Quest PharmaTech Inc. — Capital/Financing Update 2020

Apr 28, 2020

SHARE SUBSCRIPTION AGREEMENT

THIS SUBSCRIPTION AGREEMENT (the "Agreement") is made on April 20, 2020 (the "Effective Date").

BY AND BETWEEN

• $(1)$ DUAL INDUSTRIAL CO., LTD, a company with limited liability established under the laws of the Republic of Korea and having its registered office located $at$ Address Information Redacted , Republic of Korea (the "Company"): and
• $(2)$

ONCOQUEST INC., a corporation established under the laws of the Province of Alberta, Canada and having its head office located at 8123 Roper Road NW, Edmonton, Alberta T6E 6S4, Canada (the "Subscriber").

The Company and the Subscriber may hereinafter be referred to individually as a "Party" and collectively as the "Parties."

WHEREAS

The Company has agreed to newly issue and allot to the Subscriber, and the Subscriber has agreed to subscribe for, the share capital of Two Hundred and Twelve Billion Nine Hundred Seventy-Four Million Nine Hundred Ninety-Nine Thousand Eight Hundred and Eighty-Five (212,974,999,885) Korean Won, divided into Sixty-Five Million Two Hundred Twenty-Nine Thousand Seven Hundred and Nine (65,229,709) shares of the Company's common stock (the "Subscription Shares"), subject to and in accordance with the terms and conditions herein.

NOW, THEREFORE, in consideration of the foregoing recitals, the mutual promises hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. DEFINITIONS

In this Agreement (including the Recitals) and in the Schedules, the following expressions shall, except where the context otherwise requires, have the following meanings:

"Aggregate Subscription means the sum of Twenty-Four Billion Three Hundred Forty Million Three Hundred Sixty (24,340,000,360).

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Price"

KOREAN WON (the "Tranche A Price") and One Hundred Eighty-Eight Billion Six Hundred Thirty-Four Million Nine Hundred Ninety-Nine Thousand Five Hundred and Twenty-Five (188,634,999,525) KOREAN WON (the "Tranche B Price"), which amounts shall be the total price of the Subscription Shares issued pursuant: to this Agreement:

"Asset Transfer Agreement"

means the agreement entered into on April 20, 2020 by and between the Subscriber and the Company, and which agreement provides for the transfer of certain Purchased Assets of Subscriber to the Company, including the Subscriber's OQ Patents, Sponsorship of the IND Applications and Oregovomab Orphan Drug Designation ("Purchased Assets" is defined in the Asset Transfer Agreement and said definition is incorporated herein);

"Board"	means the board of directors of the Company;
"Business Day"	means any day (other than Saturdays and Sundays) on which the banks in Republic of Korea and the Province of Alberta, Canada are generally open for business;
"Closing"	means the closing of the subscription for the Subscription Shares in accordance with the terms of this Agreement;
"First Closing Date"	means July 31, 2020;
"KRW"	means Korean Won.
"Second Closing Date"	means the date on which the Second Closing of the Asset Transfer Agreement occurs.
"Share(s)"	means shares of the Company's common stock with a par value of KRW200;
"Shareholder(s)"	means holder(s) of the Share(s);

$LCA$

"Subscription"	means Three Thousand Two Hundred and Sixty-Five
Price"	$(3,265)$ KRW

Subscription has the meaning provided for in the Preamble Shares" hereinabove:

$60/22$

means per cent.

$1.2$

$1.3$

$1.4$

$1.5$

References to ordinances and to statutory provisions shall be construed as references to those ordinances or statutory provisions as respectively amended or re-enacted or as their application is modified by other provisions (whether before or after the date hereof) from time to time and to any orders, regulations, instruments or subordinate legislation made under the relevant ordinances or statutory provisions thereof and shall include references to any repealed ordinance or any provisions of which they are re-enactments (whether with or without modification).

References to "persons" include references to individuals, firms, companies, corporations and unincorporated bodies of persons and vice versa, and reference to a certain gender shall include any gender.

Reference herein to "Clauses," "Recitals" and "Schedules" are to the clauses and recitals in and schedules to this Agreement (unless the context otherwise requires) and the Schedules shall be deemed to form part of this Agreement.

The headings are inserted for convenience only and shall not affect the construction of this Agreement.

• 1.6 Unless the context requires otherwise, in this Agreement words importing the singular include the plural and vice versa and words importing a gender or the neuter include both genders and the neuter.
• The expressions the "Company" and the "Subscriber" shall, where the context permits, include their respective successors, personal representatives, executors, administrators, estates and permitted assigns.

