RACURA ONCOLOGY LTD — Proxy Solicitation & Information Statement 2018

May 16, 2018

RACE ONCOLOGY LIMITED ACN 149 318 749

NOTICE OF GENERAL MEETING

Notice is given that the Meeting will be held at:

TIME: 11.30 AM AEST

DATE: 20 JUNE 2018

PLACE: SMC Conference & Function Centre, Tuscan Room, Ground Floor, 66 Goulburn Street, Sydney NSW 2000

The business of the Meeting affects your shareholding and your vote is important. This Notice of Meeting should be read in its entirety. If Shareholders are in doubt as to how they should vote, they should seek advice from their professional advisors prior to voting.

The Directors have determined pursuant to Regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the Meeting are those who are registered Shareholders at 7.00 pm AEST on 18 June 2018.

BUSINESS OF THE MEET ING

AGENDA

1. RESOLUTION 1 – RATIFICATION OF TRANCHE 1 SHARES ISSUED

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution:

"That, for the purposes of ASX Listing Rule 7.4 and for all other purposes, Shareholders ratify the issue of 9,872,062 Shares on the terms and conditions set out in the Explanatory Statement."

Voting Exclusion: The Company will disregard any votes cast in favour of the Resolution by or on behalf of a person who participated in the issue or any associates of those persons. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form, or, it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

2. RESOLUTION 2 – APPROVAL TO ISSUE TRANCHE 2 SHARES

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution:

"That, for the purposes of ASX Listing Rule 7.1 and for all other purposes, approval is given for the Company to issue up to 1,500,000 Shares on the terms and conditions set out in the Explanatory Statement."

Voting Exclusion: The Company will disregard any votes cast in favour of the Resolution by or on behalf of a person who is expected to participate in, or who will obtain a material benefit as a result of, the proposed issue (except a benefit solely by reason of being a holder of ordinary securities in the Company) or an associate of that person (or those persons). However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form, or, it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

3. RESOLUTION 3 – APPROVAL TO ISSUE BROKER OPTIONS

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution:

"That, for the purposes of ASX Listing Rule 7.1 and for all other purposes, approval is given for the Company to issue up to 5,000,000 unlisted Options to the Broker (or its nominees) on the terms and conditions set out in the Explanatory Statement."

Voting Exclusion: The Company will disregard any votes cast in favour of the Resolution by or on behalf of a person who is expected to participate in, or who will obtain a material benefit as a result of, the proposed issue (except a benefit solely by reason of being a holder of ordinary securities in the Company) or an associate of that person (or those persons). However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form, or, it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

4. RESOLUTION 4 – APPROVAL TO VARY MILESTONE 1 IN PERFORMANCE SHARES TERMS AND AVOID BREACH OF 20% PROHIBITION

To consider and, if thought fit, to pass, with or without amendment, the following resolution as a special resolution:

"That, for the purposes of sections 195(4) and 246B of the Corporations Act, and for all other purposes, approval is given for the Company to vary the terms of existing Performance Shares issued to Update Pharma Inc. in accordance with Variation 1 and Variation 2 on the terms and conditions set out in the Explanatory Statement."

Voting Exclusion: The Company will disregard any votes cast on this Resolution by Dr. William Garner that is the subject of the approval and any of his associates. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form, or, it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

5. RESOLUTION 5 – APPROVAL TO VARY PERFORMANCE SHARES TERMS TO AVOID BREACH OF 20% PROHIBITION

To consider and, if thought fit, to pass, with or without amendment, the following resolution as a special resolution:

"That for the purposes of 195(4) and 246B of the Corporations Act, and for all other purposes, approval is given for the Company to vary the terms of existing Performance Shares issued to Update Pharma Inc. in accordance with Variation 2 on the terms and conditions set out in the Explanatory Statement."

