ASSIGNMENT,
NOVATION AND AMENDMENT AGREEMENT
AND
CONSENT
THIS
ASSIGNMENT, NOVATION AND AMENDMENT AGREEMENTAND
CONSENT made as of the 1st day
of May, 2007,
AMONG:
LORUS
THERAPEUTICS INC., a corporation continued under
the laws of Canada (“Lorus”)
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and -
GENESENSE
TECHNOLOGIES
INC., a corporation
incorporated under the laws of the Province of Ontario
(“GeneSense”)
-
and -
6650309
CANADA INC., a corporation incorporated under the
laws of Canada (the “Assignee”)
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and -
THE
ERIN MILLS INVESTMENT
CORPORATION, a corporation
incorporated under the laws of the Province of Ontario
(“TEMIC”)
WHEREAS
Lorus, TEMIC and GeneSense (a wholly owned subsidiary of Lorus) entered into
a
subscription agreement dated as of October 6, 2004 (the “Subscription
Agreement”) providing for, among other things, the issuance by Lorus of
the Convertible Debentures to TEMIC (the Subscription Agreement and the
Convertible Debentures collectively referred to herein as the “Debenture
Documents”);
AND
WHEREAS the Initial Debenture was issued on October 6, 2004 and the
Mandatory Debentures were issued on January 14, 2005 and April 15, 2005,
respectively;
AND
WHEREAS as security for the Convertible Debentures, Lorus and TEMIC
entered into a share pledge agreement dated as of October 6, 2004 (the
“Share Pledge Agreement”) to secure the payment, performance
and satisfaction of Lorus’ obligations under the Convertible
Debentures;
AND
WHEREAS as additional security for the Convertible Debentures,
GeneSense granted a security interest pursuant to a general security agreement
dated as of October 6, 2004 (the “GSA”) in favour of TEMIC in
the Collateral to secure the Obligations (as both terms are defined in the
GSA)
and guaranteed, pursuant to a guarantee and indemnity dated as of October
6,
2004 (the “Guarantee”) the Guaranteed Obligations (as defined
in the Guarantee) in favour of TEMIC (the GSA and the Guarantee collectively
referred to herein as the “Security Documents”);
AND
WHEREAS Lorus proposes to enter into a corporate reorganization
transaction to be completed by way of plan of arrangement (the
“Arrangement”) under the CanadaBusiness
Corporations Act pursuant to which Lorus will transfer substantially all of
its assets, including its antisense patent assets, to a new corporate entity,
which will carry on the same business that Lorus carried on prior to the
completion of the Arrangement;
AND
WHEREAS Lorus wishes to transfer, assign and convey all of its right,
title interest and estate in and to the Debenture Documents and the Share
Pledge
Agreement to the Assignee and the Assignee wishes to accept such transfer,
assignment and conveyance and assume all obligations and responsibilities
of
Lorus with respect to the Debenture Documents and the Share Pledge Agreement,
all as hereinafter provided;
AND
WHEREAS the Arrangement provides that Lorus shall issue to the Assignee
a demand non-interest bearing promissory note for the amount owing under
the
Convertible Debentures as consideration for the Assignment (as defined in
Article 3 below);
AND
WHEREAS the Debenture Documents provide that Lorus may assign such
documents as part of a merger, acquisition, reorganization or sale of all
or
substantially all of its assets without consent from TEMIC, provided that
the
Assignee agrees to be bound by the terms of the Debenture Documents and provides
not less than 15 days’ written notice of such agreement to TEMIC and the
security granted by the Convertible Debentures is not impaired in any
way;
AND
WHEREAS the assignment and novation of the Debenture Documents requires
the amendment of the Security Documents;
AND
WHEREAS the parties hereto wish to confirm that the assignment and
novation of the Debenture Documents and the amendment of the Security Documents
shall automatically become effective contemporaneously with the effective
time
of the Arrangement (the “Effective Time”);
NOW
THEREFORE in consideration of the premises hereto, the mutual covenants
and agreements herein set forth and other good and valuable consideration
(the
receipt and sufficiency of which is hereby acknowledged by each of the parties
hereto), the parties hereby agree as follows:
ARTICLE 1
- NOTICE
(1) Lorus
hereby gives written notice to TEMIC of the Arrangement as required pursuant
to
the terms of the Debenture Documents.
