Document:

EX-4.2 COMMON STOCK PURCHASE WARRANT/330,470 SHARE

 

Exhibit 4.2

THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
ANY STATE SECURITIES LAWS. THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE
OF THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS WARRANT UNDER SAID ACT AND
ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO VERSO TECHNOLOGIES, INC. THAT SUCH REGISTRATION IS NOT REQUIRED.

Right to Purchase up to 330,470 Shares of Common Stock of

VERSO TECHNOLOGIES, INC.

(subject to adjustment as provided herein)

COMMON STOCK PURCHASE WARRANT

			
	No. VC0104
	 	Issue Date: December 29, 2006

     VERSO TECHNOLOGIES, INC., a corporation organized under the laws of the State of Minnesota
(the “Company”), hereby certifies that, for value received, LAURUS MASTER FUND, LTD., or assigns
(the “Holder”), is entitled, subject to the terms set forth below, to purchase from the Company (as
defined herein) from and after the Issue Date of this Warrant and at any time or from time to time
before 5:00 p.m., New York time, through the close of business December ___, 2011 (the “Expiration
Date”), up to 330,470 fully paid and nonassessable shares of Common Stock (as hereinafter defined),
$0.01 par value per share, at the applicable Exercise Price per share (as defined below). The
number and character of such shares of Common Stock and the applicable Exercise Price per share are
subject to adjustment as provided herein.

     As used herein the following terms, unless the context otherwise requires, have the following
respective meanings:

     (a) The term “Company” shall include Verso Technologies, Inc. and any person or entity
which shall succeed, or assume the obligations of, Verso Technologies, Inc. hereunder.

     (b) The term “Common Stock” includes (i) the Company’s Common Stock, par value $0.01
per share; and (ii) any other securities into which or for which any of the securities
described in the preceding clause (i) may be converted or exchanged pursuant to a plan of
recapitalization, reorganization, merger, sale of assets or otherwise.

     (c) The term “Other Securities” refers to any stock (other than Common Stock) and other
securities of the Company or any other person (corporate or otherwise) which the holder of
the Warrant at any time shall be entitled to receive, or shall have

Warrant

 

 

received, on the exercise of the Warrant, in lieu of or in addition to Common Stock, or
which at any time shall be issuable or shall have been issued in exchange for or in
replacement of Common Stock or Other Securities pursuant to Section 4 or otherwise.

     (i) The “Exercise Price” applicable under this Warrant shall be a price of
$0.91.

     1. Exercise of Warrant.

          1.1 Number of Shares Issuable upon Exercise. From and after the date hereof through
and including the Expiration Date, the Holder shall be entitled to receive, upon exercise of this
Warrant in whole or in part, by delivery of an original or fax copy of an exercise notice in the
form attached hereto as Exhibit A (the “Exercise Notice”), shares of Common Stock of the Company,
subject to adjustment pursuant to Section 4.

          1.2 Fair Market Value. For purposes hereof, the “Fair Market Value” of a share of
Common Stock as of a particular date (the “Determination Date”) shall mean:

     (a) If the Company’s Common Stock is traded on the American Stock Exchange or another
national exchange or is quoted on the National or Capital Market of The Nasdaq Stock Market,
Inc. (“Nasdaq”), then the closing or last sale price, respectively, reported for the last
business day immediately preceding the Determination Date.

     (b) If the Company’s Common Stock is not traded on the American Stock Exchange or
another national exchange or on the Nasdaq but is traded on the NASD Over The Counter
Bulletin Board, then the mean of the average of the closing bid and asked prices reported
for the last business day immediately preceding the Determination Date.

     (c) Except as provided in clause (d) below, if the Company’s Common Stock is not
publicly traded, then as the Holder and the Company agree or in the absence of agreement by
arbitration in accordance with the rules then in effect of the American Arbitration
Association, before a single arbitrator to be chosen from a panel of persons qualified by
education and training to pass on the matter to be decided.

     (d) If the Determination Date is the date of a liquidation, dissolution or winding up,
or any event deemed to be a liquidation, dissolution or winding up pursuant to the Company’s
charter, then all amounts to be payable per share to holders of the Common Stock pursuant to
the charter in the event of such liquidation, dissolution or winding up, plus all other
amounts to be payable per share in respect of the Common Stock in liquidation under the
charter, assuming for the purposes of this clause (d) that all of the shares of Common Stock
then issuable upon exercise of the Warrant are outstanding at the Determination Date.

          1.3 Company Acknowledgment. The Company will, at the time of the exercise of this
Warrant, upon the request of the holder hereof acknowledge in writing its continuing obligation to
afford to such holder any rights to which such holder shall continue to

Warrant

2

 

be entitled after such exercise in accordance with the provisions of this Warrant. If the
holder shall fail to make any such request, such failure shall not affect the continuing obligation
of the Company to afford to such holder any such rights.

          1.4 Trustee for Warrant Holders. In the event that a bank or trust company shall have
been appointed as trustee for the holders of this Warrant pursuant to Subsection 3.2, such bank or
trust company shall have all the powers and duties of a warrant agent (as hereinafter described)
and shall accept, in its own name for the account of the Company or such successor person as may be
entitled thereto, all amounts otherwise payable to the Company or such successor, as the case may
be, on exercise of this Warrant pursuant to this Section 1.

     2. Procedure for Exercise.

          2.1 Delivery of Stock Certificates, Etc., on Exercise. The Company agrees that the
shares of Common Stock purchased upon exercise of this Warrant shall be deemed to be issued to the
Holder as the record owner of such shares as of the close of business on the date on which this
Warrant shall have been surrendered and payment made for such shares in accordance herewith. As
soon as practicable after the exercise of this Warrant in full or in part, and in any event within
three (3) business days thereafter, the Company at its expense (including the payment by it of any
applicable issue taxes) will cause to be issued in the name of and delivered to the Holder, or as
such Holder (upon payment by such Holder of any applicable transfer taxes) may direct in compliance
with applicable securities laws, a certificate or certificates for the number of duly and validly
issued, fully paid and nonassessable shares of Common Stock (or Other Securities) to which such
Holder shall be entitled on such exercise, plus, in lieu of any fractional share to which such
holder would otherwise be entitled, cash equal to such fraction multiplied by the then Fair Market
Value of one full share, together with any other stock or other securities and property (including
cash, where applicable) to which such Holder is entitled upon such exercise pursuant to Section 1
or otherwise.

          2.2 Exercise.

     (a) Payment may be made either (i) in cash or by certified or official bank check
payable to the order of the Company equal to the applicable aggregate Exercise Price, (ii)
by delivery of this Warrant, or shares of Common Stock and/or Common Stock receivable upon
exercise of this Warrant in accordance with the formula set forth in subsection (b) below,
or (iii) by a combination of any of the foregoing methods, for the number of Common Shares
specified in such Exercise Notice (as such exercise number shall be adjusted to reflect any
adjustment in the total number of shares of Common Stock issuable to the Holder per the
terms of this Warrant) and the Holder shall thereupon be entitled to receive the number of
duly authorized, validly issued, fully-paid and non-assessable shares of Common Stock (or
Other Securities) determined as provided herein.

