Development Agreement

Exhibit 10.1

THIS AGREEMENT made as of December 29, 2006.

BETWEEN:

GLOBE LABORATORIES INC. ,
a company amalgamated under the laws of British Columbia

(the “ Vendor ”)

AND:

CHEMOKINE THERAPEUTICS (B.C.) CORP .,
a company incorporated under the laws of British Columbia

(the “ Purchaser ”)

AND:

CHEMOKINE THERAPEUTICS CORP.
a corporation incorporated under the laws of Delaware

(“ CTC ”)

WHEREAS:

THIS AGREEMENT WITNESSES THAT, in consideration of the premises and the covenants and agreements herein contained, the Vendor and the Purchaser agree as follows:

ARTICLE 1
INTERPRETATION

1.1 Definitions.

In this Agreement unless otherwise expressly provided:

“ Agreement ” means this agreement and all amendments made hereto by written agreement between the Vendor, the Purchaser and CTC;

“ Assets ” has the meaning set out in Section 2.1;

“ Business Day ” means a day other than a Saturday, Sunday or statutory holiday in British Columbia;

“ Closing Date ” means January 1, 2007 or such other date as may be agreed to in writing between the Vendor and the Purchaser;

“ Effective Time ” means 12:01 a.m. (Vancouver time) on the Closing Date or such other time on the Closing Date as the parties hereto may agree;

“ Employees ” means all employees employed by the Vendor as at today’s date, except Gleb Feldman and Yong Chen;

“ Excluded Liabilities ” has the meaning set out in Section 2.2;

“ IRAP Agreement ” means the contribution agreement which came into effect on November 1, 2005 between the Vendor and the National Research Council Canada;

“ Purchase Price ” has the meaning set out in Section 3.1; and

“ Sublease ” means the Vendor’s interest in a certain sublease described in an Extension and Amendment of Sub-Lease between Discovery Parks Trust and the Vendor dated for reference the 13 ^th day of December, 2006, covering certain premises located at the Gerald McGavin Building at 2386 East Mall, University of British Columbia, Vancouver, British Columbia.

1.2 Interpretatio n.

In this Agreement:

1.3 Governing Law.

This Agreement and all matters arising hereunder will be governed by and construed in accordance with the laws of the Province of British Columbia and the federal laws of Canada applicable therein.

ARTICLE 2
SALE AND PURCHASE OF ASSETS

2.1 Assets to be Sold and Purchased.

Upon and subject to the terms and conditions hereof, the Vendor hereby agrees to sell, transfer and assign to the Purchaser, and the Purchaser hereby agrees to purchase and accept from the Vendor the property and equipment owned by the Vendor listed in Schedule A hereto together with the subleasehold interest (including improvements) described in Schedule E (collectively, the “Assets”), free and clear of all liens, charges and encumbrances.

The Purchaser agrees to assume the obligations of the lease for the photocopy machine to be transferred from the Vendor to the Purchaser on the Closing Date.

2.2 Excluded Liabilities.

2.3 Chemokine Assets

The Vendor acknowledges that the equipment listed in Schedule S belongs to the Purchaser and on or before February 28, 2007 will either be returned to the Purchaser or purchased for $40,800 being the fair market value as determined by Universal Appraisal Company Ltd. of Burnaby, British Columbia by the Vendor together with GST and PST thereon. The Purchaser shall have the right to setoff the amount due (including GST and PST) against any amount owing by it to the Vendor, provided it agrees to remit the GST and PST thereon.

ARTICLE 3
PURCHASE PRICE

3.1 Purchase Price

The purchase price payable by the Purchaser to the Vendor for the Assets (the “Purchase Price”) is $375,935 which is equal to the aggregate fair market value of the Assets as of the Closing Date, as determined by Universal Appraisal Company Ltd. of Burnaby, British Columbia.

3.2 Payment of Purchase Price

The Purchaser will pay the Purchase Price to the Vendor on the Closing Date as follows:

If requested by the Vendor the Purchaser will grant a security interest in the Assets securing payment of the notes.

3.3 Allocation of Purchase Price.

The Purchase Price shall be allocated among the Assets as set out in Schedule D.

ARTICLE 4
TAX MATTERS

4.1 GST Payment

The Purchaser will be liable for all GST properly payable upon and in connection with the sale, transfer and assignment of the Assets and other transactions contemplated herein between the Vendor and the Purchaser.

4.2 PST Payment.

The Purchaser will be liable for and will pay and remit all provincial sales taxes (if any), registration charges and transfer fees properly payable upon and in connection with sale, transfer and assignment of the Assets and other transactions contemplated herein between the Vendor and the Purchaser.

