Document:

Exhibit 10.4

 

GLEAVE SERVICES AGREEMENT

 

THIS
AGREEMENT, made as of the 21st day of December, 2001 between:

 

DR. MARTIN GLEAVE,
an individual residing in Vancouver, British Columbia (hereinafter referred to
as “Gleave”)

 

-and-

 

ONCOGENEX TECHNOLOGIES INC. a
corporation incorporated under the laws of Canada.

 

RECITALS:

 

WHEREAS the Corporation has been formed in order to pursue the research,
development and commercialization of oncology therapeutics and diagnostics
acquired or developed by the Corporation;

 

AND
WHEREAS Gleave owns or controls 4,100,000
common shares of the Corporation;

 

AND
WHEREAS Gleave has agreed to perform certain
functions and services pursuant to the terms of this Agreement for the purposes
of achieving the Gleave Milestones;

 

AND
WHEREAS Gleave has deposited 1,000,000 of
his common shares of the Corporation in escrow releasable upon the achievement
of the Gleave Milestones;

 

NOW
THEREFORE in consideration of the mutual
covenants and agreements herein contained and other good and valuable
consideration (the receipt and sufficiency of which are hereby acknowledged)
the parties agree as follows:

 

1.                                      Definitions

 

Wherever used in this Agreement or the recitals or schedules hereto,
the following terms shall have the following meanings:

 

(a)                                  “Agreement”
means this agreement and the schedules hereto, as they may be amended or
supplemented from time to time by the parties in writing;

 

(b)                                 “Completion
of Phase I Clinical Milestone” means the completion of a phase I
clinical study by the Corporation to evaluate OGX-011 in prostate cancer
including accrual and data analysis;

 

*Certain information in this exhibit has been omitted as confidential,
as indicated by [***]. This information has been filed separately with the
Commission.

 

 

(c)                                  “Confidential
Information” means information which is confidential to the
Corporation or in which the Corporation has a proprietary interest, including
but not limited to:

 

(i)                                     information
relating to the Corporation’s finances, the Corporation’s business plans, practices
and strategies, including the Corporation’s patent strategies;

 

(ii)                                  the
Technology and Corporation Intellectual Property and information relating to
the Technology and Corporation Intellectual Property, including production
data, technical and engineering data, test data and test results, the status
and details of research and development of any product or services, and
information regarding acquiring, protecting, enforcing and licensing
proprietary rights (including patents, copyrights and trade secrets);

 

(iii)                               enhancements,
modifications, additions, other improvements or work product resulting from or
related to work or projects performed or to be performed by the Corporation
related to the Technology or Corporation Intellectual Property, including, but
not limited to, the interim and final lines of inquiry, hypotheses, research
and conclusions related thereto and the methods, processes, procedures,
analysis, techniques and audits used in connection with the Technology or
Corporation Intellectual Property; and

 

(iv)                              the
information and materials referred to in Section 14 hereof.

 

(d)                                 “Corporation”
means OncoGenex Technologies Inc. together with its affiliates and
subsidiaries;

 

(e)                                  “Corporation
Intellectual Property” means all ideas, concepts, business and trade
names, trademarks, know-how, trade secrets, inventions, improvements, devices,
methods, processes and discoveries, whether patentable or not, and whether or
not reduced to writing or other tangible form or to actual or constructive
practice which: (i) are part of the Technology licensed to the Corporation
under the UBC Licenses; (ii) are conceived, created or developed by Gleave
through the performance of his duties under Section 2 hereof; (iii) are
licensed or assigned to the Corporation or otherwise developed or acquired on
behalf of or by the Corporation; (iv) result from the use of the premises or
property (including equipment, supplies or Confidential Information) owned,
used, leased or licensed by the Corporation or which reasonably relates to its
business; or (v) are enhancements, modifications, additions, or other
improvements to the foregoing or the Technology or work product resulting from
or related to work or projects performed or to be performed by the Corporation
related to the foregoing or the Technology;

 

(f)                                    “Escrowed Shares” means 1,000,000 common shares of the
Corporation registered in the name of Gleave and subject to the Escrow
Agreement;

 

(g)                                 “Gleave
Escrow Agreement” means the escrow agreement dated December 21st
, 2001 and between Gleave, the Corporation, MOI Escrow Services Ltd.;

 

2

 

(h)                                 “Gleave
Milestones” shall have the meaning ascribed thereto pursuant to
Section 3 hereto;

 

(i)                                     “Initiation of Phase I Clinical Milestone” means the
initiation of a phase I clinical study by the Corporation to evaluate OGX-011
in prostate cancer, and authorized by either the Therapeutic Products
Directorate of Canada or the Federal Drug Administration of the United States
of America;

 

(j)                                     “Negative Waiver” means a waiver by Gleave in favour of the
University of British Columbia of all of Gleave’s economic interests and rights
to revenue streams in respect of the Technology as contemplated by Policy 88 of
the University of British Columbia, such waiver made for the purposes of
enabling the Corporation to negotiate a reduced fee in respect of the UBC
Licenses with the University of British Columbia in respect of the Technology
and such other intellectual property licensed to the Corporation from the
University of British Columbia as the parties may agree;

 

(k)                                  “OGX-011”
means an antisense inhibitor of Clusterin having the sequence [***], with
phosphorothioate linkages throughout and in which bases [***] and [***] contain
2’-O-methoxyethyl sugar modifications;

 

(l)                                     “Technology” means the technology as listed and described in
Schedule “A” hereto;

 

(m)                               “Term”
shall have the meaning ascribed thereto in Section 5 hereof;

 

(n)                                 “UBC
Licenses” means the licenses entered into by the University of
British Columbia and the Corporation effective November 1, 2001 which define
the terms under which the Corporation has acquired an exclusive license to the
Technology.

 

2.                                      Gleave
Services

 

2.1                                 Gleave
agrees to perform all functions normally associated with the position of a
Chief Scientific Officer (“CSO”) for the Term of this Agreement and shall
oversee the scientific development of the Technology and the Corporation
Intellectual Property by the Corporation. Gleave shall perform all duties
related to the functions of a CSO, including all of the following:

 

(a)                                  management of scientific collaborations;

 

(b)                                 co-develop and on-going modification of a commercialization plan;

 

(c)                                  participate in establishing the strategic direction of the
Corporation;

 

(d)                                 participate in establishing and managing strategic alliances;

 

(e)                                  co-develop appropriate government grant applications, including but
not limited to Industrial Research Assistance Program (IRAP) and Science
Council of British Columbia;

 

3

 

(f)                                    participate in meetings and presentations requiring scientific
representation of the Corporation;

 

(g)                                 participate in the organization of appropriate advisory teams or
boards;

 

(h)                                 enhance and develop the Technology and Corporation Intellectual
Property and pursue inventions and other valuable creations; and

 

(i)                                     provide the Negative Waiver and execute all documents necessary to
effect same.

 

2.2                                 Gleave
shall be available to render such Gleave Services in good faith as reasonably
requested by the Corporation. The Corporation acknowledges that Gleave also has
duties and responsibilities to the University of British Columbia and that he
is required to abide by the guidelines of the University of British Columbia
with respect to outside professional activities. Gleave hereby represents and
warrants that, to the best of his knowledge, such guidelines shall not
materially impair his ability to provide the Gleave Services.

 

3.                                      Release
of Shares From Escrow

 

3.1                                 Gleave
shall deposit the Escrowed Shares with the Escrow Agent and subject to the
terms and conditions of the Escrow Agreement. Subject to the terms of the
Escrow Agreement, the Escrowed Shares will be released to Gleave upon the
occurrence of the following events (the “Gleave Milestones”):

 

(a)                                  as to 500,000 Escrowed Shares, upon achieving the Initiation of
Phase I Clinical Milestone; and

 

(b)                                 as to 500,000 Escrowed Shares, upon achieving the Completion of
Phase I Clinical Milestone.

 

4.                                      Reimbursement
for Expenses

 

4.1                                 The
Corporation shall reimburse Gleave for all reasonable expenses incurred by him
on behalf of the Corporation, provided that such expenses have been previously
authorized by the Corporation. Such expenses shall include, but not be limited
to, travel, room and board costs, if any, incurred by Gleave in attending
meetings on behalf of the Corporation. The Corporation shall make such payment
within ten (10) days after receiving a statement setting forth such expenses
incurred and related receipts.

 

5.                                      Term
and Termination

 

5.1                                 Subject
to Article 9, the term of this Agreement shall be for two (2) years from the
date hereof (the “Term”), provided that:

 

(a)                                  the Corporation shall have the right to terminate this Agreement at
an earlier date if Gleave defaults on his obligations hereunder and the
Corporation has given written notice to Gleave of such default and Gleave has
failed to correct such default within thirty (30) days of such notice, and;

 

4

 

(b)                                 the Corporation shall have the right to terminate this Agreement at
an earlier date on five (5) days prior written notice to Gleave if Gleave
ceases to beneficially own or control any shares of the Corporation.

 

6.                                      Release
of Escrowed Shares on Early Termination

 

6.1                                 If
this Agreement is terminated by the Corporation before the end of the Term in
accordance with the provisions of Section 5(a) hereto, any Escrowed Shares
which are releasable due to satisfactory performance of either of the
Initiation of Phase I Clinical Milestone or the Completion of Phase I Clinical
Milestone but which, at the time of termination of this Agreement, have not yet
been issued to Gleave shall be released forthwith upon termination of this
Agreement.

 

7.                                      Non-Use
and Non-Disclosure

 

7.1                                 Gleave
agrees that he will occupy a position of trust and confidence with respect to
the affairs and business of the Corporation and that it is reasonable and
necessary for Gleave to make non-use and non-disclosure covenants to be
effective during and after the Term hereof. Gleave acknowledges and agrees that
the Confidential Information has commercial value by virtue of its secrecy.
Gleave shall not: (a) use any Confidential Information for any purpose other
than to further the best interests of the Corporation only; or (b) disclose to
any third party any Confidential Information disclosed to him by or for the
Corporation, except to further the best interests of the Corporation and only
if the Board of Directors approves such disclosure in advance in writing.
Without limiting the foregoing, Gleave shall not publish any material
containing Confidential Information without the prior written consent of the
Corporation and shall submit draft materials of any publication containing
Confidential Information to the Board of Directors of the Corporation for prior
review to ensure that the Corporation is satisfied that it contains no
Confidential Information and shall allow a period of at least sixty (60) days
for such review. The foregoing restrictions on use and disclosure shall not apply
to any Confidential Information that:

 

(a)                                  the Board of Directors, in its sole discretion, has granted prior
express consent for Gleave to disclose or use;

 

(b)                                 at the time Gleave uses or discloses such Confidential Information
to a third party, has been previously made available to Gleave by a person,
other than the Corporation or anyone acting on behalf of the Corporation,
having the right to do so without breaching any obligation of non-use or
confidentiality;

 

(c)                                  at the time Gleave uses or discloses such Confidential Information
to a third party it has already become publicly known, for example, by
publication, through no breach of any obligation of non-use or confidentiality;
or

 

(d)                                 is required to be disclosed pursuant to a requirement of a governmental
agency or law so long as Gleave provides the Corporation with notice of such
requirement prior to any such disclosure.

 

5

 

8.                                      No
Rights to Confidential Information

 

8.1                                 Nothing
in this Agreement shall be construed to grant to Gleave any express or implied
option, license or other rights, title or interest in or to the Confidential
Information, or obligate either party to enter into any agreement granting any
such right.

 

9.                                      Obligations
Continue

 

9.1                                 Gleave’s
obligations under this Agreement with respect to Confidential Information are
to remain in effect until the expiration of any patent owned or licensed by the
Corporation related to that matter (if any), and for all other matters, for
five (5) years from the termination of this Agreement, and will exist and
continue in full force and effect for such period notwithstanding any breach or
repudiation, or any alleged breach or repudiation of this Agreement by the
Corporation.

 

10.                               Representations,
Warranties and Covenants

 

10.1                           Gleave
represents, warrants and covenants to the Corporation that:

 

(a)                                  he has the capacity to enter into and perform his obligations under
this Agreement;

 

(b)                                 the entering into and
performance of Gleave’s duties under this Agreement will not breach or conflict
with or create a conflict of interest under any agreement or other obligation
to any third party, including, but not limited to any obligation to keep
confidential the proprietary information of any third party;

 

(c)                                  Gleave is not bound
by any agreement with or obligation to any third party that conflicts with
Gleave’s obligations hereunder or that may affect the Technology or the
Corporation Intellectual Property;

 

(d)                                 Gleave will not improperly bring to the
Corporation or use any trade secrets, confidential information or other
proprietary information of any third party; and

 

(e)                                  Gleave will not in
performing this Agreement, knowingly infringe the intellectual property rights
of any third party.

 

6

 

11.                               Non-Competition

 

11.1                           Gleave
acknowledges that his relationship with the Corporation and knowledge of
Confidential Information will enable Gleave to put the Corporation at a
significant competitive disadvantage if Gleave is employed or engaged by or
becomes involved in a business competitive with that of the Corporation.
Accordingly, during the term of this Agreement and for a period of two (2)
years after any termination of this Agreement, Gleave will not be engaged,
directly or indirectly, individually, in partnership, in conjunction with any
other person or as an employee, consultant, adviser, principal, agent, member
or proprietor in any competitive business (direct or indirect) unless the
Corporation otherwise agrees.

 

11.2                           The restriction
in this section will not prohibit Gleave from holding not more than five
percent of the issued shares of a public company listed on any recognized stock
exchange or traded on any bona fide “over
the counter” market anywhere in the world.

 

12.                               No
Solicitation

 

12.1                           Gleave
shall not during the term of this Agreement and for a period of two (2) years
after any termination of this Agreement, induce or solicit, attempt to induce
or solicit or assist any third party in inducing or soliciting any employee or
consultant of the Corporation to leave the Corporation or to accept employment
or engagement elsewhere.