     (b) Notwithstanding any provisions herein to the contrary, if (a) the Fair Market Value
of one share of Common Stock is greater than the Exercise Price (at the date of calculation
as set forth below), (b) an effective registration statement filed pursuant to that certain
Registration Rights Agreement entered into by the Company and Holder dated as of the date
hereof, as the same may be amended, modified and/or

Warrant

3

 

supplemented from time to time (the “Registration Rights Agreement”), is not available
for the resale of all of the shares of Common Stock issuable upon exercise of this Warrant
at the time a properly endorsed Exercise Notice is delivered to the Company, and (c) such
Exercise Notice is delivered on or after the one-year anniversary of the Issue Date, in lieu
of exercising this Warrant for cash, the Holder may elect to receive shares equal to the
value (as determined below) of this Warrant (or the portion thereof being exercised) by
surrender of this Warrant at the principal office of the Company together with the properly
endorsed Exercise Notice in which event the Company shall issue to the Holder a number of shares of Common Stock computed using the following formula:

	 	 	 	 	 	 	 
	 

	 	X=
	 	Y(A-B)
 

      A
	 	 

Where X = the number of shares of Common Stock to be issued to the Holder

	 	 	 	 	 	 	 
	 

	 	Y
	 	=
	 	the number of shares of Common Stock purchasable under this Warrant or, if
only a portion of this Warrant is being exercised, the portion of this Warrant being
exercised (at the date of such calculation)
	 
	 	 	 	 	 	 
	 

	 	A
	 	=
	 	the Fair Market Value of one share of the Company’s Common Stock (at the date
of such calculation)
	 
	 	 	 	 	 	 
	 

	 	B
	 	=
	 	the Exercise Price per share (as adjusted to the date of such calculation)

     3. Effect of Reorganization, Etc.; Adjustment of Exercise Price.

          3.1 Reorganization, Consolidation, Merger, Etc. In case at any time or from time to
time, the Company shall (a) effect a reorganization, (b) consolidate with or merge into any other
person, or (c) transfer all or substantially all of its properties or assets to any other person
under any plan or arrangement contemplating the dissolution of the Company, then, in each such
case, as a condition to the consummation of such a transaction, proper and adequate provision shall
be made by the Company whereby the Holder, on the exercise hereof as provided in Section 1 at any
time after the consummation of such reorganization, consolidation or merger or the effective date
of such dissolution, as the case may be, shall receive, in lieu of the Common Stock (or Other
Securities) issuable on such exercise prior to such consummation or such effective date, the stock
and other securities and property (including cash) to which such Holder would have been entitled
upon such consummation or in connection with such dissolution, as the case may be, if such Holder
had so exercised this Warrant, immediately prior thereto, all subject to further adjustment
thereafter as provided in Section 4.

          3.2 Dissolution. In the event of any dissolution of the Company following the
transfer of all or substantially all of its properties or assets, the Company, concurrently with
any distributions made to holders of its Common Stock, shall at its expense deliver or cause to be
delivered to the Holder the stock and other securities and property (including cash, where
applicable) receivable by the Holder pursuant to Section 3.1, or, if the Holder shall so instruct
the Company, to a bank or trust company specified by the Holder and having its principal office in
New York, NY as trustee for the Holder.

Warrant

4

 

          3.3 Continuation of Terms. Upon any reorganization, consolidation, merger or transfer
(and any dissolution following any transfer) referred to in this Section 3, this Warrant shall
continue in full force and effect and the terms hereof shall be applicable to the shares of stock
and other securities and property receivable on the exercise of this Warrant after the consummation
of such reorganization, consolidation or merger or the effective date of dissolution following any
such transfer, as the case may be, and shall be binding upon the issuer of any such stock or other
securities, including, in the case of any such transfer, the person acquiring all or substantially
all of the properties or assets of the Company, whether or not such person shall have expressly
assumed the terms of this Warrant as provided in Section 4. In the event this Warrant does not
continue in full force and effect after the consummation of the transactions described in this
Section 3, then the Company’s securities and property (including cash, where applicable) receivable
by the Holder will be delivered to the Holder or the Trustee as contemplated by Section 3.2.

     4. Extraordinary Events Regarding Common Stock. In the event that the Company shall
(a) issue additional shares of the Common Stock as a dividend or other distribution on outstanding
Common Stock or any preferred stock issued by the Company, (b) subdivide its outstanding shares of
Common Stock, (c) combine its outstanding shares of the Common Stock into a smaller number of
shares of the Common Stock, then, in each such event, the Exercise Price shall, simultaneously with
the happening of such event, be adjusted by multiplying the then Exercise Price by a fraction, the
numerator of which shall be the number of shares of Common Stock outstanding immediately prior to
such event and the denominator of which shall be the number of shares of Common Stock outstanding
immediately after such event, and the product so obtained shall thereafter be the Exercise Price
then in effect. The Exercise Price, as so adjusted, shall be readjusted in the same manner upon the
happening of any successive event or events described herein in this Section 4. The number of
shares of Common Stock that the holder shall thereafter, on the exercise hereof as provided in
Section 1, be entitled to receive shall be adjusted to a number determined by multiplying the
number of shares of Common Stock that would otherwise (but for the provisions of this Section 4) be
issuable on such exercise by a fraction of which (a) the numerator is the Exercise Price that would
otherwise (but for the provisions of this Section 4) be in effect, and (b) the denominator is the
Exercise Price in effect on the date of such exercise (taking into account the provisions of this
Section 4). Notwithstanding the foregoing, in no event shall the Exercise Price be less than the
par value of the Common Stock.

     5. Certificate as to Adjustments. In each case of any adjustment or readjustment in
the shares of Common Stock (or Other Securities) issuable on the exercise of this Warrant, the
Company at its expense will promptly cause its Chief Financial Officer or other appropriate
designee to compute such adjustment or readjustment in accordance with the terms of this Warrant
and prepare a certificate setting forth such adjustment or readjustment and showing in detail the
facts upon which such adjustment or readjustment is based, including a statement of (a) the
consideration received or receivable by the Company for any additional shares of Common Stock (or
Other Securities) issued or sold or deemed to have been issued or sold, (b) the number of shares of
Common Stock (or Other Securities) outstanding or deemed to be outstanding, and (c) the Exercise
Price and the number of shares of Common Stock to be received upon exercise of this Warrant, in
effect immediately prior to such adjustment or readjustment and as adjusted or

Warrant

5

 

readjusted as provided in this Warrant. The Company will forthwith mail a copy of each such
certificate to the holder and any Warrant agent of the Company (appointed pursuant to Section 11
hereof).

     6. Reservation of Stock, Etc., Issuable on Exercise of Warrant. The Company will at
all times reserve and keep available, solely for issuance and delivery on the exercise of this
Warrant, shares of Common Stock (or Other Securities) from time to time issuable on the exercise of
this Warrant.

     7. Assignment; Exchange of Warrant. Subject to compliance with applicable securities
laws, this Warrant, and the rights evidenced hereby, may be transferred by any registered holder
hereof (a “Transferor”) in whole or in part. On the surrender for exchange of this Warrant, with
the Transferor’s endorsement in the form of Exhibit B attached hereto (the “Transferor Endorsement
Form”) and together with evidence reasonably satisfactory to the Company demonstrating compliance
with applicable securities laws, which shall include, without limitation, a legal opinion from the
Transferor’s counsel (at the Company’s expense) that such transfer is exempt from the registration
requirements of applicable securities laws, the Company at its expense (but with payment by the
Transferor of any applicable transfer taxes) will issue and deliver to or on the order of the
Transferor thereof a new Warrant of like tenor, in the name of the Transferor and/or the
transferee(s) specified in such Transferor Endorsement Form (each a “Transferee”), calling in the
aggregate on the face or faces thereof for the number of shares of Common Stock called for on the
face or faces of the Warrant so surrendered by the Transferor.

     8. Replacement of Warrant. On receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of any such
loss, theft or destruction of this Warrant, on delivery of an indemnity agreement or security
reasonably satisfactory in form and amount to the Company or, in the case of any such mutilation,
on surrender and cancellation of this Warrant, the Company at its expense will execute and deliver,
in lieu thereof, a new Warrant of like tenor.

     9. Registration Rights. The Holder has been granted certain registration rights by
the Company. These registration rights are set forth in a Registration Rights Agreement.

