1018-00006 · Penterra Pharmaceuticals Corp · Correspondence

client-letter-closing-confirmation.docx DOCUMENT IP / Technology

10 / 39 ← → ✕

PRIVILEGED & CONFIDENTIAL ATTORNEY-CLIENT COMMUNICATION

CALDERWOOD & HARKNESS LLP Attorneys at Law 600 Lexington Avenue, 30th Floor New York, NY 10022 Telephone: (212) 554-7000 Facsimile: (212) 554-7001 www.calderwoodharkness.com

October 20, 2023

Anita M. Fremont, Esq. General Counsel Penterra Pharmaceuticals Corp. 400 Pharma Drive, Suite 800 Princeton, NJ 08540

Re: Closing Confirmation — Out-License of PPC-4187 (Penteracitinib) to Meridian Bio Therapeutics Limited

Dear Anita:

I. Confirmation of Closing

Calderwood & Harkness LLP is pleased to confirm that the closing (the "Closing") of the out-license of compound PPC-4187 (proposed International Nonproprietary Name: Penteracitinib; proposed trade name: PENTECLAR) by Penterra Pharmaceuticals Corp., a Delaware corporation ("Penterra"), to Meridian Bio Therapeutics Limited, a Hong Kong limited company ("Meridian"), occurred today, October 20, 2023 (the "Effective Date"), in accordance with the terms and conditions of that certain Exclusive License Agreement, dated as of October 2, 2023, by and between Penterra and Meridian (the "License Agreement"), together with all schedules, exhibits, annexes, and ancillary transaction documents executed in connection therewith (collectively, the "Transaction Documents").

We note that the Closing occurred subsequent to the originally scheduled closing date of October 9, 2023. The delay was attributable to the completion of intellectual property assignment recordation in the last applicable jurisdiction, which was finalized on October 18, 2023, thereby satisfying the final outstanding closing condition under Section 8.1(e) of the License Agreement. As you are aware, the Board of Directors of Penterra authorized the entry into the License Agreement and the consummation of the transactions contemplated thereby by unanimous written consent dated July 18, 2023, and all requisite corporate approvals on the Meridian side were obtained contemporaneously.

This letter sets forth a summary of the key transaction terms, confirms the release of the upfront payment from escrow, identifies the fully executed Transaction Documents being delivered herewith, addresses antitrust and regulatory clearance matters, outlines post-closing obligations and associated deadlines, identifies counterparty counsel and advisors, and addresses certain fee and billing matters. This letter is intended for informational and confirmatory purposes only, and in the event of any conflict between the terms described herein and the terms set forth in the License Agreement or any other Transaction Document, the terms of such Transaction Document shall control.

II. Summary of Key Transaction Terms

The following is a summary of the principal terms of the License Agreement and the transactions consummated at the Closing. This summary is qualified in its entirety by reference to the License Agreement and the other Transaction Documents.

Licensed Compound. The licensed compound is PPC-4187, a selective Janus kinase 1 (JAK1) inhibitor being developed for the treatment of moderate-to-severe atopic dermatitis in adult patients. The compound is formulated as an oral, once-daily, film-coated tablet in 25 mg and 50 mg dose strengths. PPC-4187 has completed Phase IIb clinical development (Study PPC-4187-201), a randomized, double-blind, placebo-controlled trial enrolling 420 patients, with topline results reported in June 2023 demonstrating a statistically significant improvement in the primary endpoint of EASI-75 response at Week 16 (p<0.001 versus placebo). The compound is currently designated for pivotal Phase III development.

Licensor. Penterra Pharmaceuticals Corp., a corporation organized under the laws of the State of Delaware, with its shares listed on the Nasdaq Global Select Market under the ticker symbol "PNTR" (Employer Identification Number: 22-3948175).

Licensee. Meridian Bio Therapeutics Limited, a company incorporated with limited liability under the laws of Hong Kong (Company Registration No. 2847631), with its registered office in Central, Hong Kong SAR.

Licensed Territory. The license granted under the License Agreement covers the following countries and territories (collectively, the "Territory"):

• People's Republic of China (including Hong Kong Special Administrative Region and Macau Special Administrative Region)

• Japan

• Republic of Korea

• Australia

• New Zealand

• Singapore

• Thailand

• Malaysia

• Indonesia

• Philippines

• Vietnam

• Taiwan

Retained Rights. Penterra retains all rights to PPC-4187 and the Licensed IP (as defined in the License Agreement) outside the Territory, including, without limitation, in the United States, Canada, the European Union/European Economic Area, the United Kingdom, Latin America, the Middle East, Africa, and all other countries and territories not expressly included within the Territory.

Financial Terms. The total potential deal value under the License Agreement is up to One Hundred Twenty Million Dollars ($120,000,000), comprising the following components:

Upfront Payment: Eighteen Million Dollars ($18,000,000), payable at the Closing. This payment has been released from escrow as confirmed in Section III below.

Development Milestones: Thirty-Two Million Dollars ($32,000,000) in the aggregate, payable upon achievement of the following development milestones:

(i) Six Million Dollars ($6,000,000) upon dosing of the first patient in the first Phase III clinical trial of PPC-4187 in any Territory country;

(ii) Eight Million Dollars ($8,000,000) upon dosing of the first patient in the second Phase III clinical trial of PPC-4187 in any Territory country;

(iii) Ten Million Dollars ($10,000,000) upon completion of database lock for the first Phase III clinical trial of PPC-4187 with a positive outcome meeting the primary endpoint; and

(iv) Eight Million Dollars ($8,000,000) upon completion of database lock for the second Phase III clinical trial of PPC-4187 with a positive outcome meeting the primary endpoint.

Regulatory Milestones: Twenty-Five Million Dollars ($25,000,000) in the aggregate, payable upon achievement of the following regulatory milestones:

(i) Ten Million Dollars ($10,000,000) upon the first regulatory approval of PPC-4187 in any Territory country;

(ii) Eight Million Dollars ($8,000,000) upon regulatory approval of PPC-4187 in Japan;

(iii) Four Million Dollars ($4,000,000) upon regulatory approval of PPC-4187 in the Republic of Korea; and

(iv) Three Million Dollars ($3,000,000) upon regulatory approval of PPC-4187 in Australia.

Commercial/Sales Milestones: Forty-Five Million Dollars ($45,000,000) in the aggregate, payable upon the first achievement of the following cumulative annual net sales thresholds in the Territory:

(i) Ten Million Dollars ($10,000,000) upon first achievement of annual net sales of PPC-4187 in the Territory exceeding Fifty Million Dollars ($50,000,000);

(ii) Fifteen Million Dollars ($15,000,000) upon first achievement of annual net sales of PPC-4187 in the Territory exceeding One Hundred Fifty Million Dollars ($150,000,000); and

(iii) Twenty Million Dollars ($20,000,000) upon first achievement of annual net sales of PPC-4187 in the Territory exceeding Three Hundred Million Dollars ($300,000,000).

Royalties. Meridian shall pay Penterra tiered royalties on annual net sales of PPC-4187 in the Territory as follows:

Following expiration of all Licensed Patents in a given country within the Territory (the "Post-Patent Period"), royalty rates applicable to net sales in such country shall be reduced to fifty percent (50%) of the otherwise applicable rate — i.e., 4%, 5.5%, and 7%, respectively.

Minimum Annual Royalty. Beginning with the first full calendar year following the first commercial sale of PPC-4187 in any country within the Territory, Meridian shall pay Penterra a minimum annual royalty of Two Million Dollars ($2,000,000), creditable against earned royalties for the applicable calendar year.

