Document:

exv10w14

 

Exhibit 10.14

MEMORANDUM OF LEASE AGREEMENT made effective the 1st day of July, 2005.

BETWEEN:

THE WESTAIM CORPORATION

(hereinafter referred to as the “Lessor”)

-and-

NUCRYST PHARMACEUTICALS CORP.

(hereinafter referred to as the “Lessee”)

GRANT OF LEASE

     IN CONSIDERATION of the rents, covenants and agreements hereinafter reserved and
contained, the following constitutes a lease between the Parties of the Leased Premises in the
Buildings located on the Lands, on the terms and subject to the covenants and agreements of the
Parties hereinafter set out.

	 	 	 	 	 	 	 
	ARTICLE 1	 	— INTENT OF LEASE
	 
	 	 	 	 	 	 
	1.1	 	It is the intent of this Lease and agreed to by both Parties that all and every cost,
expense, rate, tax or charge in any way related to the Leased Premises and to the
Lessee’s share of Operating Costs (all as hereinafter defined) will be borne by the
Lessee without any variation, set-off, or deduction whatsoever, except as herein
expressly set out to the contrary.
	 
	 	 	 	 	 	 
	ARTICLE 2	 	— BASIC TERMS, SCHEDULES AND DEFINITIONS
	 
	 	 	 	 	 	 
	2.1	 	Basic Terms
	 
	 	 	 	 	 	 
	 

	 	(a)
	 	(i)
	 	Lessor:
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	The Westaim Corporation
	 
	 	 	 	 	 	 
	 

	 	 	 	(ii)
	 	Address of Lessor:
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	The Westaim Corporation
	 

	 	 	 	 	 	10102-114 Street
	 

	 	 	 	 	 	Fort Saskatchewan, Alberta
	 

	 	 	 	 	 	Canada T8L 3W4

 

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	 	 	 	 	 	Attention: Legal Services
	 

	 	 	 	 	 	Fax: 780-992-5301
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	With a copy to:
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	The Westaim Corporation
	 

	 	 	 	 	 	1010, 144-4th Avenue S.W.
	 

	 	 	 	 	 	Calgary, Alberta T2P 3N4
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	Attention: Chief Financial Officer
	 

	 	 	 	 	 	Fax:403-237-8181
	 
	 	 	 	 	 	 
	 

	 	(b)
	 	(i)
	 	Lessee:
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	Nucryst Pharmaceuticals Corp.
	 
	 	 	 	 	 	 
	 

	 	 	 	(ii)
	 	Address of Lessee:
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	Nucryst Pharmaceuticals Corp.
	 

	 	 	 	 	 	10102-114 Street 
	 

	 	 	 	 	 	Fort Saskatchewan, Alberta

Canada T8L 3W4
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	Attention: Vice-President Operations
	 

	 	 	 	 	 	Fax: 780-992-5501
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	With a copy to:
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	Nucryst Pharmaceuticals Corp.
	 

	 	 	 	 	 	Suite B, 50 Audubon Road
	 

	 	 	 	 	 	Wakefield, Massachusetts 01880
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	Attention: President
	 

	 	 	 	 	 	Attention: Vice-President Finance and Administration
	 

	 	 	 	 	 	Fax:781-246-6012
	 
	 	 	 	 	 	 
	 	 	(c)	 	Leased Premises: approximately 62,684 square feet of space in the MMC Building, as shown
cross-hatched in red on Schedules “A-2”, “A-3”, “A-4” and “A- 5” and approximately 7,854
square feet of space in the R&D/AIMS I Building, as shown shaded in green on Schedule “A-1”
	 
	 	 	 	 	 	 
	 	 	(d)	 	Address of Leased Premises:
	 
	 	 	 	 	 	 
	 	 	 	 	10102-114 Street,
	 	 	 	 	Fort Saskatchewan, Alberta
	 	 	 	 	T8L 3W4

 

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	 	(e)
	 	(i)
	 	Term:
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	For the Leased Premises located in the MMC Building, the Term shall be ten
(10) years commencing on July 1, 2005 and ending on June 30, 2015, together
with any extensions in accordance with the terms of this Lease.
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	For the Leased Premises located in the R&D/AIMS I Building, the Term shall
be five (5) years commencing on July 1, 2005 and ending on June 30, 2010,
together with any extensions in accordance with the terms of this Lease.
	 
	 	 	 	 	 	 
	 

	 	 	 	(ii)
	 	Commencement Date: July 1, 2005
	 
	 	 	 	 	 	 
	 	 	(f)	 	Basic Rent:
	 
	 	 	 	 	 	 
	 

	 	 	 	(i)
	 	$521,530.88 per annum (calculated based on $8.32 per square
foot of Floor Area of the Leased Premises in the MMC Building per annum), to
be paid in advance in equal monthly installments on the first day of each
month.
	 
	 	 	 	 	 	 
	 

	 	 	 	(ii)
	 	$39,270.00 per annum (calculated based on $5.00 per square foot
of Floor Area of the Leased Premises in the R&D/AIMS I Building per annum), to
be paid in advance in equal monthly installments on the first day of each
month.
	 
	 	 	 	 	 	 
	 	 	(g)	 	Lands: lands legally described as Lot 3 Plan 912 0267 and Lot 49 Block 1 Plan
042 4648.

     The foregoing Basic Terms are hereby approved by the Parties and each reference in this Lease
to any of the Basic Terms shall be construed to include the provisions set forth above as well as
all of the additional terms and conditions of the applicable sections of this Lease where such
Basic Terms are more fully set forth.

	2.2	 	Schedules

     All schedules to this Lease are incorporated into and form an integral part of this Lease.
The schedules are as follows:

	 	 	 	 	 
	 

	 	Schedules “A-1” through “A-7” -
	 	Diagrams showing the Leased Premises
and Reserved Parking Stalls
	 
	 	 	 	 
	 

	 	Schedule “B-1” through “B-3”
	 	Diagrams showing the MMC Building, the
R&D/AIMS I Building and the Complex
Common Facilities

 

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	 	Schedule “C”
	 	List of tenant’s fixtures and leasehold
improvements which the Lessee can
remove upon termination of the Lease
	 
	 	 	 	 
	 

	 	Schedule “D”
	 	Definitions

	2.3	 	Definitions

     In this Lease, the words, phrases and expressions set forth in Schedule “D” are used with the
meanings defined therein. The definitions contained in Schedule “D” are not exhaustive of the
defined terms or expressions used in this Lease and other terms or expressions may be defined
throughout this Agreement.

ARTICLE 3 — GRANT OF LEASE

	3.1	 	Demise

     The Lessor, being registered and beneficial owner of the Lands as legally described in
Section 2.1(g) and the Building, subject, however, to such mortgages and encumbrances as are
registered against title thereto as of the date hereof, does hereby lease to the Lessee, the
Leased Premises for the Term and upon and subject to the covenants and conditions hereinafter
expressed.

ARTICLE 4 — TERM, COMMENCEMENT AND EXTENSION OF TERM

	4.1	 	Term

     The Term of this Lease shall be for the period set out in Section 2.1(e)(i), beginning on the
Commencement Date set out in Section 2.1(e)(ii), subject to extension as set forth in Section 4.4
of this Lease.

	4.2	 	Overholding

     If the Lessee remains in possession of the Leased Premises after the expiration or termination
of the Term (or any renewal or extension thereof) without objection by the Lessor and without any
written agreement otherwise providing, then the Lessee shall be deemed to be a tenant from month to
month, except that the monthly payments of Basic Rent shall be equal to one hundred and twenty
(120%) percent of the monthly Basic Rent payable immediately prior to expiration or termination,
and subject otherwise to all of the provisions of this Lease which shall be read with such changes
as are appropriate to a monthly tenancy. This provision shall not authorize the Lessee to so
overhold where the Lessor has objected to such overholding or has required the Lessee to vacate the
Leased Premises.

 

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	4.3	 	Surrender on Termination

     Upon the expiration of the Term or sooner termination of this Lease pursuant to any provision
hereof, the Lessee:

	 	(a)	 	shall vacate and surrender up to the Lessor the Leased Premises in accordance
with all the requirements of this Lease;
	 
	 	(b)	 	may remove all tenant’s fixtures installed on the Leased Premises which are
listed in Schedule C attached hereto and such other tenant’s fixtures or leasehold
improvements installed on the Leased Premises which the Lessor has expressly agreed
in writing may be removed upon termination together with such unattached
equipment, unattached furnishings and unattached contents which are the personal
property of the Lessee (and not otherwise), and shall in any event remove any permitted
identification signs or fixtures and such tenant’s fixtures, equipment, furnishings
and contents and also all leasehold improvements installed by the Lessee if
and to the extent required to do so by the Lessor, and shall pay to the Lessor on
demand the cost of removal of any permitted identification signs or fixtures and all
tenant’s fixtures, furnishings, contents and leasehold improvements which the Lessee
shall have failed to remove in accordance with any requirements of the Lessor or before
the expiration or sooner termination of this Lease, and the Lessee shall make good all
damage to the Leased Premises and to any heating, ventilating, air
conditioning and utility systems serving the Leased Premises caused by the removal
thereof and failing which shall pay to the Lessor all cost and expense incurred by the
Lessor in making good such damage or restoration; and
	 
	 	(c)	 	shall leave the Leased Premises in such a state of repair and condition as
shall comply in all respects with the provisions of this Lease, subject to reasonable
wear and tear.

	4.4	 	Extension of Term

	 	(a)	 	Provided that the Lessee is not in default under this Lease at the time it
gives notice to the Lessor of the Lessee’s intention to extend the initial Term of this
Lease with respect to the MMC Building and/or the R&D/AIMS I Building, the Lessor
shall, at the expiration of the applicable Term, upon request in writing by the Lessee
delivered to the Lessor at least six (6) months but not more than twelve (12) months
prior to the expiration of the applicable Term, grant to the Lessee a right to extend
the initial Term for a further term of five (5) years (the “First Renewal Term”) from
the expiration of the initial Term upon the same terms and conditions as contained in
this Lease except as to the inclusion of this clause 4.4(a) and except as to the amount
of Basic Rent payable during the First Renewal Term which shall be equal to the Fair
Market Value of the Basic Rent, as mutually agreed between the parties or, failing such
agreement, as determined by arbitration, provided always that, in no event shall such
Fair Market Value of the Basic Rent be less than an amount calculated as follows:

 

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	Basic Rent during
Term     x
	 	 
	 	CPI at End of Term
	 

	
	 	 
	 	 
	 

	

	 	 
	 	Alberta CPI at Commencement Date

	 	(b)	 	Provided that the Lessee is not in default under this Lease at the time it
gives notice to the Lessor of the Lessee’s intention to extend the First Renewal Term
with respect to the MMC Building and/or the R&D/AIMS I Building, as the case may be,
the Lessor shall, at the expiration of the applicable First Renewal Term, upon request
in writing by the Lessee delivered to the Lessor at least six (6) months but not more
than twelve (12) months prior to the expiration of the applicable First Renewal Term,
grant to the Lessee a right to extend the applicable First Renewal Term for a further
term of five (5) years (the “Second Renewal Term”) from the expiration of the
applicable First Renewal Term upon the same terms and conditions as contained in this
Lease except as to the inclusion of clauses 4.4 (a) and 4.4 (b) and except as to the
amount of Basic Rent payable during the Second Renewal Term which shall be equal to the
Fair Market Value of the Basic Rent, as mutually agreed between the parties or, failing
such agreement, as determined by arbitration, provided always that, in no event shall
such Fair Market Value of the Basic Rent be less than an amount calculated as follows:

	 	 	 	 	 	 	 
	 

	Basic Rent in First Renewal Term     x
	 	 
	 	CPI at End of Term
	 

	
	 	 
	 	 
	 

	
	 	 
	 	CPI at commencement date of
First Renewal Term

	 	(c)	 	Provided that the Lessee is not in default under this Lease at the time it
gives notice to the Lessor of the Lessee’s intention to extend the Second Renewal Term
with respect to the R&D/AIMS I Building (but not the MMC Building), the Lessor shall,
at the expiration of the Second Renewal Term with respect to the R&D/AIMS I Building,
upon request in writing by the Lessee delivered to the Lessor at least six (6) months
but not more than twelve (12) months prior to the expiration of the Second Renewal Term
for the R&D/AIMS I Building, grant to the Lessee a right to extend the Second Renewal
Term for the R&D/AIMS I Building for a further term of five (5) years (the “Third
Renewal Term”) from the expiration of the Second Renewal Term upon the same terms and
conditions as contained in this Lease except as to the inclusion of this clause 4.4(b)
and except as to the amount of Basic Rent payable during the Third Renewal Term which
shall be equal to the Fair Market Value of the Basic Rent, as mutually agreed between
the parties or, failing such agreement, as determined by arbitration, provided always
that, in no event shall such Fair Market Value of the Basic Rent be less than an amount
calculated as follows:

	 	 	 	 	 	 	 
	 

	Basic Rent in Second Renewal
Term     x
	 	 
	 	CPI at End of Term
	 

	
	 	 
	 	 
	 

	
	 	 
	 	CPI at commencement date of Second Renewal
Term

(d) Notwithstanding anything contained in clause 4.4 (a), (b) or (c) above, the Lessee shall not be
entitled to extend the First Renewal Term or the Second Renewal Term for the R&D/AIMS I Building
unless it concurrently extends the Term for the Leased Premises in the MMC Building so

 

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that the Term applicable to the Leased Premises in the R&D/AIMS I Building and the Term applicable
to the Leased Premises in the R&D/AIMS I Building expire concurrently.