     10. Maximum Exercise. Notwithstanding anything herein to the contrary, in no event
shall the Holder be entitled to exercise any portion of this Warrant in excess of that portion of
this Warrant upon exercise of which the sum of (1) the number of shares of Common Stock
beneficially owned by the Holder and its Affiliates (other than shares of Common Stock which may be
deemed beneficially owned through the ownership of the unexercised portion of the Warrant or the
unexercised or unconverted portion of any other security of the Holder subject to a limitation on
conversion analogous to the limitations contained herein) and (2) the number of shares of Common
Stock issuable upon the exercise of the portion of this Warrant with respect to which the
determination of this proviso is being made, would result in beneficial ownership by the Holder and
its Affiliates of any amount greater than 9.99% of the then outstanding shares of Common Stock
(whether or not, at the time of such exercise, the Holder and its Affiliates beneficially own more
than 9.99% of the then outstanding shares of Common Stock). As used herein, the term “Affiliate”
means any person or entity that, directly or indirectly through one or

Warrant

6

 

more intermediaries, controls or is controlled by or is under common control with a person or
entity, as such terms are used in and construed under Rule 144 under the Securities Act. For
purposes of the proviso to the second preceding sentence, beneficial ownership shall be determined
in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended, and
Regulations 13D-G thereunder, except as otherwise provided in clause (1) of such proviso. The
limitations set forth herein (x) may be waived by the Holder upon provision of no less than
sixty-one (61) days prior notice to the Company and (y) shall automatically become null and void
following notice to the Company upon the occurrence and during the continuance of an Event of
Default (as defined in the Security Agreement dated as of the date hereof among the Holder, the
Company and various subsidiaries of the Company (as amended, modified, restated and/or supplemented
from time to time, the “Security Agreement”)), except that at no time shall the number of shares of
Common Stock beneficially owned by the Holder exceed 19.99% of the outstanding shares of Common
Stock. Notwithstanding anything contained herein to the contrary, the number of shares of Common
Stock issuable by the Company and acquirable by the Holder pursuant to the terms of this Warrant,
the Security Agreement, any Ancillary Agreement (as defined in the Security Agreement) or
otherwise, shall not exceed an aggregate of 7,390,182 shares of Common Stock (subject to
appropriate adjustment for stock splits, stock dividends, or other similar recapitalizations
affecting the Common Stock) (the “Maximum Common Stock Issuance”), unless the issuance of Common
Shares hereunder in excess of the Maximum Common Stock Issuance shall first be approved by the
Company’s shareholders. If at any point in time and from time to time the number of shares of
Common Stock issued pursuant to the terms of this Warrant, the Security Agreement, any Ancillary
Agreement (as defined in the Security Agreement) or otherwise, together with the number of shares
of Common Stock that would then be issuable by the Company to the Holder in the event of a
conversion pursuant to the terms of this Warrant, the Security Agreement, any Ancillary Agreement
(as defined in the Security Agreement) or otherwise, would exceed the Maximum Common Stock Issuance
but for this Section 10, the Company shall promptly call a shareholders meeting to solicit
shareholder approval for the issuance of the shares of Common Stock hereunder in excess of the
Maximum Common Stock Issuance.

     11. Warrant Agent. The Company may, by written notice to the each Holder of the
Warrant, appoint an agent for the purpose of issuing Common Stock (or Other Securities) on the
exercise of this Warrant pursuant to Section 1, exchanging this Warrant pursuant to Section 7, and
replacing this Warrant pursuant to Section 8, or any of the foregoing, and thereafter any such
issuance, exchange or replacement, as the case may be, shall be made at such office by such agent.

     12. Transfer on the Company’s Books. Until this Warrant is transferred on the books
of the Company, the Company may treat the registered holder hereof as the absolute owner hereof for
all purposes, notwithstanding any notice to the contrary.

     13. Notices, Etc. All notices and other communications from the Company to the Holder
shall be mailed by first class registered or certified mail, postage prepaid, at such address as
may have been furnished to the Company in writing by such Holder or, until any such Holder
furnishes to the Company an address, then to, and at the address of, the last Holder who has so
furnished an address to the Company.

Warrant

7

 

     14. Miscellaneous. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party against which
enforcement of such change, waiver, discharge or termination is sought. THIS WARRANT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS. ANY ACTION BROUGHT CONCERNING THE TRANSACTIONS CONTEMPLATED BY
THIS WARRANT SHALL BE BROUGHT ONLY IN STATE COURTS OF NEW YORK OR IN THE FEDERAL COURTS LOCATED IN
THE STATE OF NEW YORK; PROVIDED, HOWEVER, THAT THE HOLDER MAY CHOOSE TO WAIVE THIS PROVISION AND
BRING AN ACTION OUTSIDE THE STATE OF NEW YORK. The individuals executing this Warrant on behalf of
the Company agree to submit to the jurisdiction of such courts and waive trial by jury. The
prevailing party shall be entitled to recover from the other party its reasonable attorneys’ fees
and costs. In the event that any provision of this Warrant is invalid or unenforceable under any
applicable statute or rule of law, then such provision shall be deemed inoperative to the extent
that it may conflict therewith and shall be deemed modified to conform with such statute or rule of
law. Any such provision which may prove invalid or unenforceable under any law shall not affect
the validity or enforceability of any other provision of this Warrant. The headings in this
Warrant are for purposes of reference only, and shall not limit or otherwise affect any of the
terms hereof. The invalidity or unenforceability of any provision hereof shall in no way affect
the validity or enforceability of any other provision hereof. The Company acknowledges that legal
counsel participated in the preparation of this Warrant and, therefore, stipulates that the rule of
construction that ambiguities are to be resolved against the drafting party shall not be applied in
the interpretation of this Warrant to favor any party against the other party.

[BALANCE OF PAGE INTENTIONALLY LEFT BLANK;

SIGNATURE PAGE FOLLOWS]

Warrant

8

 

     IN WITNESS WHEREOF, the Company has executed this Warrant as of the date first written above.

	 	 	 	 	 	 	 	 	 
	 	 	 	 	VERSO TECHNOLOGIES, INC.	 	 
	WITNESS:
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 /s/ Martin D. Kidder	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 Martin D. Kidder	 	 
	 

	 	 	 	 	 	 	 	 
	 /s/ Jeffrey
Richards

	 	 	 	Title:	 	 CFO	 	 
	 

	 	 	 	 	 	 	 	 
	  Jeffrey
Richards

	 	 	 	 	 	 	 	 

Warrant

9

 

EXHIBIT A

FORM OF SUBSCRIPTION

(To Be Signed Only On Exercise Of Warrant)

	 	 	 
	TO:

	 	Verso Technologies, Inc.
	 

	 	400 Galleria Parkway
	 

	 	Suite 200
	 

	 	Atlanta, Georgia 30339
	 

	 	Attention: Chief Financial Officer

     The undersigned, pursuant to the provisions set forth in the attached Warrant (No.___),
hereby irrevocably elects to purchase (check applicable box):

	 	 	 
	                    

	 	                     shares of the common stock covered by such warrant; or
	 
	 	 
	                    

	 	the maximum number of shares of common stock covered by such
warrant pursuant to the cashless exercise procedure set forth in
Section 2.

     The undersigned herewith makes payment of the full Exercise Price for such shares at the price
per share provided for in such Warrant, which is $___. Such payment takes the form of
(check applicable box or boxes):

	 	 	 
	                    

	 	$                     in lawful money of the United States; and/or
	 
	 	 
	                    

	 	the cancellation of such portion of the attached Warrant as is
exercisable for a total of ___ shares of Common Stock (using
a Fair Market Value of $     per share for purposes of this
calculation); and/or
	 
	 	 
	                    

	 	the cancellation of such number of shares of Common Stock as is
necessary, in accordance with the formula set forth in Section
2.2, to exercise this Warrant with respect to the maximum number
of shares of Common Stock purchasable pursuant to the cashless
exercise procedure set forth in Section 2.

     The undersigned requests that the certificates for such shares be issued in the name of, and
delivered to                                                              whose address is
                                                                                .

     The undersigned represents and warrants that (i) all offers and sales by the undersigned of
the securities issuable upon exercise of the within Warrant shall be made pursuant to registration
of the Common Stock under the Securities Act of 1933, as amended (the “Securities Act”) or pursuant
to an exemption from registration under the Securities Act; and (ii) the undersigned is an
accredited investor within the meaning of Regulation D under Securities Act.

