Document:

CHINA
MEDICINE CORPORATION

    Guangri
Tower, Suite 702 No 9 Siyounan Road, 1st Street, Yuexiu District | Guangzhou,
Guangdong Province | 510600 | China

     

    April 30,
2010

     

    Fred
Waikuen Cheung

    

     

    Re:           EMPLOYMENT
AGREEMENT

     

    Dear
Fred:

     

    On behalf
of China Medicine Corporation, a Nevada corporation (the “Company”), I am
pleased to offer you the position of Chief Financial Officer (“CFO”) to the
Company for a period of four years, or as agreed upon by you and the
Company.  Your employment by the Company shall be governed by the
following terms and conditions (this “Agreement”):

     

    1.           Duties
and Scope of Employment.

     

    (a)           Position.  For the term of
your employment under this Agreement (your “Employment”), the
Company agrees to employ you as a financial consultant.  You will
report to the Company’s CEO or to such other person as the Company subsequently
may determine.  You will be working out of the Company’s office in
Guangzhou, China.  You will perform the duties and have the
responsibilities and authority customarily performed and held by an employee in
your position or as otherwise may be assigned or delegated to you by the
Company’s Board of Directors and CEO, including but not limited to the
following:

     

    (i)           Strategy

     

    (1)           Partner
with the CEO on all operational and strategic issues as they arise; provide
strategic recommendations to the president based on financial analysis and
projections, cost identification and allocation, and revenue/expense
analysis.

     

    (2)           Participate
in the ongoing strategic planning process as an integral member of the senior
management team.

     

    (ii)           Financial
Management

     

    (1)           Review
and approve preparation and finalization of monthly, quarterly and annual
financial reporting materials.

     

    (2)           Oversee
budgeting, financial forecasting, and cash flow for administration, existing
programs, and proposed new sites.

     

    (3)           Manage
full-time financial and accounting staff, including hiring and retaining
additional staff as needed in the future.

     

    (4)           Coordinate
all audit activities.

     

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    (iii)           Administrative
Leadership and Management

     

    (1)           Serve
as a business partner to the CEO on the organization’s financial, budgeting, and
administrative processes—including HR, payroll, and benefits functions—with an
eye to continuously developing and improving systems.

     

    (2)           Lead
technical staff to design an IT plan for the future, and implement it
successfully to meet IT needs (hardware and software) as the organization
grows.  Review all formal finance-, HR-, and IT-related procedures,
processes, and administration, recommending improvements to the systems in place
and managing the systems going forward, including the implementation of a
Western-styled ERP system.

     

    (3)           Manage
the organization’s physical infrastructure, physical plant, and system
maintenance (phone system, security, cleaning, supplies, etc.), with assistance
from office managers.

     

    (b)           Obligations
to the Company.  During your
Employment, you shall devote your full business efforts and time to the
Company.  During your Employment, without the prior written approval
of the Company’s Chief Executive Officer, you shall not render services in any
capacity to any other person or entity and shall not act as a sole proprietor or
partner of any other person or entity or own more than five percent of the stock
of any other corporation.  Notwithstanding the foregoing, you may
serve on corporate, civic or charitable boards or committees, deliver lectures,
fulfill speaking engagements, teach at educational institutions, or manage
personal investments without such advance written consent, provided that such
activities do not individually or in the aggregate interfere with the
performance of your duties under this Agreement.  You shall comply
with the Company’s policies and rules, as they may be in effect from time to
time during your Employment.

     

    (c)           No
Conflicting Obligations.  You represent and
warrant to the Company that you are under no obligations or commitments, whether
contractual or otherwise, that are inconsistent with your obligations under this
Agreement.  In connection with your Employment, you shall not use or
disclose any trade secrets or other proprietary information or intellectual
property in which you or any other person has any right, title or interest and
your Employment will not infringe or violate the rights of any other
person.  You represent and warrant to the Company that you have
returned all property and confidential information belonging to any prior
employer.

     

    (d)           Term.    The
effective date of this Agreement shall be April 30, 2010 (the “Effective
Date”).  Subject to the provisions for termination as provided
herein, the term of this Agreement shall be the period beginning April 30, 2010
and ending April 30, 2014, or may be extended as agreed to by you and the
Company.

     

    2.           Cash and
Incentive Compensation.

     

    (a)          Salary.  As compensation
for your services, you shall be paid an initial base annual salary at a gross
rate of US$120,000.  The portion of such annual salary equal to
RMB180,000 shall be payable by Guangzhou Konzern Medicine Co., Ltd. (“Konzern”),
and the remainder by China Medicine Corporation.  The annual
compensation specified in this subsection (a), together with any
modifications in such compensation that the Company may make from time to time,
is referred to in this Agreement as “Base
Salary.”  The Board or any Compensation Committee of the Board
shall review your Base Salary at least annually.  Effective as of the
date of any change to your Base Salary, the Base Salary as so changed shall be
considered the new Base Salary for all purposes of this Agreement.

     
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    (b)          Incentive
Bonuses.  If you and the
Company extend your assignment beyond 1-year, you will be eligible to be
considered for an annual incentive bonus each calendar year, beginning in the
second year, during the term of your employment under this Agreement based upon
the achievement of certain objective or subjective criteria established by the
Company’s Board of Directors (the “Board”) or any
Compensation Committee of the Board.  The determinations of the Board
with respect to such bonus shall be final and binding.  You shall not
earn an incentive bonus unless you are employed by the Company on the date when
such bonus is payable.

     

    (c)          Stock.  Subject to the
approval of the Board, the Company shall issue to you one hundred twenty
thousand (120,000) shares of the Company's common stock (the “Stock”) in your four
service years, subject to the terms set forth below.

     

    (i)           Issuance of
Stock.  Upon vesting, the Company shall cause the shares
certificates of Stock to be issued in your name by the every
anniversary.  The Stock shall be held in the custody of the Company or
its designee for your account.  The Stock shall be subject to and
shall bear appropriate legends with respect to the restrictions described
herein.

     

    (ii)           Vesting.  Your
interest in the Stock shall vest (a) as to one-fourth of such Stock (30,000
shares) at 12:01 a.m. on the date after the first anniversary of the date of
Confirmation, (b) as to an additional one-fourth (30,000 shares) at 12:01 a.m.
on the date after the second anniversary of the date of Confirmation, (c) as to
an additional one-fourth (30,000 shares) at 12:01 a.m. on the date after the
third anniversary of the date of Confirmation, and (d) as to the final
one-fourth (30,000 shares) at 12:01 a.m. on the date after the fourth
anniversary of the date of Confirmation, so as to be 100% vested at 12:01 a.m.
on the date after the fourth anniversary of the date of Confirmation,
conditioned upon your continued employment with the Company as of each vesting
date.

     

    (iii)          Restrictions.

     

    (1)           You
may not sell, transfer, assign, pledge or otherwise encumber or dispose of any
portion of the Stock or rights granted hereunder until such portion of the Stock
becomes vested in accordance with Section 2(d)(ii)of this
Agreement.  The period of time between the Effective Date and the date
all Stock becomes vested is referred to herein as the “Period.”

     
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    (2)           If
your employment with the Company is terminated for any reason which does not
give rise to 100% vesting of the Restricted Stock, as provided in Section
2(c)(ii) above, you shall forfeit the balance of the Stock subject to the
provisions of this Agreement which have not vested at the time of your
termination of employment, and transfer ownership back to the Company, provided
that if your employment is not terminated for resignation or for cause, you will
be entitled to a pro-rata portion, based upon time of employment, of the stock
that is not yet vested.