 

12.2                           Gleave
shall not directly or indirectly solicit, interfere with or endeavour to direct
or entice away from the Corporation any customer, client, strategic partner or
any person, firm or corporation in the habit of dealing with the Corporation.

 

13.                               Ownership
of Corporation Intellectual Property

 

13.1                           Gleave
agrees that Gleave shall not acquire any right, title or interest in or to the
Corporation Intellectual Property, all of such right title and interest being
owned or licensed by the Corporation. The Corporation, its assignees and its
licensees, are not required to designate Gleave as the author of any
Corporation Intellectual Property. Gleave hereby waives in whole all moral
rights and agrees never to assert any moral rights which Gleave may have in the
Corporation Intellectual Property, the right to be associated with the
Corporation Intellectual Property, the right to restrain or claim damages for
any distortion, mutilation or other modification or enhancement of the
Corporation Intellectual Property and the right to restrain, use or reproduce
the Corporation Intellectual Property in any context and in connection with any
product, service, cause or institution and Gleave further confirms that the
Corporation may use or alter any such Corporation Intellectual Property as the
Corporation sees fit in its absolute discretion. Gleave agrees to disclose to
the Corporation, promptly and fully in writing and in complete enabling detail,
any and all Corporation Intellectual Property which is conceived or created by
Gleave. Title to such Corporation Intellectual Property and any patents issued
or copyrights obtained thereon (including any of the patents listed in Appendix
A hereto) shall be and remain in the Corporation (or with the University of
British Columbia if so required by the UBC Licenses). The Corporation shall
retain the exclusive right to use and practice the Corporation Intellectual
Property and any Canadian, U.S., or other patents issuing thereon.

 

7

 

14.                               Records

 

14.1                           Gleave
shall keep complete, accurate and authentic notes, reference materials, data
and records of all Corporation Intellectual Property in the manner and form
requested by the Corporation and all such materials shall be considered
Confidential Information upon their creation.

 

15.                               Patent
Applications

 

15.1                           Gleave
agrees that the Corporation or any entity designated by the Corporation shall
have the exclusive right, subject to any restrictions listed in the UBC
Licenses, at its sole cost and in its sole discretion, to apply for and obtain
patents or copyrights in respect of the Technology and the Corporation
Intellectual Property in Canada, the United States and all other countries.
Whenever requested to do so, both during the term of this Agreement and after
termination hereof, Gleave shall promptly at the sole cost of the Corporation
execute and deliver any and all documents for copyright protection and any and
all patent applications, assignments, oaths, declarations, or other instruments
that the Corporation shall deem desirable, including, without limitation, those
documents necessary to apply for and obtain, or to maintain patents in Canada,
the United States or any other country in respect of the Technology and the
Corporation Intellectual Property.

 

16.                               Further
Assurances

 

16.1                           Gleave
shall do all further things that may be reasonably necessary or desirable in
order to give full effect to the foregoing. If Gleave’s cooperation is required
in order for the Corporation to obtain or enforce legal protection of the
Technology or the Corporation Intellectual Property following the termination
of this Agreement, Gleave shall provide that cooperation at the sole cost of
the Corporation provided that Gleave shall obtain the prior written approval of
the Corporation before incurring any such cost.

 

17.                               Notices

 

17.1                           All notices, requests, demands or
other communications required or permitted to be given by one party to another
hereunder shall be given in writing by personal delivery or by registered mail,
postage prepaid, addressed to such other party or delivered to such other party
as follows:

 

(a)                                  if to
Gleave:

 

Dr. Martin Gleave

[***]

 

(b)                                 if to the Corporation:

 

OncoGenex Technologies Inc.

D-9,
2733 Heather Street

Vancouver,
British Columbia  V5Z 3J5

Facsimile
no.: (604) 875-5604

 

8

 

Attention:                                         Scott Cormack, President

 

or at such other address of which notice is given in writing from time
to time and such notices, requests, demands or other communications shall be
deemed to have been received when delivered personally or by courier, or if by
facsimile, on the next business day after transmission, or if mailed, on the
fourth business day after the mailing thereof provided that if any such notice,
request, demand or other communications shall have been mailed and if regular
mail service shall be interrupted by strikes or other irregularities on or
before the fourth business day after the mailing thereof, such notices,
requests, demands or other communications shall be deemed to have been received
on the fourth business day following the resumption of normal mail service.

 

18.                               Governing
Law

 

This Agreement shall be governed and
construed in accordance with the laws of British Columbia.

 

19.                               Assignment

 

Gleave may not assign this Agreement, in
whole or in part, without the prior written consent of the Corporation, such
consent to not be unreasonably withheld.

 

20.                               Enurement

 

This Agreement
shall be binding on and enure to the benefit of the parties, their successors,
permitted assigns and legal representatives.

 

21.                               Severability

 

If any
provision of this Agreement is held to be invalid or unenforceable, the
remaining provisions shall continue to be binding and enforceable on both
parties, and the invalid or unenforceable provision shall be severed from this
Agreement.

 

22.                               Entire
Agreement and Amendment

 

This Agreement
constitutes the entire agreement between the parties as to the subject matter
of this Agreement. All prior negotiations, representations, warranties,
agreements and promises related to this Agreement are superseded and merged
into this document. The prior Gleave services agreement dated September 6, 2000
between the parties is hereby terminated. This Agreement shall not be amended,
revised or modified without the prior written consent of both parties.

 

23.                               Counterparts

 

This Agreement
may be signed in counterparts and by facsimile and each of such counterparts
shall constitute an original document and such counterparts, taken together,
shall constitute one and the same instrument.

 

9

 

IN WITNESS WHEREOF
the parties have executed this Agreement as of the date first above written.

 

 

	
  /s/
  Sherry Tryssenaar

  	
   

  	
  /s/
  Martin Gleave

  
	
  Witness

  	
  DR. MARTIN GLEAVE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ONCOGENEX TECHNOLOGIES INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Per:

  	
  /s/
  Scott Cormack

  
	
   

  	
   

  	
  Scott
  Cormack, President

  

 

10

 

Schedule A

 

Technology

 

1.                                       [***]

 

2.                                       [***]

 

3.                                       [***]

 

4.                                       [***]

 

5.                                       [***]

 

6.                                       [***]

 

7.                                       [***]

 

8.                                       And all applications that may be filed based on
the foregoing, including, without limitation, all regular, divisional or
continuation, in whole or in part, applications based on the foregoing, and all
applications corresponding to the foregoing filed in countries other than the
United States;  and

 

9.                                       Any and all issued and unexpired re-issues,
re-examinations, renewals or extensions that may be based on any of the patents
described above.

 

10.                                 All know-how, inventions, and improvements
related to any of the above.

 

11

 

GLEAVE SERVICES AMENDING AGREEMENT

 

THIS AGREEMENT, made as of 1ST day of January, 2002 between:

 

DR. MARTIN GLEAVE,
an individual residing in Vancouver, British Columbia (hereinafter referred to
as “Gleave”)

 

-and-

 

ONCOGENEX TECHNOLOGIES INC. a
corporation incorporated under the laws of Canada (hereinafter referred to as
the “Corporation”).

 

RECITALS:

 

WHEREAS the Corporation and Gleave entered into a services agreement dated
December 21, 2001 relating to Gleave (the “Gleave Services Agreement”)
providing certain services for the benefit of the Corporation;

 

AND
WHEREAS the Corporation and Gleave wish to
have Gleave participate in the compensation program of the Corporation,
including its Employee Stock Option Plan;

 

NOW
THEREFORE in consideration of the mutual
covenants and agreements herein contained and other good and valuable
consideration (the receipt and sufficiency of which are hereby acknowledged)
the parties agree as follows:

 

1.                                      CONSTRUCTION

 

Terms having
capitalized first letter and not otherwise defined herein shall have the
meaning ascribed to them in the Gleave Services Agreement.

 

2.                                      AMENDMENT

 

The Gleave Services Agreement is hereby amended by adding the following
sections after Section 3.1:

 

3.2                                 Gleave
shall be entitled to the base compensation as set out in Schedule “B” hereto.

 

3.3                                 Gleave
shall be entitled to an annual cash bonus as set out in Schedule “C” hereto.

 

3.4                                 Gleave
shall be entitled to participate in the Corporation’s share option plan as set
forth in Schedule “D” attached hereto and in accordance with its terms as
amended from time to time.

 

 

3.                                      GENERAL

 

Except as provided
in Article 2 herein, the Gleave Services Agreement remains unamended and in
full force and effect between the parties to this Agreement.

 

This Agreement
may be executed by the parties in separate counterparts and by facsimile, each
of which such counterparts when so executed and delivered shall be deemed to
constitute one and the same instrument.

 

IN
WITNESS WHEREOF the parties have executed
this Agreement as of the date first above written.

 

	
  /s/ Sherry Tryssenaar

  	
   

  	
  /s/ Martin Gleave

  
	
  Witness

  	
  DR.
  MARTIN GLEAVE

  
	
  S.
  Tryssenaar

  	
   

  
	
   

  	
   

  
	
   

  	
  ONCOGENEX
  TECHNOLOGIES INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Per:

  	
  /s/ Scott
  Cormack  

  
	
   

  	
   

  	
  (Authorized
  Signatory)

  

 

2

 

SCHEDULE B

 

ONCOGENEX TECHNOLOGIES INC.

 

Compensation

 

B (1)                       Gleave shall be entitled to an
annual consulting fee equal to $45,000 (the “Consulting Fee”) for the Term of
the Agreement. The Consulting Fee shall be paid to Gleave in equal monthly
payments of $3,750 per month within 10 days following the end of each month.

 

B (2)                       Gleave and OncoGenex hereby confirm
that Gleave is acting as an independent contractor to OncoGenex and will, at
Gleave’s own expense, pay all income taxes, unemployment insurance premiums,
Canada Pension Plan premiums, Workers’ Compensation contributions, and all other
taxes, charges and contributions levied or required by competent governmental
authorities in Canada in respect of monies paid to Gleave under this Agreement
and OncoGenex will not have any obligation whatsoever to compensate Gleave or
persons working with Gleave for annual vacation, sickness, accident or
disability, whether or not resulting from the performance by Gleave of
obligations of Gleave under this Agreement, retirement pension or benefits or
any benefits resulting from the expiration of the Term of the Agreement or for
any other benefits accorded by OncoGenex to any of its employees.

 

 

SCHEDULE C

 

ONCOGENEX TECHNOLOGIES INC.

 

Bonus Plan – Milestones

 

C (1)                       Gleave shall be entitled to an
annual cash bonus equal to $45,000 (the “Bonus”) for the Term of the Agreement.
Any Bonus paid will be allocated to the achievement of particular milestones
and overall performance as follows:

 

(a)                                  40% of Bonus for regulatory approval
of an IND for OGX-011.

(b)                                 20% of Bonus for selection, as
approved by the Board, of a second product for pre-clinical development.

(c)                                  20% of Bonus for securing additional
new grant funding exceeding [***].

(d)                                 20% of Bonus for the approval by the
Board to acquire an additional new drug target/therapeutic.

 

 

SCHEDULE D

 

ONCOGENEX TECHNOLOGIES INC.

 

STOCK OPTION PLAN

 

 

SCHEDULE “A”

 

ONCOGENEX TECHNOLOGIES INC.

 

STOCK OPTION PLAN

OPTION AGREEMENT

 

This Option Agreement is entered into between
OncoGenex Technologies Inc. (the “Company”) and
the Optionee named below pursuant to the Company Stock Option Plan as amended
(the “Plan”), a copy of which is attached
hereto, and confirms that:

 

1.                                       on March 1, 2002 (the “Grant Date”);

 

2.                                       Dr. Martin Gleave (the “Optionee”);

 

3.                                       was granted the option (the “Option”)
to purchase 100,000 common shares (the “Option Shares”)
of the Company;

 

4.                                       for the price (the “Option Price”)
of $0.80 per share;

 

5.                                       which shall be exercisable (“Vested”)
in whole or in part in the following amounts as follows:

 

i)                 as to 25,000 shares for each of the first two years
following the Grant Date, 12,500 shares for each approval by the Board to
acquire additional drug target or therapeutic.

 

ii)              as to 25,000 shares for each of the first two
years following the Grant Date,  12,500 shares for each new [***] pf grant
funding secured by Dr. Gleave for the benefit of the Company as determined by
the Board.

 

6.                                       terminating on March 1, 2009 (the “Expiry Date”);

 

all on the terms and subject to the
conditions set out in the Plan. For greater certainty, once Option Shares have
become Vested, they continue to be exercisable until the termination or
cancellation thereof as provided in this Option Agreement and the Plan.

 

By signing this Option Agreement, the
Optionee acknowledges that the Optionee has read and understands the Plan and
agrees to the terms and conditions of the Plan and this Option Agreement.

 

In order to exercise this Option, the
Optionee must deliver to the Company:

 

(a)                                  a notice of exercise in the form attached hereto
as Exhibit No. 1, duly completed and executed together with a certified cheque
for payment for all Option Shares in respect of which the Option is exercised;
and

 

(b)                                 if required by the Company in order for the
Company to comply with the Shareholders’ Agreement (as defined in the Plan), a
counterpart to the Shareholders’ Agreement in a form acceptable to the Company
duly and originally executed by the Optionee.

 

 

IN WITNESS WHEREOF the parties hereto have executed this Option
Agreement as of the 1st  day of March ,
2002.

 

	
  SIGNED, SEALED AND DELIVERED

  	
  )

  	
   

  
	
  in the presence of

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  
	
  /s/ Sherry Tryssenaar

  	
  )

  	
  /s/ Martin Gleave

  
	
  Witness

  	
  )

  	
  OPTIONEE

  
	
  S. Tryssenaar

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ONCOGENEX TECHNOLOGIES INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Scott Cormack

  

 

2

 

EXHIBIT NO. 1 TO OPTION
AGREEMENT

 

EXERCISE
FORM

 

TO:                                                                          OncoGenex Technologies Inc.

