Document:

Execution
Version

 

LORUS THERAPEUTICS
INC.

 

EXECUTIVE EMPLOYMENT
AGREEMENT

 

    	 

    	 

    

 

EXECUTIVE EMPLOYMENT
AGREEMENT

 

THIS AGREEMENT is made the 25th day of October,
2013

 

BETWEEN:

 

LORUS THERAPEUTICS
INC.

(the “Corporation”)

 

- and -

 

DR. WILLIAM G. RICE

(the “Executive”)

 

RECITALS:

 

		A.	The Corporation
                                         is involved in the biopharmaceutical business specializing in the development and commercialization
                                         of pharmaceutical products and technologies.

 

		B.	The Corporation
                                         wishes to employ the Executive in the position of Chairman of the Board (“Chair”)
                                         and Chief Executive Officer.

 

		C.	The Corporation
                                         and the Executive have agreed to enter into this Executive Employment Agreement (“Agreement”)
                                         in order to formalize in writing the terms and conditions reached between them governing
                                         the Executive’s employment with the Corporation in his position as Chair and Chief
                                         Executive Officer.

 

NOW THEREFORE in consideration of the covenants
in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which are acknowledged by the
parties, the parties agree as follows:

 

		1.	Definitions

 

In this Agreement,

 

“Affiliate”
means a corporation, partnership, limited liability company or any other entity which owns at least a majority of the
outstanding shares of the Corporation or of which the Corporation owns at least a majority of the outstanding shares, equity or
other ownership interests;

 

“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 a Corporation recognized holiday in the jurisdiction in which
the recipient of a notice or other communication received in accordance with Section 12 is located;

 

“Disability”
means the Executive’s inability to perform the essential functions of the position described in this Agreement,
with or without reasonable accommodations, for a period of 180 consecutive calendar days, or for any period of 180 days (whether
or not consecutive) in any consecutive 365-day period, due to a physical or mental disability. A determination of a Disability
shall be made by a physician satisfactory to both the Executive and the Corporation; provided that if the Executive and the Corporation
do not agree on a physician, the Executive and the Corporation shall each select a physician and these two together shall select
a third physician, whose determination as to a Disability shall be binding on all parties. The Corporation shall administer this
provision in compliance with all applicable federal and state laws;

 

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

 

“Good
Reason” means any one of the following conditions that occurs without the Executive’s written consent:
(i) a material reduction in the Executive’s responsibilities and authority as Chief Executive Officer of the Corporation;
(ii) a material reduction in the Executive’s Basic Salary, other than in connection with an across-the-board decrease of
base salaries applicable to all senior executives of the Corporation; or (iii) relocation of the Executive’s principal place
of employment to a place that increases the Executive’s one-way commute from the Executive’s residence by at least
fifty (50) miles as compared to the Executive’s then-current principal place of employment immediately prior to such relocation.
Notwithstanding the foregoing, in order to resign for Good Reason, the Executive must (1) provide the Corporation with written
notice within sixty (60) days after the first occurrence of the event giving rise to Good Reason setting forth the basis for the
resignation; (2) allow the Corporation at least thirty (30) days from receipt of such written notice to rescind or cure such event
(the “Cure Period”); and (3) if such condition is not reasonably rescinded or cured within the Cure Period,
the Executive’s resignation from all positions he then holds with the Corporation (including any subsidiary or parent entities)
must be effective not later than thirty (30) days after the expiration of the Cure Period and in any event not later than two
(2) years following the first occurrence of the event giving rise to Good Reason;

 

“Just
Cause” means: (i) theft, fraud, dishonesty or material misconduct by the Executive involving the property, business
or affairs of the Corporation or the carrying out of the Executive’s duties, which results in (or could result in) material
harm to the Corporation; (ii) any material breach by the Executive of any term of this Agreement (other than a material breach
of the Employee Proprietary Information and Inventions Agreement attached hereto as Schedule “B”) 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 material breach would constitute just cause for the
termination of this Agreement and the Executive’s employment hereunder; or (iii) any material breach of the Employee Proprietary
Information and Inventions Agreement attached hereto as Schedule “B”;

 

“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;

 

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“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”;
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
7 hereof (the “Employment Period”).

 

		3.	Nature
                                         of Employment

 

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

 

3.2.          During
the Employment Period, the Executive will faithfully, honestly and diligently serve the Corporation. The Executive will (except
in the case of illness, accident or vacation) 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 remain as Chairman of the Board of Cylene Pharmaceuticals, Inc. and, with the prior written consent of the Board
of Directors of the Corporation (the “Board”), 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, and provides, in a manner
satisfactory to the Board, 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 the United States), and the Executive
agrees to travel as reasonably required in order to fulfill the Executive’s duties. The Executive will be reimbursed for
the cost of any business visitor visas necessary for the performance of his duties while employed by the Corporation.

 

3.3.          The
Executive will comply with all rules, regulations and reasonable and legal 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.

 

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		4.	Remuneration

 

4.1.          Basic
Salary. The Corporation will pay to the Executive a gross annual salary (the “Basic Salary”) as set out
in Schedule “A”. The Basic Salary will be payable in equal installments in accordance with the practices of the Corporation
applicable to its other senior executives.