ISSUANCE AND SUBSCRIPTION OF SHARES

$2.1$

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1.7

Subject to the terms of this Agreement, the Company agrees to allot and issue to the Subscriber at Closing, as fully paid and non-assessable Shares, and the

Subscriber agrees to subscribe for, the Subscription Shares in exchange for the Aggregate Subscription Price.

Full payment of the Tranche A Price shall be satisfied on the First Closing Date by the Subscriber contributing its right to receive Twenty-Four Billion Three Hundred Forty Million Three Hundred Sixty (24,340,000,360) KOREAN WON under the Asset Transfer Agreement, as an in-kind contribution by the Subscriber.

Full payment of the Tranche B Price shall be satisfied on the Second Closing Date by the Subscriber contributing its right to receive One Hundred Eighty-Eight Billion Six Hundred Thirty-Four Million Nine Hundred Ninety-Nine Thousand Five Hundred and Twenty-Five (188,634,999,525) KOREAN WON under the Asset Transfer Agreement, as an in-kind contribution by the Subscriber.

On the Effective Date, the Company shall initiate the process to receive the required approvals related to this Agreement from the relevant government and regulatory authorities.

$2.5$ The Parties agree that the respective dates of payment prescribed under Sections 2.2 and 2.3 may be adjusted in order to comply with the applicable procedures stipulated under the relevant Korean laws and regulations.

$3.$ COVENANTS

$2.2$

$2.3$

$2.4$

$3.1$ On the Effective Date, the Company shall:

• $(a)$ deliver to the Subscriber a copy of the resolutions of the Company's Board of Directors approving issuance of the Subscription Shares in accordance with the terms of this Agreement and the Company's execution of (i) this Agreement, (ii) the Asset Transfer Agreement, and (iii) other documents that are required by the terms of this Agreement to be executed; and
• (b) execute the Asset Transfer Agreement.

On the Effective Date, the Subscriber shall:

deliver to the Company a copy of the resolution of the Subscriber's Board $(a)$ of Directors approving execution of (i) this Agreement, (ii) the Asset

$\mathbf{A}$ .

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Transfer Agreement, and (iii) other documents that are required by the terms of this Agreement to be executed; and

(b) execute the Asset Transfer Agreement.

As conditions precedent to the issuance of the Subscription Shares, on or prior to the Closing:

• both Parties shall have performed and complied in all material respects with $(a)$ the covenants and obligations contained in this Agreement required to be performed and complied with by it on or prior to the First and Second Closing Date.
• (b) both Parties shall have made all necessary filings and reports and shall have obtained all approvals, consents, waivers or other authorizations for its consummation of this Agreement; and
• (c) no law, regulation, rule or injunction enacted, entered, promulgated, enforced or issued by any governmental authority or other legal restraint or prohibition preventing the consummation of this Agreement shall be in effect.
• Closing

$4.1$

The Closing of the issuance and subscription of the Subscription Shares shall take place at the office of the Company on the Closing Date or at such other place and time as shall be agreed by the Company and the Subscriber, as follows:

• on the First Closing Date the Subscriber shall (i) submit an executed share (a) subscription form (jusik chungyaksuh in Korean) and (ii) make full payment of the Trandche A Purchase Price by contributing the right to receive Twenty-Four Billion Three Hundred Forty Million Three Hundred Sixty (24,340,000,360) KOREAN WON under the Asset Transfer Agreement as an in-kind contribution; and
• (b) on the Second Closing Date the Subscriber shall (i) submit an executed share subscription form (jusik chungyaksuh in Korean) and (ii) make full payment of the Trandche B Purchase Price by contributing the right to receive One Hundred Eighty-Eight Billion Six Hundred Thirty-Four Million Nine Hundred Ninety-Nine Thousand Five Hundred and Twenty-

$3.3$

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Five (188,634,999,525) KOREAN WON under the Asset Transfer Agreement as an in-kind contribution

In lieu of actual delivery or delivery by mail, the transfer of the Subscription Shares shall be registered on the electronic registration ledger of the Korea Securities Depository (the "KSD") pursuant to the Republic of Korea Act on Electronic Registration of Stocks, Bonds, etc;

$-6-$

In compliance with the relevant laws of Republic of Korea, the Subscriber shall deposit the Subscription Shares with the KSD for a period of one (1) year (the "Lock-up Period"), and shall not withdraw or transfer any of the Subscription Shares deposited with the KSD during the Lock-up Period.

REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS

The Company hereby represents, warrants to and undertakes in favour of the Subscriber that:

• (a) the Company has the requisite power, authority and capacity to execute and deliver, has taken all actions necessary to authorize the execution and delivery of, and to perform the obligations under, this Agreement;
• (b) this Agreement, when duly executed, will constitute valid and legally binding and enforceable obligations of the Company, enforceable against the Company in accordance with the terms herein, except as may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other similar laws of general application affecting enforcement of creditors' rights generally, and (ii) the availability of the remedy of specific performance or injunctive or other forms of equitable relief, at the discretion of the governmental authority before which any proceeding therefor may be brought:

(c) the Company has been duly incorporated and is validly existing under the laws of Republic of Korea, is not in receivership or liquidation, has not taken any steps to enter into liquidation, no petition has been presented for its winding up, and there are no grounds on which a petition or application could be based for the winding up or appointment of a receiver thereof; and

$4.3$

4.2

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(d) the Subscription Shares will be issued and allotted as fully paid up and nonassessable, in accordance with the by-laws of the Company.

The Subscriber hereby represents, warrants to and undertakes in favour of the Company that:

• (a) the Subscriber has the requisite power, authority and capacity to execute and deliver, has taken all actions necessary to authorize the execution and delivery of, and to perform the obligations under, this Agreement; and
• (b) this Agreement, when duly executed, will constitute valid and legally binding and enforceable obligations of the Subscriber, enforceable against the Subscriber in accordance with the terms herein, except as may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other similar laws of general application affecting enforcement of creditors' rights generally, and (ii) the availability of the remedy of specific performance or injunctive or other forms of equitable relief, at the discretion of the governmental authority before which any proceeding therefor may be brought

INDEMNITY

Subject to the other provisions herein, each Party (the "Indemnifying Party") will indemnify and hold harmless the other Party (the "Indemnified Party") for, and will pay to the Indemnified Party the amount of any losses, liabilities, claims, damages and expenses, including reasonable attorneys' fees but excluding indirect, special or consequential damages (collectively, the "Damages"), actually incurred by the Indemnified Party and arising from any breach by the Indemnifying Party of (i) any representation or warranty made by the Indemnifying Party in this Agreement, or (ii) any covenant or obligation undertaken by the Indemnifying Party in this Agreement.

$7.$ TERMINATION

This Agreement shall be effective as of the Effective Date and shall be valid unless terminated, and the subscription for the Subscription Shares contemplated hereby may be abandoned at any time prior to the Closing Date:

(a) by mutual written consent of the Parties;

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6.

$6.1$

7.1

• by the Subscriber if the Company has materially breached any of the $(b)$ representations and warranties in Clause 5.1 or materially breaches any of its other representations, warranties and obligations hereunder; or
• (c) by the Company, if the Subscriber has materially breached any of the representations and warranties in Clause 5.2 or materially breaches any of its other representations, warranties and obligations hereunder.

Notwithstanding any other term hereof, this Agreement (including the rights or obligations of either Party pursuant to the terms of Clause 6.1 hereof) shall be terminated and of no effect in the event that the Second Closing of the Asset Transfer Agreement does not occur, for any reason.

NOTICES

8.

$8.1$

Each notice, demand, consent or other communication given or made under this Agreement shall be in writing and shall be delivered or sent to the relevant Party at its address, email address or fax number set out below (or such other address, email address or fax number as the addressee has, by five days' prior written notice, specified to the other Party):

To the Company:

Address: Fax: Email: Attn:

Contact Information Redacted

To the Subscriber:

Address:	8123 Roper Road NW, Edmonton, Alberta T6E 6S4, Canada
Fax:	$[-1-780-416-0324]$
Email:	madi@oncoquestinc.com
Attn:	Chief Executive Officer

8.2

Any notice, demand, consent or other communication so addressed to the relevant Party shall be deemed to have been delivered (a) if given or made by letter, when actually delivered to the relevant address; or (b) if given or made by email or fax, when dispatched with a confirmed transmission report.

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All notices, demands, consents and other communications pursuant to this Agreement shall be in the English language.

MISCELLANEOUS

8.3

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9.1

$9.2$

9.3

9.4

Confidentiality: Each Party undertakes that it will not (save as otherwise provided in this Agreement) make any announcement or release or disclose any information in connection with this Agreement or disclose the identity of any of the Parties unless (a) such disclosure is required by regulatory authorities or by law; (b) such disclosure is to their respective professional advisers under a duty of confidentiality; and (c) the other Party shall have given its respective consent to such disclosure which consent may not be unreasonably withheld and may be given either generally or in a specific case or cases and may be subject to conditions.

Tax and Expenses: Except as otherwise expressly provided in this Agreement, each Party shall be responsible for and bear its own taxes, fees, costs and expenses imposed, levied, assessed or incurred on or by the Party for or in connection with the negotiation, preparation, execution and performance of this Agreement.

Headings: The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of any provision of this Agreement.