Voting Exclusion: The Company will disregard any votes cast on this Resolution by Dr. William Garner that is the subject of the approval and any of his associates. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form, or, it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

Dated: 15 May 2018

By order of the Board

Peter Webse Company Secretary

Voting in person

To vote in person, attend the Meeting at the time, date and place set out above.

Voting by proxy

To vote by proxy, please complete and sign the enclosed Proxy Form and return by the time and in accordance with the instructions set out on the Proxy Form.

In accordance with section 249L of the Corporations Act, Shareholders are advised that:

• each Shareholder has a right to appoint a proxy;
• the proxy need not be a Shareholder of the Company; and
• a Shareholder who is entitled to cast 2 or more votes may appoint 2 proxies and may specify the proportion or number of votes each proxy is appointed to exercise. If the member appoints 2 proxies and the appointment does not specify the proportion or number of the member's votes, then in accordance with section 249X(3) of the Corporations Act, each proxy may exercise one-half of the votes.

Shareholders and their proxies should be aware that changes to the Corporations Act made in 2011 mean that:

• if proxy holders vote, they must cast all directed proxies as directed; and
• any directed proxies which are not voted will automatically default to the Chair, who must vote the proxies as directed.

Should you wish to discuss the matters in this Notice of Meeting please do not hesitate to contact the Company Secretary on +61 8 6377 8043.

EXPLANATORY STATEMENT

This Explanatory Statement has been prepared to provide information which the Directors believe to be material to Shareholders in deciding whether or not to pass the Resolutions.

1. BACKGROUND TO CAPITAL RAISING

On 12 March 2018 and 16 March 2018, the Company announced a capital raising comprising:

• (a) 9,872,062 Shares (Tranche 1 Shares); and
• (b) 1,500,000 Shares (Tranche 2 Shares),

at an issue price of $0.32 per Share to professional and sophisticated investors raising a total of $3,639,060 (Capital Raising).

The Company intends on applying the funds towards operations, the manufacturing of Bisantrene for the US registration clinical trial and the expansion of the Bisantrene Named Patient Program.

The Company issued the Tranche 1 Shares on 19 March 2018 out of its 15% annual placement capacity (Placement Capacity). Resolution 1 seeks ratification of the Tranche 1 Shares.

The Tranche 2 Shares are in excess of the Company's Placement Capacity, and accordingly, their issue is subject to Shareholder approval pursuant to Resolution 2.

The Company engaged the services of 708 Capital Pty Ltd (Broker) to provide corporate advice and capital raising services in connection with the Capital Raising (Capital Raising Services). The Company has agreed to issue 5,000,000 unlisted Options (Broker Options) to the Broker as consideration for the Capital Raising Services. The Company is seeking approval to issue the Broker Options to the Broker pursuant to Resolution 3.

2. RESOLUTION 1 – RATIFICATION OF TRANCHE 1 SHARES ISSUED

2.1 General

On 19 March 2018, the Company issued 9,872,062 Shares at an issue price of $0.32 per Share to raise $3,159,060. Resolution 1 seeks Shareholder ratification pursuant to ASX Listing Rule 7.4 for the issue of those Shares (Ratification).

ASX Listing Rule 7.1 provides that a company must not, subject to specified exceptions, issue or agree to issue more equity securities during any 12 month period than that amount which represents 15% of the number of fully paid ordinary securities on issue at the commencement of that 12 month period.

ASX Listing Rule 7.4 sets out an exception to ASX Listing Rule 7.1. It provides that where a company in general meeting ratifies the previous issue of securities made pursuant to ASX Listing Rule 7.1 (and provided that the previous issue did not breach ASX Listing Rule 7.1) those securities will be deemed to have been made with shareholder approval for the purpose of ASX Listing Rule 7.1.

By ratifying this issue, the Company will retain the flexibility to issue equity securities in the future up to the 15% annual placement capacity set out in ASX Listing Rule 7.1 without the requirement to obtain prior Shareholder approval.