     

    3.           Vacation/PTO
and Employee Benefits.  During your
Employment, you shall be eligible to accrue up to 15 days of paid vacation /
paid time off, pro-rated for the remainder of this calendar year, in accordance
with the Company’s vacation / paid time off policy, as it may be amended from
time to time.  During your Employment, you shall be eligible to
participate in the employee benefit plans maintained by the Company and
generally available to similarly situated employees of the Company, subject in
each case to the generally applicable terms and conditions of the plan in
question and to the determinations of any person or committee administering such
plan.

     

    4.           Business
Expenses.  The Company will
reimburse you for your necessary and reasonable business expenses incurred in
connection with your duties hereunder upon presentation of an itemized account
and appropriate supporting documentation, all in accordance with the Company’s
generally applicable policies.

     

    5.           Termination.

     

    (a)           Employment
at Will.  Your Employment
shall be “at will,” meaning that either you or the Company shall be entitled to
terminate your Employment at any time and for any reason, with or without
Cause.  Any contrary representations that may have been made to you
shall be superseded by this Agreement.  This Agreement shall
constitute the full and complete agreement between you and the Company on the
“at-will” nature of your Employment, which may only be changed in an express
written agreement signed by you and a duly authorized officer of the
Company.

     

    (b)           Rights
Upon Termination.  Except as
expressly provided in Section 6, upon the termination of your
Employment, you shall only be entitled to the compensation and benefits earned
and the reimbursements described in this Agreement for the period preceding the
effective date of the termination.

     

    6.           Termination
Benefits.

     

    (a)           General
Release.  Any other
provision of this Agreement notwithstanding, subsections (b) shall not
apply unless and until (i) you have executed (and do not revoke) a full and
complete general release of all claims in a form provided by the Company without
alteration and (ii) you have returned all Company property.

     

    (b)           Severance
Pay.  If, during the
term of this Agreement, the Company terminates your Employment for any reason
other than Cause, death or Permanent Disability, then, in addition to the
amounts payable in accordance with Section 5(b), the Company shall pay
you severance pay at a rate equal to your Base Salary in effect at the time of
termination of your Employment for a period of 3 month(s) following the
termination of your Employment (the “Continuation
Period”).  

     
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    (c)          Definition
of “Cause”  For all purposes
under this Agreement, “Cause” shall
mean:

     

    (i)           any
breach by you of this Agreement, the Confidential Information and Invention
Assignment Agreement between you and the Company, or any other written agreement
between you and the Company, if such breach causes material harm to the
Company;

     

    (ii)          any
failure by you to comply with the Company’s written policies or rules, as they
may be in effect from time to time during your Employment, if such failure
causes material harm to the Company;

     

    (iii)         your
repeated failure to follow reasonable and lawful instructions from the Company
or the Chief Executive Officer of the Company and your failure to cure such
condition after receiving 20 days advance written notice;

     

    (iv)        commission,
conviction of, or a plea of “guilty” or “no contest” to, a felony under the laws
of any jurisdiction by you;

     

    (v)         your
misappropriation of funds or property of the Company;

     

    (vi)        neglect
of your duties; or

     

    (vii)       any
gross or willful misconduct by you.

     

    (d)          Definition
of “Permanent Disability.”  For all purposes
under this Agreement, “Permanent Disability”
shall mean your inability to perform the essential functions of your position
with or without reasonable accommodation for a period of 90 consecutive days
because of your physical or mental impairment.

     

    7.           Pre-Employment
Conditions.

     

    (a)          Confidentiality
Agreement.  Your acceptance
of this offer and commencement of employment with the Company is contingent upon
the execution, and delivery to an officer of the Company, of the Company’s
Confidential Information and Invention Assignment Agreement, a copy of which is
enclosed for your review and execution (the “Confidentiality
Agreement”), prior to or on your Start Date.

     

    (b)          Right to
Work.  You will be
required to provide to the Company documentary evidence of your identity and
eligibility for employment in the People’s Republic of China.  Such
documentation must be provided to us within three (3) business days of your
Start Date, or our employment relationship with you may be
terminated.

     

    (c)          Verification
of Information.  This offer of
employment is also contingent upon the successful verification of the
information you provided to the Company during your application process, as well
as a general background check performed by the Company to confirm your
suitability for employment.  By accepting this offer of employment,
you warrant that all information provided by you is true and correct to the best
of your knowledge, you agree to execute any and all documentation necessary for
the Company to conduct a background check and you expressly release the Company
from any claim or cause of action arising out of the Company’s verification of
such information.

     
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    8.           Successors.

     

    (a)           Company’s
Successors.  This Agreement
shall be binding upon any successor (whether direct or indirect and whether by
purchase, lease, merger, consolidation, liquidation or otherwise) to all or
substantially all of the Company’s business and/or assets.  For all
purposes under this Agreement, the term “Company” shall
include any successor to the Company’s business or assets that become bound by
this Agreement.

     

    (b)           Your
Successors.  This Agreement
and all of your rights hereunder shall inure to the benefit of, and be
enforceable by, your personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and
legatees.

     

    9.           Miscellaneous
Provisions.

     

    (a)           Indemnification.  The Company shall
indemnify you to the maximum extent permitted by applicable law and the
Company’s Bylaws with respect to your service and you shall also be covered
under a directors and officers liability insurance policy paid for by the
Company to the extent that the Company maintains such a liability insurance
policy now or in the future.

     

    (b)           Notice.  Notices and all
other communications contemplated by this Agreement shall be in writing and
shall be deemed to have been duly given when personally delivered or when mailed
by registered or certified mail.  In your case, mailed notices shall
be addressed to you at the home address that you most recently communicated to
the Company in writing.  In the case of the Company, mailed notices
shall be addressed to its corporate headquarters, and all notices shall be
directed to the attention of its Secretary.

     

    (c)           Modifications
and Waivers.  No provision of
this Agreement shall be modified, waived or discharged unless the modification,
waiver or discharge is agreed to in writing and signed by you and by an
authorized officer of the Company (other than you).  No waiver by
either party of any breach of, or of compliance with, any condition or provision
of this Agreement by the other party shall be considered a waiver of any other
condition or provision or of the same condition or provision at another
time.

     

    (d)           Whole
Agreement.  No other
agreements, representations or understandings (whether oral or written and
whether express or implied) which are not expressly set forth in this Agreement
have been made or entered into by either party with respect to the subject
matter hereof.  This Agreement and the Confidentiality Agreement
contain the entire understanding of the parties with respect to the subject
matter hereof.

     

    (e)           Withholding
Taxes.  All payments made
under this Agreement shall be subject to reduction to reflect taxes or other
charges required to be withheld by laws in Hong Kong except the compensation
paid by Konzern.

     
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    (f)           Choice of
Law and Severability.  This Agreement
shall be interpreted in accordance with the laws of Hong Kong without giving
effect to provisions governing the choice of law.  If any provision of
this Agreement becomes or is deemed invalid, illegal or unenforceable in any
applicable jurisdiction by reason of the scope, extent or duration of its
coverage, then such provision shall be deemed amended to the minimum extent
necessary to conform to applicable law so as to be valid and enforceable or, if
such provision cannot be so amended without materially altering the intention of
the parties, then such provision shall be stricken and the remainder of this
Agreement shall continue in full force and effect.  If any provision
of this Agreement is rendered illegal by any present or future statute, law,
ordinance or regulation (collectively, the “Law”) then that
provision shall be curtailed or limited only to the minimum extent necessary to
bring the provision into compliance with the Law.  All the other terms
and provisions of this Agreement shall continue in full force and effect without
impairment or limitation.

