ENTROPY NEURODYNAMICS LIMITED — Capital/Financing Update 2023

Mar 8, 2023

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ASX Announcement

Melbourne, Australia, 9 March 2023

Exopharm to Receive $1 million from the Issue of Convertible Notes

Highlights:

• Company has subscriptions for a total of $1 million (before costs) in $1 convertible notes

• The Company has received the subscription funds

• Funds will be used to provide working capital and extend cash runway

• Update to terms of convertible notes

Further to its announcement of 13 February 2023, genetic medicine and exosome-based drug-delivery company Exopharm Limited (ASX:EX1) is pleased to advise that it has completed the Convertible Note (CN) subscription and issue process and that the CN subscription was over subscribed, with the amount extended to $1 million.

The Convertible Notes have been issued today to professional, sophisticated and other exempt investors who are not related parties of the Company under Convertible Note Subscription Agreements, with the main terms being:

• Subscribers must be exempt investors and not a person to whom listing rule 10.11 may apply;

• Notes cannot be transferred or sold except where the purchaser falls under the Corporations Act 2001 sections 708 or 708A exemptions;

• Conversion price applicable to converting the CN to EX1 shares is $0.008 (0.8 cents);

• Conversion is subject to the Company obtaining all necessary legal, regulatory and shareholder approvals;

• Subject to obtaining the above approvals:

• The notes may be converted by the holder between 1 May 2023 and the day 3 months before the maturity date (9 December 2023);

• The notes will automatically convert upon at the completion of the anticipated Rights Issue announced to ASX on 13 February 2023;

• The maturity date of the notes is 9 March 2024 (the first anniversary of the issue date). Notes which have not been converted or redeemed will be redeemed on earlier of the maturity date or the sale of the Company’s main undertaking or major asset;

• The notes have nil interest rate; and

EXOPHARM LIMITED ACN: 163 765 991 ASX:EX1 Address: Level 17, 31 Queen Street Melbourne 3000 Telephone: 03 9111 0026 Email: info@exopharm.com Web: www.exopharm.com

• The notes are unsecured (in the announcement of 13 February 2023 it was anticipated that the notes would be secured over the Company's intellectual property (IP), which is no longer the case).

The above is provided as a summary of key points. Attached as Appendix A is a copy of the CN Subscription Agreement which contains the full terms of the notes.

Dr Ian Dixon, CEO & Managing Director of Exopharm said “This additional funding extends the cash runway and will allow us to continue on the pathway to realise financial value from our exosomes assets with further reductions in operating costs.”

Alto Capital (ACNS Markets Pty Ltd) and Canary Capital Pty Ltd acted as joint lead managers of the note issue and have been engaged to act as joint lead managers of the anticipated Rights Issue.

The Company will arrange to hold general meetings seeking shareholder approval to permit the notes to be converted. Currently a meeting is anticipated to be held at about the end of April 2023. The Company anticipates holding further meetings to seek further approvals to maintain the ability for the notes to convert.

Further announcements will be made regarding seeking shareholder approvals (including releasing copies of the applicable notice(s) of meeting(s)) and the anticipated Rights Issue (including a timetable and copies of the offer materials).

An Appendix 3G and convertible note cleansing notice be released in conjunction with this announcement.

By the Managing Director – this announcement has been authorised for release by the Managing Director.

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COMPANY AND MEDIA ENQUIRIES:

Join our mailing list to receive updates: http://exo.ph/ExoMails www.exopharm.com P: +61 (0)3 9111 0026

Ian Dixon Managing Director Tel: +61 418 561 907 ian.dixon@exopharm.com

ABOUT EXOPHARM

Exopharm (ASX:EX1) is a leader in exosome technology and holds a portfolio of intellectual property and know-how related to exosomes and the manufacture of exosomes.

Exosomes could be an alternative means of drug-delivery inside the body, alongside technologies such as lipid nanoparticles (LNP), cell-penetrating peptides, viral vectors and liposomes.

Exopharm’s exosome technologies solve important needs for the success of exosome medicines – LEAP manufacturing technology, LOAD API loading technologies and EVPS tropism technologies.

Exosome-based medicines could improve the treatment of many chronic or inherited medical conditions.

Exopharm is making its proprietary technologies available to pharmaceutical and biotechnology companies that want to harness exosome-delivery for their own products.

FORWARD LOOKING STATEMENTS

This announcement contains forward-looking statements which incorporate an element of uncertainty or risk, such as ‘intends’, ‘may’, ‘could’, ‘believes’, ‘estimates’, ‘targets’, ‘aims’, ‘plans’ or ‘expects’. These statements are based on an evaluation of current corporate estimates, economic and operating conditions, as well as assumptions regarding future events. These events are, as at the date of this announcement, expected to take place, but there cannot be any guarantee that such events will occur as anticipated or at all given that many of the events are outside of Exopharm’s control or subject to the success of the Development Program. Furthermore, the Company is subject to several risks as disclosed in the Prospectus dated 6 November 2018.