Generic Entry Reduction. In the event that one or more generic products containing the same active pharmaceutical ingredient as PPC-4187 achieve an aggregate market share of thirty percent (30%) or greater in any country within the Territory (as measured by volume of prescriptions or units sold, as applicable), the royalty rates applicable to net sales in such country shall be reduced by forty percent (40%) for so long as such generic market share threshold continues to be met.

Most Favored Nation Pricing. Pursuant to Section 7.9 of the License Agreement, Meridian may not offer PPC-4187 at a net price in any Territory country that is more than fifteen percent (15%) below the lowest net price at which Penterra (or its licensee) offers PPC-4187 in the United States or any of the EU5 countries (France, Germany, Italy, Spain, and the United Kingdom). Quarterly reconciliation of MFN pricing compliance is required within forty-five (45) days following the end of each calendar quarter. The methodology for calculating net price and effecting reconciliation is set forth in Schedule F to the License Agreement.

Sublicensing. Meridian may grant sublicenses under the Licensed IP within the Territory with Penterra's prior written consent, which shall not be unreasonably withheld, conditioned, or delayed. In the event that Meridian grants any sublicense, Meridian shall pay to Penterra fifty percent (50%) of all sublicense income received by Meridian, net of documented, reasonable out-of-pocket development costs incurred by Meridian in connection with PPC-4187 prior to the effective date of such sublicense.

Indemnification. The License Agreement provides for mutual indemnification obligations, subject to the following limitations:

• Cap: The aggregate liability of each party under the indemnification provisions is capped at two hundred percent (200%) of total payments received by Penterra under the License Agreement, with a floor equal to Thirty-Six Million Dollars ($36,000,000) (representing 200% of the $18,000,000 upfront payment).

• De Minimis Threshold: No indemnification obligation shall arise with respect to any individual claim (or series of related claims) unless the losses attributable to such claim exceed One Hundred Fifty Thousand Dollars ($150,000).

• Aggregate Deductible Basket: No indemnification obligation shall arise until the aggregate amount of all qualifying losses exceeds Seven Hundred Fifty Thousand Dollars ($750,000), after which the indemnifying party shall be liable for all such losses from the first dollar.

• Exclusions from Cap: The foregoing cap shall not apply to claims arising out of (a) fraud or intentional misrepresentation, (b) willful misconduct, or (c) the intellectual property infringement indemnification obligations set forth in Section 12.3 of the License Agreement.

Governing Law. The License Agreement and all Transaction Documents (unless otherwise specified therein) are governed by and construed in accordance with the laws of the State of New York, without regard to its conflicts of law principles.

Dispute Resolution. Any dispute, controversy, or claim arising out of or relating to the License Agreement or any Transaction Document shall be resolved by binding arbitration administered by the International Court of Arbitration of the International Chamber of Commerce (the "ICC"), conducted in the English language, before a panel of three (3) arbitrators, with the seat of arbitration in New York, New York. Notwithstanding the foregoing, either party may seek injunctive or other equitable relief in the United States District Court for the Southern District of New York or the Supreme Court of the State of New York, New York County, without the requirement of posting a bond.

III. Escrow Payment Release Confirmation

We confirm that the upfront payment of Eighteen Million Dollars ($18,000,000) (the "Upfront Payment"), which was held in escrow by Velthorn National Bank, N.A. (the "Escrow Agent"), has been released to Penterra in full upon satisfaction of all closing conditions under the License Agreement, effective as of October 20, 2023.

The Upfront Payment was funded into the escrow account by Meridian on October 6, 2023, as confirmed by Velthorn National Bank's funding confirmation letter of even date (a copy of which is enclosed with this letter as item 21 of the enclosed Transaction Documents). The escrow arrangement is governed by that certain Escrow Agreement, dated as of October 2, 2023, by and among Penterra, Meridian, and Velthorn National Bank, N.A. (the "Escrow Agreement"), a fully executed copy of which is enclosed herewith as item 8.

The Escrow Agent contact for this matter is Teresa M. D'Angelo, Vice President, Escrow Services, Velthorn National Bank, N.A., located at 383 Madison Avenue, New York, NY 10179.

As a housekeeping matter, we note that the ongoing escrow agent fee under the Escrow Agreement is Fifteen Thousand Dollars ($15,000) as a flat annual fee, plus Two Thousand Five Hundred Dollars ($2,500) per quarter for account maintenance. These fees are payable jointly by Penterra and Meridian in accordance with Section 4.2 of the Escrow Agreement.

IV. Enclosed Fully Executed Transaction Documents

Set forth below is a list of all fully executed Transaction Documents being delivered to you in connection with the Closing. Unless otherwise indicated, each document listed below is enclosed in its execution version. Copies of all documents are being retained in the firm's files, and originals are being delivered under separate cover, where applicable, by overnight courier.

1. Exclusive License Agreement, dated as of October 2, 2023 (effective October 20, 2023), by and between Penterra Pharmaceuticals Corp. and Meridian Bio Therapeutics Limited.

2. Schedule A — Licensed Patents, listing seven (7) patent families, including:

• U.S. Patent Nos. 11,234,567 and 11,345,678;

• PCT/US2019/045123 national phase entries;

• CN Patent No. ZL 2020 1 0456789.0;

• JP Patent No. 7,012,345;

• KR Patent No. 10-2345678; and

• AU Patent No. 2020234567.

3. Schedule B — Licensed Know-How, describing the proprietary know-how, trade secrets, technical data, and regulatory documentation licensed to Meridian under the License Agreement.

4. Schedule C — Licensed Trademarks, identifying the PENTECLAR trademark, including U.S. Registration No. 6,789,012 and corresponding trademark applications and registrations in the Territory.

5. Schedule D — Territory, setting forth the complete list of countries and territories comprising the Territory.

6. Schedule E — Development Plan, outlining the proposed Phase III clinical development program, regulatory strategy, and associated timelines for PPC-4187 in the Territory.

7. Schedule F — MFN Pricing Methodology, detailing the methodology for calculating net prices, conducting quarterly reconciliations, and determining compliance with the most favored nation pricing clause.

8. Escrow Agreement, dated as of October 2, 2023, by and among Penterra, Meridian, and Velthorn National Bank, N.A.

9. API Supply Agreement, dated as of October 2, 2023, by and between Penterra and Meridian, providing for the supply of active pharmaceutical ingredient and reference standard at cost plus a fifteen percent (15%) markup, for an initial term of three (3) years from the Effective Date.

10. Technology Transfer Agreement, dated as of October 2, 2023, by and between Penterra and Meridian, providing for the transfer of manufacturing process know-how, analytical methods, and CMC documentation, with a completion deadline of twenty-four (24) months from the Effective Date.

11. Form of Quality Agreement, attached as an exhibit to the License Agreement, to be executed by the parties within sixty (60) days of the Effective Date (i.e., by December 19, 2023).

12. Trademark License Agreement for PENTECLAR, dated as of October 2, 2023, granting Meridian a license to use the PENTECLAR trademark in the Territory in connection with the commercialization of PPC-4187.

13. Pharmacovigilance Agreement, dated as of October 2, 2023, by and between Penterra and Meridian, establishing the parties' respective obligations with respect to adverse event reporting, safety data exchange, signal detection, and periodic safety reporting.

14. Officer's Certificate — Penterra Pharmaceuticals Corp., executed by Anita M. Fremont, Esq., General Counsel, dated October 20, 2023.