     

    (g)           No
Assignment.  This Agreement
and all of your rights and obligations hereunder are personal to you and may not
be transferred or assigned by you at any time.  The Company may assign
its rights under this Agreement to any entity that assumes the Company’s
obligations hereunder in connection with any sale or transfer of all or a
substantial portion of the Company’s assets to such entity.

     

    (h)           Counterparts.  This Agreement
may be executed in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.

     

    [Signature
Page Follows]

     
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    We are
all delighted to be able to extend you this offer and look forward to working
with you.  To indicate your acceptance of the Company’s offer, please
sign and date this letter in the space provided below and return it to me, along
with a signed and dated original copy of the Confidentiality Agreement, on or
before February 22, 2010.  The Company requests that you begin work in
this new position on or before April 30, 2010  Please indicate the
date (either on or before the aforementioned date) on which you expect to begin
work in the space provided below (the “Start
Date”).

     

    
      
        	
                Very
      truly yours,

              
	 
      
	
                CHINA
      MEDICINE CORPORATION

              
	 
      	 
      
	
                By:

              	
                /s/ Senshan Yang

              
	 
      	
                (Signature)

              
	 
      
	
                Name:
      Senshan Yang

              
	
                Title:
      Chief Executive Officer

              

      

    

    

    
      
        	
                ACCEPTED
      AND AGREED:

              	 
      
	 
      	 
      
	
                FRED
      WAIKUEN CHEUNG

              	 
      
	 
      	 
      
	
                /s/ Fred Cheung

              	 
      
	
                (Signature)

              	 
      
	 
      	 
      
	 
      	 
      
	
                Date

              	 
      
	 
      	 
      
	
                Anticipated
      Start Date: _________________

              	 
      

      

    

    

    Attachment
A:  Confidential Information and Invention Assignment
Agreement

     
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    ATTACHMENT
A

     

    CONFIDENTIAL
INFORMATION AND

    INVENTION
ASSIGNMENT AGREEMENT

     

    (See
Attached)
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    CHINA
MEDICINE CORPORATION

     

    CONFIDENTIAL INFORMATION
AND

    INVENTION ASSIGNMENT
AGREEMENT

     

    Employee Name:_Fred Waikuen
Cheung

     

    Effective Date: April 30,
2010

     

    As a
condition of my becoming employed (or my employment being continued) by China
Medicine Corporation, a Nevada corporation, or any of its current or future
subsidiaries, affiliates, successors or assigns (collectively, the “Company”), and in
consideration of my employment with the Company and my receipt of the
compensation now and hereafter paid to me by the Company, I agree to the
following:

     

    1.           Relationship.  This Agreement
will apply to my employment relationship with the Company.  If that
relationship ends and the Company, within a year thereafter, either reemploys me
or engages me as a consultant, I agree that this Agreement will also apply to
such later employment or consulting relationship, unless the Company and I
otherwise agree in writing.  Any such employment or consulting
relationship between the Company and me, whether commenced prior to, upon or
after the date of this Agreement, is referred to herein as the “Relationship.”

     

    2.           Duties.  I will perform
for the Company such duties as may be designated by the Company from time to
time or that are otherwise within the scope of the Relationship and not contrary
to instructions from the Company.  During the Relationship, I will
devote my entire best business efforts to the interests of the Company and will
not engage in other employment or in any activities detrimental to the best
interests of the Company without the prior written consent of the
Company.

     

    3.           Confidential
Information.

     

    (a)           Protection
of Information.  I understand that
during the Relationship, the Company intends to provide me with information,
including Confidential Information (as defined below), without which I would not
be able to perform my duties to the Company.  I agree, at all times
during the term of the Relationship and thereafter, to hold in strictest
confidence, and not to use, except for the benefit of the Company to the extent
necessary to perform my obligations to the Company under the Relationship, and
not to disclose to any person, firm, corporation or other entity, without
written authorization from the Company in each instance, any Confidential
Information that I obtain, access or create during the term of the Relationship,
whether or not during working hours, until such Confidential Information becomes
publicly and widely known and made generally available through no wrongful act
of mine or of others who were under confidentiality obligations as to the item
or items involved.  I further agree not to make copies of such
Confidential Information except as authorized by the Company.

     

    
      
         

      

      
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    (b)           Confidential
Information.  I understand that
“Confidential
Information” means information and physical material not generally known
or available outside the Company and information and physical material entrusted
to the Company in confidence by third parties.  Confidential
Information includes, without limitation:  (i) Company Inventions (as
defined below); (ii) technical data, trade secrets, know-how, research, product
or service ideas or plans, software codes and designs, developments, inventions,
laboratory notebooks, processes, formulas, techniques, biological materials,
mask works, engineering designs and drawings, hardware configuration
information, lists of, or information relating to, employees and consultants of
the Company (including, but not limited to, the names, contact information,
jobs, compensation, and expertise of such employees and consultants), lists of,
or information relating to, suppliers and customers (including, but not limited
to, customers of the Company on whom I called or with whom I became acquainted
during the Relationship), price lists, pricing methodologies, cost data, market
share data, marketing plans, licenses, contract information, business plans,
financial forecasts, historical financial data, budgets or other business
information disclosed to me by the Company either directly or indirectly,
whether in writing, electronically, orally, or by observation.

     

    (c)           Third
Party Information.  My agreements in
this Section 3 are intended to be for the benefit of the Company and any
third party that has entrusted information or physical material to the Company
in confidence.

     

    (d)           Other
Rights.  This Agreement is
intended to supplement, and not to supersede, any rights the Company may have in
law or equity with respect to the protection of trade secrets or confidential or
proprietary information.

     

    4.           Ownership
of Inventions.

     

    (a)           Inventions
Retained and Licensed.  I have attached
hereto, as Exhibit
A, a complete list describing with particularity all Inventions (as
defined below) that, as of the Effective Date, belong solely to me or belong to
me jointly with others, and that relate in any way to any of the Company’s
actual or proposed businesses, products, services, or research and development,
and which are not assigned to the Company hereunder; or, if no such list is
attached, I represent that there are no such Inventions at the time of signing
this Agreement.

     

    (b)           Use or
Incorporation of Inventions.  If in the course
of the Relationship, I use or incorporate into a product, process or machine any
Invention not covered by Section 4(d) of this Agreement in which I have an
interest, I will promptly so inform the Company.  Whether or not I
give such notice, I hereby irrevocably grant to the Company a nonexclusive,
fully paid-up, royalty-free, assumable, perpetual, worldwide license, with right
to transfer and to sublicense, to practice and exploit such Invention and to
make, have made, copy, modify, make derivative works of, use, sell, import, and
otherwise distribute such Invention under all applicable intellectual property
laws without restriction of any kind.

     

    (c)           Inventions.  I understand that
“Inventions”
means discoveries, developments, concepts, designs, ideas, know how,
improvements, inventions, trade secrets and/or original works of authorship,
whether or not patentable, copyrightable or otherwise legally
protectable.  I understand this includes, but is not limited to, any
new product, machine, article of manufacture, biological material, method,
procedure, process, technique, use, equipment, device, apparatus, system,
compound, formulation, composition of matter, design or configuration of any
kind, or any improvement thereon.  I understand that “Company Inventions”
means any and all Inventions that I may solely or jointly author, discover,
develop, conceive, or reduce to practice during the period of the Relationship,
except as otherwise provided in Section 4(g) below.