	 	 	 	 	 	 	 	 	 	 	 
	Dated:
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	(Signature must conform to name of holder as
specified on the face of the Warrant)	 	 
	 

	 	 	 	 	 	Address:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 

Warrant

10

 

EXHIBIT B

FORM OF TRANSFEROR ENDORSEMENT

(To Be Signed Only On Transfer Of Warrant)

     For value received, the undersigned hereby sells, assigns, and transfers unto the person(s)
named below under the heading “Transferees” the right represented by the within Warrant to purchase
the percentage and number of shares of Common Stock of Verso Technologies, Inc. into which the
within Warrant relates specified under the headings “Percentage Transferred” and “Number
Transferred,” respectively, opposite the name(s) of such person(s) and appoints each such person
Attorney to transfer its respective right on the books of Verso Technologies, Inc. with full power
of substitution in the premises.

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Percentage	 	Number
	Transferees	 	Address	 	 	 	Transferred	 	Transferred
	 
	 	 	 	 	 	 	 	 

	 	 	 	 	 	 	 	 	 	 	 
	Dated:
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	(Signature must conform to name of holder as
specified on the face of the Warrant)	 	 
	 

	 	 	 	 	 	Address:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	SIGNED IN THE PRESENCE OF:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	(Name)	 	 

ACCEPTED AND AGREED:

[TRANSFEREE]

	 	 	 
	 

(Name)

	 	 

Warrant

11exv10w1

 

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:

	A.	 	CTC and the Vendor entered into a Development Agreement dated January 1, 2003 (the
“Development Agreement”) with respect to the Vendor providing biotechnology research and
development for the benefit of CTC;
	 
	B.	 	The Vendor and CTC wish to cease future research and development under the Development
Agreement;
	 
	C.	 	The Purchaser is a wholly-owned subsidiary of CTC; and
	 
	D.	 	The Vendor desires to sell and the Purchaser desires to purchase certain assets of the Vendor
on an “as is” basis and otherwise subject to the terms and conditions set forth in this
Agreement.

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:

1

 

“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
13th 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 Interpretation. 

In this Agreement:

	 	(i)	 	“this Agreement” means this agreement as supplemented or amended and in effect
from time to time and includes the attached schedules;
	 
	 	(ii)	 	all references to a designated “Article”, “section”, “subsection” or other sub
or to a schedule are to the designated Article, section, subsection or other sub of or
schedule to this Agreement;
	 
	 	(iii)	 	the words “herein”, “hereof”, “hereunder” and other words of similar import
refer to this Agreement as a whole and not to any particular Article, section,
subsection, schedule or other sub of this Agreement;
	 
	 	(iv)	 	the headings are for convenience only and do not form a part of this Agreement
and are not intended to interpret, define or limit the scope, extent or intent of this
Agreement or any of its provisions;

2

 

	 	(v)	 	the singular of any term includes the plural, and vice versa, and any reference
to the masculine, feminine or neuter, as the case may be, will include a reference to
each of the masculine, feminine or neuter, as the case may be, and where applicable, a
corporation, the word “or” is not exclusive and the word “including” is not limiting
whether or not non-limiting language (such as “without limitation” or “but not limited
to” or words of similar import) is used with reference thereto but rather refers to all
other items or matters that could reasonably fall within the broadest possible scope of
such general statement, term or matter;
	 
	 	(vi)	 	any reference to currency is to Canadian currency;
	 
	 	(vii)	 	any reference to a statute includes a reference to such statute and to the
regulations made pursuant thereto with all amendments made thereto and in force from
time to time, and to any statute or regulations that may be passed which has the effect
of supplementing or superseding such statute or such regulations; and
	 
	 	(viii)	 	any reference to an entity includes and is also a reference to any entity that is a
successor to such entity.

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.

	 	(a)	 	Except as provided in this Agreement, the Purchaser will not assume and will
not be liable for any other obligations or liabilities of the Vendor whatsoever
including, without limiting the generality of the foregoing:

	 	(i)	 	any obligation to any Employee accrued up to the Closing Date;

3

 

	 	(ii)	 	any taxes or amounts due under the Income Tax Act (Canada) or
any other taxes whatsoever that may be or become payable by the Vendor, or any
income or corporation taxes resulting from or arising as a consequence of the
sale by the Vendor to the Purchaser of the Assets;
	 
	 	(iii)	 	any liabilities of the Vendor arising under or with respect to
the Sublease prior to the Effective Time; and
	 
	 	(iv)	 	any liabilities of the Vendor arising under or with respect to
the IRAP Agreement.

	 	(b)	 	The Vendor will indemnify and save harmless the Purchaser from and against any
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:

	 	(a)	 	as to $125,312 by issuing a non-interest bearing promissory note due January
10, 2007, in the form attached as Schedule B; and
	 
	 	(b)	 	as to $250,623 by issuing an interest bearing promissory note due on the
earlier of June 30, 2007 and 3 business days after CTC completes a material financing,
in the form attached in Schedule C.

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

4

 

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:

	 	(i)	 	the Vendor is a corporation duly amalgamated and existing under the laws of
British Columbia, has the power and authority to enter into this Agreement and to carry
out the transactions contemplated by this Agreement, all of which have been duly and
validly authorized by all requisite proceedings and this Agreements constitutes a
legal, valid and binding obligation of the Vendor;
	 
	 	(ii)	 	the Vendor is the legal and beneficial owner of the Assets;
	 
	 	(iii)	 	the Vendor has and shall, on the Closing Date, have good and marketable title
to the Assets, free and clear of all liens, charges and encumbrances; and
	 
	 	(iv)	 	the Vendor is resident in Canada within the meaning of the Income Tax Act
(Canada).

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

 

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

6

 

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.

	 	(a)	 	The Vendor agrees to deliver to CTC, or the Purchaser, as the case may be, all
Confidential Information (as defined in the Development Agreement), Work Product (as
defined in the Development Agreement) and studies, tests and electronic files and
work-in-progress as well as notes, writings, documents and other materials related to
the Work Product (collectively, the “Delivery Items”).
	 
	 	(b)	 	The Vendor will make delivery of all Delivery Items, as set out in paragraph
(a) above, on or before January 10, 2007 (the “Delivery Date”). In the event that the
Vendor inadvertently fails to deliver anything that would reasonably be considered a
Delivery Item by the Delivery Date, the Vendor agrees and covenants that the Vendor
will not use in any way, or convey, assign or transfer in any way to a third party,
such Delivery Item. The Vendor will safeguard and hold such Delivery Item in trust for
the benefit of CTC until such time as CTC requests delivery of the Delivery Item.

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

 

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.

	 	(a)	 	The Vendor and the CTC will work in good faith to attempt to reach agreement on
all issues covered by this Article 7 and failing such agreement by February 28, 2007,
will work in good faith to resolve any disputes that arise under this Article 7. Where
a dispute arises out of or in connection with this Article 7 that cannot be resolved
by the parties, the parties agree to seek an amicable settlement of that dispute by
mediation and, if necessary, arbitration.
	 
	 	(b)	 	If good faith efforts to resolve the dispute have not been successful, either
party may refer a dispute to mediation by providing written notice to the other party.
If the parties cannot agree on a mediator within fifteen (15) days of receipt of the
notice to mediate, then either party may make application to the British Columbia
Mediator Roster Society to have one appointed. The mediation will be held in Vancouver,
B.C., in accordance with the British Columbia International Commercial Arbitration
Centre’s (the “BCICAC”) “Mediation Procedures for Cases under the BCICAC Rules”, and
the costs of mediation will be shared equally between the parties.
	 
