Marvel Biosciences Corp. — M&A Activity 2020

Nov 3, 2020

Marvel Biotechnology Inc. Suite 420, 505 8th Avenue S.W. Calgary, Alberta, T2P 1G2

October 28, 2020

Alphanco Venture Corp . 2110 28th Street West Vancouver, British Columbia V7V 4M3

Dear Sirs/Mesdames:

Re: Binding Letter Agreement (�Ag�eemen��) - Proposed Business Combination with Alphanco Venture Corp.

This Agreement summarizes the principal terms of a negotiated ��a��ac�i�� (� Transaction �) �� be completed by way of a merger between Marvel Biotechnology Inc. (� Marvel �) and a newly incorporated wholly owned subsidiary (�he � AVC Subsidiary �) of Alphanco Venture Corp. (� AVC �). On closing the Transaction, the shareholders of Marvel (� Marvel Shareholders �) will exchange their Marvel common shares for AVC common shares and Marvel will amalgamate with the AVC Subsidiary and carry on the business of Marvel as the active business of the resulting issuer. For purposes of this Letter Agreement, the publicly listed entity with Marvel as its subsidiary that results from the closing of the Transaction is referred to herein as the � Resulting Issuer �. Marvel a�d AVC a�e �efe��ed �� he�ei� each a� a � Party � a�d c���ec�i�e�� a� �he � Parties �.

The Transaction will be �he � Qualifying Transaction � �f AVC, as such term is defined in Policy 2.4 �f �he c�����a�e fi�a�ce �a��a� �f �he TSX Ve����e E�cha�ge (�he � Exchange �). The Q�a�if�i�g T�a��ac�i�� i� c���ide�ed �� be a� A���� Le�g�h Q�a�if�i�g T�a��ac�i��, a� ��ch �e�� is defined under the policies of the Exchange.

By executing this Letter Agreement, Marvel and AVC agree to proceed diligently and in good faith to the negotiation, execution and delivery of a definitive agreement which shall contain substantially the same terms and conditions as contained herein and containing such additional usual and customary terms for a transaction of this nature, all satisfactory to the Parties and their respective counsel, acting reasonably (the � Definitive Agreement �).

The terms and conditions contained herein are binding. The Parties agree that the final structure of the business combination is subject to receipt of final tax, corporate and securities law advice for both Marvel and AVC. The closing (� Closing �) of the Transaction/Definitive Agreement will be subject to the approval of the Exchange.

Based on information currently known to AVC and Marvel, it is proposed that the Definitive Agreement will include, implicitly or explicitly, the following information:

1. Background . The Parties acknowledge the following:

• 2 -

• (a) AVC is a corporation incorporated under the laws of British Columbia and currently has 6,700,000 common shares issued and outstanding on a non-diluted basis. It also has outstanding share purchase warrants and options to purchase up to 1,070,000 common shares. AVC is a reporting issuer in the Provinces of British Columbia, Alberta and Ontario. Its principal regulator is the British Columbia Securities Commission. It currently has three directors on its board of directors (the � AVC Board �) and it has its common shares listed and trading on the Exchange as a capital pool company.

• (b) AVC has no debt and currently holds a minimum of $390,000 in cash, net of all current payables (including the cost of preparation and SEDAR filing of its audited financial statements for the fiscal year ended July 31, 2020). AVC estimates its current monthly expenses, not including AVC Shareholder Meeting (as defined below) costs, Exchange fees (sustaining and Qualifying Transaction) and legal fees, of no more than $600 per month. Legal fees are estimated to be no more than $15,000 (covering the preparation of this Agreement, news releases until Closing, the Shareholder Meeting, the Concurrent Financing, reviewing & commenting on the requisite documents prepared by Marvel legal counsel, and Closing but not including disbursements and taxes) which Marvel management accepts. It is assumed that Marvel legal counsel will prepare the Definitive Agreement, incorporate the AVC Subsidiary & address all amalgamation steps, address Exchange requirements towards obtaining Exchange approval of the Transaction including preparation and finalization of the Filing Statement (as referenced herein) and all other related steps to Closing the Transaction.

