter and the terms of the Escrow Agreement, the terms of the Escrow Agreement shall govern and control in all respects.
This confirmation letter is delivered by Escrow Agent pursuant to, and in accordance with, Section 2.4 of the Escrow Agreement, which requires Escrow Agent to deliver written confirmation to Licensor, Licensee, and their respective counsel promptly following receipt of the Escrow Deposit. This letter is intended solely as a confirmation of the matters set forth herein and does not constitute a separate agreement or undertaking by Escrow Agent.
The Escrow Agreement is governed by and shall be construed in accordance with the laws of the State of New York, without regard to principles of conflicts of law that would require the application of the laws of any other jurisdiction. Any dispute arising under or in connection with the Escrow Agreement or this confirmation letter shall be subject to the exclusive jurisdiction of the state and federal courts located in the Borough of Manhattan, City of New York, as provided in Section 8.7 of the Escrow Agreement.
6. Notices and Contact Information
All notices, instructions, requests, demands, and other communications relating to the Escrow Account, including any release instructions, should be directed to the following representative of Escrow Agent:
Escrow Agent Contact: Teresa M. D'Angelo Escrow Officer Escrow Services Division Velthorn National Bank, N.A. 383 Madison Avenue New York, NY 10179 Telephone: (212) 554-8120 Facsimile: (212) 554-8199
Email: tdangelo@greylockbank.com
All release instructions must be provided in writing and in the form specified in Exhibit A to the Escrow Agreement, and must be executed by the authorized signatories designated in the incumbency certificates delivered to Escrow Agent pursuant to Section 6.2 of the Escrow Agreement. Escrow Agent shall be entitled to rely upon, and shall not be liable for acting or refraining from acting upon, any notice, instruction, certificate, or other document furnished to it hereunder that Escrow Agent believes in good faith to be genuine and to have been signed or presented by the proper party or parties.
The parties are reminded that, pursuant to Section 6.3 of the Escrow Agreement, any change in the authorized signatories of Licensor or Licensee must be communicated to Escrow Agent in writing, together with updated incumbency certificates, at least two (2) business days prior to the submission of any release instructions signed by such new signatories.
7. No Other Obligations; Limitation of Liability
This letter is solely a confirmation of the receipt and deposit of the Escrow Deposit into the Escrow Account and the current status thereof. Nothing contained in this letter shall be construed to modify, amend, supplement, or otherwise alter in any manner the terms and conditions of the Escrow Agreement. The rights and obligations of Escrow Agent are governed exclusively by the Escrow Agreement, and Escrow Agent shall not be deemed to have assumed any obligations, duties, or responsibilities beyond those expressly set forth in the Escrow Agreement by reason of this letter or otherwise.
Escrow Agent acts solely in its capacity as escrow agent under the Escrow Agreement and does not act as, and shall not be deemed to be, an agent, fiduciary, or representative of either Licensor or Licensee, or of any other party to the transactions contemplated by the License Agreement or the Escrow Agreement. Escrow Agent makes no representations or warranties with respect to, and assumes no responsibility for, the validity, sufficiency, or enforceability of the License Agreement or any other agreement between Licensor and Licensee, the accuracy or completeness of any information provided to Escrow Agent by the parties, or the satisfaction or non-satisfaction of any conditions precedent to the release of the Escrow Deposit.
The limitations on Escrow Agent's liability set forth in Section 7 of the Escrow Agreement, including the exculpation and indemnification provisions contained therein, apply in full force and effect with respect to this letter and the matters described herein.
Should you have any questions regarding this confirmation or the Escrow Account, please do not hesitate to contact the undersigned at the telephone number or email address set forth above.
Very truly yours,
VELTHORN NATIONAL BANK, N.A., as Escrow Agent
By: ________
Name: Teresa M. D'Angelo
Title: Escrow Officer
Escrow Services Division
cc:
Penterra Pharmaceuticals Corp. — Garrett T. Holloway, Chief Financial Officer 400 Pharma Drive, Suite 800, Princeton, NJ 08540
Meridian Bio Therapeutics Limited — Patrick S.H. Kwok, Chief Financial Officer 18/F, Blossom Tower, 88 Queen's Road Central, Hong Kong SAR
Calderwood & Harkness LLP — Peter Vassiliev, Esq. 600 Lexington Avenue, 30th Floor, New York, NY 10022
Lam, Cheung & Firth LLP — Rebecca S. Liang, Esq. 25/F, Jardine House, 1 Connaught Place, Central, Hong Kong SAR
| Description | Amount (USD) |
| Escrow Deposit received October 6, 2023 | $18,000,000.00 |
| Accrued interest | $0.00 |
| Less: Fees deducted to date | $0.00 |
| Current Escrow Account Balance | $18,000,000.00 |