	4.5	 	Lease Option

     In consideration of the Lessee entering into this Agreement and agreeing to lease the
Leased Premises upon the terms and conditions herein, and in consideration of the sum of ONE
DOLLAR ($1.00) now paid by the Lessee to the Lessor (the receipt and sufficiency of which is
hereby acknowledged by the Lessor), the Lessor hereby grants to the Lessee the sole, exclusive
and irrevocable option to lease additional space in the Building located on the Lands (either en
bloc or as individual, discrete parcels, as the case may be) from time to time upon the terms
and conditions herein.

	 	(a)	 	From time to time, in the event that the Lessor determines to attempt to lease
any unleased space in the Building located on the Lands to a third party (“the Unleased
Space”), the Lessor shall first provide written notice to the Lessee that it intends to
attempt to lease such Unleased Space (the “Lessor’s Notice”). In addition, from time
to time, in the event that the Lessee determines that it wishes to lease any Unleased
Space, it may do so by written election to the Lessor as outlined herein;
	 
	 	(b)	 	Within fifteen (15) days after a Lessor’s Notice, or from time to time as the
Lessee shall determine, the Lessee has the option (the “Lease Option”) to lease the
Unleased Space, or portion or portions thereof (such Unleased Space or portion thereof
being referred to as the “Option Additional Space” once it is the subject of a Lease
Option which has been exercised by the Lessee), from the Lessor upon the following
terms and conditions:

	 	(i)	 	any exercise of the Lease Option shall be unconditional;
	 
	 	(ii)	 	the lease rate for basic rent of space leased to the Lessee
by virtue of the Lease Option shall be equal to the fair market value of the
Basic Rent on a triple net basis, as mutually agreed between the Lessor and
the Lessee or, failing such agreement, as determined by arbitration, provided
always that, in no event shall such fair market value of Basic Rent be less
than the then current Basic Rent for the Leased Premises in the MMC Building
or in the R&D/AIMS I Building, as the case may be, (on a per square foot
basis) plus an additional amount required to be paid to the Lessor to enable
it to fully recover its Capital Improvement Costs over the term for the
Option Additional Space;
	 
	 	(iii)	 	all rent shall be payable monthly, in advance;
	 
	 	(iv)	 	the term for the Option Additional Space shall be the same as
the Term remaining for the Leased Premises at the time of exercise of the
Lease Option. In the event that the time remaining under the Term for the
Option Additional Space is, or will be, shorter than five years from the date
of possession of the said Option Additional Space, then, notwithstanding
anything else contained in this Lease (and in particular

 

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	 	 	 	the time limits contained in the renewal option provisions in section 4.4
hereof) but subject always to section 4.4(a) hereof, concurrently with its
exercise of the Lease Option, the Lessee shall have the right to exercise
the next renewal option for the MMC Building pursuant to section 4.4
hereof;
	 
	 	(v)	 	the possession date shall be ninety (90) days from the
date of exercise of the Lease Option by the Lessee.

	 	(c)	 	Upon any exercise of the Lease Option as aforesaid, the Lessee shall be bound
to lease the Option Additional Space, or portion thereof, from the Lessee and the
Lessor shall be bound to lease the Option Additional Space, or portion thereof, to the
Lessor at the price and upon the terms mentioned above, and otherwise subject to the
specific terms and provisions, mutatis mutandis, of this Lease.
	 
	 	(d)	 	If, after a Lessor’s Notice, the Lessee does not exercise its Lease Option with
respect to Unleased Space, or portion thereof, as identified in the Lessor’s Notice
within fifteen (15) days from the date of receipt such Lessor’s Notice from the Lessor,
then the Lessee shall be deemed to have declined to exercise its Lease Option with
respect to the Unleased Space and the Lessor shall be shall be free to proceed to lease
the Unleased Space, or portion thereof, to any third party or parties, provided always
that, in the event that the Lessor does not enter into an agreement to lease the
Unleased Space or a portion thereof within 180 days following the earlier of the expiry
of the said fifteen time day period date or the date that the Lessee provides notice
that it will not exercise its Lease Option with respect to the Unleased Space, the
Lessor shall be required to again comply with the provisions of subsections 4.5 (a) to
(c) hereof, inclusive.
	 
	 	(e)	 	Notwithstanding anything else contained herein, the provisions of this Lease
Option shall have no application to any leases, rentals, licenses or other
possessory interests that the Lessor grants or intends to grant to any related or
affiliated party.

The Lease Option shall expire on July 1, 2019.

	4.6	 	Construction Option

     From time to time, provided that the Lessee is not in default under this Lease, the Lessee
may give notice to the Lessor of the Lessee’s requirement that additional space be made available
to the Lessee by construction of an expansion to the Building (such expansion from time to time
being referred to as the “Expansion Additional Space”), whereupon the Lessor and the Lessee shall:

	 	(a)	 	commence, conduct and continue good faith negotiations to attempt to agree upon
the expansion of the Building (the “Building Expansion”) as reasonably required by the
Lessee for permitted use to allow for the construction, fixturing, equipment and
utility installation and finishing of the Expansion Additional Space to meet the
requirements and purposes reasonably required by the Lessee in

 

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	 	 	 	accordance with standards and specifications reasonably required by the Lessee (the
“Lessee Expansion Requirements”) and the timing of such expansion;
	 
	 	(b)	 	upon agreement between the Lessee and the Lessor respecting the Building
Expansion and the Lessee’s Expansion Requirements, the Lessor shall proceed with the
application for all permits necessary for the construction of the Building Expansion and
the Expansion Additional Space (the “Permits”);
	 
	 	(c)	 	in the event that the applications by the Lessor for the Permits results in any
changes to the Building Expansion or the Expansion Additional Space, then, prior to
proceeding with construction, the Lessor shall obtain the consent of the Lessee to such
changes, which consent shall not be unreasonably withheld;
	 
	 	(d)	 	after issuance of the necessary development and building permits for the
construction of the Building Expansion and the Expansion Additional Space, the Lessor
shall construct the Building Expansion and the Expansion Additional Space and all
fixturing, finishing, equipment and utility installations contemplated by the Lessee
Expansion Requirements, all in accordance with applicable Governmental Requirements;
	 
	 	(e)	 	possession of the Expansion Additional Space shall be granted to the Lessee upon
substantial completion thereof and the Lessee’s obligation to make payment of basic
rent and additional rent for the Expansion Additional Space shall commence upon such
substantial completion;
	 
	 	(f)	 	in the event that there are any conflicts with the Lessee Expansion Requirements
and any applicable Governmental Requirements relating to the Lessee
Expansion Requirements, the said Governmental Requirements shall supersede and govern
and the Lessee Expansion Requirements shall be deemed to be amended accordingly;
	 
	 	(g)	 	upon completion of the Expansion Additional Space, the term for the Expansion
Additional Space shall be the same as the Term remaining for the Leased Premises at the
time of exercise of possession of the Expansion Additional Space being given to the
Lessee. In the event that the time remaining under the Term is, or will be, shorter than
five years from the date of possession of the Expansion Additional Space, then,
notwithstanding anything else contained in this Lease (and in particular the time limits
contained in the renewal option provisions in section 4.4 hereof) but subject always to
section 4.4(d) hereof, concurrently with its exercise of the Construction Option, the
Lessee shall have the right to exercise the next applicable renewal option pursuant to
section 4.4 hereof;
	 
	 	(h)	 	the basic rent for such Expansion Additional Space shall be equal to the fair
market value of basic rent on a triple net basis, as mutually agreed between the parties
or, failing such agreement, as determined by arbitration, provided always that, in no
event shall such fair market value of basic rent be less than an amount required to be
paid to the Lessor to enable it to fully recover its Construction Costs over the
remaining Term (without consideration of any renewals);

 

Page 10

	 	(i)	 	in the event that development and building permits are not issued for the
construction of the Building Expansion and the Expansion Additional Space as both the
Lessor and the Lessee agree, then the Lessee hereby agrees that it does fully and
completely indemnify the Lessor from any and all of its Planning Costs incurred. The
Lessor agrees to make payment to the Lessee of such Planning Costs within ten days
from the date that the Lessor invoices the Lessee for such costs. In default of such
payment, the Lessee agrees to pay interest to the Lessor on the outstanding amount of
such Planning Costs at the rate of 18% per annum until paid.

The Construction Option shall expire on July 1, 2019.

	4.7	 	Amendments to Lease Resulting From Additional Space

     Upon the Lessee being obligated respecting any Additional Space in accordance with the terms
and provisions hereof, all terms and provisions hereof shall be deemed to be automatically amended
as may be required to give full force and effect to the provisions of sections 4.5 and 4.6 hereof.
Without limitation, the Leased Premises shall be deemed to include the Additional Space and the
requirements for payment of Basic Rent and Additional Rent shall be deemed to include the
requirement for payment of the basic rent and additional rent for such Additional Space.

ARTICLE 5  — RENT

	5.1	 	Basic Rent

     The Lessee shall pay to the Lessor yearly and every year during the Term, the total of Basic
Rent in lawful money of Canada in the sum of $560,800.88 payable by equal monthly installments in
the sum of $46,733.41 each, commencing on the Commencement Date and payable on the first day of
each and every month thereafter during the Term herein granted. For certainty and clarification,
the total amount of Basic Rent is the aggregate of Basic Rent for the Leased Premises in the MMC
Building and the Basic Rent for the Leased Premises in the R&D/AIMS I Building and is calculated
as follows: the sum of $521,530.88 per annum ($43,460.91 per month) which is calculated at the
rate of $8.32 per square foot of the Floor Area of 62,684 square feet of the Leased Premises in
the MMC Building and $39,270.00 per annum ($3,272.50 per month) which is calculated at the rate of
$5.00 per square foot of the Floor Area of 7,854 square feet of the Leased Premises in the
R&D/AIMS I Building.

	5.2	 	Additional Rent

     The Lessee shall pay to the Lessor in addition to Basic Rent, all other amounts which shall
become due and payable from time to time under any provision of this Lease (including without
limitation amounts which become due and payable pursuant to Article 13), and each of which amounts
so payable shall be deemed to be rent, recoverable as such, and when in default all remedies of the
Lessor for non-payment of rent shall be applicable thereto. Such amounts are referred to herein as
Additional Rent.

 

Page 11

	5.3	 	Pro Rata Adjustment of Rent

     All rent shall be deemed to accrue from day to day, and if for any reason it shall become
necessary to calculate rent for irregular periods of less than one (1) year or one (1) month, as
the case may be, an appropriate pro rata adjustment shall be made in order to calculate rent for
such irregular period.

	5.4	 	Manner and Place of Payment

     All rents, including Basic Rent and Additional Rent, payable by the Lessee to the Lessor
under this Lease and all other payments of whatsoever nature required or contemplated by this
Lease to be paid by the Lessee to the Lessor shall be:

	 	(a)	 	paid to the Lessor by the Lessee in Canadian dollars;
	 
	 	(b)	 	paid to the Lessor at the address noted in Section 2.1(a)(ii), or such other
places as the Lessor may designate in writing from time to time;
	 
	 	(c)	 	made when due hereunder, without prior demand thereof and without any setoff,
compensation or deduction whatsoever;
	 
	 	(d)	 	applied towards amounts then outstanding hereunder in such manner as the Lessor
may, in its discretion, see fit, and without restricting the generality of the
foregoing, the acceptance by the Lessor of any amount less than the full amount which
is due and owing by the Lessee shall not constitute an accord and satisfaction or
otherwise oblige the Lessor to accept in full settlement, anything less than the full
amount owing and outstanding at any time;
	 
	 	(e)	 	deemed to be rent, in partial consideration for which this Lease has been
entered into, and shall be payable and recoverable as rent, such that the Lessor shall
have all rights and remedies against the Lessee for default in making any such payment
which may not be expressly said to be rent as the Lessor has for default in payment in
rent.

	5.5	 	Interest on Arrears

     Whenever the Lessee shall fail to pay any rent or other amount owing to the Lessor under this
Lease or any installment thereof when due, or shall pay an amount which is thereafter determined,
estimated or found to be less than the amount properly due, the Lessee shall pay interest at a rate
of eighteen (18%) percent per annum, compounded monthly on the unpaid amount of deficiency, from
the date it was properly due until paid.

 

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ARTICLE 6 — GENERAL COVENANTS

	6.1	 	Covenants of the Lessor

     The Lessor covenants with the Lessee for quiet enjoyment of the Leased Premises and the
rights appurtenant thereto, subject to the provisions of this Lease, and to observe and perform
all the covenants and provisions of this Lease on its part to be observed and performed.

	6.2	 	Covenants of the Lessee

     The Lessee covenants with the Lessor to pay rent, and to observe and perform all the
covenants and provisions of this Lease on its part to be observed and performed.

ARTICLE 7 — USE

	7.1	 	Permitted Uses

     The Lessee shall use the Leased Premises for research and development, manufacturing,
warehouse and general office use, but for no other purpose without the prior written consent of the
Lessor. All uses and activities shall be carried on exclusively in the Building and there shall be
no external uses, activities or impact on the outside of the Building or any of the yards or lands
located in the vicinity thereof.

	7.2	 	Compliance with Laws, Policies and Regulations

     The Lessee shall carry on and conduct its business from the Leased Premises in such manner as
to comply in all material respects with any and all applicable statutes, bylaws, rules and
regulations of any federal, provincial, municipal or other competent authority for the time being
in force and to comply with any and all safety and security policies, rules and regulations as may
affect the Leased Premises from time to time as required by the Lessor, and shall not do anything
upon the Leased Premises in contravention thereof.