     

    
      
         

      

      
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    (d)           Assignment
of Company Inventions.  I agree that I
will promptly make full written disclosure to the Company, will hold in trust
for the sole right and benefit of the Company, and hereby assign to the Company,
or its designee, all my right, title and interest throughout the world in and to
any and all Company Inventions and all patent, copyright, trademark, trade
secret and other intellectual property rights therein.  I further
acknowledge that all Company Inventions that are made by me (solely or jointly
with others) within the scope of and during the period of the Relationship are
“works made for hire” (to the greatest extent permitted by applicable law) and
are compensated by my salary.  I hereby waive and irrevocably
quitclaim to the Company or its designee any and all claims, of any nature
whatsoever, that I now have or may hereafter have for infringement of any and
all Company Inventions.

     

    (e)           Maintenance
of Records.  I agree to keep
and maintain adequate and current written records of all Company Inventions made
or conceived by me (solely or jointly with others) during the term of the
Relationship.  The records may be in the form of notes, sketches,
drawings, flow charts, electronic data or recordings, laboratory notebooks, or
any other format.  The records will be available to and remain the
sole property of the Company at all times.  I agree not to remove such
records from the Company’s place of business except as expressly permitted by
Company policy which may, from time to time, be revised at the sole election of
the Company for the purpose of furthering the Company’s business.  I
agree to deliver all such records (including any copies thereof) to the
Company at the time
of termination of the Relationship as provided for in Sections 5
and 6.

     

    (f)           Patent
and Copyright Rights.  I agree to assist
the Company, or its designee, at its expense, in every proper way to secure the
Company’s, or its designee’s, rights in the Company
Inventions and any copyrights, patents, trademarks, mask work rights, moral
rights, or other intellectual property rights relating thereto in any and all
countries, including the disclosure to the Company or its designee of all
pertinent information and data with respect thereto, the execution of all
applications, specifications, oaths, assignments, recordations, and all other
instruments which the Company or its designee shall deem necessary in order to
apply for, obtain, maintain and transfer such rights, or if not transferable,
waive such rights, and in order to assign and convey to the Company or its
designee, and any successors, assigns and nominees the sole and exclusive right,
title and interest in and to such Company Inventions, and any copyrights,
patents, mask work rights or other intellectual property rights relating
thereto.  I further agree that my obligation to execute or cause to be
executed, when it is in my power to do so, any such instrument or papers shall
continue during and at all times after the end of the Relationship and until the
expiration of the last such intellectual property right to expire in any country
of the world.  I hereby irrevocably designate and appoint the
Company and its
duly authorized officers and agents as my agent and attorney-in-fact, to act for
and in my behalf and stead to execute and file any such instruments and papers
and to do all other lawfully permitted acts to further the application for,
prosecution, issuance, maintenance or transfer of letters patent, copyright,
mask work and other registrations related to such Company
Inventions.  This power of attorney is coupled with an interest and
shall not be affected by my subsequent incapacity.

     

    
      
         

      

      
        -12-

        
          

        

      

      
         

      

    

    (g)           Exception
to Assignments.  I understand that
the Company Inventions will not include, and the provisions of this Agreement
requiring assignment of inventions to the Company do not apply to, any
invention which qualifies fully for exclusion under the provisions of applicable
state law, if any,  In order to assist in the determination of which
inventions qualify for such exclusion, I will advise the Company promptly in
writing, during and after the term of the Relationship, of all Inventions solely
or jointly conceived or developed or reduced to practice by me during the period
of the Relationship.

     

    5.           Company
Property; Returning Company Documents.  I acknowledge and
agree that I have no expectation of privacy with respect to the Company’s
telecommunications, networking or information processing systems (including,
without limitation, files, e-mail messages, and voice messages) and that my
activity and any files or messages on or using any of those systems may be
monitored at any time without notice.  I further agree that any
property situated on the Company’s premises and owned by the Company, including
disks and other storage media, filing cabinets or other work areas, is subject
to inspection by Company personnel at any time with or without
notice.  I agree that, at the time of termination of the Relationship,
I will deliver to the Company (and will not keep in my possession, recreate or
deliver to anyone else) any and all devices, records, data, notes, reports,
proposals, lists, correspondence, specifications, drawings, blueprints,
sketches, laboratory notebooks, materials, flow charts, equipment, other
documents or property, or reproductions of any of the aforementioned items
developed by me pursuant to the Relationship or otherwise belonging to the
Company, its successors or assigns.

     

    6.           Termination
Certification.  In the event of
the termination of the Relationship, I agree to sign and deliver the “Termination
Certification” attached hereto as Exhibit B;
however, my failure to sign and deliver the Termination Certification shall in
no way diminish my continuing obligations under this Agreement.

     

    7.           Notice to
Third Parties.  I agree that
during the periods of time during which I am restricted in taking certain
actions by the terms of this Agreement (the “Restriction Period”),
I shall inform any entity or person with whom I may seek to enter into a
business relationship (whether as an owner, employee, independent contractor, or
otherwise) of my contractual obligations under this Agreement.  I also
understand and agree that the Company may, with or without prior notice to me
and during or after the term of the Relationship, notify third parties of my
agreements and obligations under this Agreement.  I further agree
that, upon written request by the Company, I will respond to the Company in
writing regarding the status of my employment or proposed employment with any
party during the Restriction Period.

     

    8.           Solicitation
of Employees, Consultants and Other Parties.  As described
above, I acknowledge and agree that the Company's Confidential Information
includes information relating to the Company's employees, consultants, customers
and others, and that I will not use or disclose such Confidential
Information except as authorized by the Company.  I further agree as
follows:

     

    (a)           Employees,
Consultants. I
agree that during the term of the Relationship, and for a period of twelve (12)
months immediately following the termination of the Relationship for any reason,
whether with or without cause, I shall not either directly or indirectly
solicit, induce, recruit or encourage any of the Company’s employees or
consultants to terminate their relationship with the Company, or attempt to
solicit, induce, recruit, encourage or take away employees or consultants of the
Company, either for myself or for any other person or entity.

     

    
      
         

      

      
        -13-

        
          

        

      

      
         

      

    

    (b)           Other
Parties. I agree
that during the term of the Relationship, and for a period of twelve (12)
months immediately following the termination of the Relationship for any reason,
whether with or without cause, I shall not use any Confidential Information of
the Company to negatively influence any of the Company’s clients or customers
from purchasing Company products or services or to solicit or influence or
attempt to influence any client, customer or other person either directly or
indirectly, to direct any purchase of products and/or services to any person,
firm, corporation, institution or other entity in competition with the business
of the Company.

     

    9.           At-Will
Relationship.  I understand and
acknowledge that, except as may be otherwise explicitly provided in a separate
written agreement between the Company and me, my Relationship with the Company
is and shall continue to be at-will, as defined under applicable law, meaning
that either I or the Company may terminate the Relationship at any time for any
reason or no reason, without further obligation or liability, other than those
provisions of this Agreement that explicitly survive the termination of the
Relationship.

     

    10.           Representations
and Covenants.

     

    (a)           Facilitation
of Agreement.  I agree to
execute promptly, both during and after the end of the Relationship, any proper
oath, and to verify any proper document, required to carry out the terms of this
Agreement, upon the Company’s written request to do so.