15. Officer's Certificate — Meridian Bio Therapeutics Limited, executed by David R. Cheung, Chief Executive Officer, dated October 20, 2023.

16. Secretary's Certificate — Penterra Pharmaceuticals Corp., certifying copies of resolutions of the Board of Directors authorizing the transaction, incumbency of officers, and organizational documents (including Certificate of Incorporation and Bylaws) (EIN: 22-3948175).

17. Secretary's Certificate — Meridian Bio Therapeutics Limited, certifying copies of resolutions of the Board of Directors, incumbency of officers, and constitutional documents (HK Company Registration No. 2847631).

18. Good Standing Certificate — Penterra Pharmaceuticals Corp., issued by the Secretary of State of the State of Delaware, obtained October 12, 2023.

19. Legal Opinion — Calderwood & Harkness LLP to Meridian Bio Therapeutics Limited, dated October 20, 2023, delivered on behalf of Penterra in accordance with Section 8.2(d) of the License Agreement.

20. Legal Opinion — Lam, Cheung & Firth LLP to Penterra Pharmaceuticals Corp., dated October 20, 2023, delivered on behalf of Meridian in accordance with Section 8.3(d) of the License Agreement.

21. Escrow Funding Confirmation Letter — Velthorn National Bank, N.A., dated October 6, 2023, confirming receipt of $18,000,000 from Meridian into the escrow account.

Please review the enclosed documents carefully and contact us promptly if you identify any discrepancies or if any documents appear to be missing.

V. Antitrust and Regulatory Clearance

We confirm that no filing under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), was required in connection with the Closing. The transaction constitutes a pure intellectual property license and does not involve the acquisition of voting securities, assets, or a controlling interest in any entity. Moreover, the transaction does not meet the applicable HSR size-of-transaction thresholds. Our analysis in this regard was confirmed as of October 5, 2023, and no objection or inquiry from the U.S. Federal Trade Commission or the Antitrust Division of the U.S. Department of Justice has been received.

We further confirm that a filing with the Committee on Foreign Investment in the United States ("CFIUS") is not applicable to this transaction, as the License Agreement does not involve a foreign acquisition of, or investment in, a U.S. business. The transaction is structured as an outbound license of intellectual property rights by a U.S. licensor, and no change of control over Penterra or any of its subsidiaries is contemplated.

With respect to regulatory filings in the People's Republic of China, we note that Meridian should separately evaluate whether a Technology Import Contract filing is required under the PRC Technology Import and Export Administration Regulations (技术进出口管理条例) in connection with the importation of the licensed technology into the PRC through Meridian Pharma (Shanghai) Co., Ltd., Meridian's wholly foreign-owned enterprise in the PRC. This analysis should be conducted by Meridian's PRC counsel in light of the specific categories of technology being licensed and transferred.

Additionally, Meridian is solely responsible for obtaining all required PRC outbound remittance approvals in connection with the payment of milestone payments, royalties, and any other amounts due to Penterra under the License Agreement, including compliance with the State Administration of Foreign Exchange ("SAFE") regulations. We understand that such payments will be routed through Meridian Pharma (Shanghai) Co., Ltd., and Meridian should ensure that all necessary foreign exchange registrations and tax clearance certificates are obtained in advance of each payment.

VI. Post-Closing Obligations and Deadlines

Set forth below is a summary of the principal post-closing obligations of the parties under the License Agreement and the ancillary Transaction Documents, together with the associated deadlines. We will be maintaining a detailed post-closing obligations tracker and will proactively advise Penterra as deadlines approach.

A. Quality Agreement Execution

The form of Quality Agreement is attached as an exhibit to the License Agreement and must be executed by both parties no later than December 19, 2023 (sixty (60) days from the Effective Date). The Quality Agreement will govern the supply of API by Penterra to Meridian, including specifications for the active pharmaceutical ingredient, quality standards, change control procedures, deviation handling protocols, stability testing requirements, and obligations relating to regulatory inspections by the U.S. Food and Drug Administration, China's National Medical Products Administration, Japan's Pharmaceuticals and Medical Devices Agency, and other applicable regulatory authorities. We recommend that Penterra's quality assurance team begin substantive discussions with Meridian's quality counterparts promptly to ensure timely execution.

B. Technology Transfer

Under the Technology Transfer Agreement, Penterra is obligated to transfer manufacturing process know-how, analytical methods (including HPLC and dissolution methods), formulation parameters, and Chemistry, Manufacturing, and Controls ("CMC") documentation to Meridian's designated contract manufacturing organization(s) in the Asia-Pacific region. The deadline for completion of all technology transfer activities is October 20, 2025 (twenty-four (24) months from the Effective Date).

Penterra's current contract manufacturer for PPC-4187 is Alkerra Manufacturing Inc., located at 5200 Meridian Parkway, Research Triangle Park, NC 27713. The technology transfer will be coordinated by the following key personnel:

• Penterra: Dr. Priya Nandakumar, Vice President, intellectual Property, and Leland J. Cho, Senior Vice President, Business Development.

• Meridian: Dr. Kenji Morimoto, Chief Manufacturing Officer.

We recommend that the parties schedule an initial technology transfer kick-off meeting within the first thirty (30) days following the Effective Date to establish a detailed project plan, identify key milestones, and allocate resources.

C. Joint Steering Committee (JSC) Formation

Pursuant to Article 4 of the License Agreement, the parties are required to establish a Joint Steering Committee (the "JSC") consisting of three (3) representatives from each party. The JSC is responsible for overseeing all development, regulatory, and commercialization activities with respect to PPC-4187 in the Territory, and shall meet on a quarterly basis (or more frequently as mutually agreed). The initial organizational meeting of the JSC should be scheduled promptly. We recommend that Penterra designate its three JSC representatives and communicate such designations to Meridian within the next two (2) weeks.

D. Joint Patent Committee (JPC) Formation

In addition to the JSC, Article 10 of the License Agreement requires the establishment of a Joint Patent Committee (the "JPC"), consisting of two (2) representatives from each party. The JPC is charged with overseeing patent prosecution, maintenance, defense, and enforcement activities with respect to the Licensed Patents in the Territory. Penterra retains the tie-breaking vote on all matters relating to global intellectual property strategy, while Meridian holds the tie-breaking vote on Territory-specific commercialization matters, subject in all cases to compliance with the MFN pricing provisions. We recommend that Dr. Nandakumar serve as one of Penterra's representatives on the JPC.

E. IP Recordation

As noted above, all patent and trademark assignment recordations across the Territory jurisdictions were completed as of October 18, 2023, which was the final closing condition to be satisfied. We confirm that recordation filings have been completed and accepted in all applicable intellectual property offices, including the China National intellectual Property Administration (CNIPA), the Japan Patent Office (JPO), the Korean intellectual Property Office (KIPO), IP Australia, and the intellectual Property Office of Singapore (IPOS), among others. Whitford & Cascade Insurance Brokers, under the direction of Dr. Alan J. Whitford, assisted with the preparation and filing of all patent recordation filings across the Territory. Confirmation of recordation from each jurisdiction has been received and copies are maintained in our files.

F. MFN Pricing Reconciliation

Quarterly MFN pricing reconciliation is required within forty-five (45) days following the end of each calendar quarter, in accordance with Section 7.9 and Schedule F of the License Agreement. The first reconciliation will apply to the calendar quarter in which the first commercial sale of PPC-4187 occurs in any country within the Territory. We will advise Penterra in advance of the first applicable reconciliation date once Meridian provides notice of first commercial sale.