	7.3	 	Nuisance

     The Lessee shall not do or permit to be done or omitted anything which could damage the
Building or the Lands other than normal wear and tear or which shall or might result in any
nuisance in or about the Leased Premises, whether to the Lessor or to any other party, the whole as
determined by the Lessor acting reasonably. In any of the foregoing events, the Lessee shall
forthwith remedy the same and if such thing or condition shall not be so remedied, the Lessor may,
after such notice, if any, as the Lessor may deem appropriate in the circumstances, correct such
situation at the expense of the Lessee and the Lessee shall pay such expense to the Lessor as
Additional Rent.

 

Page 13

ARTICLE 8 — COMMON FACILITIES AND PARKING

	8.1	 	Right of Use of Common Facilities

     Subject to all the terms of this Lease, the Lessee shall have, in connection with the Leased
Premises and the business required to be carried on therein, the right and license to use during
business hours for itself and its employees and persons having business with it and in connection
with such business the non-exclusive right to use the Common Facilities in common with all others
entitled thereto for their appropriate and intended purposes in each case.

	8.2	 	Restrictions on Use of Common Facilities

     The Common Facilities and the right to the use thereof extended to the Lessee under Section
8.1 shall be subject to the following:

	 	(a)	 	Such right of use shall not extend to parts of the Common Facilities from time
to time allocated by the Lessor for other use or to other parties, whether temporary or
permanent, such as storage areas or areas containing utility or mechanical systems.
Without limitation, the Lessor may restrict or rescind entirely the Lessee’s right to
use the Complex Common Facilities; provided that the Lessor shall use reasonable
commercial efforts to minimize any interference with the Lessee’s use of the Leased
Premises.
	 
	 	(b)	 	The Common Facilities shall at all times be under the exclusive control and
management of the Lessor.
	 
	 	(c)	 	The Lessor shall have the right to alter or relocate the Common Facilities or
any parts thereof, and to interfere with the use of any portions thereof as may be
necessary and reasonable during the making of alterations, reconstructions or repairs
to any portion of the Building and Lands; provided that the Lessor shall use reasonable
commercial efforts to minimize any interference with the Lessee’s use of the Leased
Premises.
	 
	 	(d)	 	The Lessee shall not park and shall use its reasonable efforts to prevent its
employees from parking any vehicles in the parking areas or facilities except in such
parts as may be allocated from time to time by the Lessor for the use of tenants and
their employees, and shall co-operate with the Lessor as may be required to effectively
control parking.

	8.3	 	Parking

     The Lessor hereby further grants the Lessee, during the Term hereof, for the benefit of the
Lessee its officers, officials and employees (the “Users”), the following permits and licenses
respecting parking:

 

Page 14

Firstly, an exclusive permit and license to use 33 of the motor vehicle parking spaces located on
the Lands (the “Reserved Parking Stalls”) for the exclusive benefit and use of the Lessee and the
Users;

Secondly, a non-exclusive permit and license to use a Ratable Share (as defined below) of the
motor vehicle parking spaces located on the Parking Lands (the “Parking Spaces”) for the
non-exclusive benefit and use of the Lessee and the Users in common with all other persons to whom
the Lessor grants rights of use, licenses, easements or interests in the Parking Lands, together
with the non-exclusive free and uninterrupted right, permit and licence, over the roadways and
walkways located on the Parking Lands for vehicular and pedestrian ingress and egress, in
accordance with their intended use and purpose. For certainty, it is hereby confirmed that the
Parking Spaces are not specifically reserved or identified and no User has any exclusive right to
use any particular Parking Space and that the use of the Parking Spaces is in common with all
other users of the parking spaces located on the Parking Lands and that all use of all parking
spaces located on the lands (including the Parking Spaces) is on a “first come -first serve”
basis. (For the purpose hereof, “Ratable Share” shall mean a fraction, the numerator of which is
the difference between the number of full time employees employed in the business of the Lessee on
the Leased Premises and the number of Reserved Parking Stalls and the denominator of which is the
number of full time employees employed by all of the businesses in the area or vicinity of the
Parking Lands and whose full time employees, from time to time, use the Parking Lands for the
purpose of parking while in attendance at work).

The permits and licenses granted under this section 8.3 are subject to the following additional
provisions:

	 	(a)	 	From time to time, the Lessor may, in its sole and absolute discretion,
determine the number of Parking Spaces that the Lessee is entitled to use under this
Agreement based upon the Lessee’s Ratable Share as defined above, and, in that regard,
if the Lessee’s entitlement to Parking Spaces is to be reduced, then the Lessor shall
be entitled to reduce the number of Parking Spaces that the Lessee is entitled to use
under this Agreement by thirty days written notice to the Lessee.
	 
	 	(b)	 	The Lessee shall comply with all requirements, rules and procedures of the
Lessor governing or affecting the safety and security of the Lands and the Parking
Lands and adjacent areas.
	 
	 	(c)	 	The Lessee acknowledges and agrees that, as the Reserved Parking Stalls have
electrical service available, the Lessee shall make payment of electricity costs for
electrical service for the Reserved Parking Stalls as part of the Operating Costs
hereunder.
	 
	 	(d)	 	The Lessee acknowledges and agrees that, as some of the Parking Spaces have
electrical service available, the Lessee shall make payment of its Ratable Share of
electricity costs for electrical service for the Parking Spaces as part of the
Operating Costs hereunder.

 

Page 15

ARTICLE 9  — REPAIRS, MAINTENANCE AND ALTERATIONS

	9.1	 	Lessor’s Obligation to Repair And Maintain

The Lessor shall at all times during the Term keep or cause to be kept in good repair,
order and condition:

	 	(a)	 	the portions of the Building which are structural in nature, being responsible
only for effecting Structural Repairs to the Building, including, but not limited to,
repairing the foundations, exterior weather walls, structural portions of roofs,
structural portions of bearing walls and structural columns and beams;
	 
	 	(b)	 	all heating, ventilating, air conditioning and utility systems serving the
Leased Premises, excluding all gas and utility systems which exclusively serve the
Lessee or the Leased Premises;
	 
	 	(c)	 	the Common Facilities and all elevators, stairways, and washrooms located
within the Leased Premises;
	 
	 	(d)	 	all security and emergency alarm systems serving the Leased Premises;
	 
	 	(e)	 	subject to Section 9.6, all damage to the Lands and Building which is covered
or required to be covered by any insurance required to be effected by the Lessor; and
	 
	 	(f)	 	the landscaped areas and all driveways, sidewalks, Parking Lands and other
parking areas located on the Lands including, without limitation, removal of snow and
ice as and when reasonably required having regard to weather conditions.

The Lessor shall supply janitorial services for the Leased Premises, consistent with the
standard of high quality premises of similar use and shall maintain the exterior of the
Building including, without limitation, outside window washing.

	9.2	 	Lessee’s Obligations to Repair and Maintain

The Lessee shall at all times during the Term at its own cost and expense:

	 	(a)	 	keep in good repair, order and condition, consistent with the standard of
premises of similar use, the Leased Premises which exclusively serve the Lessee or the
Leased Premises or exclusively support the Lessee’s equipment or use, and all
improvements, fixtures and furnishings therein of every nature or kind and whether or
not furnished or installed by the Lessor or the Lessee, but with the exception only of
reasonable wear and tear and those repairs in and to the Leased Premises which are
expressly the obligation of the Lessor pursuant to Section 9.1;

 

Page 16

	 	(b)	 	immediately before the termination of the Term and subject to the provisions of
Section 4.3(b), clean the Leased Premises and leave the Leased Premises in a broom
clean state and shall not leave upon the Leased Premises any refuse, garbage or waste
materials;
	 
	 	(c)	 	The Lessee, its employees or agents shall not mark, paint, drill or in any way
deface any walls, ceilings, partitions, floors, wood, stone or ironwork without the
written approval of the Lessor.

	9.3	 	Additional Provisions Respecting Repair

The Lessee agrees with the Lessor as follows:

	 	(a)	 	The Lessor and its employees or agents shall be entitled at all reasonable
times during normal business hours and at any times in the case of any real or
apprehended emergency, to enter and examine the state of maintenance and repair of the
Leased Premises and to do such acts or things as may be necessary or advisable to
prevent or abate damage or injury to the Leased Premises;
	 
	 	(b)	 	The Lessee shall give prompt written notice to the Lessor of the existence of
any condition, including any need for repair, within the Leased Premises which might
cause any damage or injury or is a hazard to any portion of the Leased Premises, and
of any need for repair, which is the Lessor’s obligation under Section 9.1;
	 
	 	(c)	 	The Lessee shall be liable for all destruction or damage of property of the
Lessor or others caused by any defect, failure or want of repair of anything for the
condition and repair of which the Lessee is responsible under Section 9.2;
	 
	 	(d)	 	If the Lessee fails to repair promptly as required in this Article, the Lessor
may make such repair on the Lessee’s behalf, and all reasonable expenses incurred by
the Lessor in so doing plus eighteen (18%) percent shall be reimbursed to it by the
Lessee on demand; provided that except in cases of real or apprehended emergency or
where any destruction, damage, risk or material inconvenience affecting any part of the
Leased Premises exists or might ensue failing an immediate repair, the Lessor shall
first give written notice to the Lessee to so repair;
	 
	 	(e)	 	Should the Lessor deem it necessary to supervise any repairs by the Lessee, or
should any damage be caused in the course of such repairs or the Lessor otherwise be
put to any expense in connection with such repairs, the Lessee shall upon demand
reimburse to the Lessor all reasonable expenses incurred by the Lessor in connection
therewith.

In the event that there is any damage or destruction to any of the items which are the Lessor’s
obligation under section 9.1, and such damage or destruction results in any emergency

 

Page 17

condition or imminent danger to life or property, then the Lessee shall be entitled to perform
such remedial repairs as may be reasonably necessary to alleviate the emergency condition or
imminent danger, provided always that the Lessee shall make bona fide efforts to advise the Lessor
of the emergency condition or imminent danger and obtain its consent before the performance of
such remedial repairs. In the event that the Lessee is unable to contact the Lessor to obtain its
consent, it shall be entitled to proceed with such remedial repairs as are reasonable in the
circumstances to rectify the emergency condition or imminent danger, but shall forthwith provide
notice to the Lessor of such emergency condition or imminent danger and such remedial repairs. In
the event that the Lessee has undertaken any such remedial repairs, it shall submit invoices (with
all supporting documentation, including copies of all third party invoices) for all reasonable
costs incurred for such remedial repairs relating to those items which are the Lessor’s
responsibility immediately upon the same being incurred and the Lessor shall make payment of such
costs within thirty days from receipt.

	9.4	 	Lessee’s Alterations

     The Lessee may at any time and from time to time at its own expense make and build such
changes, alterations, renovations, improvements and additions to the Leased Premises for the
purposes of its business, provided however that no change, alterations, renovation, improvement or
addition shall be made without the Lessee first having obtained the Lessor’s prior written approval
which shall not be unreasonably delayed or withheld if the proposed change, alterations,
renovation, improvement or addition is in keeping with the standards of quality and design from
time to time established by the Lessor for the Building. All work performed in the Leased Premises
will accord with all applicable bylaws and other legal requirements. All changes, alterations,
renovations, improvements and additions to the Leased Premises, whether made pursuant to this
Section 9.4 or otherwise, shall be and become the property of the Lessor as provided herein but
subject to the rights and obligations of the Lessee respecting the removal thereof as provided in
Section 4.3. The Lessee will so conduct all changes, alterations and improvements so as to prevent
any lien attaching to the Building or the Lands and in this respect shall comply with all
provisions of this Lease. In the conduct of such work, and except as expressly permitted by the
Lessor, the Lessee shall not interfere with or cut into any structure, exterior walls, structural
floors or ceilings or any heating, ventilating, air conditioning or other utility system.

	9.5	 	Governmental Orders and Regulations and Insurer’s Requirements

     The Lessee shall at all times keep the Leased Premises in accordance with the laws,
directions, rules and regulations and bylaws of every governmental authority having jurisdiction
and in accordance with the requirements of the insurers of the Building or the Lessee’s insurers,
and shall not commit, suffer or permit any act or omission which shall cause any breach thereof. If
any such insurers or any such laws, directions, rules, regulations or bylaws require any changes in
the Leased Premises by reason of the Lessee’s conduct of business in or use of the Leased Premises,
the Lessee shall perform such changes at its own expense but subject to the approval of the Lessor.
The foregoing obligation of the Lessee shall not apply to changes which are the responsibility of
the Lessor under Section 9.1.

 

Page 18

	9.6	 	Termination on Destruction or Damage

	 	(a)	 	If and whenever the Leased Premises shall be destroyed or damaged (including
without limitation, smoke and water damage) by any casualty required to be insured
against by the Lessor or otherwise insured against by the Lessor, and if as a result of
such occurrence:

	 	(i)	 	the Leased Premises are rendered untenantable in part, this
Lease shall continue in full force and effect and the Lessor shall, subject to
Section 9.6(b) hereof, commence diligently to reconstruct, rebuild or repair
the Leased Premises, and if the damage is such that the portion of the Leased
Premises rendered untenantable is not reasonably capable of use and occupancy
by the Tenant for the purposes of its business for any period of time in
excess of ten (10) days, rent shall abate proportionately to the portion of
the Leased Premises rendered untenantable from the date of such damage or
destruction until the Lessor’s repairs have been completed;
	 
	 	(ii)	 	the Leased Premises are rendered wholly untenantable for a
period in excess of ten (10) days, this Lease shall continue in full force and
effect and the Lessor shall, subject to Section 9.6(b) hereof, commence
diligently to repair, restore or rebuild the Leased Premise and rent shall
abate entirely from the date of such damage or destruction and until the
Lessor’s repairs have been completed;
	 
	 	(iii)	 	the Leased Premises are not rendered untenantable in whole of
in part, this Lease shall continue in full force and effect, the rent and
other amounts payable by the Lessee shall not terminate, be reduced or abate
and the Lessor shall, subject to Sections 9.6(b) and 9.7 hereof, commence
diligently to repair, restore, or rebuild the Leased Premises.