	 	(c)	 	Where mediation is not successful in resolving a dispute and the mediator has
been inactive for forty-five (45) days after the mediation, either party may refer the
dispute for final and binding resolution by arbitration by providing written notice to
the other party. If the parties cannot agree on an arbitrator within thirty (30) days
of receipt of the notice to arbitrate, then either party may make application to the
British Columbia Arbitration & Mediation Institute to appoint one. The arbitration will
be held in Vancouver, B.C., in accordance with the BCICAC’s “Shorter rules for Domestic
Commercial Arbitration”, and the costs of arbitration will be shared equally between
the parties.

8

 

ARTICLE 8

CONDITIONS

8.1 Conditions for the Benefit of the Purchaser.

The sale by the Vendor and the purchase by the Purchaser of the Assets is subject to the following
conditions, which are for the exclusive benefit of the Purchaser and which are to be performed or
complied with at or prior to the Closing Date:

	 	(a)	 	the representations and warranties of the Vendor set forth in Section 5.1 will
be true and correct on the Closing Date with the same force and effect as if made at
and as of such time;
	 
	 	(b)	 	no action or proceeding in Canada will be pending or threatened by any person,
government, governmental authority, regulatory body or agency to enjoin, restrict or
prohibit the sale and purchase of the Assets contemplated hereby;
	 
	 	(c)	 	all necessary steps and proceedings, including the due authorization of the
transactions by the directors and if necessary, the shareholders of the Vendor, will
have been taken to permit the Assets to be duly and regularly transferred to, and the
registrable Assets registered in the name of, the Purchaser free and clear of all
charges, liens and encumbrances and any other rights of others;
	 
	 	(d)	 	the Vendor will have terminated all contracts, whether written or oral, with
the Employees;
	 
	 	(e)	 	the Vendor will have executed any instrument, document or certificate necessary
to effect a partial assignment of the Sublease, substantially in form set out in
Schedule E and received the consent of the landlord therefor; and
	 
	 	(f)	 	the Vendor will have delivered to the Purchaser all other documents and
assurances as reasonably requested by the Purchaser to more effectively complete the
transactions herein provided for.

8.2 Conditions for the Benefit of the Vendor.

The sale by the Vendor and the purchase by the Purchaser of the Assets is subject to the following
conditions, which are for the exclusive benefit of the Vendor and which are to be performed or
complied with at or prior to the Closing Date:

	 	(a)	 	the representations and warranties of the Purchaser set forth in Section 5.3
will be true and correct on the Closing Date with the same force and effect as if made
at and as of such time; and
	 
	 	(b)	 	the directors of the Purchaser and CTC will have approved the transactions
contemplated herein.

9

 

ARTICLE 9

GENERAL

9.1 Risk. 

The Assets will be at the risk of the Vendor until the Effective Time.

9.2 Transfer Documents.

Each of the Vendor and the Purchaser will deliver or cause to be delivered on the Closing Date or
within a reasonable time thereafter all deeds, documents of title, conveyances, bills of sale,
transfers, assignments, declarations of trust, acknowledgements, consents, indentures and other
instruments and documents necessary or desirable to effect the transfer of the Assets to the
Purchaser and to obtain all necessary consents and approvals, if any, in connection therewith or in
respect thereof.

9.3 Time.

Time shall be of the essence of this Agreement and the transactions contemplated in this Agreement
notwithstanding the extension of any of the dates under this Agreement.

9.4 Further Assurances. 

Each of Vendor and the Purchaser will at any time and from time to time execute and deliver such
further agreements, instruments and documents and do all such acts and things as may be necessary
or desirable to give full effect to the meaning and intent of this Agreement.

9.5 Enurement. 

This Agreement will enure to the benefit of and be binding upon the parties and upon their
respective successors and assigns.

9.6 Counterparts/Facsimile Transmission.

This Agreement may be executed in several counterparts, each of which when executed by any of the
parties will be deemed to be an original and such counterparts will together constitute one and the
same instrument. This Agreement may be executed and delivered by facsimile transmission.

9.7 Schedules

The Schedules attached to this Agreement form part of this Agreement.

10

 

IN WITNESS WHEREOF the parties have executed this Agreement on the date first appearing above.

	 	 	 	 	 
	GLOBE LABORATORIES INC.	 	 
	 
	 	 	 	 
	By:

	 	/s/ Hassan Salari
 

Authorized Signatory
	 	 

	 	 	 	 	 
	CHEMOKINE THERAPEUTICS (B.C.) CORP.	 	 
	 
	 	 	 	 
	By:

	 	/s/ Hassan Salari
 

Authorized Signatory
	 	 

	 	 	 	 	 
	CHEMOKINE THERAPEUTICS CORP.	 	 
	 
	 	 	 	 
	By:

	 	/s/ Bashir Jaffer
 

Authorized Signatory
	 	 

11

 

SCHEDULE A

ASSETS

Chemokine Therapeutics Corp.

405-6190 Agronomy Road, Vancouver, BC

	 	 	 	 	 
	 	 	December 18, 2006
	 
	 	 	Market Value
	 	 	“In Use”
	FURNITURE AND FIXTURES
	 	 	 	 
	1- Double pedestal desk
	 	 	275	 
	1- Bookcase and key pad tray
	 	 	100	 
	1- Storage cabinet
	 	 	100	 
	1- Guest chair
	 	 	100	 
	1- Microwave
	 	 	50	 
	1- Desk, bookcase, chair (New Lab, Ahmed)
	 	 	750	 
	1- Fridge/microwave combo
	 	 	150	 
	1- Leather chair (Room 204, Donald)
	 	 	60	 
	1- Fridge
	 	 	150	 
	1- Shredder
	 	 	100	 
	1- Lot of 3 file cabinets - 5 drawer lateral
	 	 	950	 
	1- Artificial plant
	 	 	100	 
	1- Lot of 2 storage cabinet
	 	 	250	 
	1- Desk
	 	 	140	 
	1- Desk
	 	 	140	 
	1- Lot of 4 bookcases, 1 chair
	 	 	500	 
	1- Lot of 5 paper towel holders
	 	 	250	 
	1- Portable heater
	 	 	50	 
	1- Dividers for office
	 	 	170	 
	1- Lab chair
	 	 	700	 
	1- Desk/workstation
	 	 	450	 
	1- Evolution chair
	 	 	80	 
	1- Lot of 3 - DCX Mira desks
	 	 	400	 
	 
	 	 	 	 
	Total Furniture and Fixtures to be purchased by Chemokine
	 	 	6,015	 

12

 

Chemokine Therapeutics Corp.

405-6190 Agronomy Road, Vancouver, BC

	 	 	 	 	 
	 	 	December 18, 2006
	 
	 	 	Market Value
	 	 	“In Use”
	COMPUTER HARDWARE
	 	 	 	 
	1- Cell phone
	 	 	50	 
	1- Fax machine
	 	 	50	 
	1- Computer printer
	 	 	200	 
	1- Palm top (hand-held device) Palm Pilot
	 	 	50	 
	1- Computer equipment
	 	 	200	 
	1- Samsung fax machine
	 	 	150	 
	1- Computer equipment
	 	 	500	 
	1- Computer
	 	 	100	 
	1- Monitor
	 	 	50	 
	1- Computer
	 	 	100	 
	1- Laptop battery
	 	 	0	 
	1- Floppy drive — external
	 	 	10	 
	1- Computer for chemistry office
	 	 	300	 
	1- Monitors, printer
	 	 	150	 
	1- Monitor
	 	 	100	 
	1- Printers
	 	 	50	 
	1- Printer, phone
	 	 	100	 
	1- Phone
	 	 	50	 
	1- Phone
	 	 	50	 
	1- HP printer
	 	 	50	 
	1- Canon Digital Camera (camera stolen in April,
2005)
	 	 	0	 
	1- HP Scanjet 5590 scanner
	 	 	100	 
	1- Scanner
	 	 	10	 
	1- Canon DV Camcorder ZR500
	 	 	200	 
	1- Digital Recorder SN 573601
	 	 	50	 
	1- Backup Unit - 1 Pine 250GB RJ45 HD
	 	 	50	 
	1- Sandisk 2.0 GB Cruzer Micro M2
	 	 	20	 
	 
	 	 	 	 
	Total Computer Hardware to be purchased by Chemokine
	 	 	2,740	 

13

 

Chemokine Therapeutics Corp.