G. API Supply

Under the API Supply Agreement, Penterra is obligated to supply active pharmaceutical ingredient and reference standard to Meridian at cost plus a fifteen percent (15%) markup for an initial term of three (3) years from the Effective Date. Meridian is required to submit rolling forecasts and purchase orders in accordance with the terms of the API Supply Agreement. Penterra's supply obligations are to be coordinated through Alkerra Manufacturing Inc. during the initial term, pending completion of the technology transfer to Meridian's designated APAC manufacturer.

H. Pharmacovigilance. Adverse event reporting and safety data exchange obligations under the Pharmacovigilance Agreement are effective immediately as of the Effective Date. Both parties are required to comply with ICH E2B(R3) and ICH E2D standards for individual case safety report transmission and periodic safety reporting. Penterra's drug safety team should ensure that the required data exchange mechanisms and secure transmission systems are operational and that designated safety contacts have been identified and communicated to Meridian's pharmacovigilance department.

I. Withholding Tax and Transfer Pricing

Royalty and milestone payments under the License Agreement are subject to applicable withholding taxes. We note the following considerations:

• Direct payments from Meridian Bio Therapeutics Limited (Hong Kong) to Penterra should be subject to a zero percent (0%) withholding tax rate under the U.S.–Hong Kong arrangement, subject to confirmation that no "permanent establishment" issues arise.

• Payments routed through Meridian Pharma (Shanghai) Co., Ltd. will be subject to a ten percent (10%) PRC withholding tax on royalty and milestone payments, unless such rate is reduced pursuant to the applicable tax treaty between the PRC and Hong Kong (which may provide for a reduced rate of seven percent (7%) for qualifying royalties). Meridian should consult with its PRC tax advisors to optimize the payment routing structure and ensure that all required PRC tax filings and clearance certificates are obtained.

With respect to transfer pricing, Penterra should maintain contemporaneous transfer pricing documentation supporting the arm's-length nature of the cost-plus-fifteen-percent (15%) pricing under the API Supply Agreement, consistent with U.S. Treasury Regulations under Section 482 of the Internal Revenue Code and the OECD Transfer Pricing Guidelines. Our tax specialist, Sylvia Hartwell (Partner, Tax Practice, Calderwood & Harkness LLP), is available to provide ongoing guidance on tax structuring and compliance matters in connection with the transaction.

Meridian is responsible for all Territory-based value-added taxes (VAT), goods and services taxes (GST), and analogous indirect taxes applicable to the importation, manufacture, and sale of PPC-4187 in the Territory.

We note that Clarendon Bates LLP (Robert F. Stanhope, CPA, Partner) has been consulted regarding the ASC 606 revenue recognition treatment of milestone payments under the License Agreement, and Penterra's finance team should coordinate with Mr. Stanhope to ensure that the accounting treatment is appropriately reflected in Penterra's financial statements for the fiscal year ending December 31, 2023, and subsequent periods.

VII. Counterparty Counsel and Advisors

For your reference, the following firms served as counsel and advisors to Meridian in connection with the transaction:

Meridian's Legal Counsel: Lam, Cheung & Firth LLP

• Lead Partner: Jonathan M. Firth, Esq.

• Associate: Rebecca S. Liang, Esq.

• Hong Kong Office: 25/F, Jardine House, 1 Connaught Place, Central, Hong Kong SAR

• New York Office: 1345 Avenue of the Americas, 22nd Floor, New York, NY 10105

Meridian's Financial Advisor: Eastbridge Partners Limited

• Managing Director: Simon K.P. Woo

• Address: 12/F, Two Exchange Square, 8 Connaught Place, Central, Hong Kong SAR

Meridian's Japan Regulatory Counsel: Nakamura & Takeda Law Offices

• Lead Counsel: Yuki Nakamura

• Address: Marunouchi Park Building, 2-6-1 Marunouchi, Chiyoda-ku, Tokyo 100-6921, Japan

Meridian's Product Liability and Clinical Trial Insurer: Jade Dragon Insurance Limited

• Underwriter: Christine A. Lo

• Address: Central, Hong Kong SAR

The following firm served as Penterra's financial advisor:

Penterra's Financial Advisor: Prescott Hale & Co. LLC

• Senior Managing Director: Victoria R. Chen

• Address: 277 Park Avenue, 40th Floor, New York, NY 10172

VIII. Calderwood & Harkness LLP Engagement Team

The following members of Calderwood & Harkness LLP comprised the engagement team for this transaction:

• Marcus Delgado — Responsible Partner, intellectual Property

• Catherine Bloom — Billing Partner, intellectual Property

• Peter Vassiliev — Lead Associate, intellectual Property

• Wendy Schultz — Working Associate, intellectual Property

• Sylvia Hartwell — Specialist Partner, Tax

Our firm remains available to provide ongoing counsel to Penterra with respect to all post-closing obligations, JSC and JPC governance matters, patent prosecution coordination in the Territory, MFN pricing compliance, technology transfer milestones, and any disputes that may arise under the License Agreement or any of the ancillary Transaction Documents.

IX. Fee and Billing Matters

We will be issuing a final invoice for all professional fees and disbursements incurred through the Closing Date in accordance with the terms of our engagement letter dated July 10, 2023. Based on the scope of work performed, we estimate that total fees for the engagement will fall within the range of Eight Hundred Fifty Thousand Dollars ($850,000) to One Million One Hundred Thousand Dollars ($1,100,000), calculated on the basis of blended hourly rates as set forth in the engagement letter. Any questions regarding billing should be directed to Catherine Bloom, Billing Partner, at (212) 554-7145 or cbloom@calderwoodharkness.com.

X. Closing Remarks

On behalf of the entire Calderwood & Harkness team, we extend our sincere congratulations to Penterra on the successful closing of this transaction. The out-license of PPC-4187 to Meridian represents a significant milestone in Penterra's pipeline monetization strategy and provides a compelling pathway for the commercialization of Penteracitinib across the Asia-Pacific region. This transaction meaningfully enhances Penterra's non-dilutive funding profile while preserving the company's strategic rights in the United States, Europe, and other major markets.

We are proud to have served as your counsel in connection with this transaction and look forward to continuing to support Penterra in the post-closing phase. As noted above, we will maintain a comprehensive post-closing obligations tracker and will proactively advise you and your team as key deadlines approach. Please do not hesitate to contact me or any member of the engagement team with any questions or if we can be of further assistance.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Marcus Delgado Partner Calderwood & Harkness LLP 600 Lexington Avenue, 30th Floor New York, NY 10022 Telephone: (212) 554-7112

Email: mdelgado@calderwoodharkness.com

cc:

Dr. Raymond K. Ostrowski, Chief Executive Officer, Penterra Pharmaceuticals Corp. Leland J. Cho, Senior Vice President, Business Development, Penterra Pharmaceuticals Corp. Dr. Priya Nandakumar, Vice President, intellectual Property, Penterra Pharmaceuticals Corp. Garrett T. Holloway, Chief Financial Officer, Penterra Pharmaceuticals Corp. Catherine Bloom, Calderwood & Harkness LLP Peter Vassiliev, Calderwood & Harkness LLP Wendy Schultz, Calderwood & Harkness LLP Sylvia Hartwell, Calderwood & Harkness LLP

Enclosures: As listed in Section IV above (21 items)

Annual Net Sales Tier	Royalty Rate
Net sales ≤ $50,000,000	8%
Net sales > $50,000,000 – $150,000,000	11%
Net sales > $150,000,000	14%