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Appendix A: Convertible Note Subscription Agreement

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CONVERTIBLE NOTE SUBSCRIPTION AGREEMENT

Exopharm Limited

Exopharm Limited

issuer

The person(s) specified in item 1 of the Contract Particulars.

subscriber

Level 26, 140 St Georges Terrace Perth WA 6000 PO Box 8098 Cloisters Square Perth WA 6850

Ref: [BLA/EST/001]

Contact: Jamie Ogilvie jamie.ogilvie@blackwall.legal +61 409 788 874

www.blackwall.legal

CONVERTIBLE NOTE SUBSCRIPTION AGREEMENT Exopharm Limited

Contents

	Contents
	PARTIES ................................................................................................................................. 1
	CONTRACT PARTICULARS ............................................................................................ 1
1.	SUBSCRIPTION FOR CONVERTIBLE NOTES ........................................................ 2
1.1.	Agreement to subscribe ......................................................................................................... 2
1.2.	No separate application ......................................................................................................... 2
1.3.	Terms of convertible notes ................................................................................................... 2
1.4.	Payment of subscription amount ......................................................................................... 2
2.	ISSUE OF CONVERTIBLE NOTES .............................................................................. 2
2.1.	Conditions precedent to issue .............................................................................................. 2
2.2.	Issue of convertible notes ..................................................................................................... 3
2.3.	Scale back or termination ...................................................................................................... 3
3.	WARRANTIES AND ACKNOWLEDGEMENTS ...................................................... 3
3.1.	Issuer warranties ..................................................................................................................... 3
3.2.	Subscriber warranties ............................................................................................................. 4
3.3.	Mutual warranties ................................................................................................................... 5
3.4.	Reliance .................................................................................................................................... 5
3.5.	Issuer undertakings ................................................................................................................. 6
3.6.	Subscriber acknowledgements .............................................................................................. 6
3.7.	Implied terms .......................................................................................................................... 8
4.	GENERAL MATTERS ........................................................................................................ 8
4.1.	Further acts and documents ................................................................................................. 8
4.2.	Applicable law and jurisdiction ............................................................................................. 8
4.3.	Notices ..................................................................................................................................... 9
4.4.	Rights of third parties .......................................................................................................... 10
4.5.	Variations and assignment................................................................................................... 10
4.6.	Counterparts .......................................................................................................................... 10
4.7.	Expenses ................................................................................................................................ 10
4.8.	Entire agreement .................................................................................................................. 10
4.9.	Severance and enforceability ............................................................................................... 11
4.10.	No merger.............................................................................................................................. 11
4.11.	Waivers and consents ........................................................................................................... 11
4.12.	Indemnities ............................................................................................................................ 11
4.13.	Interpretation ........................................................................................................................ 12
	SCHEDULE 1 – GLOSSARY .......................................................................................... 14
	SCHEDULE 2 – NOTE TERMS ..................................................................................... 17
	SIGNING PAGE ................................................................................................................ 24

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CONVERTIBLE NOTE SUBSCRIPTION AGREEMENT Exopharm Limited

Convertible Note Subscription Agreement

Entered into on February 2023

Parties

issuer Name: Exopharm Limited ACN 163 765 991 Address : Suite 201/697 Burke Road, Camberwell 3124 Email : investors@exopharm.com Contact : Mr David Franks subscriber The person(s) specified in item 1 of the Contract Particulars.

Contract Particulars

1. subscriber Name : ACN : Address : Email : Contact :

2. convertible

XX,XXX convertible notes , each having a face value of $1.00.

notes

3. The sum of $XX,XXX subscription amount

4. sunset date 3 March 2023

Background

A. The directors of the issuer have the power under the issuer’s constitution to borrow money and issue securities in the issuer .

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CONVERTIBLE NOTE SUBSCRIPTION AGREEMENT Exopharm Limited

• B. The directors of the issuer have resolved to create and issue the convertible notes .

• C. The parties now enter this agreement to record the terms and conditions on which the convertible notes are to be subscribed for and issued.

Operative Terms

In consideration for the mutual covenants hereafter set forth, the parties agree as follows:

1. SUBSCRIPTION FOR CONVERTIBLE NOTES

1.1. Agreement to subscribe

The subscriber agrees to subscribe for, and the issuer agrees to issue, the convertible note s for the subscription amount , on and subject to the terms and conditions of this agreement .

1.2. No separate application

This agreement serves as an application by the subscriber for the issue of the convertible note s.

1.3. Terms of convertible notes

• (a) Each convertible note is issued on the note terms and will, from the issue date , rank equally with all other convertible notes .

• (b) Each party must comply with the note terms in relation to each convertible note .

1.4. Payment of subscription amount

The subscriber must pay the subscription amount to the issuer , within 5 business days of this agreement , by way of electronic funds transfer into a bank account nominated by the issuer , or by such other method of payment approved by the issuer .

2. ISSUE OF CONVERTIBLE NOTES

2.1. Conditions precedent to issue

The issue of the convertible note s is subject to and conditional on:

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CONVERTIBLE NOTE SUBSCRIPTION AGREEMENT Exopharm Limited

• (a) the issuer obtaining subscriptions for convertible notes (including under this agreement ) totalling at least $600,000 on or before the sunset date ;

• (b) shares continuing to be quoted and trading on ASX ; and

• (c) the issuer not being subject to any actual or anticipated material legal disputes,

(together, issue conditions ).

2.2. Issue of convertible notes

Subject to the issuer having received the subscription amount in full, the issuer must:

• (a) issue the convertible note s to the subscriber within 5 business days of the issue conditions being satisfied;

• (b) enter the subscriber ’s details on the issuer ’s register of convertible note holders ( register ); and

• (c) deliver to the subscriber a certificate for the convertible note s, setting out the number, face value and maturity date of convertible note s issued to the subscriber

2.3. Scale back or termination

• 2.3.1. At any time prior to the issue date , the issuer may, in its absolute discretion:

• (a) scale back the number of convertible notes to be issued to the subscriber ; or

• (b) terminate this agreement .