D-9,
2733 Heather Street

Vancouver,
British Columbia V5Z 3J5

Telephone:                                    604-875-5686

Facsimile:                                            604-875-5604

Attention:                                         Mr. Scott D. Cormack

 

I, the undersigned holder of the attached
Option Agreement with OncoGenex Technologies Inc. (the “Company”),
hereby exercise my Option and agree to acquire                          
common shares of the Company (the “Acquired Shares”)
and enclose a certified cheque in the amount of $                           
representing the exercise price (Option Price multiplied by number of shares
being acquired) for the Acquired Shares.

 

I hereby request that the Company issue the
Acquired Shares to me under the OncoGenex Technologies Inc. Stock Option Plan
and irrevocably direct that the Acquired Shares be issued registered in the
following name and address and delivered as follows:

 

	
  Name in Full

  	
   

  	
  Registered Address

  	
   

  	
  Delivery Address

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

(PLEASE PRINT IN FULL THE NAME IN WHICH
CERTIFICATES ARE TO BE ISSUED.)

 

DATED this                 
day of                                                       ,
                          .

 

	
   

  	
   

  
	
   

  	
  Signature of Optionee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name of Optionee

  
	
   

  	
   

  

 

3

 

 

GLEAVE SERVICES SECOND AMENDING AGREEMENT

 

THIS AGREEMENT, made as of 24th day of September, 2003 between:

 

DR. MARTIN GLEAVE,
an individual residing in Vancouver, British Columbia (hereinafter referred to
as “Gleave”)

 

-and-

 

ONCOGENEX TECHNOLOGIES INC. a
corporation incorporated under the laws of Canada (hereinafter referred to as
the “Corporation”).

 

RECITALS:

 

WHEREAS the Corporation and Gleave entered into a services agreement dated
December 21, 2001 (the “Gleave Services Agreement”) and an amending agreement
dated March 1, 2002 (the “Gleave Services First Amending Agreement”) relating
to Gleave providing certain services for the benefit of the Corporation;

 

AND
WHEREAS the Corporation and Gleave wish to
amend the term and Gleave’s participation in the compensation program of the
Corporation, including its Employee Stock Option Plan;

 

NOW
THEREFORE in consideration of the mutual
covenants and agreements herein contained and other good and valuable
consideration (the receipt and sufficiency of which are hereby acknowledged)
the parties agree as follows:

 

1.                                      CONSTRUCTION

 

Terms having
capitalized first letter and not otherwise defined herein shall have the
meaning ascribed to them in the Gleave Services Agreement.

 

2.                                      AMENDMENT

 

2.1                                 Article
5 of the Gleave Services Agreement is hereby deleted and replaced with the
following:

 

“5.1                     Subject
to Article 9, the term of this Agreement shall be from the date first written
above until December 31, 2005 (the “Term”), provided that:

 

(a)                the Corporation shall have the right to terminate this Agreement at
an earlier date if Gleave defaults on his obligations hereunder and the
Corporation has given written notice to Gleave of such default and Gleave has
failed to correct such default within thirty (30) days of such notice, and;

 

 

(b)               the Corporation shall have the right to terminate this Agreement at
an earlier date on five (5) days prior written notice to Gleave if Gleave
ceases to beneficially own or control any shares of the Corporation.

 

2.2                                 The Gleave Services
Amending Agreement is hereby amended by replacing Schedule “B” and Schedule “C”
thereto with Schedule “B” and Schedule “C” attached hereto, and;

 

2.3                                 In addition to the
stock options granted pursuant to the Gleave Services First Amending Agreement,
Gleave shall be entitled to participate in the Corporation’s share option plan
as set forth in Schedule “D” attached hereto and in accordance with its terms
as amended from time to time.

 

3.                                      GENERAL

 

This
Agreement, the Gleave Services First Amending Agreement and the Gleave Services
Second Amending Agreement shall be the whole and complete agreements between
the Parties with respect to Gleave’s provision of services to the Corporation;
these agreements replace and supersede any and all previous verbal or written
agreements that may have been entered into. For clarity, except as provided in
Article 2 herein, the Gleave Services Agreement remains unamended and in full
force and effect between the parties to this Agreement. This Agreement may not
be amended or modified except by written amendment signed between the Parties
hereto.

 

This Agreement
may be executed by the parties in separate counterparts and by facsimile, each
of which such counterparts when so executed and delivered shall be deemed to
constitute one and the same instrument.

 

IN
WITNESS WHEREOF the parties have executed
this Agreement as of the date first above written.

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Sherry Tryssenaar

  	
   

  	
  /s/ Martin Gleave

  
	
  Witness

  	
   

  	
  DR. MARTIN GLEAVE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ONCOGENEX TECHNOLOGIES INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Per:

  	
  /s/ Sherry Tryssenaar

  
	
   

  	
   

  	
   

  	
  (Authorized Signatory)

  
	
   

  	
   

  	
   

  

 

 

SCHEDULE B

 

ONCOGENEX TECHNOLOGIES INC.

 

Compensation

 

Effective September •, 2003:

 

B (1)                       Gleave shall be entitled to an
annual consulting fee equal to $60,000 (the “Consulting Fee”). The Consulting
Fee shall be paid to Gleave in equal monthly payments of $5,000 per month
within 10 days following the end of each month.

 

B (2)                       For travel outside of the province
of British Columbia as requested by the Chief Executive Officer or President of
OncoGenex, Gleave shall be reimbursed $2,000 per day (the “Travel Per Diem”).
The Travel Per Diem shall be paid to Gleave within 10 days following the
receipt by OncoGenex of an invoice received from Gleave in respect of such
travel.

 

B (3)                       Gleave and OncoGenex hereby confirm
that Gleave is acting as an independent contractor to OncoGenex and will, at
Gleave’s own expense, pay all income taxes, unemployment insurance premiums,
Canada Pension Plan premiums, Workers’ Compensation contributions, and all
other taxes, charges and contributions levied or required by competent
governmental authorities in Canada in respect of monies paid to Gleave under
this Agreement and OncoGenex will not have any obligation whatsoever to
compensate Gleave or persons working with Gleave for annual vacation, sickness,
accident or disability, whether or not resulting from the performance by Gleave
of obligations of Gleave under this Agreement, retirement pension or benefits
or any benefits resulting from the expiration of the Term of the Agreement or
for any other benefits accorded by OncoGenex to any of its employees.

 

 

SCHEDULE C

 

ONCOGENEX TECHNOLOGIES INC.

 

Bonus Plan – Milestones

 

C (1)                       Gleave shall be entitled to an
annual cash bonus equal to $45,000 (the “Bonus”) for fiscal year 2003 and then
$60,000 for each of fiscal years 2004 and 2005. The Bonus shall be based
on objectives as established by the Board and communicated to Gleave. Any Bonus
awarded for Gleave’s performance during fiscal year 2003 will be allocated to
the achievement of overall corporate performance and to achievement of
particular individual milestones as set forth below. New milestones for the
Bonus in subsequent fiscal years will be set on an annual basis by the
Compensation Committee and approved by the Board.

 

2003 Corporate Milestones (to a maximum of 70% of Bonus):

 

1.               Conclude
Series “B” Financing;

 

2.               Enhance shareholder value by continuing
clinical development of OGX-011 and expanding clinical indications:

 

i)                 Initiate OGX-011 + Taxotere clinical
study;

ii)              Complete 80% patient
accrual, or dose first patient at intended maximum dosage, for phase I
pre-surgery study of OGX-011;

iii)           Complete 80% patient
accrual, or dose first patient at intended maximum dosage, for phase I study of
OGX-011 + Taxotere;

iv)          Expand co-development
relationship with Isis through establishment of new project plan to include
non-small cell lung cancer;

v)             Prepare phase II prostate and/or NSCL
cancer protocol;

vi)          Obtain additional grant
funding for clinical development of OGX-011;

 

3.               Enhance shareholder value by advancing
development of OGX-225 for clinical development in 2004:

 

i)                 In-license backbone chemistry for
OGX-225;

ii)              Complete
pre-clinical pharmacology supporting clinical development of OGX-225;

iii)           Complete
pharmacokinetic and toxicology studies for OGX-225;

iv)          Obtain grant funding for the pre-clinical
and/or clinical development of OGX-225;

 

4.               Enhance shareholder value by
diversifying the Corporation’s product portfolio mix:

 

i)                 Evaluate/assess new product/technology
opportunities;

ii)              Acquire new product/technology
opportunities as appropriate;

 

5.               Maintain operations within budget;

 

6.               Establish Scientific Advisory Board.

 

 

2003 Personal Milestones:

 

Up to 30% of Bonus based on
Gleave’s achievement of the following 2003 Personal Objectives:

 

a.               Clinical development of OGX-011;

 

b.              Pre-clinical development of OGX-225;

 

c.               Grants in excess of [***];

 

d.              Establishment of SAB.

 

 

SCHEDULE
D

 

ONCOGENEX TECHNOLOGIES INC.

 

STOCK OPTION PLAN

 

 

ONCOGENEX TECHNOLOGIES INC.

 

AMENDED AND RESTATED STOCK OPTION PLAN

 

1.                                      PURPOSE
OF THE PLAN

 

OncoGenex Technologies Inc. (the
“Company”) hereby establishes a stock option plan for directors, officers,
employees and Service Providers (as defined below) of the Company and its
subsidiaries, to be known as the “OncoGenex
Technologies Inc. Stock Option Plan” (the “Plan”).

 

2.                                      DEFINITIONS

 

In this Plan, the following terms shall have the following meanings:

 

2.1                                 “Board”
means the Board of Directors of the Company.

 

2.2                                 “Change of Control”
means the acquisition after December 21, 2001 by any person or by any person
and a Joint Actor, whether directly or indirectly, of voting securities (as
defined in the Securities Act) of the Company, which, when added to all other
voting securities of the Company at the time held by such person or by such
person and a Joint Actor, totals for the first time not less than fifty percent
(50%) of the outstanding voting securities of the Company or the votes attached
to those securities are sufficient, if exercised, to elect a majority of the
Board of Directors of the Company.

 

2.3                                 “Common
Shares” means the common shares of the Company.

 

2.4                                 “Company”
means OncoGenex Technologies Inc.

 

2.5                                 “Corporate
Reorganization” has the meaning ascribed to it in Subsection 5.3.

 

2.6                                 “Disability”
means:

 

(a)                                  any period of 365 consecutive days during which the Optionee is
prevented, notwithstanding reasonable efforts to accommodate the disability,
from performing his/her essential duties for the Company for more than 182 days
in the aggregate by reason of illness or mental or physical disability; or

 

(b)                                 the Optionee being found of unsound
mind or incapable of managing his/her own affairs  by the final judgement or order of a court of
competent jurisdiction.

 

 

2.7                                 “Equity
Securities” means:

 

(i)                                     shares
or any other security of the Company that carries the residual right to
participate in the earnings of the Company and, on liquidation, dissolution or
winding-up, in the assets of the Company, whether or not the security carries
voting rights;

 

(ii)                                  any
warrants, options or rights entitling the holders thereof to purchase or
acquire any such securities; or

 

(iii)                               any securities issued by the Company which are convertible or
exchangeable into such securities.

 

2.8                                 “Expiry
Date” means the date set by the Board under Section 3.1 of the Plan, as the
last date on which an Option may be exercised.

 

2.9                                 “Founder” means Dr.
Martin Gleave and Gleave HoldCo.

 

2.10                           “Fully
Converted Basis” at any time means that all shares convertible into Common
Shares outstanding at that time shall be deemed to have been fully converted,
in accordance with the rights, privileges, restrictions and conditions attached
thereto, into Common Shares and Common Shares issuable as a result thereof
shall be deemed to have been issued and to form part of the holdings of the
Person(s) entitled to receive such Common Shares.

 

2.11                           “Fully
Diluted Basis” at any time means that all options, warrants or other rights of
any kind to acquire Common Shares and all securities convertible or
exchangeable into Common Shares outstanding at that time shall be deemed to
have been fully exercised, converted or exchanged, as the case may be, and the
Common Shares issuable as a result thereof shall be deemed to have been fully
issued and to form part of the holdings of the Person(s) entitled to receive
such Common Shares.

 

2.12                           “Gleave
HoldCo” means 603356 B.C. Ltd.

 

2.13                           “Grant
Date” means the date specified in an Option Agreement as the date on which an
Option is granted.

 

2.14                           “Investment
Agreement” means the investment agreement dated September 24, 2003 among the
Company, the Major Investors and Scott Cormack;

 

2.15                           “Joint
Actor” means a person acting “jointly or in concert with” another person as
that phrase is interpreted in Section 96 of the Securities Act, provided
however, if more than one Major Investor concurrently acquires Shares pursuant
to the Shareholders’ Agreement, the Investment Agreement or the rights
attaching to their Shares, those Major Investors shall not be considered Joint
Actors of each other solely by reason of such acquisition.

 

 

2.16                           “Major
Investors” means Ventures West 7 Limited Partnership (“Ventures West Canada”),
Ventures West 7 U.S. Limited Partnership (“Ventures West U.S.”), H.I.G. Horizon
Corp. (“H.I.G. Horizon”), Working Opportunity Fund (EVCC) Ltd. (“WOF”),
Business Development Bank of Canada (“BDC”) and Milestone Medica Corporation
(“MMC”) (or their respective successors or permitted assigns) and “Major
Investor” means any one of them, provided that if any of Ventures West Canada,
Ventures West U.S., H.I.G. Horizon, WOF, BDC and MMC ceases to be a shareholder
of the Company without successor or assignee then “Major Investors” or “Major
Investor” means the remaining parties or party alone.