 

4.2.          Benefits.
The Executive will be eligible to participate in all Corporation benefit programs provided by the Corporation to its United States-based
executive officers, once such benefit programs have been adopted and established in the United States. At this time, the Corporation
anticipates such benefit programs will include: group health care coverage (including medical, dental and vision), life insurance,
short term and long term disability coverage, accidental death and dismemberment, a 401(k)
plan, and a non-qualified deferred compensation plan (“Deferred Compensation Plan”). Until the Corporation
adopts and establishes a group health care coverage plan, the Corporation agrees to pay Executive a taxable monthly benefits allowance,
as set out in Schedule “A.”

 

4.3.          Deferred
Compensation Plan. The Corporation will make pre-ordinary income tax contributions to the Executive’s Deferred Compensation
Plan account as set out in Schedule “A”.

 

4.4.          Bonus
Remuneration. The Executive will be entitled to receive bonus remuneration (“Bonus Remuneration”) in respect
of each Year of Employment during the Employment Period, or any part thereof, as the Board, in its good faith 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 Remuneration target is as set out in Schedule “A”.

 

4.5.          Share
Options. The Executive shall be eligible to receive options to acquire common shares of the Corporation, subject to Executive’s
continued employment with the Corporation through the applicable date of grant, and in accordance with the following:

 

		4.5.1.	the Executive
                                         shall on the Effective Date of this Agreement (as set out in Schedule “A”),
                                         receive a grant of an option to acquire 425,000
                                         common shares of the Corporation (the “Initial Option”). The Initial
                                         Option will be granted pursuant to and subject to the terms of the Share Option Plan
                                         and its standard Stock Option Agreement. The Initial Option will immediately be fully
                                         vested and exercisable on the date of grant and will have an exercise price equal to
                                         the fair market value of the common shares on the date of grant.

 

		4.5.2.	the Executive
                                         shall, within two (2)
                                         days following the closing of a bridge financing of the Corporation of at least
                                         U.S. $4
                                         million on or about December 31,
                                         2013, by
                                         way of equity investment, receive a grant of an additional option to acquire 845,000
                                         common shares of the Corporation (the “Additional Option”). The Additional
                                         Option will be granted pursuant to and subject to the terms of the Share Option Plan
                                         and its standard Stock Option Agreement, upon approval of the Board. The Additional Option
                                         shall vest over three years and will have an exercise price equal to the fair market
                                         value of the common shares on the date of grant.

 

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		4.5.3.	the Executive
                                         shall, within two (2) days upon the closing of the Corporation’s financing of at
                                         least U.S. $17 million on or about April 30, 2014, by way of equity investment (the “PIPE”),
                                         receive an additional grant of an option to acquire 1,680,000 common shares of the Corporation
                                         (the “PIPE Option”). The PIPE Option will be granted pursuant to and
                                         subject to the terms of the Share Option Plan and its standard Stock Option Agreement,
                                         upon approval of the Board. The PIPE Option will vest over three years and will have
                                         an exercise price equal to the fair market value of the common shares on the date of
                                         grant.

 

4.6.          Communication
of Annual Objectives. Prior to the commencement of each Year of Employment throughout the Employment Period, the Lead Independent
director of the Corporation, based on discussions with the full Board, will provide a written communication to the Executive setting
out:

 

		4.6.1.	the corporate
                                         objectives as agreed to by the Executive and the Board relating to the employment of
                                         the Executive for the ensuing fiscal year of the Corporation;

 

		4.6.2.	the Basic Salary
                                         of the Executive during the ensuing fiscal year; and

 

		4.6.3.	the potential
                                         Bonus Remuneration to which the Executive may become entitled during the ensuing fiscal
                                         year and the basis of calculation thereof; 

 

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

 

		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.

 

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		6.	Vacation

 

Executive will be entitled during
each Year of Employment during the Employment Period to accrue vacation time at the rate provided in Schedule
“A”. Vacation will be taken by the Executive at times reasonably acceptable to the Corporation having regard to
its operations and will be in accordance with the Corporation’s vacation policy.

 

		7.	Termination
                                         of Employment

 

7.1.          The
Corporation shall have the right to terminate the Executive’s employment with or without Just Cause, at any time and without
notice. The Executive shall have the right to resign for Good Reason by written notice of resignation delivered to the Board in
accordance with the definition of “Good Reason.” The Executive shall have the right to resign without Good Reason
by providing at least sixty (60) days written notice of the resignation delivered to the Corporation (provided that after Executive
has provided such notice to the Corporation, the Corporation may in its discretion shorten such notice period to a lesser duration
and in such case the Corporation would only have to provide Executive with the compensation and benefits that had been earned
as of the actual date of Executive’s termination of employment). If the Executive resigns without Good Reason, he will continue
to be paid until his 60-day notice period, or shorter period thereof, ends during the Employment Period. In light of the parties’
understanding and mutual agreement that it is essential that the Corporation have an orderly transition period in the event of
Executive’s resignation without Good Reason, in such event, the Executive agrees to provide any transitional services reasonably
requested by the Board during such notice period (at the Corporation’s sole cost and expense) and further agrees that the
Corporation shall be entitled to obtain equitable relief to the extent needed to require Executive’s specific performance
during the notice period, provided that the Corporation waives any right to seek contractual damages or other monetary remedies
that arise solely with respect to any resignation upon less than sixty (60) days written notice.

 

This Agreement and the Executive’s
employment hereunder will automatically terminate upon the Executive’s death, without any further obligations on the part
of the Corporation to the Executive or the Executive’s estate, other than accrued and unpaid Basic Salary and accrued and
unused vacation pay, and any other accrued benefit required to be paid by law, up to the date of the Executive’s death.