2.2 Technical information required by ASX Listing Rule 7.4

Pursuant to and in accordance with ASX Listing Rule 7.5, the following information is provided in relation to the Ratification:

• (a) 9,872,062 Shares were issued;
• (b) the issue price was $0.32 per Share;
• (c) the Shares issued were all fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company's existing Shares;
• (d) the Shares were issued to sophisticated and professional investors. None of these subscribers are related parties of the Company; and
• (e) the funds raised from this issue will be used to operations, to fund manufacturing of Bisantrene for the US registration clinical trial and the expansion of the Bisantrene Named Patient Program.

3. RESOLUTION 2 – APPROVAL TO ISSUE TRANCHE 2 SHARES

3.1 General

Resolution 2 seeks Shareholder approval for the issue of up to 1,500,000 Shares at an issue price of $0.32 per Share to raise up to $480,000 (Tranche 2 Placement).

A summary of ASX Listing Rule 7.1 is set out in Section 2.1 above.

The effect of Resolution 2 will be to allow the Company to issue the Shares pursuant to the Placement during the period of 3 months after the Meeting (or a longer period, if allowed by ASX), without using the Company's 15% annual placement capacity.

3.2 Technical information required by ASX Listing Rule 7.1

Pursuant to and in accordance with ASX Listing Rule 7.3, the following information is provided in relation to the Tranche 2 Placement:

• (a) the maximum number of Shares to be issued is 1,500,000;
• (b) the Shares will be issued no later than 3 months after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules) and it is intended that issue of the Shares will occur on the same day;
• (c) the issue price will be $0.32 per Share;
• (d) the Shares will be issued to sophisticated and professional investors. None of these subscribers are related parties of the Company;
• (e) the Shares issued will be fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company's existing Shares; and

(f) the Company intends to use the funds raised from the Placement towards operations, the manufacturing of Bisantrene for the US registration clinical trial and the expansion of the Bisantrene Named Patient Program.

4. RESOLUTION 3 – APPROVAL TO ISSUE BROKER OPTIONS

4.1 General

Resolution 3 seeks Shareholder approval for the issue of 5,000,000 Broker Options in consideration for the Broker Services (Options Placement).

A summary of ASX Listing Rule 7.1 is set out in section 2.1 above.

The effect of Resolution 3 will be to allow the Company to issue the Broker Options pursuant to the Options Placement during the period of 3 months after the Meeting (or a longer period, if allowed by ASX), without using the Company's 15% annual placement capacity.

4.2 Technical information required by ASX Listing Rule 7.1

Pursuant to and in accordance with ASX Listing Rule 7.3, the following information is provided in relation to the Options Placement:

• (a) the maximum number of Broker Options to be issued is 5,000,000;
• (b) the Broker Options will be issued no later than 3 months after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules) and it is intended that issue of the Options will occur on the same date;
• (c) the Broker Options will be issued for nil cash consideration in satisfaction of the Capital Raising Services;
• (d) the Broker Options will be issued to the Broker or its nominees, who are not related parties of the Company;
• (e) the Broker Options will be issued on the terms and conditions set out in Schedule 1; and
• (f) no funds will be raised from the Options Placement as the Broker Options are being issued in consideration for the Capital Raising Services.

5. RESOLUTIONS 4 AND 5 – APPROVAL TO VARY PERFORMANCE SHARES TERMS

5.1 General

In consideration for the acquisition of the intellectual property in Bisantrene, the Company issued 10,000,000 Performance Shares to Update Pharma convertible into two tranches of Shares with each tranche having a separate milestone event triggering their conversion (on a 1:1 basis), which, as they currently read, are as follows:

• (a) 5,000,000 Performance Shares shall convert upon the Company satisfying the following milestones within a period of 24 months from the date of issue of the Performance Shares:
  • (i) the Company having received approval under section 505(b)(2) of the Federal Food, Drug, and Cosmetic Act 1938 which allows

the use of information from historical clinical trials not conducted by the Company or Update Pharma; and

(ii) the Company having received approval for, and commenced, a bridging study on a medical product to extrapolate foreign clinical trial data on safety, efficacy and dose response within a new region,

(Tranche 1 Performance Shares); and

(b) 5,000,000 Performance Shares shall convert if, within a period of 24 months from the date of issue of the Performance Shares, the Company has received approval to distribute unauthorised medications to physicians and named patients with unmet medical needs under an early access program (Tranche 2 Performance Shares).

