Document:

LORUS THERAPEUTICS INC.

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

for

 

AVANISH VELLANKI

 

This Executive Employment
Agreement (the “Agreement”), made between Lorus Therapeutics
Inc. (the “Company”) and Avanish Vellanki (“Executive”) (together, the “Parties”),
is effective as of November 29th, 2013 (the “Effective Date”). From and following the
Effective Date, this Agreement shall replace and supersede that certain Consulting Services Agreement between Executive and the
Company entered into as of November 4, 2013 (the “Consulting Agreement”); provided that, Executive
will retain the right to receive all consulting fees earned as of the Effective Date, pursuant to the terms of the Consulting
Agreement.

 

Whereas,
the Company desires for Executive to provide services to the Company, and wishes to provide Executive with certain compensation
and benefits in return for such employment services; and

 

Whereas,
Executive wishes to be employed by the Company and to provide personal services to the Company in return for certain compensation
and benefits;

 

Now, Therefore,
in consideration of the mutual promises and covenants contained herein and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Parties hereto agree as follows:

 

		1.	Employment by the Company.

 

1.1        Position.
Executive shall serve as the Company’s Chief Business
Officer. During the term of Executive’s employment with the Company, Executive will devote Executive’s best efforts
and substantially all of Executive’s business time and attention to the business of the Company, except for approved vacation
periods and reasonable periods of illness or other incapacities permitted by the Company’s general employment policies.

 

1.2        Duties
and Location. Executive shall perform such duties as are required
by the Company’s Chief Executive Officer, to whom Executive will report. Executive’s primary office location shall
be the Company’s California office. The Company reserves the right to reasonably require Executive to perform Executive’s
duties at places other than Executive’s primary office location from time to time, and to require reasonable business travel.
The Company may modify Executive’s job title and duties as it deems necessary and appropriate in light of the Company’s
needs and interests from time to time.

 

1.3        Policies
and Procedures. The employment relationship between the Parties
shall be governed by the general employment policies and practices of the Company, except that when the terms of this Agreement
differ from or are in conflict with the Company’s general employment policies or practices, this Agreement shall control.

 

    	1.

    	 

    

 

		2.	Compensation.

 

2.1        Salary.
For services to be rendered hereunder, Executive shall receive
a base salary at the rate of U.S. $250,000 per year (the “Base Salary”), which Base Salary will
be increased to the rate of $315,000 per year effective as of the closing of the Second Financing (as defined in Section 5.2 herein).
The Base Salary will be subject to standard payroll deductions and withholdings and payable in accordance with the Company’s
regular payroll schedule.

 

2.2        Bonus.
Executive will be eligible for an annual discretionary bonus
of up to forty percent (40%) of Executive’s then current Base Salary (the “Annual Bonus”).
Whether Executive receives an Annual Bonus for any given fiscal year, and the amount of any such Annual Bonus, will be determined
in the good faith discretion of the Company’s Board of Directors (“Board”),
based upon the Company’s and Executive’s achievement of objectives and milestones to be determined on an annual
basis by the Board. Executive must remain an active employee through the end of any given fiscal year in order to earn an Annual
Bonus for that fiscal year, and any such bonus will be paid prior to the fifteenth (15th) day of the third (3rd)
month following the close of the Company’s fiscal year in which Executive’s right to such amount became vested. Except
as otherwise provided in Section 6.2 herein, Executive will not be eligible for, and will not earn, any Annual Bonus (including
a prorated bonus) if Executive’s employment terminates for any reason before the end of the fiscal year.

 

3.          Standard
Company Benefits. Executive shall, in accordance with Company
policy and the terms and conditions of the applicable Company benefit plan documents, be eligible to participate in the benefit
and fringe benefit programs provided by the Company to its U.S. based executive officers and other employees from time to time.

 

4.          Expenses.
The Company will reimburse Executive for reasonable travel,
entertainment or other expenses incurred by Executive in furtherance or in connection with the performance of Executive’s
duties hereunder, in accordance with the Company’s expense reimbursement policy as in effect from time to time. Specifically,
Executive will be reimbursed for the cost of any business visitor visas necessary for the performance of his duties while employed
by the Company.

 

5.          Equity.
Pursuant to the Consulting Agreement, Executive was eligible
to receive grants of options to acquire a total of 1,275,000 common shares of the Company (collectively, the “Option”).
Executive acknowledges that he has already received a grant of the first tranche of the Option (for 425,000 shares) from the Company,
which were granted and became fully vested and exercisable on November 4, 2013 (the “First Tranche”).
Notwithstanding the termination of the Consulting Agreement, and in addition to the First Tranche, Executive shall be eligible
to receive grants of the remaining portions of the Option on the following terms:

 

5.1        Second
Tranche. Subject to approval by the Board, and contingent
upon Executive’s continued services through the closing of a bridge financing of the Company of at least U.S. $4 million
(the “First Financing”), within two (2) days following the closing of the First Financing, Executive
shall be granted an option to purchase 425,000 common shares of the Company with an exercise price equal to the fair market value
of the common shares on the date of grant (the “Second Tranche”). The Second Tranche shall
be governed in all respects by the terms of the Company’s Share Option Plan and its standard form of Stock Option Agreement,
and shall vest over 36 months from the date of grant in 36 equal monthly installments, subject to Executive’s continued
services through each vesting date.

 

    	2.

    	 

    

 

5.2        Third
Tranche. Subject to approval by the Board, and contingent
upon Executive’s continued services through the closing of a financing by the Company of at least U.S. $17 million (the
“Second Financing”), within two (2) days following the closing of the Second Financing, Executive
shall be granted an option to purchase 425,000 common shares of the Company with an exercise price equal to the fair market value
of the common shares on the date of grant (the “Third Tranche”). The Third Tranche shall be governed
in all respects by the terms of the Company’s Share Option Plan and its standard form of Stock Option Agreement, and shall
vest over 36 months from the date of grant in 36 equal monthly installments, subject to Executive’s continued services through
each vesting date.

 

		6.	Termination
of Employment; Severance.

 

6.1        At-Will
Employment. Executive’s employment relationship is at-will.
Either Executive or the Company may terminate the employment relationship at any time, with or without Cause (as defined below)
or advance notice.

 

6.2        Termination
Without Cause; Resignation for Good Reason.

 

(i)         The
Company may terminate Executive’s employment with the Company at any time without Cause. Further, Executive may resign at
any time for Good Reason (as defined below).

 

(ii)        In
the event Executive’s employment with the Company is terminated by the Company without Cause, or Executive resigns for Good
Reason, then provided such termination constitutes a “separation from service” (as defined under Treasury Regulation
Section 1.409A-l(h), without regard to any alternative definition thereunder, a “Separation from Service”),
and provided that Executive satisfies the Release Requirement in Section 7 herein, and remains in compliance with the
terms of this Agreement, the Company shall provide Executive with the following “Severance Benefits”:

 

(a)        Either
(a) a lump sum cash payment equal to Executive’s annual Base Salary at the time of employment termination (without giving
effect to any reduction in Base Salary that would give Executive the right to resign for Good Reason), to be paid by the Company
on the first payroll period following the Effective Date of the Release, less applicable deductions and withholdings, (the “Lump
Sum Payment”); or (b) if the Company, in the good faith discretion of the Board, is unable to make the Lump
Sum Payment at the time of employment termination due to a lack of sufficient operating funds, an amount equal to Executive’s
annual Base Salary (without giving effect to any reduction in Base Salary that would give Executive the right to resign for Good
Reason) to be paid in substantially equal installments on a monthly basis during the nine (9) month period following the employment
termination date (the “Monthly Installment Payments”); provided that, in each case, any payments scheduled
to be made prior to the Effective Date of the Release shall instead accrue and be paid in a single lump sum during the first payroll
period following the Effective Date of the Release. Notwithstanding the foregoing, the Company may elect to make the Monthly Installment
Payments in lieu of the Lump Sum Payment only if an exemption is available from application of Section 409A of the Code with respect
to such payments so that such payment schedule will not result in adverse tax consequences to Executive under Section 409A of
the Internal Revenue Code of 1986, as amended (the “Code”) and the regulations and other guidance thereunder
and any state law of similar effect (collectively “Section 409A”).

 

    	3.

    	 

    

 

(b)        Either
(a) a lump sum cash payment in an amount equal to the average of the Annual Bonus payment Executive received from the Company
during the last three years of employment completed prior to the year of the employment termination, pro rated based on the number
of days Executive worked during the fiscal year of the employment termination, divided by 365 (the “Severance Bonus
Payment”), to be paid by the Company on the first payroll period following the Effective Date of the Release,
less applicable deductions and withholdings (the “Lump Sum Bonus Payment”); or (b) if
the Company, in the good faith discretion of the Board, is unable to make the Lump Sum Bonus Payment at the time of employment
termination due to a lack of sufficient operating funds, an amount equal to Executive’s Severance Bonus Payment to be paid
in substantially equal installments on a monthly basis during the nine (9) month period following the employment termination date
(the “Monthly Installment Bonus Payments”); provided
that, in each case, any payments scheduled to be made prior to the Effective Date of the Release shall instead accrue and be paid
in a single lump sum during the first payroll period following the Effective Date of the Release. Notwithstanding the foregoing,
the Company may elect to make the Monthly Installment Bonus Payments in lieu of the Lump Sum Bonus Payment only if an exemption
is available from application of Section 409A of the Code with respect to such payments so that such payment schedule will not
result in adverse tax consequences to Executive under Section 409A of the Code.

 

(c)        If
the Company has previously established a group health plan in which Executive participates prior to Executive’s termination
and Executive timely elects COBRA coverage following any such termination, the Company will pay Executive for the full amount
of such COBRA premiums for himself and his covered dependants (on a monthly basis) for a period of up to twelve (12) months following
the date of termination; provided, that, if and to the extent that any benefit described in this Section 6.2(ii)(c) is
not or cannot be paid or provided under any Company plan or program without penalties or adverse tax consequences to the Company
or for any other reason, as determined by the Company in its sole discretion, then the Company shall pay Executive a fully taxable
cash payment equal to the COBRA premium for that month, subject to applicable tax withholding premiums for a period of up to twelve
(12) months following the date of termination; provided, further, that the COBRA payments or, if applicable, the taxable
monthly payment discussed above, shall terminate on the earliest to occur of (A) the close of the 12-month period following the
termination of Executive’s employment; (B) the expiration of Executive’s (or Executive’s dependents’)
eligibility for continuation coverage under COBRA; and (C) the date when Executive becomes eligible for group health insurance
coverage in connection with new employment or self-employment. If Executive becomes eligible for coverage under another employer’s
group health plan or otherwise ceases to be eligible for COBRA coverage during the period provided in this Section 6.2(ii)(c),
Executive must immediately provide written notice to the Company of such event, and the Company-provided COBRA payments, or if
applicable, the monthly payments under this Section 6.2(ii)(c) shall immediately cease.

