Quest PharmaTech Inc. — Capital/Financing Update 2022

Nov 15, 2022

BONDS SUBSCRIPTION AGREEMENT

THIS BONDS SUBSCRIPTION AGREEMENT (the "Agreement") is made on February (72021 (the "Closing Date").

BY AND BETWEEN:

$\langle 0 \rangle$ ONCOQUEST PHARMACEUTICALS INC., a company with limited liability established under the laws of the Republic of Korea and having its registered

Address information redacted

ONCOQUEST, INC., a corporation established under the laws of the Province of $(2)$ Alberta, Canada and having its head office located at 8123 Roper Road NW, Edmonton, Alberta T6F 6S4, Canada (the "Subscriber").

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

WHEREAS

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• The Company agrees to issue and allot to the Subscriber bonds, carrying the $(A)$ rights, privileges, restrictions, ferms, and conditions as are described in the attached Schedule A hereto, in the aggregate principal amount of Two Hundred Twelve Billion Nine Hundred Seventy-Four Million Nine Hundred Ninety-Nine Thousand Eight Hundred and Eighty-Five (212,974,999,885) Korean Won (the "Bonds"); and
• The Subscriber agrees to subscribe for all of the Bonds upon the terms and $(B)$ conditions set forth 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

$-\mathcal{C}$

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

"Aggregate Principal

means the amount that comprises Two

Amount?

Hundred Twelve Billion Nine Hundred Seventy-Four Million Nine Hundred Ninety-Nine Thousand Eight Hundred and Eighty-Five (212,974,999,885) Korean Won and which amount shall be the total price of the Bonds issued pursuant to this Agreement;

"Business Day"

"Closing"

Sundays) on which the banks in Republic of Korea and the Province of Alberta, Canada are generally open for business;

means any day (other than Saturdays and

means the date of the issuance of the Bonds in accordance with the terms of this Agreement.

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"Korea"

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means Republic of Korea;

means percent

$1.2$

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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 repeated 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 "Schedule" are to the clauses $1.4$ 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.

1.5

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$1.3$

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

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.

$\overline{\mathcal{L}}$ $\infty$

The expressions the "Company" and the "Subscriber" shall, where the $1.7$ context permits, include their respective successors, personal representatives, executors, administrators, estates and permitted assigns.

Ž. ISSUANCE AND SUBSCRIPTION

• $2.1$ Subject to the terms of this Agreement, the Company agrees to issue the Bonds to the Subscriber at Closing, and the Subscriber agrees to subscribe for the Bonds in exchange for the Aggregate Principal Amount. The Parties may agree to an offset. arrangement.
• $2.2$ The details of the rights, privileges, restrictions, terms and conditions of the Bonds appear in Schedule A, attached hereto and made a part hereof.
• $\widehat{\mathcal{H}}_{\mathbf{z}}$ COVENANTS

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• On the Closing, the Company shall: 3, 1
• deliver to the Subscriber a copy of the resolutions of the Company's Board $(a)$ of Directors approving the issuance of the Bonds in accordance with the terms of this Agreement and the Company's execution of (i) this Agreement and (ii) any other documents that are required by the terms of this Agreement to be executed; and
• fulfil all conditions precedent to Closing. $(b)$
• $3.2$ On the Closing, the Subscriber shall deliver to the Company a copy of the resolution of the Subscriber's Board of Directors approving execution of (i) this Agreement, and (ii) other documents that are required by the terms of this Agreement to be executed.
• 1. CLOSING

$1c.4$

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

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• The Subscriber shall make full payment of the Aggregate Principal $(a)$ Amount: and
• The Company shall deliver the Bonds to the Subscriber. $(b)$

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REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS Ŝ.