• 2.3.2. In the event that the issuer gives notice to the subscriber of the application of clause 2.3.1, the subscription amount or portion thereof (as the case may be) will be refunded to the subscriber within 5 business days .

WARRANTIES AND ACKNOWLEDGEMENTS

3.1. Issuer warranties

The issuer warrants to the subscriber that the following statements are true and correct in all material respects, and not misleading in any material respect, at the date of this agreement and at the date the convertible note s are issued (except where a statement is expressed to be given on a particular date, in which case that statement is given on that date only):

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CONVERTIBLE NOTE SUBSCRIPTION AGREEMENT Exopharm Limited

• (a) ( approvals ) subject to the terms of this agreement , the issuer warrants to the subscriber that the issuer has obtained all approvals and consents of its shareholders necessary to issue the convertible note s, including pursuant to the issuer ’s constitution; and

• (b) ( equal ranking ):

• (i) all convertible note s will rank equally with all other convertible notes then on issue; and

• (ii) all conversion shares issued on conversion of convertible note s will, from the time of issue, be fully paid and rank equally with all other shares then on issue.

3.2. Subscriber warranties

The subscriber warrants to the issuer that the following statements are true and correct in all material respects, and not misleading in any material respect, at the date of this agreement and at the date the convertible note s are issued (except where a statement is expressed to be given on a particular date, in which case that statement is given on that date only):

• (a) ( investor type ) the subscriber :

• (i) is an exempt investor ; and

• (ii) is not a person to whom listing rule 10.11 may apply (or an associate of such a person).

• (b) ( purpose of subscription ) the subscriber is not subscribing for the convertible note s, or shares issued upon conversion of convertible note s, with the purpose of:

• (i) selling or transferring all or any of them; or

• (ii) granting, issuing or transferring interests in or options over them,

except where disclosure to investors is not required under sections 708 or 708A of the Corporations Act ; and

• (c) ( trust warranties ) if the subscriber enters this agreement in the capacity as a trustee of a trust ( trust )

• (i) the subscriber is the only trustee of the trust ;

• (ii) action is not pending nor threatened to remove the subscriber as trustee of the trust ;

• (iii) a default does not subsist under the terms of the trust ;

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CONVERTIBLE NOTE SUBSCRIPTION AGREEMENT Exopharm Limited

• (iv) the subscriber has full power and authority to enter into and perform this agreement under the terms of the trust ; and

• (v) the subscriber has a right of indemnity out of the trust ’ s assets for all liabilities incurred by it under this agreement and the assets of the trust are sufficient to satisfy that right.

3.3. Mutual warranties

Each party ( warrantor ) warrants to the other party that the following statements are true and correct in all material respects, and not misleading in any material respect, at the date of this agreement and at the date the convertible note s are issued (except where a statement is expressed to be given on a particular date, in which case that statement is given on that date only):

• (a) ( incorporation ) if the warrantor is a body corporate:

• (i) it is incorporated, registered (or taken to be registered) and validly existing under the laws of the jurisdiction of its incorporation;

• (ii) the signing, delivery and performance by the warrantor of this agreement does not and will not violate, breach, or result in a contravention of the warrantor ’s constitution or other constituent documents;

• (b) ( power and authority ) the warrantor has full power, legal capacity and authority to enter into and perform the warrantor ’s obligations under this agreement in accordance with its terms;

• (c) ( approvals ) the warrantor has taken all necessary actions and obtained all necessary approvals to authorise the warrantor ’s execution, delivery and performance of this agreement (if any);

• (d) ( binding obligations ) this agreement constitutes legal, valid and binding obligations on the warrantor and is enforceable in accordance with its terms, subject to laws generally affecting creditors’ rights and to principles of equity;

• (e) ( no breach ) the signing, delivery and performance by the warrantor of this agreement does not and will not violate, breach, or result in a contravention of any applicable law by the warrantor ; and

• (f) ( solvency ) the warrantor is not subject to an insolvency event , and the warrantor not aware of any insolvency event pending in relation to the warrantor .

3.4. Reliance

Each party acknowledges that, in relation to the warranties given in this agreement by that party , the other party has entered this agreement and will perform the other party ’s

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CONVERTIBLE NOTE SUBSCRIPTION AGREEMENT Exopharm Limited

obligations under this agreement (including to complete each transaction contemplated by this agreement ) in reliance upon such warranties.

3.5. Issuer undertakings

During the term , the issuer undertakes:

• (a) to use its best endeavours to complete:

• (i) the entitlement issue ; or

• (ii) a material capital raise ; and

• (b) that the issuer will not:

• (i) declare or pay a dividend or carry out a return of capital; or

• (ii) lend any money to any third party (including any related entity

until all convertible notes have been converted or redeemed.