PRIVILEGED & CONFIDENTIAL ATTORNEY-CLIENT COMMUNICATION
CALDERWOOD & HARKNESS LLP Attorneys at Law 600 Lexington Avenue, 30th Floor New York, NY 10022 Telephone: (212) 554-7000 Facsimile: (212) 554-7001 www.calderwoodharkness.com
October 20, 2023
Anita M. Fremont, Esq. General Counsel Penterra Pharmaceuticals Corp. 400 Pharma Drive, Suite 800 Princeton, NJ 08540
Re: Closing Confirmation — Out-License of PPC-4187 (Penteracitinib) to Meridian Bio Therapeutics Limited
Dear Anita:
I. Confirmation of Closing
Calderwood & Harkness LLP is pleased to confirm that the closing (the "Closing") of the out-license of compound PPC-4187 (proposed International Nonproprietary Name: Penteracitinib; proposed trade name: PENTECLAR) by Penterra Pharmaceuticals Corp., a Delaware corporation ("Penterra"), to Meridian Bio Therapeutics Limited, a Hong Kong limited company ("Meridian"), occurred today, October 20, 2023 (the "Effective Date"), in accordance with the terms and conditions of that certain Exclusive License Agreement, dated as of October 2, 2023, by and between Penterra and Meridian (the "License Agreement"), together with all schedules, exhibits, annexes, and ancillary transaction documents executed in connection therewith (collectively, the "Transaction Documents").
We note that the Closing occurred subsequent to the originally scheduled closing date of October 9, 2023. The delay was attributable to the completion of intellectual property assignment recordation in the last applicable jurisdiction, which was finalized on October 18, 2023, thereby satisfying the final outstanding closing condition under Section 8.1(e) of the License Agreement. As you are aware, the Board of Directors of Penterra authorized the entry into the License Agreement and the consummation of the transactions contemplated thereby by unanimous written consent dated July 18, 2023, and all requisite corporate approvals on the Meridian side were obtained contemporaneously.
This letter sets forth a summary of the key transaction terms, confirms the release of the upfront payment from escrow, identifies the fully executed Transaction Documents being delivered herewith, addresses antitrust and regulatory clearance matters, outlines post-closing obligations and associated deadlines, identifies counterparty counsel and advisors, and addresses certain fee and billing matters. This letter is intended for informational and confirmatory purposes only, and in the event of any conflict between the terms described herein and the terms set forth in the License Agreement or any other Transaction Document, the terms of such Transaction Document shall control.
II. Summary of Key Transaction Terms
The following is a summary of the principal terms of the License Agreement and the transactions consummated at the Closing. This summary is qualified in its entirety by reference to the License Agreement and the other Transaction Documents.
Licensed Compound. The licensed compound is PPC-4187, a selective Janus kinase 1 (JAK1) inhibitor being developed for the treatment of moderate-to-severe atopic dermatitis in adult patients. The compound is formulated as an oral, once-daily, film-coated tablet in 25 mg and 50 mg dose strengths. PPC-4187 has completed Phase IIb clinical development (Study PPC-4187-201), a randomized, double-blind, placebo-controlled trial enrolling 420 patients, with topline results reported in June 2023 demonstrating a statistically significant improvement in the primary endpoint of EASI-75 response at Week 16 (p<0.001 versus placebo). The compound is currently designated for pivotal Phase III development.
Licensor. Penterra Pharmaceuticals Corp., a corporation organized under the laws of the State of Delaware, with its shares listed on the Nasdaq Global Select Market under the ticker symbol "PNTR" (Employer Identification Number: 22-3948175).
Licensee. Meridian Bio Therapeutics Limited, a company incorporated with limited liability under the laws of Hong Kong (Company Registration No. 2847631), with its registered office in Central, Hong Kong SAR.
Licensed Territory. The license granted under the License Agreement covers the following countries and territories (collectively, the "Territory"):
• People's Republic of China (including Hong Kong Special Administrative Region and Macau Special Administrative Region)
• Japan
• Republic of Korea
• Australia
• New Zealand
• Singapore
• Thailand
• Malaysia
• Indonesia
• Philippines
• Vietnam
• Taiwan
Retained Rights. Penterra retains all rights to PPC-4187 and the Licensed IP (as defined in the License Agreement) outside the Territory, including, without limitation, in the United States, Canada, the European Union/European Economic Area, the United Kingdom, Latin America, the Middle East, Africa, and all other countries and territories not expressly included within the Territory.
Financial Terms. The total potential deal value under the License Agreement is up to One Hundred Twenty Million Dollars ($120,000,000), comprising the following components:
Upfront Payment: Eighteen Million Dollars ($18,000,000), payable at the Closing. This payment has been released from escrow as confirmed in Section III below.
Development Milestones: Thirty-Two Million Dollars ($32,000,000) in the aggregate, payable upon achievement of the following development milestones:
(i) Six Million Dollars ($6,000,000) upon dosing of the first patient in the first Phase III clinical trial of PPC-4187 in any Territory country;
(ii) Eight Million Dollars ($8,000,000) upon dosing of the first patient in the second Phase III clinical trial of PPC-4187 in any Territory country;
(iii) Ten Million Dollars ($10,000,000) upon completion of database lock for the first Phase III clinical trial of PPC-4187 with a positive outcome meeting the primary endpoint; and
(iv) Eight Million Dollars ($8,000,000) upon completion of database lock for the second Phase III clinical trial of PPC-4187 with a positive outcome meeting the primary endpoint.
Regulatory Milestones: Twenty-Five Million Dollars ($25,000,000) in the aggregate, payable upon achievement of the following regulatory milestones:
(i) Ten Million Dollars ($10,000,000) upon the first regulatory approval of PPC-4187 in any Territory country;
(ii) Eight Million Dollars ($8,000,000) upon regulatory approval of PPC-4187 in Japan;
(iii) Four Million Dollars ($4,000,000) upon regulatory approval of PPC-4187 in the Republic of Korea; and
(iv) Three Million Dollars ($3,000,000) upon regulatory approval of PPC-4187 in Australia.
Commercial/Sales Milestones: Forty-Five Million Dollars ($45,000,000) in the aggregate, payable upon the first achievement of the following cumulative annual net sales thresholds in the Territory:
(i) Ten Million Dollars ($10,000,000) upon first achievement of annual net sales of PPC-4187 in the Territory exceeding Fifty Million Dollars ($50,000,000);
(ii) Fifteen Million Dollars ($15,000,000) upon first achievement of annual net sales of PPC-4187 in the Territory exceeding One Hundred Fifty Million Dollars ($150,000,000); and
(iii) Twenty Million Dollars ($20,000,000) upon first achievement of annual net sales of PPC-4187 in the Territory exceeding Three Hundred Million Dollars ($300,000,000).
Royalties. Meridian shall pay Penterra tiered royalties on annual net sales of PPC-4187 in the Territory as follows:
Following expiration of all Licensed Patents in a given country within the Territory (the "Post-Patent Period"), royalty rates applicable to net sales in such country shall be reduced to fifty percent (50%) of the otherwise applicable rate — i.e., 4%, 5.5%, and 7%, respectively.
Minimum Annual Royalty. Beginning with the first full calendar year following the first commercial sale of PPC-4187 in any country within the Territory, Meridian shall pay Penterra a minimum annual royalty of Two Million Dollars ($2,000,000), creditable against earned royalties for the applicable calendar year.
Generic Entry Reduction. In the event that one or more generic products containing the same active pharmaceutical ingredient as PPC-4187 achieve an aggregate market share of thirty percent (30%) or greater in any country within the Territory (as measured by volume of prescriptions or units sold, as applicable), the royalty rates applicable to net sales in such country shall be reduced by forty percent (40%) for so long as such generic market share threshold continues to be met.