 

7.2.          Mitigation.
In the event of termination of the Executive’s employment and his execution and non-revocation of the Release and Waiver
that entitles him to severance, the Executive shall have no obligation to find employment.

 

7.3.          Resignation
as Officer or Director. Upon termination of employment, the Executive shall be deemed to automatically resign each position
that he then holds as an officer or director of the Corporation; provided that (and without limiting the foregoing), if requested
by the Corporation, the Executive shall contemporaneously deliver a written notice of resignation to the Board, unless requested
by the Board in writing to continue on in one of his positions with the Corporation.

 

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7.4.          Severance
Benefits For Qualifying Termination. If: (i) the Executive’s employment is terminated either: (A) by the Corporation
without Just Cause (other than due to Executive’s death or Disability), or (B) by the Executive for Good Reason (each a
“Qualifying Termination”); and (ii) the Executive satisfies the Release Requirement, then the Executive will
receive the following Severance Benefits:

 

7.4.1.          Either
(a) a lump sum cash payment equal to the Executive’s annual Basic Salary at the time of employment termination (without
giving effect to any reduction in Basic Salary that would give Executive the right to resign for Good Reason), less applicable
deductions and withholdings, to be paid by the Corporation on the first payroll period following the Effective Date of the Release
(the “Lump Sum Payment”); or (b) if the Corporation, 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
the Executive’s annual Basic Salary (without giving effect to any reduction in Basic 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 Corporation
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”).

 

7.4.2.          A
lump sum cash payment in an amount equal to the average of the Bonus Remuneration the Executive received from the Corporation
during the last three Years of Employment completed prior to the year of the employment termination, pro rated based on the number
of days the Executive worked during the year of the employment termination divided by 365 (the “Bonus Payment”).
The Bonus Payment, less applicable deductions and withholdings, will be paid on the first payroll period following the Effective
Date of the Release; and

 

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7.4.3.          If
the Corporation has not previously established a group health plan that Executive has commenced to participate in prior to Executive’s
termination, the Corporation shall continue to pay the Executive a monthly payment of U.S.$2,000.00 (before deduction for income
taxes and other required deductions), payable on the last Friday of each month, for a period of twelve (12) months following the
date of termination, provided that any payments scheduled to be made prior to the Effective Date of the Release shall instead
accrue and be paid during the first payroll period that follows the Effective Date of the Release. If the Corporation has previously
established a group health plan in which Executive participates prior to Executive’s termination and Executive timely elects
COBRA coverage following any Qualifying Termination, the Corporation will pay the 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 7.4.3 is not or cannot be paid or provided under any Corporation plan or program without
adverse tax consequences to the Corporation or for any other reason, as determined by the Corporation in its sole discretion,
then the Corporation shall pay the 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 the Executive’s employment; (B) the expiration
of the Executive’s (or Executive’s dependents’) eligibility for continuation coverage under COBRA; and (C) the
date when the Executive becomes eligible for group health insurance coverage in connection with new employment or self-employment.
If the 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 7.4.3, Executive must immediately provide written notice to the
Corporation of such event, and the Corporation-provided COBRA payments, or if applicable, the monthly payments under this Section
7.4.3 shall immediately cease.

 

7.5.          Release
Requirement. Notwithstanding the foregoing, to be eligible for any of the Severance Benefits, on or within thirty (30) days
following the termination of employment, the Executive must satisfy the requirement (the “Release Requirement”)
to return to the Corporation a signed and dated general release of all known and unknown claims in a form acceptable to the Corporation
(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 will be paid hereunder prior to the
Effective Date of the Release. Accordingly, if the Executive breaches the preceding sentence and/or refuses to sign and deliver
to the Corporation an executed Release and Waiver or signs and delivers to the Corporation the Release and Waiver but exercises
his right, if any, under applicable law to revoke the Release and Waiver (or any portion thereof), then the Executive will not
be entitled to any bonus, severance, or payment under this Agreement.

 

		8.	IRS
                                         Code Section 409A

 

Notwithstanding anything to the contrary
herein, the following provisions apply to the extent benefits provided herein are subject to Section 409A. Severance Benefits
shall not commence until the Executive has a “separation from service” for purposes of Section 409A. Each installment
of Severance Benefits is a separate “payment” for purposes of Treas. Reg. Section 1.409A-2(b)(2)(i), and the Severance
Benefits are intended to satisfy the exemptions from application of Section 409A provided under Treasury Regulations Sections
1.409A-1(b)(4), and 1.409A-1(b)(9). However, if such exemptions are
not available and the Executive is, upon separation from service, a “specified employee” for purposes of Section 409A,
then, solely to the extent necessary to avoid adverse personal tax consequences to the Executive under Section 409A, the timing
of the Severance Benefits payments shall be delayed until the earlier of (i) six (6) months and one day after the separation from
service, or (ii) the date of the Executive’s death. If the Corporation 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. The Severance
Benefits are intended to qualify for an exemption from application of Section 409A or comply with its requirements to the extent
necessary to avoid adverse personal tax consequences under Section 409A, and any ambiguities herein shall be interpreted accordingly.