3.6. Subscriber acknowledgements

The subscriber acknowledges and agrees that:

• (a) an investment in the issuer is highly speculative and involves risks, including the following:

• (i) shareholders in the issuer may not receive dividends or dividends may be reduced;

• (ii) the value of shares or share-based securities in the issuer may fall;

• (iii) there may not be any market for the issuer ’s shares and therefore the convertible note s and the shares issued on their conversion may constitute an illiquid investment;

• (iv) there is no guarantee that the subscriber will be able to sell shares issued on the conversion of the convertible note s for an amount greater than or equal to the subscription amount ; and

• (v) the value of convertible notes and shares may be impacted by both internal and external factors such as the issuer ’s profitability, expected future profits, dividend policy, balance sheet and marketing success, as well as the general economic outlook (domestic and international), government fiscal, monetary and regulatory policies, changes in interest rates, rates of inflation, currency exchange rates, commodity prices, financial market

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CONVERTIBLE NOTE SUBSCRIPTION AGREEMENT Exopharm Limited

volatility, acts of terrorism, the occurrence of hostilities or natural disasters, other force majeure events, and industry developments;

• (b) any investor presentation materials provided by the issuer to the subscriber before this agreement ( investor materials ) do not purport to contain all of the information that a prospective investor may require to make an evaluation of the issuer , the convertible note s or shares and the issuer shall not be obliged to update any materials or information unless required to be released to ASX (in which case the Issuer will only be obliged to make such a release to ASX and not be required to inform subscriber directly.)

• (c) nothing in any investor materials is, or is intended to be, a recommendation to invest in the issuer ;

• (d) the issuer does not purport to give financial or investment advice in relation to the convertible note s;

• (e) account has not been taken of the objectives, financial situation or needs of the subscriber in preparing any investor materials ;

• (f) investor materials may contain forward-looking statements which may be predictive in nature and incorporate an element of uncertainty or risk, such as ‘intends’, ‘may’, ‘could’, ‘believes’, ‘estimates’, ‘targets’ or ‘expects’, in respect of which there cannot be any guarantee that such events will occur as anticipated, or at all, given that many of the events are outside of the issuer ’s control;

• (g) the subscriber has been given the opportunity to obtain independent professional advice (e.g. legal, accounting, financial, tax) before entering into this agreement ;

• (h) the subscriber has made, and it relies upon, its own research, enquiries and analysis in relation to the issuer and the convertible note s, except to the extent expressly set out in this agreement (including in warranties given by the issuer );

• (i) the warranties given by the issuer are the only warranties or representations that the subscriber requires, and on which the subscriber has relied, in deciding whether to enter into this agreement and subscribe for the convertible note s; and

• (j) the issuer and any person connected with it is not liable to make any payment (whether by way of payment of damages or otherwise) for any claim to the extent that any loss or damage claimed by the subscriber :

• (i) is contingent, prospective, not ascertained or ascertainable, unless and until such liability becomes an actual liability and is due and payable;

• (ii) could only have been avoided if the issuer breached its obligations at law; or

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CONVERTIBLE NOTE SUBSCRIPTION AGREEMENT Exopharm Limited

• (iii) apart from such change already announced, but not enacted, as at date of this agreement , arises in relation to:

• (1) a change in the judicial interpretation of the law in any jurisdiction after the date of this agreement ; or

• (2) a change in the administrative practice of any governmental agency after the date of this agreement , including any change which takes effect retrospectively;

• (iv) if a legal cost, is an unreasonable legal cost; or

• (v) can be remedied by the issuer , provided it is remedied to the satisfaction of the subscriber , acting reasonably, within 21 days after the issuer receives written notice of the claim .

3.7. Implied terms

All terms, conditions, warranties and guarantees (as applicable) which would, but for this clause 3.7, be implied into this agreement by operation of law are excluded to the maximum extent permitted by law.

4. GENERAL MATTERS

4.1. Further acts and documents

Each party undertakes and agrees to do or to procure to be done all such acts (including the execution of any appropriate documents in form and content reasonably satisfactory to every party ) as may be necessary, subject to this agreement , to consummate the transaction or transactions contemplated herein and to give effect to the intent and purposes of this agreement fully and effectively.

4.2.

Applicable law and jurisdiction

• 4.2.1. This agreement , and any dispute or claim arising out of or in connection with it or its formation (including all non-contractual disputes or claims), shall be governed by, construed, interpreted and applied in accordance with the law applying in Western Australia for the time being, save for any such laws as to conflicts or choice of law which would refer construction or interpretation to the substantive law of another jurisdiction.

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CONVERTIBLE NOTE SUBSCRIPTION AGREEMENT Exopharm Limited

4.2.2. Each party irrevocably:

• (a) submits to the non-exclusive jurisdiction of the courts of Western Australia and any courts competent to determine appeals from those courts, with respect to any proceedings that may be brought at any time relating to this agreement ; and

• (b) waives any objection that it may now or in the future have to the venue of any proceedings, and any claim that it may now or in the future have that any proceedings have been brought in an inconvenient forum, if that venue falls within paragraph (a).

4.3. Notices

• 4.3.1. Each communication (including each notice, consent, approval, request and demand) under or in connection with this agreement :

• (a) must be in writing, in the English language;

• (b) must be addressed in accordance with the details set out in page 1 of this agreement (or as otherwise notified by that party to every other party from time to time):

• (c) must be signed by the party making it or (on that party ’s behalf) by the solicitor for or any attorney, director, secretary or authorised agent of that party ;

• (d) must be delivered by hand, or posted to the address (provided that any communication to be posted must be posted from within the jurisdiction in which it is to be delivered), or sent to the email address of the addressee in accordance with clause 4.3.1(b); and

• (e) is taken to be received by the addressee:

  • (i) (in the case of post) on the fifth day after the date of posting;

  • (ii) (in the case of email) at the time that the email is ready for collection via the recipient's or the recipient's internet service provider's mail server; and

  • (iii) (in the case of delivery by hand) on delivery,

but if the communication is taken to be received on a day that is not a business day , it is taken to be received at 9.00am on the next business day .