Most Favored Nation Pricing. Pursuant to Section 7.9 of the License Agreement, Meridian may not offer PPC-4187 at a net price in any Territory country that is more than fifteen percent (15%) below the lowest net price at which Penterra (or its licensee) offers PPC-4187 in the United States or any of the EU5 countries (France, Germany, Italy, Spain, and the United Kingdom). Quarterly reconciliation of MFN pricing compliance is required within forty-five (45) days following the end of each calendar quarter. The methodology for calculating net price and effecting reconciliation is set forth in Schedule F to the License Agreement.
Sublicensing. Meridian may grant sublicenses under the Licensed IP within the Territory with Penterra's prior written consent, which shall not be unreasonably withheld, conditioned, or delayed. In the event that Meridian grants any sublicense, Meridian shall pay to Penterra fifty percent (50%) of all sublicense income received by Meridian, net of documented, reasonable out-of-pocket development costs incurred by Meridian in connection with PPC-4187 prior to the effective date of such sublicense.
Indemnification. The License Agreement provides for mutual indemnification obligations, subject to the following limitations:
• Cap: The aggregate liability of each party under the indemnification provisions is capped at two hundred percent (200%) of total payments received by Penterra under the License Agreement, with a floor equal to Thirty-Six Million Dollars ($36,000,000) (representing 200% of the $18,000,000 upfront payment).
• De Minimis Threshold: No indemnification obligation shall arise with respect to any individual claim (or series of related claims) unless the losses attributable to such claim exceed One Hundred Fifty Thousand Dollars ($150,000).
• Aggregate Deductible Basket: No indemnification obligation shall arise until the aggregate amount of all qualifying losses exceeds Seven Hundred Fifty Thousand Dollars ($750,000), after which the indemnifying party shall be liable for all such losses from the first dollar.
• Exclusions from Cap: The foregoing cap shall not apply to claims arising out of (a) fraud or intentional misrepresentation, (b) willful misconduct, or (c) the intellectual property infringement indemnification obligations set forth in Section 12.3 of the License Agreement.
Governing Law. The License Agreement and all Transaction Documents (unless otherwise specified therein) are governed by and construed in accordance with the laws of the State of New York, without regard to its conflicts of law principles.
Dispute Resolution. Any dispute, controversy, or claim arising out of or relating to the License Agreement or any Transaction Document shall be resolved by binding arbitration administered by the International Court of Arbitration of the International Chamber of Commerce (the "ICC"), conducted in the English language, before a panel of three (3) arbitrators, with the seat of arbitration in New York, New York. Notwithstanding the foregoing, either party may seek injunctive or other equitable relief in the United States District Court for the Southern District of New York or the Supreme Court of the State of New York, New York County, without the requirement of posting a bond.
III. Escrow Payment Release Confirmation
We confirm that the upfront payment of Eighteen Million Dollars ($18,000,000) (the "Upfront Payment"), which was held in escrow by Velthorn National Bank, N.A. (the "Escrow Agent"), has been released to Penterra in full upon satisfaction of all closing conditions under the License Agreement, effective as of October 20, 2023.
The Upfront Payment was funded into the escrow account by Meridian on October 6, 2023, as confirmed by Velthorn National Bank's funding confirmation letter of even date (a copy of which is enclosed with this letter as item 21 of the enclosed Transaction Documents). The escrow arrangement is governed by that certain Escrow Agreement, dated as of October 2, 2023, by and among Penterra, Meridian, and Velthorn National Bank, N.A. (the "Escrow Agreement"), a fully executed copy of which is enclosed herewith as item 8.
The Escrow Agent contact for this matter is Teresa M. D'Angelo, Vice President, Escrow Services, Velthorn National Bank, N.A., located at 383 Madison Avenue, New York, NY 10179.
As a housekeeping matter, we note that the ongoing escrow agent fee under the Escrow Agreement is Fifteen Thousand Dollars ($15,000) as a flat annual fee, plus Two Thousand Five Hundred Dollars ($2,500) per quarter for account maintenance. These fees are payable jointly by Penterra and Meridian in accordance with Section 4.2 of the Escrow Agreement.
IV. Enclosed Fully Executed Transaction Documents
Set forth below is a list of all fully executed Transaction Documents being delivered to you in connection with the Closing. Unless otherwise indicated, each document listed below is enclosed in its execution version. Copies of all documents are being retained in the firm's files, and originals are being delivered under separate cover, where applicable, by overnight courier.
1. Exclusive License Agreement, dated as of October 2, 2023 (effective October 20, 2023), by and between Penterra Pharmaceuticals Corp. and Meridian Bio Therapeutics Limited.
2. Schedule A — Licensed Patents, listing seven (7) patent families, including:
• U.S. Patent Nos. 11,234,567 and 11,345,678;
• PCT/US2019/045123 national phase entries;
• CN Patent No. ZL 2020 1 0456789.0;
• JP Patent No. 7,012,345;
• KR Patent No. 10-2345678; and
• AU Patent No. 2020234567.
3. Schedule B — Licensed Know-How, describing the proprietary know-how, trade secrets, technical data, and regulatory documentation licensed to Meridian under the License Agreement.
4. Schedule C — Licensed Trademarks, identifying the PENTECLAR trademark, including U.S. Registration No. 6,789,012 and corresponding trademark applications and registrations in the Territory.
5. Schedule D — Territory, setting forth the complete list of countries and territories comprising the Territory.
6. Schedule E — Development Plan, outlining the proposed Phase III clinical development program, regulatory strategy, and associated timelines for PPC-4187 in the Territory.
7. Schedule F — MFN Pricing Methodology, detailing the methodology for calculating net prices, conducting quarterly reconciliations, and determining compliance with the most favored nation pricing clause.
8. Escrow Agreement, dated as of October 2, 2023, by and among Penterra, Meridian, and Velthorn National Bank, N.A.
9. API Supply Agreement, dated as of October 2, 2023, by and between Penterra and Meridian, providing for the supply of active pharmaceutical ingredient and reference standard at cost plus a fifteen percent (15%) markup, for an initial term of three (3) years from the Effective Date.
10. Technology Transfer Agreement, dated as of October 2, 2023, by and between Penterra and Meridian, providing for the transfer of manufacturing process know-how, analytical methods, and CMC documentation, with a completion deadline of twenty-four (24) months from the Effective Date.
11. Form of Quality Agreement, attached as an exhibit to the License Agreement, to be executed by the parties within sixty (60) days of the Effective Date (i.e., by December 19, 2023).
12. Trademark License Agreement for PENTECLAR, dated as of October 2, 2023, granting Meridian a license to use the PENTECLAR trademark in the Territory in connection with the commercialization of PPC-4187.
13. Pharmacovigilance Agreement, dated as of October 2, 2023, by and between Penterra and Meridian, establishing the parties' respective obligations with respect to adverse event reporting, safety data exchange, signal detection, and periodic safety reporting.
14. Officer's Certificate — Penterra Pharmaceuticals Corp., executed by Anita M. Fremont, Esq., General Counsel, dated October 20, 2023.
15. Officer's Certificate — Meridian Bio Therapeutics Limited, executed by David R. Cheung, Chief Executive Officer, dated October 20, 2023.