5.2 246B Corporations Act

Section 246B of the Corporations Act and clause 2.4 of the Constitution provide that the rights attaching to a class of shares cannot be varied without:

• (a) a special resolution passed at a meeting of the members holding Shares in that class; or
• (b) the written consent of the members who are entitled to at least 75% of the votes that may be cast in respect of Shares in that class.

The Company must give written notice of the variation to the members of the affected class within 7 days after the variation is made.

Resolution 4 seeks Shareholder approval to make Variation 1 and Variation 2 to the terms and conditions attaching to the Performance Shares. In the event Resolution 4 is passed by the requisite majority, the Company will give written notice of the variation to the rights attaching to the Performance Shares to Update Pharma within 7 days.

Resolution 5 seeks Shareholder approval to make Variation 2 to the terms and conditions attaching to the Performance Shares. In the event Resolution 5 is passed by the requisite majority, the Company will give written notice of the variation to the rights attaching to the Performance Shares to Update Pharma within 7 days.

Resolutions 4 and 5 are special resolutions. Accordingly, at least 75% of votes cast by Shareholders present and eligible to vote at the Meeting must be in favour of Resolutions 4 and 5 for either of them to be passed.

5.3 Variations

Variation 1

For the purposes of Resolution 4, Variation 1 shall mean:

(a) deleting sub-paragraph (i) of paragraph (a) (Milestones) and replacing it with the following:

"5,000,000 Performance Shares shall convert upon the Company, within a period of 24 months from the date of issue of the Performance Shares, having received advice from the FDA that the Company may use information from historical clinical trials conducted by third parties in connection with the development and approval of Bisantrene under section 505(b)(2) of the FFDC Act".

Variation 2

For the purposes of Resolutions 4 and 5, Variation 2 shall mean:

• (a) deleting paragraph (b) "Conversion of Performance Shares" and replacing it with the following:
  • "(b) (Conversion of Performance Shares): Subject to paragraphs (b)(i) and (b)(ii) below, in the event a Milestone is satisfied and the Holder gives the Company written notice of its election to convert all or a proportion of the Performance Shares into Shares (Election Notice), the Performance Shares held by the Holder the subject of the Election Notice will convert into an equal number of Shares. If;
    • (i) the conversion of the Performance Shares into Company Shares would result in the Holder being in contravention of section 606(1) of the Corporations Act, then the conversion of such number of Performance Shares that would cause the contravention will be deferred (Deferred Conversion Performance Shares) until such time or times thereafter the conversion would not result in such a breach; and
    • (ii) the above paragraph (b)(i) applies, the Company shall as soon as practicable call a meeting of its shareholders for the purposes of obtaining approval under item 7, section 611 of the Corporations Act for the conversion of the Deferred Conversion Performance Shares into the Company Shares."

5.4 Reasons for the Variations

Variation 1

With respect to the milestone set out in Section 5.1(a)(i) (Part A Milestone), there is no formal "approval" granted by the FDA under the FFDC Act with respect to 505(b)(2) status of a drug. However, the Company believes that this part of the milestone attaching to the Tranche 1 Performance Shares has now been achieved following a recent Type C correspondence exchange ("Type C Meeting") with the FDA in which the FDA confirmed that the Company's formulation and the Lederle formulation for Bisantrene are sufficiently identical that all the historical preclinical and clinical relating to the Lederle formulation can be applied to Bisantrene and the proposed development program for Bisantrene meets the requirements for 505(b)(2) evaluation. The Company therefore considers that the Part A Milestone has been achieved.