	 	(b)	 	Notwithstanding anything contained in Section 9.6(a), if and whenever:

	 	(i)	 	the Leased Premises are damaged or destroyed by any cause to
such an extent that in the Lessor’s reasonable opinion the Leased Premises
shall not be capable, with due diligence, of being repaired, restored or
rebuilt in a period of one hundred and eighty (180) days after the happening
of such destruction or damage; or
	 
	 	(ii)	 	the Building shall be destroyed or damaged by any cause to such
an extent that in the Lessor’s reasonable opinion either it shall not be
capable, with due diligence, of being repaired, restored or rebuilt within a
period of one hundred and eighty (180) days after the happening of such
destruction or damage, or the estimated cost of repairing, restoring or
rebuilding it will exceed the proceeds of insurance available to the Lessor for
the purpose;

 

Page 19

	 	 	 	then the Lessor or the Lessee may at its option terminate this Lease upon thirty (30) days
written notice to the other party, to be given within sixty (60) days after the happening
of such destruction or damage, and in such event the Lessee shall on or before the expiry
of such period of thirty (30) days surrender the Leased Premises and this Lease to the
Lessor and rent and all other amounts due or becoming due hereunder shall be apportioned
and paid to the date of such damage or destruction.

ARTICLE
10 — TAXES

	10.1	 	Property Taxes Payable by Lessor

     The Lessor shall promptly pay or cause to be paid when due to the municipality or other
taxing authorities having jurisdiction all Property Taxes relating to the Leased Premises, subject
to its right of postponement as provided in Section 10.3.

	10.2	 	Business Taxes Payable by Lessee

     The Lessee shall promptly pay when due to the municipality or taxing authorities having
jurisdiction all business taxes imposed in respect of any and every business carried on in the
Leased Premises or in respect of the use or occupancy thereof, including by the Lessee,
subtenants, licensees, concessionaires or other occupants of the Leased Premises.

	10.3	 	Payment of Taxes

     The Lessor may postpone payment of any Property Taxes on the Leased Premises payable by it
pursuant to Section 10.1, and the Lessee may postpone payment of any business taxes payable by it
pursuant to Section 10.2, in each case to the extent permitted by law and if prosecuting in good
faith any appeal against the imposition thereof, but provided that in the case of a postponement
by the Lessee which involves any risk of the Leased Premises or any part thereof or the Lessor
becoming liable to assessment, prosecution, fine or other liability, the Lessee shall have given
security in a form and of an amount satisfactory to the Lessor in respect of such liability and
such undertakings as the Lessor may reasonably require to ensure payment thereof.

	10.4	 	Sales Taxes

     Notwithstanding any other provisions of this Lease to the contrary, the Lessee covenants to
pay the Lessor an amount equal to any and all Sales Taxes imposed on or required to be paid or
collected by the Lessor, it being the intention of the Parties that the Lessor shall be fully
reimbursed by the Lessee with respect to any and all Sales Taxes. The amount of such Sales Taxes so
payable by the Lessee shall be calculated by the Lessor in accordance with the applicable
legislation and shall be paid to the Lessor at the same time as the amounts to which such Sales
Taxes apply are payable by the Lessor.

 

Page 20

ARTICLE
11 — SIGNAGE

	11.1	 	Lessee’s Signs

     The Lessee shall be entitled to install on the exterior of the front of the Leased Premises a
sign as is normally installed in connection with its business, provided that the size, design, and
location of such sign is approved by the Lessor, which approval shall not be unreasonably withheld
or delayed. All signage must be in accordance with all applicable bylaws, rules and regulations of
any governmental authority and in keeping with the standards for the Building as established by
the Lessor, acting reasonably. All costs associated with such signage shall be for the sole cost
and expense of the Lessee.

ARTICLE 12  — HEATING, VENTILATING AND AIR CONDITIONING & UTILITIES

	12.1	 	Lessor’s Covenants

The Lessor agrees with the Lessee that:

	 	(a)	 	the Lessor shall supply utilities (including electricity and domestic running
water) to the Leased Premises but only to the extent that such utilities are currently
provided to the Leased Premises and the Common Facilities and are not now, or in the
future, capable of being metered separately;
	 
	 	(b)	 	the Lessor shall operate all the heating, ventilating and air
conditioning equipment of the Leased Premises in such manner and as may be necessary to
maintain comfortable conditions therein to the extent reasonably possible; and
	 
	 	(c)	 	there are appropriate ducts in the Leased Premises for telephone
and telecommunication systems.

	12.2	 	Utilities

     The Lessee agrees to pay all rates, charges, costs and expenses for electricity, gas, water,
telephone charges and other utility services used by the Lessee to the extent separately metered
to the Leased Premises, either now or in the future. The Lessee shall not impose a load upon
electrical or other services greater than a normal prudent user of such services engaged in the
business of the Lessee.

ARTICLE 13 — OPERATING COSTS

	13.1	 	Lessee’s Payment of Operating Cost

     The Lessee shall pay to the Lessor in the manner provided in Section 13.2, for each fiscal
period adopted by the Lessor for the operation of the Building and the Lands any part of which is
within the Term, the Lessee’s Proportionate Share of the Operating Costs attributable

 

Page 21

to such fiscal period. Where the whole of any fiscal period is not included within the Term the
appropriate allocation of Operating Costs for such fiscal period shall be made. Operating Costs
shall mean all of the Lessor’s outlays, costs, charges and expenses associated with the operation,
supervision, maintenance, administration, management and repair of the Building and Lands of
any kind or nature whatsoever and howsoever arising, and shall include, without limitation or
duplication:

	 	(a)	 	such of the following costs and expenses incurred or facilities supplied which
are attributable to the maintenance, repair, supervision, policing, security,
inspection, operation, administration and management of the Building and the Lands:
the cost of lighting, heating, ventilating, air-conditioning and supplying water,
natural gas and other utilities; Environmental Costs; cleaning or janitorial services;
snow and ice removal; striping and repairing parking areas; supervising, policing and
security; painting; planting and landscaping; maintenance, repairs and
replacements to the apparatus for heating, ventilating and air-conditioning installed
in the Building; operating and maintaining the garbage compaction equipment; repairs
and replacements to the Leased Premises, other than Structural Repairs, business
taxes, place of business taxes and any other taxes levied in respect of or fairly
attributable to the Building; Property Taxes; costs of appeals against assessments for
Property Taxes; insurance premiums; supplies; all office expenses and Leased Premises
personnel wages; employee benefits and payroll expenses; and
	 
	 	(b)	 	other reasonable costs and expenses not otherwise expressly
included hereunder attributable to the maintenance, repair, supervision, policing,
security, inspection, operation, administration and management of the Building and the
Lands.

There shall be excluded from Operating Costs without duplication:

	 	(i)	 	periodic depreciation on the capital cost to the Lessor of the Building at the
time that the Building was first constructed;
	 
	 	(ii)	 	payments of principal and interest under any mortgages on the Building;
	 
	 	(iii)	 	capital taxes and corporate income, profits or excess profit taxes assessed upon the
income of the Lessor;
	 
	 	(iv)	 	the costs of repair of damage against which Lessor has insured or is required
to insure hereunder;
	 
	 	(v)	 	the cost for Structural Repairs;
	 
	 	(vi)	 	leasing commissions, general corporate overhead and administrative surcharges
incurred by the Lessor.

 

Page 22

13.2 Payment and Adjustment of Operating Costs

	 	(a)	 	Prior to the Commencement Date and prior to the commencement of each fiscal
period adopted by the Lessor for the operation of the Building and the Lands which
commences thereafter during the Term, or in each case as soon after the commencement of
such fiscal period as possible, the Lessor shall furnish to the Lessee an estimate of
Operating Costs for such fiscal period and the amount thereof payable and contributable
by the Lessee calculated in accordance with Section 13.1.
	 
	 	 	 	The Lessee shall pay to the Lessor on account of its obligations under Section 13.1
the amount so estimated to be payable in equal monthly instalments throughout such
fiscal period on each date for payment of an installment of Basic Rent pursuant to
Section 5.1.
	 
	 	(b)	 	Within one hundred and twenty (120) days after the end of such fiscal period
the Lessor shall furnish to the Lessee a statement of the Lessor’s actual Operating
Costs during such fiscal period (or if applicable broken portion thereof) and the
amount thereof payable by the Lessee pursuant to Section 13.1, and showing in
reasonable detail the information relevant and necessary to the calculation and
determination thereof. If such amount is greater or less than the payments on account
thereof made pursuant to Section 13.2(a), appropriate adjustments will be made between
the Lessor and the Lessee within fifteen (15) days after delivery of such statement.
Neither party may claim a re-adjustment after the expiration of one year from the
delivery of such statement. The Lessor shall maintain full records of all Operating
Costs and will make them available for review and inspection by the Lessee or its
agents upon reasonable prior notice to the Lessor. In the event of any dispute
between the Lessor and the Lessee relating to Operating Costs, the parties shall use
reasonable commercial efforts to resolve the dispute within a reasonable period of
time, failing which the matter shall be settled by arbitration in accordance with the
Arbitration Act.
	 
	 	(c)	 	If any of the Operating Costs (e.g. Property Taxes, insurance premiums) are not
separately metered, assessed or levied in respect of the Building or any other
buildings located in the vicinity of the Lands, then the Lessor may make a reasonable
allocation of such Operating Costs between the Building and such other buildings.

ARTICLE
14 — INSURANCE

14.1
Lessor’s Insurance

     The Lessor shall throughout the Term take out, provide, maintain and keep in force or cause to
be provided and kept in force:

 

Page 23

	 	(a)	 	fire insurance (including standard extended coverage endorsement perils and
leakage from fire protective devices) or alternatively at Lessor’s option, all risk
insurance in respect of the buildings and fixed improvements in the Building in an
amount equal to the full replacement cost thereof without deduction for
depreciation, but excluding tenant’s fixtures and (except to the extent that the Lessor
elects to insure them) leasehold improvements installed or constructed by tenants
including the Lessee;
	 
	 	(b)	 	if any boiler or pressure vessel is operated by parties other than the Lessee
in the Leased Premises, boiler and pressure vessel insurance with respect thereto;
	 
	 	(c)	 	comprehensive general business liability insurance with respect to the
operation of the Building for personal injury or death and damage to property of
others;
	 
	 	(d)	 	loss of rental income insurance;
	 
	 	(e)	 	such other types of insurance as the Lessor, acting reasonably, considers that
it is prudent to carry.

Insurance effected by the Lessor under this Section 14.1 shall be with insurers duly licensed to
transact insurance in Alberta, shall be in such reasonable amounts and on such terms and
conditions as would be carried by a prudent owner on a reasonably similar commercial building,
having regard to size, age, use and location. The Lessor shall provide evidence satisfactory to
the Lessee of all policies of insurance which the Lessor has placed on the Lands and the Building
upon the Lessee’s request.

14.2 Lessee’s Insurance

     The Lessee shall throughout the Term take out, provide, maintain and keep in force:

	 	(a)	 	fire insurance (including standard extended coverage endorsement perils and
leakage from fire protective devices) in respect of the Lessee’s fixtures, furniture,
equipment, inventory and stock in trade, the Lessee’s leasehold improvements to the
extent that the Lessor has not elected to insure them pursuant to Section 14.1, and
such other property in or forming part of the Leased Premises (not being property which
the Lessor is bound to insure pursuant to Section 14.1) as the Lessor may from time to
time require;
	 
	 	(b)	 	if any boiler or pressure vessel is operated by the Lessee in the Leased
Premises, boiler and pressure vessel insurance with respect thereto;
	 
	 	(c)	 	business interruption and business loss insurance;
	 
	 	(d)	 	commercial general liability insurance applying to all operations of the Lessee
and against claims for bodily injury, including death, property damage or loss arising
out of the use or occupation of the Leased Premises, or the Lessee’s business on or
about the Leased Premises.

 

Page 24

Insurance effected by the Lessee under this Section 14.2 shall be with insurers duly licensed to
transact insurance in Alberta, shall be in amounts and on terms and conditions which are
satisfactory to the Lessor, acting reasonably (and in the case of insurance under Section 14.2(a)
and 14.2(b) shall be on a full replacement cost basis and in the case of insurance under Section
14.2(d) shall have limits not less than eight million dollars ($8,000,000.00) in respect of any
one accident or occurrence), and shall be without subrogation against the Lessor and those for
whom it is responsible in law. At the request of the Lessor the Lessee shall file with the Lessor
such copies of current policies or certificates or other proofs as may be required to establish
the Lessee’s insurance coverage in effect from time to time and the payment of premiums thereon,
and if the Lessee fails to insure or pay premiums or to file satisfactory proof thereof as so
required, the Lessor may without notice to the Lessee effect such insurance and recover any
premiums paid therefor from the Lessee on demand.