405-6190 Agronomy Road, Vancouver, BC

	 	 	 	 	 
	 	 	December 18, 2006
	 
	 	 	Market Value
	 	 	“In Use”
	COMPUTER SOFTWARE
	 	 	 	 
	1- Adobe Acrobat V 5.0
	 	 	0	 
	1- Microsoft Project 2002
	 	 	0	 
	1- Microsoft Office Pro
	 	 	0	 
	1- Lab software
	 	 	0	 
	1- Quickbooks
	 	 	0	 
	1- Microsoft Office x 2
	 	 	0	 
	1- Acrobat, Office, Int. Security
	 	 	0	 
	1- Chemistry Draw and Bio Draw
	 	 	200	 
	1- Returned Bio Draw
	 	 	0	 
	1- Prism 4 for Windows
	 	 	200	 
	1- Norton Internet Security for Microsoft Office
	 	 	0	 
	1- Microsoft Project and Microsoft Office
	 	 	0	 
	1- ChemDraw
	 	 	200	 
	1- Microsoft Office
	 	 	0	 
	1- Endnote v9
	 	 	0	 
	1- Lot of 11 Microsoft XP Pro Licenses
	 	 	0	 
	1- Lot of 5 - Server Client Access Licenses
	 	 	0	 
	1- Microsoft Office — Mac Student Teacher Ed.
	 	 	0	 
	1- Microsoft Office Professional
	 	 	0	 
	1- EndNote V 9.0 for Mac
	 	 	200	 
	1- Prism 4 for Mac
	 	 	200	 
	1- Set of 3 of 5 server licenses, 3 copies Microsoft Office,
1c
	 	 	0	 
	1- Sonicwall firewall upgrade
	 	 	200	 
	1- Microsoft Office Small Business Edition
	 	 	0	 
	 
	 	 	 	 
	 
	 	 	1,200	 

14

 

Chemokine Therapeutics Corp.

405-6190 Agronomy Road, Vancouver, BC

	 	 	 	 	 
	 	 	December 18, 2006
	 
	 	 	Market Value
	 	 	“In Use”
	Tenants Improvements
	 	 	 	 
	 
	 	 	 	 
	1 - Lot of tenant improvements to the Chemistry and
Biology laboratories consisting of 1,800 sq.ft. of
interior partitions with gyproc walls taped and painted
273 sq.ft. sound board, 8 doors, 73 sq. ft. of interior
glazing, 10 ceiling mounted fluorescent “in use” lighted
sign, approx. 20 wired outlets consisting of standard
outlets GFI and 240 volt outlets and including security
system. Technical wiring consisting of data runs and
drops, IT cabling, telephone and hub installations, with
wall jacks and outlets. Included are exhaust hoods with
vents to atmosphere, high voltage ceiling exhaust fan
and kitchen cabinets with stainless steel sink. The cost
of demolition is not included.
	 	 	47,000	 

15

 

Chemokine Therapeutics Corp.

405-6190 Agronomy Road, Vancouver, BC

	 	 	 	 	 
	 	 	December 18, 2006
	 
	 	 	Market Value
	 	 	“In Use”
	Leased Equipment to be purchased by Chemokine
	 	 	 	 
	1- Aggregometer
	 	 	10,000	 
	 
	 	 	 	 
	Total Leased Equipment
	 	 	10,000	 

16

 

Chemokine Therapeutics Corp.

405-6190 Agronomy Road, Vancouver, BC

	 	 	 	 	 
	 	 	December 18, 2006
	 
	 	 	Market Value
	 	 	“In Use”
	EQUIPMENT
	 	 	 	 
	 
	 	 	 	 
	Animal Unit
	 	 	 	 
	1- Nuaire Laminar Flow Hood Serial # 101351091405 Model
NV 301-430 50” wide floor model
	 	 	3,000	 
	1- Sartorious Balance, Top load Model TE1502S Serial
#17656810
	 	 	1,000	 
	1- Transport Cart 4-wheel 18” x 31” FG IU/S
	 	 	200	 
	1- Flexible arm halogen lamp
	 	 	40	 
	1- Rodent Restrainer Plus Labs 541 RR
	 	 	50	 
	1- Rodent Injector Plus Labs 561 RC
	 	 	160	 
	1- Fixture with lamp model 750 - 001 Serial # 011 250
volts Entellus Inspection lamp
	 	 	100	 
	 
	 	 	 	 
	Centrifuge
	 	 	 	 
	1- Custom Cabinet for centrifuge 30 1/2” x 34 x 24” Plam
– 4 full suspension drawers
	 	 	900	 
	1- Adapter & Metal plate for centrifuge for balance
	 	 	400	 
	 
	 	 	 	 
	Flex Station
	 	 	 	 
	1- Molecular Devices and Flex Station 384 - 3 drawers
complete with software Serial #FXX01639
	 	 	70,000	 
	1- Emax with software, microplate reader and filter lens
Serial #E11336
	 	 	6,000	 
	 
	Freezers/Refrigerators
	 	 	 	 
	1- Sanyo Freezer MDF-293 Ultra Low Serial #10808229
	 	 	5,000	 
	1- RVT4104 Refrigerated Vapor Trap Serial #041400340-1G
	 	 	2,500	 
	 
	 	 	 	 
	Gilson Analytical HPLC
	 	 	 	 
	1- Chamber valve
	 	 	30	 

17

 

	 	 	 	 	 
	 	 	December 18, 2006
	 
	 	 	Market Value
	 	 	“In Use”
	EQUIPMENT Contd.
	 	 	 	 
	 
	Gilson Preparative HPLC consisting of:
	 	 	 	 
	1- 334 pump Serial #380K2D432

333 pump Serial #380K2C410

306 pump Serial #123568

811C Dynamic Mixer 369DST119

807 Manomeric Module Serial #360K3S397

FC204 Fraction Collector Serial #17005B044

Vydac Protein & Peptide C18 Column Cat:

218TP1520100 Lot EO10308-1-S
	 	 	90,000	 
	 
	 	 	 	 
	Individual Equipment
	 	 	 	 
	1- Drew Scientific Hemavet 850 FS Serial #HV02588
	 	 	8,000	 
	Labconco Equipment large
	 	 	 	 
	1- Labconco Guardian Airflow Monitor (LED System)
counter top model Cat 3950401 Serial #050942940B
	 	 	3,000	 
	1- Labconco Lyophilizer 12L (Cascade purge) Freeze Dry
System Serial #030706851A
	 	 	15,000	 
	1- Labconco Flask Scrubber Serial #041128245P
	 	 	6,000	 
	1- Hook-up of Dishwasher (valve with dishwasher)
	 	 	0	 
	 
	 	 	 	 
	Peptide Synthesizers
	 	 	 	 
	1- Symphony Peptide Synthesizer Serial #3789
	 	 	80,000	 
	 
	 	 	 	 
	Pipettors
	 	 	 	 
	1- Pipet Aid Falcon Express, portable Serial #105194
	 	 	500	 
	1- Pipettor Rack Plastic rack
	 	 	100	 
	1- VW R 20/200 pipettes Serial #442254565
	 	 	500	 
	1- VWR 1/2 pipettes Serial #542210271
	 	 	500	 
	 
	 	 	 	 
	Single Channel Pipettes
	 	 	 	 
	1- Finnpipette Labsystems 4500 Serial #67264
	 	 	500	 
	 
	 	 	 	 
	Tissue Culture Room
	 	 	 	 
	1- Labconco
Purified Delta Class A2 & stand Serial #41230755 Class II Bis Safety cab Delta series Model

#36208/36209 50” wide
	 	 	5,000	 
	1- Rollerbase for Sanyo incubators, spray coat finish
	 	 	400	 

18

 

	 	 	 	 	 
	 	 	December 18, 2006
	 
	 	 	Market Value
	 	 	“In Use”
	EQUIPMENT Contd.
	 	 	 	 