While the FDA had previously (at the pre-IND meeting in February 2017) confirmed that Bisantrene qualifies for the 505(b)(2) pathway, this qualification depended on whether Race could establish through its manufacturing and other specifications that its formulation was identical in every material respect to the Lederle formulation. The Company believes that this has now been achieved.

With respect to the milestone set out in Section 5.1(a)(ii) (Part B Milestone), the Company considers that the principal purpose of the original bridging study, as described in the Prospectus, was to allow Race to demonstrate in a human study and to the satisfaction of the FDA, that its new formulation was pharmaceutically and clinically equivalent to the original Lederle formulation upon which historical preclinical and clinical data were based, such that the historical data could be used in support of the registration of Bisantrene. The impact of successfully completing the human bridging study would have been that the Company could have then proceeded to a phase 3 study and subsequent registration.

However, the Company decided not to develop a new formula immediately and rather go with an identical formula to the formula developed Lederle. The original rationale for developing a new formula was that there are known issues associated with the original formula for Bisantrene with respect to its solubility in plasma and consequent phlebitis (bruising around injection site) when given by peripheral venous catheter. As such, the drug has historically been administered by central venous catheter (CVC), which largely avoided phlebitis.

The Company's original view was that CVC administration of drugs is cumbersome for hospital staff (and the patient) and may be unacceptable in current practice. Therefore, the Company originally believed that it needed to develop a new formulation that would overcome the solubility problem and allow the drug to be given by peripheral venous catheter.

After forming a scientific advisory board, discussions with the Company's US regulatory advisors and discussions with clinicians, the Company determined that, while a new formulation would be desirable in the long term, CVC administration was acceptable in current practice for administration of a chemotherapy in a disease like acute myeloid leukemia (AML), especially when the drug is to be used as a life-saving drug of last resort (salvage therapy) in the treatment of relapsed/refractory AML. This avoided the immediate need to develop a new formula, which had a number of benefits for the Company and its Shareholders, including:

• (a) it eliminated the risk that development of a new formula might not succeed;
• (b) it saved the Company around 18 months and $3,000,000 for a human bridging study;
• (c) it enabled the Company to secure 505(b)(2) designation from the FDA without the risk of a human bridging study that might not fully support such designation; and
• (d) it enabled the Company to manufacture a finished product more quickly and thereby be in a position to start the named patient program more expeditiously.

By utilising the original Lederle formulation, the Company averted the need for the original bridging study, allowing it (once 505(b)(2) status was granted) to proceed immediately to a phase 3 study. Therefore, the Company is of the view that the commercial effect of the Part B Milestone has been achieved by virtue of the fact that the bridging study is no longer needed.

Given that the Company considers that both the Part A Milestone and Part B Milestone have been satisfied, the Company is seeking to undertake Variation 1 in order to give commercial effect to what was agreed when the HOA was originally entered into.

Variation 2

Pursuant to Section 606(1) of the Corporations Act, a person must not acquire a relevant interest in issued voting shares in a listed company if the person acquiring the interest does so through a transaction in relation to securities entered into by or on behalf of the person and because of the transaction, that person's or someone else's voting power in the company increases:

• (a) from 20% or below to more than 20%; or
• (b) from a starting point that is above 20% and below 90%,

(Prohibition).

The Company wishes to undertake Variation 2 to ensure that the Performance Shares will not convert in the event their conversion would result in a breach of the 20% Prohibition.

If Shareholder approval is obtained in respect of Resolution 5, this will ensure that there is no breach of the 20% Prohibition if either the Tranche 1 or Tranche 2 Performance Shares convert regardless of whether Resolution 4 is passed.

The full revised terms and conditions of the Performance Shares, assuming Resolutions 4 and 5 are approved are included at Schedule 2. In the event that only Resolution 5 is approved, only Variation 2 will be made and the Performance Shares will otherwise remain on the terms and conditions set out in the Company's announcement dated 11 July 2016.