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CONVERTIBLE NOTE SUBSCRIPTION AGREEMENT Exopharm Limited

4.4. Rights of third parties

• 4.4.1. To the extent permitted by law, a person who is not a party to this agreement shall have no right to enforce any term of this agreement under any legislation in any jurisdiction, except where otherwise expressly set out in this agreement .

• 4.4.2. Notwithstanding any rights of persons who are not parties to enforce this agreement , this agreement may be:

• (a) varied by the parties in accordance with clause 4.5.1 without the consent of any person who is not a party ; and

• (b) terminated by consent of the parties , and in any other manner and circumstance in which termination is allowed, without the consent of any person who is not a party .

4.5.

Variations and assignment

• 4.5.1. Subject to paragraph 2.5 of the note terms , this agreement may only be varied by a document signed by or on behalf of each the parties .

• 4.5.2. This agreement is personal to the parties and, subject to paragraph 2.6 of the note terms , no party may assign or dispose of any interest in or rights under this agreement without the written consent of the other party .

4.6.

Counterparts

• 4.6.1. This agreement may be executed in any number of counterparts and by the parties on separate counterparts.

• 4.6.2. Each counterpart constitutes an original of this agreement and all together constitute one agreement.

4.7. Expenses

Except as otherwise provided in this agreement , each party must pay its own costs and expenses in connection with negotiating, preparing, executing and performing this agreement .

4.8. Entire agreement

To the extent permitted by law, in relation to its subject matter this agreement :

• (a) embodies the entire understanding between, by or of the parties , and constitutes the entire terms agreed between, by or of the parties ; and

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CONVERTIBLE NOTE SUBSCRIPTION AGREEMENT Exopharm Limited

(b) supersedes any prior written or other agreement, deed or document made between, by or of the parties .

4.9. Severance and enforceability

Any provision, or the application of any provision, of this agreement that is void, illegal or unenforceable in any jurisdiction does not affect the validity, legality or enforceability of that provision in any other jurisdiction or of the remaining provisions of this agreement in that or any other jurisdiction.

4.10. No merger

The rights and obligations of the parties under this agreement do not merge on completion of any transaction under this agreement , and survive the execution and delivery of any assignment or other document entered into for the purpose of implementing any transaction under this agreement .

4.11.

Waivers and consents

• 4.11.1. Failure to exercise or enforce, or a delay in exercising or enforcing, or the partial exercise or enforcement, of a right provided by law or under this agreement by a party does not preclude, or operate as a waiver of, the exercise or enforcement, or further exercise or enforcement, of that or any other right provided by law or under this agreement .

• 4.11.2. A waiver or consent given by a party under this agreement is only effective and binding on that party if it is given or confirmed in writing by that party .

• 4.11.3. No waiver of a breach of a term of this agreement operates as a waiver of another breach of that term or of a breach of any other term of this agreement .

• 4.11.4. A consent required under this agreement from a party may be given or withheld, or may be given subject to any conditions, as that party in its absolute discretion think fit, unless this agreement expressly provides otherwise.

4.12. Indemnities

• 4.12.1. Each indemnity in this agreement is a continuing obligation, separate and independent from the other obligations of the parties , and survives termination, completion or expiration of this agreement .

• 4.12.2. It is not necessary for a party to incur expense or to make any payment before enforcing a right of indemnity conferred by this agreement .

• 4.12.3. A party must pay on demand any amount it must pay under an indemnity in this agreement .

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CONVERTIBLE NOTE SUBSCRIPTION AGREEMENT Exopharm Limited

4.13. Interpretation

• 4.13.1. References to this agreement include the Background and all and any Schedules, Attachments, Exhibits and Annexures to it, which form part of this agreement for all purposes.

• 4.13.2. The headings in this agreement are inserted for convenience only and shall be ignored in its construction.

• 4.13.3. In this agreement , unless the context otherwise requires, references to:

• (a) clauses, recitals and schedules are, unless otherwise expressly stated, references to the clauses, recitals and schedules to or of this agreement ;

• (b) the singular shall include the plural and vice versa, and words which denote any gender include all genders;

• (c) a company shall be construed so as to include any company, corporation or other body corporate wherever and however incorporated or established;

• (d) a person includes any body corporate, unincorporated body, a corporation, association, partnership, government authority, or other legal entity;

• (e) a person includes the person’s executors, administrators, substitutes, successors and permitted assigns;

• (f) any agreement or document is a reference to the agreement or document as amended, novated, supplemented, varied or replaced from time to time, in accordance with this agreement or that other agreement or document;

• (g) statutes include statutes amending, consolidating or replacing the statutes referred to and all regulations, orders-in-council, rules, by-laws, ordinances and statutory instruments made under those statutes;

• (h) sections of statutes or terms defined in statutes refer to corresponding sections or defined terms in amended, consolidated or replacement statutes;

• (i) a statutory provision or legal term in Western Australia for any action, remedy, method of judicial proceeding, document, legal status, court, official or any other legal concept or thing shall in respect of any jurisdiction other than Western Australia be deemed to include what most nearly approximates in that jurisdiction to the statutory provision or legal term in Western Australia;

• (j) writing shall include any modes of reproducing words in a legible and nontransitory form;

• (k) the words “include”, “including”, “for example”, “such as” and other similar words or phrases shall be construed without limitation, so as not limit the

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CONVERTIBLE NOTE SUBSCRIPTION AGREEMENT Exopharm Limited

meaning of the words to which any given example relates to that example or to examples of a similar kind;

• (l) a day is to a period of time commencing at midnight in Perth, Western Australia and ending 24 hours later; and

• (m) time is to the time in Perth, Western Australia.