14.3 Increases in Rates

     The Lessee shall not do or omit or permit to be done or omitted upon the Leased Premises
anything which shall cause any rate of insurance upon the Building or any part thereof to be
increased or cause insurance to the cancelled. If any such rate of insurance shall be increased as
aforesaid, the Lessee shall pay to the Lessor an amount of increase as Additional Rent. If any
insurance policy upon the Building or any part thereof is cancelled or threatened to be cancelled
by reason of the use or occupancy by the Lessee or any act or omission as aforesaid, the Lessee
shall forthwith remedy or rectify such use, occupation, act or omission upon being requested to do
so by the Lessor, and if the Lessee fails to remedy or rectify, the Lessor may at its option
terminate this Lease forthwith and the Lessee shall immediately deliver up possession of the
Leased Premises to the Lessor.

ARTICLE 15  — ASSIGNMENT, SUBLETTING, SALE OR MORTGAGE

15.1
Assignment and Subletting

	 	(a)	 	The Lessee shall not assign this Lease in whole or in part, nor sublet all or
any part of the Leased Premises, nor grant any license or part with possession of the
Leased Premises or transfer any other right or interest under this Lease, without the
prior written consent of the Lessor in each instance, which consent shall not be
unreasonably withheld so long as the proposed assignment or sublease complies with the
provisions of this Article.
	 
	 	(b)	 	Notwithstanding any assignment or sublease, the Lessee shall remain fully
liable on this Lease and shall not be released from performing any of the terms,
covenants and conditions of this Lease.
	 
	 	(c)	 	If the Lease is assigned or if the Leased Premises or any part thereof are
sublet or occupied by anyone other than the Lessee, the Lessor may collect rent
directly from the assignee, subtenant or occupant, and apply the net amount collected,
or the necessary portion thereof, to the rent herein reserved.

 

Page 25

	 	(d)	 	No assignment or sublease shall be made or proposed other than to responsible
persons, firms, partnerships or bodies corporate who are experienced in and agree to
carry on the type of business conducted in the Leased Premises by the Lessee, and who
undertake in favour of the Lessor to perform and observe the obligations of the Lessee
hereunder by entering into an assumption agreement directly with the Lessor.
	 
	 	(e)	 	The consent by the Lessor to any assignment or sublease shall not constitute a
waiver of the necessity of such consent to any subsequent assignment or sublease.

15.2 Bulk Sale

     No bulk sale of the goods and assets of the Lessee may take place without first obtaining the
written consent of the Lessor, which consent shall not be unreasonably withheld so long as the
Lessee and the purchaser are able to provide the Lessor with assurances, in a form satisfactory to
the Lessor, that the Lessee’s obligations hereunder will continue to be performed and respected,
in the manner satisfactory to the Lessor, after completion of the said bulk sale.

15.3 Subordination and Attornment

	 	(a)	 	This Lease and the Lessee’s rights hereunder shall automatically be subordinate
to any mortgage or mortgages, or encumbrance resulting from any other method of
financing or refinancing, now or hereafter in force against the Lands or any part
thereof, as now or hereafter constituted, and to all advances made or hereafter to
be-made upon the security hereof; and, upon the request of the Lessor, the Lessee shall
execute such documentation as may be required by the Lessor in order to confirm and
evidence such subordination; provided that the form of any such subordination will
provide that the rights of the Lessee under this Lease shall not be interfered with so
long as the Tenant is not in default hereunder.
	 
	 	(b)	 	The Lessee shall, in the event any proceedings are brought, whether in
foreclosure or by way of the exercise of the power of sale or otherwise, under any
mortgage or other method of financing or refinancing made by the Lessor in respect of
the Lands, attorn to the encumbrancer upon any such foreclosure or sale and recognize
such encumbrancer as the Lessor under this Lease, should such encumbrancer so elect and
require.
	 
	 	(c)	 	The Lessor shall use reasonable efforts to ensure that no subordination or
attornment as required by this Article shall have the effect of disturbing the Lessee’s
occupation and possession of the Leased Premises, provided that the Lessee is not in
default hereunder and complies with all of the covenants, terms and conditions hereof.

 

Page 26

15.4
Estoppel Certificate, Acknowledgment

	 	(a)	 	Whenever requested by the Lessor, a mortgagee or an encumbrance holder or other
third party having any interest in the Lands, the Lessee shall within ten (10) days of
the request execute and deliver an Estoppel Certificate or other form of certified
acknowledgment as to the Commencement Date, the status and the validity of this Lease,
the state of the rental account hereunder, any incurred defaults on the part of the
Lessor alleged by the Lessee, and such other information as may reasonably be required,
including, if requested, a copy of the Lessee’s most recent audited financial
statements.
	 
	 	(b)	 	Lessee’s failure to deliver such certificate or acknowledgment within the time
provided shall constitute default hereunder and shall be conclusive against the Lessee
that the information set out in the certificate or acknowledgment which the Lessee was
requested to execute is as set out in such certificate or acknowledgment.

15.5 Sale by Lessor

     In the event of a sale by the Lessor of any portion or all its interest in the Lands, the
Lessor shall thereafter be entirely relieved of the performance of all terms, covenants and
obligations thereafter to be performed by the Lessor under this Lease, to the extent of the
interest or portion so sold or transferred and it shall be deemed and construed without further
agreement between the parties that the purchaser or transferee, as the case may be, has assumed
and agreed to carry out any and all covenants of the Lessor hereunder.

15.6 Financial Information

     The Lessee shall, annually, within one hundred twenty days of the end of its fiscal
year, provide the Lessor with audited financial statements of the Lessee or any indemnifier or
guarantor of this Lease, as the Lessor or any Mortgagee of the Lands may require.

15.7 Subordinate Right of First Offer

     The Lessor hereby grants to the Lessee an irrevocable right of first offer to purchase the
Lands (either en bloc or as individual, discrete parcels, as the case may be) upon the terms and
conditions following:

	 	(a)	 	The Lessee hereby expressly acknowledges and agrees that the Lessor has granted
a right of first offer to purchase the lands to Sherritt International Inc. (the
“Sherritt Right of First Offer”) and that the Sherrit Right of First Offer has priority
and precedence in all respects over this right of first offer from time to time;
	 
	 	(b)	 	In the event that the Lessor determines to attempt to sell the Lands, or any
portion thereof, provided that the Lessor has not entered into an agreement to

 

Page 27

	 	 	 	sell the Lands, or portion thereof, pursuant to the Sherritt Right of First Offer,
the Lessor shall provide written notice to the Lessee that it intends to attempt to
sell the Lands, or the portion thereof which the Vendor intends to sell (the
“Lessee’s Right of First Offer”);
	 
	 	(c)	 	Within 21 days after such written notice, the Lessee has the sole and exclusive
right to make an offer to the Lessor to purchase the Lands, or the portion thereof
which is intended to be sold by the Lessor, upon such terms and conditions as the
Lessee shall deem appropriate, provided always that offer must be
unconditional, the purchase price being offered by the Lessee must be cash payable upon
closing, the closing date may not be longer than 60 days from the date of acceptance of
the offer by the Lessor; and the Lands being purchased shall be without any
representations or warranties whatsoever by the Lessor and shall be on an “as is, where
is” basis;
	 
	 	(d)	 	The Lessor must accept or reject the Lessee’s offer to purchase within 30 days
from the date of receipt thereof. Any acceptance shall be by delivery of a written
acceptance to the Lessee. If the offer is so accepted, the Lessor shall be bound to
sell the Lands, or portion thereof, to the Lessee and the Lessee shall be bound to
purchase the Lands, or portion thereof, from the Lessee at the price and upon the terms
contained in the accepted offer;
	 
	 	(e)	 	If the Lessor does not accept the Lessee’s offer within 30 days from the date
of receipt thereof, or if it rejects the Lessee’s offer, then it shall be shall be free
to proceed with a sale of the Lands, or the portion thereof identified in a notice
delivered pursuant to section 15.7(b) hereof, provided always that: it may not sell
such lands at a purchase price which is less than the purchase price which was offered
by the Lessee; and, in the event that the Lessor does not consummate a sale of the
Lands or the portion thereof identified in a notice delivered pursuant to section
15.7(b) within 180 days following the earlier of the expiry of the 30 day period
identified in section 15.7(d) or the date of rejection of the Lessee’s offer, the
Lessor shall be required to again comply with the provisions of sections 15.7(b) to (e)
hereof, inclusive.

ARTICLE 16  — INDEMNITY, LIENS

16.1
Lessee’s Indemnity

     Except as provided in Section 16.5 (a), the Lessee shall at all times during the Term,
indemnify and save harmless the Lessor of and from all loss and damage and all actions, claims,
costs, (including solicitor and his own client costs on a full indemnity basis), demands, expenses,
fines, liabilities and suits of any nature whatsoever for which the Lessor shall or may become
liable, incur or suffer by reason of a breach, violation or non-performance by the Lessee of any
covenant, term or provision hereof or by reason of any builders’ or other liens for any work done
or materials provided or services rendered for alterations, improvements or repairs to the Leased
Premises, made by or on behalf of the Lessee, or by reason of any injury occasioned to or suffered
by any person or damage to any property, by reason of any wrongful

 

Page 28

act or omission, default or negligence on the part of the Lessee or any of its agents,
concessionaires, contractors, customers, employees, invitees or licensees in or about the Lands.

16.2 Personal Injury and Property Damage

     The Lessor shall not be liable or responsible for:

	 	(a)	 	any personal injury or consequential damage of any nature whatsoever, however
caused, that may be suffered or sustained by the Lessee or by any other person who may
be upon the Leased Premises; or
	 
	 	(b)	 	any loss or damage of any nature whatsoever, howsoever caused, to the Leased
Premises, any property belonging to the Lessee or to any other person while such
property is in or about the Leased Premises;

except to the extent any such death, injury, loss or damage results or arises from any
wrongful act or omission, default or negligence on the part of the Lessor or any or its
agents, servants, invitees, contractors, employees or other persons for whom it may in law
be responsible and provided that in no event shall the Lessor be responsible for any loss,
injury or damage to property as contemplated by Section 16.5(b).

16.3 Liens

     The Lessee shall, immediately upon demand by the Lessor, remove or cause to be removed, and
thereafter institute and diligently prosecute any action pertinent thereto, any builders’ or other
lien or claim of lien noted or filed against or otherwise constituting an encumbrance on any title
of the Lessor. Without limiting the foregoing obligations of the Lessee, the Lessor may cause the
same to be removed, in which case the Lessee shall pay to the Lessor as Additional Rent the cost
thereof, including the Lessor’s complete legal costs.

16.4 Lessor’s Indemnity

     Except as provided in Section 16.5 (b), the Lessor shall at all times during the Term,
indemnify and save harmless the Lessee of and from all loss and damage and all actions, claims,
costs (including solicitor and his own client costs on a full indemnity basis), demands, expenses,
fines, liabilities and suits of any nature whatsoever for which the Lessee shall or may become
liable, incur or suffer by reason of a breach, violation or non-performance by the Lessor of any
covenant, term, or provision hereof or by reason of any injury occasioned to or suffered by the
Lessee by reason of any wrongful act or omission, default or negligence on the part of the Lessor
or its agents, servants, invitees, contractors or employees in or about the Lands.

16.5 Limitations of Liability

	 	(a)	 	The Lessee shall not be liable to the Lessor in respect of any loss, injury or
damage against which the Lessor has insured or is required to insure under Section 14.1
(a), (b) or (d); and

 

Page 29

	 	(b)	 	The Lessor shall not be liable to the Lessee in respect of any loss, injury or
damage to property against which the Lessee has insured or is required to insure under
Section 14.2(a), (b) or (c) or in respect of any loss, injury or damage to property
that arises as a result of any act, omission by any tenant or occupant of the Lands or
any adjacent lands and any of their respective agents, servants, invitees, contractors
or employees.