 

    	4.

    	 

    

 

(iii)       Furthermore,
in the event Executive’s employment with the Company is terminated by the Company pursuant to Section 6.2(ii), in either
case, within three (3) months immediately preceding or twelve (12) months immediately following the consummation of a Change in
Control (as defined below), in lieu of (and not additional to) the severance benefits described in Section 6.2(ii), and provided
that Executive satisfies the Release Requirement in Section 7 herein and remains in compliance with the terms of this Agreement,
the Company shall instead provide Executive with the following benefits (the “Change in Control Severance Benefits”).
For the avoidance of doubt: (A) in no event will Executive be entitled to severance benefits under Section 6.2(ii) and this
Section 6.2(iii), and (B) if the Company has commenced providing severance benefits to Executive under Section 6.2(ii) prior to
the date that Executive becomes eligible to receive Change in Control Severance Benefits under this Section 6.2(iii), the benefits
previously provided to Executive under Section 6.2(ii) of this Agreement shall reduce the severance benefits provided under this
Section 6.2(iii):

 

(a)        Either
(a) a lump sum cash payment equal to eighteen (18) months of Executive’s annual Base Salary at the time of employment
termination (without giving effect to any reduction in Base Salary that would give Executive the right to resign for Good Reason),
to be paid by the Company on the first payroll period following the Effective Date of the Release, less applicable deductions
and withholdings (the “Lump Sum CIC Payment”); or (b) if the Company, in the good faith discretion of
the Board, is unable to make the Lump Sum Payment at the time of employment termination due to a lack of sufficient operating
funds, an amount equal to eighteen (18) months of Executive’s annual Base Salary (without giving effect to any reduction
in Base Salary that would give Executive the right to resign for Good Reason) to be paid in substantially equal installments on
a monthly basis during the nine (9) month period following the employment termination date, less applicable deductions and withholdings
(the “Monthly CIC Installment Payments”); provided that, in each case, any payments scheduled to be
made prior to the Effective Date of the Release shall instead accrue and be paid in a single lump sum during the first payroll
period following the Effective Date of the Release. Notwithstanding the foregoing, the Company may elect to make the Monthly CIC
Installment Payments in lieu of the Lump Sum CIC Payment only if an exemption is available from application of Section 409A of
the Code with respect to such payments so that such payment schedule will not result in adverse tax consequences to Executive
under Section 409A of the Code.

 

(b)        Either
(a) a lump sum cash payment in an amount equal to 150% of the average of the Annual Bonus payment Executive received from the
Company during the last three years of employment completed prior to the year of the employment termination, pro-rated based on
the number of days Executive worked during the fiscal year of the employment termination, divided by 365 (the “C/C
Bonus Payment”), to be paid by the Company on the first payroll period following the Effective Date of the
Release, less applicable deductions and withholdings, (the “Lump Sum CIC Bonus Payment”); or
(b) if the Company, in the good faith discretion of the Board, is unable to make the Lump Sum CIC Bonus Payment at the time of
employment termination due to a lack of sufficient operating funds, an amount equal to Executive’s CIC Bonus Payment to
be paid in substantially equal installments on a monthly basis during the nine (9) month period following the employment termination
date, less applicable deductions and withholdings (the “Monthly CIC Installment
Bonus Payments”); provided that, in each case, any payments scheduled to be made prior to the Effective Date of
the Release shall instead accrue and be paid in a single lump sum during the first payroll period following the Effective Date
of the Release. Notwithstanding the foregoing, the Company may elect to make the Monthly CIC Installment Bonus Payments in lieu
of the Lump Sum CIC Bonus Payment only if an exemption is available from application of Section 409A of the Code with respect
to such payments so that such payment schedule will not result in adverse tax consequences to Executive under Section 409A of
the Code.

 

    	5.

    	 

    

 

(c)        If
the Company has previously established a group health plan in which Executive participates prior to Executive’s termination
and Executive timely elects COBRA coverage following any such termination, the Company will pay Executive for the full amount
of such COBRA premiums for himself and his covered dependants (on a monthly basis) for a period of up to twelve (12) months following
the date of termination; provided, that, if and to the extent that any benefit described in this Section 6.2(ii)(c) is
not or cannot be paid or provided under any Company plan or program without penalties or adverse tax consequences to the Company
or for any other reason, as determined by the Company in its sole discretion, then the Company shall pay Executive a fully taxable
cash payment equal to the COBRA premium for that month, subject to applicable tax withholding premiums for a period of up to twelve
(12) months following the date of termination; provided, further, that the COBRA payments or, if applicable, the monthly
payment discussed above, shall terminate on the earliest to occur of (A) the close of the 12-month period following the termination
of Executive’s employment; (B) the expiration of Executive’s (or Executive’s dependents’) eligibility
for continuation coverage under COBRA; and (C) the date when Executive becomes eligible for group health insurance coverage in
connection with new employment or self-employment. If Executive becomes eligible for coverage under another employer’s group
health plan or otherwise ceases to be eligible for COBRA coverage during the period provided in this Section 6.2(iii)(c), Executive
must immediately provide written notice to the Company of such event, and the Company- provided COBRA payments, or if applicable,
the monthly payments under this Section 6.2(iii)(c) shall immediately cease.

 

(d)        Notwithstanding
anything to the contrary set forth in the Company’s Share Option Plan or form of award agreement, effective as of Executive’s
employment termination date, the vesting and exercisability of all then outstanding unvested stock options, restricted shares or
other equity awards then held by Executive shall accelerate such that all shares become immediately vested and exercisable, if
applicable, by Executive upon such termination and shall remain exercisable, if applicable, following Executive’s termination
as set forth in the applicable equity award documents.

 

6.3        Termination
for Cause; Resignation Without Good Reason; Death or Disability.

 

(i)         The
Company may terminate Executive’s employment with the Company at any time for Cause. Further, Executive may resign at any
time without Good Reason. Executive’s employment with the Company may also be terminated due to Executive’s death or
disability.

 

    	6.

    	 

    

 

(ii)        If
Executive resigns without Good Reason, or the Company terminates Executive’s employment for Cause, or upon Executive’s
death or disability, then (i) Executive will no longer vest in the Option, (ii) all payments of compensation by the Company to
Executive hereunder will terminate immediately (except as to amounts already earned), and (c) Executive
will not be entitled to any severance benefits, including (without limitation) the Severance Benefits and Change in Control Benefits
listed in Sections 6.2(ii) and 6.2(iii). In addition, Executive shall resign from all positions and terminate any relationships
as an employee, advisor, officer or director with the Company and any of its affiliates, each effective on the date of termination.

 

7.          Conditions
to Receipt of Severance Benefits and Change in Control Severance Benefits. Notwithstanding
the foregoing, to be eligible for any of the Severance Benefits or Change in Control Severance Benefits, on or within thirty (30)
days following the termination of employment, Executive must satisfy the requirement (the “Release
Requirement”) to return to the Company a signed and dated general release of all known and unknown claims in a form
acceptable to the Company (the “Release and Waiver”)
and allow that Release and Waiver to become effective in accordance with its terms (such date, the “Effective
Date of the Release”). No Severance Benefits or Change in Control Severance Benefits will be paid hereunder
prior to the Effective Date of the Release. Accordingly, if Executive breaches the preceding sentence and/or refuses to sign and
deliver to the Company an executed Release and Waiver or signs and delivers to the Company the Release and Waiver but exercises
his right, if any, under applicable law to revoke the Release and Waiver (or any portion thereof), then Executive will not be
entitled to any severance, payment or benefit under this Agreement.

 

8.          Section
409A. It is intended that all of the severance benefits and
other payments payable under this Agreement satisfy, to the greatest extent possible, the exemptions from the application of Code
Section 409A provided under Treasury Regulations 1.409A-1(b)(4), 1.409A-1(b)(5)
and 1.409A-1(b)(9), and this Agreement will be construed to the greatest extent possible as consistent with those provisions,
and to the extent no so exempt, this Agreement (and any definitions hereunder) will be construed in a manner that complies with
Section 409A. For purposes of Code Section 409A (including, without limitation, for purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii)),
Executive’s right to receive any installment payments under this Agreement (whether severance payments, reimbursements or
otherwise) shall be treated as a right to receive a series of separate payments and, accordingly, each installment payment hereunder
shall at all times be considered a separate and distinct payment. Notwithstanding any provision to the contrary in this Agreement,
if Executive is deemed by the Company at the time of Executive’s Separation from Service to be a “specified employee”
for purposes of Code Section 409A(a)(2)(B)(i), and if any of the payments upon Separation from Service set forth herein and/or
under any other agreement with the Company are deemed to be “deferred compensation”, then to the extent delayed commencement
of any portion of such payments is required in order to avoid a prohibited distribution under Code Section 409A(a)(2)(B)(i) and
the related adverse taxation under Section 409A, such payments shall not be provided to Executive prior to the earliest of (i)
the expiration of the six-month and one day period measured from the date of Executive’s Separation from Service with the
Company, (ii) the date of Executive’s death or (iii) such earlier date as permitted under Section 409A without the imposition
of adverse taxation. Upon the first business day following the expiration of such applicable
Code Section 409A(a)(2)(B)(i) period,
all payments deferred pursuant to this Paragraph shall be paid in a lump
sum to Executive, and any remaining payments due shall be paid as otherwise provided herein or in the applicable agreement. No
interest shall be due on any amounts so deferred. If the Company determines that any severance benefits provided under this Agreement
constitutes “deferred compensation” under Section 409A, for purposes of determining the schedule for payment of the
severance benefits, the effective date of the Release will not be deemed to have occurred any earlier than the sixtieth (60th)
date following the Separation From Service, regardless of when the Release actually becomes effective.

 

    	7.