• 4.13.4. In the event of a conflict or an inconsistency between the main body of this agreement and any of the Schedules, the former shall prevail.

• 4.13.5. Where any word or phrase is given a defined meaning in this agreement , any other grammatical form of that word or phrase has a corresponding meaning.

• 4.13.6. No rule of construction of documents shall apply to the disadvantage of a party , on the basis that the party put forward this agreement or any relevant part of it.

• 4.13.7. When, in this agreement , a period of time dates from a given day or the day of an act or event, it is to be calculated exclusive of that day.

• 4.13.8. When, in this agreement , a day on or by which anything to be done is not a business day , that thing may be done on the next business day .

• 4.13.9. If two or more persons by this agreement undertake an obligation or give any warranty they will be bound jointly and severally unless the context requires otherwise.

• 4.13.10. The official language of this agreement is English and any interpretation or construction of this agreement shall be based solely on the English text.

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Schedule 1 – Glossary

In this agreement , unless the context otherwise requires, the parties defined commencing on Page 1 shall have the meanings ascribed to them there, and the following terms bear the following meanings:

agreement means this Convertible Note Subscription Agreement. associate has the meaning given in the Corporations Act. ASX means the Australian Securities Exchange

business day means a day (other than a Saturday or a Sunday) on which banks in Western Australia are open for normal business.

claim means a claim, demand action, suit or proceeding under law, whether present, unascertained, immediate, future or contingent.

convertible note means an unsecured convertible note issued by the issuer on the note terms .

conversion has the meaning given to that term in paragraph 4.1 of the note terms .

conversion period means the period commencing on 1 May 2023 and ending at 5.00pm WST on the date that is three months before the maturity date .

conversion price means $0.008

conversion share has the meaning given to that term in paragraph 4.4(b) of the note terms .

Contract means the information set out on page 1 of this agreement . Particulars

Corporations Act means the Corporations Act 2001 (Cth).

entitlement issue means an issue of shares in accordance with a pro rata offer to shareholders of the issuer to raise a minimum of A$1,500,000 as announced to ASX on 13 February 2023 and includes issues of shares from shortfall (if any) in acceptances and application for additional shares by eligible shareholders where permitted by the listing rules.

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CONVERTIBLE NOTE SUBSCRIPTION AGREEMENT – Exopharm Limited Schedule 1 – Glossary

exempt investor means a “sophisticated investor”, “experienced investor”, or “professional investor” for the purposes of section 708(8), section 708(10) or section 708(11) of the Corporations Act respectively.

  - **face value** means the face value of a _convertible note_ , as specified in paragraph 2.3 of the _note terms_ .

• governmental means any federal, state, territory or local government, or any ministry, agency department, court, commission, tribunal, statutory body, board, agency, instrumentality, political subdivision or similar entity.

• insolvency event means, in relation to a party ( relevant party ), means any one or more of the following:

   - (a) a ‘controller’ (as defined in the _Corporations Act_ ), administrator, liquidator, provisional liquidator, bankruptcy trustee or similar officer is appointed to the _relevant party_ or any of the _relevant party_ ’s assets;
  
   - (b) an application is made to a court for an order to appoint a person described in paragraph (a) of this definition and that application is not permanently stayed, withdrawn or dismissed within 30 days;
  
   - (c) the _relevant party_ enters into, or resolves to enter into, a deed of company arrangement, bankruptcy, a scheme of arrangement, or a compromise or composition with any class of creditors, other than for a solvent reconstruction;
  
   - (d) a resolution is passed or an order is made for the winding up or dissolution of the _relevant party_ ;
  
   - (e) the _relevant party_ ceases to (or is unable to) pay its creditors (or any class of them) in the ordinary course of business, or announces its intention not to pay its creditors;
  
   - (f) the _relevant party_ is (or states that it is) insolvent or is deemed to be insolvent under relevant insolvency or bankruptcy law;
  
   - (g) the _relevant party_ is declared bankrupt under relevant insolvency or bankruptcy law; or
  
   - (h) anything having a substantially similar effect to any of the events specified in paragraphs (a) to (g) of this definition happens under the law of any applicable jurisdiction.
  

issue conditions has the meaning given to that term in clause 2.1.

• issue date means the date of issue of the convertible notes .

listing rules means the listing rules of ASX .

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CONVERTIBLE NOTE SUBSCRIPTION AGREEMENT – Exopharm Limited Schedule 1 – Glossary

material capital	means a placement to raise a minimum of A$1,500,000 (or by a combination
raise	of issuing shares under the entitlement issues and a placement)
maturity date	means the date 12 months after the_issue date_.
note terms	means the terms of_convertible notes_, as specified in Schedule 2.
noteholder	means the registered holder of a_convertible note_.
redemption	has the meaning given to that term in paragraph 4.5 of the_note terms_.
register	means the register of_convertible notes_maintained by the_issuer_.
related entity	has the meaning given in the_Corporations Act_.
related party	has the meaning given in the_Corporations Act_.
requisite majority	means those_noteholders_whose aggregate face value of_convertible notes_with
	substantially the same terms as the_convertible notes_issued under this_agreement_
	represents a majority of the total face value on all issued_convertible notes_.
share	means a fully paid ordinary share in the_issuer_.
subscription	means the amount specified in item 3 of the Contract Particulars.
amount
sunset date	means the date specified in item 4 of the Contract Particulars.
term	means the period from the date of execution of this_agreement_to the_maturity_
	date.

