**EXHIBIT7(a)**

 

 

Deed of Settlement andRelease

 

ProgenPharmaceuticals Limited (ACN 010 975 612)

 

Progen

 

MedigenBiotechnology Corporation (a company incorporated in Taiwan)

 

Medigen

 

Dr JohnChiplin, Dr Julie Michele Cherrington, Dr Gordon Leroy Schooley, Thomas JamesBurt, Tzong-Pai (Paul) Lin, Stuart Bruce James, Heng Hsin Tang and JoeYeh-Chiao Lin

 

Miscellaneous Parties

 

Clayton Utz

Lawyers

Level 28, Riparian Plaza71 Eagle Street  Brisbane  QLD 4000  Australia

GPO Box 55  Brisbane QLD  4001

T + 61 7 3292 7000  F +61 7 3221 9669

 

**www.claytonutz.com**

 

Our reference  12154/15936/80092418

 

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| **Contents** |                                  |                                           |
|--------------|---------------------------------------|------------------------------------------------|
| ** **   | ** **                            | ** **                                     |
| **1.**       | **Definitions and interpretation**    | **ii**                                         |
|         |                                  |                                           |
|         | 1.1                                   | Definitions                                    | ii |
|         | 1.2                                   | Interpretation                                 | iii |
| ** **   | ** **                            | ** **                                     |
| **2.**       | **Payment**                           | **iv**                                         |
|         |                                  |                                           |
|         | 2.1                                   | Payments                                       | iv |
|         | 2.2                                   | Date and Direction of Payment                  | iv |
| ** **   | ** **                            | ** **                                     |
| **3.**       | **Release**                           | **iv**                                         |
|         |                                  |                                           |
|         | 3.1                                   | Release of Progen                              | iv |
|         | 3.2                                   | Release of Medigen                             | v |
|         | 3.3                                   | Related Parties                                | v |
| ** **   | ** **                            | ** **                                     |
| **4.**       | **Undertakings**                      | **v**                                          |
| ** **   | ** **                            | ** **                                     |
| **5.**       | **Share Stability**                   | **vi**                                         |
| ** **   | ** **                            | ** **                                     |
| **6.**       | **Procurements and  Recommendations** | **vii**                                        |
|         |                                  |                                           |
|         | 6.1                                   | Resignation and withdrawal                     | vii |
|         | 6.2                                   | Progen Procurements and Agreement with Medigen | vii |
|         | 6.3                                   | Miscellaneous Obligations                      | x |
| ** **   | ** **                            | ** **                                     |
| **7.**       | **Progen Chief Executive Officer**    | **xi**                                         |
| ** **   | ** **                            | ** **                                     |
| **8.**       | **Binding effect of this deed**       | **xi**                                         |
| ** **   | ** **                            | ** **                                     |
| **9.**       | **Disposal of Proceedings**           | **xi**                                         |
| ** **   | ** **                            | ** **                                     |
| **10.**      | **Costs**                             | **xi**                                         |
| ** **   | ** **                            | ** **                                     |
| **11.**      | **Warranty**                          | **xi**                                         |
| ** **   | ** **                            | ** **                                     |
| **12.**      | **General**                           | **xii**                                        |
|         |                                  |                                           |   |
|         | 12.1                                  | Governing law                                  | xii |
|         | 12.2                                  | Jurisdiction                                   | xii |
|         | 12.3                                  | Severance                                      | xiii |
|         | 12.4                                  | Entire agreement                               | xiii |
|         | 12.5                                  | Amendments                                     | xiii |
|         | 12.6                                  | Waiver                                         | xiii |
| ** **   | ** **                            | ** **                                     |
| **13.**      | **Acknowledgments**                   | **xiii**                                       |
| ** **   | ** **                            | ** **                                     |
| **14.**      | **Counterparts**                      | **xiv**                                        |

 

i

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**Deedof Settlement and Release dated**

** **

**Parties****                                                                                        ****Progen Pharmaceuticals Limited (ACN 010 975 612)** of16 Benson Street, Brisbane, Queensland, Australia 4066 (**Progen**)

** **

**MedigenBiotechnology Corporation**(a company incorporated inTaiwan)****(**Medigen**)

 

**DrJohn Chiplin, Dr Julie Michele Cherrington, Dr Gordon Leroy Schooley, ThomasJames Burt, Tzong-Pai (Paul) Lin, Stuart Bruce James, Heng Hsin Tang and JoeYeh-Chiao Lin** (**Miscellaneous Parties**)

 

**Recitals**

 

1.                                                       Progenis a public company incorporated according to the *CorporationsAct*2001 (Cth) who, at all material times, has carried on businessas a globally focused biotechnology company engaged in the discovery,development and commercialisation of small molecule pharmaceuticals primarilyfor the treatment of cancer and was carrying on the research known as the PI-88technology relating to stopping the progression and metastasis of cancer.

 

2.                                                       Sincethe early 1990’s Progen has been developing PI-88 for the treatment of livercancer.  During 2000 Progen entered intoa document entitled “Agreement for Strategic Alliance” with Medigen for thedevelopment of PI-88.

 

3.                                                       The “Agreementfor Strategic Alliance” was terminated by Progen and Medigen pursuant to theterms of a written document entitled “ASA Termination Agreement” that wasentered into on 16 January 2007.

 

4.                                                       TheASA Termination Agreement contains the following terms:

###  

### (a)                                                   clause 1.1 which provides that:

 

“**TransactionEvent”**meansin relation to Progen:

 

...

 

(c)                                                  Progen enters into anagreement with a third party that is not a related body corporate of Progen,which agreement is or has become unconditional, which provides for one or moreof the following:

 

(i)                                                       the grant of a licence to thethird party to commercialise PI-88;

 

(ii)                                                  a joint venture, partnershipor similar arrangement under which Progen and the third party agree to carry onbusiness of commercialising PI-88 and the third party is obliged to makematerial financial contributions to that activity;

 

whetheror not such agreement includes an agreement to further develop PI-88.”

 

### (b)                                                  clause 5.5 which provides to the effectthat within 20 business days after the confirmation of the firstTransaction Event to occur after the signing of the agreement, Progen must payto Medigen $2 million in the manner described in clause 5.2(a) of theagreement.

 

5.                                                       In2009 the Disputes arose and Progen issued Proceedings against Medigen.  Medigen denies the allegations in theStatement of Claim.

 

6.                                                       Withoutadmission of liability and to avoid the cost and inconvenience of litigation,the parties have agreed to resolve the Disputes on the basis set out in thisdeed.

 

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**Operativeprovisions**

** **

# **1.**                                                      Definitions andinterpretation

# ** **

## **1.1**                                               Definitions

 

In this deed:

 

**Act**means *Corporations Act*2001 (Cth).

 

**Board Composition Resolution**means any resolution to:

 

### (a)                                                   elect, appoint or remove a director orwhich would otherwise affect the tenure or appointment of a director; or

###  

### (b)                                                  amend the constitution (or take anyother step) to affect the power, composition and proceedings of the board ofdirectors of Progen, the number of directors of Progen or the role of StuartJames as Chairman of the Board of Directors of Progen.

###  

**Medigen Shares** means the sharesin Progen owned by Medigen.

 

**Claims**means all actions, suits, claims, demands, causes ofaction (whether legal, equitable, in negligence, under any statute orotherwise), costs and expenses and all other liabilities of any naturewhatsoever (whether or not the parties were or could have been aware of them)in any way related to the Disputes or circumstances arising out of or in anyway connected or related to the Disputes excluding any claims against FormerDirectors and Officers in respect of breaches of their duties and obligationsowed to Progen or to its shareholders.

 

**Current Directors and Officers**means the persons holding the position of a director or officer of Progen on orafter 2 July 2009, other than Justus Homburg.

 

**Disputes** means:

 

### (a)                                                   whether or not a ‘Transaction Event’has occurred under the ASA Termination Agreement entitling Medigen to receivepayment of $2 million pursuant to clause 5.5 of the ASA Termination Agreement;

###  

### (b)                                                  whether Medigen has engaged in conductas alleged in the Statement of Claim in contravention of section 606 of the *Corporations Act*2001 (Cth);

###  

### (c)                                                   whether the directors of Progen actedproperly in authorising the Proceedings to be issued against Medigen and otherpersons/entities based on facts and matters alleged in the Statement of Claim;and

###  

### (d)                                                  the Proceedings.

###  

**Excluded Persons** means JoeYeh-Chiao Lin, Heng Hsin Tang, Fu-Chang Tsai, Fu-Ying Wang, Fu Mei Wang, Lee LiHsueh Yang, Su-Hua Chuang, Pai-Mao Lin, Lee Chuan Huang and Ya Wen Huang.

 

**Former Directors and Officers**meansthe directors and officers of Progen, other than the Current Directors andOfficers.

 

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**Miscellaneous Parties**meansDr John Chiplin, Dr Julie Michele Cherrington, Dr Gordon Leroy Schooley, ThomasJames Burt, Tzong-Pai (Paul) Lin, Heng Hsin Tang, Joe Yeh-Chiao Lin and StuartBruce James.

 

**MedigenRelated Party** means:

 

### (a)                                                   a “related body corporate” of Medigenas defined under section 50 of the *Corporations Act*2001;

###  

### (b)                                                  an “associated entity” of Medigen asdefined under section 50AAA of the *Corporations Act*2001;and

###  

### (c)                                                   a person in their capacity as a directoror officer of Medigen or an entity described in subparagraphs (a) and (b) aboveother than Stephen Chang.

###  

**Other Shareholders** means Yung-FongLu, Chi-Liang Yang, Ho-Lung Wu, CCH Investment Corporation (a companyincorporated in Western Samoa) and Tzu Liang Huang (also known as James Huang).

 

**Proceedings** means theproceedings in the Supreme Court of Queensland (number BS 8391 of 2009,Brisbane Registry).

 

**ProgenRelated Party** means:

 

### (a)                                                   a “related body corporate” of Progen asdefined under section 50 of the *Corporations Act*2001;

###  

### (b)                                                  an “associated entity” of Progen asdefined under section 50AAA of the *Corporations Act*2001;and

###  

### (c)                                                   a person in their capacity as a directoror officer of Progen (other than a person who is one of the Former Directorsand Officers) or an entity described in subparagraphs (a) and (b) above.

###  

**Statement of Claim** refers to theStatement of Claim which was filed in the Proceedings on 28 September 2009.

 

## **1.2**                                               Interpretation

 

In this deed:

 

### (a)                                headings are for convenience only anddo not affect interpretation,

###  

### and unless the context indicatesa contrary intention:

###  

### (b)                               an obligation or liability assumed by,or a right conferred on, 2 or more persons binds or benefits them jointly andseverally;

###  

### (c)                                **person** includes an individual, the estate ofan individual, a corporation, an authority, an association or a joint venture(whether incorporated or unincorporated), a partnership and a trust;

###  

### (d)                               a reference to a party includes thatparty’s executors, administrators, successors and permitted assigns, includingpersons taking by way of novation and, in the case of a trustee, includes asubstituted or an additional trustee and further includes any person claimingon behalf of or under or through a party to this deed;

###  

### 

###  

### (e)                                a reference to a document (includingthis deed) is to that document as varied, novated, ratified or replaced fromtime to time;

###  

### (f)                                  a reference to a statute or statutoryprovision includes a statutory modification or re-enactment of it or astatutory provision substituted for it, and each ordinance, by-law, regulation,rule and statutory instrument (however described) issued under it;

###  

### (g)                               a word importing the singular includesthe plural (and vice versa), and a word indicating a gender includes everyother gender;

###  

### (h)                               a reference to a party, clause,schedule, exhibit, attachment or annexure is a reference to a party, clause,schedule, exhibit, attachment or annexure to or of this deed, and a referenceto this deed includes all schedules, exhibits, attachments and annexures tothis deed;

###  

### (i)                                   if a word or phrase is given a definedmeaning, any other part of speech or grammatical form of that word or phrasehas a corresponding meaning;

###  

### (j)                                   nothing inthis Deed is to be interpreted against a party solelyon the ground that the party put forward this Deed or a relevant part of it.

###  

### (k)                                **includes** in any form is not a word oflimitation; and

###  

### (l)                                   a reference to **$** or **dollar**is to Australian currency.

 

# **2.**                                                      Payment

 

## **2.1**                                               Payments

 

In compromise of the dispute referred to in clause (a) of thedefinition of “Disputes” contained in paragraph 1.1 of this deed, Progen agreesto pay Medigen the sum of one million and eight hundred thousand dollars(inclusive of GST, if any) ($1,800,000.00) (**SettlementSum**).

 

If the payment of $1,800,000 is a taxable supply, Medigen agrees todeliver a tax invoice to Progen.

 

This compromise is severable from the balance of this deed andindependent of the validity or enforceability of the balance of the deed.

 

## **2.2**                                               Date and Direction ofPayment

###  

### Progen shall make payment of theSettlement Sum to the trust account of the solicitors acting for Medigen(Rockwell Bates) or as otherwise directed by Medigen in writing 3 days prior tothe date for payment, with payment being due within seven (7) days of thedate of execution of this deed by all parties.

###  

# **3.**                                                      Release

 

## **3.1**                                               Release of Progen

 

Medigen releases and discharges Progen and any Progen Related Partyfrom all Claims which Medigen:

 

(a)                                                   nowhas;

 

(b)                                                  atany time had;

 

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(c)                                                   mayhave; or

 

(d)                                                  butfor this deed, could or might have had,

 

against Progen and any Progen Related Party.

 

## **3.2**                                               Release of Medigen

 

Progen releases and discharges Medigen and any Medigen Related Partyfrom all Claims which Progen:

 

(a)                                                   nowhas;

 

(b)                                                  atany time had;

 

(c)                                                   mayhave; or

 

(d)                                                  butfor this deed, could or might have had,

 

against Medigen and any Medigen Related Party.

 

## **3.3**                                               Related Parties

 

(e)                                                   Medigenand Progen (as promisors) covenant and agree with each other (as promisees)that, in consideration of the matters contained in this deed, they will do allthings necessary to ensure that all persons included in the definition ofProgen Related Party (as beneficiaries) and Medigen Related Party (asbeneficiaries) receive the full benefit of the releases and dischargescontemplated by this deed.

 

(f)                                                     Withoutlimiting any other clause and without affecting the rights of the parties interse arising under the provisions of this deed, this deed shall operate as a deedpoll by each of the parties in favour of all persons included in the definitionof the Progen Related Party and Medigen Related Party that are not signatoriesto this deed.