• (c) Marvel is a corporation incorporated under the laws of Alberta and as of October 14, 2020, had 13,110,098 common shares issued and outstanding on a non-diluted. It also has 14,168,200 share purchase warrants outstanding to purchase 14,168,200 common shares and accordingly, on a fully diluted basis it would have 27,278,298 common shares outstanding.

• (d) Ma��e� ca��ie� �� a� ac�i�e bi��ech����g� b��i�e�� (�he � Marvel Business �).

• (e) Marvel has no long-term debt and is currently incurring executive management and administration expenses from Renaissance Mercantile Corp. (excluding scientific and clinical expenses, fees for Dr. Williams, professional advisory fees and other standard operating expenses) of no more than $50,000 per month which will continue at least until Closing.

• (f) Prior to November 13, 2020, Marvel intends on completing, in one or more closings, a non-b���e�ed ��i� (� Unit �) ��i�a�e ��ace�e�� (� Marvel Private Placement �) at $0.30 per Unit of no less than $250,000 (of which $106,000 has been raised so far) and no more than $500,000, each Unit consisting of a common �ha�e a�d a �ha�e ���cha�e �a��a�� (� Warrant �), each Wa��a�� e��i��i�g �he h��de� to purchase an additional common share at $0.50 per share for a period of 24 months. Marvel has granted AVC the option for AVC Shareholders or purchasers sourced by AVC to purchase up to $250,000 of the Marvel Private Placement Units. No further issuances of securities by Marvel will occur prior to the closing of the

4815-6263-5983, v. 3

• 3 -

Definitive Agreement. As a result of the forgoing, Marvel anticipates having no more than 15,610,098 common shares and 16,668,200 share purchase warrants issued and outstanding on closing of the Definitive Agreement.

• (g) On Closing, Marvel Shareholders will exchange (�he � Marvel AVC Share Exchange �) their Marvel common shares one for one (1:1) for Resulting Issuer common shares such Resulting Issuer common shares to be issued at a deemed price of $0.40 per share in accordance with Exchange market price guidelines.

• (h) On Closing, Marvel Warrant holders will exchange (�he � Marvel AVC Warrant Exchange �) their Marvel Warrants one for one (1:1) for Resulting Issuer warrants that will have the same exercise price and term as the Marvel Warrants with respect to the purchase of AVC common shares.

• (i) Ma��e� ac�����edge� �ha� �he E�cha�ge �i�� �e��i�e �he e�c��� �f a�� � Principal (as defined in the policies of the Exchange) held Resulting Issuer common shares and may require the escrow of Resulting Issuer common shares he�d b� � NonPrincipals � (a� defined in the policies of the Exchange) pursuant to the seed share resale restrictions of Exchange Policy 5.4.

• (j) On Closing, the name of the Resulting Issuer will be changed to a name to be determined by Marvel at its sole discretion.

2. Business Combination: The Transaction will consist of the following principal steps:

• (a) On signing this Agreement, AVC will request a halt in trading of its common shares and disseminate a comprehensive news release announcing the terms of the Transaction (after review by the Exchange).

• (b) AVC will incorporate the AVC Subsidiary in Alberta.

• (c) The Parties will complete their due diligence and the Definitive Agreement will be entered into forthwith.

• (d) Marvel will close the Marvel Private Placement of no less than $250,000 and no more than $750,000 by November 13, 2020.

• (e) AVC �i�� h��d a� a���a� a�d ��ecia� �ha�eh��de� �ee�i�g (�he � AVC Shareholder Meeting �) bef��e �he e�d �f 2020, c���e���� �ched��ed f�� Dece�be� 15, 2020, and in addition to regular business at the AVC Shareholder Meeting, the AVC shareholders will be asked to approve:

  • (i) The continuation of AVC from British Columbia into Alberta, the timing of such continuation to occur concurrent with Closing, or such date thereafter as determined by the board of directors of the Resulting Issuer, and the adoption of such revised constating documents as required to effect such continuation without changing the material characteristics of the AVC common shares that are to become Resulting Issuer common shares;

4815-6263-5983, v. 3

• 4 -

  • (ii) The increase in the size of the AVC Board from three to five directors and to elect nominees of Marvel as the directors of AVC, conditional and effective on Closing;

  • (iii) The appointment of MNP LLP as the auditors of AVC to hold office, conditional and effective upon the Closing and to authorize the AVC Board to fix the remuneration to be paid to the auditors; and

  • (iv) new Stock Option Plan.