 

2.17                           “Offer”
has the meaning ascribed to it in Subsection 4.5.

 

2.18                           “Option”
means an option to purchase Shares granted pursuant to this Plan.

 

2.19                           “Option
Agreement” means an agreement, in the form attached hereto as Schedule “A”,
whereby the Company grants to an Optionee an Option.

 

2.20                           “Optionee”
means each of the directors, officers, employees and Service Providers granted
an Option pursuant to this Plan and their heirs, executors and administrators
and an Optionee may also be a corporation or family trust controlled by an
individual eligible for an Option grant pursuant to this Plan.

 

2.21                           “Option
Price” means the price per Share specified in an Option Agreement, adjusted
from time to time in accordance with the provisions of Section 5.

 

2.22                           “Option
Shares” means the aggregate number of Shares, which an Optionee may purchase
under an Option.

 

2.23                           “Person”
means any individual, partnership, joint venture, syndicate, sole
proprietorship, company or corporation with or without share capital, trust,
trustee, executor, administrator, or other legal personal representatives,
regulatory body or agency, government or governmental agency, authority or
entity howsoever designated or constituted.

 

2.24                           “Plan”
has the meaning ascribed to it in Section 1.

 

2.25                           “Purchaser”
has the meaning ascribed to it in Subsection 6.1(a).

 

2.26                           “Securities
Act” means the Securities Act, R.S.B.C. 1996, c.418, as amended, as at the date
hereof.

 

2.27                           “Selling
Shareholders” has the meaning ascribed to it in Subsection 6.1(a).

 

2.28                           “Service
Provider” means:

 

 

(a)                                  any person or company
engaged to provide management, consulting or advisory services for the Company
or for any entity controlled by the Company, provided such person is not an
employee of the Company; and

 

(b)                                 any person who is
providing management, consulting or advisory services to the Company or to any
entity controlled by the Company indirectly through a company that is a Service
Provider under Subsection 2.28(a), provided such person is not an employee of
the Company.

 

2.29                           “Shareholders’
Agreement” means the shareholders’ agreement dated as of the date of the first
issuance of Class B Preferred shares by the Company and made among the Company,
the Major Investors, the Founder and Scott Cormack, as amended and restated
from time to time.

 

2.30                           “Share
Reorganization” has the meaning ascribed to it in Subsection 5.1.

 

2.31                           “Shares”
means the common shares in the capital of the Company as constituted on the
date of this agreement provided that, in the event of any adjustment pursuant
to Section 5, “Shares” shall thereafter mean the shares or other property
resulting from the events giving rise to the adjustment.

 

2.32                           “Substantial
Sale” has the meaning ascribed to it in Subsection 6.1(a).

 

2.33                           “Transfer”
includes any sale, exchange, assignment, gift, bequest, disposition, mortgage,
charge, pledge, encumbrance, grant of a security interest or other arrangement
by which possession, legal title or beneficial ownership passes from one Person
to another, or to the same Person in a different capacity, whether or not voluntarily
and whether or not for value, and any agreement to effect any of the foregoing;
and the words “Transferred”, “Transferring” and similar words have
corresponding meanings.

 

2.34                           “Unissued
Option Shares” means the number of Shares, at a particular time, which have
been allotted for issuance upon the exercise of an Option but which have not
been issued, as adjusted from time to time in accordance with the provisions of
Section 5, such adjustments to be cumulative.

 

2.35                           “Vested”
means that an Option has become exercisable in respect of a number of Option
Shares by the Optionee pursuant to the terms of the Option Agreement.

 

3.                                      GRANT
OF OPTIONS

 

3.1                                 Option Terms

 

The Board may from time to time authorize the issue of Options to
directors, officers, employees and Service Providers of the Company and its
subsidiaries.

 

 

The Option Price under each Option shall be determined by the Board at
the time of issue of the Option and shall be subject to adjustment as provided
in Section 5.

 

The Expiry Date for each Option shall be set by the Board at the time
of issue of the Option and shall not be more than seven years after the Grant
Date. Options shall not be assignable (or transferable), except to a
corporation or family trust controlled by an individual eligible for an Option
grant pursuant to this Plan or as otherwise provided herein.

 

3.2                                 Limits on Shares
Issuable on Exercise of Options

 

The maximum number of Shares which may be issuable pursuant to options
granted under the Plan shall be equal to a maximum of 15% of the number of
Shares outstanding from time to time on a Fully Diluted Basis or such
additional amount as may be approved from time to time by the Board, but in any
event not to exceed 1,173,312 Shares.

 

3.3                                 Option Agreements

 

Each Option shall be confirmed by the execution of an Option Agreement.
Each Optionee shall have the option to purchase from the Company the Option
Shares at the time and in the manner set out in the Plan and in the Option
Agreement applicable to that Optionee. The execution of an Option Agreement
shall constitute conclusive evidence that it has been completed in compliance
with this Plan.

 

4.                                      EXERCISE
OF OPTION

 

4.1                                 When Options May be
Exercised

 

Subject to Sections 4.3 and 4.4, an Option may be exercised to purchase
any number of Shares up to the number of Vested Unissued Option Shares at any
time after the Grant Date up to 4:30 p.m. local time on the Expiry Date and
shall not be exercisable thereafter.

 

4.2                                 Manner of Exercise

 

The Option shall be exercisable by delivering to the Company a notice
specifying the number of Shares in respect of which the Option is exercised
together with payment in full of the Option Price for each such Share.

 

Upon notice and payment there will be a binding contract for the issue
of the Shares in respect of which the Option is exercised, upon and subject to
the provisions of the Plan. Delivery of the Optionee’s cheque payable to the
Company in the amount of the Option Price shall constitute payment of the

 

 

Option Price unless the cheque is not honoured upon presentation in
which case the Option shall not have been validly exercised.

 

4.3                                 Vesting of Option
Shares

 

Subject to Section 4.4, each Option shall become Vested in accordance
with the Option Agreement or as may be determined by the Board on the Grant
Date or as otherwise provided herein.

 

4.4                                 Termination Of
Employment

 

If an Optionee ceases to be a director, officer, employee or Service
Provider of the Company or one of the Company’s subsidiaries, his or her Option
shall be exercisable as follows:

 

(a)                                  Death or
Disability

 

If the Optionee ceases to be a director, officer, employee or Service
Provider of the Company or a subsidiary of the Company, due to his or her death
or Disability or, in the case of an Optionee that is a company, the death or
Disability of the person who provides management or consulting services to the
Company or to any entity controlled by the Company, the Option then held by the
Optionee shall be exercisable to acquire Vested Unissued Option Shares up to
the Expiry Date or the date that is six (6) months after the Optionee ceases to
be a director, officer, employee or Service Provider, which ever is sooner,
after which the Option held by such Optionee shall be cancelled.

 

(b)                                 Termination For
Cause

 

If the Optionee, or in the case of an Option granted to an Optionee who
falls under the definition of Service Provider set out in Subsection 2.28(b),
the Optionee’s employer, ceases to be a director, officer, employee or Service
Provider of the Company or a subsidiary of the Company as a result of
termination for cause, as that term is interpreted by the courts of the
jurisdiction in which the Optionee, or, in the case of the Optionee who
satisfies the definition of Service Provider set out in Subsection 2.28(b), the
Optionee’s employer, is employed or engaged, any outstanding Option held by
such Optionee on the date of such termination, whether in respect of Option
Shares that are Vested or not, shall be cancelled as of that date.

 

 

(c)                                  Early Retirement,
Voluntary Resignation or Termination Other than For Cause

 

If the Optionee or, in the case of an Option granted to an Optionee who
falls under the definition of Service Provider set out in Subsection 2.28(b),
the Optionee’s employer, ceases to be a director, officer, employee or Service
Provider, as the case may be, of the Company or a subsidiary of the Company due
to his or her retirement at the request of his or her employer earlier than the
normal retirement date under the Company’s retirement policy then in force, or
due to his or her termination by the Company other than for cause, or due to
his or her voluntary resignation, the Option then held by the Optionee shall be
exercisable to acquire Vested Unissued Option Shares as follows:

 

(i)                                     subject
to Subsection 4.4(c)(ii), in the case of an employee of the Company or of a
subsidiary of the Company, until the Expiry Date or the date which is sixty
(60) days after the Optionee ceases to be an employee of the Company or a
subsidiary of the Company, which ever is sooner, after which the Option held by
such Optionee shall be cancelled;

 

(ii)                                  in
the case of a director and/or officer who is also an employee of the Company or
of a subsidiary of the Company, until the Expiry Date or the date which is one
(1) year after the Optionee ceases to be an employee of the Company or a
subsidiary of the Company, which ever is sooner, after which the Option held by
such Optionee shall be cancelled;

 

(iii)                               in
the case of a director and/or officer who is not also an employee of the
Company or a subsidiary of the Company, or in the case of a Service Provider,
until the Expiry Date of the Option.

 

For greater certainty, an Option that had not become Vested in respect
of certain Unissued Option Shares at the time that the relevant event referred
to in this Section 4.4 occurred, shall not be or become exercisable in respect
of such Unissued Option Shares and shall be cancelled.

 

Notwithstanding that an Option may have been transferred to a family
trust, the Option will terminate after the transferor of the Option ceases to
be a director, officer, employee or Service Provider of the Company or a
subsidiary of the Company, on the date specified in and in accordance with
Subsection 4.4(a), (b) or (c), as the case may be.

 

 

4.5                                 Effect of a
Take-over Bid

 

If a bona fide
offer (an “Offer”) for Shares is made to the Optionee or to shareholders of the
Company generally or to a class of shareholders which includes the Optionee,
which Offer, if accepted in whole or in part, would result in a Change of
Control , the Company shall, immediately upon receipt of notice of the Offer,
notify each Optionee who is an officer or director of the Company of full
particulars of the Offer, whereupon all Option Shares subject to such Option
will become Vested and the Option may be exercised in whole or in part by the
Optionee so as to permit the Optionee to tender the Option Shares received upon
exercise, pursuant to the Offer. However, if:

 

(a)                                  the Offer is not
completed within the time specified therein; or

 

(b)                                 all of the Option
Shares tendered by the Optionee pursuant to the Offer are not taken up or paid
for by the offeror in respect thereof,

 

then the Option Shares received upon such exercise, or
in the case of clause (b) above, the Option Shares that are not taken up and paid
for, may be returned by the Optionee to the Company and reinstated as
authorized but unissued Shares and with respect to such returned Option Shares,
the Option shall be reinstated as if it had not been exercised and the terms
upon which such Option Shares were to become Vested pursuant to Section 4.3
shall be reinstated. If any Option Shares are returned to the Company under
this Section 4.5, the Company shall immediately refund the exercise price to
the Optionee for such Option Shares.

 

4.6                                 Acceleration of
Expiry Date

 

If at any time when an Option granted under the Plan remains
unexercised with respect to any Unissued Option Shares, an Offer is made by an
offeror, the Board may, upon notifying each Optionee of full particulars of the
Offer, declare all Option Shares issuable upon the exercise of Options granted
under the Plan, Vested, and declare that the Expiry Date for the exercise of
all unexercised Options granted under the Plan is accelerated so that all
Options will either be exercised or will expire prior to the date upon which
Shares must be tendered pursuant to the Offer. After a declaration by the Board
under this Section 4.6, the provisions of Section 4.5 will continue to apply to
the Option.

 

 

4.7                                 Effect of a Change
of Control

 

If a Change of Control occurs, 50% (or such larger percentage as may be
determined by the Board) of all Option Shares subject to each outstanding
Option which have not yet Vested will become Vested, whereupon such Option may
be exercised in whole or in part by the Optionee to the extent that the Option
is Vested as a result of this Section 4.7.

 

4.8                                 Exclusion From
Severance Allowance, Retirement Allowance or Termination Settlement

 

If the Optionee, or, in the case of an Option granted
to an Optionee who falls under the definition of Service Provider set out in
Subsection 2.28(b), the Optionee’s employer, retires, resigns or is terminated
from employment or engagement with the Company or any subsidiary of the
Company, the loss or limitation, if any, pursuant to the Option Agreement with
respect to the right to purchase Option Shares which were not Vested at that
time or which, if Vested, were cancelled, shall not give rise to any right to
damages and shall not be included in the calculation of nor form any part of
any severance allowance, retiring allowance or termination settlement of any
kind whatsoever in respect of such Optionee.

 

4.9                                 Shares Not Acquired

 

Any Unissued Option Shares not acquired by an Optionee under an Option
which has expired may be made the subject of a further Option pursuant to the
provisions of the Plan.

 

5.                                      ADJUSTMENT
OF OPTION PRICE AND NUMBER OF OPTION SHARES

 

5.1                                 Share
Reorganization

 

Whenever the Company issues Shares to all or substantially all holders
of Shares by way of a stock dividend or other distribution, or subdivides all
outstanding Shares into a greater number of Shares, or combines or consolidates
all outstanding Shares into a lesser number of Shares (each of such events
being herein called a “Share Reorganization”) then effective immediately after
the record date for such dividend or other distribution or the effective date
of such subdivision, combination or consolidation, for each Option:

 

(a)                                  the Option Price will
be adjusted to a price per Share which is the product of:

 

(i)                                     the Option Price
in effect immediately before that effective date or record date; and

 

 

(ii)                                  a
fraction, the numerator of which is the total number of Shares outstanding on
that effective date or record date before giving effect to the Share
Reorganization, and the denominator of which is the total number of Shares that
are or would be outstanding immediately after such effective date or record
date after giving effect to the Share Reorganizations; and

 

(b)                                 the number of Unissued
Option Shares will be adjusted by multiplying (i) the number of Unissued Option
Shares immediately before such effective date or record date by (ii) a fraction
which is the reciprocal of the fraction described in clause (a)(ii) above.