• The Company hereby represents, warrants to and undertakes in favour of the $5.1$ 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,
• this Agreement when duly executed will constitute valid and legally $(b)$ binding and enforceable obligations of the Company, enforceable against the Company in accordance with the terms herein, except as may be limited by (b) 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;
• the Company has been duly incorporated and is validly existing under the. $\omega$ laws of Republic of Korea, is not in receivership or liquidation, has not taken any steps to enter into liquidation and 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
• at Closing, the Bonds will be properly issued by the Company, in $(d)$ compliance with all securities and corporate laws and regulations of Republic of Korea, bearing the rights, privileges, restrictions, terms, and conditions as are described in the attached Schedule A hereto.
• $5.2^\circ$

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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

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delivery of, and to perform the obligations under, this Agreement; and ang p

(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.

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6. 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 Closing Date and shall be valid unless $7.1$ terminated, and the subscription contemplated hereby may be abandoned at any time prior to the Closing Date:
• by mutual written consent of the Parties; $(a)$
• $(b)$ by the Subscriber if the Company has materially breached any of the representations and warranties in Clause 5.1; or
• by the Company, if the Subscriber has materially breached any of the (c). representations and warranties in Clause 5.2.

Ő. NOTICES

$8.1$ Each notice, demand, consent or other communication given or made under this -

$LCA$

Agreement shall be in writing and shall be delivered or sent to 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:

8123 Roper Road NW, Edmonton, Alberta T6E 6S4, Canada Address: Fax: +1-780-416-0324 Email: madi@oncoquestine.com Atm: Chief Executive Officer

$8.2$

$9.1$

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

MISCELLANEOUS 9.

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 Parties shall have given their respective consents: to such disclosure which consents 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 $9.3$ 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 $9.4$ remedy under this Agreement shall operate as a waiver thereof, nor shall single or partial exercise of the same preclude any further exercise thereof or the exerciseof 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 construct as a waiver thereof

Severability: If any term or other provision of this Agreement is invalid, illegal or $9.5$ 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 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 9.6 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 hereaftermade 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 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

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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 $9.7$ 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.
• No Assignment. No Party shall be entitled to assign its rights or delegate its duties $9.8$ hereunder to any other person without the prior written consent of the other Party hereto.
• Whole Agreement: This Agreement (together with any documents referred to 9,9 herein) constitutes the whole agreement between the Parties and it is expressly declared that no variations hereof shall be effective unless made in writing.
• Amendment: Unless otherwise specifically provided for in this Agreement, any $9.10$ 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 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.
• No Third Party Beneficiaries: This Agreement shall be binding upon and mure to 9.13 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 temedy of any nature whatsoever under or by reason of this Agreement.

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$9.14$ Interpretation:

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(a) The Parties hereto have participated jointly in the negotiation and drafting of this Agreement. If any ambiguity or question of intent or interpretation artses, this Agreement will be construed as if drafted fointly 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."

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• Governing Law. This Agreement shall be governed by, and construed in $9.15$ accordance with the Baw of Republic of Korea without any reference to any conflict on 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. $9.16$ 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.

[Signatures/seals appear on the following page]

IN WITNESS WHEREOF, this Agreement has been entered into on ÷, written above. the date first

ä

The Company

e.

Signature Information Redacted

ONCOQUEST PHARMACEUTICALS INC. in the presence of

The Subscriber

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SIGNED by Madi Madiyalakan, CEO Y. for and behalf of ONCOQUEST INC. in the presence of: Riccre Werme ontroller

ATTACHMENT A

CONDITIONS OF THE BONDS

ONCOQUEST PHARMACEUTICALS INC. (the "Company") agrees to issue on February 7 2021 (the 'Issue Date') in favour of OncoQuest Inc. (the 'Bondholder') corporate bonds, carrying the rights, privileges, restrictions, terms, and conditions as are described below (the "Conditions").

1. Issue Price and Principal Amount.

The issue price and original principal amount of the Bonds shall be Two Hundred Twelve Billion Nine Hundred Seventy-Four Million Nine Hundred Ninety-Nine Thousand Fight Hundred and Eighty-Five (212,974,999,885) Korean Won.