16. Secretary's Certificate — Penterra Pharmaceuticals Corp., certifying copies of resolutions of the Board of Directors authorizing the transaction, incumbency of officers, and organizational documents (including Certificate of Incorporation and Bylaws) (EIN: 22-3948175).
17. Secretary's Certificate — Meridian Bio Therapeutics Limited, certifying copies of resolutions of the Board of Directors, incumbency of officers, and constitutional documents (HK Company Registration No. 2847631).
18. Good Standing Certificate — Penterra Pharmaceuticals Corp., issued by the Secretary of State of the State of Delaware, obtained October 12, 2023.
19. Legal Opinion — Calderwood & Harkness LLP to Meridian Bio Therapeutics Limited, dated October 20, 2023, delivered on behalf of Penterra in accordance with Section 8.2(d) of the License Agreement.
20. Legal Opinion — Lam, Cheung & Firth LLP to Penterra Pharmaceuticals Corp., dated October 20, 2023, delivered on behalf of Meridian in accordance with Section 8.3(d) of the License Agreement.
21. Escrow Funding Confirmation Letter — Velthorn National Bank, N.A., dated October 6, 2023, confirming receipt of $18,000,000 from Meridian into the escrow account.
Please review the enclosed documents carefully and contact us promptly if you identify any discrepancies or if any documents appear to be missing.
V. Antitrust and Regulatory Clearance
We confirm that no filing under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), was required in connection with the Closing. The transaction constitutes a pure intellectual property license and does not involve the acquisition of voting securities, assets, or a controlling interest in any entity. Moreover, the transaction does not meet the applicable HSR size-of-transaction thresholds. Our analysis in this regard was confirmed as of October 5, 2023, and no objection or inquiry from the U.S. Federal Trade Commission or the Antitrust Division of the U.S. Department of Justice has been received.
We further confirm that a filing with the Committee on Foreign Investment in the United States ("CFIUS") is not applicable to this transaction, as the License Agreement does not involve a foreign acquisition of, or investment in, a U.S. business. The transaction is structured as an outbound license of intellectual property rights by a U.S. licensor, and no change of control over Penterra or any of its subsidiaries is contemplated.
With respect to regulatory filings in the People's Republic of China, we note that Meridian should separately evaluate whether a Technology Import Contract filing is required under the PRC Technology Import and Export Administration Regulations (技术进出口管理条例) in connection with the importation of the licensed technology into the PRC through Meridian Pharma (Shanghai) Co., Ltd., Meridian's wholly foreign-owned enterprise in the PRC. This analysis should be conducted by Meridian's PRC counsel in light of the specific categories of technology being licensed and transferred.
Additionally, Meridian is solely responsible for obtaining all required PRC outbound remittance approvals in connection with the payment of milestone payments, royalties, and any other amounts due to Penterra under the License Agreement, including compliance with the State Administration of Foreign Exchange ("SAFE") regulations. We understand that such payments will be routed through Meridian Pharma (Shanghai) Co., Ltd., and Meridian should ensure that all necessary foreign exchange registrations and tax clearance certificates are obtained in advance of each payment.
VI. Post-Closing Obligations and Deadlines
Set forth below is a summary of the principal post-closing obligations of the parties under the License Agreement and the ancillary Transaction Documents, together with the associated deadlines. We will be maintaining a detailed post-closing obligations tracker and will proactively advise Penterra as deadlines approach.
A. Quality Agreement Execution
The form of Quality Agreement is attached as an exhibit to the License Agreement and must be executed by both parties no later than December 19, 2023 (sixty (60) days from the Effective Date). The Quality Agreement will govern the supply of API by Penterra to Meridian, including specifications for the active pharmaceutical ingredient, quality standards, change control procedures, deviation handling protocols, stability testing requirements, and obligations relating to regulatory inspections by the U.S. Food and Drug Administration, China's National Medical Products Administration, Japan's Pharmaceuticals and Medical Devices Agency, and other applicable regulatory authorities. We recommend that Penterra's quality assurance team begin substantive discussions with Meridian's quality counterparts promptly to ensure timely execution.
B. Technology Transfer
Under the Technology Transfer Agreement, Penterra is obligated to transfer manufacturing process know-how, analytical methods (including HPLC and dissolution methods), formulation parameters, and Chemistry, Manufacturing, and Controls ("CMC") documentation to Meridian's designated contract manufacturing organization(s) in the Asia-Pacific region. The deadline for completion of all technology transfer activities is October 20, 2025 (twenty-four (24) months from the Effective Date).
Penterra's current contract manufacturer for PPC-4187 is Alkerra Manufacturing Inc., located at 5200 Meridian Parkway, Research Triangle Park, NC 27713. The technology transfer will be coordinated by the following key personnel:
• Penterra: Dr. Priya Nandakumar, Vice President, intellectual Property, and Leland J. Cho, Senior Vice President, Business Development.
• Meridian: Dr. Kenji Morimoto, Chief Manufacturing Officer.
We recommend that the parties schedule an initial technology transfer kick-off meeting within the first thirty (30) days following the Effective Date to establish a detailed project plan, identify key milestones, and allocate resources.
C. Joint Steering Committee (JSC) Formation
Pursuant to Article 4 of the License Agreement, the parties are required to establish a Joint Steering Committee (the "JSC") consisting of three (3) representatives from each party. The JSC is responsible for overseeing all development, regulatory, and commercialization activities with respect to PPC-4187 in the Territory, and shall meet on a quarterly basis (or more frequently as mutually agreed). The initial organizational meeting of the JSC should be scheduled promptly. We recommend that Penterra designate its three JSC representatives and communicate such designations to Meridian within the next two (2) weeks.
D. Joint Patent Committee (JPC) Formation
In addition to the JSC, Article 10 of the License Agreement requires the establishment of a Joint Patent Committee (the "JPC"), consisting of two (2) representatives from each party. The JPC is charged with overseeing patent prosecution, maintenance, defense, and enforcement activities with respect to the Licensed Patents in the Territory. Penterra retains the tie-breaking vote on all matters relating to global intellectual property strategy, while Meridian holds the tie-breaking vote on Territory-specific commercialization matters, subject in all cases to compliance with the MFN pricing provisions. We recommend that Dr. Nandakumar serve as one of Penterra's representatives on the JPC.
E. IP Recordation
As noted above, all patent and trademark assignment recordations across the Territory jurisdictions were completed as of October 18, 2023, which was the final closing condition to be satisfied. We confirm that recordation filings have been completed and accepted in all applicable intellectual property offices, including the China National intellectual Property Administration (CNIPA), the Japan Patent Office (JPO), the Korean intellectual Property Office (KIPO), IP Australia, and the intellectual Property Office of Singapore (IPOS), among others. Whitford & Cascade Insurance Brokers, under the direction of Dr. Alan J. Whitford, assisted with the preparation and filing of all patent recordation filings across the Territory. Confirmation of recordation from each jurisdiction has been received and copies are maintained in our files.
F. MFN Pricing Reconciliation