    	 

    

 

		9.	Section
280G; Limitations on Payment.

 

9.1        If
any payment or benefit Executive will or may receive from the Company or otherwise (a “280G Payment”)
would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (ii) but for this sentence,
be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then
any such 280G Payment provided pursuant to this Agreement (a “Payment”) shall be equal to the Reduced
Amount. The “Reduced Amount” shall be either (x) the largest
portion of the Payment that would result in no portion of the Payment (after reduction) being subject to the Excise Tax or (y)
the largest portion, up to and including the total, of the Payment, whichever amount (i.e., the amount determined by clause (x)
or by clause (y)), after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise
Tax (all computed at the highest applicable marginal rate), results in Executive’s receipt, on an after-tax basis, of the
greater economic benefit notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction
in a Payment is required pursuant to the preceding sentence and the Reduced Amount is determined pursuant to clause (x) of the
preceding sentence, the reduction shall occur in the manner (the “Reduction Method”) that results in
the greatest economic benefit for Executive. If more than one method of reduction will result in the same economic benefit, the
items so reduced will be reduced pro rata (the “Pro Rata Reduction Method”).

 

9.2        Notwithstanding
any provision of section 9.1 to the contrary, if the Reduction Method or the Pro Rata Reduction Method would result in any portion
of the Payment being subject to taxes pursuant to Section 409A that would not otherwise be subject to taxes pursuant to Section
409A, then the Reduction Method and/or the Pro Rata Reduction Method, as the case may be, shall be modified so as to avoid the
imposition of taxes pursuant to Section 409A as follows: (A) as a first priority, the modification shall preserve to the greatest
extent possible, the greatest economic benefit for Executive as determined on an after-tax basis; (B) as a second priority, Payments
that are contingent on future events (e.g., being terminated without Cause), shall be reduced (or eliminated) before Payments
that are not contingent on future events; and (C) as a third priority, Payments that are “deferred compensation” within
the meaning of Section 409A shall be reduced (or eliminated) before Payments that are not deferred compensation within the meaning
of Section 409A.

 

9.3        Unless
Executive and the Company agree on an alternative accounting firm or law firm, the accounting firm engaged by the Company for general
tax compliance purposes as of the day prior to the effective date of the Change in Control transaction shall perform the foregoing
calculations. If the accounting firm so engaged by the Company is serving as accountant or auditor for the individual, entity or
group effecting the Change in Control transaction, the Company shall appoint a nationally recognized accounting or law firm to
make the determinations required by this section 10. The Company shall bear all expenses with respect to the determinations by
such accounting or law firm required to be made hereunder. The Company shall use commercially reasonable efforts to cause the accounting
or law firm engaged to make the determinations hereunder to provide its calculations, together with detailed supporting documentation,
to Executive and the Company within fifteen (15) calendar days after the date on which Executive’s right to a 280G Payment
becomes reasonably likely to occur (if requested at that time by Executive or the Company) or such other time as requested by Executive
or the Company.

 

    	8.

    	 

    

 

9.4        If
Executive receives a Payment for which the Reduced Amount was determined pursuant to clause (x) of Section 9.1 and the Internal
Revenue Service determines thereafter that some portion of the Payment is subject to the Excise Tax, Executive agrees to promptly
return to the Company a sufficient amount of the Payment (after reduction pursuant to clause (x) of Section 9.1) so that no portion
of the remaining Payment is subject to the Excise Tax. For the avoidance of doubt, if the Reduced Amount was determined pursuant
to clause (y) of Section 9.1, Executive shall have no obligation to return any portion of the Payment pursuant to the preceding
sentence.

 

		10.	Definitions.

 

10.1      Cause. For
purposes of this Agreement, “Cause” for termination will mean: (a) Executive’s commission of any felony or
commission of a crime involving dishonesty; (b) Executive’s participation in any fraud against the Company; (c)
material breach of Executive’s duties to the Company; (d) Executive’s persistent unsatisfactory performance of
job duties after written notice from the Board and a reasonable opportunity to cure (if deemed curable); (e)
Executive’s intentional damage to any property of the Company; (f) Executive’s misconduct, or other violation of
Company policy that causes harm; (g) breach of any written agreement between Executive and the Company; and (h) conduct by
Executive which in the good faith and reasonable determination of the Board demonstrates gross unfitness to serve.

 

10.2      Good
Reason. For purposes of this Agreement, Executive shall have
“Good Reason” for resignation from employment with the Company if any of the following actions are taken by the Company
without Executive’s prior written consent: (a) a material reduction in Executive’s Base Salary, unless pursuant to
a salary reduction program applicable generally to the Company’s senior executives; (b) a material reduction in Executive’s
duties (including responsibilities and/or authorities), provided, however, that a change in job position (including a change
in title) shall not be deemed a “material reduction” in and of itself unless Executive’s new duties are materially
reduced from the prior duties; or (c) relocation of Executive’s principal place of employment to a place that increases
Executive’s one-way commute by more than fifty (50) miles as compared to Executive’s then-current principal place
of employment immediately prior to such relocation. In order for Executive to resign for Good Reason, each of the following requirements
must be met: (i) Executive must provide written notice to the Company’s Chief Executive Officer within 30 days after the
first occurrence of the event giving rise to Good Reason setting forth the basis for Executive’s resignation, (ii) the Executive
must allow the Company at least 30 days from receipt of such written notice to cure such event, (iii) such event is not reasonably
cured by the Company within such 30 day period (the “Cure Period”),
and (iv) Executive must resign from all positions Executive then holds with the Company not later than 30 days after the
expiration of the Cure Period.

 

    	9.

    	 

    

 

10.3      Change
in Control. For purposes of this Agreement, “Change in
Control” shall mean the consummation of any of the following: (a) the acquisition of the Company by another entity by means
of any transaction or series of related transactions to which the Company is party (including, without limitation, any stock acquisition,
reorganization, merger or consolidation but excluding any sale of stock for capital raising purposes) other than a transaction
or series of transactions in which the holders of the voting securities of the Company outstanding immediately prior to such transaction
continue to retain (either by such voting securities remaining outstanding or by such voting securities being converted into voting
securities of the surviving entity), following such transaction, at least fifty percent (50%) of the total voting power represented
by the voting securities of the surviving entity outstanding immediately after such transaction or series of transactions; (b)
a sale, lease or other conveyance of all or substantially all of the assets of the Company; or (c) any liquidation, dissolution
or winding up of the Company, whether voluntarily or involuntarily. Notwithstanding the foregoing, the Company and Executive agree
that Change in Control does not include any reorganization, sale or plan of arrangement undertaken to move the domicile of the
Company to the U.S., pursuant to which the Company will become a wholly-owned subsidiary of a Delaware corporation.

 

		11.	Proprietary
Information Obligations.

 

11.1      Confidential
Information Agreement. As a condition of employment, Executive
shall execute and abide by the Company’s standard form of Employee Confidential Information and Inventions Assignment Agreement
(the “Confidentiality Agreement”).

 

11.2      Third-Party
Agreements and Information. Executive represents and warrants
that Executive’s employment by the Company does not conflict with any prior employment or consulting agreement or other agreement
with any third party, and that Executive will perform Executive’s duties to the Company without violating any such agreement.
Executive represents and warrants that Executive does not possess confidential information arising out of prior employment, consulting,
or other third party relationships, that would be used in connection with Executive’s employment by the Company, except as
expressly authorized by that third party. During Executive’s employment by the Company, Executive will use in the performance
of Executive’s duties only information which is generally known and used by persons with training and experience comparable
to Executive’s own, common knowledge in the industry, otherwise legally in the public domain, or obtained or developed by
the Company or by Executive in the course of Executive’s work for the Company.

 

		12.	Outside
Activities During Employment.

 

12.1      Non-Company
Business. Except with the prior written consent of the Board,
Executive will not during the term of Executive’s employment with the Company undertake or engage in any other employment,
occupation or business enterprise, other than ones in which Executive is a passive investor. Executive may engage in civic and
not-for-profit activities so long as such activities do not materially interfere with the performance of Executive’s duties
hereunder. Notwithstanding the foregoing, Executive may remain as Co-Founder and Executive Chairman of Independence Brewing Company
Pvt. Ltd, and the associated position of Manager of Indus Brew LLC, provided that such outside activities do not materially interfere
with the performance of Executive’s duties hereunder.

 

    	10.

    	 

    

 

12.2      No
Adverse Interests. Executive agrees not to acquire, assume
or participate in, directly or indirectly, any position, investment or interest known to be adverse or antagonistic to the Company,
its business or prospects, financial or otherwise.

 

13.          Tax
Equalization. The Company will provide Executive with tax equalization,
if applicable, to account for any tax liabilities above US tax liabilities, resulting from the performance of Executive’s
duties hereunder.

 

14.          Dispute
Resolution. To ensure the rapid and economical resolution
of disputes that may arise in connection with Executive’s employment with the Company, Executive and the Company agree that
any and all disputes, claims, or causes of action, in law or equity, including but not limited to statutory claims, arising from
or relating to the enforcement, breach, performance, or interpretation of this Agreement, Executive’s employment with the
Company, or the termination of Executive’s employment from the Company, will be resolved pursuant to the Federal Arbitration
Act, 9 U.S.C. §1-16, and to the fullest extent permitted by law, by final, binding and confidential arbitration conducted
in San Jose, California by JAMS, Inc. (“JAMS”) or its successors, under JAMS’ then applicable
rules and procedures for employment disputes (which can be found at http://www.jamsadr.com/rules-clauses/, and
which will be provided to Executive on request); provided that the arbitrator shall: (a) have the authority to compel adequate
discovery for the resolution of the dispute and to award such relief as would otherwise be permitted by law; and (b) issue a written
arbitration decision including the arbitrator’s essential findings and conclusions and a statement of the award. The Parties
shall be entitled to all rights and remedies that either would be entitled to pursue in a court of law, provided, however,
that in no event shall the arbitrator be empowered to hear or determine any class or collective claim of any type. Both Executive
and the Company acknowledge that by agreeing to this arbitration procedure, they waive the right to resolve any such dispute through
a trial by jury or judge or administrative proceeding. The Company shall pay all filing fees in excess of those which would
be required if the dispute were decided in a court of law, and shall pay the arbitrator’s fee. Nothing in this Agreement
is intended to prevent either the Company or Executive from obtaining injunctive relief in court to prevent irreparable harm pending
the conclusion of any such arbitration.

 

		15.	General
Provisions.

 

15.1      Notices.
Any notices provided must be in writing and will be deemed
effective upon the earlier of personal delivery (including personal delivery by fax) or the next day after sending by overnight
carrier, to the Company at its primary office location and to Executive at the address as listed on the Company payroll.

 

15.2      Severability.
Whenever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to
be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality
or unenforceability will not affect any other provision or any other jurisdiction, but this Agreement will be reformed, construed
and enforced in such jurisdiction to the extent possible in keeping with the intent of the Parties.

 

    	11.

    	 

    

 

15.3      Waiver.
Any waiver of any breach of any provisions of this Agreement
must be in writing to be effective, and it shall not thereby be deemed to have waived any preceding or succeeding breach of the
same or any other provision of this Agreement.