 

# **4.**                                                      Undertakings

###  

### Medigen hereby undertakes toProgen (and agrees to also provide such undertakings to the Supreme Court ofQueensland) that it:

###  

(a)                                                   willnot act in any manner whatsoever that contravenes section 606 of the Act inrespect of his/its shareholding (whether legally or beneficially held) inProgen, and:

 

(i)                                                     willdirect any person or entity who holds shares in Progen on its behalf to actconsistently with the provisions of this deed;

 

(ii)                                                  willnot give any directions to any person or entity who holds shares in Progen onits  behalf to act in any mannerinconsistent with the provisions of this deed; and

 

(b)                                                  subjectto Progen complying with its obligations in clause 5 and on condition that theMiscellaneous Parties or any directors of Progen appointed from time to timecontinue to observe their statutory and fiduciary duties to Progen:

 

(i)                                                     willnot for the lesser of a period of 18 months from the date of execution of thisdeed by all parties or the period for which it retains the Medigen Shares,take, or join in taking, any action (or give any direction 

 

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either directly orindirectly to any person who holds shares in Progen on its behalf) to:

 

A.                                                   causea general meeting of members of Progen to be convened under any of sections249D, 249E, 249F or 249G of the Act or clauses 8.5 or 8.7 of Progen’sconstitution; or

 

B.                                                     causea resolution to be considered at a general meeting of members of Progen undersection 249N and 249O of the Act,

 

concerning or involving a Board CompositionResolution without the written consent of a majority of the Board of Directorsof Progen in accordance with its Constitution, save for a proposed resolutionto appoint Justus Homburg or Stephen Chang as a director of Progen.

 

(ii)                                                  will,so long as it retains the Medigen Shares, cause the Medigen Shares to be votedon any Board Composition Resolutions moved at a general meeting of membersconvened in the period of 18 months from the date of execution of this deed, inaccordance with the recommendation of a majority of the directors of Progen inaccordance with its Constitution, save for a proposed resolution to appointJustus Homburg or Stephen Chang as a director of Progen.

 

(iii)                                               willin respect of the Medigen Shares, so long as it retains the Medigen Shares,appoint Mr Stuart James, while he holds the office of Chairman of Progen ascorporate representative under section 250D of the Act, to vote on any BoardComposition Resolution in accordance with the previous provisions of this deed,and not to take any steps to revoke or override that appointment.

 

(iv)                                              willnot dispose of or otherwise deal with the Medigen Shares in such a way so as toavoid the obligations described in clauses 4(b)(i), (ii) and (iii) ofthis Deed.  Subject to the foregoing,Medigen remains free to dispose of its shares on the open market and/or in another arms length transaction (such as a share buy back).

 

# **5.**                                                      Share Stability

###  

### (a)                                                   Medigen will not for the lesser of aperiod of 18 months from the date of execution of this deed by all parties orthe period for which it retains the Medigen Shares increase its shareholding inProgen, save and except for the case where shares are acquired from one of theOther Shareholders.

###  

### (b)                                                  Each of the Miscellaneous Parties willnot for the lesser of a period of 18 months from the date of execution of thisdeed by all parties or the period for which she/he retains her/his respectiveshares in Progen increase her/his relevant interest (if any) in Progen, saveand except for the case where shares are acquired from one of :

####  

#### (i)                                                     Medigen;or

####  

#### (ii)                                                  theOther Shareholders.

####  

### (c)                                                   Progen will cause a search to beundertaken of its share register prior to any vote with respect to a BoardComposition Resolution.  In the event anyof Medigen or the Other Shareholders or the Miscellaneous Parties (togetherreferred to as the **Controlled Parties**)in total have increased his/her/its shareholding in Progen such 

 

----

 

### that therelative percentage of shares in Progen owned by the Controlled Parties hasincreased above the relative percentage of the relevant interest in Progenowned by the Controlled Parties as at the date of this deed (**Relevant Percentage**), or Progen receives a SubstantialShareholder Notice pursuant to section 671B of the *CorporationsAct* 2001, indicating a Controlled Party has acquired a relevantinterest in shares such that the Relevant Percentage would be exceeded if therelevant interest was counted, Progen will give notice of that fact to each ofthe Controlled Parties.

###  

### (d)                                                  If at any time (including in thecircumstance in clause 5(c)) Progen becomes aware that any of the ControlledParties has acquired a relevant interest in Progen such that the RelevantPercentage would be exceeded if the relevant interest was counted, Progen willgive notice of that fact to each of the Controlled Parties (which may be by anotice given under clause 5(c)).

###  

### (e)                                                   The Controlled Parties agree that ifthe acquisition of a relevant interest has resulted from one of the ControlledParties not complying with clauses 5(a) or (b), that non complying partywill, within 10 Business Days of receipt of the notice, dispose to a person whois not an associate (as defined by section 12 of the *CorporationsAct* 2001)  the relevantinterest in Progen necessary to ensure that the Relevant Percentage is notexceeded.

###  

### (f)                                                     Progen will provide such information tothe Controlled Parties as may be required by them to enable them to comply withclause 5(e).

###  

### (g)                                                  Progen warrants that it will enter intoan agreement with all other of the Controlled Parties (except for Heng HsinTang and Joe Yeh-Chiao Lin) to a similar effect as the requirements of thisclause.

###  

# **6.**                                                      Procurements andRecommendations

# ** **

## **6.1**                                               Resignation andwithdrawal

###  

### Medigen shall use its bestendeavours to procure the resignation (and withdrawal of nomination as directorfor the 2009 AGM) of one of the following persons as director of Progen within7 days of the date of execution of this deed by all parties (suchresignation to take effect at the 2009 AGM of Progen):

###  

(a)                                                   MrThomas Burt;

 

(b)                                                  MrHeng Hsin Tang; and

 

(c)                                                   MrJoe Yeh-Chiao Lin,

 

and if Medigen is unable to do so, Mr Joe Yeh-Chiao Lin agrees toresign as a director of Progen and withdraw his nomination as director for the2009 AGM.

 

## **6.2**                                               Progen Procurementsand Agreement with Medigen

###  

### (a)                                                   Dr Gordon Leroy Schooley will resign asa director of Progen and withdraw his nomination as director for the 2009 AGMby giving notice within 7 days of the date of execution of this deed byall parties to this deed of his resignation to take effect on the date ofProgen’s 2009 AGM.

###  

### (b)                                                  Each of Mr Thomas Burt, Mr Heng HsinTang, Mr Joe Yeh-Chiao Lin, Dr John Chiplin, Dr Julie Michele Cherrington, DrGordon Leroy Schooley and Stuart 

 

----

 

### James, havingresolved as the Board of Directors of Progen that it is in the interests ofProgen and the shareholders of Progen as a whole to do so, agree that if theyare directors of Progen at the relevant time that:

####  

#### (i)                                                     withrespect to the 2009 AGM of Progen, they as directors on the Progen Board havedecided to unanimously recommend that Progen shareholders vote in favour of allof any resolutions for the:

#####  

##### A.                                                   appointmentof Tzong-Pai (Paul) Lin as a director of Progen;

#####  

##### B.                                                     reappointmentof the following directors:

######  

###### 1)                                                      StuartJames (as Chairman of the Board with a casting vote);

######  

###### 2)                                                      (dependingupon the resignation referred to in clause 6.1 (a) above): 2 of thefollowing 3 persons (if required to be re-elected): Thomas Burt, Heng HsinTang, Joe Yeh-Chiao Lin;

######  

###### 3)                                                      (ifrequired to be re-elected): Dr John Chiplin and Dr Julie Michele Cherrington,

######  

and that the Board issue a written recommendation to that effect priorto the 2009 AGM;

 

#### (ii)                                                  withrespect to the 2010 AGM of Progen, they as directors on the Progen Board shallunanimously recommend that Progen shareholders vote in favour of all of any resolutionsfor the:

#####  

##### A.                                                   reappointmentof the following directors:

######  

###### 1)                                                      StuartJames as Chairman of the Progen Board, with a casting vote (if required to bere-elected) or any replacement that filled a casual vacancy left by Mr James(if required to be re-elected);

######  

###### 2)                                                      (dependingupon the resignation referred to in clause 6.1 (a) above): 2 of thefollowing 3 persons (if required to be re-elected): Thomas Burt, Heng HsinTang, Joe Yeh-Chiao Lin;

######  

###### 3)                                                      (ifrequired to be re-elected): Dr John Chiplin and Dr Julie Michele Cherrington orany replacement that filled a casual vacancy left by them (if required to bere-elected);

######  

###### 4)                                                      Tzong-Pai(Paul) Lin (if required to be re-elected) or any replacement that filled acasual vacancy left by Dr Lin (if required to be re-elected),

######  

and that any relevant notice of meeting include astatement by the Board to that effect; and

 

#### (iii)                                               withrespect to any casual vacancies of directors for a period of 18 months from thedate of execution of this deed by all parties, they as directors on the ProgenBoard shall unanimously recommend that Progen 

 

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#### shareholders vote in favour of a resolution to fillthe casual relevant vacancy with the replacement director (who must have hadprevious experience as a director of a publicly listed company and be of goodcharacter and be a person other than Justus Homburg, Stephen Chang or theirassociate (as defined by section 9 of the *Corporations Act*2001) as nominated by the outgoing director;

####  

#### (iv)                                              withrespect to the 2009 and 2010 AGM of Progen they will not nominate or supportthe nomination of Justus Homburg or Stephen Chang as directors of Progen;

####  

#### (v)                                                 theywill not change, withdraw or modify their recommendation in favour of theresolutions,

####  

unless the Board has first obtained written external legal advice thatthese directors of Progen, by virtue of their fiduciary duties, are requirednot to make the recommendations or to change, withdraw or modify theirrecommendation (as applicable) in which event, upon the directors of Progen notacting in accordance with the provisions of clause 6.2(b) above Medigen isreleased from the obligations referred to in clause 4(b)(i), (ii) and (iii) above.

 

### (c)                                                   Progen will:

###  

#### (i)                                                     withrespect to the 2009 AGM of Progen recommend that Progen shareholders vote infavour of all of any resolutions for the:

####  

##### A.                                                   appointmentof Tzong-Pai (Paul) Lin as a director of Progen;

#####  

##### B.                                                     reappointmentof the following directors:

#####  

###### 1)                                                      StuartJames (as Chairman of the Board with a casting vote);

######  

###### 2)                                                      (dependingupon the resignation referred to in clause 6.1 (a) above): 2 of thefollowing 3 persons (if required to be re-elected): Thomas Burt, Heng HsinTang, Joe Yeh-Chiao Lin;

######  

###### 3)                                                      (ifrequired to be re-elected): Dr John Chiplin and Dr Julie Michele Cherrington orany replacement that filled a casual vacancy left by them (if required to bere-elected);

######  

and that Progen issue a written recommendation to that effect prior tothe 2009 AGM;

 

#### (ii)                                                  withrespect to the 2010 AGM of Progen, recommend that Progen shareholders vote infavour of all of any resolutions for the:

#####  

##### A.                                                   reappointmentof the following directors:

#####  

###### 1)                                                      StuartJames as Chairman of the Progen Board, with a casting vote (if required to bere-elected) or any replacement that filled a casual vacancy left by Mr James(if required to be re-elected);

 

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###### 2)                                                      (dependingupon the resignation referred to in clause 6.1 (a) above): 2 of thefollowing 3 persons (if required to be re-elected): Thomas Burt, Heng HsinTang, Joe Yeh-Chiao Lin;

######  

###### 3)                                                      (ifrequired to be re-elected): Dr John Chiplin and Dr Julie Michele Cherrington orany replacement that filled a casual vacancy left by them (if required to bere-elected);

######  

###### 4)                                                      Tzong-Pai(Paul) Lin (if required to be re-elected) or any replacement that filled acasual vacancy left by Dr Lin (if required to be re-elected),

######  

and that any relevant notice of meeting include astatement by Progen to that effect; and

 

#### (iii)                                               willnot change, withdraw or modify its recommendation in favour of the resolutions

####  

unless Progen has first obtained written external legal advice that itought not make the recommendations or ought to change, withdraw or modify itsrecommendation (as applicable) in which event, upon Progen not acting inaccordance with the provisions of clause 6.2 (c) above the Medigen isreleased from the obligations referred to in clause 4(b) (i), (ii) and(iii)  above.

 

## **6.3**                                               MiscellaneousObligations

###  

### (a)                                                   All parties to this deed must doeverything necessary to give effect to clause 6.1, 6.2 and 6.3 of this deed.

###  

### (b)                                                  For the lesser of the period of 18months from the date of execution of this deed by all parties to this deed orthe period for which Medigen retains the Medigen Shares, Progen undertakes toMedigen that it will use its best endeavours to obtain an undertaking from allfuture directors on its board that neither Justus Homburg or Mr Stephen Changor their associates (as defined by section 9 of the *CorporationsAct* 2001) will be permitted to fill a casual vacancy on its board orperform the role of CEO of Progen.

###  

### (c)                                                   Progen and Medigen agree to consent tothe Supreme Court of Queensland making an order in the terms set out in **Annexure A**to this deed.

###  

### (d)                                                  All parties to this deed agree that theperformance of the obligations contained in clauses 2 to 11 (inclusive) of thisdeed are conditional upon the Supreme Court of Queensland making an order inthe terms set out in order 2 of Annexure A to this deed regarding section 259Aof the *Corporations Act* 2001.

###  

### (e)                                                   Progen warrants that for the lesser ofthe period of 18 months from the date of execution of this deed by all partiesto this deed or the period for which Medigen retains the Medigen Shares, itwill not enter into an arrangement with the Excluded Persons to acquire a relevant interest in theExcluded Persons’ shares in Progen inbreach of section 606 of the Act, without obtaining an order of the court or amodification from ASIC permitting such arrangement.

 

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# **7.**                                                      Progen Chief ExecutiveOfficer

###  

### Upon execution of this deed byall parties, the following will occur with respect to the position of ChiefExecutive Officer of Progen:

###  

(a)                                                   theBoard of Progen will immediately take the necessary steps to terminate the employmentof Justus Homburg as CEO of Progen in a manner consistent with the terms of hisemployment contract dated 7 April 2006;

 

(b)                                                  theBoard of Progen will appoint an international executive search firm to shortlist suitably experienced and qualified candidates for the position of CEO ofProgen and Stephen Chang and Justus Homburg will not be considered by thesearch firm for the position of CEO of Progen;

 

(c)                                                   theexecutive search process for the position of CEO of Progen will be overseen bya sub-committee of the Board of Progen. The sub-committee will comprise three directors of Progen made up of:

 

(i)                                                     DrJohn Chiplin as sub-committee chairman; and

 

(ii)                                                  twoof Thomas Burt, Heng Hsin Tang or Dr Paul Lin (if he is appointed as a directorof Progen);

 

(d)                                                  oncethe short list of candidates for the position of CEO of Progen is finalised,with the assistance of the international executive search firm thesub-committee of the Board will make a recommendation to the Board of Progenfor approval.

 

# **8.**                                                      Binding effect of thisdeed

# ** **

This deed binds the parties and any executor, administrator,transferee, assignee, liquidator or trustee in bankruptcy appointed in respectof it.

 

# **9.**                                                      Disposal ofProceedings

# ** **

### Each party must do immediatelyall things necessary, expedient, or convenient to dispose of the Proceedings.

###  

# **10.**                                               Costs

# ** **

Each party will bear its own costs of and incidental to the Proceedingsand facts and matters the subject of this Deed.

 

# **11.**                                               Warranty

# ** **

### (a)                                                   Medigen and the Miscellaneous Partieswarrant that they have taken independent legal advice as to the nature, effectand extent of this deed.