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CONVERTIBLE NOTE SUBSCRIPTION AGREEMENT – Exopharm Limited Schedule 2 – note terms

Schedule 2 – note terms

1. DEFINITIONS

Italicised terms in these note terms have the same meaning as given in the glossary at Schedule 1.

2. FORM OF CONVERTIBLE NOTE

2.1.

Nature of convertible note

Each convertible note is an unsecured, unquoted, convertible note, issued by the issuer on and subject to these note terms , which constitutes:

• (a) an unconditional and irrevocable undertaking by the issuer to the noteholder to make all payments in respect of the convertible note in accordance with these note terms ; and

• (b) an entitlement to the other benefits given to the noteholder under these note terms in relation to the convertible note .

2.2.

Certificate

A certificate will be issued by the issuer to the noteholder in respect of their convertible notes on receipt by the issuer of the subscription amount .

2.3.

Face value

Each convertible note has a face value of $1.00 ( face value ) which must be fully paid on subscription.

2.4.

Register conclusive

Entries in the register in relation to a convertible note constitute conclusive evidence that the person so entered is the absolute owner of the convertible note , subject to correction for fraud or error. Except as required or permitted by law, the issuer must treat the person entered in the register as the absolute owner of that convertible note .

2.5. Variation

These note terms may be amended, or any term thereof waived, on the written consents of both the issuer and the requisite majority .

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CONVERTIBLE NOTE SUBSCRIPTION AGREEMENT – Exopharm Limited Schedule 2 – note terms

2.6. Transfer

• (a) Subject to any restrictions under applicable law, a convertible note is transferrable at any time before redemption or conversion , by

• (i) any method permitted by the Corporations Act ; or

• (ii) otherwise, by written instrument of transfer in any usual form or in any other form approved by the directors of the issuer that is permitted by law.

• (b) A convertible note :

• (i) may only be transferred to exempt investors ; and

• (ii) must not be transferred to a person to whom listing rule 10.1 or 10.11 may apply (or any associate of such a person) without the prior written consent of the issuer , which consent may be conditional.

3. INTEREST

Interest does not accrue in relation to a convertible note .

4. CONVERSION AND REDEMPTION

4.1.

• Noteholder’s right to convert

C onvertible notes may be converted into conversion shares in accordance with this paragraph 4 ( conversion ) at any time during the conversion period by the noteholder giving the issuer written notice to that effect at any time on or before the end of the conversion period.

4.2. Automatic conversion

• (a) Subject to paragraph 4.2(b), convertible notes will automatically convert to conversion shares on completion of:

• (i) the entitlement issue ; or

• (ii) a material capital raise .

For the avoidance of doubt, the entitlement issue is not necessarily “completed” when the offer to eligible shareholders closes and may be completed by the issue of shares from the shortfall (if any) in acceptances and applications for additional shares by eligible shareholders where, and in the period, permitted by the listing rules, and a material capital raise will be deemed

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CONVERTIBLE NOTE SUBSCRIPTION AGREEMENT – Exopharm Limited Schedule 2 – note terms

to be completed if a total of $1,500,000 is raised by a combination of issuing shares under the entitlement issue and a placement.

• (b) The automatic conversion of convertible notes in accordance with paragraph 4.2(a) is:

  • (i) conditional on shares continuing to be quoted and trading on ASX ; and

  • (ii) subject to satisfaction of the requirements of paragraph 4.3.

• 4.3. Conversion subject to approvals

• (a) Despite any other provision of these note terms , conversion is conditional upon all necessary legal, regulatory and shareholder approvals being obtained, including:

  • (i) any approvals required under listing rules 7 or 10 ; or

  • (ii) approval under item 7 of section 611 of the Corporations Act , if applicable and unless having regard to the anticipated time and cost of obtaining that approval the Issuer determines such approval shall not be sought, in which case the number of convertible notes to be converted will be such number as results in the holder(s) of relevant interest to or for which the approval would have applied or been required not exceed 20% or such greater percentage as may be permitted by the Corporations Act (whether under item 9 of section 611 of the Act or otherwise) and the balance of its or their convertible notes shall be redeemed under paragraph 4.5).

• (b) The issuer and the noteholder must (subject to sub paragraph 4.3(a)(ii)) use their respective best endeavours to procure the approvals under paragraph 4.3(a) as soon as reasonably practicable after:

  • (i) a notice to convert is received under paragraph 4.1; or

  • (ii) successful completion of the entitlement issue or a material capital raise under paragraph 4.2.

• (c) If the approvals under paragraph 4.3(a) are not obtained within 60 days (or such longer period as agreed by the noteholder in writing) of:

  • (i) a notice to convert being received under paragraph 4.1; or

  • (ii) successful completion of the entitlement issue or a material capital raise ,

the convertible note (or the relevant number of convertible notes if sub paragraph 4.3(a)(ii) applies)will be redeemed under paragraph 4.5.

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CONVERTIBLE NOTE SUBSCRIPTION AGREEMENT – Exopharm Limited Schedule 2 – note terms

(d) During the period provided for seeking the approvals under paragraph 4.3(c) and the period provided for in paragraph 4.4(c), the convertible notes will not be redeemable unless the approvals are not obtained.