5.5 Chapter 2E of the Corporations Act

For a public company, or an entity that the public company controls, to give a financial benefit to a related party of the public company, the public company or entity must:

• (a) obtain the approval of the public company's members in the manner set out in sections 217 to 227 of the Corporations Act; and
• (b) give the benefit within 15 months following such approval,

unless the giving of the financial benefit falls within an exception set out in sections 210 to 216 of the Corporations Act.

The proposed Variation to the terms of the Performance Shares constitutes giving a financial benefit and William Garner is a related party of the Company by virtue of being a Director.

The Directors (other than William Garner who has a material personal interest in the Variation) consider that Shareholder approval pursuant to Chapter 2E of the Corporations Act is not required in respect of the Variation because the HOA was negotiated on an arm's length basis and entered into prior to Mr Garner being a Director of the Company. The sole purpose of the Variation is to give commercial effect to what was agreed under the HOA and the Company therefore considers the Variation to be reasonable and necessary in the circumstances.

GLOSSARY

$ means Australian dollars.

ASIC means the Australian Securities & Investments Commission.

ASX means ASX Limited (ACN 008 624 691) or the financial market operated by ASX Limited, as the context requires.

ASX Listing Rules means the Listing Rules of ASX.

Board means the current board of directors of the Company.

Business Day means Monday to Friday inclusive, except New Year's Day, Good Friday, Easter Monday, Christmas Day, Boxing Day, and any other day that ASX declares is not a business day.

Broker means 708 Capital Pty Ltd (ACN 142 319 202).

Broker Options means the Options issued to the Broker the subject of Resolution 3.

Capital Raising has the meaning given to that term in Section 1 of the Explanatory Statement.

Chair means the chair of the Meeting.

Company means Race Oncology Limited (ACN 149 318 749).

Constitution means the Company's constitution.

Corporations Act means the Corporations Act 2001 (Cth).

Directors means the current directors of the Company.

Existing Option means an Option which has been issued by the Company prior to the date of this Notice of Meeting.

Explanatory Statement means the explanatory statement accompanying the Notice.

FDA means the US Food and Drug Administration.

FFDC Act means the Federal Food, Drug, and Cosmetic Act 1938.

General Meeting or Meeting means the meeting convened by the Notice.

Issue means the proposed issue of Shares to Update Pharma upon conversion of the Performance Shares as outlined in Section 2.1 of the Explanatory Statement.

Notice or Notice of Meeting means this notice of meeting including the Explanatory Statement and the Proxy Form.

Option means an option to acquire a Share with the terms and conditions set out in Schedule 1.

Optionholder means a holder of an Option.

Option means an option to acquire a Share.

Performance Shares means the performance shares issued to Update Pharma, the terms and conditions of which are set out in the Company's announcement dated 11 July 2016.

Prospectus means the Company's initial public offering prospectus dated 11 May 2016.

Proxy Form means the proxy form accompanying the Notice.

Resolutions means the resolutions set out in the Notice, or any one of them, as the context requires.

Section means a section of the Explanatory Statement.

Share means a fully paid ordinary share in the capital of the Company.

Shareholder means a registered holder of a Share.

Tranche 1 Performance Shares has the meaning given to that term in Section 5.1

Tranche 2 Performance Shares has the meaning given to that term in Section 5.1

Tranche 1 Shares has the meaning given to that term in Section 1 of the Explanatory Statement.

Tranche 2 Shares has the meaning given to that term in Section 1 of the Explanatory Statement.

Update Pharma means Update Pharma Inc.

Variation 1 has the meaning given to that term in Section 5.3.

Variation 2 has the meaning given to that term in Section 5.3.

Variations means Variation 1 and Variation 2.

WST means Western Standard Time as observed in Perth, Western Australia.

SCHEDULE 1 – TERMS AND CONDITIONS OF BROKER OPTIONS

(a) Entitlement

Each Option entitles the holder to subscribe for one Share upon exercise of the Option.