The total principal amount of the Bonds to be registered shall be Two Hundred Twelve Billion Nine Hundred Seventy-Four Million Nine Hundred Ninety-Nine Thousand Eight Hundred and Eighty-Five (212,974,999,885) Korean Won-

The Bonds shall be comprised of one (1) individual Bonds with the respective values ascribed as follows (the "Individual Bond"):

One (1) of the Individual Bonds shall have a value of Two Hundred Twelve Billion Nine Hundred Seventy-Four Million Nine Hundred Ninety-Nine Thousand Eight Hundred and Eighty-Five (212,974,999,885) KOREAN WON

2, Interest Rate.

.
K

• The interest-rate and the yield to maturity of the Bonds shall be respectively 1%. $(A)$ per annum,
• Interest shall be paid every three (3) months starting from the Issue Date. $(B)$ Provided, if the Company exercises the Call Option to redeem all or part of the Bonds pursuant to Clause 5, the Company shall pay the interest on the redeemed Bonds together with the redemption payment to the Bondholder.

3. Maturity

The maturity date of the Bonds ("Due Date") shall be February 18 2022, provided that the Company shall have an option to extend the Due Date by giving notice of such extension to the Bondholder. The Company may extend the Due Date a maximum of five

9)

(5) times, each time the Company extends the Duc Date, the extension period shall be one (I) year. In the event that the Company extends the Due Date, the Bondholder and the Company agree that the interest rate that shall be applied up to the date to which the Due Date is extended shall be the London Interbank Offered Rate ("LIBOR") that is applicable on the day that the Company extends the Due Date plus 1% per annum.

$4^°$ REDEMPTION

The Company will redeem the Bonds at 100 per cent of the principal amount outstanding. on the Due Date.

$5.$ CALL OPTION

The Company may exercise its sole right of redeeming a portion or all of its Bonds. In case the Company redeems the Bonds in accordance with this Clause 5, the Company shall notify the Bondholder in writing stating the amount of Bonds to be redeemed by the Company, and such amount shall be paid to the Bondholder within 30 days of such notice.

$\overline{6}$ Offset

The Company may offset the redemption payment under Clause 4 and Clause 5 hereunder with a payment to be made for shares and/or bonds to be issued by the

1. EVENTS OF DEFAULT

• The Bondholder may give notice to the Company that the Bonds are immediately $(A)$ due and repayable if any of the following events occurs and is continuing (each an "Event of Default"):
• a default is made in the payment of principal in respect of any of the $\omega$ Bonds when and as the same ought to be paid in accordance with this Conditions; or
• a default is made by the Company in the performance or observance of $(i)$ any condition or provision contained in the Bonds and on its part to be performed or observed and (if remediable) such default continues for the period of thirty (30) days following the service by the Bondholder on the Company of notice requiring such default to be remedied; or -
• a resolution is passed or an order of a court of competent jurisdiction is (iii) made that the Company be wound up or dissolved otherwise than for the

purposes of or pursuant to and followed by a consolidation, amalgamation inerger or reconstruction the terms of which shall have previously been. approved in writing by the Bondholder, or ﷺ .

the Company (a) stops payment (within the meaning of Korean or any $(iv)$ other applicable bankruptcy law) or (b) (otherwise than for the purposes of such a consolidation, amalgamation, merger, reconstruction or voluntary solvent winding up or dissolution as is referred to in (iii) above) ceases or through an official action of the Board of Directors of the Company threatens to cease to carry on business or (c) is unable to pay its debts as and when they fall due; or

a y

proceedings shall have been initiated against the Company under the $(y)$ Debtor Rehabilitation and Insolvency Act or analogous insolvency law (or the equivalent of such proceedings under the laws, rules and regulations of any other applicable jurisdiction) and such proceedings shall not have been discharged or stayed within a period of thirty (30) days; or

the Company shall initiate or consent to proceedings in relation to itself under the Debtor Rehabilitation and Insolvency Act or make an assignment for the benefit of, or enter into any composition with, its creditors

Upon the occurrence of any Event of Default, the Bonds will immediately become due and repayable, without further action or formality, at the sum of the principal amount of the Bonds from (and including) the date of the occurrence of such an Event of Default to (but excluding) the date of actual payment in respect of such Bonds under these Conditions.

am.

[End of Bond Conditions]

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$(vi)$

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