ARTICLE 17 — DEFAULT, REMEDIES, TERMINATION

17.1 Default

     If and whenever:

	 	(a)	 	the Lessee shall be in default in the payment of any money, whether hereby
expressly reserved or deemed as rent, or any part thereof, and such default shall
continue for three (3) days following any specific due date on which the Lessee is to
make such payment or, in the absence of such specific due date, for the three (3) days
following written notice by the Lessor requiring the Lessee to pay the same; or
	 
	 	(b)	 	the Lessee’s leasehold interest hereunder, or any goods, chattels or, equipment
of the Lessee located in the Leased Premises shall be taken or seized in execution or
attachment, or if any writ of execution shall issue against the Lessee and not be
discharged within twenty-one (21) days of its issuance, or the Lessee shall become
insolvent or commit an act of bankruptcy or become bankrupt or take the benefit of any
Act that may be in force for bankrupt or insolvent debtors or become involved
involuntary or involuntary winding up, dissolution or liquidation proceedings,
or if a receiver or receiver and manager shall be appointed for the affairs, business,
property or revenues of the Lessee; or
	 
	 	(c)	 	the Lessee shall fail to commence, diligently pursue and complete the Lessee’s
work to be performed pursuant to any agreement to lease pertaining to the Leased
Premises or other agreement signed by the parties or fail to open for business when
required by the provisions of this Lease, or vacate or abandon the Leased Premises or
fail or cease to operate pursuant to the provisions of this Lease or otherwise cease to
conduct business from the Leased Premises, or use or permit or suffer the use of the
Leased Premises for any purposes other than as allowed pursuant to this Lease, or fail
to remedy or rectify any act or omission hereunder, or if the Lessee should move or
commence, attempt or threaten to move its goods, chattels and equipment out of the
Leased Premises other than in the routine and ordinary course of its business; or
	 
	 	(d)	 	the Lessee or any agent of the Lessee falsifies any report or statement
required to be furnished to the Lessor or anyone else pursuant to this Lease; or
	 
	 	(e)	 	the Lessee makes a sale in bulk of any of its assets, wherever situated (other
than a bulk sale made to an Assignee or Sublessee pursuant to a permitted

 

Page 30

	 	 	 	assignment or subletting hereunder and pursuant to the Bulk Sales Act of Alberta);
or
	 
	 	(f)	 	the Lessee abandons or attempts to abandon the Leased Premises, or sells or
disposes of the trade fixtures, goods or chattels of the Lessee or removes them from
the Leased Premises so that there would not in the event of such sale or disposal be
sufficient trade fixtures, goods or chattels of the Lessee on the Leased Premises
subject to distress to satisfy all rent due or accruing hereunder for a period of at
least three (3) months; or
	 
	 	(g)	 	the Leased Premises become and remain vacant for a period of five (5)
consecutive days or are used by any persons other than such as are entitled to use them
hereunder; or
	 
	 	(h)	 	the Lessee assigns, transfers, encumbers, sublets or permits the occupation or
use or the parting with or sharing possession of all or any part of the Leased
Premises by anyone except in a manner permitted by this Lease; or
	 
	 	(i)	 	re-entry is permitted under any other term of this Lease; or
	 
	 	(j)	 	the Lessee shall not observe, perform and keep each and every of the
covenants, agreements, stipulations, obligations, conditions and other provisions of
this Lease to be observed, performed and kept by the Lessee and shall persist in such
default, in the case of monetary payments, beyond the ten (10) day period stipulated
in paragraph (a) — aforesaid or, in the case of any other default, after ten (10) days
following written notice from the Lessor requiring that the Lessee remedy, correct or
comply or, in the case of any such default which would reasonably require more than
ten(10) days to rectify, unless the Lessee shall commence rectification within the
said ten (10) day notice period and thereafter promptly and diligently and
continuously proceed with the rectification of any such default;

then, and in each of such cases, and at the option of the Lessor and in addition to any
other rights or remedies the Lessor may have pursuant to this Lease or at law, the Lessor
may, immediately re-enter upon the Leased Premises and may expel all occupants thereof and
remove all property from the Leased Premises and such property may be removed and sold or
disposed of by the Lessor in such manner as it deems advisable, including by private sale,
or may be stored in a public warehouse or elsewhere at the cost and for the account of the
Lessee, all without service of notice or resort to legal process and without the Lessor
being considered guilty of trespass or becoming liable for any loss or damage which may be
occasioned thereby. If the Lessor elects to re-enter the Leased Premises as herein provided,
or if it takes possession pursuant to legal proceedings or pursuant to any notice provided
for by law, it may either terminate this Lease or it may from time to time without
terminating this Lease, make such alterations and repairs as are necessary in order to relet
the Leased Premises, or any part thereof, for such term or terms (which may be for a term
extending beyond the Term) and at such rent and upon such other terms, covenants and
conditions as the Lessor in its sole discretion considers advisable.

 

Page31

17.2 Lessor may Perform

     If the Lessee shall fail to observe, perform or keep any of the provisions of this Lease to
be observed, performed and kept by the Lessee, the Lessor may, but shall not be obliged to, at its
discretion and without prejudice to any other right, claim or action it may have, rectify the
default of the Lessee, whether or not performance by the Lessor on behalf of the Lessee is
otherwise expressly referred to in the applicable Section of this Lease. For such purpose the
Lessor may make any payment or do or cause to be done such things as may be required including,
without limiting the generality of the foregoing, entry upon the Leased Premises. Any such
performance by or at the behest of the Lessor shall be at the expense of the Lessee and the Lessee
shall pay to the Lessor as Additional Rent the cost thereof.

17.3 Distress

     If and whenever the Lessee shall be in default in the payment of any money, whether hereby
expressly reserved or deemed as rent, or any part thereof, the Lessor may, without notice or any
form of legal process whatever, enter upon the Leased Premises and seize, remove and sell by
judicial or formal process or by private sale the Lessee’s goods, chattels and equipment therefrom
or seize, remove and sell, by judicial or formal process or by private sale, any goods, chattels
and equipment at any place to which the Lessee or any other person may have removed them, in the
same manner as if they had remained and been distrained upon the Leased Premises, all
notwithstanding any rule of law or equity to the contrary, and the Lessee hereby waives and
renounces the benefit of any present or future statute or law limiting or eliminating the Lessor’s
right of distress or sale.

17.4 Costs and Interest

     All costs, expenses and expenditures of the Lessor, incurred upon any default by the Lessee
hereunder, including, without limitation, the legal costs incurred by the Lessor on an
indemnification basis as between solicitor and his own client shall, forthwith on demand, be paid
by the Lessee to the Lessor as Additional Rent. All rent and other sums due to the Lessor pursuant
to the terms of this Lease shall be paid by the Lessee promptly when due, and if not so paid,
shall bear interest from their respective due dates at the rate of eighteen (18%) per cent per
annum, both before and after default, demand and judgment.

17.5 Vacate Upon Termination. Survival

     At the termination of this Lease, whether by affluxion of time or otherwise, the Lessee shall
vacate and deliver up possession of the Leased Premises in the same state and condition as they
were in upon delivery of possession to the Lessee, subject to the exceptions from the Lessee’s
obligation to repair and subject to the Lessee’s rights and obligations in respect of removal and
the Lessee shall thereupon surrender all keys to the Leased Premises to the Lessor at the place
then fixed for payment of rent and shall inform the Lessor of all combinations on locks, safes and
vaults, if any, in the Leased Premises. The indemnity agreements contained in this Lease shall
survive the termination of this Lease.

17.6 Additional Rights on Re-Entry

     If the Lessor shall re-enter the Leased Premises or terminate this Lease, then:

 

Page 32

	 	(a)	 	notwithstanding any such re-entry, termination, or the Term thereby becoming forfeited and
void, the provisions of this Lease relating to the consequences of termination shall survive;
	 
	 	(b)	 	the Lessor may use such force as it may deem necessary for the purpose of gaining admittance
to and retaking possession of the Leased Premises and the Lessee hereby releases the Lessor
from all actions, proceedings, claims and demands whatsoever for or in respect of any such
forcible entry or any loss or damage in connection therewith or consequential thereupon;
	 
	 	(c)	 	the Lessor may relet the Leased Premises or any part thereof for a term or terms which may be
less or greater than the balance of the Term and may grant reasonable concessions in
connection therewith; and
	 
	 	(d)	 	the Lessee shall pay to the Lessor on demand:

	 	(i)	 	rent and all other amounts payable hereunder up to the time of re-entry or
to termination, whichever shall be the later; and
	 
	 	(ii)	 	such reasonable expenses as the Lessor may incur or has incurred in
connection with the re-entering, terminating, reletting, collecting sums due or
payable by the Lessee, realizing upon assets seized, including without limitation
brokerage, legal fees and disbursements on an indemnification basis as between a
solicitor and his own client, and the expenses of keeping the Leased Premises in good
order, repairing the same and preparing them for reletting; and
	 
	 	(iii)	 	at the Lessor’s option, either of the following:(A)as liquidated damages
for the loss of refit and other income of the Lessor expected to be derived from the
lease during the period which would have constituted the unexpired portion of the
Term had it not been terminated, the greater of:

	 	(1)	 	an amount determined by reducing to present worth at an
assumed interest rate of eighteen (18%) per cent per annum all Basic Rent and
Additional Rent to become payable during the period which would have
constituted the unexpired portion of the Term, such determination to be made
by the Lessor, who may make reasonable estimates of when any such other
amounts would have become payable and may make such other
assumptions of fact as may be reasonable in the circumstances; and
	 
	 	(2)	 	an amount equal to accelerated Basic Rent and Additional Rent
for a period of six (6) months; or

	 	(iv)	 	damages on the footing of a present recovery of damages for loss of benefit
of the Lease over its unexpired Term, without any requirement in law or in equity
imposed upon the Lessor to notify the Lessee prior to, concurrently with, or at any
time following the exercise of the option of the

 

Page 33

	 	 	 	Lessor to terminate this Lease that the Lessor intends to claim such damages
from the Lessee.

17.7 No Waiver

     No provision of this Lease shall be deemed to have been waived by the Lessor unless a written
waiver from the Lessor has first been obtained and, without limiting the generality of the
foregoing, no acceptance of rent subsequent to any default and no condoning, excusing or
overlooking by the Lessor on previous occasions of any default nor any earlier written waiver
shall be taken to operate as a waiver by the Lessor or in any way to defeat or affect the rights
and remedies of the Lessor.

17.8 Remedies Cumulative

     No reference to or exercise of any specific right or remedy by the Lessor shall prejudice or
preclude the Lessor from any other remedy, whether allowed at law or in equity or expressly
provided for herein. No such remedy shall be exclusive or dependent upon any other such remedy,
but the Lessor may from time to time exercise any one (1) or more of such remedies independently
or in combination. Without limiting the generality of the foregoing, the Lessor shall be entitled
to commence and maintain an action against the Lessee to collect any rent not paid when due,
without exercising the option to terminate this Lease.

17.9 Failure to Pay

     Should the Lessee fail to make any payment required by the Lessee pursuant to this Lease, the
Lessor may, without prejudice to any other right or remedy of the Lessor, pay all or part of such
required payment without prior notice to the Lessee and recover such payment from the Lessee as
Additional Rent.

17.10 Lien on Trade Fixtures

     If the Lessee at any time while in possession of the Leased Premises during the Term or
otherwise, is in default under any covenant or obligation contained in this Lease, the Lessor has a
paramount lien and charge on all stock-in-trade, inventory, fixtures, equipment, chattels and
facilities of the Lessee as security against loss or damage resulting from any such default by the
Lessee and the said stock-in-trade, inventory, fixtures, equipment, chattels or facilities shall
not be removed by the Lessee until such default is cured, unless otherwise permitted in writing by
the Lessor and such lien and charge is hereby granted by the Lessee in favour of the Lessor. The
provisions of this Article and the lien and charge hereby conferred shall survive expiration of the
Term or earlier termination of this Lease.

ARTICLE 18 — ENVIRONMENTAL

18.1 Definitions

	 	(a)	 	“Contaminant” includes but is not limited to, any pollutants,
dangerous substances, liquid waste, toxic substances, hazardous wastes,
hazardous

 

Page 34

	 	 	 	materials, hazardous substances and contaminants including any of the
foregoing as defined in any Environmental Law;
	 
	 	(b)	 	“Environment” means the components of the earth and includes:

	 	(i)	 	air, land and water;
	 
	 	(ii)	 	all layers of the atmosphere;
	 
	 	(iii)	 	all organic or inorganic matter and living organisms; and
	 
	 	(iv)	 	the interacting natural systems that include components
referred to in Sections 17.1(b)(i) to I7.1(b)(iii);

	 	(c)	 	“Environmental Activity” means any activities, events or circumstances in
respect of a Contaminant, including, without limitation, its storage, use, holding,
collection, purchase, accumulation, assessment, generation, manufacture,
construction, processing, treatment, stabilization, disposition, handling
or transportation, or its Release into the Environment;
	 
	 	(d)	 	“Environmental Authority” means any international, federal, provincial or
municipal ministry, department or agency which enforces Environmental Laws;
	 
	 	(e)	 	“Environmental Damage” means any direct or indirect damage from any
Environmental Activity which violates any Environmental Law;
	 
	 	(f)	 	“Environmental Law” means any and all current and future
applicable international, federal, provincial or municipal laws, by-laws, statutes,
regulations, orders or judgments, relating to the environment, occupational health and
safety, or any Environmental Activity;
	 
	 	(g)	 	“Order” means any claim, action, investigation, lien, prosecution, notice, work
order, control order, stop order or directive, written or oral, issued, pending or
threatened from any third party, court or Environmental Authority;
	 
	 	(h)	 	“Release” includes, but is not limited to, spill, discharge, dispose of,
spray, inject, inoculate, abandon, deposit, leak, seep, pour, emit, empty, throw,
dump, place and exhaust and any definition of Release in any future applicable
Environmental Law.

18.2  Lessee’s Covenants

     The Lessee covenants and agrees with the Lessor:

	 	(a)	 	To comply with all Environmental Laws existing now or in the future and/or any
environmental permits held by the Lessee relating to its activities in the Leased
Premises during the Term and to report to the Lessor immediately:

 

Page 35

	 	(i)	 	Any material Release of any Contaminant on the Leased
Premises, the Building or the Lands during the Term by the Lessee or as a
result of the Lessee’s use or occupancy of the Leased Premises;
	 
	 	(ii)	 	Any regulatory action or proposed action by an
Environmental Authority in connection with the Leased Premises or any
activity conducted on the Leased Premises during the Term. The Lessee shall
provide the Lessor with copies of any Orders, reports or other
communications received by the Lessee or any agent of the Lessee from any
Environmental Authority with respect to the Leased Premises forthwith upon
receipt. The Lessee shall, concurrently, provide the Lessor with copies of
any communications submitted to any Environmental Authority with respect to
the Leased Premises by or on behalf of the Lessee;
	 
	 	(iii)	 	Any violation of Environmental Law as a result of
activities conducted on the Leased Premises during the Term or any breach of
any of the covenants contained herein;

	 	(b)	 	To immediately take all remedial action required by any Order in the event of a
violation of any Environmental Law as a result of activities conducted on the Leased
Premises or the Release of a Contaminant on the Leased Premises during the Term, and to
forthwith advise the Lessor in writing of such violation and of the remedial action
being taken in respect thereof;
	 
	 	(c)	 	To maintain the Leased Premises and Environmental Activity to at least the
standards required by Environmental Laws relating to the industrial use and nature of
the business conducted on the Leased Premises, as regulated and interpreted by any
relevant Environmental Authority.