4.4. Conversion procedure

If a convertible note is to be converted:

• (a) the noteholder consents to becoming a member of the issuer and being bound by the issuer ’s constitution;

• (b) the issuer will issue new shares ( conversion shares ) to the noteholder calculated by dividing the face value by the conversion price , with any entitlement to a fraction of a conversion share to be rounded to the nearest whole number, or if the fractional entitlement is exactly one half, rounded up to the nearest whole number;

• (c) the issuer must issue the conversion shares within 10 business days of the notice to convert being received under paragraph 4.1 and the last condition in paragraph 4.2(a) being satisfied, whichever is the later in time;

• (d) all conversion shares will, from the time of issue, rank equally in all respects with all other shares then on issue; and

• (e) the issuer ’s obligations in relation to the convertible note (including any obligation to pay the face value ) are satisfied and discharged upon issue of the conversion shares in accordance with this paragraph 4.4.

4.5. Redemption

Subject to paragraph 4.7, convertible notes not previously converted, or redeemed in accordance with paragraph 4.3(c) or 4.6, will be redeemed on the maturity date .

4.6.

Early redemption

Convertible notes will be automatically redeemed on receipt of proceeds from the sale of:

• (a) the issuer’s main undertaking; or

• (b) a major asset (as described in Section 3.2 of ASX guidance note 13).

4.7. Redemption procedure

If a convertible note is to be redeemed:

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CONVERTIBLE NOTE SUBSCRIPTION AGREEMENT – Exopharm Limited Schedule 2 – note terms

• (a) the issuer must pay the noteholder the face value by way of cash payment in cleared funds, before or within 10 business days of the maturity date ;

• (b) the face value must be paid to the noteholder by way of electronic funds transfer into an Australian bank account nominated by the noteholder in writing; and

• (c) the issuer ’s obligations in relation to the convertible note are satisfied and discharged, and all other rights conferred, or restrictions imposed, by the convertible note will cease to have effect, upon payment of the face value being made in accordance with this paragraph 4.7.

5. NOTEHOLDER’S RIGHTS

5.1. Restrictions

A convertible note does not confer on the noteholder any right:

• (a) of participation or any entitlement inherent in holding shares or other securities in the issuer

• (b) to receive notice of, attend, or vote on any resolution proposed at, a general meeting of the issuer , except and only to the extent required by applicable law;

• (c) to receive a dividend by the issuer , whether fixed or at the discretion of the directors of the issuer ; or

• (d) to:

• (i) a return of capital by the issuer , whether on winding-up of the issuer , a reduction of capital, an in specie distribution of assets, or otherwise; or

• (ii) participate in the surplus profits or assets of the issuer on winding-up of the issuer .

5.2. Rights of participation in new issues of securities

A noteholder will not, solely by virtue of being the registered holder of a convertible note , be entitled to participate in any new issue of shares or other securities in the issuer , made by the issuer to its shareholders unless and to the extent that the convertible note has converted and conversion shares have been issued before the record date for determining entitlements to the new issue of shares or securities, such that the noteholder participates as a shareholder of the issuer .

5.3. Reorganisation

If there is a reorganisation (including consolidation, sub-division, reduction or return) of the share capital of the issuer ( reorganisation ), then the rights of the

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CONVERTIBLE NOTE SUBSCRIPTION AGREEMENT – Exopharm Limited Schedule 2 – note terms

noteholder to convert a convertible note that has not been redeemed or converted prior to the reorganisation :

• (a) are to be reconstructed in the same proportion and manner as any such reconstruction of the issued capital of the issuer ; and

• (b) are subject to the same provisions (if any) with respect to the rounding of entitlements as are sanctioned by the meeting of members of the issuer which approves any such reorganisation ,

• (c) but in all other respects, the terms for conversion will remain unchanged.

6. PAYMENTS

6.1. Deductions

The issuer may deduct from any payment payable to the noteholder , the amount of any withholding or other tax, duty or levy required by applicable law to be deducted in relation to such payment, in which case the issuer must:

• (a) pay the full amount required to be deducted to the relevant governmental agency responsible for collection of the same, within the time allowed for such payment without incurring penalty under the applicable law; and

• (b) must deliver to the noteholder the relevant receipt issued by the governmental agency without delay after it is received by the issuer .

6.2.

Calculation of payments

• (a) All calculations of payments will be rounded to two decimal places.

• (b) For the purposes of making any payment, any fraction of a cent will be disregarded.

6.3. Date of payment

If the date scheduled for any payment in relation to a convertible note is not a business day , then the payment will be made on the next business day (and without any interest or other payment in respect of such delay).

• 6.4.

Time limit for claims

A claim against the issuer for payment of any amount in relation to a convertible note is void unless made within 1 year of the due date for payment.

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CONVERTIBLE NOTE SUBSCRIPTION AGREEMENT – Exopharm Limited

Schedule 2 – note terms

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CONVERTIBLE NOTE SUBSCRIPTION AGREEMENT – Exopharm Limited Signing Page

Signing Page

IN WITNESS WHEREOF this document has been duly executed by and on behalf of the parties on the day and year first above written.

issuer EXECUTED by Exopharm Limited ACN 163 765 991 in accordance with section 127 of the Corporations Act :

← ← Signature of Director Signature of Director/Secretary Full name of Director (please print) Full name of Director/Secretary (please print)

subscriber (if a EXECUTED by XXXXXX in accordance with section 127 of the Corporations Act : company)

← ← Signature of Director Signature of Director/Secretary Full name of Director (please print) Full name of Director/Secretary (please print)

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