 

5.2                                 Special
Distribution

 

Whenever the Company issues by way of a dividend or otherwise
distributes to all or substantially all holders of Shares;

 

(a)                                  shares of the
Company, other than the Shares;

 

(b)                                 evidences of
indebtedness;

 

(c)                                  any cash or other
assets, excluding cash dividends (other than cash dividends which the Board has
determined to be outside the normal course); or

 

(d)                                 rights, options or
warrants;

 

then to the extent that such dividend or distribution does not
constitute a Share Reorganization (any of such non-excluded events being herein
called a “Special Distribution”), and effective immediately after the record
date at which holders of Shares are determined for purposes of the Special
Distribution, for each Option the Option Price will be reduced, and the number
of Unissued Option Shares will be
correspondingly increased, by such amount, if any, as is determined by the
Board in its sole and unfettered discretion to be appropriate in order to
properly reflect any diminution in value of the Option Shares as a result of
such Special Distribution.

 

5.3                                 Corporate Organization

 

Whenever there is:

 

(a)                                  a reclassification of outstanding Shares, a
change of Shares into other shares or securities, or any other capital
reorganization of the Company, other than as described in Sections 5.1 or 5.2;

 

 

(b)                                 a consolidation, merger or amalgamation of
the  Company with or into another
corporation resulting in a reclassification of outstanding Shares into other
shares or securities or a change of Shares into other shares or securities; or

 

(c)                                  a transaction whereby all or substantially all of
the Company’s undertaking and assets become the property of another
corporation;

 

(any such event being herein
called a “Corporate Reorganization”) the Optionee will have an option to
purchase (at the times, for the consideration, and subject to the terms and
conditions set out in the Plan) and will accept on the exercise of such option,
in lieu of the Unissued Option Shares which he would otherwise have been
entitled to purchase, the kind and amount of shares or other securities or
property that he would have been entitled to receive as a result of the
Corporate Reorganization if, on the effective date thereof, he had been the
holder of all Unissued Option Shares or if appropriate, as otherwise determined
by the Directors.

 

5.4                                 Determination of Option Price and Number of
Unissued Option Shares

 

If any questions arise at any time with
respect to the Option Price or number of Unissued Option Shares deliverable
upon exercise of an Option following a Share Reorganization, Special
Distribution or Corporate Reorganization, such questions shall be conclusively
determined by the Company’s auditor, or, if they decline to so act, any other
firm of Chartered Accountants in Vancouver, British Columbia, that the Board
may designate and who will have access to all appropriate records and such
determination will be binding upon the Company and all Optionees.

 

6.                                      SUBSTANTIAL SALE

 

6.1                                 Substantial
Sale

 

For so long as the Shareholders’ Agreement is in effect, if

 

(a)                                  securityholders
of the Company (the “Selling Shareholders”) holding not less than seventy seven
percent of the outstanding Common Shares calculated on a Fully Converted Basis
have agreed to Transfer their Equity Securities (a “Substantial Sale”) to a
Person, or Persons acting in concert, (a “Purchaser”); and

 

(b)                                 the
Purchaser offers to purchase the Options of an Optionee, the Optionee must sell
the Options to the Purchaser at a price equal to

 

 

	
  The number of Shares then exercisable under the Option

  	
   

  	
  X

  	
   

  	
  The price per Share paid by the Purchaser to the Selling Shareholders
  minus the exercise price per Share under the Option

  

 

on equivalent terms and conditions, mutatis mutandis,
as those agreed to by the Selling Shareholders in respect of the Substantial
Sale, but in any event subject to the rights, privileges, restrictions and
conditions, including all liquidation preferences, attaching to the securities
as set out in the Company’s constating documents.

 

If the Purchaser offers to buy the Options of an Optionee and the
Optionee does not sell the Optionee’s Options to the Purchaser as contemplated
above, then the Optionee’s Option will expire, terminate and be cancelled on
completion of the Substantial Sale.

 

7.                                      MISCELLANEOUS

 

7.1                                 Right to Employment

 

Neither this Plan nor any of the provisions
hereof shall confer upon any Optionee any right with respect to employment or
continued employment with the Company or any subsidiary of the Company or
interfere in any way with the right of the Company or any subsidiary of the
Company to terminate such employment.

 

7.2                                 Necessary Approvals

 

The obligation of the Company to sell and
deliver Shares in accordance with the Plan is subject to the approval of any
governmental authority having jurisdiction. If any Shares cannot be issued to
any Optionee for any reason, including, without limitation, the failure to
obtain such approval, then the obligation of the Company to issue such Shares
shall terminate and any Option Price paid by an Optionee to the Company shall
be immediately refunded to the Optionee by the Company.

 

7.3                                 Administration of the Plan

 

The Board shall, without limitation, have
full and final authority in its discretion, but subject to the express
provisions of the Plan, to interpret the Plan, to prescribe, amend and rescind
rules and regulations relating to the Plan and to make all other determinations
deemed necessary or advisable in respect of the Plan. Except as set forth in
Section 5.4, the interpretation and construction of any provision of the Plan
by the Board shall be final and conclusive. Administration of the Plan shall be
the responsibility of the appropriate officers of the Company and all costs in
respect thereof shall be paid by the Company.

 

 

7.4                                 Income Taxes

 

As a condition of and prior to participation
in the Plan any Optionee shall on request authorize the Company in writing to
withhold from any remuneration otherwise payable to him or her any amounts
required by any taxing authority to be withheld for taxes of any kind as a
consequence of his or her participation in the Plan.

 

7.5                                 Amendments to the Plan

 

The Board may from time to time, subject to
applicable law and to the prior approval, if required, of any regulatory body
having authority over the Company or the Plan, suspend, terminate or
discontinue the Plan at any time, or amend or revise the terms of the Plan or
of any Option granted under the Plan and the Option Agreement relating thereto,
provided that no such amendment, revision, suspension, termination or
discontinuance shall in any manner adversely affect any Option previously
granted to an Optionee under the Plan without the consent of that Optionee. For
further certainty, nothing in the Plan shall limit the Board’s ability to grant
Options under the Plan on terms that may be different or more favorable to an
Optionee than those specified herein.

 

7.6                                 Form of Notice

 

A notice given to the Company shall be in
writing, signed by the Optionee and delivered to the Secretary of the Company.

 

7.7                                 No Representation or Warranty

 

The Company makes no representation or warranty
as to the future market value of any Shares issued in accordance with the
provisions of the Plan.

 

7.8                                 Compliance with Applicable Law

 

If any provision of the Plan or any Option
Agreement contravenes any law or any order, policy, by-law or regulation of any
regulatory body having authority over the Company or the Plan, then such
provision shall be deemed to be amended to the extent required to bring such
provision into compliance therewith.

 

7.9                                 No Assignment

 

No Optionee may assign any of his or her
rights under the Plan without the consent from the Board or a majority of the
Major Investors.

 

 

7.10                           Rights
of Optionees

 

An Optionee shall have no rights
whatsoever as a shareholder of the Company in respect of any of the Unissued
Option Shares (including, without limitation, voting rights or any right to
receive dividends, warrants or rights under any rights offering).

 

7.11                           Conflict

 

In the event of any conflict between the
provisions of this Plan and an Option Agreement, the provisions of the Plan
shall govern.

 

7.12                           Governing Law

 

The Plan and each Option Agreement issued
pursuant to the Plan shall be governed by the laws of the province of British
Columbia.

 

7.13                           Time of Essence

 

Time is of the essence of this Plan and of
each Option Agreement. No extension of time will be deemed to be or to operate
as a waiver of the essentiality of time.

 

7.14                           Entire Agreement

 

This Plan and the Option Agreement sets out
the entire agreement between the Company and the Optionees relative to the
subject matter hereof and supersedes all prior agreements, undertakings and
understandings, whether oral or written.

 

This Amended and Restated Stock Option Plan was approved by the Board
of Directors on September 16, 2003 and is restated after giving effect to the
consolidation of the Company’s share capital on a one for five basis on
September 23, 2003.

 

 

SCHEDULE “A”

 

ONCOGENEX TECHNOLOGIES INC.

 

STOCK OPTION PLAN

OPTION AGREEMENT

 

This Option Agreement is entered into between
OncoGenex Technologies Inc. (the “Company”) and
the Optionee named below pursuant to the Company Stock Option Plan as amended
(the “Plan”), a copy of which is attached
hereto, and confirms that:

 

1.                                       on September 24, 2003 (the “Grant Date”);

 

2.                                       Dr. Martin Gleave (the “Optionee”);

 

3.                                       was granted the option (the “Option”)
to purchase 133,870 common shares (the “Option Shares”)
of the Company;

 

4.                                       for the price (the “Option Price”)
of $0.90 per share

 

5.                                       which shall be exercisable (“Vested”)
in whole or in part in the following amounts on or after the following dates:

 

i)                 as to 84,996 shares, 3,148 shares per month upon
the 1st day of each subsequent month following the Grant Date;

 

ii)              as to 48,874 shares, provided that the Company
has completed the second tranche of the Class B equity issue (the “Second Closing”), these shares will Vest in an equal monthly
amount upon the 1st day of each month commencing immediately after
the Second Closing, where the monthly amount is calculated by dividing 48,874
by the number of months remaining after completing the Second Closing and
before December 31, 2005. For clarity, these 48,874 shares will not Vest if the
Company does not complete the Second Closing on or before November 1, 2004.

 

6.                                       terminating on September 24, 2010 (the “Expiry Date”);

 

all on the terms and subject to the
conditions set out in the Plan. For greater certainty, once Option Shares have
become Vested, they continue to be exercisable until the termination or
cancellation thereof as provided in this Option Agreement and the Plan.

 

By signing this Option Agreement, the
Optionee acknowledges that the Optionee has read and understands the Plan and
agrees to the terms and conditions of the Plan and this Option Agreement.

 

In order to exercise this Option, the
Optionee must deliver to the Company:

 

(a)                                  a notice of exercise in the form attached hereto
as Exhibit No. 1, duly completed and executed together with a certified cheque
for payment for all Option Shares in respect of which the Option is exercised;
and

 

 

(b)                                 if required by the Company in order for the
Company to comply with the Shareholders’ Agreement (as defined in the Plan), a
counterpart to the Shareholders’ Agreement in a form acceptable to the Company
duly and originally executed by the Optionee.

 

IN WITNESS WHEREOF the parties hereto have executed this Option
Agreement as of the 24th day of September, 2003.

 

 

	
  SIGNED, SEALED AND DELIVERED

  	
  )

  	
   

  
	
  in the presence of

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  
	
   

  	
   

  	
  )

  	
  /s/ Martin Gleave

  
	
  Witness

  	
  )

  	
  OPTIONEE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ONCOGENEX TECHNOLOGIES INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Scott Cormack

  
	
   

  	
   

  	
   

  
				

 

 

EXHIBIT NO. 1 TO OPTION
AGREEMENT

 

EXERCISE
FORM

 

TO:                                                                         OncoGenex Technologies Inc.

Suite
550, 2660 Oak Street

Vancouver,
British Columbia V6H 3Z6

Telephone:                                    604-736-3678

Facsimile:                                            604-736-3687

Attention:                                         Mr. Scott D. Cormack

 

I, the undersigned holder of the attached
Option Agreement with OncoGenex Technologies Inc. (the “Company”),
hereby exercise my Option and agree to acquire             
common shares of the Company (the “Acquired Shares”)
and enclose a certified cheque in the amount of $             
representing the exercise price (Option Price multiplied by number of shares
being acquired) for the Acquired Shares.

 

I hereby request that the Company issue the
Acquired Shares to me under the OncoGenex Technologies Inc. Stock Option Plan
and irrevocably direct that the Acquired Shares be issued registered in the
following name and address and delivered as follows:

 

	
  Name in Full

  	
   

  	
  Registered Address

  	
   

  	
  Delivery Address

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

(PLEASE PRINT IN FULL THE NAME IN WHICH
CERTIFICATES ARE TO BE ISSUED.)

 

DATED this       
day of                       ,
          .

 

	
   

  	
   

  
	
   

  	
  Signature of Optionee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name of Optionee

  

 

 

GLEAVE SERVICES THIRD AMENDING AGREEMENT

 

THIS AGREEMENT, made as of 10th day of August,
2005 between:

 

DR. MARTIN GLEAVE, an individual residing in Vancouver, British Columbia (hereinafter
referred to as “Gleave”)

 

-and-

 

ONCOGENEX TECHNOLOGIES INC. a corporation incorporated under the laws of Canada (hereinafter
referred to as the “Corporation”).

 

RECITALS:

 

WHEREAS the Corporation and Gleave
entered into a services agreement dated December 21, 2001 (the “Original Gleave
Services Agreement”) and an amending agreement dated March 1, 2002 (the “Gleave
Services First Amending Agreement”) and a second amending agreement dated
September 24, 2003 (the “Gleave Services Second Amending Agreement”) relating
to Gleave providing certain services for the benefit of the Corporation;

 

AND
WHEREAS the
Corporation and Gleave wish to amend the term and Gleave’s participation in the
compensation program of the Corporation, including its Employee Stock Option
Plan, as amended from time to time (the “Plan”);

 

NOW
THEREFORE
in consideration of the mutual covenants and agreements herein contained and
other good and valuable consideration (the receipt and sufficiency of which are
hereby acknowledged) the parties agree as follows:

 

1.                                      CONSTRUCTION

 

                                                The Original Gleave Services
Agreement as amended by the Gleave Services First Amending Agreement and the
Gleave Services Second Amending Agreement is hereinafter referred to as the
(“Gleave Services Agreement”).  Terms
having a capitalized first letter and not otherwise defined herein shall have
the meaning ascribed to them in the Gleave Services Agreement.