 

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		9.	Parachute
                                         Payment

 

If any payment or benefit the Executive
would receive pursuant to this Agreement (“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 such Payment shall be reduced 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 being
subject to the Excise Tax or (y) the largest portion of the Payment, which such amount, 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 the Executive’s receipt, on an after-tax basis, of the greater amount of the Payment notwithstanding that all
or some portion of the Payment may be subject to the Excise Tax. If a reduction in payments or benefits constituting Parachute
Payments is necessary so that the Payment equals the Reduced Amount, reduction shall occur in the following order: reduction of
cash payments; reduction of employee benefits. The accounting firm then engaged by the Corporation for general audit purposes
shall perform the foregoing calculations. The Corporation shall bear all expenses with respect to the determinations by such accounting
firm required to be made hereunder. Any good faith determinations of the accounting firm made hereunder shall be final, binding
and conclusive upon the Executive and the Corporation.

 

		10.	No
                                         Conflicting Obligations

 

		10.1.	The Executive
                                         warrants to the Corporation that:

 

		10.1.1.	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

 

		10.1.2.	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 Inventions (as defined in the Employee Proprietary
                                         Information and Inventions Agreement attached hereto as Schedule “B”).

 

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

 

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

 

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

 

		11.	Proprietary
                                         Information and Assignment of Inventions Agreement

 

Concurrently herewith, the Executive shall
execute and deliver to the Corporation (and comply with) an Employee Proprietary Information and Inventions Agreement (“PIA”)
in the form attached hereto as Schedule “B.”

 

		12.	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 7 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 confirmed 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”.

 

		13.	Headings

 

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

 

		14.	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.

 

		15.	Entire
                                         Agreement

 

This Agreement and the attached Schedules
“A” and “B” 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. 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, 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.

 

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		16.	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 Corporation and the Executive. 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.

 

		17.	Binding
                                         Effect: Assignment

 

This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective successors and permitted assigns. The Executive may not assign
his rights or delegate his obligations under this Agreement, and any attempt at an assignment or delegation shall be void and
of no effect. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs,
executors, successors and permitted assigns.

 

		18.	Affiliates

 

To the extent that the Executive performs
services for Affiliates of the Corporation, his obligations hereunder with respect to the Corporation also shall be deemed to
include such Affiliates.

 

		19.	Governing
                                         Law

 

This Agreement and the Executive’s
employment hereunder will be governed by and construed in accordance with the laws of the State of California.

 

		20.	Arbitration

 

20.1.          All
disputes, controversies or differences between the parties hereto which are not settled by common accord shall be conclusively
settled by arbitration before one arbitrator in San Diego, California, in accordance only with the then-current American Arbitration
Association Employment Rules, and judgment and the award rendered by the arbitrator may be entered in any court or tribunal of
competent jurisdiction. In any arbitration proceeding conducted pursuant to this section, both parties shall have the right to
discovery, to call witnesses and to cross-examine the other party’s witnesses (either through legal counsel, expert witnesses,
or both). All decisions of the arbitrator shall be final, conclusive and binding upon the parties. The arbitrator shall issue
a written decision, including the essential findings and conclusions on which the award is based, and all decisions of the arbitrator
shall not be subject to judicial review.

 

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20.2.          The
Corporation shall bear the fees and costs of the arbitrator and the arbitration specific costs and each party shall bear their
own costs and expenses (including attorneys’ fees and expenses) incurred in connection with the arbitration; provided, in
the event of such arbitration or any litigation between the Executive and the Corporation in aid of arbitration or to enforce
an award or in respect of a matter that is not subject to arbitration pursuant to this Agreement, the prevailing party shall be
entitled to attorneys’ fees and costs pursuant to applicable law and, if a party to this Agreement hereafter pursues any
dispute by any method other than as set forth herein, the responding party shall be entitled to recover from the initiating party
all damages, costs, expenses and attorneys’ fees incurred as a result of defending such action.

 

20.3.          The
agreement to arbitrate provided by this section specifically includes, but is not limited to: any claims arising out of or relating
to the Executive’s employment with the Corporation or the terms and conditions or the termination thereof; any claims arising
out of or relating to this Agreement or any other agreement to which the Executive and the Corporation are parties and that arises
out of or relates in any way to the Executive’s employment with the Corporation or the terms and conditions or the termination
thereof; any claim that this Agreement or any such other agreement is invalid, unenforceable, void, voidable or is or may be rescinded,
revoked or terminated and any claim arising out of or relating in any way to any action or omission of any kind whatsoever in
the course of or connected in any way with any relations between the Corporation and the Executive, including, by way of example
and not limitation, the following types of claims: wage or overtime claims, wrongful or constructive discharge claims, discrimination
claims (including sex, age, race, religion, national origin), harassment claims of any kind and claims for denial of benefits.
BY AGREEING TO ARBITRATION HEREUNDER, BOTH THE EXECUTIVE AND THE CORPORATION UNDERSTAND THEY ARE AGREEING TO HAVE ANY DISPUTE
RELATING TO THIS AGREEMENT OR THE BREACH OR TERMINATION THEREOF DECIDED BY A NEUTRAL ARBITRATOR AND AS TO THOSE DISPUTES DECIDED
BY THE NEUTRAL ARBITRATOR, THE EXECUTIVE AND THE CORPORATION ARE GIVING UP THEIR RIGHT TO A JURY OR COURT TRIAL.

 

20.4.          Notwithstanding
the foregoing provisions of this section, either the Executive or the Corporation, in a court of competent jurisdiction, may seek
to obtain preliminary injunctive and/or other equitable relief in support of claims to be prosecuted in an arbitration to the
extent allowed by the California Arbitration Act by filing an action in court in accordance with California Code of Civil Procedure
Section 1281.8.