ARTICLE 2
- EFFECTIVE TIME
(1) Each
of the parties hereby irrevocably acknowledge and agree that each of the
provisions in Article 3 and Article 4 hereof shall automatically
become effective at the Effective Time without any further act or instrument,
provided that, if the Effective Time does not occur within ninety days from
the
date hereof, this assignment, novation and amendment agreement and consent
(the
“Agreement”) shall terminate and be of no further force and
effect.
ARTICLE 3
- ASSIGNMENT AND NOVATION
(1) Lorus
hereby unconditionally and irrevocably transfers, assigns and conveys to
the
Assignee, and the Assignee hereby accepts the transfer, assignment and
conveyance from Lorus of all of Lorus’ right, title, interest and estate in and
to the Debenture Documents and the Share Pledge Agreement effective as of
the
Effective Time (the “Assignment”).
(2) The
Assignee hereby unconditionally and irrevocably accepts the Assignment and
replaces Lorus, for all intents and purposes, from and after the Effective
Time,
as a party to the Debenture Documents and the Share Pledge Agreement and
in
consideration of the consent and cooperation of TEMIC, further acknowledges
itself indebted to TEMIC in the place of and in substitution for Lorus for
the
full principal amount together with any accrued but unpaid interest owing
under
the Debenture Documents. The Assignee further acknowledges and agrees
with TEMIC that from and after the Effective Time, TEMIC shall be entitled
to
hold and enforce all of the rights and benefits of TEMIC under the Debenture
Documents and the Share Pledge Agreement as against the Assignee, and the
Debenture Documents and Share Pledge Agreement shall continue in force with
the
Assignee substituted as a party in the name, place and stead of
Lorus. The parties hereto agree that as a result of the foregoing,
TEMIC shall have a first priority security interest in the assets and
undertaking of the Assignee.
(3) The
Assignee covenants with Lorus and TEMIC that it unconditionally and irrevocably
assumes and is bound by, and agrees to observe and perform all the terms,
obligations and provisions to be observed and performed by Lorus under the
Debenture Documents and the Share Pledge Agreement from and after the Effective
Time.
(4) Lorus
shall be unconditionally and irrevocably released and discharged from the
observance and performance of the terms, obligations and provisions that
arise
or accrue under the Debenture Documents and the Share Pledge Agreement from
and
after the Effective Time.
(5) In
consideration for the Assignee’s assumption of Lorus’ obligations under the
Debenture Documents, Lorus will pay the Assignee an amount equal to the amount
owing by Lorus under the Convertible Debentures (the “Debt
Amount”) by issuing to the Assignee a promissory note, repayable on
demand without interest, for an amount equal to the Debt Amount at the Effective
Time.
(6) From
and after the Effective Time, TEMIC:
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(a)
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consents
to the Assignment, and accepts the Assignee as a party to the Debenture
Documents and the Share Pledge Agreement in the name, place and
stead of
Lorus;
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(b)
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covenants
and agrees that, from and after the Effective Time, the Assignee
shall be
entitled to hold and enforce all of the rights and benefits of
Lorus under
the Debenture Documents and the Share Pledge Agreement, and the
Debenture
Documents and Share Pledge Agreement shall continue in force with
the
Assignee substituted as a party in the name, place and stead of
Lorus;
and
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(c)
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releases
and discharges Lorus from the observance and performance of all
terms and
covenants of the Debenture Documents and the Share Pledge Agreement
and
all obligations and liabilities.
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(7) From
and after the Effective Time, Lorus releases and discharges TEMIC from all
actions, causes of actions, liabilities, claims and demands whatsoever that
Lorus ever had, now has or may hereafter have for or by reason of or in any
way
arising out of the Debenture Documents and the Share Pledge
Agreement.