Waiver: No failure or delay by the Subscriber in exercising any right, power or remedy under this Agreement shall operate as a waiver thereof, nor shall a single or partial exercise of the same preclude any further exercise thereof or the exercise of any other right, power or remedy. Without limiting the foregoing, no waiver by the Subscriber of any breach by the Company of any provision hereof shall be deemed to be a waiver of any subsequent breach of that or any other provision hereof and any forbearance or delay by the Subscriber in exercising any of its rights hereunder shall not be construed as a waiver thereof.

Severability: If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement will nevertheless remain in full force and effect. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties hereto will negotiate in good faith to modify this Agreement so as to effect the original intent of the

9.5

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Parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the extent possible. Any term or provision of this Agreement held invalid, illegal or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid, illegal or unenforceable.

Survival: All of the representations, warranties, covenants and agreements made by the Parties in this Agreement or pursuant hereto in any certificate, instrument, or document shall survive the consummation of the transactions described herein, and may be fully and completely relied upon by the Company and the Subscriber, as the case may be, notwithstanding any investigation heretofore or hereafter made by any of them or on behalf of any of them, and shall not be deemed merged into any instruments or agreements delivered at Closing Date or thereafter. Notwithstanding anything in this Clause 9.6 which may be to the contrary, any claim, demand, or cause of action with respect to a breach of any warranty or representation made in this Agreement must be made or brought, if at all, within two (2) years after the Closing Date or the period permitted under applicable law, whichever is earlier.

Time of the Essence: Time is of the essence of this Agreement, both as regards the dates and periods specifically mentioned and as to any dates and periods which may, by agreement in writing between or on behalf of the Company and the Subscriber, be substituted for them.

9.8 No Assignment: No Party shall be entitled to assign its rights or delegate its duties hereunder to any other person without the prior written consent of the other Party hereto.

• 9.9 Whole Agreement: This Agreement (together with any documents referred to herein) constitutes the whole agreement between the Parties and it is expressly declared that no variations hereof shall be effective unless made in writing.
• 9.10 Amendment: Unless otherwise specifically provided for in this Agreement, any provision of this Agreement may be amended, supplemented or waived only if the Parties agree in writing.
• $9.11$ Counterparts: This Agreement may be executed in one or more counterparts each of which shall be binding on each Party by whom or on whose behalf it is so executed, but which together shall constitute a single instrument. For the avoidance of doubt, this Agreement shall not be binding on any Party unless and

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9.7

$9.6 -$

until it shall have been executed by or on behalf of all persons expressed to be the Parties. This Agreement shall be considered properly executed and delivered by a Party if executed by that Party and transmitted by electronic means and shall be equally effective as delivery of a manually executed counterpart hereof. The Parties acknowledge and agree that in any legal proceedings between them respecting or in any way relating to this Agreement, each waives the right to raise any defence based on the delivery of this Agreement by electronic means.

9.12 No Third-Party Beneficiaries: This Agreement shall be binding upon and inure to the benefit of each Party hereto and their respective representatives, heirs, successors and permitted assigns. Nothing in this Agreement, express or implied, is intended to or shall confer upon any other person any right, benefit, claim or remedy of any nature whatsoever under or by reason of this Agreement.

9.13 Interpretation:

• (a) The Parties hereto have participated jointly in the negotiation and drafting of this Agreement. If any ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the Parties and no presumptions or burden of proof will arise favoring or disfavoring any Party by virtue of authorship of any provisions of this Agreement.
• (b) All pronouns and any variations thereof refer to the masculine, feminine or neuter, singular or plural, as the context may require.
• (c) The words "include," "includes" and "including" shall be deemed to be followed by the phrase "without limitation."
• 9.14 Governing Law: This Agreement shall be governed by, and construed in accordance with the Law of Republic of Korea without any reference to any conflict, or choice of laws, rules or principles. Each of the Parties hereby agrees that any action or proceeding arising out of or relating to this Agreement or the breach or threatened breach of this Agreement may be commenced and prosecuted in the Seoul Central District Court, and consents and submits to the exclusive jurisdiction of the Seoul Central District Court in respect of any such proceeding.

Language: This Agreement may be translated into or summarized in the Korean language. In the event of any conflict between the Korean translation or summary and this English version of this Agreement, this English version shall prevail.

9.15

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IN WITNESS whereof this Agreement has been duly executed by the parties hereto the day and year first above writing.

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DUAL INDUSTRIAL CO, LTD. in the presence of:

Signature Info Redacted

The Subscriber

SIGNED by Ragupathy Madiyalakan, CEO for and behalf of ONCOQUEST INC. in the presence of:

Maddelle

Thomas wo