 

		21.	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.

 

		22.	Acknowledgement

 

The Executive acknowledges that:

 

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

 

    	-12-

    	 

    

 

		(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 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

 

		(v)	this Agreement
                                         is entered into voluntarily by the Executive.

 

[Remainder of page
intentionally left blank. Signature page follows.]

 

    	-13-

    	 

    

 

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

 

	 	 	 	LORUS THERAPEUTICS INC.	 
	 	 	 	 	 	 
	Date:	Oct. 25, 2013	 	By:	/s/ Jim A. Wright	c/s
	 	 	 	 	 	 
	 	 	 	Name: 	Jim A. Wright	 
	 	 	 	 	 	 
	 	 	 	Title:	Chairman of the Board of Directors	 
	 	 	 	 	 	 
	I agree and accept employment on these terms.	 	 	 	 
	 	 	 	 	 	 
	WITNESS:	)	 	 	 
	 	)	 	 	 
	 	 	)	 	 	 
	/s/ Aiding
    H Young	)	 	/s/ William G. Rice	l/s
	Signature of Witness	)	 	DR. WILLIAM G. RICE	 
	 	 	)	 	 	 
	 	 	)	 	 	 
	Aiding H Young	)	 	 	 
	Witness Name (Please Print)	)	 	 	 

 

    	-14-

    	 

    

 

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. William G. Rice (the “Executive”).

 

		1.	In accordance with
                                         Section 2 of the Agreement, the Executive’s employment with the Corporation will
                                         commence on October 25, 2013 (the “Effective Date”).

 

		2.	In accordance with
                                         Section 2 of the Agreement, the office to be held by the Executive in the Corporation
                                         will be Chair and Chief Executive Officer. The Corporation may, at any time, and subject
                                         to the Executive’s rights under the Agreement, 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 Chair and Chief Executive
                                         Officer.

 

		3.	In accordance with
                                         Section 3.1 of the Agreement, the undersigned has agreed to perform the duties of the
                                         office of Chair and Chief Executive Officer in accordance with paragraph 2 of this Schedule
                                         “A” 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 of the Agreement, the Executive will be entitled to a Basic Salary of U.S.
                                         $380,000.00 per year (before deduction for income taxes and other required deductions),
                                         which Basic Salary will be increased to U.S. $480,000.00 per year effective as of the
                                         closing of the PIPE (as defined in the Agreement). Thereafter, the Corporation will review
                                         the Executive’s Basic Salary annually, with a view to considering increases which
                                         the Board, upon advice of the Compensation Committee, deems to be appropriate and in
                                         the best interests of the Corporation.

 

		5.	In accordance with
                                         Section 4.2 of the Agreement, the Executive will be entitled to a monthly payment of
                                         U.S. $2,000.00 (before deduction for income taxes and other required deductions), payable
                                         on the last Friday of each month, until such time that the Corporation adopts and establishes
                                         a group health care coverage plan and the Executive commences participation in such plan.

 

		6.	In accordance with
                                         Section 4.3 of the Agreement, the Corporation shall contribute an amount equal to 3%
                                         of the Executive’s Basic Salary annually to the Executive’s Deferred Compensation
                                         Plan account, with such contributions made on a pre-ordinary income tax basis and in
                                         manner that complies with the requirements of Section 409A of the U.S. Internal Revenue
                                         Code.

 

    	 

    	 

    

 

		7.	In accordance with
                                         and subject to Section 4.4 of the Agreement and any management incentive compensation
                                         plan, the Executive shall be entitled to receive annual Bonus Remuneration of up to 45%
                                         of his then current Basic Salary (as determined as of the last day of the applicable
                                         performance period for which the Bonus Remuneration was earned); provided that upon the
                                         closing of the PIPE, the Compensation Committee of the Corporation will evaluate in good
                                         faith the Executive’s eligibility for an immediate payment of a pro rata portion
                                         of the Bonus Remuneration for the applicable performance period. Any Bonus Remuneration
                                         will be paid to the Executive no later than the later of: (i) the fifteenth (15th)
                                         day of the third (3rd) month following the close of the Corporation’s fiscal year
                                         in which such Bonus Remuneration is earned or (ii) March 15 following the calendar year
                                         in which such Bonus Remuneration is earned.

 

		8.	In accordance with
                                         Section 5.2 of the Agreement, the Executive will be provided with an annual automobile
                                         allowance of U.S. $14,400.00 (before deduction for income taxes and other required deductions)
                                         payable in equal monthly installments on the last Friday of each month.

 

		9.	In accordance with
                                         Section 6, the Executive will accrue twenty-five (25) days of paid vacation annually,
                                         to be adjusted to reflect periods of employment of less than a full calendar year (which,
                                         if not fully used, may be carried over from year to year, up to a reasonable cap as set
                                         forth by the Corporation).

 

		10.	In accordance with
                                         Section 12, any notice or communication to be given or made must be addressed as follows:

 

if to the Executive

Attention: Dr. William G. Rice

13601 Nogales Drive

Del Mar, CA 92014

 

if to the Corporation:

Lorus Therapeutics Inc.

2 Meridien Road

Toronto, ON

Attention: Lead Independent Director

 

with copies to:

 

McCarthy Tétrault LLP

Suite 4700, Toronto Dominion Bank
Tower

Toronto-Dominion Centre

Toronto, Ontario

M5K 1E6

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

 

    	 

    	 

    

 

APPENDIX 1

 

Job Description

 

Dr. William G. Rice

 

Dr. William G. Rice
(“Rice”) will be the Chair and Chief Executive Officer of the Corporation.

