1.
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COVENANTS
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(a)
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Assignment and Sale of Intellectual Property
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(b)
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Sale of Shares in Pharma Immune Inc.
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(c)
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Cash and Share Payment
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(d)
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Assignment and Novation of License Agreement
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(e)
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License to Lorus
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(f)
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Supply and Services Agreement
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(g)
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Cancellation of Debentures
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(h)
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Discharges by TEMIC
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(i)
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Return of Pledged Securities
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(j)
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Mutual Releases
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(k)
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Collateral Documentation
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(l)
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Allocation
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2.
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REPRESENTATIONS AND WARRANTIES
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(a)
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Lorus hereby represents and warrants to TEMIC that as of the date hereof, it has not (i) made any arrangements; (ii) entered into agreements (except for the Virulizin License Agreement); or (iii) entered into letters of understanding or of intent, regarding the sale, licensing or other monetization of Virulizin or any other technology, know-how or intellectual property owned by it or its subsidiaries with any other person, firm or corporation in any jurisdiction, nor does it have any prospects of doing so. This representation and warranty is made by Lorus on the understanding that is being relied by TEMIC as basis for entering into this Agreement and completing the transactions contemplated by this Agreement and it is intended to survive the completion of all transactions for a period of two (2) years after the date of this Agreement.
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(b)
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TEMIC represents and warrants it has not sold, assigned or encumbered or parted with possession of or granted any interest in any of the Debentures, the Guarantee, the GSA or the Pledge.
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3.
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CLOSING
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(a)
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The closing of the transactions referred to in this Agreement will take place at the offices of TEMIC’s counsel, or such other place as the parties may agree in writing, on the 19th day of June, 2009, (the “Date of Closing”) at 1:00 pm local time (the “Time of Closing”), unless the parties otherwise agree in writing.
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(b)
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The closing of the transactions contemplated herein is conditional on the consent to the within transaction by Zor and execution and delivery by Zor to TEMIC and Lorus of the Novation Agreements and there being no legal or administrative proceeding to prohibit or enjoin the transactions provided in this Agreement or any agreements to be delivered by the parties as provided in this Agreement.
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(c)
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The delivery of some but not all of the agreements contemplated herein by a party or a party related to a party shall entitle any other party to terminate this Agreement and the transactions contemplated in the agreements delivered pursuant to this Agreement in addition to any other remedies it may have at law or otherwise.
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4.
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RELEASE OF SECURITY AND GUARANTEE
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(a)
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TEMIC acknowledges and agrees that Lorus has repaid or provided for all of the Obligations (as such term is defined in the Debentures) in full;
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(b)
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TEMIC releases and forever discharges in full (without any further action by any person) Lorus and GeneSense from any and all assignments, mortgages, charges, pledges, liens, hypothecs, encumbrances securing or in effect securing any obligation, conditional sale or title retention agreement or security interest whatsoever, howsoever created or arising, whether absolute or contingent, fixed or floating, legal or equitable, perfected or not (collectively the “Security”) held by or granted to TEMIC with respect to the Debentures including, without limitation, on or over any of the assets of Lorus and GeneSense of whatsoever nature and kind, securing the repayment of any indebtedness of or the performance of the Obligations and effective on the Time of Closing such Security ceases to be of any further force or effect;
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(c)
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TEMIC releases GeneSense from all obligations pursuant to the Guarantee; and
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(d)
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TEMIC grants, releases, remises, reconveys, transfers, assigns, discharges and forever quitclaims and surrenders to Lorus, without representation by or recourse to TEMIC, all of the Lorus’ and GeneSense’s assets of whatsoever nature and kind now covered or intended to be covered by the Security, to have and to hold the said property and assets with all and singular the appurtenances thereto to Lorus and GeneSense forever and absolutely freed, acquitted, discharged and released of and from the Security and from the obligations, principal money, interest and other money thereby secured and every trust, proviso, covenant, matter and thing therein contained. All agreements, documents or other instruments evidencing or comprising the Security or the indebtedness, liabilities and obligations thereby secured are hereby cancelled and terminated and are of no further force and effect.
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5.
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GENERAL
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(a)
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TEMIC’s Rights. The execution and delivery of this Agreement do not impair or reduce the ability of TEMIC to immediately commence enforcement proceedings under the Debentures or any other security it may have against Lorus prior to the Time of Closing. Such rights shall remain in full force and effect until the Time of Closing.
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(b)
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Notice. Any notice or other communication required or permitted to be given under this Agreement shall be in writing and shall be given by prepaid mail, by facsimile or other means of electronic communication or by hand-delivery. Any such notice or other communication, if mailed by prepaid mail shall be deemed to have been received on the second day after the date that was post-marked upon it, or if sent by facsimile or other means of electronic communication or hand-delivered, shall be deemed to have been received on the day it is delivered. All notices and other communications given or made pursuant to this Agreement shall be addressed as follows:
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(i)
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if to TEMIC:
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(ii)
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if to Lorus:
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(c)
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Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the Province of Ontario and the laws of Canada applicable therein.
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(d)
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Severability. Except as otherwise contemplated herein, should any provisions of this Agreement be held by a court of law to be illegal, invalid or unenforceable, the legality, validity and enforceability of the remaining provisions of this Agreement shall not be affected or impaired thereby.
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(e)
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Entire Agreement. This Agreement, including the agreements contemplated in the Schedules hereto, constitutes the entire agreement between the parties relating to this subject matter and supersedes all prior or contemporaneous oral or written agreements concerning such subject matter. This Agreement may only be changed by mutual agreement or authorized representatives of the parties in writing.
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(f)
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Counterparts. This Agreement may be executed in any number of counterparts provided each party executes a counterpart and all of these counterparts taken together shall for all purposes constitute one agreement, binding on the parties notwithstanding that all parties are not signatory to the same counterpart. Counterparts may be executed either in original or faxed form and the parties adopt any signatures received by a receiving fax machine as original signatures of the parties; provided, however, that any party providing its signature in such manner shall promptly forward to the other party an original of the signed copy of this Agreement which was so faxed.
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(g)
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Enurement. This Agreement will enure to the benefit of and be binding upon the respective successors and assigns of the parties.
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LORUS THERAPEUTICS INC.
Per:___________________________________________
Name: Aiping Young
Title: Authorized Signing Officer
I have authority to bind the corporation
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THE ERIN MILLS INVESTMENT CORPORATION
Per:____________________________________________
Name: Gerry C. Quinn
Title: President
I have authority to bind the corporation
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File No.
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Registration No. and Registration Period
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Debtor(s)
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Secured Party
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Collateral Description
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636556365
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20070621 1406 1462 2101
As transferred by Registration No.
20070711 1402 1462 6697
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6650309 Canada Inc.
Transferred to Lorus Therapeutics Inc.
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The Erin Mills Investment Corporation
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I/E/A/O/MVI
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609534108
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20041004 1952 1531 7995
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Genesense Technologies Inc.
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The Erin Mills Investment Corporation
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I/E/A/O/MVI
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