###  

### (b)                                                  Save for CCH Investment which hasprovided details of its shareholding in Progen, Progen warrants that accordingto its records the following persons held the following shares in Progen as atthe indicated dates:

 

----

 
| **Name**                          | ** ** | **Shareholding** | ** ** | **Percentage holding in  Progen** | ** ** | **Date of last   confirmation**        | ** ** |
|-----------------------------------|------------|------------------|------------|-----------------------------------|------------|----------------------------------------|------------|
| Medigen Biotechnology Corporation |       | 2,096,482        |       | 8.48                              | %          | 12/11/09                               |       |
| CCH Investment                    |       | 965,356          |       | 3.91                              | %          | 17/11/09                               |       |
| Chi-Liang Yang                    |       | 472,992          |       | 1.91                              | %          | 12/11/09                               |       |
| Yung-Fong Lu                      |       | 396,816          |       | 1.61                              | %          | 12/11/09                               |       |
| Ho-Lung Wu                        |       | 388,694          |       | 1.57                              | %          | 12/11/09                               |       |
| James Huang                       |       | 439,045          |       | 1.78                              | %          | 14/7/09 Substantial Shareholder notice |       |
| Dr Gordon Schooley                |       | 7,434            |       | 0.03                              | %          | 12/11/09                               |       |
| Dr John Chiplin                   |       | 0                |       | 0                                 | %          | 12/11/09                               |       |
| Dr Julie Cherrington              |       | 0                |       | 0                                 | %          | 12/11/09                               |       |
| Thomas Burt                       |       | 0                |       | 0                                 | %          | 12/11/09                               |       |
| Tzong-Pai (Paul) Lin              |       | 0                |       | 0                                 | %          | 12/11/09                               |       |
| Stuart James                      |       | 0                |       | 0                                 | %          | 12/11/09                               |       |
| Heng Hsin Tang                    |       | 1,500            |       | 0.01                              | %          | 2/11/09                                |       |
| Joe Yeh-Chiao Lin                 |       | 5,923            |       | 0.02                              | %          | 3/11/09                                |       |
| **TOTAL:**                        | ** ** | **4,774,242**    | ** ** | **19.32**                         | **%**      |                                   |       |

###  

### (c)                                                   Medigen warrants (in respect of its ownshares) that the number of shares attributed to it above is correct.

###  

### (d)                                                  The parties to this deed acknowledgethat each other party is relying on the warranties in this clause in executingthis deed.

###  

# **12.**                                               General

# ** **

## **12.1**                                        Governing law

## ** **

This deed is governed by and must be construed according to the laws ofQueensland, Australia.

 

## **12.2**                                        Jurisdiction

###  

### (a)                                                   Each party irrevocably submits to thenon exclusive jurisdiction of the courts of Queensland, and the courts competentto determine appeals from those courts, with 

 

----

 

### respect toany proceedings which may be brought at any time relating in any way to thisdeed.

###  

### (b)                                                  Each party irrevocably waives anyobjection it may now or in the future have to the venue of any proceedings, andany claim it may now or in the future have that any proceedings have beenbrought in an inconvenient forum, where that venue falls withinclause 12.2 (a).

###  

## **12.3**                                        Severance

 

If at any time any provision of this deed is or becomes illegal, invalidor unenforceable in any respect under the law of any jurisdiction, that willnot affect or impair:

 

### (a)                                                   the legality, validity orenforceability in that jurisdiction of any other provision of this deed; or

###  

### (b)                                                  the legality, validity orenforceability under the law of any other jurisdiction of that or any otherprovision of this deed.

###  

## **12.4**                                        Entire agreement

 

To the extent permitted by law, in relation to the subject matter ofthis deed, this deed:

 

### (a)                                                   embodies the entire understanding ofthe parties, and constitutes the entire terms agreed by the parties; and

###  

### (b)                                                  supersedes any prior written or otheragreement of the parties.

###  

## **12.5**                                        Amendments

## ** **

This deed may only be varied by a deed signed by or on behalf of eachparty.

 

## **12.6**                                        Waiver

## ** **

### (a)                                                   Failure to exercise or enforce, or adelay in exercising or enforcing, or the partial exercise or enforcement of, aright, power or remedy provided by law or under this deed by a party does notpreclude, or operate as a waiver of, the exercise or enforcement, or further exerciseor enforcement, of that or any other right, power or remedy provided by law orunder this deed.

###  

### (b)                                                  A waiver or consent given by a partyunder this deed is only effective and binding on that party if it is given orconfirmed in writing by that party.

###  

### (c)                                                   No waiver of a breach of a term of thisdeed operates as a waiver of another breach of that term or of a breach of anyother term of this deed.

###  

# **13.**                                               Acknowledgments

# ** **

### The parties acknowledge thatthey enter into this deed fully and voluntarily on their own information andinvestigation.  Each party to this deedacknowledges that it is their intention to, and they do, fully, finally,absolutely and forever settle according to the provisions of this deed any andall, Claims which now exist, or may exist or have ever existed between them.

 

----

 

# **14.**                                               Counterparts

 

This deed may be executed in any number of counterparts and by theparties on separate counterparts (including by way of email exchange).  Each counterpart constitutes the agreement ofeach party who has executed and delivered that counterpart.

 

**Executed**as adeed.

 

 
| **Executed**by  **Progen Pharmaceuticals Limited (ACN 010 975 612)**  in accordance with Section 127 of the Corporations Act 2001 (Cth) by or  in the presence of: |   |                                      |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------|
|                                                                                                                                                                    |   |                                      |
|                                                                                                                                                                    |   |                                      |
| Signature  of Director                                                                                                                                                  |   | Signature  of Secretary/other Director    |
|                                                                                                                                                                    |   |                                      |
|                                                                                                                                                                    |   |                                      |
| Name of  Director in full                                                                                                                                               |   | Name of  Secretary/other Director in full |
|                                                                                                                                                                    |   |                                      |
|                                                                                                                                                                    |   |                                      |
| Date:                                                                                                                                                                   |   |                                      |
| ** **                                                                                                                                                              |   |                                      |
| ** **                                                                                                                                                              |   |                                      |
| **Executed**by  **Medigen Biotechnology Corporation****of Taiwan** in accordance with laws of Taiwan by or in the  presence of:                                         |   |                                      |
|                                                                                                                                                                    |   |                                      |
|                                                                                                                                                                    |   |                                      |
| Signature  of Director                                                                                                                                                  |   | Signature  of Secretary/other Director    |
|                                                                                                                                                                    |   |                                      |
|                                                                                                                                                                    |   |                                      |
| Name of  Director in full                                                                                                                                               |   | Name of  Secretary/other Director in full |
|                                                                                                                                                                    |   |                                      |
|                                                                                                                                                                    |   |                                      |
| Date:                                                                                                                                                                   |   |                                      |

 

----

 
| **Executed**by  **Dr John Chiplin****of 63 The Esplanade, Mosman in the State of New  South Wales, Australia (2088)** by or in the presence of:               |   |                  |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------|
|                                                                                                                                                          |   |                  |
|                                                                                                                                                          |   |                  |
| Signature                                                                                                                                                     |   | Signature  of Witness |
|                                                                                                                                                          |   |                  |
|                                                                                                                                                          |   |                  |
| Date                                                                                                                                                          |   | Name of  Witness      |
|                                                                                                                                                          |   |                  |
|                                                                                                                                                          |   |                  |
| **Executed**by  **Dr Julie Michele Cherrington****of 1311 Caminito Faro, La Jolla, California,  United States of America (92037)** by or in the  presence of: |   |                  |
|                                                                                                                                                          |   |                  |
|                                                                                                                                                          |   |                  |
| Signature                                                                                                                                                     |   | Signature  of Witness |
|                                                                                                                                                          |   |                  |
|                                                                                                                                                          |   |                  |
| Date                                                                                                                                                          |   | Name of  Witness      |
| ** **                                                                                                                                                    |   |                  |
| ** **                                                                                                                                                    |   |                  |
| **Executed**by  **Dr Gordon Leroy Schooley****of 14350 Via Baroda, San Diego, California,  United States of America (92130)**by or in the  presence of:       |   |                  |
|                                                                                                                                                          |   |                  |
|                                                                                                                                                          |   |                  |
| Signature                                                                                                                                                     |   | Signature  of Witness |
|                                                                                                                                                          |   |                  |
|                                                                                                                                                          |   |                  |
| Date                                                                                                                                                          |   | Name of  Witness      |

 

----

 
| **Executed**by  **Thomas James Burt****of 251/55 Victoria Harbour Promenade, Docklands,  in the State of Victoria, Australia (3008)** by or in the  presence of: |   |                  |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------|
|                                                                                                                                                             |   |                  |
|                                                                                                                                                             |   |                  |
| Signature                                                                                                                                                        |   | Signature  of Witness |
|                                                                                                                                                             |   |                  |
|                                                                                                                                                             |   |                  |
| Date                                                                                                                                                             |   | Name of  Witness      |
| ** **                                                                                                                                                       |   |                  |
| ** **                                                                                                                                                       |   |                  |
| **Executed**by  **Tzong-Pai (Paul) Lin****of ****Room 8, 6F, No. 68,  Sec.4 Roosevelt Boulevard Taipei, Taiwan**by or in the  presence of:        |   |                  |
|                                                                                                                                                             |   |                  |
|                                                                                                                                                             |   |                  |
| Signature                                                                                                                                                        |   | Signature  of Witness |
|                                                                                                                                                             |   |                  |
|                                                                                                                                                             |   |                  |
| Date                                                                                                                                                             |   | Name of  Witness      |
| ** **                                                                                                                                                       |   |                  |
| ** **                                                                                                                                                       |   |                  |
| **Executed**by  **Stuart Bruce James****of 7 Glan Avon Road, Hawthorn, in the State of  Victoria, Australia (3122)**by or in the presence of:                    |   |                  |
|                                                                                                                                                             |   |                  |
|                                                                                                                                                             |   |                  |
| Signature                                                                                                                                                        |   | Signature  of Witness |
|                                                                                                                                                             |   |                  |
|                                                                                                                                                             |   |                  |
| Date                                                                                                                                                             |   | Name of  Witness      |

 

----

 
| **Executed**by  **Heng Hsin Tang of****66 Bordeaux Street Eight Mile Plains Queensland**by  or in the presence of: |   |                  |
|--------------------------------------------------------------------------------------------------------------------|--------|-----------------------|
|                                                                                                               |   |                  |
|                                                                                                               |   |                  |
| Signature                                                                                                          |   | Signature  of Witness |
|                                                                                                               |   |                  |
|                                                                                                               |   |                  |
| Date                                                                                                               |   | Name of  Witness      |
| ** **                                                                                                         |   |                  |
| ** **                                                                                                         |   |                  |
| **Executed**by  **Joe Yeh-Chiao Lin of****19 Harrison Street, Stretton in the State of  Queensland**               |   |                  |
| ** **                                                                                                         |   |                  |
| by or in the presence of:                                                                                          |   |                  |
|                                                                                                               |   |                  |
|                                                                                                               |   |                  |
| Signature                                                                                                          |   | Signature  of Witness |
|                                                                                                               |   |                  |
|                                                                                                               |   |                  |
| Date                                                                                                               |   | Name of  Witness      |

 

----

 

**Annexure A - Order**

 

----

 

 

Deed of Settlement andRelease

 

ProgenPharmaceuticals Limited (ACN 010 975 612)

 

Progen

 

**Yung-FongLu, Chi-Liang Yang and Ho-Lung Wu**

** **

Shareholders

 

DrJohn Chiplin, Dr Julie Michele Cherrington, Dr Gordon Leroy Schooley, ThomasJames Burt, Tzong-Pai (Paul) Lin, Heng Hsin Tang and Joe Yeh-Chiao Lin andStuart Bruce James

 

Miscellaneous Parties

 

Clayton Utz

Lawyers

Level 28, Riparian Plaza71 Eagle Street Brisbane QLD 4000 Australia

GPO Box 55 Brisbane QLD4001

T + 61 7 3292 7000 F +617 3221 9669

 

**www.claytonutz.com**

 

Our reference  12154/15936/80092418

** **

----

** **
| **Contents** |
|--------------|
|         |   |   |   |   |
| **1.**       | ** ** | **Definitions  and interpretation** | ** ** | **i** |
|         |   |   |   |   |
|         |   | 1.1 | Definitions |   | i |
|         |   | 1.2 | Interpretation |   | ii |
|         |   |   |   |   |   |
| **2.**       | ** ** | **Undertakings** | ** ** | **iii** |
|         |   |   |   |   | ** ** |
| **3.**       | ** ** | **Procurements  and Recommendations** | ** ** | **iv** |
|         |   |   |   |   |   |
|         |   | 3.1 | Shareholder procurements |   | iv |
|         |   | 3.2 | Progen Procurements and  Agreement with the Shareholders |   | v |
|         |   | 3.3 | Further Obligations |   | vii |
|         |   |   |   |   |   |
| **4.**       | ** ** | **Release** | ** ** | **viii** |
|         |   |   |   |   | ** ** |
|         |   | 4.1 | Release of Progen |   | viii |
|         |   | 4.2 | Release of the  Shareholders |   | viii |
|         |   | 4.3 | Related Parties |   | viii |
|         |   |   |   |   |   |
| **5.**       | ** ** | **Share  Stability** | ** ** | **viii** |
|         |   |   |   |   | ** ** |
| **6.**       | ** ** | **Progen  Chief Executive Officer** | ** ** | **ix** |
|         |   |   |   |   | ** ** |
| **7.**       | ** ** | **Binding  effect of this deed** | ** ** | **x** |
|         |   |   |   |   | ** ** |
| **8.**       | ** ** | **Disposal  of Proceedings** | ** ** | **x** |
|         |   |   |   |   | ** ** |
| **9.**       | ** ** | **Costs** | ** ** | **x** |
|         |   |   |   |   | ** ** |
| **10.**      | ** ** | **Warranty** | ** ** | **x** |
|         |   |   |   |   | ** ** |
| **11.**      | ** ** | **General** | ** ** | **xi** |
|         |   |   |   |   |   |
|         |   | 11.1 | Governing law |   | xi |
|         |   | 11.2 | Jurisdiction |   | xi |
|         |   | 11.3 | Severance |   | xii |
|         |   | 11.4 | Entire agreement |   | xii |
|         |   | 11.5 | Waiver |   | xii |
|         |   |   |   |   |
| **12.**      | ** ** | **Acknowledgments** | ** ** | **xii** |
|         |   |   |   | ** ** |
| **13.**      | ** ** | **Counterparts** | ** ** | **xii** |

 

i

----

 

**Deed of Settlement and Release dated**

** **

**Parties****                                                                                        ****Progen Pharmaceuticals Limited (ACN 010 975 612)** of16 Benson Street, Brisbane, Queensland, Australia 4066 (**Progen**)

 

**Yung-Fong Lu, Chi-LiangYang and Ho-Lung Wu**(**Shareholders**)

 

**Dr John Chiplin, Dr JulieMichele Cherrington, Dr Gordon Leroy Schooley, Thomas James Burt, Tzong-Pai(Paul) Lin, Heng Hsin Tang, Joe Yeh-Chiao Lin and Stuart Bruce James******(**Miscellaneous Parties**)

 

**Recitals**

** **

1.                                                       Progenis a public company incorporated according to the *CorporationsAct*2001 (**Act**) that, atall material times, has carried on business as a globally focused biotechnologycompany engaged in the discovery, development and commercialisation of smallmolecule pharmaceuticals primarily for the treatment of cancer and was carryingon the research known as the PI-88 technology relating to stopping theprogression and metastasis of cancer.