 

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

 

Rice 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. Rice will also
be responsible for securing strategic alliances with other credible bio-technology 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.

 

Rice will report to
the Board of Directors of the Corporation and will be a member of the Board of Directors of the Corporation.

 

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

 

    	 

    	 

    

 

SCHEDULE “B”

 

EMPLOYEE PROPRIETARY
INFORMATION AND INVENTIONS AGREEMENT

 

I understand that as part of my employment
(“Employment”) by Lorus Therapeutics Inc. (the “Company”), whether pursuant to that certain
Executive Employment Agreement of even date herewith (the “Employment Agreement”) or otherwise, I am or may
be expected to make new contributions and discoveries of value to the Company. I further understand that my Employment creates
in me a duty of trust and confidentiality to the Company with respect to any information (1) related, applicable or useful to
the business of the Company, including the Company’s anticipated research and development assigned to me by the Company;
or (2) resulting from the use of equipment, supplies or facilities owned, leased or contracted for by the Company; or (3) related,
applicable or useful to the business of any client of the Company, which may be made known to me by the Company or by any client
of the Company, or learned by me during the period of my Employment.

 

As part of the consideration for my Employment
and the compensation received by me from the Company (including bonuses and benefits) from time to time, I hereby agree as follows:

 

1.          All
Proprietary Information (as defined on Annex 1 hereto) and Inventions (as defined on Annex 1 hereto) shall be the
sole property of the Company and its assigns, and the Company and its assigns shall be the sole owner of all patents, trademarks,
service marks and copyrights and other rights (collectively referred to herein as “Rights”) pertaining to Proprietary
Information and Inventions. I hereby assign to the Company any rights I may have or acquire in Proprietary Information or Inventions
or Rights pertaining to the Proprietary Information or Inventions. I further agree as to all Proprietary Information or Inventions
to assist the Company or any person designed by it in every proper way (but at the Company’s expense) to obtain and from
time to time enforce Rights relating to said Proprietary Information or Inventions in any and all countries. I will execute all
documents for use in applying for, obtaining and enforcing such Rights on such Proprietary Information or Inventions as thereof
to the Company or persons designated by it. My obligation to assist the Company or any person designated by it in obtaining and
enforcing Rights relating to Proprietary Information or Inventions shall continue beyond the cessation of my Employment (“Cessation
of my Employment”), but the Company shall compensate me at a reasonable rate after the Cessation of my Employment for
time actually spent by me upon the Company’s request for such assistance. In the event the Company is unable, after reasonable
effort, to secure my signature on any document or documents needed to apply for or enforce any Right relating to Proprietary Information
or to an Invention, whether because of my physical or mental incapacity or for any other reason whatsoever, I hereby irrevocably
designate and appoint the Company and its duly authorized officers and agents as my agents and attomeys-in-fact to act for and
in my behalf and stead in the execution and filing of any such application and in furthering the application for an enforcement
of Rights with the same legal force and effect as if such acts were performed by me. I hereby acknowledge that all original works
of authorship which are made by me (solely or jointly with others) within the scope of my Employment and which are protectable
by copyright are “works for hire” as that term is defined in the United States Copyright Act (17 USCA, Section 101).

 

    	 

    	 

    

 

2.          I
will promptly disclose to the Company, and the Company hereby agrees to receive such disclosures in confidence, all discoveries,
developments, designs, improvements, inventions, formulas, software programs, processes, techniques, know-how, negative know-how
and data, whether or not patentable or registrable under patent, copyright or similar statutes or reduced to practice, made or
conceived or reduced to practice or learned by me, either alone or jointly with others during the period of my Employment, for
the purpose of permitting the Company to determine whether they constitute Inventions. In order to facilitate the complete and
accurate disclosures described above, I agree to maintain complete written records of all Inventions, and of all work, study and
investigation related thereto done by me during my Employment, which records shall be the property of the Company.

 

3.          At
all times, both during my Employment and after the Cessation of my Employment, whether the cessation is voluntary or involuntary,
for any reason or no reason, or by disability, I will keep in strictest confidence and trust all Proprietary Information, and
I will not disclose, use, or induce or assist in the use or disclosure of any Proprietary Information or Rights pertaining to
Proprietary Information, or anything related thereto, without the prior express written consent of the Company, except as may
be necessary in the ordinary course of performing my duties as an employee of the Company. I recognize that the Company has received
and in the future will receive from third parties their confidential or proprietary information subject to a duty of the Company’s
part to maintain the confidentiality of such information and to use it only for certain limited purposes. I agree that I owe the
Company and such third parties, during my Employment and thereafter, a duty to hold all such confidential or proprietary information
in the strictest confidence, and I will not disclose, use, or induce or assist in the use or disclosure of any such confidential
or proprietary information without the prior express written consent of the Company, except as may be necessary in the ordinary
course of performing my duties as an employee of the Company consistent with the Company’s agreement with such third party.