 

15.4      Complete
Agreement. This Agreement, together with the Employee Confidential
Information and Inventions Agreement between the Company and Executive, of even date herewith, constitute the entire agreement
between Executive and the Company with regard to the subject matter hereof and is the complete, final, and exclusive embodiment
of the Company’s and Executive’s agreement with regard to this subject matter. This Agreement is entered into without
reliance on any promise or representation, written or oral, other than those expressly contained herein, and it supersedes any
other such promises, warranties or representations. It cannot be modified or amended except in a writing signed by a duly authorized
officer of the Company.

 

15.5      Counterparts.
This Agreement may be executed in separate counterparts, any
one of which need not contain signatures of more than one party, but both of which taken together will constitute one and the same
Agreement.

 

15.6      Headings.
The headings of the paragraphs hereof are inserted for convenience
only and shall not be deemed to constitute a part hereof nor to affect the meaning thereof.

 

15.7      Successors
and Assigns. This Agreement is intended to bind and inure to
the benefit of and be enforceable by Executive and the Company, and their respective successors, assigns, heirs, executors and
administrators, except that Executive may not assign any of his duties hereunder and he may not assign any of his rights hereunder
without the written consent of the Company, which shall not be withheld unreasonably.

 

15.8      Tax
Withholding and Indemnification. All payments and awards contemplated
or made pursuant to this Agreement will be subject to withholdings of applicable taxes in compliance with all relevant laws and
regulations of all appropriate government authorities. Executive acknowledges and agrees that the Company has neither made any
assurances nor any guarantees concerning the tax treatment of any payments or awards contemplated by or made pursuant to this Agreement.
Executive has had the opportunity to retain a tax and financial advisor and fully understands the tax and economic consequences
of all payments and awards made pursuant to the Agreement.

 

15.9      Choice
of Law. All questions concerning the construction, validity
and interpretation of this Agreement will be governed by the laws of the State of California.

 

    	12.

    	 

    

 

In
Witness Whereof, the Parties have executed this Agreement on the day and year first written above.

 

	 	Lorus Therapeutics Inc.
	 	 
	 	By:	/s/ William
    G. Rice
	 	 	William G.
    Rice, Ph. D.
	 	 	Chairman of the Board and Chief 
	 	 	Executive Officer

 

	 	Executive
	 	 
	 	/s/ Avanish Vellanki
	 	Avanish Vellanki

 

    	13.LORUS
THERAPEUTICS INC.

 

EXECUTIVE
EMPLOYMENT AGREEMENT

 

    	 

    	 

    

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

THIS
AGREEMENT is made the 21st day of September, 2006

 

BETWEEN:

 

LORUS THERAPEUTICS INC.

(the
“Corporation”)

 

-
and –

 

DR. AIPING YOUNG

(the
“Executive”)

 

RECITALS:

 

		A.	The Corporation is a member of a group of companies comprising Lorus Therapeutics Inc. and its
Affiliates from time to time (the “Lorus Group”) and is involved in the biopharmaceutical business specializing in
the development and commercialization of pharmaceutical products and technologies.

 

		B.	The Executive is currently employed by the Corporation in the position of Chief Operating Officer.

 

		C.	The terms and conditions of the Executive’s employment by the Corporation are currently governed
by the Employment Agreement entered into between the Executive and the Corporation, effective October 29, 1999.

 

		D.	The Corporation wishes to continue the Executive’s employment in the position of
                                                          President and Chief Executive Officer.

 

		E.	The Corporation and the Executive have agreed to enter into a new Employment Agreement to
                                                          formalize in writing the terms and conditions reached between them governing the Executive’s continuing employment with
                                                          the Corporation in the position of President and Chief Executive Officer;

 

NOW
THEREFORE in consideration of the covenants in this Agreement and for other good and valuable consideration, including, without
limitation, the grant of stock options described herein, the receipt and sufficiency of which are acknowledged by the parties,
the parties agree as follows:

 

		1.	Definitions

 

In
this Agreement,

 

“Affiliate”
means any company that is an affiliate of the Corporation as defined under the Securities Act
(Ontario);

 

    	- 2 -

    	 

    

 

“Agreement”
means this agreement and all schedules attached to this agreement, in each case as they may be amended or supplemented
from time to time;

 

“Basic
Salary” has the meaning set out in section 4.1;

 

“Benefits”
has the meaning set out in section 4.2;

 

“Business
Day” means any day, other than Saturday, Sunday or any statutory holiday in the Province of Ontario;

 

“Change in Control”
means:

 

		(a)	the initial acquisition by any Person, or any Persons acting jointly or in concert, whether directly
or indirectly, of Voting Shares of the Corporation which, together with all other Voting Shares of the Corporation held by such
persons, constitutes, in the aggregate, more than 50% of all outstanding Voting Shares of the Corporation (an “Acquisition”);

 

		(b)	an amalgamation, arrangement or other form of business combination of the Corporation with another
corporation which results in the holders of voting shares of that other corporation holding, in the aggregate, more than 50% of
all outstanding Voting Shares of the Corporation resulting from the business combination (an “Arrangement”);

 

		(c)	a sale, disposition, lease or exchange to or with another Person or Persons (other than an Affiliate)
of assets of the Corporation representing 50% or more of the net book value of the assets of the Corporation, determined as of
the date of the most recently published audited annual or unaudited quarterly interim financial statements of the Corporation (a
“Sale”); or

 

		(d)	a change in the composition of the Board over any twelve (12) month period such that more than 50%
of the individuals who were directors of the Corporation at the beginning of the period are no longer directors at the end of the
period, unless such change is a consequence of normal attrition or as a result of a decision of the Board;

 

For
greater certainty, “Change in Control” does not include: (1) an Acquisition, Arrangement or Sale which is undertaken
for the purposes of financing the Corporation or (2) an Acquisition, Arrangement or Sale in which substantially all of the assets
of the Corporation are sold, disposed of, leased or exchanged to a corporation with substantially the same ownership of Voting
Shares as those of the Corporation immediately preceding such Acquisition, Arrangement or Sale or (3) any other capital reorganization
of the Corporation.

 

“Competitive
Business” means any business involved anywhere in the world in developing, producing, distributing, selling or
licensing pharmaceutical goods, in any media now existing or hereafter developed, and/or services relating to pharmaceutical products
and technologies in the same therapeutic categories as those in which the Corporation is actively involved;

 

    	- 3 -

    	 

    

 

“Confidential
Information” means all confidential or proprietary information, intellectual property (including trade secrets)
and confidential facts relating to the business or affairs of the Lorus Group, its clients or its suppliers (excluding general
skills and knowledge), whether or not originated by the Executive;

 

“Developments”
means all discoveries, inventions, designs, works of authorship, improvements and ideas (whether or not patentable or
copyrightable) and legally recognized proprietary rights (including, but not limited to, patents, copyrights, trademarks, topographies,
know-how and trade secrets), and all records and copies of records relating to the foregoing, that are owned by the Lorus Group
or that:

 

		(a)	result or derive from the Executive’s employment or from the Executive’s knowledge or
use of Confidential Information;

 

		(b)	are conceived or made by the Executive (individually or in collaboration with others) during the term
of the Executive’s employment by the Corporation;

 

		(c)	result from or derive from the use or application of the resources of the Lorus Group; or

 

		(d)	relate to the business operations of or actual or demonstrably anticipated research and development
by the Lorus Group;

 

“Directors
and Officers Alternate Compensation Plan” means the plan established, subject to shareholder approval, to permit
the Corporation to discharge certain of its compensation obligations to its directors and senior officers through the issuance
of common shares of the Corporation;

 

“Disability”
means the mental or physical state of the Executive such that the Executive has been unable as a result of illness,
disease, mental or physical disability or similar cause, as determined by a legally qualified medical practitioner selected by
the Corporation, to fulfill the Executive’s obligations under this Agreement either for any consecutive 180-day period or
for any period of 180 days (whether or not consecutive) in any consecutive 365-day period;

 

“Employment
Period” has the meaning set out in section 2;

 

Good
Reason” means the occurrence of any of the following upon, or prior to the expiry of the eighteen (18) month period
following, a Change in Control, unless the Executive provides express written consent thereto:

 

		(a)	Change
                                         in Duties. The assignment to the Executive of any duties inconsistent with
                                         the Executive’s status as President and Chief Executive Officer, or a material
                                         change in the nature or status of the Executive’s responsibilities, or a material
                                         change in the duties or reporting relationships of the Executive, in each case from those
                                         in effect immediately prior to a Change in Control of the Corporation;

 

    	- 4 -

    	 

    

 

		(b)	Reduced Base Salary.
A material reduction by the Corporation in the Executive’s annual base salary as in effect on the date hereof or as the same
may be increased from time to time or the failure by the Corporation to grant the Executive a salary increase at a rate commensurate
with the increases accorded to other key executives of the Corporation at the Executive's status and level of seniority with the
Corporation;

 

		(c)	Reduced Bonus Entitlement.
A material reduction by the Corporation in the Executive’s bonus entitlement;

 

		(d)	Relocation.
The Corporation requiring the Executive to be based anywhere other than within the greater metropolitan area where the Executive
is primarily based at the time of a Change in Control of the Corporation, except for required travel on the Corporation’s
business to an extent substantially consistent with the Executive’s travel obligations in the ordinary course of business
immediately prior to the Change in Control of the Corporation;

 

		(e)	Pension Plan, Benefit
Plans and Perquisites. The failure by the Corporation to continue to provide the Executive with benefits at least as
favourable as those enjoyed by the Executive under the Pension Plans, or any retirement arrangement established for the Executive,
or any of the Corporation’s life insurance, medical, health, and accident, disability or savings plans in which the Executive
was participating at the time of a Change in Control of the Corporation; the taking of any action by the Corporation that would
directly or indirectly materially reduce any such benefits or deprive the Executive of any material perquisite enjoyed by the Executive
at the time of the Change in Control, including, without limitation and to the extent applicable, car allowance, secretarial services,
office space, telephones, computer facilities, expense reimbursement or other such perquisites to which the Executive is entitled
at the time of the Change in Control;

 

		(f)	Share Options.
The failure by the Corporation to grant the Executive any portion of the share options to which the Executive is entitled pursuant
to this Agreement and the Corporation’s Stock Option Plan in effect at the time of the Change in Control without the Executive’s
consent; or

 

		(g)	any other reason which would be considered to amount to constructive dismissal by a court of competent
jurisdiction;

 

Any
event, act or omission which constitutes Good Reason within the meaning of this definition shall be deemed not to be Good Reason
if the Executive fails to object within sixty (60) days of learning of the event, act or omission or, if the event, act or omission
is curable and is cured in its entirety by the Corporation within thirty (30) days of written notice. The Executive shall have
sixty (60) days upon learning of the event, act or omission to give notice in writing to the Corporation stating the Executive’s
basis for the Executive’s position that there is Good Reason. Upon the receipt of such written notice, the Corporation shall
have thirty (30) days to cure the event, act or omission in its entirety and if so cured there shall be deemed to be no Good Reason.