18.3 Indemnity

     The Lessee hereby indemnifies and saves harmless the Lessor and its directors, officers,
employees and agents of and from all claims, demands, actions, causes of action, costs, expenses,
losses, judgments, damages, liabilities, assessments, fines, penalties, obligations (including
remediation obligations) and reasonable professional advisor fees on a solicitor and client basis
which the Lessor and its directors, officers, employees and agents shall or may become liable,
incur or suffer by reason of any Environmental Damage to the Leased Premises, the Building or the
Lands or emanating from the Leased Premises, the Building or the Lands arising directly or
indirectly as a consequence of the operations, activities or omissions during the Term of the
Lessee or its employees, contractors, agents, invitees or others for whom the Lessee is responsible
at law.

18.4 Survival of Environmental Covenants

     Notwithstanding the expiration or termination of this Lease, the agreements and covenants
contained in Article 17 shall nonetheless survive the expiration or termination of this Lease and
remain in full force and effect for the benefit of the Lessor.

 

Page 36

18.5 Lessor’s Right to Remedy Default

     If the Lessee shall fail to observe, perform or keep any of the provisions of this Lease with
respect to environmental issues, to be observed, performed and kept by the Lessee, the Lessor may,
but shall not be obliged to, at its discretion and without prejudice to any other right, claim or
action it may have, rectify the default of the Lessee, whether or not performance by the Lessor on
behalf of the Lessee is otherwise expressly referred to in the applicable section of this Lease.
For such purpose the Lessor may make any payment or do or cause to be done such things as may be
required including, without limiting the generality of the foregoing, entry upon the Leased
Premises. Any such performance by or at the behest of the Lessor shall be at the expense of the
Lessee and the Lessee shall pay to the Lessor as Additional Rent the cost thereof.

ARTICLE 19  — INTERPRETATION AND MISCELLANEOUS

19.1  Arbitration

If the parties are unable to agree upon the fair market value of the Basic Rent as contemplated by
section 4.4 (a) or 4.4 (b) hereof, upon the fair market value of the Basic Rent as contemplated by
section 4.5 (b) (ii) hereof, or upon the fair market value of the Basic Rent as contemplated by
section 4.6 (g) hereof, then matters shall be settled by arbitration in accordance with the
Arbitration Act by a single arbitrator. For the purposes of any such arbitration, the arbitrator
shall be bound by the principals and minimum amounts mentioned in the aforesaid sections.

19.2 Further Documents and Assurances

     The parties hereto and each of them do hereby covenant and agree to do such things and
execute such further documents, agreements and assurances as may be necessary or advisable from
time to time in order to carry out the terms and conditions of this Agreement in accordance with
their true intent, including, without limitation, such documents and instruments as the Lessor
deems necessary or advisable to carry out the terms and conditions of Sections 4.5 and 4.6 hereof.

19.3 Collateral Representations and Agreements

     This Lease constitutes the entire agreement between the Lessor and Lessee pertaining to the
Leased Premises, and may be amended only by an agreement in writing signed by the Lessor and the
Lessee. The Lessee acknowledges that there are no collateral agreements or representations,
warranties, promises, or inducements pertaining to the Leased Premises or this Lease not embodied
herein.

19.4 Costs. Expenses and Expenditures

     All costs, expenses and expenditures of the Lessor, incurred upon or as a result (direct or
indirect) of any default by the Lessee hereunder or in exercise or enforcement of any of the
Lessor’s rights or remedies hereunder, including, without limitation, the legal costs incurred by

 

Page 37

the Lessor on a full indemnification basis as between solicitor and his own client shall, forthwith
on demand, be paid by the Lessee to the Lessor as Additional Rent.

19.5 
Time of the Essence

     Time shall be of the essence hereof.

19.6 Notices

     Any written notice provided for in this Lease shall be effectively given to the Lessor by
registered mail addressed to or by delivery to the Lessor at address set out in Section 2.1(a)(ii)
or at such other address as the Lessor may from time to time designate in writing, and given to
the Lessee by registered mail addressed to or by delivery to the Lessee at the address set out in
Section 2.1(b) or at such other address as the Lessee may from time to time designate in writing
or at the Leased Premises, and every such notice shall be deemed to have been given three (3)
business days after the day it was so mailed (unless mail service is then affected or likely to be
affected prior to receipt by labour unrest or strike) or upon the day it was delivered.

19.7 Registration

     The Lessee may register this Lease by filing a caveat provided such caveat does not attach
this Lease to it or incorporate this Lease into it and only recites the Parties to the Lease, the
date of the Lease, the legal description of the Lands, and the Term of the Lease and any renewal
options.

19.8 Legal Relationship

     The provision of this Lease for the payment by the Lessee of Additional Rent is a reservation
of rent only, and neither such provision nor any other provision of this Lease is intended to
create a joint venture or partnership or any other similar relationship between the Lessor and the
Lessee, it being agreed that such relationship is that of lessor and lessee only.

19.9 Accord and Satisfaction

     No payment by the Lessee or receipt by the Lessor of a lesser amount than the payment of
Basic Rent or Additional Rent or other payments herein stipulated shall be deemed to be other than
on account of the earliest stipulated sum due, nor shall any endorsement or statement of any
cheque or any letter accompanying any cheque or payment be deemed an accord and satisfaction, and
the Lessor may accept such cheque or payment without prejudice to the Lessor’s right to recover
the balance due or pursue any other remedy provided in this Lease.

19.10 Net Lease

     The Lessee acknowledges and agrees that this Lease shall be a net lease for the Lessor and
that the Lessor shall not be responsible during the term hereof for any costs, charges, expenses or
outlays of any nature whatever arising from, or relating to, the Leased Premises or

 

Page 38

the Building or the contents thereof or the Lands, excepting only those for which the Lessor has
covenanted hereunder to pay on its own account and the Lessor’s income taxes.

19.11 Interpretation

     This Lease shall be construed and governed by the laws of the Province of Alberta.
Should any provision of this Lease be unenforceable or illegal it shall be considered separate and
severable from the remaining provisions of this Lease, which shall remain in force and be binding
as though the said provision has not been included. The headings of Articles set out in this Lease
are for convenience of reference only, and shall not affect the interpretation thereof. All
references to the Lessee shall be read with such changes in number and gender as may be
appropriate, according to whether the Lessee is a male or female person or a corporation or
partnership, and if more than one person constitutes the Lessee their covenants shall be deemed to
be joint and several. The words “herein”, “hereunder”, and similar expressions used in any
provision of this Lease relate to the whole of this Lease and not to such provisions only.

19.12 Enurement

     This Lease and everything herein contained shall, except where otherwise provided, be
binding upon and enure to the benefit of the Parties and the successors and assigns of the Lessor,
and the approved successors and permitted assigns of the Lessee.

19.13 Acceptance

     The Lessee hereby accepts this Lease of the Leased Premises, to be held by it as Lessee
subject to the conditions, restrictions and covenants above set forth.

19.14 Counterpart Execution

     This Agreement may be executed in several counterparts each of which when so executed
shall be deemed to be an original, and such counterparts shall constitute one and the same
instrument and notwithstanding their date of execution shall be deemed to bear date as of the date
of this Agreement.

     IN WITNESS WHEREOF the Lessor and the Lessee have properly executed this Lease.

	 	 	 	 	 
	THE WESTAIM CORPORATION

	 	NUCRYST PHARMACEUTICALS CORP.
	 
	 		 
	Per:	 /s/ [ILLEGIBLE]

	 	Per:	 /s/ [ILLEGIBLE]

	 
	 		 
	Per:	 /s/ [ILLEGIBLE]

	 	Per:	 /s/ [ILLEGIBLE]

 

SCHEDULE
A-1

LEASED PREMISES

R&D/AIMS/ BUILDING

 

 

SCHEDULE
A-2

LEASED PREMISES

MMC BUILDING

 

 

SCHEDULE
A-3

LEASED PREMISES

MMC BUILDING

 

 

SCHEDULE
A-4

LEASED PREMISES

MMC BUILDING

 

 

SCHEDULE
A-5

LEASED PREMISES

MMC BUILDING

 

 

SCHEDULE
A-6

RESERVED PARKING STALLS

 

 

SCHEDULE
A-7

RESERVED PARKING STALLS

 

 

SCHEDULE
B-1

COMPLEX COMMON FACILITIES

R&D/AIMS/BUILDING

 

 

SCHEDULE
B-2

COMPLEX COMMON FACILITIES

MMC BUILDING

 

 

 

 

Page 1

SCHEDULE“C”

TENANT’S  FIXTURES & LEASEHOLD IMPROVEMENTS

1.0 Plant Equipment

Roll Coater One: RC-1

	§	 	Vacuum Vessel
	 
	§	 	Four complete pump trains including:

	 	-	 	E2M275 rotary vacuum pumps
	 
	 	-	 	EH2600 Boosters
	 
	 	-	 	Aerzen blowers c/w 40 HP GE motors
	 
	 	-	 	All valves, piping and instrumentation

	 
	 	-	 	Pump stands

	§	 	Two complete diffusion pump systems
	 
	§	 	One Polycold cryopump
	 
	§	 	PLC cabinet complete with all cables and instruments
	 
	§	 	Web drive cabinet
	 
	§	 	MDX cabinet c/w power supplies and wiring
	 
	§	 	UPS including circuit panel “F”, panel “UPS”, and transformer
	 
	§	 	Magnetron chilled water system including:

	 	-	 	water pump
	 
	 	-	 	heat exchanger
	 
	 	-	 	water tank
	 
	 	-	 	controller & valve
	 
	 	-	 	all instrumentation associated with system

	§	 	Motor control center #7 (RC-1 basement)
	 
	§	 	Air handler AS-11 (RC-1 cooling)
	 
	§	 	One ton budget crane complete
	 
	§	 	Oxygen control panel complete

Roll Coater Two: RC-2 a.k.a. APIC-1

	§	 	Vacuum Vessel
	 
	§	 	One complete pump train including:

	 	-	 	E2M275 rotary vacuum pump
	 
	 	-	 	EH2600 Booster
	 
	 	-	 	Aerzen blowers c/w 40 HP GE motor
	 
	 	-	 	All valves, piping and instrumentation
	 
	 	-	 	Pump stand

	§	 	Motor control center #8 in RC-2 electrical room c/w transformers

 

 

Page 2

	§	 	Control cabinet c/w all cabling and instrumentation
	 
	§	 	Logic/drive cabinet c/w all cabling and instrumentation
	 
	§	 	MDX cabinet c/w all power supplies and wiring

Roll
Coater Three: RC-3

	§	 	Vacuum Vessel
	§	 	Two complete pump trains including:

	 
	 	-	 	E2M275 rotary vacuum pumps
	 
	 	-	 	EH2600 Boosters
	 
	 	-	 	Aerzen blowers c/w 40 HP GE motors
	 
	 	-	 	All valves, piping and instrumentation
	 
	 	-	 	Pump stands

	§	 	One Polycold cryopump
	 
	§	 	PLC cabinet complete with all cables and instruments
	 
	§	 	Control console
	 
	§	 	Gas distribution cabinet
	 
	§	 	MDX cabinet c/w power supplies and wiring
	 
	§	 	Two 250kg overhead cranes
	 
	§	 	Hydraulic pumping system
	 
	§	 	Magnetron chilled water system including:

	 	-	 	water pump
	 
	 	-	 	heat exchanger
	 
	 	-	 	water tank

	 
	 	-	 	controller & valve
	 
	 	-	 	all instrumentation associated with system

	§	 	Motor control center #9 complete with both transformers

Roll Coater Four: RC-4

	§	 	Vacuum Vessel

	§	 	Four complete pump trains including:

	 	-	 	E2M275 rotary vacuum pumps
	 
	 	-	 	EH2600 Boosters
	 
	 	-	 	Aerzen blowers c/w 40 HP GE motors
	 
	 	-	 	All valves, piping and instrumentation
	 
	 	-	 	Pump stands

	§	 	Polycold c/w all instrumentation
	 
	§	 	PLC cabinet complete with all cables and instruments

	§	 	Web drive cabinet
	 
	§	 	MDX cabinet c/w power supplies and wiring
	 
	§	 	UPS
	 
	§	 	Magnetron chilled water system including:

	 	-	 	water pump

 

 

Page 3

	 	-	 	heat exchanger

	 	-	 	water tank

	 
	 	-	 	
 controller & valve
	 
	 	-	 	all instrumentation associated with system

	§	 	Motor control center in RC-4 basement c/w two transformers
	 
	§	 	Air handler (RC-4 cooling)
	 
	§	 	One ton crane complete
	 
	§	 	Three ton crane complete
	 
	§	 	Oxygen control panel complete

Laminator One: LM-1

	§	 	Sonic cabinet
	 
	§	 	Control console
	 
	§	 	Two unwind modules
	 
	§	 	Sonic module
	 
	§	 	Rewind module
	 
	§	 	Crush cutter
	 
	§	 	Trim collection system
	 
	§	 	LM-1 Overhead crane

Laminator Two: LM-2

	§	 	Complete heat lamination unit

	§	 	Power transformer c/w switch gear

Packaging Machine One: PM-1

	§	 	Complete four side seal automated packaging machine

	§	 	Exit conveyor

	§	 	Unwind stands

Packaging Machine Two: PM-2

	§	 	Complete 4SS-400 four side seal automated packaging machine
	 
	§	 	4SS Control cabinet
	 
	§	 	Integrated PD120 dressing manufacturing system
	 
	§	 	Variable speed exit conveyor
	 
	§	 	Power transformer c/w motor control center

Facility Systems

 Four complete central vacuum systems along with all stainless steel vacuum lines.