 

4.          I
acknowledge that during my Employment with the Company, I have a fiduciary duty and/or duty of loyalty to the Company. During
the period of my Employment, I will not, unless provided for in my Employment Agreement or with the Company’s express written
consent: (a) directly or indirectly engage in any activity which is in competition with the Company, (b) alone or in concert with
others, in any way use or disclose Proprietary Information in order to solicit, entice or in any way divert any client to do business
with any business entity in competition with the Company, or (c) make any copies of Proprietary Information without the express
written authorization of the Company, unless such copies are necessary in the ordinary course of performing my duties as an employee
of the Company. Additionally, I agree that during my Employment with the Company and for one (1) year thereafter, I will not either
directly or indirectly, solicit or attempt to solicit any employee, independent contractor, or consultant of the Company to terminate
his, her or its relationship with the Company in order to become an employee, consultant, or independent contractor to or for
any other person or entity.

 

5.          In
the event of the Cessation of my Employment, I will deliver to the Company all devices, records, sketches, reports, proposals,
client information, lists, correspondence, equipment, software, documents, photographs, photostats, negatives, undeveloped film,
notes, drawings, specifications, tape recordings or other electronic recordings, programs, data and other materials or property
of any nature belonging to the Company or pertaining to my work with the Company, and I will not take with me, or allow a third
party to take, any of the foregoing or any reproduction of any of the foregoing.

 

    	 

    	 

    

 

6.          Any
provision in this Agreement requiring me to assign my rights in any invention shall not apply to an invention that qualifies fully
under the provisions of Section 2870 of the California Labor Code, the terms of which have been set forth on Annex 1 to
this Agreement. I understand that I bear the full burden of proving to the Company that an invention qualifies fully under Section
2870. By signing this Agreement, I acknowledge receipt of a copy of this Agreement and of written notification of the provisions
of Section 2870. Notwithstanding the foregoing, I also assign to the Company (or as directed by it) any rights I may have or acquire
in any Invention, full title to which is required to be in the United States by a contract between the Company and the United
States or any of its agencies.

 

7.          As
a matter of record I have listed in Item 1 of Annex 2 attached hereto all inventions or improvements relevant to the
subject matter of my Employment which have been made or conceived of or first reduced to practice by me alone or jointly with
others prior to my Employment. I represent and warrant that such list is complete. I further represent and warrant that, in
due consideration for my Employment and the compensation received by me from the Company, and in return for the Company
reimbursing me for the fees associated with the patent application described under Annex 2, I hereby voluntarily agree
to sell, convey, assign and transfer unto the Company, its successors, assigns and legal representatives, the full and
exclusive right, title and interest in and to the patent application described under Annex 2, for which I am the sole
inventor, and all related U.S. and foreign patent applications and patents. I hereby covenant that I have the full right to
convey the patent application and all related U.S. and foreign patent applications and patents, and that I have not executed
and will not execute any agreement in conflict herewith. I hereby agree and acknowledge that California Labor Code Section
2870 does not apply to my voluntary assignment of the patent application described under Annex 2.

 

8.          I
represent that my performance of all the terms of this Agreement and as an employee of the Company does not and will not breach
any agreement to keep in confidence proprietary information acquired by me in confidence or in trust prior to my Employment with
the Company. I have not entered into, and I agree that I will not enter into, any agreement, either written or oral, in conflict
herewith.

 

9.          I
represent and warrant to and covenant with the Company that I will not bring to the Company, as of this date, any materials or
documents of a former employer (which term, for purposes of this paragraph 9, shall also include persons, firms, corporations
and other entities for which I have acted as an independent contractor or consultant) that are not generally available to the
public, unless I have obtained written authorization from any such former employer for their possession and use. The materials
or documents of a former employer that are not generally available to the public that I will bring to the Company for use in my
Employment are identified in Item 2 of Annex 2 attached hereto, and as to each such item, I represent and warrant that
I have obtained prior to the commencement date of my Employment express written authorization for their possession and use in
my service to the Company. I also understand that, in my service to the Company, I am not to breach any obligation of confidentiality
that I have to former employers, and I agree to fulfill all such obligations during my Employment.

 

    	 

    	 

    

 

10.          I
acknowledge that irreparable injury will result to the Company from my violation or continued violation of the terms of this Agreement,
and I expressly agree that the Company shall be entitled, in addition to damages and any other remedies provided by law, to an
injunction or other equitable remedy respecting such violation or continued violation by me.

 

11.         The
terms and conditions of this Agreement shall apply to any period, if any, during which I perform services for the Company as a
consultant or independent contractor, as well as any time during which I am employed directly by the Company. Upon the Cessation
of my Employment, I agree to sign and deliver the “Termination Certificate” attached hereto as Annex 3.
My failure to sign such Termination Certificate, however, shall not affect my obligations under the Agreement.

 

12.         Nothing
in this Agreement shall obligate the Company to continue to retain me as an employee. I understand that this means that the Company
has and will continue to have the absolute and unconditional right to terminate my Employment for any reason or no reason, with
or without cause or prior notice, provided that such termination shall not relieve the Company of any obligations it may have
to make payments to me pursuant to the Employment Agreement.

 

13.         I
acknowledge that I have carefully read this Agreement, know its contents, and either have been represented by independent counsel
who has explained to me the legal consequences of this Agreement or have determined not to obtain such independent counsel after
being advised by the Company to obtain such independent counsel.

 

	 	Executed this 25th day of October, 2013.	 
	 	 	 	 
	 	LORUS THERAPEUTICS INC.	 
	 	 	 	 