 

    	- 5 -

    	 

    

  

“Just
Cause” means: (i) theft, fraud, dishonesty or misconduct by the Executive involving the property, business or affairs
of the Lorus Group or the carrying out of the Executive’s duties; (ii) any material breach or non-observance by the Executive
of any term of this Agreement (other than those listed in (iii)) that is capable of correction, after notice by the Corporation
of the failure to do so and an opportunity for the Executive to correct the same within a reasonable time from the date of receipt
of that notice and which breach or non-observance would constitute just cause for the termination of this Agreement and the Executive’s
employment hereunder at common law; or (iii) any breach or non-observance or threatened breach or non-observance of any of sections
9, 10, 11, 12 or 13;

 

“Person”
means any individual, partnership, limited partnership, joint venture, syndicate, sole proprietorship, company or corporation with
or without share capital, unincorporated association, trust, trustee, executor, administrator or other legal personal representative,
regulatory body or agency, government or governmental agency, authority or entity however designated or constituted;

 

“Share
Option Plan” means the Corporation’s Stock Option Plan as the same is in effect at any relevant time;

 

“Stock
Option Agreement” means any agreement required to be executed and delivered pursuant to the Share Option Plan”

 

“Stop
Work Notice” has the meaning set out in section 8.3;

 

“Termination
Date” has the meaning set out in section 8.2;

 

“Voting
Shares” means any securities of the Corporation ordinarily carrying the right to vote at elections of directors of the
Corporation or such Affiliate, provided that if any such security shall at any time carry the right to cast more than one vote
for the election of directors, such security shall, when and so long as it carries such right, be considered for the purposes of
this Agreement to constitute and be such number of securities of the Corporation as is equal to the number of votes for the election
of directors that may be cast by its holder; and

 

“Year
of Employment” means any 12-month period commencing on the date of commencement of the Executive’s employment under
this Agreement contained in Schedule “A” or on any anniversary of that date.

 

		2.	Employment
                                         and Term

 

The
Corporation will employ the Executive, and the Executive will serve the Corporation in the office set forth in Schedule “A”,
with effect from the date contained in Schedule “A”, until the effective date that the Executive’s employment
is terminated in accordance with section 8 hereof (the “Employment Period”).

 

		3.	Nature
                                         of Employment

 

3.1.          The
Executive will perform the duties of the office as outlined in Schedule “A”.

 

    	- 6 -

    	 

    

 

3.2.          During
the Employment Period, the Executive will faithfully, honestly and diligently serve the Corporation and the Lorus Group. The Executive
will (except in the case of illness or accident) devote all of the Executive’s business time and attention to the Executive’s
employment and will use the Executive’s best efforts to promote the interests of the Corporation. Notwithstanding the foregoing,
the Executive may, with the prior written consent of the board of directors of the Corporation, which consent will not be unreasonably
withheld, serve on the board of directors of other corporations or accept part-time unpaid academic appointments, provided that
any such board or academic appointment does not interfere with the performance of the Executive’s obligations hereunder,
is not a Competitive Business and provides, in a manner satisfactory to the board of directors of the Corporation, for the adequate
protection of any intellectual property arising out of or in connection with such appointment. Unless otherwise specified in Schedule
“A”, the Executive appreciates that the Executive’s duties may involve travel from the Executive’s place
of employment (both within and outside of the country in which that place is located), and the Executive agrees to travel as reasonably
required in order to fulfill the Executive’s duties.

 

3.3.          The
Executive will comply with all rules, regulations and instructions of the Corporation now in force, or that may be adopted
from time to time, and communicated by the Corporation to its executives generally.

 

		4.	Remuneration

 

4.1.          Basic
Remuneration. The Corporation will pay the Executive a gross annual salary (the “Basic Salary”) as provided
in Schedule “A”. The Basic Salary will be payable in equal instalments in accordance with the practices of the Corporation
applicable to its other senior executives. The Corporation will review the Executive’s Basic Salary annually, with a view
to considering increases, as appropriate.

 

4.2.          Benefits.
The Executive will be entitled to participate in all benefit plans, funds or arrangements available from time to time to senior
executive officers of the Corporation (the “Benefits”) (currently the benefits set out in Schedule “A”).

 

4.3.          Bonus
Remuneration. The Executive will be entitled to receive bonus remuneration, if any, in respect of each Year of Employment
during the Employment Period, or any part thereof, as the board of directors of the Corporation, in its sole discretion, may authorize
in accordance with the terms of any management incentive compensation plan of the Corporation in effect from time to time. The
Executive’s current bonus target is as set forth in Schedule “A”.

 

4.4.          Share
Options.

 

		4.4.1	the Executive shall, within seven (7) days following
the effective date of this Agreement (as set out in Schedule “A”), receive a grant of 1,000,000 options to acquire
common shares in the capital of the Corporation pursuant to the Corporation’s 2003 Share Option Plan, subject to the execution
and delivery by the Executive of a duly completed Stock Option Agreement.

 

		4.4.2	the Executive shall be eligible to receive a grant
of options to acquire up to 500,000 common shares in the capital of the Corporation per Year of Employment during the Employment
Period pursuant to the Share Option Plan in respect of the attainment of those corporate performance objectives during the previous
fiscal year to be determined by the board of directors in its sole discretion. Share options will be granted, if at all, to the
extent that the board of directors of the Corporation, in its sole discretion, may determine.

 

    	- 7 -

    	 

    

 

		4.4.3	subject to the last sentence of this paragraph, the
Executive shall be eligible to receive a grant of an additional 1,000,000 options to acquire common shares in the capital of the
Corporation provided that within a three (3) year period following the effective date of this Agreement (as set out in Schedule
"A"), the price of the Corporation's common shares on the Toronto Stock Exchange (or such other exchange on which the
majority of the Corporation's common shares are traded) exceed $1.00 per share for a period of ninety (90) consecutive calendar
days; other than if such increase in the Corporation's share price occurs by way of (i) consolidation, amalgamation, arrangement,
including an Arrangement, Amalgamation or Sale of the Corporation with or into any other corporation resulting in any reclassification
of the outstanding common shares (provided that the foregoing shall not be deemed to include any transaction that creates value
for shareholders of the Corporation), (ii) any change of the common shares into other securities, or (iii) any other capital reorganization
of the Corporation, including, without limitation, a consolidation or other reclassification of the securities of the Corporation;
all as determined by the board of directors of Corporation in its sole discretion. For greater clarity, the intention of the foregoing
grant of options is to recognize shareholder value created by the Executive during the term of her employment with the Corporation
and the board of directors of the Corporation shall have regard to this in determining whether the foregoing milestone has been
met.

 

4.5           Communication
of Annual Objectives. Prior to the commencement of each Year of Employment throughout the Employment Period, the Chair
of the board of directors of the Corporation will provide a written communication to the Executive setting out:

 

		4.5.1	the corporate objectives relating to the employment
of the Executive for the ensuing fiscal year of the Corporation;

 

		4.5.2	the Basic Salary of the Executive during the ensuing
fiscal year;

 

		4.5.3	the potential bonus to which the Executive may become
entitled during the ensuing fiscal year and the basis of calculation thereof; and

 

		4.5.4	the stock options to which the Executive may become
entitled; 

 

in each case as the same have been determined by the Compensation Committee of the board of directors of the Corporation
and approved by the board of directors.

 

    	- 8 -

    	 

    

 

		5.	Expenses

 

5.1.          Travel
and Related Expenses. The Corporation will, upon presentation of expense statements or receipts and any other
supporting documentation as the Corporation may reasonably require, pay or reimburse the Executive in accordance with the
Corporation’s expense policies for all travel and out-of-pocket expenses reasonably incurred or paid by the Executive
in the performance of the Executive’s duties and responsibilities.

 

5.2.          Automobile.
The Corporation will provide the Executive with an annual automobile allowance as set out in Schedule “A”, such automobile
allowance to be inclusive of all costs, including without limitation, the purchase or lease and maintenance of the Executive’s
automobile.

 

5.3.          Memberships.
The Corporation will pay, on behalf of the Executive, the cost of annual memberships as set out in Schedule “A”.

 

		6.	Vacation

 

The
Executive will be entitled during each Year of Employment during the Employment Period to vacation time with pay as provided in
Schedule “A”. Vacation will be taken by the Executive at times reasonably acceptable to the Corporation having regard
to its operations. The Corporation acknowledges that the Executive currently has 76 days of accrued vacation which the Executive
remains entitled to exercise at time or times mutually agreeable to the Executive and the Corporation. However, the Executive agrees
and acknowledges that, with respect to the Executive’s vacation entitlements which accrue following the effective date of
this Agreement and the Executive’s employment hereunder, if the Executive has not taken the full vacation to which the Executive
is entitled in any calendar year, the Executive may, with the consent of the Chair, carry over up to one week of unused vacation
to the following Year of Employment, and otherwise will lose the entitlement to the unused portion of vacation, except as provided
under applicable employment legislation.

 

Notwithstanding
the foregoing, if the Executive’s employment is terminated pursuant to section 8 below, the Executive will not be entitled
to receive any payment in lieu of any vacation to which the Executive was entitled as of the date of termination and which had
not already been taken by the Executive except to the extent, if any, of the payments in respect of vacation pay required under
applicable employment legislation, or otherwise as approved by the board of directors of the Corporation acting in its discretion.

 

		7.	Directors
                                         and Officers Alternative Compensation Plan

 

Subject
to the Executive’s prior written consent, the Executive will participate in the Directors and Officers Alternative Compensation
Plan. Participation in the Directors and Officers Alternative Compensation Plan shall, to the extent required, be subject to the
plan being approved by the shareholders of the Corporation.