 

2.                                      AMENDMENT

 

2.1           Article 5 of the Gleave Services
Agreement is hereby deleted and replaced with the following:

 

“5.1                           Subject to Article 9, the term of this
Agreement shall be from the date first written above until December 31, 2008
(the “Term”), provided that:

 

(a)                                  the Corporation shall have the right to
terminate this Agreement at an earlier date if Gleave defaults on his
obligations hereunder and the Corporation has given written notice to Gleave of
such default and Gleave has failed to correct such default within thirty (30)
days of such notice;

 

 

                                                                                                (b)                                 the Corporation may terminate this Agreement
at any time and without cause by providing written notice of termination to
Gleave, in which case the Corporation shall pay to Gleave an amount equal to
the lesser of $100,000 and the aggregate remaining consulting fees payable to
the end of the Term had this Agreement not been so terminated; and

 

                                                                                                (c)                                  the Corporation shall have the right to
terminate this Agreement at an earlier date on five (5) days prior written
notice to Gleave if Gleave ceases to beneficially own or control any shares of
the Corporation.”

 

2.2                                 The Gleave Services Agreement is hereby
amended by replacing Schedule “B” and Schedule “C” thereto with Schedule “B”
and Schedule “C” attached hereto.

 

2.3                                 Notwithstanding the terms of the
Corporation’s stock option plan, if the Corporation notifies Gleave of
termination of this Agreement, without cause, any options (“Options”) to
purchase shares in the capital of the Corporation which have been granted to
Gleave after July 13, 2005 and which have vested as at the date of termination,
shall be exercisable by Gleave, until the expiry date specified in the Option
agreement and the date which is 365 days after such notification, which ever is
sooner, but not thereafter.

 

2.4                                 Except as otherwise provided in Article 2 herein,
the terms of the Plan shall govern.  In
the event of any inconsistency between the Plan and Article 2 herein, the terms
of this Article 2 shall prevail.

 

3.                                      GENERAL

 

                                                The Gleave Services Agreement as
amended by this Agreement comprises the entire agreement between the Parties
with respect to Gleave’s provision of services to the Corporation and replaces
and supersedes any and all previous verbal or written agreements that may have
been entered into.  For clarity, except
as provided in Article 2 herein, the Gleave Services Agreement remains
unamended and in full force and effect between the parties to this
Agreement.  This Agreement may not be
amended or modified except by written amendment signed between the Parties
hereto.

 

                                                This Agreement may be executed by
the parties in separate counterparts and by facsimile, each of which such
counterparts when so executed and delivered shall be deemed to constitute one
and the same instrument.

 

IN WITNESS WHEREOF the parties have executed this
Agreement as of the date first above written.

 

 

	
  /s/
  Sherry Tryssenaar

  	
   

  	
  /s/
  Martin Gleave

  
	
  Witness: S.
  Tryssenaar

  	
   

  	
  DR. MARTIN GLEAVE

  

 

2

 

 

	
   

  	
   

  	
  ONCOGENEX TECHNOLOGIES INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Per:

  	
  /s/ Scott Cormack 

  
	
   

  	
   

  	
   

  	
  (Authorized Signatory)

  

 

3

 

SCHEDULE B

ONCOGENEX TECHNOLOGIES INC.

Compensation

 

Effective
January 1, 2006:

 

B
(1)        Gleave shall be entitled to an
annual consulting fee equal to $100,000 (the “Consulting Fee”).  The Consulting Fee shall be paid to Gleave in
equal monthly payments of $8,333.33 per month within 10 days following the end
of each month.

 

B (2)        For travel exclusive to OncoGenex that
is outside of the Province of British Columbia as requested by the Chief Executive
Officer or President of OncoGenex, Gleave shall be reimbursed $2,000 per day
(the “Travel Per Diem”).  The Travel Per
Diem shall be paid to Gleave within 10 days following the receipt by OncoGeneX
of an invoice received from Gleave in respect of such travel.

 

B (3)        Gleave and OncoGenex hereby confirm that
Gleave is acting as an independent contractor to OncoGenex and will, at
Gleave’s own expense, pay all income taxes, unemployment insurance premiums,
Canada Pension Plan premiums, Workers’ Compensation contributions, and all
other taxes, charges and contributions levied or required by competent
governmental authorities in Canada in respect of monies paid to Gleave under
this Agreement and OncoGenex will not have any obligation whatsoever to
compensate Gleave or persons working with Gleave for annual vacation, sickness,
accident or disability, whether or not resulting from the performance by Gleave
of obligations of Gleave under this Agreement, retirement pension or benefits
or any benefits resulting from the expiration of the Term of the Agreement or
for any other benefits accorded by OncoGenex to any of its employees.

 

 

SCHEDULE C

ONCOGENEX TECHNOLOGIES INC.

 

Bonus Plan – Milestones

 

Effective
Janaury 1, 2006:

 

C
(1)        During the Term (as defined in
this Agreement), Gleave shall be entitled to an annual cash bonus of up to 40%
of the annual consulting fee payable to Gleave under this Agreement (the
“Bonus”).  The Bonus shall be based on
achievement of overall corporate performance of objectives as established by
the Board at the beginning of the fiscal year.Exhibit 10.5

 

EMPLOYMENT AGREEMENT

 

THIS AGREEMENT
made as of the 9th day of January, 2006.

 

BETWEEN:

 

OncoGenex Technologies Inc., a Corporation incorporated under the laws of Canada and having an
office at Vancouver, British Columbia

 

(together
with any subsidiaries hereinafter referred to as the “Company”)

 

OF THE FIRST PART

 

AND:

 

Stephen Anderson, an individual, domiciled at West Vancouver, British Columbia

 

(hereinafter
referred to as the “Employee”)

 

OF THE SECOND PART

 

WHEREAS the
Company is a biotechnology company engaged in the development of therapeutics
for cancer;

 

AND WHEREAS the
Company and the Employee wish to enter into this Employment Agreement under the
terms and conditions herein;

 

AND WHEREAS
during the course of the Employee’s employment with the Company, the Employee
will be introduced to, have contact with, and his services may be solicited by,
one or more of the clients of the Company;

 

AND WHEREAS
the Employee will acquire knowledge, experience and expertise, as well as
detailed knowledge of the Company’s confidential customer and supplier lists
and information, marketing techniques, price lists, trade secrets and other
property which is and shall be the property of the Company, and the disclosure,
loss or, unauthorized use of which would substantially harm the business of the
Company;

 

NOW THEREFORE THIS AGREEMENT WITNESSES that for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto hereby agree as follows:

 

ARTICLE 1

TERM OF EMPLOYMENT

 

1.1                                 The term of employment under this Agreement
shall commence on January 9, 2006 (the “Effective Date”)
and shall be for an indefinite term, subject to termination as provided for in
Article 6 hereof. In accordance with the other terms of this Agreement, the

 

*Certain information in
this exhibit has been omitted as confidential, as indicated by [***]. This
information has been filed separately with the Commission.

 

 

Employee
shall devote himself full-time to his employment duties and responsibilities
with the Company.

 

ARTICLE 2

DUTIES AND RESPONSIBILITIES

 

2.1                                 The Employee shall serve the Company as an
Employee in the position of Chief Financial Officer and reporting to the
President.

 

2.2                                 The Employee shall undertake and perform the
following duties and responsibilities:

 

(a)                                  Provide financial leadership and strategic
advice in the development of financial policies, procedures and internal
controls in a manner that supports the achievement of the Company’s strategic
and operating goals and objectives which includes transformation and
maintenance of financial systems required for a reporting issuer;

 

(b)                                 Ensure that there is a broad sense of
financial discipline applied to all officers and employees;

 

(c)                                  Oversee the Company’s financial and budgetary
planning process, mentor staff on budgetary process and procedures, and
regularly review performance against plan;

 

(d)                                 Ensure that appropriate due diligence has
been carried out prior to the Company committing to a course of action where
the Company is expending funds or committing to a contractual obligation;

 

(e)                                  Responsible for tax planning and compliance,
cost containment, analysis and development of opportunities regarding
acquisitions or divestitures and contract negotiations with suppliers or
partners;

 

(f)                                    Endorse all financial information as to its
completeness, reliability and accuracy submitted to the Board of Directors, any
public sector agency, investors and other stakeholders;

 

(g)                                 Interpret, analyze and present financial and
related information for senior management and/or the Board of Directors, in
order to facilitate understanding of issues and options, and to guide
appropriate decisions;

 

(h)                                 Participate in road shows as a key presenter
to investors, analysts and investment bankers;

 

(i)                                     Establish and maintain financial model to
support Company valuations;

 

(j)                                     Establish and maintain sound relationships
with investors, financial institutions, auditors and investment bankers;

 

(k)                                  Co-lead (with the CEO) negotiations with
venture capital investors, financial institutions and/or investment bankers as
directed by the CEO and/or Board of Directors;

 

2

 

(l)                                     Act as the primary Management contact for the
audit committee, and ensure audit committee members have necessary and accurate
information related to the organisation and the committee’s responsibilities;

 

(m)                               Manage overall corporate governance activities including compliance
with securities regulations, shareholder and investment agreements, and other
contractual or legislative obligations of the Company;

 

(n)                                 Oversee business development activities with
particular consideration of strategic fit, financial and contractual
obligations of agreements, and impact on financial and human resources of the
Company;

 

(o)                                 Facilitate a timely due diligence process as
necessary to secure additional capital and strategic partnerships;

 

(p)                                 Identify and manage business risks and
insurance requirements;

 

(q)                                 Ensure that direct reports have clearly defined
roles, understand personal and corporate priorities, and receive appropriate
mentoring to enhance individual performance towards corporate objectives; and

 

(r)                                    perform such other duties and
responsibilities as may be assigned or vested in him by the Employee’s
supervisor from time to time and which are consistent with the duties and
responsibilities of a Chief Financial Officer.

 

2.3                                 In accordance with the other terms of this
Agreement, the Employee agrees during the continuance of his employment, to devote
his entire working time, services, skill and ability to such employment and to
serve at all times with loyalty and honesty in the best interests of the
Company. Prior written consent from the President must be obtained if the
Employee wishes to engage in activities with for-profit and charitable or
non-profit organizations during normal working hours.

 

ARTICLE 3 

BASE COMPENSATION

 

3.1                                 In consideration of the services provided by
the Employee hereunder, the Company shall, as of the Effective Date, pay to the
Employee an annual base salary in the amount of one hundred eighty thousand
dollars ($180,000) as increased from time to time in accordance with Article
3.2 (“Base Salary”), payable semi-monthly or
such other manner as may be agreeable to the parties hereto and in compliance
with any applicable legislation.

 

3.2                                 Such Base Salary shall be reviewed by the
Employee’s supervisor and may be further reviewed by the Compensation Committee
of the Board every twelve (12) months based on the Employee’s performance,
corporate cash flow, achievement of corporate objectives and in accordance with
Company policies. Any recommended increase may require approval by the Board. Annual
performance reviews will be conducted by the Employee’s supervisor. Annual
determination of personal objectives will be conducted by the Employee’s
supervisor.

 

3

 

3.3                                 The Employee shall be eligible to participate
in any bonus plans (“Bonus”) offered
by the Company to its Employees in accordance with the terms thereof as
established by the Board and as amended from time to time. Initially, the
Employee shall be eligible for a Bonus of up to 25% of the Base Salary. The
Bonus shall be based on annual corporate objectives as established by the Board
and annual personal objectives as established by the Employee’s supervisor,
each of which shall be communicated to the Employee annually by December 31 in
the year preceding the year in which the milestones pertain and attached hereto
as Appendix A. At the same time, the allocation of bonus potential between
corporate and personal objectives for the upcoming year will be communicated to
the Employee.

 

ARTICLE 4 

INCENTIVE COMPENSATION

 

4.1                                 The Employee shall participate in the Company’s
share option plan (the “Plan”) as
determined by the Board of Directors and in accordance with its terms as
amended from time to time.

 

4.2                                 The exercise of any Options shall at all
times be subject to obtaining any applicable regulatory or legal approval.

 

ARTICLE 5

BENEFITS

 

5.1                                 Group Insurance and Pension

 

The Employee shall be
eligible on the Effective Date for any group medical, dental, insurance and
pension programs applicable to the Employees of the Company.

 

5.2                                 Vacation

 

The Employee shall be
entitled to 20 Business Days (as defined in Article 11.11) of annual paid
vacation during each year with vacation entitlement in the first year after the
Effective Date accruing monthly from the Effective Date. Unused vacation may
not be carried over for more than twelve months after the completion of each
fiscal year.

 

5.3                                 Expenses

 

The
Employee shall be reimbursed for all out-of-pocket expenses incurred on behalf
of the Company within 15 days of receipt by the Company of an expense report
together with original receipts in respect of such expenses.

 

ARTICLE 6 

TERMINATION OF THIS AGREEMENT

 

6.1                                 Notwithstanding any other provisions herein
but subject to Article 11.8 hereof, and without prejudice to rights accrued to
the Employee to the Date of Termination (as defined herein), this Agreement
shall terminate automatically upon the death of the Employee or on the Date of
Termination. The “Date of Termination”
will be, as applicable, the date the Company terminates the Employee in
accordance with Article 6.2, or the date the Company requests the Employee to
cease his duties under this Agreement or the Employee resigns for Constructive
Dismissal in accordance with

 

4

Article
6.5 hereof, or the date the Employee commences his retirement in accordance
with Article 6.6 hereof, or the date determined in accordance with Article 6.7
hereof.

 

6.2                                 Nothing in this Agreement shall restrict or
impair the Company’s right to terminate the employment of the Employee without
compensation:

 

(a)                                  at any time by notice in writing from the
Company to the Employee for just cause, which without limiting the generality
of the foregoing, shall include:

 

(i)                                     serious misconduct;

(ii)                                  breach of fiduciary duty;

(iii)                               failure to obey the lawful direction of the Employee’s
supervisor;

(iv)                              fraud;

(v)                                 theft;

(vi)                              willful breach or habitual neglect of
significant and material duties the Employee is required to perform; and

(vii)                           material breach of a restrictive covenant of
this Agreement.