 

2.                                                       During2009 Disputes arose and Progen issued Proceedings against the Shareholders andother persons/entities. The Shareholders deny the allegations in the Statementof Claim.

 

3.                                                       Withoutadmission of liability and to avoid the cost and inconvenience of litigation,the Shareholders and Progen have agreed to resolve the Proceedings and theDisputes between them on the basis set out in this deed.

 

**Operativeprovisions**

** **

# **15.**                                               Definitions andinterpretation

# ** **

## **15.1**                                        Definitions

## ** **

In this deed:

 

**Act**means *Corporations Act 2001* (Cth).

 

**Board Composition Resolution**means any resolution to:

 

### (a)                 elect, appoint or remove a director or which would otherwiseaffect the tenure or appointment of a director; or

###  

### (b)                 amend the constitution (or take any other step) to affectthe power, composition or proceedings of the board of directors of Progen, thenumber of directors of Progen or the role of Stuart James as Chairman of theBoard of Directors of Progen.

###  

**Claims**meansall actions, suits, claims, demands, causes of action (whether legal,equitable, in negligence, under any statute or otherwise), costs and expensesand all other liabilities of any nature whatsoever (whether or not the partieswere or could have been aware of them) in any way related to the Disputes orcircumstances arising out of or in any way connected or related to the Disputesexcluding any claims against Former Directors and Officers in respect ofbreaches of their duties and obligations owed to Progen or to its shareholders.

 

**Current Directors and Officers**means the persons holding the position of a director or officer of Progen on orafter 2 July 2009, other than Justus Homburg.

 

**Disputes** means:

 

### ****

###  

### (c)                                                   whether the Shareholders have engagedin conduct as alleged in the Statement of Claim in contravention of section 606of the Act;

###  

### (d)                                                  whether the directors of Progen actedproperly in authorising the Proceedings to be issued against the Shareholdersand other persons/entities based on facts and matters alleged in the Statementof Claim; and

###  

### (e)                                                   the Proceedings.

###  

**Excluded Persons** means**Joe Yeh-Chiao Lin, Heng Hsin Tang, Fu-Chang Tsai, Fu-YingWang, Fu Mei Wang, Lee Li Hsueh Yang, Su-Hua Chuang, Pai-Mao Lin, Lee ChuanHuang and Ya Wen Huang.

 

**Former Directors and Officers**meansthe directors and officers of Progen, other than the Current Directors andOfficers.

 

**Miscellaneous Parties**meansDr John Chiplin, Dr Julie Michele Cherrington, Dr Gordon Leroy Schooley, ThomasJames Burt, Tzong-Pai (Paul) Lin, Heng Hsin Tang, Joe Yeh-Chiao Lin and StuartBruce James.

 

**Proceedings** means theproceedings in the Supreme Court of Queensland (number BS 8391 of 2009,Brisbane Registry).

 

**Related Party**means:

 

### (f)                                                     a “related body corporate” as definedunder section 50 of the *Corporations Act 2001*;

###  

### (g)                                                  an “associated entity” as defined undersection 50AAA of the *Corporations Act 2001*;and

###  

### (h)                                                  a director or officer of Progen (otherthan a person who is one of the Former Directors and Officers) or an entitydescribed in subparagraphs (a) and (b) above.

###  

**Shares** means the sharesin Progen owned by each of the Shareholders.

 

**Shareholders** means Yung-FongLu, Chi-Liang Yang and Ho-Lung Wu.

 

**Statement of Claim** refers to theStatement of Claim which was filed in the Proceedings on 28 September 2009.

 

## **15.2**                                        Interpretation

## ** **

In this deed:

 

### (a)                                headings are for convenience only anddo not affect interpretation,

###  

### and unless the context indicatesa contrary intention:

###  

### (b)                               an obligation or liability assumed by,or a right conferred on, 2 or more persons binds or benefits them jointly andseverally;

###  

### (c)                                **person** includes an individual, the estate ofan individual, a corporation, an authority, an association or a joint venture(whether incorporated or unincorporated), a partnership and a trust;

###  

### ****

###  

### (d)                              a reference to a party includes thatparty’s executors, administrators, successors and permitted assigns, includingpersons taking by way of novation and, in the case of a trustee, includes asubstituted or an additional trustee and further includes any person claimingon behalf of or under or through a party to this deed;

###  

### (e)                               a reference to a document (includingthis deed) is to that document as varied, novated, ratified or replaced fromtime to time;

###  

### (f)                                 a reference to a statute or statutoryprovision includes a statutory modification or re-enactment of it or astatutory provision substituted for it, and each ordinance, by-law, regulation,rule and statutory instrument (however described) issued under it;

###  

### (g)                              a word importing the singular includesthe plural (and vice versa), and a word indicating a gender includes everyother gender;

###  

### (h)                              a reference to a party, clause,schedule, exhibit, attachment or annexure is a reference to a party, clause,schedule, exhibit, attachment or annexure to or of this deed, and a referenceto this deed includes all schedules, exhibits, attachments and annexures tothis deed;

###  

### (i)                                  if a word or phrase is given a definedmeaning, any other part of speech or grammatical form of that word or phrasehas a corresponding meaning;

###  

(j)                                  nothinginthis Deed is to be interpreted against a party solelyon the ground that the party put forward this Deed or a relevant part of it.

 

### (k)                               **includes** in any form is not a word oflimitation; and

###  

### (l)                                  a reference to **$** or **dollar**is to Australian currency.

###  

# **16.**                                               Undertakings

# ** **

### The Shareholders hereby undertake to Progen (and agree toalso provide such undertakings to the Supreme Court of Queensland) that each ofthem:

###  

(e)                 will not act in any mannerwhatsoever that contravenes section 606 of the Act in respect of his/hershareholding (whether legally or beneficially held) in Progen, and:

 

(i)                                                    willdirect any person or entity who holds shares in Progen on their behalf to actconsistently with the provisions of this deed;

 

(ii)                                                 willnot give any directions to any person or entity who holds shares in Progen ontheir behalf to act in any manner inconsistent with the provisions of thisdeed; and

 

(f)                  subject to Progen complyingwith its obligations in clause 5 and on condition that the MiscellaneousParties continue to observe their statutory and fiduciary duties to Progen,he/she:

 

(i)                                                    willnot for the lesser of a period of 18 months from the date of execution of thisdeed by all parties or the period for which she/he retains her/his respectiveShares, take, or join in taking, any action (or give any direction eitherdirectly or indirectly to any person who holds shares in Progen on theirbehalf) to:

 

----

 

A.                                                   causea general meeting of members of Progen to be convened under any of sections249D, 249E, 249F or 249G of the Act or clauses 8.5 or 8.7 of Progen’sConstitution; or

 

B.                                                     causea resolution to be considered at a general meeting of members of Progen undersections 249N and 249O of the Act,

 

concerning or involving a Board Composition Resolution without thewritten consent of a majority of the Board of Directors of Progen in accordancewith its Constitution, save for a proposed resolution to appoint Justus Homburgor Stephen Chang as a director of Progen.

 

(ii)                 will for the lesser of aperiod of 18 months from the date of execution of this deed by all parties orthe period for which she/he retains her/his respective Shares cause her/hisShares to be voted on any Board Composition Resolutions moved at a generalmeeting of members convened in the period of 18 months from the date ofexecution of this deed, in accordance with the recommendation of a majority ofthe directors of Progen in accordance with its Constitution, save for aproposed resolution to appoint Justus Homburg or Stephen Chang as a director ofProgen.

 

(iii)                will for the lesser of aperiod of 18 months from the date of execution of this deed by all parties orthe period for which she/he retains her/his respective Shares appoint StuartJames while he holds the office of Chairman of Progen as corporaterepresentative under section 250D of the Act in the case of a body corporate,and as proxy under section 249X of the Act to vote on any Board CompositionResolution in the case of an individual, to vote in accordance with theprevious provisions of this deed and not to take any steps to revoke oroverride that appointment.

 

(iv)               will not dispose of orotherwise deal with her, his Shares in such a way so as to avoid theobligations described in clauses 2(b)(i), (ii) or (iii) of thisdeed.  Subject to the foregoing, theShareholders remain free to dispose of their shares on the open market and/orin an other arms length transaction (such as a share buy back).

 

# **17.**                                               Procurements andRecommendations

# ** **

## **17.1**                                        Shareholder procurements

## ** **

### The Shareholders shall use their best endeavours to procurethe resignation (and withdrawal of nomination as director for the 2009 AGM) ofone of the following persons as director of Progen within 7 days of thedate of execution of this deed by all parties (such resignation to take effectat the 2009 AGM of Progen or such other date as it is held):

###  

(a)                                                   MrThomas Burt;

 

(b)                                                  MrHeng Hsin Tang; and

 

(c)                                                   MrJoe Yeh-Chiao Lin,

 

and if the Shareholders are unable to do so, Mr Joe Yeh-Chiao Linagrees to resign as a director of Progen and withdraw his nomination asdirector for the 2009 AGM.

 

----

## ** **

## **17.2**                                        Progen Procurementsand Agreement with the Shareholders

## ** **

### (a)                                                   Dr Gordon Leroy Schooley will resign asa director of Progen and withdraw his nomination as director for the 2009 AGMwithin 7 days of the date of execution this deed by all parties to thisdeed of his resignation to take effect on the date of Progen’s 2009 AGM.

###  

### (b)                                                  Each of Mr Thomas Burt, Mr Heng HsinTang, Mr Joe Yeh-Chiao Lin, Dr John Chiplin, Dr Julie Michele Cherrington, DrGordon Leroy Schooley and Stuart James having resolved as the Board ofDirectors of Progen that it is in the interests of Progen and the shareholdersof Progen as a whole to do so, agree that if they are directors of Progen atthe relevant time that:

###  

#### (i)                                                    withrespect to the 2009 AGM of Progen, they as directors on the Progen Board havedecided to unanimously recommend that Progen shareholders vote in favour of allof any resolutions for the:

####  

##### A.                                                   appointmentof Tzong-Pai (Paul) Lin as a director of Progen;

#####  

##### B.                                                     reappointmentof the following directors:

#####  

###### 1)                                                      StuartJames (as Chairman of the Board with a casting vote);

######  

###### 2)                                                      (dependingupon the resignation referred to in clause 3.1 above): 2 of the following 3persons (if required to be re-elected): Thomas Burt, Heng Hsin Tang, JoeYeh-Chiao Lin; and

######  

###### 3)                                                      (ifrequired to be re-elected): Dr John Chiplin, and Dr Julie Michele Cherrington,

######  

and that the Board issue awritten recommendation to that effect prior to the 2009 AGM;

 

#### (ii)                                                 withrespect to the 2010 AGM of Progen, they as directors on the Progen Board shallunanimously recommend that Progen shareholders vote in favour of all of anyresolutions for the:

####  

##### A.                                                   reappointmentof the following directors:

#####  

###### 1)                                                      StuartJames as Chairman of the Progen Board, with a casting vote (if required to bere-elected) or any replacement that filled a casual vacancy left by Mr James(if required to be re-elected);

######  

###### 2)                                                      (dependingupon the resignation referred to in clause 3.1 above): 2 of the following 3persons (if required to be re-elected): Thomas Burt, Heng Hsin Tang, JoeYeh-Chiao Lin;

######  

###### 3)                                                      (ifrequired to be re-elected): Dr John Chiplin and Dr Julie Michele Cherrington orany replacement that filled a casual vacancy left by them (if required to bere-elected); and

 

###### 

######  

###### 4)                                                      Tzong-Pai(Paul) Lin (if required to be re-elected) or any replacement that filled acasual vacancy left by Dr Lin (if required to be re-elected),

######  

and that any relevant notice of meeting include a statement by theBoard to that effect; and

 

#### (iii)                                             withrespect to any casual vacancies of directors for a period of 18 months from thedate of execution of this deed by all parties, they as directors on the ProgenBoard shall unanimously recommend that Progen shareholders vote in favour of aresolution to fill the casual relevant vacancy with the replacement director(who must have had previous experience as a director of a publicly listedcompany and be of good character and be a person other than Justus Homburg,Stephen Chang or their associate (as defined by section 9 of the *Corporations Act* 2001) nominated by the outgoing director;

####  

#### (iv)                                            withrespect to the 2009 and 2010 AGM of Progen they will not nominate or supportthe nomination of Justus Homburg or Stephen Chang as directors of Progen; and

####  

#### (v)                                                 theywill not change, withdraw or modify their recommendation in favour of the resolutions,

####  

unless the Board has first obtained written external legal advice thatthese directors of Progen, by virtue of their fiduciary duties, are requirednot to make the recommendations or to change, withdraw or modify theirrecommendation (as applicable) in which event, upon the directors of Progen notacting in accordance with the provisions of clause 3.2 (b) above theShareholders are released from the obligations referred to in clause 2 (b) (i),(ii) and (iii) above.

 

### (c)                                                   Progen will:

###  

#### (i)                                                    withrespect to the 2009 AGM of Progen recommend that Progen shareholders vote infavour of all of any resolutions for the:

####  

##### A.                                                   appointmentof Tzong-Pai (Paul) Lin as a director of Progen;

#####  

##### B.                                                     reappointmentof the following directors:

#####  

###### 1)                                                      StuartJames (as Chairman of the Board with a casting vote);

######  

###### 2)                                                      (dependingupon the resignation referred to in clause 3.1 above): 2 of the following 3persons (if required to be re-elected): Thomas Burt, Heng Hsin Tang, JoeYeh-Chiao Lin; and

######  

###### 3)                                                      (ifrequired to be re-elected): Dr John Chiplin and Dr Julie Michele Cherrington orany replacement that filled a casual vacancy left by them (if required to bere-elected),

######  

and that Progen issue awritten recommendation to that effect prior to the 2009 AGM;

 

#### 

####  

#### (ii)                                                 withrespect to the 2010 AGM of Progen, recommend that Progen shareholders vote infavour of all of any resolutions for the:

####  

##### A.                                                   reappointmentof the following directors:

#####  

###### 1)                                                      StuartJames as Chairman of the Progen Board, with a casting vote (if required to bere-elected) or any replacement that filled a casual vacancy left by Mr James(if required to be re-elected);

######  

###### 2)                                                      (dependingupon the resignation referred to in clause 3.1 above): 2 of the following 3persons (if required to be re-elected): Thomas Burt, Heng Hsin Tang, Joe Yeh-ChiaoLin;

######  

###### 3)                                                      (ifrequired to be re-elected): Dr John Chiplin and Dr Julie Michele Cherrington orany replacement that filled a casual vacancy left by them (if required to bere-elected); and

######  

###### 4)                                                      Tzong-Pai(Paul) Lin (if required to be re-elected) or any replacement that filled acasual vacancy left by Dr Lin (if required to be re-elected),

######  

and that any relevant notice of meeting include a statement by Progento that effect; and

 

#### (iii)                                               willnot change, withdraw or modify its recommendation in favour of the resolutions,

####  

#### unless Progen hasfirst obtained written external legal advice that it ought not make therecommendations or ought to change, withdraw or modify its recommendation (asapplicable) in which event, upon Progen not acting in accordance with theprovisions of clause 3.2(c) above the Shareholders are released from theobligations referred to in clause 2 (b) (i), (ii) and (iii) above.