     

    (b)           No
Conflicts.  I represent that
my performance of all the terms of this Agreement does not and will not breach
any agreement I have entered into, or will enter into, with any third party,
including without limitation any agreement to keep in confidence proprietary
information or materials acquired by me in confidence or in trust prior to or
during the Relationship.  I will not disclose to the Company or use
any inventions, confidential or non-public proprietary information or material
belonging to any previous client, employer or any other party.  I will
not induce the Company to use any inventions, confidential or non-public
proprietary information, or material belonging to any previous client, employer
or any other party.  I acknowledge and agree that I have listed on
Exhibit A all
agreements (e.g.,
non-competition agreements, non-solicitation of customers agreements,
non-solicitation of employees agreements, confidentiality agreements, inventions
agreements, etc.), if any, with a current or former client, employer, or any
other person or entity, that may restrict my ability to accept employment with
the Company or my ability to recruit or engage customers or service providers on
behalf of the Company, or otherwise relate to or restrict my ability to perform
my duties for the Company or any obligation I may have to the
Company.  I agree not to enter into any written or oral agreement that
conflicts with the provisions of this Agreement.

     

    (c)           Voluntary
Execution.  I certify and
acknowledge that I have carefully read all of the provisions of this Agreement,
that I understand and have voluntarily accepted such provisions, and that I will
fully and faithfully comply with such provisions.

     

    
      
         

      

      
        -14-

        
          

        

      

      
         

      

    

    11.           General
Provisions.

     

    (a)           Governing
Law.  The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of Hong Kong, without giving effect to the principles of conflict of
laws.

     

    (b)           Entire
Agreement.  This Agreement
sets forth the entire agreement and understanding between the Company and me
relating to its subject matter and merges all prior discussions between
us.  No amendment to this Agreement will be effective unless in
writing signed by both parties to this Agreement.  The Company shall
not be deemed hereby to have waived any rights or remedies it may have in law or
equity, nor to have given any authorizations or waived any of its rights under
this Agreement, unless, and only to the extent, it does so by a specific writing
signed by a duly authorized officer of the Company, it being understood that,
even if I am an officer of the Company, I will not have authority to give any
such authorizations or waivers for the Company under this Agreement without
specific approval by the Board of Directors.  Any subsequent change or
changes in my duties, obligations, rights or compensation will not affect the
validity or scope of this Agreement.

     

    (c)           Severability.  If one or more of
the provisions in this Agreement are deemed void or unenforceable to any extent
in any context, such provisions shall nevertheless be enforced to the fullest
extent allowed by law in that and other contexts, and the validity and force of
the remainder of this Agreement shall not be affected.  The Company
and I have attempted to limit my right to use, maintain and disclose the
Company’s Confidential Information, and to limit my right to solicit employees
and customers only to the extent necessary to protect the Company from unfair
competition.  Should a court of competent jurisdiction determine that
the scope of the covenants contained in Section 8 exceeds the maximum restrictiveness such
court deems reasonable and enforceable, the parties intend that the court should
reform, modify and enforce the provision to such narrower scope as it determines
to be reasonable and enforceable under the circumstances existing at that
time.

     

    (d)           Successors
and Assigns.  This Agreement
will be binding upon my heirs, executors, administrators and other legal
representatives, and my successors and assigns, and will be for the benefit of
the Company, its successors, and its assigns.

     

    (e)           Remedies.  I acknowledge and
agree that violation of this Agreement by me may cause the Company irreparable
harm, and therefore agree that the Company will be entitled to seek
extraordinary relief in court, including, but not limited to, temporary
restraining orders, preliminary injunctions and permanent injunctions without
the necessity of posting a bond or other security (or, where such a bond or
security is required, I agree that a $1,000 bond will be adequate), in addition to and
without prejudice to any other rights or remedies that the Company may have for
a breach of this Agreement.

     

    (f)           Advice
of Counsel.  I
ACKNOWLEDGE THAT, IN EXECUTING THIS AGREEMENT, I HAVE HAD THE OPPORTUNITY TO
SEEK THE ADVICE OF INDEPENDENT LEGAL COUNSEL, AND I HAVE READ AND UNDERSTOOD ALL
OF THE TERMS AND PROVISIONS OF THIS AGREEMENT.  THIS AGREEMENT SHALL
NOT BE CONSTRUED AGAINST ANY PARTY BY REASON OF THE DRAFTING OR PREPARATION
HEREOF.

     

    [Signature
Page Follows]

    
      
         

      

      
        -15-

        
          

        

      

      
         

      

    

    The
parties have executed this Agreement on the respective dates set forth below, to
be effective as of the Effective Date first above written.

     

    
      
        
          
            
              
                
                  
                    	
                            THE
      COMPANY:

                          
	 
      
	
                            CHINA
      MEDICINE CORPORATION

                          
	 
      
	
                            By:

                          	 
      
	 
      	
                            (Signature)

                          
	 	 
	
                            Name:
      Senshan Yang (杨森山)
      _______________

                          
	
                            Title:
      Chief Executive Officer ________________

                          
	 
      
	
                            Address:

                          
	
                            ____________________

                          
	
                            __________  ______

                          
	
                            United
      States

                          
	
                            Fax:
      ________________

                          
	 
      
	
                            Date:

                          	 
      
	 
      
	
                            EMPLOYEE:

                          
	 
      
	
                            FRED WAIKUEN CHEUNG

                          
	
                            (PRINT
      NAME)

                          
	 
      
	 
      
	
                            (Signature)

                          
	 
      
	
                            Address:

                          
	      
                            ____________________

                          
	      
                            ____________________

                          
	
                            Fax: 
      ________________

                          
	 
	
                            Date:

                          	 
      

                  

                

              

            

          

        

      

    

     

    
      
         

      

      
        -16-

        
          

        

      

      
         

      

    

    EXHIBIT
A

     

    LIST
OF PRIOR INVENTIONS

    AND
ORIGINAL WORKS OF AUTHORSHIP

    EXCLUDED
UNDER SECTION 4(a)

     

    
      
        
          
            
              
                	
                        Title

                      	 	
                        Date

                      	 	
                        Identifying
      Number

                        or Brief Description

                      
	 
      	 	 
      	 	 
      

              

            

          

        

      

    

     

    

    ___ No
inventions, improvements, or original works of authorship

     

    ___
Additional sheets attached

     

    Signature
of Employee:_________________________________________

     

    Print
Name of Employee:________________________________________

     

    Date:_______________________________________________________

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    EXHIBIT
B

     

    TERMINATION
CERTIFICATION

     

    This is
to certify that I do not have in my possession, nor have I failed to return, any
devices, records, data, notes, reports, proposals, lists, correspondence,
specifications, drawings, blueprints, sketches, laboratory notebooks, flow
charts, materials, equipment, other documents or property, or copies or
reproductions of any aforementioned items belonging to China Medicine
Corporation, a Nevada corporation, its subsidiaries, affiliates, successors or
assigns (collectively, the “Company”).

     

    I further
certify that I have complied with all the terms of the Company’s Confidential
Information and Invention Assignment Agreement signed by me, including the
reporting of any Inventions (as defined therein), conceived or made by me
(solely or jointly with others) covered by that agreement, and I acknowledge my
continuing obligations under that agreement.