 

(b)                                 if the Employee shall become
permanently disabled, at any time by notice in writing from the Company to the
Employee, provided that such termination does not adversely affect the Employee’s
access to long term disability insurance benefits or other health benefits. For
purposes of this subsection 6.2 (b), the Employee shall be deemed to be
permanently disabled immediately following:

 

(i)                                     any period of 365 consecutive days during
which he is prevented, notwithstanding reasonable efforts to accommodate the
disability, from performing his essential duties as an Employee of the Company
for more than 182 days in the aggregate by reason of illness or mental or
physical disability; or

 

(ii)                                  his being
found of unsound mind or incapable of managing his own affairs by the final
judgement or order of a court of competent jurisdiction.

 

6.3                                 The Employee acknowledges and agrees that,
during the first 6 months of employment starting on the Effective Date (the “Probationary
Period”), he is employed on a probationary basis. During the Probationary
Period, this Agreement may be terminated by the Company on not less than 1
weeks’ notice in writing. The Company may, at its discretion, elect to pay 1
weeks’ salary in lieu of notice. If the Company terminates the employment of
the Employee during the Probationary Period, the Date of Termination shall mean
the last day on which the Employee works for the Company.

 

6.4                                 For the purposes of this Agreement, “Constructive Dismissal” shall be deemed to have occurred
only if there exists any material adverse change without the prior written
consent of the Employee in the title, position, job function or compensation of
the Employee from those current on the Effective Date, taking into
consideration normal changes in job functions as the Company grows.

 

6.5                                 At any time after the Probationary Period,
the Company may terminate the employment of the Employee in accordance with
this Article 6.5. In the event employment of the Employee is terminated by the
Company for reasons other than for just cause, or the Employee resigns as a
result of a Constructive Dismissal, the Employee shall be entitled to the
following:

 

5

 

(a)                                  four (4) weeks notice plus an additional two
weeks for each full year of the Employee’s employment at the date such notice
is given (the “Severance Period”),
to a maximum of twenty-six (26) weeks, or pay in lieu of notice (“Severance”) of an amount determined by multiplying the
Employee’s average weekly earnings ((inclusive of Base Salary and Bonus) where
such average is calculated over the 104 week period (or such lesser period if
the Employee is terminated in accordance with this Article 6.5 less than 2
years from the Effective Date) immediately preceding the Severance Period) by
the number of weeks in the Severance Period. The Severance may be paid to the
Employee either in a lump sum or by equal weekly, semi-monthly or monthly
installments for the duration of the Severance Period, at the Company’s sole
discretion;

 

(b)                                 any payment to the Employee under this
Article 6.5 shall be deemed to include all required termination and/or
severance payments pursuant to the provisions of the Employment
Standards Act (British Columbia) as amended from time to time; and

 

(c)                                  to the extent that such insurance plans permit,
continued entitlement under all group medical, dental and insurance plans,
excluding short and long term disability plans and pension plan, to which the
Employee is entitled at the time of termination of employment; such
continuation of benefit entitlement shall be for a period equal to the
Severance Period or until the date the Employee becomes employed elsewhere
wherein comparable benefits are provided, whichever date comes first. To the
extent the continuance of certain benefit plans, excluding short and long term
disability, is not permitted, the Company shall pay to the Employee, no later
than thirty (30) days after the Date of Termination, an amount equal to ten per
cent (10%) of the Employee’s weekly Base Salary in effect immediately prior to
the Date of Termination (being the Base Salary divided by 52) multiplied by the
number of weeks in the Severance Period.

 

6.6                                 This Agreement is terminated, without
prejudice to rights accrued to the Employee to the Date of Termination, when
the Employee commences his retirement.

 

6.7                                 The Employee may, by
providing one month notice in writing to the Company (the “Notice Period”), terminate this Agreement and his employment with
the Company. In such circumstance, the Company may request that the Employee
cease duties prior to the expiry of the Notice Period. The Company shall, in
such event, pay to the Employee an amount equal to the difference between what
the Employee would have received had the employment of the Employee been
continued for the Notice Period and the amount actually paid by the Company to
the Employee during the Notice Period. In the event the Employee provides such
notice to the Company, the “Date
of Termination”
shall mean the last day on which the Employee works for the Company.

 

ARTICLE 7 

NON-COMPETITION

 

7.1                                 During the term of this Agreement and for six
(6) months following the termination of this Agreement, the Employee will not,
within Canada, the United States or Europe, without the written consent of the
Company:

 

6

 

(a)                                  own or
have any interest directly in, save and except for an interest of less than 5%
in a publicly traded company;

 

(b)                                 act as an
officer, director, agent, employee or consultant of; or

 

(c)                                  assist in
any way or in any capacity,

 

any person, firm, association, syndicate,
partnership, joint venture, collaboration, corporation or other entity that is
engaged in a business that is substantially similar to or that competes with
the Business.

 

7.2                                 The term “Business”
as used in this Agreement means the development and commercialization of the
Technology as defined in the Article 10 hereof and such other business plans as
approved by the Board from time to time and which are in effect on the Date of
Termination of this Agreement.

 

ARTICLE 8 

NON-SOLICITATION

 

8.1                                 The Employee will not, for a
period of six (6) months from the Date of Termination of this Agreement:

 

(a)                                  directly
or indirectly, either personally, through an agent or by letters, circulars or
advertisements, contact for the purpose of solicitation or actually solicit any
person, firm, association, syndicate, joint venture, collaboration,
corporation, business entity or crown corporation who/which is or was a
customer of the Company on or at any time within the 12 months before the Date
of Termination of this Agreement, or who was scheduled to become a customer of
the Company within twelve months prior to the Date of Termination of this
Agreement;

 

(b)                                 induce or
attempt to induce any person:

 

(i)                                     who was an
employee of the Company at the Date of Termination of this Agreement; or

 

(ii)                                  who has
been, during the twelve months before the Date of Termination, an employee of
the Company;

 

to leave the employ
of the Company, whether to join the Employee in a similar enterprise or
otherwise; or

 

(c)                                  either
directly or indirectly, solicit, divert or take away any staff, temporary
personnel, trade, or business from the Company, or otherwise compete for
accounts or personnel which become known to him through his relationship with
the Company and agrees not to influence or attempt to influence any of the
Company’s customers, suppliers, or resellers or personnel not to do business
with the Company or take any action which may be reasonably foreseen to result
in harm to the Company.

 

7

 

ARTICLE 9 

CONFIDENTIALITY

 

Delivery of
Records

 

9.1                                 Any and all computer code, data,
notes, diagrams, reports, notebook pages, memoranda, and like materials,
including Confidential Information, as defined in Article 9.3 below, received
from or developed for the Company and any copies or excerpts thereof shall
remain the property of the Company. Upon the termination of the Employee’s
relationship with the Company as established under this Agreement, or at any
time during the term hereof at the request of the Company, the Employee shall
deliver to the Company all such materials and other property belonging to the
Company or developed in connection with the Business.

 

Confidentiality

 

9.2                                 In the course of carrying out and
performing his duties and responsibilities to the Company, the Employee shall
obtain access to and be entrusted with Confidential Information, as defined in
Article 9.3 below, relating to the Business.

 

9.3                                 The term “Confidential
Information” as used in this Agreement means all trade secrets,
proprietary information and other data or information (and any tangible
evidence, record or representation thereof), whether prepared, conceived or
developed by an employee or consultant of the Company or received by the
Company from an outside source which is maintained in confidence by the Company
or from any of its customers to obtain a competitive advantage over competitors
who do not have access to such trade secrets, proprietary information, or other
data or information. Without limiting the generality of the foregoing,
Confidential Information includes:

 

(a)                                  any ideas, improvements, know-how,
research, inventions, innovations, products, services, sales, scientific or
other formulae,  processes, methods,
machines, manufactures, compositions, 
procedures, tests, treatments, developments, technical data, designs,
devices, patterns, concepts, computer programs, computer code, creative
development, training or service manuals, plans for new or revised services or
products or other plans, items or strategy methods on compilation of
information, or works in process that relate to the Business, or that result
from its marketing, research and/or development activities;

 

(b)                                 any information relating to the
relationship of the Company with any clients, customers, suppliers, principals,
contacts or prospects of the Company and any information relating to the
requirements, specifications, proposals, orders, contracts or transactions of
or with any such clients, customers, suppliers, principals, contacts or
prospects of the Company, including but not limited to client lists;

 

(c)                                  any sales plan, marketing
material, plan or survey, business plan or opportunity, product or service
development plan or specification, business proposal or business agreement; and

 

(d)                                 any information relating to the
present or proposed Business.

 

8

 

9.4                                 The Employee agrees that the
Confidential Information is and will remain the exclusive property of the
Company. The Employee also agrees that the Confidential Information:

 

(a)                                  constitutes a proprietary right
which the Company is entitled to protect; and

 

(b)                                 constitutes information and
knowledge not generally known to the trade.

 

9.5                                 The Employee understands that the
Company has from time to time in its possession information belonging to others
or which is claimed by others to be confidential or proprietary and which the
Company has agreed to keep confidential. The Employee agrees that all such
information shall be Confidential Information for the purposes of this
Agreement.

 

9.6                                 For purposes of the copyright laws
of the United States of America, to the extent, if any, that such laws are
applicable to any Confidential Information, it shall be considered a work made
for hire and the Company shall be considered the author thereof.

 

9.7                                 The Employee acknowledges and
agrees that any Confidential Information disclosed to the Employee is in the
strictest confidence and the Employee agrees to maintain and hold in strict
confidence all Confidential Information disclosed to him. The disclosure of any
such Confidential Information by the Employee in any form whatsoever except (i)
as required in performance by the Employee of his duties hereunder and in furtherance
of the best interest of the Company, (ii) as authorized by the President
including under a non-disclosure agreement signed by the President, or (iii) as
permitted under Article 9.10 of this Agreement, is and shall be considered a
fundamental breach of this Agreement  and
shall entitle the Company to terminate immediately this Agreement without
further payment to the Employee.

 

9.8                                 Except in accordance with this Article 9, the
Employee shall not:

 

(a)                                  duplicate,
transfer, disclose or use nor allow any other person to duplicate, transfer or
disclose any of the Confidential Information; or

 

(b)                                 incorporate,
in whole or in part, within any domestic or foreign patent application that is
not for the benefit of the Company, any proprietary or Confidential
Information.

 

9.9                                 The Employee will safeguard all
Confidential Information to which the Employee has access at all times so that
it is not exposed to or used by unauthorized persons, and will exercise at
least the same degree of care that he would use to protect his own confidential
information.

 

9.10                           The restrictive obligations set
forth above shall not apply to the disclosure or use of any Confidential
Information which:

 

(a)                                  is or
later becomes publicly known under circumstances involving no breach of any
confidentiality provisions, including this Agreement by the Employee;

 

(b)                                 is already
known to the Employee outside his work for the Company under this Agreement, at
the time of receipt of the Confidential Information;

 

(c)                                  is
lawfully made available to the Employee by a third party; or

 

9

 

(d)                                 is
required by law to be disclosed but only to the extent of such requirement and
the Employee shall immediately notify in writing the President of the Company
upon receipt of any request for such disclosure.

 

9.11                          The term “Personal Information” means information about an
identifiable individual collected or created by the Company or its employees
in relation to the services they perform for the Company, but does not include the name, title,
business address, or business telephone number of an employee or consultant of the
Company.

 

9.12                          Unless the law
otherwise specifies or the
Companyotherwise
directs in writing, the Employee may only collect, create, use and disclose
Personal Information that is necessary for the performance of his employment
obligations, and must not collect, use or disclose Personal Information about
an individual without the consent of the individual to whom the information
relates.

 

9.13                          The Employee
agrees to protect all Personal Information collected or stored by him by taking
reasonable security measures, in accordance with the sensitivity of the
information in question, to protect it against unauthorized access by any other
party, and from unauthorized collection, use, disclosure, copying, modification
or disposal.

 

9.14                          The Employee
further agrees to comply with all applicable laws and Company policies and practices that relate to the collection, use, disclosure,
storage and disposal of Personal Information.

 

9.15                          The Employee
agrees to retain Personal Information until directed by the Company in writing to dispose of it or deliver it as specified in the
direction.

 

9.16                          The Employee agrees to immediately rectify,
delete or update Personal Information on receiving instructions to this effect
from the Company.

 

9.17                          The obligations of the parties under this Personal Information
provision will survive the termination of the Agreement.

 

ARTICLE 10

INTELLECTUAL PROPERTY

 

10.1                           As used in this Article 10, the following
words and phrases are defined as follows:

 

(a)           “UBC Licenses”
means the licenses entered into by the University of British Columbia and the
Company effective November 1, 2001, September 1, 2002 and April 5, 2005
which define the terms under which the Company has acquired an exclusive
license to certain technology.

 

(b)           “Technology”
means all ideas, concepts, business and trade names, trademarks, know-how,
trade secrets, inventions, improvements, devices, methods, processes and discoveries,
whether patentable or not, and whether or not reduced to writing or other
tangible form or to actual or constructive practice which either:  (i) are part
of the technology licensed to the Company under the UBC Licenses; or (ii) are
otherwise developed or acquired on behalf of or by the Company, including but
not

 

10

limited to
the technology licensed to the Company under the agreements with Isis
Pharmaceuticals.

 

10.2                           The Employee acknowledges and agrees that the
Company is currently engaged in the development and commercialization of the
Technology. In consideration of the Employee’s employment by the Company, the
Employee hereby transfers and assigns to the Company all intellectual property
rights, arising during the term of this Agreement in and to all ideas,
know-how, discoveries, inventions, documents or other information relating to
the Technology as well as any copyright and other rights in any designs, plans,
specifications, documents or other work relating to the Technology.