• (f) Marvel will hold an annual and special shareholder meeting or obtain a written resolution of its shareholders, at its earliest convenience to approve the Transaction and all matters in connection thereto;

• (g) As a condition of Closing a�d ��bjec� �� �he � Minimum AVC Participation � (a� defined below), the Resulting Issuer will complete, concurrent with Closing, a private placement of a minimum 5,000,000 shares (� Resulting Issuer Shares �) a�d up to a maximum of 10,000,000 Resulting Issuer Shares at a price of $0.40 per Resulting Issuer Share, for aggregate gross proceeds of a minimum $2,000,000 and a maximum of $4,000,000 (�he � Concurrent Financing �).

• (h) Pursuant to this Agreement, AVC has committed to AVC Shareholders or purchasers sourced by AVC purchasing a minimum of $1,000,000 worth of securities in connection with this Transaction made up of the aggregate dollar amount taken down by such purchasers in (i) the Marvel Private Placement, up to $250,000, and (ii) the balance of a minimum $750,000 of Resulting Issuer Shares, as totals $1,000,000 (or more) (�efe��ed �� a� �he � Minimum AVC Participation �). It is expected that insiders of Marvel, their assigns, or their friends, family, business associates or accredited investors, shall subscribe for a minimum of $2,000,000 worth of Resulting Issuer Shares.

• (i) Exchange approvals with respect to the Transaction will be sought, including the preparation of a comprehensive Exchange Form 3B2 �Filing Statement for a Qualifying Transaction� with audited annual financial statements, and as may be required, review engagement interim financial statements of Marvel completed and attached thereto.

• (j) On Closing the Marvel AVC Share Exchange and the Marvel AVC Warrant Exchange will be affected.

• (k) On or before Closing, all of the existing stock options in AVC will be cancelled. At Closing, all directors of AVC will resign except for Joanne Yan, an AVC director that Marvel has consented to continue to act as a director.

3. Closing . The Closing of the Transaction will occur on a date and at a time and place as mutually agreed by the Parties.

4815-6263-5983, v. 3

• 5 -

4. Standstill . Until this Agreement has been terminated, AVC, Marvel, their agents and advisors, and the shareholders of Marvel shall exclusively act in good faith towards the completion of definitive documentation in respect of the Transaction and to Closing forthwith.

5. Conditions Precedent . The Closing of the Transaction is conditional upon the following: (a) Marvel obtaining all necessary shareholder approvals for the Transaction from the Marvel shareholders;

(b) each of AVC and Marvel and their respective advisors completing to their satisfaction, as determined by each Party acting reasonably, all such corporate, financial, legal, regulatory and such other due diligence investigations as are customary in transactions similar to this Transaction;

(c) there will be no material adverse change in the business or operations of AVC or Marvel from the date of execution of this Agreement until the Closing of the Transaction;

(d) AVC will have a minimum of cash calculated as $390,000 less the expenses described in subsection 1(b) of this Agreement;

(e) the Parties obtaining all necessary approvals of regulatory, stock exchange and securities authorities and commissions, and compliance with requirements of applicable securities laws;

(f) each of AVC and Marvel shall have obtained all consents required under any material agreements to which AVC or Marvel are Parties;

(g) approval of the Definitive Agreement and all of the related transactions necessary thereto by the boards of directors of AVC and Marvel;

• (h) if necessary, receipt of court approval for the business combination; and

(i) such other conditions as counsel to AVC, and Marvel may advise, acting reasonably.

6. Fees and Expenses . Each of the Parties hereto will bear all costs, charges and expenses incurred by such Party in connection with this Agreement and the consummation of the Transaction contemplated herein. AVC will pay all Exchange fees in connection with the Qualifying Transaction.

7. Board Representation . The Board of Directors of the corporation resulting from the Transaction shall initially be composed of five (5) members, consisting of five (5) of nominees of Marvel, it being acknowledged that Joanne Yan, an existing AVC director has been offered to continue as a director.