####  

## **17.3**                                        Further Obligations

## ** **

### (a)                                                   All parties to this deed must doeverything necessary to give effect to clauses 3.1 and 3.2 of this deed.

###  

### (b)                                                  Progen and each of the Shareholdersagree to consent to the Supreme Court of Queensland making an order in theterms set out in **Annexure A** tothis deed.

###  

### (c)                                                   All parties to this deed agree that theperformance of the obligations contained in clauses 2 to 10 (inclusive) of thisdeed are conditional upon the Supreme Court of Queensland making an order inthe terms set out in order 2 of Annexure A to this deed regarding section 259Aof the *Corporations Act* 2001.

###  

### (d)                                                  Progen warrants that for the lesser ofthe period of 18 months from the date of execution of this deed by all partiesto this deed or the period for which the Shareholders retain their Shares, itwill not enter into an arrangement with the Excluded Persons to acquire a relevant interest in theExcluded Persons’ shares in Progen inbreach of section 606 of the Act, without obtaining an order of the court or amodification from ASIC permitting such arrangement.

###  

### 

# ** **

# **18.**                                               Release

# ** **

## **18.1**                                        Release of Progen

## ** **

The Shareholders release and discharge Progen and any Related Partyfrom all Claims which the Shareholders:

 

(d)                                                  nowhave;

 

(e)                                                   atany time had;

 

(f)                                                     mayhave; or

 

(g)                                                  butfor this deed, could or might have had,

 

against Progen and/or anyRelated Party.

 

## **18.2**                                        Release of the Shareholders

## ** **

Progen releases and discharges the Shareholders from all Claims whichProgen:

 

(h)                                                  nowhas;

 

(i)                                                      atany time had;

 

(j)                                                      mayhave; or

 

(k)                                                   butfor this deed, could or might have had,

 

against the Shareholders.

 

## **18.3**                                        Related Parties

## ** **

(l)                  The Shareholders and Progen(as promisors) covenant and agree with each other (as promisees) that, inconsideration of the matters contained in this deed, they will do all thingsnecessary to ensure that all persons included in the definition of RelatedParty (as beneficiaries) receive the full benefit of the releases anddischarges as contemplated by this deed.

 

(m)                Without limiting any otherclause and without affecting the rights of the parties inter se arising underthe provisions of this deed, this deed shall operate as a deed poll by each ofthe parties in favour of all persons included in the definition of the RelatedParty that are not signatories to this deed.

 

# **19.**                                                Share Stability

# ** **

### (a)                 Each of the Shareholders will not for the lesser of a periodof 18 months from the date of execution of this deed by all parties or theperiod for which she/he retains her/his respective Shares increase her/hisshareholding in Progen, save and except for the case where shares are acquiredfrom one of:

###  

#### (i)                                                     theShareholders; or

####  

#### (ii)                                                  CCHInvestment Corporation (a company incorporated in Western Samoa), Tzu LiangHuang (also known as James Huang) or Medigen Biotechnology Corporation (acompany incorporated in Taiwan).

####  

### 

###  

### (b)                                                  Each of the Miscellaneous Parties willnot for the lesser of a period of 18 months from the date of execution of thisdeed by all parties or the period for which she/he retains her/his respectiveshares in Progen increase her/his relevant interest (if any) in Progen, saveand except for the case where shares are acquired from one of :

###  

#### (i)                                                     theShareholders; or

####  

#### (ii)                                                  CCHInvestment Corporation (a company incorporated in Western Samoa), Tzu LiangHuang (also known as James Huang) or Medigen Biotechnology Corporation (acompany incorporated in Taiwan).

####  

### (c)                                                   Progen will cause a search to beundertaken of its share register prior to any vote with respect to a BoardComposition Resolution.  In the event anyof the Shareholders or CCH Investment Corporation (a company incorporated inWestern Samoa), Tzu Liang Huang (also known as James Huang) or MedigenBiotechnology Corporation (a company incorporated in Taiwan) or theMiscellaneous Parties (together referred to as the **Controlled Parties**) in total have increased his/hershareholding in Progen such that the relative percentage of the relevantinterest  in Progen owned by theControlled Parties has increased above the relative percentage of shares inProgen owned by the Controlled Parties as at the date of this deed (**Relevant Percentage**), or Progen receives a SubstantialShareholder Notice pursuant to section 671B of the *CorporationsAct*2001, indicating a Controlled Party has acquired a relevantinterest in shares such that the Relevant Percentage would be exceeded if therelevant interest was counted, Progen will give notice of that fact to each ofthe Controlled Parties.

###  

### (d)                                                  If at any time (including in thecircumstance in clause 5(c)) Progen becomes aware that any of the ControlledParties has acquired a relevant interest in shares in Progen such that theRelevant Percentage would be exceeded if the relevant interest was counted,Progen will give notice of that fact to each of the Controlled Parties (whichmay be by a notice given under clause 5(c)).

###  

### (e)                                                   The Controlled Parties agree that ifthe acquisition of a relevant interest has resulted from one of the ControlledParties not complying with clauses 5(a) or (b), that non complying partywill, within 10 Business Days of receipt of the notice, dispose to a person whois not an associate (as defined by section 12 of the *CorporationsAct* 2001) the relevant interestin Progen necessary to ensure thatthe Relevant Percentage is not exceeded.

###  

### (f)                                                     Progen will provide such information tothe Controlled Parties as may be required by them to enable them to comply withclause 5(e).

###  

### (g)                                                  Progen warrants that it will enter intoan agreement with all other of the Controlled Parties (save for Heng Hsin Tangand Joe Yeh-Chiao Lin) to a similar effect as the requirements of this clause.

###  

# **20.**                                               Progen Chief ExecutiveOfficer

# ** **

### Upon execution of this deed by all parties, the followingwill occur with respect to the position of Chief Executive Officer of Progen:

###  

(n)                                                  theBoard of Progen will immediately take the necessary steps to terminate theemployment of Justus Homburg as CEO of Progen in a manner consistent with theterms of his employment contract dated 7 April 2006;

 

----

 

(o)                                                  theBoard of Progen will appoint an international executive search firm to shortlist suitably experienced and qualified candidates for the position of CEO ofProgen and Stephen Chang and Justus Homburg will not be considered by thesearch firm for the position of CEO of Progen;

 

(p)                                                  theexecutive search process for the position of CEO of Progen will be overseen bya sub-committee of the Board of Progen. The sub-committee will comprise three directors of Progen made up of:

 

(i)                                                     DrJohn Chiplin as sub-committee chairman; and

 

(ii)                                                  twoof Thomas Burt, Heng Hsin Tang or Dr Paul Lin (if he is appointed as a directorof Progen); and

 

(q)                                                  oncethe short list of candidates for the position of CEO of Progen is finalised,with the assistance of the international executive search firm thesub-committee of the Board will make a recommendation to the Board of Progenfor approval.

 

# **21.**                                               Binding effect of thisdeed

# ** **

This deed binds the partiesand any executor, administrator, transferee, assignee, liquidator or trustee inbankruptcy appointed in respect of it.

 

# **22.**                                               Disposal ofProceedings

# ** **

### Each party must do immediately all things necessary,expedient, or convenient to dispose of the Proceedings.

###  

# **23.**                                               Costs

# ** **

Each party will bear its owncosts of and incidental to the Proceedings.

 

# **24.**                                               Warranty

# ** **

### (a)                                                   Each of the Shareholders and theMiscellaneous Parties warrant that:

###  

#### (i)                                                    theyhave taken independent legal advice as to the nature, effect and extent of thisdeed;

####  

#### (ii)                                                 neitherProgen nor its officers have:

####  

##### A.                                                   madeany promise, representation or inducement to; or

#####  

##### B.                                                     beenparty to any conduct material to any of the Shareholders entering into thisdeed other than as set out in this deed; and

#####  

#### (iii)                                              savefor CCH Investment which has provided details of its shareholding in Progen,Progen warrants that according to its records the following shares in Progenwere held in the following names at the indicated dates:

 

----

 
| **Name**                          | ** ** | **Shareholding** | ** ** | **Percentage  holding in  Progen** | ** ** | **Date  of last   confirmation**       | ** ** |
|-----------------------------------|------------|------------------|------------|------------------------------------|------------|----------------------------------------|------------|
| Medigen Biotechnology Corporation |       | 2,096,482        |       | 8.48                               | %          | 12/11/09                               |       |
| CCH Investment                    |       | 965,356          |       | 3.91                               | %          | 17/11/09                               |       |
| Chi-Liang Yang                    |       | 472,992          |       | 1.91                               | %          | 12/11/09                               |       |
| Yung-Fong Lu                      |       | 396,816          |       | 1.61                               | %          | 12/11/09                               |       |
| Ho-Lung Wu                        |       | 388,694          |       | 1.57                               | %          | 12/11/09                               |       |
| James Huang                       |       | 439,045          |       | 1.78                               | %          | 14/7/09 Substantial Shareholder notice |       |
| Dr Gordon Schooley                |       | 7,434            |       | 0.03                               | %          | 12/11/09                               |       |
| Dr John Chiplin                   |       | 0                |       | 0                                  | %          | 12/11/09                               |       |
| Dr Julie Cherrington              |       | 0                |       | 0                                  | %          | 12/11/09                               |       |
| Thomas Burt                       |       | 0                |       | 0                                  | %          | 12/11/09                               |       |
| Tzong-Pai (Paul) Lin              |       | 0                |       | 0                                  | %          | 12/11/09                               |       |
| Stuart James                      |       | 0                |       | 0                                  | %          | 12/11/09                               |       |
| Heng Hsin Tang                    |       | 1,500            |       | 0.01                               | %          | 2/11/09                                |       |
| Joe Yeh-Chiao Lin                 |       | 5,923            |       | 0.02                               | %          | 3/11/09                                |       |
| **TOTAL:**                        | ** ** | **4,774,242**    | ** ** | **19.32**                          | **%**      |                                   |       |

###  

### (b)                                                  The Shareholders each warrant (inrespect of their own shares) that the number of shares attributed to him/herabove is correct.

###  

### (c)                                                   The parties to this deed acknowledgethat each other party is relying on the warranties in this clause in executingthis deed.

###  

# **25.**                                               General

# ** **

## **25.1**                                        Governing law

## ** **

This deed is governed by andmust be construed according to the laws of Queensland, Australia.

 

## **25.2**                                        Jurisdiction

## ** **

### (a)                                                   Each party irrevocably submits to thenon exclusive jurisdiction of the courts of Queensland, and the courtscompetent to determine appeals from those courts, with respect to anyproceedings which may be brought at any time relating in any way to this deed.

###  

### 

###  

### (b)                                                  Each party irrevocably waives anyobjection it may now or in the future have to the venue of any proceedings, andany claim it may now or in the future have that any proceedings have beenbrought in an inconvenient forum, where that venue falls withinclause 11.2 (a).

###  

## **25.3**                                        Severance

## ** **

If at any time any provisionof this deed is or becomes illegal, invalid or unenforceable in any respectunder the law of any jurisdiction, that will not affect or impair:

 

### (a)                                                   the legality, validity orenforceability in that jurisdiction of any other provision of this deed; or

###  

### (b)                                                  the legality, validity orenforceability under the law of any other jurisdiction of that or any other provisionof this deed.

###  

## **25.4**                                        Entire agreement

## ** **

To the extent permitted bylaw, in relation to the subject matter of this deed, this deed:

 

### (a)                                                   embodies the entire understanding ofthe parties, and constitutes the entire terms agreed by the parties; and

###  

### (b)                                                  supersedes any prior written or otheragreement of the parties.

###  

## **25.5**                                        Waiver

## ** **

### (a)                                                   Failure to exercise or enforce, or adelay in exercising or enforcing, or the partial exercise or enforcement of, aright, power or remedy provided by law or under this deed by a party does notpreclude, or operate as a waiver of, the exercise or enforcement, or furtherexercise or enforcement, of that or any other right, power or remedy providedby law or under this deed.

###  

### (b)                                                  A waiver or consent given by a partyunder this deed is only effective and binding on that party if it is given orconfirmed in writing by that party.

###  

### (c)                                                   No waiver of a breach of a term of thisdeed operates as a waiver of another breach of that term or of a breach of anyother term of this deed.

###  

# **26.**                                               Acknowledgments

# ** **

### The parties acknowledge that they enter into this deed fullyand voluntarily on their own information and investigation.  Each party to this deed acknowledges that itis their intention to, and they do, fully, finally, absolutely and foreversettle according to the provisions of this deed any and all Claims which nowexist, or may exist or have ever existed between them.

###  

# **27.**                                               Counterparts

# ** **

This deed may be executed inany number of counterparts and by the parties on separate counterparts (includingby way of email exchange).  Eachcounterpart constitutes the agreement of each party who has executed anddelivered that counterpart.