	 	By:	/s/
    Jim  A. Wright	 
	 	Name: 	JIM  A.
    WRIGHT	 
	 	Title	Chairman
    of the Board	 

 

	 	/s/ William G. Rice	 
	 	DR.
    WILLIAM G. RICE, an individual 	 

 

    	 

    	 

    

 

Annex 1 to Schedule
“B”

 

“PROPRIETARY
INFORMATION” DEFINED:

 

For purposes of this Agreement, “Proprietary
Information” shall mean information not generally available to the public that has been created, discovered,
developed, or otherwise become known to the Company or in which property rights have been assigned or otherwise conveyed to the
Company, which information has material economic value or potential material economic value to the business in which the Company
is or will be engaged. Proprietary Information shall include, but not be limited to (i) trade secrets, processes, formulas, data,
know-how, negative know-how, improvements, discoveries, developments, designs, inventions, techniques, all technical data, proposals,
reports, and client information compiled by the Company, and any modifications or enhancements thereto, software, programs, and
information (whether or not necessarily in writing) which has actual or potential economic value to the Company, (ii) all loan
prospects and applications in process or pipeline that are generated or produced at any time during the term of this Agreement,
and (iii) the operating, investment, pricing or similar or other policies, procedures, practices or systems of the Company.

 

“INVENTIONS”
DEFINED:

 

For purposes of this Agreement, “Inventions”
shall mean all discoveries, developments, designs, improvements, inventions, formulas, software, programs, processes,
techniques, know-how, negative know-how, and data, whether or not patentable or registrable under patent, copyright or similar
statutes, that are related to or useful in the business or future business of the Company or result from use of premises or other
property owned, leased or contracted for by the Company. Without limiting the generality of the foregoing, Inventions shall also
include anything that derives actual or potential economic value from not being generally known to the public, or to other persons
who can obtain economic value from its disclosure or use, in each case that are related to or useful in the business or future
business of the Company.

 

CALIFORNIA LABOR CODE
SECTION 2870:

 

(a)  Any
provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights
in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own
time without using the employer’s equipment, supplies, facilities, or trade secret information except for those inventions
that either:

 

(1)  Relate
at the time of conception or reduction to practice of the invention to the employer’s business, or actual or demonstrably
anticipated research or development of the employer.

 

(2)  Result
from any work performed by the employee for the employer.

 

    	 

    	 

    

 

(b)  To
the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from
being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable.

 

    	 

    	 

    

 

Annex 2 to
Schedule “B”

 

ITEM 1:

 

The following is a complete list of all inventions
or improvements relevant to the subject matter of my employment with the Company that have been made or conceived of or first
reduced to practice by me alone or jointly with others prior to my employment with the Company:

 

LOR-2 53 AND OTHER THERAPEUTIC AGENTS FOR
TREATMENT

 

		•	Filed: October 4, 2013

		•	Inventor: Dr. William G. Rice

		•	Title: Selection and Treatment of Patients with Acute Myeloid
                                         Leukemias Having Aberrant Expression of the CDX2 Gene and Suppression of the KLF4 Gene
                                         with LOR-253 or Other Therapeutic Agents that Induce KLF4 Expression

 

ITEM 2:

 

The following is a complete list of all materials
and documents of a former employer that are not generally available to the public that I will bring or have brought to the Company
or have used or will use in my employment:

 

N/A

 

Exhibit A

 

    	 

    	 

    

 

Annex 3 to Schedule
“B”

 

EMPLOYEE
PROPRIETARY INFORMATION

AND
INVENTIONS AGREEMENT

TERMINATION
CERTIFICATION

 

I hereby certify as follows:

 

1.          When
I signed the attached Employee Proprietary Information and Inventions Agreement (the “Agreement”),
I read and understood the terms of the Agreement.

 

2.          I
hereby acknowledge that I have fully complied with the terms of the Agreement, including, without limitation, the disclosure and
assignment to Lorus Therapeutics Inc., its subsidiaries and affiliates (the “Company”)
of any Inventions covered by that Agreement, and the return of any documents and other materials of any nature pertaining
to my employment with the Company.

 

3.          I
hereby acknowledge and agree to comply with my continuing obligations under the Agreement, including, without limitation, my obligation
not to use for personal benefit or disclose to others any Proprietary Information of the Company.

 

4.          I
understand and acknowledge that should I fail to comply with my obligations under the Agreement, the Company shall have the right
to obtain an injunction against me, including, without limitation, an injunction prohibiting me from disclosing Proprietary Information
to a third party.

 

Dated:
25 Qct 2013

 

	 	/s/ William G. Rice
	 	Signature of Employee
	 	 
	 	William G. Rice, Ph. D.
	 	Print NameLORUS THERAPEUTICS INC.

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

for

 

GREGORY CHOW

 

This Executive
Employment Agreement (the “Agreement”), made between Lorus Therapeutics Inc. (the
“Company”) and Gregory Chow (“Executive”) (together, the
“Parties”), is effective as of November 29, 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 Financial 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.

 

    	 

    	 

    

 

		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.

 

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-1(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”).

 

    	 

    	 

    

 

(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 dependents (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.

 

    	 

    	 

    

 

(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 “CIC
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.

 

(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.

 

(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(h) 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-l(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.

 

    	 

    	 

    

 

		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 10.1 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.

 

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.

 

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.

 

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.

 

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

 

    	 

    	 

    

 

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, Ph.D.
	 	 	William G. Rice, Ph.D.
	 	 	Chairman of the Board and Chief
	 	 	Executive Officer
	 	 	 
	 	Executive
	 	 
	 	/s/ Gregory Chow
	 	Gregory Chow

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