8. Conduct of Business .

• (a) Between the date of the execution of this Agreement and the Closing, AVC shall carry on its business in the ordinary course, and except with the consent of Marvel,

4815-6263-5983, v. 3

• 6 -

AVC will not, nor will it permit any of its subsidiaries to, directly or indirectly, do any of the following until the earlier of the Closing of the Transaction or the termination of this Letter Agreement:

• (i) sell, pledge, dispose of or encumber any assets;

• (ii) take any steps to cease to be a reporting issuer;

• (iii) acquire by merger, amalgamation, consolidation or acquisition shares or assets, of any business operation;

• (iv) increase or reduce its capital or issue any common shares (other than as specifically provided herein) or any other securities convertible into common shares;

• (v) enter into any new lending agreements or extend or otherwise modify existing lending agreements;

• (vi) amend any of its constating documents;

• (vii) enter into any material contracts or commitments;

• (viii) waive any material rights or amend any terms of any material contracts;

• (ix) declare or pay a dividend or make any distribution in cash or in-kind to the shareholders;

• (x) repurchase or redeem any securities;

• (xi) make a material change in the compensation of any employee of AVC or Marvel;

• (xii) file for bankruptcy, reorganization or liquidation; and

• (xiii) do anything that would reasonably be expected to have a material adverse effect upon the financial condition of AVC or Marvel.

• (b) AVC and Marvel agree each with the other that, except with the consent of the other, from the date of this Agreement until the earlier of the Closing of the Transaction and the termination of this Agreement, AVC and Marvel, respectively, will:

  • (i) conduct their respective business only in the ordinary course of business;

  • (ii) maintain the value of their business as a going concern; and

  • (iii) preserve intact its business organization and relationships with third Parties (including lessors, licensors, suppliers, distributors and customers) and employees.

4815-6263-5983, v. 3

• 7 -

9. Representations, Warranties and Covenants . Customary representations, warranties and covenants will be made by each of the Parties in the Definitive Agreement and, as appropriate, in the documents relating to the Transaction and Closing.

10. Public Announcements and Confidentiality

• (a) The Parties acknowledge that disclosure of the material terms of this Agreement is required by the Exchange pursuant to Exchange policies. The Parties will cooperate fully in making such disclosure on a timely basis.

• (b) The Parties will keep confidential and not disclose to any third Party (except counsel or advisors) any confidential information provided by the other Party without prior written consent of the other Party.

11. Closing Date and Termination . This Agreement shall terminate if all the conditions set forth in Section 5 hereof have not been satisfied or waived by February 1, 2021 (the � Termination Date �), (save and except for the regulatory approval condition set forth in 5(e), provided that the Parties have not received notice that such condition is incapable of being satisfied from the applicable regulator, and neither Party has determined that such condition is not capable of being satisfied, acting reasonably, and has notified the other Party of that fact) in which case neither Party shall have any further obligations under this Agreement, save and except for the obligations of confidentiality set for in Section 10(a). The Parties may at any time agree to extend the Termination Date.

12. Counterparts . This Agreement may be executed in one or more counterparts, each of which together shall constitute one and the same instrument. This Agreement may be executed and delivered by facsimile transmission or electronic copy and when so executed and delivered this Agreement shall be deemed authentic and the signatures evidenced hereby shall be deemed genuine and create a legal and binding Agreement.

13. Amendments. This Agreement may not be amended save and except by way of written amendment executed by both Parties hereto.

14. Governing Law. This Agreement will be governed by the laws of the Province of Alberta and the federal laws of Canada applicable therein and the Parties agree to attorn any dispute of its terms to the courts thereof.

[ The remainder of this page has been left intentionally blank ]

4815-6263-5983, v. 3

• 8 -

If the foregoing is acceptable to you would you kindly sign the copy of this Agreement where indicated below.

Yours truly,

MARVEL BIOTECHNOLOGY INC.

Per:

Name: J. Roderick Matheson Title: President, CEO & Director

The above offer is accepted this 28th day of October 2020.

ALPHANCO VENTURE CORP.

Per:

Name: Joanne Yan Title: CEO, CFO & Director

4815-6263-5983, v. 3