 

**Executed**as a deed.

** **

----

 
| **Executed**by  **Progen Pharmaceuticals Limited (ACN 010 975 612)**  in accordance with Section 127 of the Corporations Act 2001 (Cth) by or  in the presence of: |   |                                      |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------|
|                                                                                                                                                                    |   |                                      |
|                                                                                                                                                                    |   |                                      |
| Signature of  Director                                                                                                                                                  |   | Signature of  Secretary/other Director    |
|                                                                                                                                                                    |   |                                      |
|                                                                                                                                                                    |   |                                      |
| Name of  Director in full                                                                                                                                               |   | Name of  Secretary/other Director in full |
|                                                                                                                                                                    |   |                                      |
|                                                                                                                                                                    |   |                                      |
| Date:                                                                                                                                                                   |   |                                      |
|                                                                                                                                                                    |   |                                      |
|                                                                                                                                                                    |   |                                      |
| **Executed**by  **Joe Yeh-Chiao Lin****of of 19 Harrison Street, Stretton in the State  of Queensland** by or in the presence of:                                       |   |                                      |
|                                                                                                                                                                    |   |                                      |
|                                                                                                                                                                    |   |                                      |
| Signature                                                                                                                                                               |   | Signature of  Witness                     |
|                                                                                                                                                                    |   |                                      |
|                                                                                                                                                                    |   |                                      |
| Date                                                                                                                                                                    |   | Name of Witness                           |
|                                                                                                                                                                    |   |                                      |
|                                                                                                                                                                    |   |                                      |
| **Executed**by  **Heng Hsin Tang****of 66 Bordeaux Street, Eight Mile Plains  Queensland**by or in the presence of:                                                     |   |                                      |
|                                                                                                                                                                    |   |                                      |
|                                                                                                                                                                    |   |                                      |
| Signature                                                                                                                                                               |   | Signature of Witness                      |
|                                                                                                                                                                    |   |                                      |
|                                                                                                                                                                    |   |                                      |
| Date                                                                                                                                                                    |   | Name of Witness                           |

 

----

 
| **Executed**by  **Yung-Fong Lu****of 6F, 14 Chong Cheng Road Section 2,  Taipei, Taiwan**by or in the presence of:                         |   |                  |
|-------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------|
| ** **                                                                                                                                      |   |                  |
| ** **                                                                                                                                      |   |                  |
| Signature                                                                                                                                       |   | Signature  of Witness |
| ** **                                                                                                                                      |   |                  |
| ** **                                                                                                                                      |   |                  |
| Date                                                                                                                                            |   | Name of  Witness      |
|                                                                                                                                            |   |                  |
|                                                                                                                                            |   |                  |
| **Executed**by  **Chi-Liang Yang****of 8F, 106 Chong Cheng Road Section 2,  Taipei, Taiwan** by or in the presence of:                     |   |                  |
| ** **                                                                                                                                      |   |                  |
| ** **                                                                                                                                      |   |                  |
| Signature                                                                                                                                       |   | Signature  of Witness |
|                                                                                                                                            |   |                  |
| ** **                                                                                                                                      |   |                  |
| Date                                                                                                                                            |   | Name of  Witness      |
|                                                                                                                                            |   |                  |
|                                                                                                                                            |   |                  |
| **Executed**by  **Ho-Lung Wu****of 4F, 3 Hsueh-Fu Road, Danshui, Taipei, Taiwan**  by or in the presence of:                                    |   |                  |
| ** **                                                                                                                                      |   |                  |
| ** **                                                                                                                                      |   |                  |
| Signature                                                                                                                                       |   | Signature  of Witness |
| ** **                                                                                                                                      |   |                  |
| ** **                                                                                                                                      |   |                  |
| Date                                                                                                                                            |   | Name of  Witness      |
|                                                                                                                                            |   |                  |
|                                                                                                                                            |   |                  |
| **Executed**by  **Dr John Chiplin****of 63 The Esplanade, Mosman in the State of New  South Wales, Australia (2088)** by or in the presence of: |   |                  |
| ** **                                                                                                                                      |   |                  |
| ** **                                                                                                                                      |   |                  |
| Signature                                                                                                                                       |   | Signature  of Witness |
| ** **                                                                                                                                      |   |                  |
| ** **                                                                                                                                      |   |                  |
| Date                                                                                                                                            |   | Name  of Witness      |

 

----

 
| **Executed**by  **Dr Julie Michele Cherrington****of 1311 Caminito Faro, La Jolla, California,  United States of America (92037)** by or in the  presence of:    |   |                  |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------|
| ** **                                                                                                                                                       |   |                  |
| ** **                                                                                                                                                       |   |                  |
| Signature                                                                                                                                                        |   | Signature  of Witness |
| ** **                                                                                                                                                       |   |                  |
| ** **                                                                                                                                                       |   |                  |
| Date                                                                                                                                                             |   | Name of  Witness      |
|                                                                                                                                                             |   |                  |
|                                                                                                                                                             |   |                  |
| **Executed**by  **Dr Gordon Leroy Schooley****of 14350 Via Baroda, San Diego, California, United  States of America (92130)**by or in the presence of:           |   |                  |
| ** **                                                                                                                                                       |   |                  |
| ** **                                                                                                                                                       |   |                  |
| Signature                                                                                                                                                        |   | Signature  of Witness |
| ** **                                                                                                                                                       |   |                  |
| ** **                                                                                                                                                       |   |                  |
| Date                                                                                                                                                             |   | Name of  Witness      |
|                                                                                                                                                             |   |                  |
|                                                                                                                                                             |   |                  |
| **Executed**by  **Thomas James Burt****of 251/55 Victoria Harbour Promenade, Docklands,  in the State of Victoria, Australia (3008)** by or in the  presence of: |   |                  |
| ** **                                                                                                                                                       |   |                  |
| ** **                                                                                                                                                       |   |                  |
| Signature                                                                                                                                                        |   | Signature  of Witness |
| ** **                                                                                                                                                       |   |                  |
| ** **                                                                                                                                                       |   |                  |
| Date                                                                                                                                                             |   | Name of  Witness      |
|                                                                                                                                                             |   |                  |
|                                                                                                                                                             |   |                  |
| **Executed**by **Tzong-Pai (Paul) Lin****of****Room 8, 6F, No. 68, Sec.4 Roosevelt  Boulevard Taipei, Taiwan**                                         |   |                  |
| ** **                                                                                                                                                       |   |                  |
| by or in the presence of:                                                                                                                                        |   |                  |

 

----

 
|                                                                                                                                          |   |                  |
|-----------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------|
| Signature                                                                                                                                     |   | Signature  of Witness |
|                                                                                                                                          |   |                  |
|                                                                                                                                          |   |                  |
| Date                                                                                                                                          |   | Name of  Witness      |
|                                                                                                                                          |   |                  |
|                                                                                                                                          |   |                  |
| **Executed**by  **Stuart Bruce James****of 7 Glan Avon Road, Hawthorn, in the State of  Victoria, Australia (3122)**by or in the presence of: |   |                  |
| ** **                                                                                                                                    |   |                  |
| ** **                                                                                                                                    |   |                  |
| Signature                                                                                                                                     |   | Signature  of Witness |
|                                                                                                                                          |   |                  |
|                                                                                                                                          |   |                  |
| Date                                                                                                                                          |   | Name  of Witness      |

 

----

 

**AnnexureA - Order**

 

----

 

 

 

Deedof Settlement and Release

 

Progen Pharmaceuticals Limited (ACN 010 975 612)

 

Progen

 

CCH Investment Corporation (a company incorporated in WesternSamoa) and Tzu Liang Huang (also known as James Huang)

 

Huang and CCH

 

Dr John Chiplin, Dr Julie Michele Cherrington, Dr GordonLeroy Schooley, Thomas James Burt, Tzong-Pai (Paul) Lin, Heng Hsin Tang, JoeYeh-Chiao Lin and Stuart Bruce James

 

Miscellaneous Parties

 

ClaytonUtz

Lawyers

Level28, Riparian Plaza 71 Eagle Street Brisbane QLD 4000 Australia

GPOBox 55 Brisbane QLD 4001

T+ 61 7 3292 7000 F +61 7 3221 9669

 

**www.claytonutz.com**

 

Ourreference 12154/15936/80092418

** **

----

** **

**Contents**

** **
| **1.**     | **Definitions  and interpretation**   | ** **                                           | **1**      |
|------------|---------------------------------------|------------------------------------------------------|------------|
|       |                                  |                                                 |       |   |
|       | 1.1                                   | Definitions                                          |       | 1 |
|       | 1.2                                   | Interpretation                                       |       | 3 |
|       |                                  |                                                 |       |   |
| **2.**     | **Undertakings**                      | ** **                                           | **3**      |
| ** ** | ** **                            | ** **                                           | ** ** |
| **3.**     | **Procurements  and Recommendations** | ** **                                           | **5**      |
|       |                                  |                                                 |       |   |
|       | 3.1                                   | Resignation and withdrawal                           |       | 5 |
|       | 3.2                                   | Progen Procurements and Agreement with Huang and CCH |       | 5 |
|       | 3.3                                   | Further Obligations                                  |       | 7 |
|       |                                  |                                                 |       |   |
| **4.**     | **Release**                           | ** **                                           | **8**      |
|       |                                  |                                                 |       |   |
|       | 4.1                                   | Release of Progen                                    |       | 8 |
|       | 4.2                                   | Release of Huang and CCH                             |       | 8 |
|       | 4.3                                   | Related Parties                                      |       | 8 |
|       |                                  |                                                 |       |   |
| **5.**     | **Share  Stability**                  | ** **                                           | **9**      |
| ** ** | ** **                            | ** **                                           | ** ** |
| **6.**     | **Progen  Chief Executive Officer**   | ** **                                           | **10**     |
| ** ** | ** **                            | ** **                                           | ** ** |
| **7.**     | **Binding  effect of this deed**      | ** **                                           | **10**     |
| ** ** | ** **                            | ** **                                           | ** ** |
| **8.**     | **Disposal  of Proceedings**          | ** **                                           | **10**     |
| ** ** | ** **                            | ** **                                           | ** ** |
| **9.**     | **Costs**                             | ** **                                           | **10**     |
| ** ** | ** **                            | ** **                                           | ** ** |
| **10.**    | **Warranty**                          | ** **                                           | **10**     |
| ** ** | ** **                            | ** **                                           | ** ** |
| **11.**    | **General**                           | ** **                                           | **11**     |
|       |                                  |                                                 |       |   |
|       | 11.1                                  | Governing law                                        |       | 11 |
|       | 11.2                                  | Jurisdiction                                         |       | 11 |
|       | 11.3                                  | Severance                                            |       | 12 |
|       | 11.4                                  | Entire agreement                                     |       | 12 |
|       | 11.5                                  | Amendments                                           |       | 12 |
|       | 11.6                                  | Waiver                                               |       | 12 |
|       |                                  |                                                 |       |   |
| **12.**    | **Acknowledgments**                   | ** **                                           | **12**     |
| ** ** | ** **                            | ** **                                           | ** ** | ** ** |
| **13.**    | **Counterparts**                      | ** **                                           | **12**     |

 

i

----

** **

**Deed of Settlementand Release dated**

** **

**Parties****                                                                                        ****Progen Pharmaceuticals Limited (ACN 010 975 612)** of16 Benson Street, Brisbane, Queensland, Australia 4066 (**Progen**)

 

**CCHInvestment Corporation (a company incorporated in Western Samoa) and Tzu LiangHuang (also known as James Huang)**(**Huang and CCH**)

 

**Dr JohnChiplin, Dr Julie Michele Cherrington, Dr Gordon Leroy Schooley, Thomas JamesBurt, Tzong-Pai (Paul) Lin, Heng Hsin Tang, Joe Yeh-Chiao Lin and Stuart BruceJames******(**Miscellaneous Parties**)

 

**Recitals**

** **

4.                                                       Progenis a public company incorporated according to the *CorporationsAct*2001 (**Act**) that, atall material times, has carried on business as a globally focused biotechnologycompany engaged in the discovery, development and commercialisation of smallmolecule pharmaceuticals primarily for the treatment of cancer and was carryingon the research known as the PI-88 technology relating to stopping theprogression and metastasis of cancer.

 

5.                                                       During2009 Disputes arose and Progen issued Proceedings against Huang and CCH and otherpersons/entities.  Huang and CCH deny theallegations in the Statement of Claim.

 

6.                                                       Withoutadmission of liability and to avoid the cost and inconvenience of litigation,Huang and CCH and Progen have agreed to resolve the Proceedings and theDisputes on the basis set out in this deed.

** **

**Operativeprovisions**

# ** **

# **28.**                                               Definitions andinterpretation

# ** **

## **28.1**                                        Definitions

## ** **

In this deed:

 

**Act**means *Corporations Act 2001* (Cth).

 

**Board Composition Resolution**means any resolution to:

 

### (a)                                                   elect, appoint or remove a director orwhich would otherwise affect the tenure or appointment of a director; or

###  

### (b)                                                  amend the constitution (or take anyother step) to affect the power, composition and proceedings of the board ofdirectors of Progen, the number of directors of Progen or the role of StuartJames as Chairman of the Board of Directors of Progen.

###  

**Claims**meansall actions, suits, claims, demands, causes of action (whether legal,equitable, in negligence, under any statute or otherwise), costs and expensesand all other liabilities of any nature whatsoever (whether or not the partieswere or could have been aware of them) in any way related to the Disputes orcircumstances arising out of or in any way connected or related to the Disputesexcluding any claims against Former Directors and Officers in respect ofbreaches of their duties and obligations owed to Progen or to its shareholders.

 

1

----

 

**CCHRelated Party** means:

 

### (c)                                                   a “related body corporate” of CCH asdefined under section 50 of the *Corporations Act 2001*;

###  

### (d)                                                  an “associated entity” of CCH asdefined under section 50AAA of the *Corporations Act 2001*;and

###  

### (e)                                                   a director, officer, employee or agent,of CCH (other than a person who is one of the Former Directors and Officers) oran entity described in subparagraphs (a) and (b) above.

###  

**Current Directors and Officers**means the persons holding the position of a director or officer of Progen on orafter 2 July 2009, other than Justus Homburg.

 

**Disputes** means:

 

### (f)                                                     whether Huang and CCH have engaged inconduct as alleged in the Statement of Claim in contravention of section 606 ofthe *Corporations Act 2001* (Cth);

###  

### (g)                                                  whether the directors of Progen actedproperly in authorising the Proceedings to be issued against Huang and CCH andother persons/entities based on facts and matters alleged in the Statement ofClaim; and

###  

### (h)                                                  the Proceedings.

###  

**Excluded Persons**means****Joe Yeh-Chiao Lin, Heng Hsin Tang, Fu-Chang Tsai, Fu-YingWang, Fu Mei Wang, Lee Li Hsueh Yang, Su-Hua Chuang, Pai-Mao Lin, Lee ChuanHuang and Ya Wen Huang.

 

**Former Directors and Officers**meansthe directors and officers of Progen, other than the Current Directors andOfficers.

 

**Huang and CCH** means CCHInvestment Corporation and Tzu Liang Huang (also known as James Huang).

 

**Huang and CCH Shares**means the shares in Progen owned legally or beneficially by Huang and CCH.

 

**Miscellaneous Parties**meansDr John Chiplin, Dr Julie Michele Cherrington, Dr Gordon Leroy Schooley, ThomasJames Burt, Tzong-Pai (Paul) Lin, Heng Hsin Tang, Joe Yeh-Chiao Lin and StuartBruce James.

 

**Other Shareholders** means Yung-FongLu, Chi-Liang Yang, Ho-Lung Wu, and Medigen Biotechnology Corporation (acompany incorporated in Taiwan).

 

**Proceedings** means theproceedings in the Supreme Court of Queensland (number BS 8391 of 2009,Brisbane Registry).

 

**ProgenRelated Party** means:

 

### (i)                                                      a “related body corporate” of Progen asdefined under section 50 of the *Corporations Act 2001*;

###  

### (j)                                                      an “associated entity” of Progen asdefined under section 50AAA of the *Corporations Act 2001*;and

###  

### 2

### ****

###  

### (k)                                                   a director, officer, employee or agent,of Progen (other than a person who is one of the Former Directors and Officers)or an entity described in subparagraphs (a) and (b) above.

###  

**Statement of Claim** refers to theStatement of Claim which was filed in the Proceedings on 28 September 2009.

 

## **28.2**                                        Interpretation

## ** **

In this deed:

 

### (m)                             headings are for convenience only anddo not affect interpretation,

###  

### and unlessthe context indicates a contrary intention:

###  

### (n)                               an obligation or liability assumed by,or a right conferred on, 2 or more persons binds or benefits them jointly andseverally;

###  

### (o)                               **person** includes an individual, the estate ofan individual, a corporation, an authority, an association or a joint venture(whether incorporated or unincorporated), a partnership and a trust;

###  

### (p)                               a reference to a party includes thatparty’s executors, administrators, successors and permitted assigns, includingpersons taking by way of novation and, in the case of a trustee, includes asubstituted or an additional trustee and further includes any person claimingon behalf of or under or through a party to this deed;

###  

### (q)                               a reference to a document (includingthis deed) is to that document as varied, novated, ratified or replaced fromtime to time;

###  

### (r)                                  a reference to a statute or statutoryprovision includes a statutory modification or re-enactment of it or astatutory provision substituted for it, and each ordinance, by-law, regulation,rule and statutory instrument (however described) issued under it;

###  

### (s)                                a word importing the singular includesthe plural (and vice versa), and a word indicating a gender includes everyother gender;

###  

### (t)                                  a reference to a party, clause,schedule, exhibit, attachment or annexure is a reference to a party, clause,schedule, exhibit, attachment or annexure to or of this deed, and a referenceto this deed includes all schedules, exhibits, attachments and annexures tothis deed;

###  

### (u)                               if a word or phrase is given a definedmeaning, any other part of speech or grammatical form of that word or phrasehas a corresponding meaning;

###  

### (v)                               nothing inthis Deed is to be interpreted against a party solelyon the ground that the party put forward this Deed or a relevant part of it.