 

		8.	Termination

 

		8.1.	Notice.
The Executive’s employment may be terminated at any time;

  

    	- 9 -

    	 

    

 

		8.1.1.	by the Corporation without prior notice and without
further obligations under this Agreement to the Executive for reasons of Just Cause or because of the occurrence of Disability;

 

		8.1.2.	by the Executive on giving prior written notice as specified
in Section 8.5, below, in the event of a Change in Control, or otherwise as specified in Schedule “A”; or

 

		8.1.3.	in any other case by the Corporation on giving prior
written notice as specified in Schedule “A”, provided that if, in the case of termination by the Corporation under
this section 8.1.3, the Executive is entitled under the applicable employment legislation to a longer period of notice than that
prescribed above, the notice to be given by the Corporation under this section 8.1.3 will be that minimum period of notice that
is required under applicable employment legislation and no more.

 

The
Executive’s employment will be automatically terminated, without further obligation on the part of the Corporation or the
Lorus Group, upon the Executive’s death.

 

8.2.          Effective
Date. The effective date on which the Executive’s employment will be deemed to have been terminated under this
section 8 (the “Termination Date”) will be:

 

		8.2.1.	in the case of termination under section 8.1.1, the
day on which the Executive is deemed, under section 16, to have received notice from the Corporation of termination;

 

		8.2.2.	in the case of termination under section 8.1.2 or
8.1.3, the last day of the minimum period referred to in the relevant section; and

 

		8.2.3.	in the case of the death of the Executive, on the
date of the Executive’s death.

 

8.3.          Immediate
Departure.

 

		8.3.1.	Stop
Work Notice. Notwithstanding the foregoing, where the Corporation is giving or has given written notice to the Executive
pursuant to sections 8.1.2 and 8.1.3 above, the Corporation will have the right, at any time prior to the end of the Employment
Period, by giving notice to the Executive to that effect (a “Stop Work Notice”), to require that the Executive cease
to perform the Executive’s duties and responsibilities and cease attending at the Corporation’s premises immediately
upon the giving of the Stop Work Notice. The Executive will, as requested in these circumstances, resign all offices held in the
Lorus Group.

 

    	- 10 -

    	 

    

 

If
a Stop Work Notice is given, the Corporation will, subject to subsection 8.3.2,continue to pay the Executive to the end
of the Employment Period. For that purpose, in calculating the Executive’s entitlement to Basic Salary and bonus
remuneration, if any, the Executive will be considered to have been actively employed by the Corporation to the end of the
Employment Period. The Executive will be entitled to Benefits only if permitted by the terms of any fund, plan or
arrangement. To the extent that continued participation is not permitted, the Corporation will pay to the Executive the
amount of contributions the Corporation would otherwise have been required to make with respect to any relevant fund, plan or
arrangement to the end of the Employment Period.

 

		8.3.2.	Mitigation.
Subject to this section, the Executive will not be required to mitigate the Executive’s loss, or to account to the Corporation
for any amount earned that might otherwise be considered to mitigate the liability of the Corporation to make the payments described
above.

 

However,
if the Executive accepts alternative employment during the notice period:

 

8.3.2.1.             all
obligations of the Corporation in respect of the continuation of benefits or payments of premiums in lieu will cease with effect
as of the date of commencement of the alternative employment;

 

8.3.2.2.             the
Corporation will, within 14 days after receiving the notice referred to in subsection 8.3.2.3, pay to the Executive an amount equal
to one-half of the Basic Salary that would otherwise have been paid to the end of the Employment Period. Payment of this amount
will be in lieu of the further payments contemplated by subsection 8.3.1. Upon such payment, the Executive will provide to the
Corporation, appropriate releases, resignations and other similar documentation; and

 

8.3.2.3.             the
Executive will advise the Corporation forthwith of the acceptance of any employment relevant to this paragraph.

  

		8.4.	Lump
Sum Payment.

 

		8.4.1.	Payment in Lieu of
Notice. Notwithstanding section 8.3 above, where the Executive has been given notice of termination under section 8.1.3
above, the Corporation will be entitled to immediately terminate the employment of the Executive (the “End Date”) upon
the payment to the Executive, within 14 days thereof, in addition to accrued and unpaid Basic Salary and earned bonuses to that
date, a lump sum payment equal to the Basic Salary and Bonus Remuneration which the Executive would otherwise have been entitled
to receive during the relevant notice period referred to in section 8.1.3and
less any amounts owing by the Executive to the Corporation. The Executive will provide to the Corporation appropriate resignations,
releases and other similar documentation. For the purposes of this payment, “Bonus Remuneration” shall be calculated
based on the amount of Bonus Remuneration paid to the Executive in respect of the last fiscal year completed prior to the End Date,
calculated pro-rata over the relevant notice
period referred to in Section 8.1.3.

 

    	- 11 -

    	 

    

 

		8.4.2.	Benefits.
In addition to the payments referred to in subsection 8.4.1 above, the Executive will be entitled to Benefits, to the extent permitted
by the terms of any fund, plan or arrangement, and, if so permitted, the Corporation will continue to make the contributions required
to be made with respect to any such fund, plan or arrangement, during the relevant period to which the lump sum payment relates.
To the extent that the terms of any fund, plan or arrangement do not permit the Executive to continue to receive the Benefits,
the Corporation will pay to the Executive, in lieu of such Benefits, an additional amount equal to the amount which the Corporation
would have been required to contribute pursuant to the terms of any fund, plan or arrangement in respect of any Executive during
the relevant period to which the lump sum payment relates.

 

		8.4.3	Share Options.
Subject to the terms of the Share Option Plan, the approval of the board of directors and regulatory approval, all share options
granted to the Executive which remain unvested as of the End Date shall vest on the first day following the End Date. Subject to
approval of the board of directors and regulatory approval, the Executive shall have twelve (12) months following the End Date
during which to exercise all of the Executive’s vested share options, including such share options which vest prior to and
following the End Date. Other than as described herein, The Executive shall have no further entitlements with respect to the grant
or vesting of share options following the End Date.

 

		8.5.	Change
in Control. Upon the occurrence a Change in Control; and:

 

		(i)	the termination of the Executive’s employment by the Corporation for any reason other than Just
Cause or the Executive’s Death or Disability; or

 

		(ii)	where the Executive terminates her employment with the Corporation for Good Reason,

 

either
upon the occurrence of a Change in Control or at any time prior to the expiry of the eighteen (18) month period following a Change
in Control, and following the delivery of written notice of termination by the Executive to the Corporation, the Executive shall
be entitled to terminate this Agreement and the Executive’s employment hereunder, and shall be entitled to receive within
fourteen (14) days following the effective date of such termination by the Executive (the “End Date”), and in lieu
of any other amounts to which the Executive may otherwise be entitled upon termination of the Executive’s employment, including,
without limitation, under any other section of this Agreement, the following:

 

    	- 12 -

    	 

    

 

		8.5.1	Lump-Sum Payment.
In addition to accrued and unpaid Basic Salary and earned bonuses to the End Date, a lump sum payment equal to the Basic Salary
and Bonus Remuneration which the Executive would otherwise have been entitled to receive for a minimum period of twenty-four (24)
months, plus one additional month for each Year of Employment completed as of the date on which such notice of termination is given
(“Severance Period”), less any amounts owing by the Executive to the Corporation. For the purposes of this payment,
“Bonus Remuneration” shall be calculated based on the amount of Bonus Remuneration paid to the Executive in respect
of the last fiscal year completed prior to the End Date, calculated pro-rata over the Severance Period.

 

		8.5.2	Benefits.
In addition to the payments referred to in subsection 8.5.1, above, the Executive will be entitled to Benefits, to the extent permitted
by the terms of any fund, plan or arrangement, and, if so permitted, the Corporation will continue to make the contributions required
to be made with respect to any such fund, plan or arrangement, during the Severance Period. To the extent that the terms of any
fund, plan or arrangement do not permit the Executive to continue to receive the Benefits, the Corporation shall pay to the Executive,
in lieu of such Benefits, an additional amount equal to the amount which the Corporation would have been required to contribute
pursuant to the terms of any fund, plan or arrangement in respect of any Executive during the relevant period to which the lump
sum payment relates.

 

		8.5.3	Share Options.
Subject to the terms of the Share Option Plan, the approval of the board of directors and regulatory approval, all share options
granted to the Executive which remain unvested as of the End Date shall vest on the first day following the End Date. Subject to
approval of the board of directors and regulatory approval, the Executive shall have twelve (12) months following the End Date
during which to exercise all of the Executive’s vested share options, including such share options which vest prior to and
following the End Date. Other than as described herein, The Executive shall have no entitlements with respect to the grant or vesting
of share options following the End Date.

 

8.6.         No
Other Entitlement. Except as provided above in this section 8, where the Executive’s employment has been terminated
by the Executive or terminated or deemed to have been terminated by the Corporation for any reason, the Executive will not be entitled,
except to the extent required under any mandatory employment standard under the applicable employment legislation, to receive any
payment as termination pay, severance pay, pay in lieu of notice, or as damages. Except as to any entitlement as provided above,
the Executive hereby waives any claims the Executive may have against the Corporation for or in respect of termination pay, severance
pay, or on account of loss of office or employment or notice in lieu thereof or damages in lieu thereof (other than rights to accrued
and unpaid Basic Salary and vacation pay and to reimbursement for expenses pursuant to section 5.1). Payments to the Executive
upon termination in accordance with this Agreement by the Corporation will be deemed to include and to satisfy entitlement to termination
pay, vacation pay and severance pay pursuant to the applicable employment legislation to the extent of those payments. Receipt
by the Executive of payments in accordance with this Agreement will be deemed to constitute a full and final release and discharge
by the Executive of the Corporation, the Lorus Group and all of its directors, officers and agents (for each of whom the Corporation
contracts as a trustee) from all claims including, without limitation, any claims in respect of the Executive’s hiring by,
employment with and termination of employment with the Corporation.

 

    	- 13 -

    	 

    

 

		9.	No
                                         Conflicting Obligations

 

		9.1.	The Executive warrants to the Corporation that:

 

		9.1.1.	the performance of the Executive’s duties as an employee of the Corporation will not breach
any agreement or other obligation to keep confidential the proprietary information of any third party; and

 

		9.1.2.	the Executive is not bound by any agreement with or obligation to any third party that conflicts with
the Executive’s obligations as an employee of the Corporation or that may affect the Corporation’s interest in the
Developments.

 

		9.2.	The Executive will not, in the performance of the Executive’s
duties as an employee of the Corporation:

 

		9.2.1.	improperly bring to the Corporation or use any trade secrets, confidential information or other proprietary
information of any third party; or

 

		9.2.2.	knowingly infringe the intellectual property rights of
any third party.

 

		10.	Confidential
                                         Information

 

The
Executive agrees that the Confidentiality Agreement executed by the Executive on October 29, 1999 remains in full force and effective
following the effective date of this Agreement and forms part of this Agreement.