	 
	Others
	 	 	 	 
	1- Tube Cutter
	 	 	100	 
	1- R-114 Rota vapour (BUCH)
	 	 	2,000	 
	1- pH meter, hand-held Serial #5694
	 	 	1,200	 
	1- VWR Heatlock analog with tapered hole - 20 hole
Serial #51214004
	 	 	200	 
	1- 6.0 Chromatotgraphy Column
	 	 	500	 
	1- Cart wheeled 3 tier FG & chrome
	 	 	100	 
	 
	 	 	 	 
	Miscellaneous
	 	 	 	 
	1- Fisher Isotemp 210 waterbath/Immersion Heater Serial
#911N1451
	 	 	900	 
	1- Stainless steel dishwashing pegboard
	 	 	500	 
	1- Stainless steel dishwashing pegboard 2
	 	 	500	 
	1- Welch Vacuum pump lab style model 400-1901
	 	 	500	 
	1- F.S.T. Self Regulatory heat pad
	 	 	600	 
	1- 2 pair of laser goggles Noir Laser Co.
	 	 	300	 
	1- Fischer Oven Thelmco MDL Gas temp 2 dr
	 	 	1,200	 
	1- Glove Box Mobile Stand Cat #VWR 15202-524
	 	 	1,000	 
	1- Bone Removal Plier FST 16025-14, Germany
	 	 	200	 
	1- Binding Machine GBC Combined Model C110e
	 	 	300	 
	 
	 	 	 	 
	Total of Equipment to be purchased by Chemokine
	 	 	308,980	 

19

 

SCHEDULE B

FORM OF PROMISSORY NOTE

January 1, 2007

          FOR VALUE RECEIVED, the undersigned does hereby unconditionally promise to pay to or to the
order of GLOBE LABORATORIES INC. (the “Holder””) at such place as the Holder may from time to
time direct in writing, the principal amount of $125,312 (the “Principal Amount”) in lawful
currency of Canada.

          The Principal Amount shall be payable on January 10, 2007. No interest shall accrue on the
Principal Amount.

          The Principal Amount may be paid, in whole or in part, at any time from time to time, without
notice, bonus or penalty.

          Presentment, protest, notice of protest and notice of dishonour of this Promissory Note are
hereby waived. This Promissory Note is not assignable.

	 	 	 	 	 
	CHEMOKINE THERAPEUTICS (B.C.) CORP.
	 
	 	 	 	 
	By:

	 	 	 	 
	 

	 	 	 	 
	 

	 	(Authorized Signatory)	 	 

20

 

SCHEDULE C

FORM OF PROMISSORY NOTE

January 1, 2007

          FOR VALUE RECEIVED, the undersigned does hereby unconditionally promise to pay to or to the
order of GLOBE LABORATORIES INC. (the “Holder””) at such place as the Holder may from time to
time direct in writing, the principal amount of $250,623 (the “Principal Amount”) in lawful
currency of Canada and to pay interest at the rate of five per cent (5%) per annum calculated
monthly not in advance on the principal amount from time to time remaining unpaid..

          The Principal Amount and interest shall be payable on June 30, 2007.

          The Principal Amount and interest may be paid, in whole or in part, at any time from time to
time, without notice, bonus or penalty.

          Presentment, protest, notice of protest and notice of dishonour of this Promissory Note are
hereby waived. This Promissory Note is not assignable.

	 	 	 	 	 
	CHEMOKINE THERAPEUTICS (B.C.) CORP.
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

(Authorized Signatory)
	 	 

21

 

SCHEDULE D

PURCHASE PRICE ALLOCATION

	 	 	 	 
	Asset	 	Fair Market Value
	Furniture and Fixtures
	 	 	6,015
	Computer Hardware
	 	 	2,740
	Computer Software
	 	 	1,200
	Leasehold Improvements
	 	 	47,000
	Leased Equipment
	 	 	10,000
	Equipment
	 	 	308,980
	 
	 	 	 
	 
	 	 	375,935

22

 

SCHEDULE E

PARTIAL ASSIGNMENT OF SUBLEASE

PARTIAL ASSIGNMENT OF SUBLEASE

GERALD McGAVIN BUILDING

UNIVERSITY OF BRITISH COLUMBIA

THIS ASSIGNMENT dated for reference December ______, 2006

AMONG:

GLOBE LABORATORIES INC. 

(“Globe”)

AND:

CHEMOKINE THERAPEUTICS (B.C.) CORP.

(“Chemokine”)

AND:

DISCOVERY PARKS TRUST by its trustee Discovery Parks

Incorporated

(the “Landlord”)

WHEREAS:

A. Pursuant to a Sub-Lease dated June 23, 2000 (the “Sublease”), the Landlord leased to Globe (as
assignee of Chemokine Therapeutics (B.C.) Corp.) Suite 202 and Suite 208 in the Gerald McGavin
Building located at 2386 East Mall, University of British Columbia, Vancouver, BC (the “Building”);

B. Pursuant to an Amendment of Lease dated September 1, 2001, the Landlord leased to Globe
additional premises being Suite 204 of the Building;

C. Pursuant to a Renewal of Lease dated May 1, 2002, the Term was extended until July 31, 2003;

D. Pursuant to a Renewal of Lease dated July 17, 2003, the Term was extended until July 31, 2004;

23

 

E. Pursuant to an Amendment and Extension of Lease dated July 23, 2004, the Term was extended until
July 31, 2005, and the Landlord leased to Globe additional premises being Suite 304 of the
Building;

F. Pursuant to an Amendment and Extension of Lease dated January 3, 2005 (the “Jan 2005
Amendment”), the Term was extended to July 31, 2007, and the Landlord leased to Globe the following
additional premises in the Building:

	 	1.	 	Suite 302 being 1,206 square feet; and
	 
	 	2.	 	Suite 303 being 1,494 square feet;

and Suite 202 (comprising 1,335 square feet) and Suite 204 (comprising 660 square feet) of the
Building were both surrendered by Globe to the Landlord, for a total net additional premises of 705
square feet;

G. Pursuant to the Jan 2005 Amendment, Globe also agreed to surrender to the Landlord its lease of
Suite 208 of the Building being Globe’s then-current office space upon relocating its office space
to the “Technical Enterprise Facility 3” (TEF3) building on the University of British Columbia
campus. Pursuant to a Sub-Lease dated May 6, 2005 between the Landlord and Chemokine Therapeutics
(B.C.) Corp. (an affiliate of Globe), Globe’s office space was relocated to premises on the fourth
floor of the TEF3 building, and accordingly, Globe surrendered to the Landlord its lease of Suite
208 of the Building;

H. Pursuant to an Amendment of Lease dated May 3, 2005, the Landlord leased to Globe additional
premises being Suite 305 of the Building;

I. Pursuant to a Sub-lease Amendment Agreement dated March 24, 2006, the Landlord leased to Globe
additional premises being Suite 307 of the Building;

J Pursuant to an Extension and Amendment of Sub-lease Agreement dated for reference December 13,
2006, the Term was extended until July 31, 2008. For greater certainty the Landlord currently
leases to Globe the Premises comprised of Suites 302, 303, 304, 305 and 307 of the Building for a
Term expiring on July 31, 2008; and

K. Globe wishes to assign Globe’s interest in the Sublease with respect to Suites 302, 303, 304 and
305, comprising 5,404 square feet (the “Assigned Premises”) to Chemokine for the balance of the
Term.

KNOW THEREFORE in consideration of the covenants and consent contained herein and other good and
valuable consideration, the receipt and sufficiency of which is hereby acknowledged by each of the
parties, the parties agree as follows:

24

 

SCHEDULE F1.0 DEFINED TERMS

     Except as otherwise defined herein, capitalized terms used in this Agreement have the meanings
ascribed to those terms in the Sublease. The term “Sublease” shall mean the Sublease and all
amendments and extensions thereto.