Quarterly MFN pricing reconciliation is required within forty-five (45) days following the end of each calendar quarter, in accordance with Section 7.9 and Schedule F of the License Agreement. The first reconciliation will apply to the calendar quarter in which the first commercial sale of PPC-4187 occurs in any country within the Territory. We will advise Penterra in advance of the first applicable reconciliation date once Meridian provides notice of first commercial sale.
G. API Supply
Under the API Supply Agreement, Penterra is obligated to supply active pharmaceutical ingredient and reference standard to Meridian at cost plus a fifteen percent (15%) markup for an initial term of three (3) years from the Effective Date. Meridian is required to submit rolling forecasts and purchase orders in accordance with the terms of the API Supply Agreement. Penterra's supply obligations are to be coordinated through Alkerra Manufacturing Inc. during the initial term, pending completion of the technology transfer to Meridian's designated APAC manufacturer.
H. Pharmacovigilance. Adverse event reporting and safety data exchange obligations under the Pharmacovigilance Agreement are effective immediately as of the Effective Date. Both parties are required to comply with ICH E2B(R3) and ICH E2D standards for individual case safety report transmission and periodic safety reporting. Penterra's drug safety team should ensure that the required data exchange mechanisms and secure transmission systems are operational and that designated safety contacts have been identified and communicated to Meridian's pharmacovigilance department.
I. Withholding Tax and Transfer Pricing
Royalty and milestone payments under the License Agreement are subject to applicable withholding taxes. We note the following considerations:
• Direct payments from Meridian Bio Therapeutics Limited (Hong Kong) to Penterra should be subject to a zero percent (0%) withholding tax rate under the U.S.–Hong Kong arrangement, subject to confirmation that no "permanent establishment" issues arise.
• Payments routed through Meridian Pharma (Shanghai) Co., Ltd. will be subject to a ten percent (10%) PRC withholding tax on royalty and milestone payments, unless such rate is reduced pursuant to the applicable tax treaty between the PRC and Hong Kong (which may provide for a reduced rate of seven percent (7%) for qualifying royalties). Meridian should consult with its PRC tax advisors to optimize the payment routing structure and ensure that all required PRC tax filings and clearance certificates are obtained.
With respect to transfer pricing, Penterra should maintain contemporaneous transfer pricing documentation supporting the arm's-length nature of the cost-plus-fifteen-percent (15%) pricing under the API Supply Agreement, consistent with U.S. Treasury Regulations under Section 482 of the Internal Revenue Code and the OECD Transfer Pricing Guidelines. Our tax specialist, Sylvia Hartwell (Partner, Tax Practice, Calderwood & Harkness LLP), is available to provide ongoing guidance on tax structuring and compliance matters in connection with the transaction.
Meridian is responsible for all Territory-based value-added taxes (VAT), goods and services taxes (GST), and analogous indirect taxes applicable to the importation, manufacture, and sale of PPC-4187 in the Territory.
We note that Clarendon Bates LLP (Robert F. Stanhope, CPA, Partner) has been consulted regarding the ASC 606 revenue recognition treatment of milestone payments under the License Agreement, and Penterra's finance team should coordinate with Mr. Stanhope to ensure that the accounting treatment is appropriately reflected in Penterra's financial statements for the fiscal year ending December 31, 2023, and subsequent periods.
VII. Counterparty Counsel and Advisors
For your reference, the following firms served as counsel and advisors to Meridian in connection with the transaction:
Meridian's Legal Counsel: Lam, Cheung & Firth LLP
• Lead Partner: Jonathan M. Firth, Esq.
• Associate: Rebecca S. Liang, Esq.
• Hong Kong Office: 25/F, Jardine House, 1 Connaught Place, Central, Hong Kong SAR
• New York Office: 1345 Avenue of the Americas, 22nd Floor, New York, NY 10105
Meridian's Financial Advisor: Eastbridge Partners Limited
• Managing Director: Simon K.P. Woo
• Address: 12/F, Two Exchange Square, 8 Connaught Place, Central, Hong Kong SAR
Meridian's Japan Regulatory Counsel: Nakamura & Takeda Law Offices
• Lead Counsel: Yuki Nakamura
• Address: Marunouchi Park Building, 2-6-1 Marunouchi, Chiyoda-ku, Tokyo 100-6921, Japan
Meridian's Product Liability and Clinical Trial Insurer: Jade Dragon Insurance Limited
• Underwriter: Christine A. Lo
• Address: Central, Hong Kong SAR
The following firm served as Penterra's financial advisor:
Penterra's Financial Advisor: Prescott Hale & Co. LLC
• Senior Managing Director: Victoria R. Chen
• Address: 277 Park Avenue, 40th Floor, New York, NY 10172
VIII. Calderwood & Harkness LLP Engagement Team
The following members of Calderwood & Harkness LLP comprised the engagement team for this transaction:
• Marcus Delgado — Responsible Partner, intellectual Property
• Catherine Bloom — Billing Partner, intellectual Property
• Peter Vassiliev — Lead Associate, intellectual Property
• Wendy Schultz — Working Associate, intellectual Property
• Sylvia Hartwell — Specialist Partner, Tax
Our firm remains available to provide ongoing counsel to Penterra with respect to all post-closing obligations, JSC and JPC governance matters, patent prosecution coordination in the Territory, MFN pricing compliance, technology transfer milestones, and any disputes that may arise under the License Agreement or any of the ancillary Transaction Documents.
IX. Fee and Billing Matters
We will be issuing a final invoice for all professional fees and disbursements incurred through the Closing Date in accordance with the terms of our engagement letter dated July 10, 2023. Based on the scope of work performed, we estimate that total fees for the engagement will fall within the range of Eight Hundred Fifty Thousand Dollars ($850,000) to One Million One Hundred Thousand Dollars ($1,100,000), calculated on the basis of blended hourly rates as set forth in the engagement letter. Any questions regarding billing should be directed to Catherine Bloom, Billing Partner, at (212) 554-7145 or cbloom@calderwoodharkness.com.
X. Closing Remarks
On behalf of the entire Calderwood & Harkness team, we extend our sincere congratulations to Penterra on the successful closing of this transaction. The out-license of PPC-4187 to Meridian represents a significant milestone in Penterra's pipeline monetization strategy and provides a compelling pathway for the commercialization of Penteracitinib across the Asia-Pacific region. This transaction meaningfully enhances Penterra's non-dilutive funding profile while preserving the company's strategic rights in the United States, Europe, and other major markets.
We are proud to have served as your counsel in connection with this transaction and look forward to continuing to support Penterra in the post-closing phase. As noted above, we will maintain a comprehensive post-closing obligations tracker and will proactively advise you and your team as key deadlines approach. Please do not hesitate to contact me or any member of the engagement team with any questions or if we can be of further assistance.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Marcus Delgado Partner Calderwood & Harkness LLP 600 Lexington Avenue, 30th Floor New York, NY 10022 Telephone: (212) 554-7112
Email: mdelgado@calderwoodharkness.com
cc:
Dr. Raymond K. Ostrowski, Chief Executive Officer, Penterra Pharmaceuticals Corp. Leland J. Cho, Senior Vice President, Business Development, Penterra Pharmaceuticals Corp. Dr. Priya Nandakumar, Vice President, intellectual Property, Penterra Pharmaceuticals Corp. Garrett T. Holloway, Chief Financial Officer, Penterra Pharmaceuticals Corp. Catherine Bloom, Calderwood & Harkness LLP Peter Vassiliev, Calderwood & Harkness LLP Wendy Schultz, Calderwood & Harkness LLP Sylvia Hartwell, Calderwood & Harkness LLP
Enclosures: As listed in Section IV above (21 items)
Annual Net Sales Tier | Royalty Rate
Net sales ≤ $50,000,000 | 8%
Net sales > $50,000,000 – $150,000,000 | 11%
Net sales > $150,000,000 | 14%

PRIVILEGED & CONFIDENTIAL ATTORNEY-CLIENT COMMUNICATION

CALDERWOOD & HARKNESS LLP

Record

Parties

Dates

Amounts