     

    I further
agree that, in compliance with the Confidential Information and Invention
Assignment Agreement, I will preserve as confidential all trade secrets,
confidential knowledge, data or other proprietary information relating to
products, processes, know-how, designs, formulas, developmental or experimental
work, computer programs, data bases, other original works of authorship,
customer lists, business plans, financial information or other subject matter
pertaining to any business of the Company or any of its employees, clients,
consultants or licensees.

     

    I further
agree that for twelve (12) months from the date of this Certification, I shall
not either directly or indirectly solicit, induce, recruit or encourage any of
the Company’s employees or consultants to terminate their relationship with the
Company, or attempt to solicit, induce, recruit, encourage or take away
employees or consultants of the Company, either for myself or for any other
person or entity.

     

    Further,
I agree that for twelve (12) months from the date of this Certification, I shall
not use any Confidential Information of the Company to negatively influence any
of the Company’s clients or customers from purchasing Company products or
services or to solicit or influence or attempt to influence any client, customer
or other person either directly or indirectly, to direct any purchase of
products and/or services to any person, firm, corporation, institution or other
entity in competition with the business of the Company.

     

    
      
        
          
            	
                    Date:
      _____________________________

                  	
                    EMPLOYEE:

                  
	 
      	 
      
	 
      	 
      
	 
      	
                    (Print
      Employee’s Name)

                  
	 
      	 
      
	 
      	 
      
	 
      	
                    (Signature)Exhibit
10.27

    

    North
Carolina Commercial Lease Agreement

     

    This
Commercial Lease Agreement ("Lease") is made and effective the 1st day of
January, 2010, by and between VALFERN HOLDINGS, INC.
("Landlord") and ADHEREX
TECHNOLOGIES, INC. ("Tenant").

     

    Landlord
is the owner of land and improvements commonly known and numbered as 501
EASTOWNE DR., Ste. 140 CHAPEL HILL, NC 27514 and legally described as follows
(the "Building"):

     

    Landlord
makes available for lease a portion of the Building designated as Approximately
1,058 RSF, said premises shall be of Suite 140 of the building designated above.
(the "Leased Premises").

     

    Landlord
desires to lease the Leased Premises to Tenant, and Tenant desires to lease the
Leased Premises from Landlord for the term, at the rental and upon the
covenants, conditions and provisions herein set forth.

     

    THEREFORE,
in consideration of the mutual promises herein, contained and other good and
valuable consideration, it is agreed:

     

    1. Term.

     

    A.
Landlord hereby leases the Leased Premises including Furniture outlined in
Exhibit B to Tenant, and Tenant hereby leases the same from Landlord, for an
"Initial Term" beginning the 15th day of
January, 2010 and ending the 15th day of
January, 2011. Landlord shall use its best efforts to give Tenant possession as
nearly as possible at the beginning of the Lease term. If Landlord is unable to
timely provide the Leased Premises, rent shall abate for the period of delay.
Tenant shall make no other claim against Landlord for any such
delay.

     

    B. Tenant
may renew the Lease for one extended term of one calendar year. Tenant shall
exercise such renewal option, if at all, by giving written notice to Landlord
not less than ninety (90) days prior to the expiration of the Initial Term. The
renewal term shall be at the rental set forth below and otherwise upon the same
covenants, conditions and provisions as provided in this Lease.

     

    2. Rental.

     

    A. Tenant
shall pay to Landlord during the Initial Term rental of $24,281.11 per year, payable in
installments of $2,023.43 per month. Each installment payment shall be due in
advance on the fifth day of each calendar month during the lease term to
Landlord at Valfern Holdings, Inc. 501 Eastowne Dr., Ste. 145 Chapel Hill, NC
27514 or at such other place designated by written notice from Landlord to
Tenant. The rental payment amount for any partial calendar months included in
the lease term shall be prorated on a daily basis. Tenant shall also pay to
Landlord a "Security Deposit" in the amount of $2023.43.
 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    B. The
rental for any renewal period shall be independently negotiated between the
parties and shall be agreed to in writing at such time as Tenant should elect to
renew the said lease.  The parties at such time shall then sign a
lease addendum laying out the annual rent.

     

    3. Use

     

    Notwithstanding
the forgoing, Tenant shall not use the Leased Premises for the purposes of
storing, manufacturing or selling any explosives, flammables or other inherently
dangerous substance, chemical, thing or device.

     

    4. Sublease
and Assignment.

     

    Tenant
shall have the right without Landlord's consent, to assign this Lease to a
corporation with which Tenant may merge or consolidate, to any subsidiary of
Tenant, to any corporation under common control with Tenant, or to a purchaser
of substantially all of Tenant's assets. Except as set forth above, Tenant shall
not sublease all or any part of the Leased Premises, or assign this Lease in
whole or in part without Landlord's consent, such consent not to be unreasonably
withheld or delayed.

     

    5. Repairs.

     

    During
the Lease term, Tenant shall make, at Tenant's expense, all necessary repairs to
the Leased Premises. Repairs shall include such items as routine repairs of
floors, walls, ceilings, and other parts of the Leased Premises damaged or worn
through normal occupancy, except for major mechanical systems or the roof,
subject to the obligations of the parties otherwise set forth in this
Lease.

     

    6. Alterations
and Improvements.

     

    Tenant,
at Tenant's expense, shall have the right following Landlord's written consent
to remodel, redecorate, and make additions, improvements and replacements of and
to all or any part of the Leased Premises from time to time as Tenant may deem
desirable, provided the same are made in a workmanlike manner and utilizing good
quality materials. Tenant shall have the right to place and install personal
property, trade fixtures, equipment and other temporary installations in and
upon the Leased Premises, and fasten the same to the premises. All personal
property, equipment, machinery, trade fixtures and temporary installations,
whether acquired by Tenant at the commencement of the Lease term or placed or
installed on the Leased Premises by Tenant thereafter, shall remain Tenant's
property free and clear of any claim by Landlord. Tenant shall have the right to
remove the same at any time during the term of this Lease provided that all
damage to the Leased Premises caused by such removal shall be repaired by Tenant
at Tenant's expense.
 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    7. Property
Taxes.

     

    Landlord
shall pay, prior to delinquency, all general real estate taxes and installments
of special assessments coming due during the Lease term on the Leased Premises,
and all personal property taxes with respect to Landlord's personal property, if
any, on the Leased Premises. Tenant shall be responsible for paying all personal
property taxes with respect to Tenant's personal property at the Leased
Premises.

     

    8. Association.

     

    Landlord
shall pay, prior to delinquency, all association dues for the premises and shall
hold harmless the tenant thereof.

     

    9. Utilities.

     

    A. The
tenant shall be responsible for any public or private utilities on the premises
and shall hold landlord harmless thereto.

     

    B. Tenant
shall pay all charges for water, sewer, gas, electricity, telephone, internet,
security, janitorial, telephone operator and other services and utilities used
by Tenant on the Leased Premises during the term of this Lease unless otherwise
expressly agreed in writing by Landlord. In the event that any utility or
service provided to the Leased Premises is not separately metered or if the
Tenant wishes to utilize any of the aforesaid services from the Landlord,
Landlord shall pay the amount due and separately invoice Tenant for Tenant's
share of the charges by a separate agreement. Tenant shall pay such amounts
within fifteen (15) days of invoice. Tenant acknowledges that the Leased
Premises are designed to provide standard office use electrical facilities and
standard office lighting. Tenant shall not use any equipment or devices that
utilizes excessive electrical energy or which may, in Landlord's reasonable
opinion, overload the wiring or interfere with electrical and other services to
other tenants.