 

		11.	Competition
                                         and Solicitation

 

11.1.       Non-Competition.
The Executive acknowledges that employment by the Corporation will give the Executive access to the Confidential Information, and
that the Executive’s knowledge of the Confidential Information will enable the Executive to put the Corporation at a significant
competitive disadvantage if the Executive is employed or engaged by or becomes involved in a Competitive Business. Accordingly,
during the Employment Period and for the relevant period of time specified in Schedule “A” after the Termination Date,
the Executive will not, directly or indirectly, individually or in partnership or in conjunction with any other Person:

 

		11.1.1.	be engaged, directly or indirectly, in any manner whatsoever, including, without limitation, either
individually or in partnership, jointly or in conjunction with any other person, or as an employee, consultant, adviser, principal,
agent, member, shareholder or proprietor in any Competitive Business; or

  

    	- 14 -

    	 

    

 

		11.1.2.	advise, invest in, lend money to, guarantee the debts
or obligations of, or otherwise have any other financial or other interest (including an interest by way of royalty or other compensation
arrangements) in or in respect of any Person which carries on a Competitive Business.

 

The
restrictions in section 11.1 above will not prohibit the Executive from (i) 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 or (ii) with the prior written consent of the board
of directors of the Corporation, which consent will not be unreasonably withheld, serve on the board of directors of other corporations
or accept part-time unpaid academic appointments, provided that any such board or academic appointment does not interfere with
the performance of the Executive’s obligations hereunder, is not a Competitive Business and provides, in a manner satisfactory
to the board of directors of the Corporation, for the adequate protection of any intellectual property arising out of or in connection
with such appointment.

 

For
greater certainty, the Executive’s obligations under this section 11.1 are in addition to the obligations respecting disclosure
and use of Confidential Information pursuant to the Confidentiality Agreement referred to in section 10.

 

11.2.   No
Solicitation of Clients and Suppliers. The Executive acknowledges the importance to the business carried on by the Lorus
Group of the client and supplier relationships developed by it and the unique opportunity that the Executive’s employment
and the Executive’s access to the Confidential Information offers to interfere with these relationships. Accordingly, the
Executive will not while employed or engaged by the Lorus Group and for the period of time specified in Schedule “A”,
directly or indirectly, contact or solicit any person who the Executive knows to be a prospective, current or former client or
supplier of the Lorus Group for the purpose of selling to the client or buying from the supplier any products or services that
are the same as or substantially similar to, or in any way competitive with, the products or services sold or purchased by the
Lorus Group during the Executive’s Employment or at the end thereof, as the case may be.

 

11.3.   No
Solicitation of Employees. The Executive acknowledges the importance to the business carried on by the Lorus Group of
the human resources engaged and developed by it and the unique access that the Executive’s employment offers to interfere
with these resources. Accordingly, the Executive will not during the Employment Period and for the period of time specified in
Schedule “A”, induce or solicit, attempt to induce or solicit or assist any third party in inducing or soliciting any
employee or consultant of the Lorus Group, to leave the Lorus Group or to accept employment or engagement elsewhere.

 

11.4.   Independent
Covenants. Each of sections 11.1, 11.2 and 11.3 will be construed as constituting obligations independent of any other
obligations in this Agreement. The existence of any claim or cause of action the Executive may have or assert against the Corporation,
whether based on this Agreement or otherwise, will not constitute a defence to the enforcement by the Corporation of any of the
covenants and agreements in the foregoing sections.

 

    	- 15 -

    	 

    

  

		12.	Intellectual
Property Rights

 

12.1.       Ownership.
All Developments will be the exclusive property of the Lorus Group and the Lorus Group will have sole discretion to deal with Developments.
For greater certainty, all work done during the Employment Period by the Executive for the Corporation or a member of the Lorus
Group is a work for hire of which the Corporation or the member of the Lorus Group, as the case may be, is the first author for
copyright purposes and in respect of which all copyright will vest in the Corporation or the relevant member of the Lorus Group,
as the case may be.

 

12.2.        Records.
The Executive will keep complete, accurate and authentic notes, reference materials, data and records of all Developments in the
manner and form requested by the Corporation. All these materials will be Confidential Information upon their creation.

 

12.3.        Moral
Rights. The Executive hereby irrevocably waives all moral rights arising under the Copyright
Act (Canada) as amended (or any successor legislation of similar effect) or similar legislation in any applicable jurisdiction,
or at common law, that the Executive may have now or in the future with respect to the Developments, including, without limitation,
any rights the Executive may have to have the Executive’s name associated with the Developments or to have the Executive’s
name not associated with the Developments, any rights the Executive may have to prevent the alteration, translation or destruction
of the Developments, and any rights the Executive may have to control the use of the Developments in association with any product,
service, cause or institution. The Executive agrees that this waiver may be invoked by the Corporation, and by any of its authorized
agents or assignees, in respect of any or all of the Developments.

 

12.4.        Further
Assurances. The Executive will do all further things that may be reasonably necessary or desirable in order to give
full effect to the foregoing. If the Executive’s co-operation is required in order for the Lorus Group to obtain or enforce
legal protection of the Developments following the termination of the Executive’s employment, the Executive will provide
that co-operation so long as the Corporation pays to the Executive reasonable compensation for the Executive’s time at a
rate to be agreed, provided that the rate will not be less than the last basic salary or compensation rate paid to the Executive
by the Corporation during the Executive’s employment.

 

		13.	Warranties.
Covenants and Remedies

 

13.1.       The
obligations of the Executive as set forth in sections 9, 10, 11 and 12 of this Agreement will be deemed to have commenced as of
the date on which the Executive was first employed by the Lorus Group. The Executive warrants that the Executive has not, to date,
breached any of the obligations set forth in any of those sections. Any breach or threatened breach of those sections by the Executive
will constitute Just Cause for immediate termination of the Executive’s employment or engagement by the Corporation.

 

    	- 16 -

    	 

    

 

13.2.       The
Executive understands that the Lorus Group has expended significant financial resources in developing its products and the Confidential
Information. Accordingly, a breach or threatened breach by the Executive of any of sections 9, 10, 11, 12 or 13.1 could result
in unfair competition with the Lorus Group and could result in the Lorus Group and its shareholders suffering irreparable harm
that is not capable of being calculated and that cannot be fully or adequately compensated by the recovery of damages alone. Accordingly,
the Executive agrees that the Corporation will be entitled to interim and permanent injunctive relief, specific performance and
other equitable remedies, in addition to any other relief to which the Corporation or the Lorus Group may become entitled.

 

13.3.       The
Executive’s obligations under each of sections 9,10,11,12,13.1 and 13.2 are to remain in effect in accordance with each of
their terms and will exist and continue in full force and effect despite any termination, breach or repudiation, or alleged breach
or repudiation, of this Agreement or the Executive’s employment (including, without limitation, the Executive’s wrongful
dismissal) by the Corporation or the Lorus Group.

 

		14.	Co-operation
by Executive

 

The
Executive will co-operate in all respects with the Corporation if a question arises as to whether the Executive has a Disability.
Without limitation, the Executive will authorize the Executive’s medical doctor or other health care specialist to discuss
the condition of the Executive with the Corporation and will as reasonably requested by the Corporation submit to examination by
a medical doctor or other health care specialist selected by the Corporation.

 

		15.	Employers
and Employees Act Not to Apply

 

The
Corporation and the Executive agree that section 2 of the Employers
and Employees Act (Ontario) or other similar provisions in Applicable Employment Legislation will not apply to or in
respect of this Agreement or the employment of the Executive hereunder.

 

		16.	Notices

 

Any
notice or other communication required or permitted to be given hereunder must be in writing, and must be given by facsimile or
other means of electronic communication or by hand-delivery as hereinafter provided, except that any notice of termination by the
Corporation under section 8 above must be hand-delivered or given by registered mail. Any notice or other communication, if mailed
by registered mail, will be deemed to have been received on the day that mail is delivered by the post office, or if sent by facsimile,
will be deemed to have been received on the Business Day following the sending, or if delivered by hand to the Executive will be
deemed to have been received at the time it is delivered to the Executive or, if delivered to the Executive or the Corporation
at the applicable address noted in Schedule “A”, when it is delivered either to the individual designated in Schedule
“A” or to an individual at that address having apparent authority to accept deliveries on behalf of the addressee.
Notice of change of address will also be governed by this section. Notices and other communications must be addressed as set out
in Schedule “A”.

 

		17.	Headings

 

The
inclusion of headings in this Agreement is for convenience of reference only and is not to affect construction or interpretation.

 

    	- 17 -

    	 

    

 

		18.	Invalidity
of Provisions

 

Each
of the provisions contained in this Agreement is distinct and severable and a declaration of invalidity or unenforceability of
any provision by a court of competent jurisdiction will not affect the validity or enforceability of any other provision.

 

		19.	Entire
Agreement

 

This
Agreement, the attached Schedule “A” and the Confidentiality Agreement referred to in section 10 constitute the entire
agreement between the parties pertaining to the subject matter of this Agreement. This Agreement supersedes and replaces all prior
agreements, if any, written or oral, with respect to the Executive’s employment by the Corporation, including the Employment
Agreement entered into by the Executive and the Corporation, effective October 29,
1999, and any rights which the Executive may have by reason of any prior agreement or by reason of the Executive’s
prior employment, if any, by the Lorus Group. There are no warranties, representations or agreements between the parties in connection
with the subject matter of this Agreement except as specifically set forth or referred to in this Agreement. No reliance is placed
on any representation, opinion, advice or assertion of fact made by the Corporation, the Lorus Group or its directors, officers
and agents (for each of whom the Corporation contracts as trustee) to the Executive, except to the extent that the same has been
reduced to writing and included as a term of this Agreement. Accordingly, there will be no liability, either in tort or in contract,
assessed in relation to any representation, opinion, advice or assertion of fact, except to the extent aforesaid.

 

		20.	Waiver,
Amendment

 

Except
as expressly provided in this Agreement, no amendment or waiver of this Agreement will be binding unless executed in writing by
the party to be bound. No waiver of any provision of this Agreement will constitute a waiver of any other provision nor will any
waiver of any provision of this Agreement constitute a continuing waiver unless otherwise expressly provided.

 

		21.	Governing
Law and Attornment

 

This
Agreement will be governed by and construed in accordance with the laws of the Province of Ontario and the laws of Canada applicable
in the Province of Ontario. The parties attorn to the non-exclusive jurisdiction of the Courts of Ontario.