###  

### (w)                             **includes** in any form is not a word oflimitation; and

###  

### (x)                                 a reference to **$** or **dollar**is to Australian currency.

###  

# **29.**                                               Undertakings

# ** **

### Huang and CCH hereby undertakesto Progen (and agree to also provide such undertakings to the Supreme Court ofQueensland) that he/it:

###  

### 3

### ****

 

(r)                                                     willnot act in any manner whatsoever that contravenes section 606 of the Act inrespect of his/its shareholding (whether legally or beneficially held) inProgen, and:

 

(i)                                                     willdirect any person or entity who holds shares in Progen on their behalf to actconsistently with the provisions of this deed;

 

(ii)                                                  willnot give any directions to any person or entity who holds shares in Progen ontheir behalf to act in any manner inconsistent with the provisions of thisdeed; and

 

(s)                                                   subjectto Progen complying with its obligations in clause 5 and on condition that theMiscellaneous Parties continue to observe their statutory and fiduciary dutiesto Progen, he/it:

 

(i)                                                     willnot for the lesser of the period of 18 months from the date of execution ofthis deed by all parties or the period for which he/it retains his/itsrespective Huang and CCH Shares, take, or join in taking, any action (or giveany direction either directly or indirectly to any person who holds shares inProgen on their behalf) to:

 

A.                                                   causea general meeting of members of Progen to be convened under any of sections249D, 249E, 249F or 249G of the Act or clauses 8.5 or 8.7 of Progen’sConstitution; or

 

B.                                                     causea resolution to be considered at a general meeting of members of Progen undersection 249N and 249O of the Act,

 

concerning or involving a Board CompositionResolution without the written consent of a majority of the Board of Directorsof Progen in accordance with its Constitution, save for a proposed resolutionto appoint Justus Homburg or Stephen Chang as a director of Progen.

 

(ii)                                                  will,so long as he/it retains his/its respective Huang and CCH Shares, cause his/itsrespective Huang and CCH Shares to be voted on any Board CompositionResolutions moved at a general meeting of members convened in the period of 18months from the date of execution of this deed, in accordance with therecommendation of a majority of the directors of Progen in accordance with itsConstitution, save for a proposed resolution to appoint Justus Homburg orStephen Chang as a director.

 

(iii)                                               willin respect of his/its respective Huang and CCH Shares, so long as he/it retainshis/its respective Huang and CCH Shares, appoint Stuart James while he holdsthe office of Chairman of Progen as corporate representative under section 250Dof the Act in the case of a body corporate, and as proxy under section 249X ofthe Act to vote on any Board Composition Resolution in the case of anindividual, to vote in accordance with the previous provisions of this deed andnot to take any steps to revoke or override that appointment.

 

(iv)                                              willnot dispose of or otherwise deal with his/its respective Huang and CCH Sharesin such a way so as to avoid the obligations described in clauses 2(b) (i),(ii) and (iii) of this deed. Subject to the foregoing, Huang and CCHremain free to dispose of their shares on the open market and/or in an otherarms length transaction (such as a share buy back).

** **

**4**

----

 

# **30.**                                               Procurements andRecommendations

# ** **

## **30.1**                                        Resignation andwithdrawal

## ** **

### Huang and CCH shall use theirbest endeavours to procure the resignation (and withdrawal of nomination asdirector for the 2009 AGM) of one of the following persons as director of Progenwithin 7 days of the date of execution of this deed by all parties (suchresignation to take effect at the 2009 AGM):

###  

(t)                                                     MrThomas Burt;

 

(u)                                                  MrHeng Hsin Tang; and

 

(v)                                                  MrJoe Yeh-Chiao Lin,

 

and if Huang and CCH are unable to do so, MrJoe Yeh-Chiao Lin agrees to resign as a director of Progen and withdraw hisnomination as director for the 2009 AGM.

 

## **30.2**                                        Progen Procurementsand Agreement with Huang and CCH

## ** **

### (a)                                                   Dr Gordon Leroy Schooley will resign asa director of Progen and withdraw his nomination as director for the 2009 AGMwithin 7 days of the date of execution this deed by all parties to thisdeed of his resignation to take effect on the date of Progen’s 2009 AGM.

###  

### (b)                                                  Each of Mr Thomas Burt, Mr Heng HsinTang, Mr Joe Yeh-Chiao Lin, Dr John Chiplin, Dr Julie Michele Cherrington, DrGordon Leroy Schooley and Stuart James having resolved as the Board ofDirectors of Progen that it is in the interests of Progen and the shareholdersof Progen as a whole to do so, agree that if they are directors of Progen atthe relevant time that:

####  

#### (i)                                                     withrespect to the 2009 AGM of Progen, they as directors on the Progen Board havedecided to unanimously recommend that Progen shareholders vote in favour of allof any resolutions for the:

####  

##### A.                                                   appointmentof Tzong-Pai (Paul) Lin as a director of Progen;

#####  

##### B.                                                     reappointmentof the following directors:

#####  

###### 1)                                                      StuartJames (as Chairman of the Board with a casting vote);

######  

###### 2)                                                      (dependingupon the resignation referred to in clause 3.1 above): 2 of the following 3persons (if required to be re-elected): Thomas Burt, Heng Hsin Tang, JoeYeh-Chiao Lin; and

######  

###### 3)                                                      (ifrequired to be re-elected): Dr John Chiplin and Dr Julie Michele Cherrington,

######  

and that theBoard issue a written recommendation to that effect prior to the 2009 AGM;

 

#### (ii)                                                  withrespect to the 2010 AGM of Progen, they as directors on the Progen Board shallunanimously recommend that Progen shareholders vote in favour of all of anyresolutions for the:

#####  

##### 5

##### 

#####  

##### A.                                                   reappointmentof the following directors:

#####  

###### 1)                                                      StuartJames as Chairman of the Progen Board, with a casting vote (if required to bere-elected) or any replacement that filled a casual vacancy left by Mr James(if required to be re-elected);

######  

###### 2)                                                      (dependingupon the resignation referred to in clause 3.1 above): 2 of the following 3persons (if required to be re-elected): Thomas Burt, Heng Hsin Tang, JoeYeh-Chiao Lin;

######  

###### 3)                                                      (ifrequired to be re-elected): Dr John Chiplin and Dr Julie Michele Cherrington orany replacement that filled a casual vacancy left by them (if required to bere-elected);

######  

###### 4)                                                      Tzong-Pai(Paul) Lin (if required to be re-elected) or any replacement that filled acasual vacancy left by Dr Lin (if required to be re-elected),

######  

and that any relevant notice of meetinginclude a statement by the Board to that effect;

 

#### (iii)                                               withrespect to any casual vacancies of directors for a period of 18 months from thedate of execution of this deed by all parties, they as directors on the ProgenBoard shall unanimously recommend that Progen shareholders vote in favour of aresolution to fill the casual relevant vacancy with the replacement director(who must have had previous experience as a director of a publicly listedcompany and be of good character and be a person other than Justus Homburg,Stephen Chang or their associate (as defined by section 9 of the *Corporations Act* 2001)) nominated by the outgoing director;

####  

#### (iv)                                              withrespect to the 2009 and 2010 AGM of Progen they will not nominate or supportthe nomination of Justus Homburg or Stephen Chang as directors of Progen;

####  

#### (v)                                                 theywill not change, withdraw or modify their recommendation in favour of theresolutions,

####  

unless the Board has first obtained writtenexternal legal advice that these directors of Progen, by virtue of theirfiduciary duties, are required not to make the recommendations or to change,withdraw or modify their recommendation (as applicable) in which event, uponthe directors of Progen not acting in accordance with the provisions of clause3.2(b) above Huang and CCH are released from the obligations referred toin clause 2(b)(i) to (iii) above.

 

### (c)                                                   Progen will:

###  

#### (i)                                                     withrespect to the 2009 AGM of Progen recommend that Progen shareholders vote infavour of all of any resolutions for the:

#####  

##### A.                                                   appointmentof Tzong-Pai (Paul) Lin as a director of Progen;

#####  

##### B.                                                     reappointmentof the following directors:

#####  

##### 6

##### 

######  

###### 1)                                                      StuartJames (as Chairman of the Board with a casting vote);

######  

###### 2)                                                      (dependingupon the resignation referred to in clause 3.1 above): 2 of the following 3persons (if required to be re-elected): Thomas Burt, Heng Hsin Tang, JoeYeh-Chiao Lin; and

######  

###### 3)                                                      (ifrequired to be re-elected): Dr John Chiplin, Dr Julie Michele Cherrington andDr Gordon Leroy Schooley or any replacement that filled a casual vacancy leftby them (if required to be re-elected)

######  

and that Progenissue a written recommendation to that effect prior to the 2009 AGM;

 

#### (ii)                                                  withrespect to the 2010 AGM of Progen, recommend that Progen shareholders vote infavour of all of any resolutions for the:

####  

##### A.                                                   reappointmentof the following directors:

#####  

###### 1)                                                      StuartJames as Chairman of the Progen Board, with a casting vote (if required to bere-elected) or any replacement that filled a casual vacancy left by Mr James(if required to be re-elected);

######  

###### 2)                                                      (dependingupon the resignation referred to in clause 3.1 above): 2 of the following 3persons (if required to be re-elected): Thomas Burt, Heng Hsin Tang, JoeYeh-Chiao Lin;

######  

###### 3)                                                      (ifrequired to be re-elected): Dr John Chiplin and Dr Julie Michele Cherrington orany replacement that filled a casual vacancy left by them (if required to bere-elected); and

######  

###### 4)                                                      Tzong-Pai(Paul) Lin (if required to be re-elected) or any replacement that filled acasual vacancy left by Dr Lin (if required to be re-elected),

######  

and that any relevant notice of meetinginclude a statement by Progen to that effect; and

 

#### (iii)                                               willnot change, withdraw or modify its recommendation in favour of the resolutions

####  

#### unless Progen has first obtained written external legal advice that itought not make the recommendations or ought to change, withdraw or modify itsrecommendation (as applicable) in which event, upon Progen not acting inaccordance with the provisions of clause 3.2 (c) above Huang and CCH arereleased from the obligations referred to in clause 2 (b)(i) to (iii) inclusiveabove.

####  

## **30.3**                                        Further Obligations

## ** **

### (a)                                                   All parties to this deed must doeverything necessary to give effect to clauses 3.1 and 3.2 of this deed.

###  

### 7

### 

###  

### (b)                                                  Progen, Huang and CCHagree to consent to the Supreme Court of Queensland makingan order in the terms set out in **Annexure A**to this deed.

###  

### (c)                                                   All parties to this deed agree that theperformance of the obligations contained in clauses 2 to 10 (inclusive) of thisdeed are conditional upon the Supreme Court of Queensland making an order inthe terms set out in order 2 of Annexure A to this deed regarding section 259Aof the *Corporations Act* 2001.

###  

### (d)                                                  Progen warrants that for the lesser ofthe period of 18 months from the date of execution of this deed by all partiesto this deed or the period for which Huang and CCH retain the Huang and CCHShares, it will not enter into an arrangement with the Excluded Persons to acquire a relevant interest in theExcluded Persons’ shares in Progen inbreach of section 606 of the Act, without obtaining an order of the court or amodification from ASIC permitting such arrangement.

# ** **

# **31.**                                               Release

# ** **

## **31.1**                                        Release of Progen

## ** **

Huang and CCH release and discharge Progenand any Progen Related Party from all Claims which Huang and CCH:

 

(w)                                                nowhave;

 

(x)                                                    atany time had;

 

(y)                                                  mayhave; or

 

(z)                                                    butfor this deed, could or might have had,

 

against Progenand/or any Progen Related Party.

 

## **31.2**                                        Release of Huang and CCH

## ** **

Progen releases and discharges Huang and CCHand any CCH Related Party from all Claims which Progen:

 

(aa)                                             nowhas;

 

(bb)                                           atany time had;

 

(cc)                                             mayhave; or

 

(dd)                                           butfor this deed, could or might have had,

 

against Huang andCCH and/or any CCH Related Party.

 

## **31.3**                                        Related Parties

## ** **

(ee)                                             Huangand CCH and Progen (as promisors) covenant and agree with each other (aspromisees) that, in consideration of the matters contained in this deed, theywill do all things necessary to ensure that all persons included in thedefinition of Progen Related Party and CCH Related Party (as beneficiaries)receive the full benefit of the rights (including all releases, discharges andindemnities) as contemplated by this deed.

 

8

----

 

(ff)                                                 Withoutlimiting any other clause and without affecting the rights of the parties interse arising under the provisions of this deed, this deed shall operate as a deedpoll by each of the parties in favour of all persons included in the definitionof the Progen Related Party and CCH Related Party that are not signatories tothis deed.

 

# **32.**                                               Share Stability

# ** **

### (a)                                                   Each of Huang and CCH will not for thelesser of a period of 18 months from the date of execution of this deed by allparties or the period for which he/it retains his/its respective shares inProgen increase his/its shareholding in Progen, save and except for the casewhere shares are acquired from one of:

###  

#### (i)                                                     theother (of Huang and CCH); or

####  

#### (ii)                                                  theOther Shareholders.

####  

### (b)                                                  Each of the Miscellaneous Parties willnot for the lesser of a period of 18 months from the date of execution of thisdeed by all parties or the period for which she/he retains her/his respectiveshares in Progen increase her/his relevant interest (if any) in Progen, saveand except for the case where shares are acquired from one of :

###  

#### (i)                                                     Huangand CCH; or

####  

#### (ii)                                                  theOther Shareholders.

###  

### (c)                                                   Progen will cause a search to beundertaken of its share register prior to any vote with respect to a BoardComposition Resolution. In the event any of the Other Shareholders or Huang orCCH or the Miscellaneous Parties (together referred to as the **Controlled Parties**) in total have increased his/hershareholding in Progen such that the relative percentage of shares in Progenowned by the Controlled Parties has increased above the relative percentage ofthe relevant interest in Progen owned by the Controlled Parties as at the dateof this deed (**Relevant Percentage**),or Progen receives a Substantial Shareholder Notice pursuant to section 671B ofthe *Corporations Act* 2001, indicating aControlled Party has acquired a relevant interest in shares such that theRelevant Percentage would be exceeded if the relevant interest was counted,Progen will give notice of that fact to each of the Controlled Parties.

###  

### (d)                                                  If at any time (including in thecircumstance in clause 5(c)) Progen becomes aware that any of the ControlledParties has acquired a relevant interest in Progen such that the RelevantPercentage would be exceeded if the relevant interest was counted, Progen willgive notice of that fact to each of the Controlled Parties (which may be by anotice given under clause 5(c)).