     

    10. Insurance.

     

    A. If the
Leased Premises or any other part of the Building is damaged by fire or other
casualty resulting from any act or negligence of Tenant or any of Tenant's
agents, employees or invitees, rent shall not be diminished or abated while such
damages are under repair, and Tenant shall be responsible for the costs of
repair not covered by insurance.

     

    B.
Landlord shall maintain fire and extended coverage insurance on the Building and
the Leased Premises in such amounts as Landlord shall deem appropriate. Tenant
shall be responsible, at its expense, for fire and extended coverage insurance
on all of its personal property, including removable trade fixtures, located in
the Leased Premises.
 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    C. Tenant
and Landlord shall, each at its own expense, maintain a policy or policies of
content coverage and comprehensive general liability insurance with respect to
the respective activities of each in the Building with the premiums thereon
fully paid on or before due date, issued by and binding upon some insurance
company approved by Landlord, such insurance to afford minimum protection of not
less than $1,000,000 combined single limit coverage of bodily injury, property
damage or combination thereof. Landlord shall be listed as an additional insured
on the Tenant's policy or policies of comprehensive general liability insurance
and content coverage, and Tenant shall provide Landlord with current
Certificates of Insurance evidencing Tenant's compliance with this Paragraph.
Tenant shall obtain the agreement of Tenant's insurers to notify Landlord that a
policy is due to expire at least (10) days prior to such expiration. Landlord
shall not be required to maintain insurance against thefts within the Leased
Premises or the Building.

     

    11. Indemnity

     

    Landlord
shall not be liable to Tenant or to Tenant’s employees, agents, invitees or
visitors, or to any other person, for any injury to persons or damage to
property on or about the Demised Premises or any adjacent area owned by Landlord
caused by the negligence or misconduct of Tenant.  Tenant shall not be
liable for any injury or damage caused by the negligence or misconduct of
Landlord, or Landlord’s employees or agents, and Landlord agrees to indemnify
and hold Tenant harmless from any loss, expense or damage arising out of such
damage or injury.

     

    12. Signs.

     

    Following
Landlord's consent, Tenant shall have the right to place on the Leased Premises,
at locations selected by Tenant, any signs which are permitted by applicable
zoning ordinances and private restrictions. Landlord may refuse consent to any
proposed signage that is in Landlord's opinion too large, deceptive,
unattractive or otherwise inconsistent with or inappropriate to the Leased
Premises or use of any other tenant. Landlord shall assist and cooperate with
Tenant in obtaining any necessary permission from governmental authorities or
adjoining owners and occupants for Tenant to place or construct the foregoing
signs. Tenant shall repair all damage to the Leased Premises resulting from the
removal of signs installed by Tenant.  Any cost of said signage shall
be the sole responsibility of the Tenant.
 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    13. Use of
Premises Prior to Commencement Date.

     

    The
tenant shall have the right to use the premises in a limited capacity prior to
the commencement of this lease at his own risk and liability.  Said
capacity shall be as follows:  Tenant shall have the right to use one
cubicle, the conference room and space adjoining the suite to store two file
cabinets.  Said use shall begin on the 23rd day of
December, 2009 and shall cease upon the commencement date of this
lease.  There shall be no charge for this use of the rental space,
provided that the security deposit has been paid in full to the Landlord by the
23rd day of December, 2010.

     

    13. Entry.

     

    Landlord
shall have the right to enter upon the Leased Premises at reasonable hours to
inspect the same, provided Landlord shall not thereby unreasonably interfere
with Tenant's business on the Leased Premises.

     

    14. Parking.

     

    During
the term of this Lease, Tenant shall have the non-exclusive use in common with
Landlord, other tenants of the Building, their guests and invitees, of the
non-reserved common automobile parking areas, driveways, and footways, subject
to rules and regulations for the use thereof as prescribed from time to time by
Landlord. Landlord reserves the right to designate parking areas within the
Building or in reasonable proximity thereto, for Tenant and Tenant's agents and
employees. Tenant hereby leases from Landlord one reserved parking space in the
parking deck at a location to be designated by the Landlord, which shall be
available for use by the Tenant.  Other than the single space in such
structural parking area, all other parking spaces around the building are
available for use by all building users on a first come-first served basis
except any spaces that are otherwise reserved. There shall be no additional
charge or rental fee for the parking space noted above.

     

    15. Building
Rules.

     

    Tenant
will comply with the rules of the Building adopted and altered by Landlord from
time to time and will cause all of its agents, employees, invitees and visitors
to do so; all changes to such rules will be sent by Landlord to Tenant in
writing. The initial rules for the Building are attached hereto as Exhibit "A"
and incorporated herein for all purposes.

     

    16. Damage
and Destruction.

     

    If the
Leased Premises or any part thereof or any appurtenance thereto is so damaged by
fire, casualty or structural defects that the same cannot be used for Tenant's
purposes, then Tenant shall have the right within ninety (90) days following
damage to elect by notice to Landlord to terminate this Lease as of the date of
such damage. In the event of minor damage to any part of the Leased Premises,
and if such damage does not render the Leased Premises unusable for Tenant's
purposes, Landlord shall promptly repair such damage at the cost of the
Landlord. In making the repairs called for in this paragraph, Landlord shall not
be liable for any delays resulting from strikes, governmental restrictions,
inability to obtain necessary materials or labor or other matters which are
beyond the reasonable control of Landlord. Tenant shall be relieved from paying
rent and other charges during any portion of the Lease term that the Leased
Premises are inoperable or unfit for occupancy, or use, in whole or in part, for
Tenant's purposes. Rentals and other charges paid in advance for any such
periods shall be credited on the next ensuing payments, if any, but if no
further payments are to be made, any such advance payments shall be refunded to
Tenant. The provisions of this paragraph extend not only to the matters
aforesaid, but also to any occurrence which is beyond Tenant's reasonable
control and which renders the Leased Premises, or any appurtenance thereto,
inoperable or unfit for occupancy or use, in whole or in part, for Tenant's
purposes.
 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    17. Default.

     

    If
default shall at any time be made by Tenant in the payment of rent when due to
Landlord as herein provided, and if said default shall continue for fifteen (15)
days after written notice thereof shall have been given to Tenant by Landlord,
or if default shall be made in any of the other covenants or conditions to be
kept, observed and performed by Tenant, and such default shall continue for
thirty (30) days after notice thereof in writing to Tenant by Landlord without
correction thereof then having been commenced and thereafter diligently
prosecuted, Landlord may declare the term of this Lease ended and terminated by
giving Tenant written notice of such intention, and if possession of the Leased
Premises is not surrendered, Landlord may reenter said premises. Landlord shall
have, in addition to the remedy above provided, any other right or remedy
available to Landlord on account of any Tenant default, either in law or equity.
Landlord shall use reasonable efforts to mitigate its damages.

     

    18. Quiet
Possession.

     

    Landlord
covenants and warrants that upon performance by Tenant of its obligations
hereunder, Landlord will keep and maintain Tenant in exclusive, quiet, peaceable
and undisturbed and uninterrupted possession of the Leased Premises during the
term of this Lease.

     

    19. Condemnation.

     

    If any
legally, constituted authority condemns the Building or such part thereof which
shall make the Leased Premises unsuitable for leasing, this Lease shall cease
when the public authority takes possession, and Landlord and Tenant shall
account for rental as of that date. Such termination shall be without prejudice
to the rights of either party to recover compensation from the condemning
authority for any loss or damage caused by the condemnation. Neither party shall
have any rights in or to any award made to the other by the condemning
authority.
 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    20. Subordination.