 

10.3                           The Employee agrees that any and
all ideas, discoveries, inventions and improvements (collectively, the “Inventions”) which he may conceive or make during the period
of his employment, either alone or jointly with others, whether or not reduced
to practice, relating or in any way appertaining to or connected with the
Technology shall be the sole and exclusive property of the Company. The
Employee will, whenever so requested by the Company, execute any and all
applications, assignments, and other instruments which the Company shall deem
necessary in order to apply for and obtain letters patent of Canada or foreign
countries for said Inventions or for any other reason.

 

10.4                           The Employee further acknowledges
and agrees that all copyright and other rights in any designs, plans,
specifications, documents or other work (“Work”) he
creates during the period of his employment with the Company, whether or not
such Work is created in the course of his employment, relating to the
Technology or to the Business, shall be the sole and exclusive property of the
Company. The Employee hereby assigns all such rights to the Company. The
Employee will, whenever so requested by the Company, execute any and all
applications, assignments, and other instruments which the Company shall deem
necessary in order to apply for and obtain registration of copyright in any
Work in Canada or foreign countries.

 

10.5                           The Employee waives all moral rights or
author’s rights in any Work he may create during the period of his employment
with the Company.

 

10.6                           At the commencement of his
employment, and at all times during the term of this Agreement, the Employee
will promptly disclose to the Company in writing and in full and enabling
detail, all Inventions he has conceived or created, whether in the course of
his employment or otherwise, relating to the Business.

 

10.7                           The foregoing obligations shall continue beyond the termination of the
term of this Agreement with respect to any and all Inventions or Work conceived
or made by the Employee during the term hereof or otherwise assigned by the
Employee to the Company and shall be binding on the Employee’s assigns,
executors, administrators or other legal representatives.

 

ARTICLE 11

MISCELLANEOUS

 

11.1                           This Agreement shall be the whole and
complete agreement between the parties hereto with respect to the employment of
the Employee; it replaces and supersedes any and all previous verbal or written
agreements that may have been entered into between the parties hereto. This
Agreement may not be amended or modified except by written amendment signed
between the parties hereto.

 

11

 

11.2                           In the event that any part of this Agreement
shall be determined at any time to be invalid, such provisions shall be deemed
severable and deleted herefrom and the remainder of this Agreement shall
constitute the whole agreement of the parties hereto and shall, except as
hereinbefore provided, continue in full force and effect.

 

11.3                           The Employee hereby confirms that he is not a
party to any agreement or under any other obligation to anyone, including any
former employer, nor does the Employee have any other interest which is
inconsistent with or in conflict with or which would prevent, limit or impair
the Employee’s performance of any obligations hereunder which the Employee has
not disclosed in writing to the Company. The Employee acknowledges that the
Company is not requesting the Employee disclose any confidential information
which the Employee may have obtained from a former employer.

 

11.4                           The Employee acknowledges that a breach by
the Employee of any of the covenants contained in Articles 7, 8, 9 and 10 of
this Agreement shall result in damages to the Company and that the Company could
not be adequately compensated for such damages by a monetary award. Accordingly,
in the event of any such breach, in addition to all other remedies available to
the Company at law or in equity, the Company shall be entitled as a matter of
right to apply to a court of competent jurisdiction for such relief by way of
restraining order, temporary or permanent injunction, decree or otherwise, as
may be appropriate to ensure compliance with the provisions of this Agreement.

 

11.5                           The Employee acknowledges that the
restrictions contained in Articles 7, 8, 9 and 10 are reasonable and valid and
the Employee hereby waives all defences to the strict enforcement thereof by
the Company.

 

11.6                           The Employee acknowledges that he
has had the opportunity to receive independent legal advice regarding the
execution of this Agreement and that he understands the contents of this
agreement and that he is executing the same voluntarily and without pressure
from the Company or anyone on its behalf.

 

11.7                           This Agreement shall enure to the benefit of and be binding upon the
parties hereto, their respective successors, heirs, representatives,
administrators and the assigns of the Company. The Employee shall not assign or
transfer this Agreement or any of his rights or obligations hereunder.

 

11.8                           The provisions of Articles 7, 8, 9, 10 and 11 shall survive the
termination of this Agreement.

 

11.9         Any
amount payable under this Agreement shall be paid in Canadian currency.

 

11.10                     This Agreement shall be governed by and construed according to the laws
of the Province of British Columbia, and both parties hereto hereby agree that
the Courts of the Province of British Columbia have exclusive jurisdiction in
any dispute, action, cause or action or otherwise that may arise from this
Agreement.

 

11.11                     Any notice or other communication or writing
required or permitted to be given under this Agreement or for the purposes of
this Agreement shall be in writing and shall be sufficiently given if delivered
personally, or if transmitted by facsimile transmission (with original to
follow by mail) or other form of recorded communication, tested prior to
transmission, to:

 

12

 

(a)                                  if to the Company:

 

400, 1001 West
Broadway

Vancouver, British
Columbia V6H 4B1

	
  Telephone:

  	
   

  	
  604-736-3678

  
	
  Facsimile:

  	
   

  	
  604-736-3687

  
	
  Attention:

  	
   

  	
  the President

  

 

(b)                                 if to the Employee:

Steve Anderson

[***]

 

or to such other address as
the party to whom such notice is to be given shall have last notified the party
giving the same in the manner provided in this Article. Any notice so delivered
shall be deemed to have been given and received on the day it is so delivered
at such address, provided that such day is not a Business Day then the notice
shall be deemed to have been given and received on the Business Day next
following the day it is so delivered. Any notice so transmitted by facsimile
transmission or other form of recorded communication shall be deemed to have
been given and received on the day of its confirmed transmission (as confirmed
by the transmitting medium), provided that if such day is not a Business Day
then the notice shall be deemed to have been given and received on the Business
Day next following such day. “Business Day”
means any day that is not a Saturday, Sunday or civic or statutory holiday in
the Province of British Columbia;

 

11.12                     No amendment or waiver of any provision of
this Agreement shall be binding on any party unless consented to in writing by
such party and approved by the Board in the case of the Company. No waiver of
any provision of this Agreement shall constitute a waiver of any other
provision nor shall any waiver constitute a continuing waiver unless otherwise
provided.

 

IN WITNESS WHEREOF this Agreement has been executed this 9th day of January, 2006 by the
parties hereto.

 

	
  SIGNED,
  SEALED AND DELIVERED

  	
  )

  	
   

  
	
  in
  the presence of

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  
	
  /s/
  Sandra Thomson

  	
   

  	
  )

  	
  /s/
  Stephen Anderson

  	
   

  
	
  Witness

  	
  )

  	
  STEPHEN
  ANDERSON

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ONCOGENEX TECHNOLOGIES INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Scott Cormack

  	
   

  
					

 

13

 

APPENDIX A

 

ONCOGENEX TECHNOLOGIES INC.

 

Bonus Plan – Milestones

 

Medium
Term (3 Year) Corporate Objectives:

 

Recognizing
that our primary objective, above all else, is to improve the survival and quality of the lives of cancer patients through
rapid and efficient development of cancer therapies, and that by doing
so all stakeholders will benefit, OncoGenex is striving to achieve the
following value-creating milestones before the end of [***]:

 

1.                                       Complete at least 5 phase II
clinical studies in which OGX-011 is combined with different therapeutic agents
in various stages and types of malignancies, in order to (1) demonstrate that OGX-011 has a broad market
opportunity across a variety of solid tumours (2) provide sufficient proof of
efficacy to justify continued development of OGX-011 (3) initiate at least one
phase III clinical study in [***], and (4) justify an accelerated regulatory
strategy if the data supports an early filing. To meet this objective, all patients
in the 4 trials initiated in 2005 must be accrued by the end of [***](1), such
that the data has sufficient time to mature after last-treatment in the last
patient. Further, the 5th Phase II trial must be initiated by the
end of [***], with accrual completed in [***]. Data integrity is also of
primary importance, as our clinical data must stand up to scrutiny by
regulatory agencies as well as investors and potential partners for OGX-011.

 

2.                                       Complete 2 phase I studies in
which OGX-427 is evaluated as a single-agent or in combination with different
therapeutic agents, in order
to (1) define the dose-limiting toxicity of OGX-427 when administered as a
single-agent or in combination, and (2) treat first patient in at least 1 phase
II study in [***]. To meet this objective, the first patient in the phase I
studies must be treated by [***] and all patients in the Phase I trials must be
accrued by [***], such that the data has sufficient time to mature after
last-treatment in the last patient. Data integrity is also of primary
importance, as our clinical data must stand up to scrutiny by regulatory
agencies as well as investors and potential partners for OGX-427.

 

3.                                       Sign a [***] or [***] in respect of [***] which will help ensure a broad-based
product development and registration strategy and rapid commercialization of
[***], and which provides significant economic return to the Company’s
investors.

 

4.                                       Continue to build OncoGenex’
product pipeline. The
Company will continue to assess in-licensing opportunities and to advance its
existing product candidates through pre-clinical research in order to ensure a
steady pipeline of near-term clinical candidates. A system of applying
predetermined assessment and selection criteria for new product opportunities
will be developed to streamline the review process.

 

5.                                       Build the financial resources and
opportunities of the Company
such that the above objectives can be met without undue interruption or delay
and to allow the Company to finance the ongoing development and commercialization
of its products. This objective will be accomplished through one or more of the
following routes: merger or acquisition; private placement; corporate
partnership; or, Initial Public Offering. Since

 

corporate
governance is crucial to all of the proposed scenarios and is becoming
increasingly important, the Company will expand its policies and procedures
related to attaining transparent and exemplary disclosure of financial and
non-financial information and will implement best practices in shareholder
communication.

 

(1)
Assumes that only stage 1 of study 011-04 is completed. Relates only to
completion of stage 1 of Study 011-06 – full study will be [***] complete by the end of [***].

 

Short
Term (2006) Corporate Objectives:

 

Any Bonus paid will be allocated to the
achievement of particular milestones and overall performance as follows:

 

A.                                   Up to 60%
of Bonus based on the Company’s achievement of the following 2006 Corporate
Objectives:

 

1.                                       Complete accrual of the Phase II
clinical development of OGX-011. We will measure our success by our ability to meet the following
targets:

 

1.1.           OGX-011-03: 
Accrue 40% of trial by end of [***]; Accrue 66% of trial by end of
[***]; Accrue 92% of trial by end of [***]; Complete accrual of trial by [***];
Prepare and submit abstract by [***] for [***].

 

1.2.           OGX-011-04: Resume accrual by April 2006; Complete
accrual of stage 1 by [***]; Make Go/No Go decision to proceed with stage II by
[***].

 

1.3.           OGX-011-05: Accrue 67% of trial by end of [***];
Complete stage I safety review and preliminary response review by [***];
Complete accrual of trial by end of [***]; Prepare and submit abstract by
[***]for [***].

 

1.4.           OGX-011-06: Complete stage I accrual by end of [***];
Make Go/No Go Decision to proceed with stage II by [***]; Resume accrual for
stage II (if proceeding) by [***]; Accrue 74% of trial by end of [***] (if
proceeding through stage II).

 

1.5.           OGX-011-07: File CTA and IND submission by [***];
Initiate accrual by end of [***]; Accrue 42% of trial by end of [***].

 

1.6.           Determine
manufacturing site for 1 batch of API by [***]; Complete manufacturing of 1
batch of OGX-011 API at chosen manufacturer by end of [***].

 

2.                                       Complete the preparation of
OGX-427 for Phase I studies and initiate the phase I clinical development. We will measure our success by our ability
to meet the following targets:

 

2.1.           Complete
murine and primate toxicology studies by [***]; Complete manufacture of drug
product for Phase I studies by [***]; File IND and CTA by [***].

 

3.                                       Garner significant interest from
potential partners for [***]
by [***], as measured by:

 

3.1.           Completing
comprehensive, face-to-face scientific presentations in respect of the
pre-clinical and clinical data for [***] with no less than [***] potential
commercial partners; or

 

2

 

3.2.           Signing
at least 2 material transfer agreements with potential commercial partners, in
order that such third parties can evaluate the compound in their own labs.

 

4.                                       Strengthen the pipeline of
additional product candidates
by:

 

4.1.           Expanding
the pre-clinical pharmacological data in support of advancing OGX-225 into
clinical development.

 

4.2.           Develop
assessment criteria for more efficient and objective assessments regarding new
products, and communicate criteria to potential licensors via our web site and
other means.

 

5.                                       Implement corporate governance
practices that ensure transparent and exemplary disclosure of financial and
non-financial information and that reflect best practices in shareholder
communication. In the course
of these efforts, we will:

 

5.1.           Develop
a list of policies and procedures needed to meet (or exceed) governance
standards for publicly traded companies by Q2/06, including enhanced financial
reporting, enhanced internal processes and controls, and a process to identify
and communicate material changes.

 

5.2.           Implement
corporate governance policies and procedures by the end of [***].

 

6.                                       Facilitate meeting all of our 3
year corporate objectives by increasing public awareness of the Company among
potential investors, underwriters, collaborators, development partners,
clinical investigators and patients, through:

 

6.1.           Strategic
use of media relations and press releases; participation in targeted
scientific, business development and/or investor conferences; creation of, or
participation in, patient and/or clinician outreach and education
opportunities; and general community involvement / networking. Success will be
measured by, among other things, monitoring the publication of news stories,
website hits, etc.

 

B.                                     Up to 30%
of Bonus based on the Employee’s achievement of the following 2006 Personal
Objectives:

 

1.                                       Personal
Objectives for 2006 will be established by January 31, 2006 and appended to
this Agreement.

 

C.            Up
to 10% of Bonus based on the Employee’s performance as determined by the team under the 360 Performance Review.

 

3

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