SCHEDULE G2.0 TENANT’S COVENANTS

     In this agreement (the “Agreement”), the expression “Tenant’s Covenants” means all obligations
of Globe as tenant of the Premises under the Sublease or as may be established by law and, without
limiting the generality of the foregoing, includes the obligation to pay Basic Rent, Rent, and all
other payments owing to the Landlord under the Sublease, whether characterized as Rent or not, and
all other obligations of a tenant under the Sublease, whether expressed as conditions, covenants,
provisos, representations, undertakings, or warranties.

SCHEDULE H3.0 EFFECTIVE DATE

     In this Agreement, the expression “Effective Date” means January 1, 2007.

SCHEDULE I4.0 ASSIGNMENT

     As of and effective on the Effective Date, Globe assigns to Chemokine all of Globe’s right,
title, and interest in and to the Sublease as it pertains to the Assigned Premises, subject to
payment by Chemokine of Rent reserved in the Sublease and the observance and performance of the
other Tenant’s Covenants with respect to the Assigned Premises only.

SCHEDULE J5.0 ASSIGNOR’S REPRESENTATIONS AND WARRANTIES

     Globe represents and warrants to Chemokine that:

	 	(a)	 	the Sublease is good, valid, and subsisting and that the Tenant’s Covenants
have been and will to the Effective Date be duly observed and performed by Globe;
	 
	 	(b)	 	Globe now has absolute authority to assign the Sublease and the interest of
Globe in the Assigned Premises in the manner aforesaid according to the true intent and
meaning of this Agreement; and
	 
	 	(c)	 	subject to payment of the Rent reserved in the Sublease and observance and
performance of the other Tenant’s Covenants by Chemokine with respect to the Assigned
Premises, Chemokine may enter the Assigned Premises for the balance
of the Term for its own use and benefit, without any interruption by Globe or any
person, firm, or corporation claiming under it.

25

 

SCHEDULE K6.0 GLOBE’S INDEMNITIES

6.1 Globe indemnifies and will hold harmless Chemokine from all actions, suits, costs, losses,
damages, charges, and expenses for or in respect of the performance of the Tenant’s Covenants with
respect to the Assigned Premises for the period up to the Effective Date.

SCHEDULE L7.0 CHEMOKINE’S COVENANTS

     During the balance of the Term and any renewal thereof, Chemokine will:

	 	(a)	 	pay the Rent reserved at the times and in the manner provided in the Sublease
with respect to Assigned Premises;
	 
	 	(b)	 	not assign the Sublease or sublet or part with possession of the Assigned
Premises or any part thereof without the prior written consent of the Landlord,
requested and granted in accordance with the Sublease;
	 
	 	(c)	 	perform all of the other Tenant’s Covenants as if Chemokine was the tenant
originally named in the Sublease with respect to the Assigned Premises; and
	 
	 	(d)	 	indemnify and save harmless Globe from all actions, suits, costs, losses,
damages, charges, and expenses for or in respect of any breach by Chemokine of the
Tenant’s Covenants with respect to the Assigned Premises arising on and after the
Effective Date.

SCHEDULE M8.0 CONSENT

     The Landlord hereby consents to the assignment contained in this Agreement.

SCHEDULE N9.0 LIMITATION OF CONSENT

     The consent of the Landlord contained in this Agreement is restricted to the assignment set
forth in this Agreement and the Landlord’s consent herein will not be deemed to be a consent to or
waiver of the requirement for the Landlord’s consent to any further or other assignment of the
Sublease or subletting or parting with possession of the Premises or any part thereof.

SCHEDULE O10.0 SURVIVAL OF PROVISIONS

     The provisions of the Sublease will survive the execution and delivery of this Agreement and
will not merge in this Agreement.

26

 

SCHEDULE P11.0 FURTHER ASSURANCES 

     Each party will, at all times hereafter at the request and cost of any other party, execute
such further and other documents as such other party may reasonably require in order to evidence or
give effect to the terms of this Agreement.

SCHEDULE Q12.0 AMENDMENT OF SUBLEASE

     The Sublease will be deemed to be amended hereby with all necessary changes being made to
incorporate and give effect to the provisions hereof. Save as amended hereby, the parties
acknowledge that the Sublease is otherwise unchanged, and that as amended hereby, the Sublease is
in full force and effect, in accordance with its terms.

SCHEDULE R13.0 ENUREMENT

     This Agreement will enure to the benefit of and be binding upon the parties and their
respective heirs, administrators, personal representatives, successors, and assigns.

IN WITNESS WHEREOF the parties executed this Agreement as of the date first above written.

	 	 	 	 	 
	DISCOVERY PARKS TRUST, by its Trustee	 	 
	Discovery Parks Incorporated	 	 
	 
	 	 	 	 
	Per:
	 	/s/ Mark Betteridge 	 	 
	 

	 	 	 	 
	 

	 	Authorized Signatory	 	 
	 
	 	 	 	 
	Per:
	 	 	 	 
	 

	 	 	 	 
	 

	 	Authorized Signatory	 	 
	 
	 	 	 	 
	GLOBE LABORATORIES INC.	 	 
	 
	 	 	 	 
	Per:
	 	/s/ Hassan Salari 	 	 
	 

	 	 	 	 
	 

	 	Authorized Signatory	 	 
	 
	 	 	 	 
	Per:
	 	 	 	 
	 

	 	 	 	 
	 

	 	Authorized Signatory
	 	 

27

 

	 	 	 	 	 
	CHEMOKINE THERAPEUTICS (B.C.) CORP.	 	 
	 
	 	 	 	 
	Per:
	 	/s/ Hassan Salari 	 	 
	 

	 	 	 	 
	 

	 	Authorized Signatory	 	 
	Per:
	 	 	 	 
	 

	 	 	 	 
	 

	 	Authorized Signatory
	 	 

28

 

SCHEDULE S

CHEMOKINE ASSETS

	 	 	 	 	 
	 	 	December 18, 2006
	 	 	Market Value
	 	 	“In Use”
	EQUIPMENT TO BE PURCHASED BY GLOBE
	 	 	 	 
	 
	 	 	 	 
	Molecular Biology
	 	 	 	 
	 
	1- Biologic F40 Duoflow Serial #476 BR 0110
	 	 	22,000	 
	1- Biologic Biofrac base unit, rack & fittings Serial #496
BR 02716
	 	 	3,500	 
	1- Mycycler Thermal cycler system Serial #580 BR 3992
	 	 	3,000	 
	1- Floor Shaker, rotor Serial # 06U 608
	 	 	7,500	 
	1- Shaker - 8400 Stirred Cell
	 	 	1,000	 
	1- 450 Sonifier - 450 Watts
	 	 	1,800	 
	1- Ice Flaker consisting of Scottsman ice machine and
filter
	 	 	2,000	 
	 
	 	 	 	 
	Total Equipment to be purchased by Globe
	 	 	40,800	 
	Rounded to the nearest $100
	 	 	40,800	 

29

 

PROMISSORY NOTE

January 1, 2007

          FOR VALUE RECEIVED, the undersigned does hereby unconditionally promise to pay to or to the
order of GLOBE LABORATORIES INC. (the “Holder””) at such place as the Holder may from time to
time direct in writing, the principal amount of $125,312 (the “Principal Amount”) in lawful
currency of Canada.

          The Principal Amount shall be payable on January 10, 2007. No interest shall accrue on the
Principal Amount.

          The Principal Amount may be paid, in whole or in part, at any time from time to time, without
notice, bonus or penalty.

          Presentment, protest, notice of protest and notice of dishonour of this Promissory Note are
hereby waived. This Promissory Note is not assignable.

	 	 	 	 
	CHEMOKINE THERAPEUTICS (B.C.) CORP. 

 	 
	By:  	/s/
Hassan Salari 	 
	 	(Authorized Signatory) 	 
	 	 	 	 
	 

30

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