 

		22.	Counterparts

 

This
Agreement may be signed in counterparts. Each counterpart will constitute an original document and all counterparts, taken together,
will constitute one and the same instrument. Executed counterparts may be delivered by telecopier or other electronic delivery.

 

    	- 18 -

    	 

    

 

		23.	Acknowledgement

 

The
Executive acknowledges that:

 

		(i)	the Executive has received a copy of this Agreement;

 

		(ii)	the Executive has had sufficient time to review and
consider this Agreement thoroughly;

 

		(iii)	the Executive has read and understands the terms of
this Agreement and the Executive’s obligations under this Agreement;

 

		(iv)	the restrictions placed upon the Executive by this
Agreement are reasonably necessary to protect the Lorus Group proprietary interests in the Confidential Information and the Developments,
and will not preclude the Executive from being gainfully employed in a suitable capacity following termination of the Executive’s
employment by the Corporation, given the Executive’s general knowledge and experience;

 

		(v)	the Executive has been given an opportunity to obtain
independent legal advice, or other advice as the Executive may desire, concerning the interpretation and effect of this Agreement,
and by signing this Agreement the Executive has either obtained advice or voluntarily waived the Executive’s opportunity
to receive same; and

 

		(vi)	the Agreement is entered into voluntarily by the Executive.

 

IN
WITNESS WHEREOF THE PARTIES HAVE EXECUTED THIS AGREEMENT UNDER THEIR RESPECTIVE SEALS.

 

	 	 	LORUS THERAPEUTICS INC.	 
	 	 	 	 
	Date:	 September 21, 2006	 	By: 	/s/ Graham Strachan	 
	 	 	Chair	 
	I agree and accept employment on these terms.		 	 
	 	 	 	 
	WITNESS:	)	 	 
	 	)	 	 
	 	)	 	 
	 	)	 	 
	/s/ Gloria Knight	)	/s/ Aiping Young	1/s
	Signature of Witness	)	DR. AIPING YOUNG	 
	 	)	PRESIDENT
    & CEO	 
	GLORIA A. KNIGHT	)	 	 
	Witness Name (Please Print)	)	 	 

 

    	- 19 -

    	 

    

 

SCHEDULE
“A”

 

EXECUTIVE
EMPLOYMENT AGREEMENT

 

This
schedule is attached to and forms an essential part of the executive employment agreement (the “Agreement”) between
Lorus Therapeutics Inc. (the “Corporation”) and Dr. Aiping Young (the “Executive”).

 

		1.	In accordance with section 2, the Executive’s
employment with the Corporation under this Agreement will commence on September 21, 2006.

 

		2.	In accordance with section 2, the office to be held
by the Executive in the Corporation will be President and Chief Executive Officer. The Corporation may, at any time, assign the
Executive to perform other functions (with the Corporation and/or any of its Affiliates) that are consistent with the Executive’s
skill and experience and the position of President and Chief Executive Officer.

 

		3.	In accordance with section 3.1, the undersigned has agreed to perform the duties of the
                                                           office of President and Chief Executive Officer in accordance with paragraph 2 above and as set out in the job description
                                                           attached as Appendix 1 to this Schedule “A”, as amended from time to time by the Corporation with the prior
                                                           written consent of the Executive.

 

		4.	In accordance with section 4.1, the Executive will be entitled to an annual basic salary
                                                           of CDN$300,000.00 (before deduction for income taxes and other required deductions, but excluding the Benefits paid by the
                                                           Corporation as provided in section 4.2 of the Agreement).

 

		5.	In accordance with section 4.2, the Executive is currently
entitled to receive the following benefits: Health (including extended health care coverage and travel assistance), Dental, Life
Insurance, Short Term and Long Term Disability coverage with all premiums to be paid by the Corporation and with no deductibles,
and Group RRSP. The Corporation will reimburse the Executive for vision wear to a maximum of $100 per annum.

 

		6.	In accordance with and subject to section 4.3, the
Executive shall be entitled to receive a Bonus of up to 40% of the Executive’s Basic Salary.

 

		7.	In accordance with Section 5.2, the Executive will
be provided with an annual automobile allowance of $12,000 (before deduction for income taxes) payable in equal monthly installments
on the last Friday of each month.

 

		8.	In accordance with section 5.3, the Corporation will
pay annually the first $1,000 of membership fees in any health club on behalf of the Executive.

 

		9.	In accordance with section 6, the Executive will be
entitled to five (5) weeks of paid vacation annually, to be adjusted to reflect periods of employment of less than a full calendar
year.

 

    	 

    	 

    

 

		10.	In accordance with section 8.1.2, the Executive may
terminate the Executive’s employment on giving to the Corporation at least four (4) months prior written notice. However,
the Executive will attempt to provide as much (additional) prior notice as is possible and will, in all cases, assist fully as
reasonably requested by the Corporation in effecting an orderly transition to the Executive’s successor.

 

		11.	In accordance with section 8.1.3, the Corporation
may terminate the Executive’s employment on giving to the Executive a minimum of eighteen (18) months prior written notice,
plus an additional one (1) month of written notice per each Year of Employment completed as of the date on which such written
notice is provided to the Executive.

 

		12.	In accordance with section 11.1, the “Non-Competition” provisions will be
                                                            valid until twelve (12) months following the Termination Date.

 

		13.	In accordance with section 11.2, the “No Solicitation of Clients and
                                                            Suppliers” provisions will be valid until twelve (12) months following the Termination Date.

 

		14.	In accordance with section 11.3, the “No Solicitation of Employees” provisions
                                                            will be valid until twelve (12) months following the Termination Date.

 

		15.	In accordance with section 16, any notice or communication to be given or made must be
                                                            addressed as follows:

 

if
to the Executive:

 

7
Sandfield Road

Toronto, ON

M3B
2B5

 

Attention:           Dr.Aiping
Young

 

if
to the Corporation:

 

Lorus
Therapeutics Inc.

2
Meridien Road

Toronto,
ON

 

Attention:           Chair
of Board of Directors

 

with
copies to:

 

McCarthy
Tétrault LLP

Suite
4700, Toronto Dominion Bank Tower

Toronto-Dominion
Centre

Toronto,
Ontario

M5K 1E6

 

    	- 2 -

    	 

    

 

	Attention:	Trevor Lawson
	Tel:	(416) 601-8227
	Facsimile:	(416) 868-0673
	Email:	tlawson@mccarthy.ca

  

    	- 3 -

    	 

    

 

APPENDIX 1

 

Job Description

 

Dr. Aiping Young

 

Dr.
Aiping Young (“Young”) will be the President and Chief Executive Officer of the Corporation.

 

As
President and Chief Executive Officer, Young will provide leadership, strategic vision, direction and effective operational execution
within budget to the Corporation and its executives and employees.

 

Young
will be responsible for developing, implementing, executing and achieving the Corporation’s strategic plans and for ensuring
that the Corporation’s strategic plans and objectives are effectively communicated, both internally to the board of directors,
executives and employees, and externally to the bio-technology and investment communities, including shareholders and potential
investors. Young will also be responsible for securing significant partnerships with other credible biotechnology and pharmaceutical
companies, for raising financing as required and for ensuring that the Corporation is able to attract, motivate and retain superior
executives and employees.

 

Young
will report to the Chair of the Corporation and will be a member of the board of directors of the Corporation.

 

In
addition to the foregoing, Young shall have such further responsibilities consistent with the position of President and Chief Executive
Officer as shall be assigned to Young by the Chair of the Corporation from time to time.

 

    	 

    	 

    

 

Draft:
May 22, 2012

 

AMENDING
AGREEMENT TO EXECUTIVE EMPLOYMENT AGREEMENT

(“Amending
Agreement”)

 

THIS
AMENDING AGREEMENT is dated as of the 29 day of May, 2012

 

IS
MADE BETWEEN

 

LORUS
THERAPEUTICS INC.

(the
“Corporation”)

 

- and -

 

DR.
AIPING YOUNG 

(the
“Executive”)

 

RECITALS

 

		A.	The Parties entered into an executive employment agreement
                                         (the “Employment
                                         Agreement”) dated September
                                         21st, 2006.

 

		B.	The parties wish to amend the Employment Agreement as provided herein in accordance with section 20 of the Employment Agreement.

 

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

  

		1.	Unless the context otherwise requires, all capitalized
terms not defined herein shall have the meanings assigned to them in the Employment Agreement.

 

		2.	Section 1 of the Employment Agreement is hereby amended
to delete the reference to “eighteen (18) month period” in the second line of the definition of “Good Reason”
and to replace it with “thirty-six (36) month period”.

 

		3.	Section 8.5 of the Employment agreement is hereby amended
to delete the reference to “eighteen (18) month period” in the second line below section 8.5(ii) and to replace it
with “thirty-six (36) month period”.

 

		4.	The Parties hereto expressly covenant and agree that
the provisions hereof shall be binding upon each of them, that the Employment Agreement will be amended and modified accordingly,
that the same shall be read and construed as if the provisions hereof were therein written and that, in the event of any conflict
between any of the provisions of the Employment Agreement and the provisions herein contained, the provisions herein contained
shall prevail.

 

    	 

    	 

    

 

		5.	It is hereby declared and agreed that the Employment
Agreement and all covenants, clauses, provisos, powers, matters and things whatsoever contained therein, save and except as herein
modified, altered or amended, shall continue in force and have application to the terms and conditions herein contained, and the
Employment Agreement, save as herein modified, altered or amended, is ratified and confirmed by each of the parties hereto.

 

		6.	This Amending Agreement may be executed in one or more
counterparts. When each of the parties hereto who have executed an identical counterpart and delivered a copy thereof to each
party (by personal delivery, electronic or facsimile transmission), then all the counterparts taken together shall be deemed to
constitute a single identical agreement dated as of the date first set forth above.

 

    	 

    	 

    

 

		7.	This Amending Agreement shall be governed by and construed
in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein.

 

[remainder
of page intentionally left blank]

 

    	 

    	 

    

 

IN
WITNESS WHEREOF the parties hereto have executed this Amending Agreement as
of the day, month and year first above written.

 

	 	LORUS THERAPEUTICS INC.
	 	 
	 	By: 	/s/ J.A.Wright
	 	Name:   	J.A.WRIGHT
	 	Title:
	CHAIRMAN, BOARD

 

	WITNESS:	 	 
	 	 	 
	/s/ Grace Tse	 	/s/ Aiping Young
	Signature of Witness	 	DR. AIPING
    YOUNG
	 	 	 
	Grace Tse	 	 
	Witness Name (Please Print)

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00231-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00231-of-00352.parquet"}]]