     

    Tenant
accepts this Lease subject and subordinate to any mortgage, deed of trust or
other lien presently existing or hereafter arising upon the Leased Premises, or
upon the Building and to any renewals, refinancing and extensions thereof, but
Tenant agrees that any such mortgagee shall have the right at any time to
subordinate such mortgage, deed of trust or other lien to this Lease on such
terms and subject to such conditions as such mortgagee may deem appropriate in
its discretion. Landlord is hereby irrevocably vested with full power and
authority to subordinate this Lease to any mortgage, deed of trust or other lien
now existing or hereafter placed upon the Leased Premises of the Building, and
Tenant agrees upon demand to execute such further instruments subordinating this
Lease or attorning to the holder of any such liens as Landlord may request. In
the event that Tenant should fail to execute any instrument of subordination
herein required to be executed by Tenant promptly as requested, Tenant hereby
irrevocably constitutes Landlord as its attorney-in-fact to execute such
instrument in Tenant's name, place and stead, it being agreed that such power is
one coupled with an interest. Tenant agrees that it will from time to time upon
request by Landlord execute and deliver to such persons as Landlord shall
request a statement in recordable form certifying that this Lease is unmodified
and in full force and effect (or if there have been modifications, that the same
is in full force and effect as so modified), stating the dates to which rent and
other charges payable under this Lease have been paid, stating that Landlord is
not in default hereunder (or if Tenant alleges a default stating the nature of
such alleged default) and further stating such other matters as Landlord shall
reasonably require.

     

    21. Security
Deposit.

     

    The
Security Deposit shall be held by Landlord without liability for interest and as
security for the performance by Tenant of Tenant's covenants and obligations
under this Lease, it being expressly understood that the Security Deposit shall
not be considered an advance payment of rental or a measure of Landlord's
damages in case of default by Tenant. Unless otherwise provided by mandatory
non-waivable law or regulation, Landlord may commingle the Security Deposit with
Landlord' s other funds. Landlord may, from time to time, without prejudice to
any other remedy, use the Security Deposit to the extent necessary to make good
any arrearages of rent or to satisfy any other covenant or obligation of Tenant
hereunder. Following any such application of the Security Deposit, Tenant shall
pay to Landlord on demand the amount so applied in order to restore the Security
Deposit to its original amount. If Tenant is not in default at the termination
of this Lease, the balance of the Security Deposit remaining after any such
application shall be returned by Landlord to Tenant within thirty days after
termination of the Lease Agreement. If Landlord transfers its interest in the
Premises during the term of this Lease, Landlord may assign the Security Deposit
to the transferee and thereafter shall have no further liability for the return
of such Security Deposit.
 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    22. Notice.

     

    Any
notice required or permitted under this Lease shall be deemed sufficiently given
or served if sent by United States certified mail, return receipt requested,
addressed as follows:

     

    If to
Landlord to:

     

    Valfern
Holdings, Inc.

     

    501
Eastowne Drive, Ste. 145

     

    Chapel
Hill, NC 27514

     

    If to
Tenant to:

     

    Adherex
Technologies, Inc.

     

    C/O
Robert Andrade

     

    501
Eastowne Drive, Ste. 140

     

    Chapel
Hill, NC 27514

     

    Landlord
and Tenant shall each have the right from time to time to change the place
notice is to be given under this paragraph by written notice thereof to the
other party.

     

    23. Brokers.

     

    Tenant
warrants that it has had no dealings with any broker or agent in connection with
this Lease, other than
Mike Lewis of Morris Commercial Inc. and J. Daniel Allen of Insight
Property Group whose commission will be paid by Landlord in terms of a
separate existing Agreement between the Landlord and Insight Property Group and
Tenant covenants to pay, hold harmless and indemnify Landlord from and against,
any and all cost, expense or liability for any compensation, commissions and
charges claimed by any other broker or agent with respect to this Lease or the
negotiation thereof arising out of Tenant's actions.
 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    24. Waiver.

     

    No waiver
of any default of Landlord or Tenant hereunder shall be implied from any
omission to take any action on account of such default if such default persists
or is repeated, and no express waiver shall affect any default other than the
default specified in the express waiver and that only for the time and to the
extent therein stated. One or more waivers by Landlord or Tenant shall not be
construed as a waiver of a subsequent breach of the same covenant, term or
condition.

     

    25. Memorandum
of Lease.

     

    The
parties hereto contemplate that this Lease should not and shall not be filed for
record, but in lieu thereof, at the request of either party, Landlord and Tenant
shall execute a Memorandum of Lease to be recorded for the purpose of giving
record notice of the appropriate provisions of this Lease.

     

    26. Headings.

     

    The
headings used in this Lease are for convenience of the parties only and shall
not be considered in interpreting the meaning of any provision of this
Lease.

     

    27. Successors.

     

    The
provisions of this Lease shall extend to and be binding upon Landlord and Tenant
and their respective legal representatives, successors and assigns.

     

    28. Consent.

     

    Landlord
shall not unreasonably withhold or delay its consent with respect to any matter
for which Landlord's consent is required or desirable under this
Lease.

     

    29. Performance.

     

    If there
is a default with respect to any of Landlord's covenants, warranties or
representations under this Lease, and if the default continues more than fifteen
(15) days after notice in writing from Tenant to Landlord specifying the
default, Tenant may, at its option and without affecting any other remedy
hereunder, cure such default and deduct the cost thereof from the next accruing
installment or installments of rent payable hereunder until Tenant shall have
been fully reimbursed for such expenditures, together with interest thereon at a
rate equal to the lesser of twelve percent (12%) per annum or the then highest
lawful rate. If this Lease terminates prior to Tenant's receiving full
reimbursement, Landlord shall pay the unreimbursed balance plus accrued interest
to Tenant on demand.

     

    30. Compliance
with Law.

     

    Tenant
shall comply with all laws, orders, ordinances and other public requirements now
or hereafter pertaining to Tenant's use of the Leased Premises. Landlord shall
comply with all laws, orders, ordinances and other public requirements now or
hereafter affecting the Leased Premises.
 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    31. Final
Agreement.

     

    This
Agreement terminates and supersedes all prior understandings or agreements on
the subject matter hereof. This Agreement may be modified only by a further
writing that is duly executed by both parties.

     

    32. Governing Law.

     

    This
Agreement shall be governed, construed and interpreted by, through and under the
Laws of the State of North Carolina.

     

    IN
WITNESS WHEREOF, the parties have executed this Lease as of the day and year
first above written.

     

    VALFERN
HOLDINGS, INC.

     

    
      
        
          
            	 
      	 
      
	 	 
	
                    Joy
      Valentine, President

                  	 
      

          

        

      

    

     

    ADHEREX
TECHNOLOGIES, INC.

     

    
      
        
          
            	 
      	 
      
	 	 
	
                    Robert
      Andrade, CFO

                  	 
      

          

        

      

    
 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Annexure
B

     

    List
of Furniture

     

    Reception
area:

     

    One
Loveseat, one coffee table, one reception desk and one work chair

     

    Work
space:

     

    3
cubicles with work surfaces and 3 work chairs, inbuilt cabinets in work area
near the server closet

     

    Conference
Room:

     

    One
conference table and 4 chairs, inbuilt cabinet

     

    Private
office:

     

    One desk
with return and credenza, one work chair,

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