ARTICLE 5
REPRESENTATIONS AND WARRANTIES

5.1 Representations and Warranties of Vendor.

The Vendor represents and warrants to the Purchaser that:

5.2 Acknowledgment of Purchaser.

The Purchaser acknowledges that otherwise than as provided in Section 5.1 above, the Assets are sold and transferred “as is” and that the Vendor makes no warranty or representation as to the physical condition of the Assets or any part thereof and any implied warranties whether pursuant to the Sale of Goods Act or otherwise are expressly denied by the Vendor and waived by the Purchaser.

5.3 Representations and Warranties of Purchaser.

The Purchaser represents and warrants to the Vendor that the Purchaser is a corporation duly incorporated and existing under the laws of British Columbia; the Purchaser is duly qualified to purchase and own the Assets and the Purchaser has full power, authority and capacity to enter into this Agreement and carry out the transactions contemplated herein.

ARTICLE 6
EMPLOYEES

6.1 Offers of Employment.

The Vendor and the Purchaser acknowledge that the Purchaser has made offers of employment to all Employees at a remuneration equal or greater to that paid by the Vendor prior to their termination effective December 31, 2006..

6.2 Termination by Vendor.

The Vendor covenants and agrees to take such steps as are necessary to terminate the employment of the Employees. As between the Vendor and the Purchaser, the Vendor is solely responsible for and will discharge all obligations and liabilities for wages, severance pay, termination pay, notice of termination of employment or payment in lieu of such notice, damages for wrongful dismissal or other employee benefits or claims, including vacation and overtime pay accrued up to the close of business on the date immediately preceding the Closing Date.

ARTICLE 7
TERMINATION OF OBLIGATIONS UNDER
DEVELOPMENT AGREEMENT

7.1 End of Research and Development Under the Agreement.

CTC and the Vendor agree that the Vendor will cease conducting research and development activities for the benefit of CTC under the Development Agreement after December 31, 2006 and without prejudice to payment obligations with respect to the period prior to January 1, 2007, CTC will accordingly have no obligation to pay for research and development conducted by the Vendor after December 31, 2006.

7.2 Remaining Provisions of Development Agreement Unaffected.

All other provisions of the Development Agreement, and in particular the provisions relating to Confidential Information (as defined in the Development Agreement), remain in full force and effect except to reflect the termination of further research and development.

7.3 Financial Statements, Books and Records.

The Vendor will provide to CTC within 60 days after the respective year ends the Vendor’s financial statements prepared by an D&H Chartered Accountants Group for the fiscal years ended December 31, 2006 and December 31, 2007 and permit CTC and its advisors to inspect

the books and records of the Vendor, as necessary, in order for CTC to verify the calculation of costs.

7.4 Adjustments.

Subject to Section 7.3, CTC and the Vendor will, by February 28, 2007, adjust all amounts due between CTC and the Vendor under the Development Agreement, for the period from January 1, 2003 to December 31, 2006, including making a final determination of costs and by taking into account advances made by CTC to the Vendor, other inter-company accounts and other items which properly require adjustment between the parties.

7.5 Delivery of Items.

7.6 Non-Competition.

The Vendor shall not, for a period of five (5) years following the Closing Date, throughout the world, directly or indirectly, as an owner, agent, contractor, consultant, or otherwise, enter into any business or activities in competition with the present business of the Purchaser or CTC, namely research and development of chemokine agonists and antagonists in the treatment of cancer or for the purpose of stem cell mobilization, neutrophils mobilization or platelets mobilization; and the use of chemokine agonists or antagonists in the growth and stimulation of stem cells or white blood cells and also specifically including any business or activities relating to research and development and that are identical or substantially similar to the ones performed under the Development Agreement.

7.7 Non-Solicitation.

The Vendor agrees that, for a period of five (5) years following the Closing Date, it will not knowingly, either directly or indirectly, solicit, accept or engage the services or assistance, financial or otherwise of any Employee or other employees of the Purchaser or CTC for itself or for any other person in respect of any business operation.

7.8 Equitable Remedies.

The Vendor acknowledges and agrees that a breach by it of any of the covenants contained in this Article 7 or the covenants in the Development Agreement relating to Confidential Information (as defined in the Development Agreement) might result in damages to CTC or the Purchaser and that CTC or the Purchaser may not adequately be compensated for such damages by monetary award. Accordingly, the Vendor agrees that, in the event of any such breach, in addition to any other remedies available to CTC and the Purchaser at law or in equity, CTC or the Purchaser, as the case may be, will be entitled to apply to a court of competent equitable jurisdiction for such relief by way of restraining order, injunction, decree or otherwise, as may be appropriate to ensure compliance with the provisions of this Article 7 and the covenants in the Development Agreement relating to Confidential Information (as defined in the Development Agreement).

7.9 Mediation/Arbitration.