(b) Exercise Price

Subject to paragraph (i), the amount payable upon exercise of each Option will be $0.45 (Exercise Price)

(c) Expiry Date

Each Option will expire at 5:00 pm (WST) on 19 March 2020 (Expiry Date). An Option not exercised before the Expiry Date will automatically lapse on the Expiry Date.

(d) Exercise Period

The Options are exercisable at any time on or prior to the Expiry Date (Exercise Period).

(e) Notice of Exercise

The Options may be exercised during the Exercise Period by notice in writing to the Company in the manner specified on the Option certificate (Notice of Exercise) and payment of the Exercise Price for each Option being exercised in Australian currency by electronic funds transfer or other means of payment acceptable to the Company.

(f) Exercise Date

A Notice of Exercise is only effective on and from the later of the date of receipt of the Notice of Exercise and the date of receipt of the payment of the Exercise Price for each Option being exercised in cleared funds (Exercise Date).

(g) Timing of issue of Shares on exercise

Within 15 Business Days after the Exercise Date, the Company will:

• (i) issue the number of Shares required under these terms and conditions in respect of the number of Options specified in the Notice of Exercise and for which cleared funds have been received by the Company;
• (ii) if required, give ASX a notice that complies with section 708A(5)(e) of the Corporations Act, or, if the Company is unable to issue such a notice, lodge with ASIC a prospectus prepared in accordance with the Corporations Act and do all such things necessary to satisfy section 708A(11) of the Corporations Act to ensure that an offer for sale of the Shares does not require disclosure to investors; and
• (iii) if admitted to the official list of ASX at the time, apply for official quotation on ASX of Shares issued pursuant to the exercise of the Options.

If a notice delivered under (g)(ii) for any reason is not effective to ensure that an offer for sale of the Shares does not require disclosure to investors, the Company must, no later than 20 Business Days after becoming aware of such notice being ineffective, lodge with ASIC a prospectus prepared in accordance with the Corporations Act and do all such things necessary to satisfy section 708A(11) of the Corporations Act to ensure that an offer for sale of the Shares does not require disclosure to investors.

(h) Shares issued on exercise

Shares issued on exercise of the Options rank equally with the then issued shares of the Company.

(i) Reconstruction of capital

If at any time the issued capital of the Company is reconstructed, all rights of an Optionholder are to be changed in a manner consistent with the Corporations Act and the ASX Listing Rules at the time of the reconstruction.

(j) Participation in new issues

There are no participation rights or entitlements inherent in the Options and holders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Options without exercising the Options.

(k) Change in exercise price

An Option does not confer the right to a change in Exercise Price or a change in the number of underlying securities over which the Option can be exercised.

(l) Transferability

The Options are transferable subject to any restriction or escrow arrangements imposed by ASX or under applicable Australian securities laws.

SCHEDULE 2 – FULL REVISED PERFORMANCE SHARES TERMS

The terms and conditions of the Performance Shares are as follows:

• (a) (Performance Shares): each Performance Share is a share in the capital of the Company;
• (b) (General Meetings): the Performance Shares shall confer on the holder (Holder) the right to receive notices of general meetings and financial reports and accounts of the Company that are circulated to the Company's shareholders. Holders have the right to attend general meetings of the Company;
• (c) (No Voting Rights): the Performance Shares do not entitle the Holder to vote on any resolutions proposed at a general meeting of the Company, subject to any voting rights under the Corporations Act 2001 (Cth) or the ASX Listing Rules where such rights cannot be excluded by these terms;
• (d) (No Dividend Rights): the Performance Shares do not entitle the Holder to any dividends;
• (e) (No Rights on Winding Up): the Performance Shares may not participate in the surplus profits or assets of the Company;
• (f) (Transfer of Performance Shares): the Performance Shares are not transferable;
• (g) (Reorganisation of Capital): in the event that the issued capital of the Company is reconstructed, all rights of a Holder will be changed to the extent necessary to comply with the ASX Listing Rules at the time of reorganisation provided that, subject to compliance with the ASX Listing Rules, following such reorganisation the economic and other rights of the Holder are not diminished or terminated;
• (h) (Application to ASX): the Performance Shares will not be quoted on ASX. If admitted to the Official List of ASX, then upon conversion of the Performance Shares into Shares in accordance with these terms, the Company must within seven (7) days after the conversion, apply for and use its best endeavours to obtain the official quotation on ASX of the Shares arising from the conversion;
• (i) (Participation in Entitlements and Bonus Issues): subject always to the rights under item (g) (Reorganisation of Capital), holders of Performance Shares will not be entitled to participate in new issues of capital offered to holders of Shares such as bonus issues and entitlement issues;
• (j) (Amendments required by ASX): the terms of the Performance Shares may be amended as necessary by the Company's board in order to comply with the ASX Listing Rules, or any directions of ASX regarding the terms provided that, subject to compliance with the ASX Listing Rules, following such amendment, the economic and other rights of the Holder are not diminished or terminated;
• (k) (No Other Rights): the Performance Shares give the Holders no rights other than those expressly provided by these terms and those provided at law where such rights at law cannot be excluded by these terms;

Conversion of the Performance Shares

(a) (Milestones): the Performance Shares will convert into Shares (on a one for one basis) upon satisfaction of following milestones:

• (i) 5,000,000 Performance Shares shall convert upon the Company, within a period of 24 months from the date of issue of the Performance Shares, having received advice from the FDA that the Company may use information from historical clinical trials conducted by third parties in connection with the development and approval of Bisantrene under section 505(b)(2) of the FFDC Act;
• (ii) 5,000,000 Performance Shares shall convert if, within a period of 24 months from the date of issue of the Performance Shares, the Company has received approval to distribute unauthorised medications to physicians and named patients with unmet medical needs under an early access program,

(each, a Milestone);

• (b) (Conversion of Performance Shares): Subject to paragraphs (b)(i) and (b)(ii) below, in the event a Milestone is satisfied and the Holder gives the Company written notice of its election to convert all or a proportion of the Performance Shares into Shares (Election Notice), the Performance Shares held by the Holder that are the subject of the Election Notice will convert into an equal number of Shares, except that If:
  • (i) the conversion of the Performance Shares into Company Shares would result in the Holder being in contravention of section 606(1) of the Corporations Act, then the conversion of such number of Performance Shares that would cause the contravention will be deferred (Deferred Conversion Performance Shares) until such time or times thereafter the conversion would not result in such a breach; and
  • (ii) the above paragraph (b)(i) applies, the Company shall as soon as practicable call a meeting of its shareholders for the purposes of obtaining approval under item 7, section 611 of the Corporations Act for the conversion of the Deferred Conversion Performance Shares into the Company Shares.
• (c) (No Conversion if Milestone not Achieved): any Performance Share not converted into a Share within 3 years from the Issue Date will be automatically redeemed by the Company for a sum of $0.0000001 per Performance Share within 10 Business Days;
• (d) (After Conversion): the Shares issued on conversion of the Performance Shares will, as and from 5.00pm (WST) on the date of issue, rank equally with and confer rights identical with all other Shares then on issue and application will be made by the Company to ASX for the official quotation of the Shares issued upon conversion;
• (e) (Conversion Procedure): upon satisfaction of a Milestone and the Holder giving written notice to the Company that the Holder elects to convert all or a proportion of the Performance Shares into Shares, the Company will issue the Holder with a new holding statement for the Shares in respect of the Performance Shares the Holder has elected to convert as soon as practicable following the conversion of the Performance Shares into Shares; and
• (f) (Ranking of Shares): the Shares into which the Performance Shares will convert will rank pari passu in all respects with the Shares on issue at the date of conversion.

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