ARTICLE 4
- AMENDMENT
(1) GeneSense
and TEMIC hereby agree to amend the Security Documents as follows:
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(a)
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All
references to “Lorus Therapeutics Inc.” and “Lorus” in the GSA shall mean
a reference to the Assignee, except to the extent the context requires
otherwise.
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(b)
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All
references to the terms “Lorus Therapeutics Inc.” and “Borrower” in the
Guarantee shall mean a reference to the Assignee, except to the
extent the
context requires otherwise.
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(2) Except
as specifically stated herein, the Security Documents shall continue in full
force and effect in accordance with the provisions thereof. After
this Agreement becomes effective as provided herein, any reference to the
Security Documents shall refer to the Security Documents as amended
hereby.
ARTICLE 5
- CONSENT
(1) TEMIC
hereby irrevocably and unconditionally consents to the Arrangement (a copy
of
the plan of arrangement having been received by TEMIC), including any and
all
steps that may be required to effect the Arrangement, including as may be
amended, modified or supplemented from time to time.
ARTICLE 6
- CONDITIONS
(1) The
respective obligations of the parties hereunder are subject to the following
conditions being met:
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(a)
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the
successful completion of the Arrangement;
and
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(b)
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any
approvals required (including shareholder approval) or exemptions
from
Canadian Securities Legislation (as defined in National Instrument
14-101
- Definitions of the Canadian Securities Administrators) shall
have been
obtained and be in full force and effect and shall not be subject
to any
stop-order or proceeding seeking a stop-order or
revocation.
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ARTICLE 7
- EXPENSES
ARTICLE 8
- GENERAL
(1) Each
of the parties severally covenants and agrees that it will, from time to
time,
and at all times hereafter, at the request of the requesting party, execute
and
deliver all such further documents and instruments and do and perform all
such
further acts and things (including the execution and delivery by the Assignee
of
any additional or replacement security documents requested by TEMIC and the
delivery of legal opinions customary for transactions of this type) as may
be
reasonably required for the purpose of giving effect to the terms of this
Agreement.
(2) This
Agreement may be executed in as many counterparts as are necessary and by
facsimile and such counterparts together shall constitute one
agreement.
(3) This
Agreement shall enure to the benefit of and be binding upon the parties hereto
and their respective successors and assigns.
(4) This
Agreement shall be construed in accordance with the laws of the Province
of
Ontario and the laws of Canada applicable therein.
(5) In
the event that any one or more of the provisions contained in this Agreement
shall for any reason be determined by a court of competent jurisdiction to
be
invalid, illegal or unenforceable in any respect, then to the maximum extent
permitted by law, such invalidity, illegality or unenforceability shall not
affect any other provision of this Agreement so long as the legal substance
of
the transactions contemplated hereby is not affected in any manner materially
adverse to any of the parties.
(6) No
modification, supplement or amendment to this agreement will be binding unless
made in writing and duly executed by all of the parties hereto.
(7) Capitalised
terms used in this Agreement shall, unless otherwise defined in this Agreement,
have the same meanings herein as in the Subscription Agreement.
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of page intentionally left blank]
IN
WITNESS WHEREOF the parties hereto have executed this
Agreement.
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LORUS
THERAPEUTICS INC. |
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Per:
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“Aiping
Young” |
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Name: Aiping
Young
Title: President
and Chief Executive Officer
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GENESENSE
TECHNOLOGIES INC. |
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Per:
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“Aiping
Young” |
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Name: Aiping
Young
Title: Director
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6650309
CANADA INC. |
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Per: |
“Aiping
Young” |
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Name: Aiping
Young
Title: President
and Chief Executive Officer
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THE
ERIN MILLS INVESTMENT CORPORATION |
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Per: |
“Gerry
C. Quinn” |
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Name: Gerry
C. Quinn
Title: President
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