###  

### (e)                                                   The Controlled Parties agree that ifthe acquisition of a relevant interest has resulted from one of the ControlledParties not complying with clauses 5(a) or (b), that non complying partywill, within 10 Business Days of receipt of the notice, dispose to a person whois not an associate (as defined by section 12 of the *CorporationsAct* 2001) the relevant interest in Progen necessary to ensure thatthe Relevant Percentage is not exceeded.

###  

### (f)                                                     Progen will provide such information tothe Controlled Parties as may be required by them to enable them to comply withclause 5(e).

###  

### (g)                                                  Progen warrants that it will enter intoan agreement with all other of the Controlled Parties (save for Heng Hsin Tang and JoeYeh-Chiao Lin)to a similar effect as the requirementsof this clause.

###  

### 9

### 

 

# **33.**                                               Progen Chief ExecutiveOfficer

# ** **

### Uponexecution of this deed by all parties, the following will occur with respect tothe position of Chief Executive Officer of Progen:

###  

(gg)                                           the Board of Progen will immediately take the necessary steps toterminate the employment of Justus Homburg as CEO of Progen in a mannerconsistent with the terms of his employment contract dated 7 April 2006;

 

(hh)                                          the Board of Progen will appoint an international executive search firm to short listsuitably experienced and qualified candidates for the position of CEO of Progenand Stephen Chang and Justus Homburg will not be considered by the search firmfor the position of CEO of Progen;

 

(ii)                                                  the executive search process for the position of CEO of Progen willbe overseen by a sub-committee of the Board of Progen.  The sub-committee will comprise threedirectors of Progen made up of:

 

(i)                                                     Dr John Chiplin as sub-committee chairman; and

 

(ii)                                                  two of Thomas Burt, Heng Hsin Tang or Dr Paul Lin (if he isappointed as a director of Progen);

 

(jj)                                                  once the short list of candidates for the position of CEO of Progenis finalised, with the assistance of the international executive search firmthe sub-committee of the Board will make a recommendation to the Board ofProgen for approval.

 

# **34.**                                               Binding effect of thisdeed

# ** **

This deed binds the parties and any executor,administrator, transferee, assignee, liquidator or trustee in bankruptcyappointed in respect of it.

 

# **35.**                                               Disposal ofProceedings

# ** **

### Eachparty must do immediately all things necessary, expedient, or convenient todispose of the Proceedings.

###  

# **36.**                                               Costs

# ** **

Each party will bear its own costs of andincidental to the Proceedings.

 

# **37.**                                               Warranty

# ** **

### (a)                                                  Each of Huang and CCHand the Miscellaneous Parties warrant that they have taken independent legaladvice as to the nature, effect and extent of this deed.

###  

### (b)                                                  Save for CCHInvestment which has provided details of its shareholding in Progen, Progenwarrants that according to its records the following shares in Progen were heldin the following names at the indicated dates:

 

10

----

 
| **Name**                           | ** ** | **Shareholding** | ** ** | **Percentage  holding in   Progen** | ** ** | **Date of  last  confirmation**        | ** ** |
|------------------------------------|------------|------------------|------------|-------------------------------------|------------|----------------------------------------|------------|
| ** **                         | ** ** | ** **       | ** ** | ** **                          | ** ** | ** **                             | ** ** |
| Medigen  Biotechnology Corporation |       | 2,096,482        |       | 8.48                                | %          | 12/11/09                               |       |
| CCH Investment                     |       | 965,356          |       | 3.91                                | %          | 17/11/09                               |       |
| Chi-Liang Yang                     |       | 472,992          |       | 1.91                                | %          | 12/11/09                               |       |
| Yung-Fong Lu                       |       | 396,816          |       | 1.61                                | %          | 12/11/09                               |       |
| Ho-Lung Wu                         |       | 388,694          |       | 1.57                                | %          | 12/11/09                               |       |
| James Huang                        |       | 439,045          |       | 1.78                                | %          | 14/7/09 Substantial Shareholder notice |       |
| Dr Gordon  Schooley                |       | 7,434            |       | 0.03                                | %          | 12/11/09                               |       |
| Dr John Chiplin                    |       | 0                |       | 0                                   | %          | 12/11/09                               |       |
| Dr Julie  Cherrington              |       | 0                |       | 0                                   | %          | 12/11/09                               |       |
| Thomas Burt                        |       | 0                |       | 0                                   | %          | 12/11/09                               |       |
| Tzong-Pai  (Paul) Lin              |       | 0                |       | 0                                   | %          | 12/11/09                               |       |
| Stuart James                       |       | 0                |       | 0                                   | %          | 12/11/09                               |       |
| Heng Hsin Tang                     |       | 1,500            |       | 0.01                                | %          | 2/11/09                                |       |
| Joe Yeh-Chiao  Lin                 |       | 5,923            |       | 0.02                                | %          | 3/11/09                                |       |
| **TOTAL**                          | ** ** | **4,774,242**    | ** ** | **19.32**                           | **%**      |                                   |       |

 

### (c)                                                  Huang and CCH eachwarrant (in respect of their own respective shares) that the number of sharesattributed to him/it above is correct.

###  

### (d)                                                 Theparties to this deed acknowledge that each other party is relying on thewarranties in this clause in executing this deed.

###  

# **38.**                                               General

# ** **

## **38.1**                                        Governing law

## ** **

This deed is governed by and must beconstrued according to the laws of Queensland, Australia.

 

## **38.2**                                        Jurisdiction

## ** **

### (a)                                                  Each partyirrevocably submits to the non exclusive jurisdiction of the courts ofQueensland, and the courts competent to determine appeals from those courts,with respect to any proceedings which may be brought at any time relating inany way to this deed.

 

11

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### (b)                                                  Each partyirrevocably waives any objection it may now or in the future have to the venueof any proceedings, and any claim it may now or in the future have that anyproceedings have been brought in an inconvenient forum, where that venue fallswithin clause 11.2 (a).

 

## **38.3**                                        Severance

 

If at any time any provision of this deed isor becomes illegal, invalid or unenforceable in any respect under the law ofany jurisdiction, that will not affect or impair:

 

### (a)                                                   the legality,validity or enforceability in that jurisdiction of any other provision of thisdeed; or

###  

### (b)                                                  the legality,validity or enforceability under the law of any other jurisdiction of that orany other provision of this deed.

###  

## **38.4**                                        Entire agreement

 

To the extent permitted by law, in relationto the subject matter of this deed, this deed:

 

### (a)                                                   embodies the entireunderstanding of the parties, and constitutes the entire terms agreed by theparties; and

###  

### (b)                                                  supersedes any priorwritten or other agreement of the parties.

###  

## **38.5**                                        Amendments

 

This deed may only be varied by a deed signedby or on behalf of each party.

 

## **38.6**                                        Waiver

 

### (a)                                                  Failure to exerciseor enforce, or a delay in exercising or enforcing, or the partial exercise orenforcement of, a right, power or remedy provided by law or under this deed bya party does not preclude, or operate as a waiver of, the exercise orenforcement, or further exercise or enforcement, of that or any other right,power or remedy provided by law or under this deed.

###  

### (b)                                                 A waiver or consentgiven by a party under this deed is only effective and binding on that party ifit is given or confirmed in writing by that party.

###  

### (c)                                                  No waiver of a breachof a term of this deed operates as a waiver of another breach of that term orof a breach of any other term of this deed.

###  

# **39.**                                               Acknowledgments

 

### The parties acknowledge that they enter into this deed fully andvoluntarily on their own information and investigation.  Each party to this deed acknowledges that itis their intention to, and they do, fully, finally, absolutely and foreversettle according to the provisions of this deed any and all Claims which nowexist, or may exist or have ever existed between them.

###  

# **40.**                                               Counterparts

 

This deed may be executed in anynumber of counterparts and by the parties on separate counterparts (includingby way of email exchange).  Eachcounterpart constitutes the agreement of each party who has executed anddelivered that counterpart.

 

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**Executed**as adeed.

 
| **Executed**by  **Progen Pharmaceuticals Limited  (ACN 010 975 612)** in accordance with Section 127 of the  Corporations Act 2001 (Cth) by or in the presence of:                                       |   |                                      |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------|
| ** **                                                                                                                                                                                                    |   |                                      |
|                                                                                                                                                                                                          |   |                                      |
| Signature  of Director                                                                                                                                                                                        |   | Signature  of Secretary/other Director    |
|                                                                                                                                                                                                          |   |                                      |
|                                                                                                                                                                                                          |   |                                      |
| Name  of Director in full                                                                                                                                                                                     |   | Name  of Secretary/other Director in full |
|                                                                                                                                                                                                          |   |                                      |
|                                                                                                                                                                                                          |   |                                      |
| Date:                                                                                                                                                                                                         |   |                                      |
|                                                                                                                                                                                                          |   |                                      |
| ** **                                                                                                                                                                                                    |   |                                      |
| **Executed**by **CCH  Investment Corporation of****25F, No.66, Sec. 1, Zhongxiao W. Rd., Zhongzheng  Dist., Taipei City 100, Taiwan (R.O.C.)** in accordance  with its Constitution by or in the presence of: |   |                                      |
| ** **                                                                                                                                                                                                    |   |                                      |
|                                                                                                                                                                                                          |   |                                      |
| Signature  of Director                                                                                                                                                                                        |   | Signature  of Secretary/other Director    |
|                                                                                                                                                                                                          |   |                                      |
|                                                                                                                                                                                                          |   |                                      |
| Name  of Director in full                                                                                                                                                                                     |   | Name  of Secretary/other Director in full |
|                                                                                                                                                                                                          |   |                                      |
|                                                                                                                                                                                                          |   |                                      |
| Date:                                                                                                                                                                                                         |   |                                      |
|                                                                                                                                                                                                          |   |                                      |
| ** **                                                                                                                                                                                                    |   |                                      |
| **Executed**by  **Joe Yeh-Chiao Lin****of 19 Harrison Street, Stretton in the State of  Queensland** by or in  the presence of:                                                                          |   |                                      |
|                                                                                                                                                                                                          |   |                                      |
|                                                                                                                                                                                                          |   |                                      |
| Signature                                                                                                                                                                                                     |   | Signature  of Witness                     |
|                                                                                                                                                                                                          |   |                                      |
|                                                                                                                                                                                                          |   |                                      |
| Date                                                                                                                                                                                                          |   | Name  of Witness                          |

 

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| **Executed**by  **Heng Hsin Tang****of 66 Bordeaux Street, Eight Mile Plains Queensland**  by or in the presence of:                                                                             |   |                  |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------|
| ** **                                                                                                                                                                                       |   |                  |
|                                                                                                                                                                                             |   |                  |
| Signature                                                                                                                                                                                        |   | Signature  of Witness |
|                                                                                                                                                                                             |   |                  |
|                                                                                                                                                                                             |   |                  |
| Date                                                                                                                                                                                             |   | Name  of Witness      |
|                                                                                                                                                                                             |   |                  |
|                                                                                                                                                                                             |   |                  |
| **Executed**by  **Tzu Liang Huang (also known as James Huang)********of****25F, No.66, Sec. 1, Zhongxiao W. Rd., Zhongzheng  Dist., Taipei City 100, Taiwan (R.O.C.)**by or in the  presence of: |   |                  |
| ** **                                                                                                                                                                                       |   |                  |
|                                                                                                                                                                                             |   |                  |
| Signature                                                                                                                                                                                        |   | Signature  of Witness |
|                                                                                                                                                                                             |   |                  |
|                                                                                                                                                                                             |   |                  |
| Date                                                                                                                                                                                             |   | Name  of Witness      |
| ** **                                                                                                                                                                                       |   |                  |
| ** **                                                                                                                                                                                       |   |                  |
| **Executed**by  **Dr John Chiplin****of 63 The Esplanade, Mosman in the State of New  South Wales, Australia (2088)** by or in the presence of:                                                  |   |                  |
| ** **                                                                                                                                                                                       |   |                  |
|                                                                                                                                                                                             |   |                  |
| Signature                                                                                                                                                                                        |   | Signature  of Witness |
|                                                                                                                                                                                             |   |                  |
|                                                                                                                                                                                             |   |                  |
| Date                                                                                                                                                                                             |   | Name  of Witness      |

 

14

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| **Executed**by  **Dr Julie Michele Cherrington****of 1311 Caminito Faro, La Jolla, California,  United States of America (92037)** by or in the  presence of:    |   |                  |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------|
| ** **                                                                                                                                                       |   |                  |
|                                                                                                                                                             |   |                  |
| Signature                                                                                                                                                        |   | Signature  of Witness |
|                                                                                                                                                             |   |                  |
|                                                                                                                                                             |   |                  |
| Date                                                                                                                                                             |   | Name  of Witness      |
|                                                                                                                                                             |   |                  |
|                                                                                                                                                             |   |                  |
| **Executed**by  **Dr Gordon Leroy Schooley****of 14350 Via Baroda, San Diego, California,  United States of America (92130)**by or in the  presence of:          |   |                  |
| ** **                                                                                                                                                       |   |                  |
| ** **                                                                                                                                                       |   |                  |
|                                                                                                                                                             |   |                  |
| Signature                                                                                                                                                        |   | Signature  of Witness |
|                                                                                                                                                             |   |                  |
|                                                                                                                                                             |   |                  |
| Date                                                                                                                                                             |   | Name  of Witness      |
|                                                                                                                                                             |   |                  |
| ** **                                                                                                                                                       |   |                  |
| **Executed**by  **Thomas James Burt****of 251/55 Victoria Harbour Promenade, Docklands,  in the State of Victoria, Australia (3008)** by or in the  presence of: |   |                  |
| ** **                                                                                                                                                       |   |                  |
|                                                                                                                                                             |   |                  |
| Signature                                                                                                                                                        |   | Signature  of Witness |
|                                                                                                                                                             |   |                  |
|                                                                                                                                                             |   |                  |
| Date                                                                                                                                                             |   | Name  of Witness      |
|                                                                                                                                                             |   |                  |
|                                                                                                                                                             |   |                  |
| **Executed**by  **Tzong-Pai (Paul) Lin****of****Room 8, 6F, No. 68, Sec.4 Roosevelt  Boulevard Taipei, Taiwan**

 

by or in the presence of:     |   |                  |

 

15

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|                                                                                                                                          |   |                  |
|-----------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------|
| Signature                                                                                                                                     |   | Signature  of Witness |
|                                                                                                                                          |   |                  |
|                                                                                                                                          |   |                  |
| Date                                                                                                                                          |   | Name  of Witness      |
|                                                                                                                                          |   |                  |
| ** **                                                                                                                                    |   |                  |
| **Executed**by  **Stuart Bruce James****of 7 Glan Avon Road, Hawthorn, in the State of  Victoria, Australia (3122)**by or in the presence of: |   |                  |
| ** **                                                                                                                                    |   |                  |
|                                                                                                                                          |   |                  |
| Signature                                                                                                                                     |   | Signature  of Witness |
|                                                                                                                                          |   |                  |
|                                                                                                                                          |   |                  |
| Date                                                                                                                                          |   | Name  of Witness      |

 

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**Annexure A - Order**

 

17

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