 

 

Page 4

	§	 	Two Bry-Air dehumidification systems (air dryers) complete with all instrumentation,
	 	 	cooling coils and associated ductwork.
	 
	§	 	Two raw material dryers c/w controllers and air filtration systems
	 
	§	 	Controlled environment ventilating and air conditioning unit (VU-1) c/w all
	 	 	instrumentation and auxiliary equipment
	 
	§	 	Controlled environment ventilating and air conditioning unit (AS-9) c/w all
	 	 	instrumentation and auxiliary equipment
	 
	§	 	All temperature & humidity transmitters and data loggers, excluding all Building
	 	 	specific operating controls
	 
	§	 	All differential pressure monitors connected to Lessee’s equipment

Other Equipment

	§	 	Three Atom hydraulic clicker die cutting presses
	 
	§	 	One hydraulic compactor
	 
	§	 	One complete bead blasting unit
	 
	§	 	One target de-bonding station c/w controller and ventilating equipment

Controlled Environments (cleanrooms)

	§	 	Material and shaft racking
	 
	§	 	PM-2 change part racks
	 
	§	 	HEPA filters and clean room lighting
	 
	§	 	Roll storage spindle racking

2.0 Laboratory Equipment

	§	 	All laboratory equipment including but not limited to:

	 	-	 	Fume hoods c/w roof fans
	 
	 	-	 	Bio-cabinets c/w roof fans
	 
	 	-	 	Environmental chambers c/w water distillers
	 
	 	-	 	Autoclaves
	 
	 	-	 	Centrifuges c/w accessories
	 
	 	-	 	Refrigeration & Freezers
	 
	 	-	 	All analytical equipment c/w all accessories

	§	 	All research equipment including but not limited to:

	 	-	 	Interatom coater c/w all auxiliary equipment
	 
	 	-	 	Argo coater c/w all auxiliary equipment
	 
	 	-	 	MRC coater c/w all auxiliary equipment
	 
	 	-	 	Surface preparation equipment
	 
	 	-	 	Summit laminator
	 
	 	-	 	Bondtex laminator

 

 

Page 1

SCHEDULE“D” 

DEFINITIONS

     In this Lease, the following words, phrases and expressions are used with the meanings
defined as follows:

	 	(a)	 	“Agreement” or “Lease” means this Lease as the same may be amended from
time to time in accordance with the terms hereof and the expressions “herein”,
“hereof, “hereto”, “above”, “below” and similar expressions used in any
paragraph, subparagraph, section or article of this Lease refer and relate to the
whole of this Lease and not to that paragraph, subparagraph, section or article
only, unless otherwise expressly provided.
	 
	 	(b)	 	“Additional Rent” means the Additional Rent payable by the Lessee to the Lessor
pursuant to this Lease as provided for in Section 5.2 hereof.
	 
	 	(c)	 	“Additional Space” means the Expansion Additional Space or the Lease Option
Additional Space, as applicable in the circumstances.
	 
	 	(d)	 	“Alberta CPI” or “CPI” means the All-Items Consumer Price Index for Alberta as
published by Statistics Canada or other department or agency of the Canadian
federal government from time to time.
	 
	 	(e)	 	“Arbitration Act” means the Arbitration Act (Alberta), and amendments thereto,
or
any like statute in effect from time to time.
	 
	 	(f)	 	“Basic Rent” means the rent set out in Section 2.1(f), as may be amended from
time to time by the incorporation of Additional Space into the Leased Premises
pursuant to the terms of this Lease. For greater certainty “Basic Rent” does not
include any goods and services tax (G.S.T.) which is payable by the Lessee in
addition to Basic Rent.
	 
	 	(g)	 	“Building” means the MMC Building or the R&D/AIMS I Building, as applicable in
the circumstances, including the Common Facilities, all as the same may be
expanded or altered in accordance with this Lease from time to time.
	 
	 	(h)	 	“Building Expansion” shall have the meaning given to it in section 4.6(a).
	 
	 	(i)	 	“Capital Improvement Costs” means any and all planning, design, project
management and construction costs associated with improvements to the Unleased Space
and any and all fees and expenses and costs associated with such activities payable to
contractors, subcontractors, consultants and the municipality relating thereto, plus
fifteen (15%) percent on all of such amounts.
	 
	 	(j)	 	“Commencement Date” means the date set out in Section 2.1 (e)(ii).

 

 

Page 2

	 	(k)	 	“Common Facilities” means the Complex Common Facilities and all lands,
improvements, facilities, utilities, installations, and equipment forming part of the
Building and the Lands other than parts of those lands, improvements, facilities,
utilities, installations and equipment designated by the Lessor for leasing to tenants
of the Building or for exclusive use by the Lessor or tenants.
	 
	 	(I)	 	“Complex Common Facilities” means the cafeteria located adjacent to the
R&D/AIMS I Building on the lands legally described as Lot 49, Block 1, Plan 042 4648
and the front lobby, cafeteria and board room of the MMC Building located on the
Lands, all as shown on Schedule “B-1” and “B-2” attached.
	 
	 	(m)	 	“Construction Costs” means any and all costs and expenses means any and all
costs and expenses of planning, design, development, demolition, project management
and construction relating to the Building Expansion and the Expansion Additional Space
in accordance with agreed upon plans and specifications and any and all fees and
expenses and costs associated with such activities payable to contractors,
subcontractors, consultants and the municipality relating thereto, plus fifteen (15%)
percent on all of such amounts.
	 
	 	(n)	 	“CPI at End of Term” means any of the following as applicable in the
circumstances:

	 	(i)	 	For a First Renewal Term, the Alberta CPI on the last day of
the month which is six months prior to the last day of the initial Term;
	 
	 	(ii)	 	For a Second Renewal Term, the Alberta CPI on the last day of
the month which is six months prior to the last day of the First Renewal Term;
	 
	 	(iii)	 	For a Third Renewal Term, the Alberta CPI on the last day of
the month which is six months prior to the last day of the Second Renewal
Term;
	 
	 	(iv)	 	In the event that the Lessee has accelerated the exercise of
its renewal rights pursuant to section 4.5(b)(iv) or section 4.6(g) hereof
(the “accelerated renewal”), a number which is extrapolated to be the CPI at
the expiry date of the then current term of the lease (without considering the
accelerated renewal) on the basis that the rate of change in the Alberta CPI
from the first day of the then current Term or renewal, as applicable, until
the last day of the then current Term or renewal, as applicable, shall be the
same as the rate of change in the Alberta CPI from the first day of the then
current Term or renewal, as applicable, until the date of exercise of the
accelerated renewal.

	 	(o)	 	“Environmental Costs” shall mean any and all costs and expenses incurred by the
Lessor associated with disposal of effluent from the Buildings and adjacent lands.
	 
	 	(p)	 	“Expansion Additional Space” shall have the meaning given to it in section 4.6
hereof.

 

 

Page 3

	 	(q)	 	“Floor Area” means the area, expressed in square feet or such other unit as the
Lessor may determine, of all floors and mezzanines of all storeys in each interior
leasable space in the Building or any specified portion thereof, calculated by
measuring from the exterior surfaces of the exterior walls and of all walls adjoining
Common Facilities, from the centre line of party or demising walls separating two (2)
or more interior leasable premises and from the lease line separating any interior
leasable premises from other areas in the Building (as the case may be) where no wall
exists, all without deduction or exclusion for any space occupied by or used for
columns, stairs, elevators, escalators or other interior construction or equipment or
for any storefront or doorway areas recessed from the lease line, and when used in
respect of the Leased Premises means the area of all floors and mezzanines of all
storeys in the Leased Premises, calculated as aforesaid.
	 
	 	(r)	 	“Governmental Requirements” means any and all applicable laws, rules,
regulations, ordinances or orders of a municipality or other governmental authority.
	 
	 	(s)	 	“Gross Leaseable Area” of the Buildings or any specified portion thereof means
the aggregate, from time to time, of the Floor Areas of all interior leaseable areas
in the Buildings or any specified portion thereof.
	 
	 	(t)	 	“High Volume Air Flow Area” means the portions of the Buildings which are
served by a make-up air unit system.
	 
	 	(u)	 	“Lab Area” means the portion of Floor Area in the Buildings used from time to
time for laboratory purposes.
	 
	 	(v)	 	Lands” means the lands described in Section 2.1 (g).
	 
	 	(w)	 	“Leased Premises” means the portion of the MMC Building comprising
approximately 62,684 square feet of Floor Area as shown cross-hatched in red on
Schedules “A-2”, “A-3”, “A-4” and “A-5” attached hereto and the portion of the
R&D/AIMS I Building comprising approximately 7,854 square feet of Floor Area as shown
shaded in green on Schedule “A-1” attached hereto.
	 
	 	(x)	 	“Lessee” means the Party described in Section 2.1(b) and the successors and
permitted assigns thereof.
	 
	 	(y)	 	“Lessor” means the Party described in Section 2.1 (a) and the successors and
assigns thereof.
	 
	 	(z)	 	“MMC Building” means the building located on the lands legally described as Lot
3 Plan 912 0367.
	 
	 	(aa)	 	“Notice” includes requests, demands, designations, statements or other writings
in this Lease required or permitted to be given by the Lessor to the Lessee or by the
Lessee to the Lessor and all writs, originating notices of motion, affidavits and any
other ancillary documents in support of all legal proceedings.

 

 

Page 4

	 	(bb)	 	“Operating Costs” means those operating costs associated with the Building and
the Lands as described and set forth in Article 13.
	 
	 	(cc)	 	“Option Additional Space” shall have the meaning given to it in section 4.5
hereof.
	 
	 	(dd)	 	“Other Areas” means the portion of the Buildings which are not High Volume Air
Flow Areas.
	 
	 	(ee)	 	“Parking Lands” means the lands legally described as Lot 27, Plan 962 3802.

	 
	 	(ff)	 	
“Parking Spaces” shall have the meaning given to it in section 8.3 hereof.
	 
	 	(gg)	 	“Parties” means the Lessor and Lessee and “Party” means either the Lessor or
the Lessee as the context requires.
	 
	 	(hh)	 	“Planning Costs” means any and all costs and expenses incurred by the Lessor
in planning, budgeting, engineering, consulting, designing and otherwise considering
the Lessee’s requirements for the Expansion Additional Space and all activities
necessarily incidental, plus fifteen (15%) percent.
	 
	 	(ii)	 	“Property Taxes” means all general, special, local improvement, school and
water taxes, levies, rates and charges from time to time imposed against the Building
and the Lands, or any part thereof, by municipal or other governmental authorities
having jurisdiction, together with the costs of contesting or negotiating the same,
but exclusive of income taxes, business taxes, place of business taxes, estate,
inheritance, succession, capital levy or transfer tax. (Should it be found that due to
changes in the method of levying or collection of any tax, levy, rate or charge to be
imposed upon the Building or the Lands, or any part thereof, or should any new tax,
levy, rate or charge be levied or imposed in lieu of or in addition to those
contemplated by the above definition, the Lessor and the Lessee hereby agree to
negotiate an amendment or new provision to this Lease as is necessary to deal with
such tax, levy, rate or charge, in an equitable manner so as to obviate any injustice
or inequity which shall have arisen and should the Lessor and the Lessee fail to agree
on such amendment or new provision the same shall be settled by arbitration in
accordance with the Arbitration Act.
	 
	 	(jj)	 	“Proportionate Share” means:

	 	(i)	 	in the case of Operating Costs (excluding natural gas costs)
relating to the Building, the proportion that the Floor Area of the portion of
the Leased Premises in the Building bears to the Gross Leaseable Area of the
Building;
	 
	 	(ii)	 	in the case of natural gas costs comprised in Operating Costs,
the Lessor’s Proportionate Share thereof shall be calculated separately from
other Operating Costs for the Building on the basis of the general principle
that High Volume Air Flow Areas in the Building consumes 2.5

 

 

Page 5

	 	 	 	times the amount of natural gas as an Other Areas in the Building;
provided that it is acknowledged that the Lessor shall not be entitled to
recover more than 100% of the natural gas costs incurred by it;

	 	(iii)	 	in the case of Section 8.2(d) and Operating Costs relating to
the Complex Common Facilities and the Lands, the sum of five thousand dollars
($5,000.00);
	 
	 	(iv)	 	in the case of Environmental Costs relating to the Building,
the proportion that the Lab Area of Leased Premises bears to the aggregate of
all of the Lab Area in the MMC Building and the R&D/AIMS I Building.

	 	(kk)	 	“Ratable Share” shall have the meaning given to it in section 8.3 hereof.
	 
	 	(II)	 	“R&D/AIMS I Building” means the three storey administrative and laboratory
building known as the “R&D/AIMS I Building” which is located on the Lands as shown on
Schedule “B-3” attached.
	 
	 	(mm)	 	“Reserved Parking Stalls” means the 33 motor vehicle parking spaces located on
the Lands and highlighted in pink on Schedules “A-6” and “A-7”.
	 
	 	(nn)	 	“Sales Tax” means the goods and services tax and any other sales tax,
consumption tax, business transfer tax, value added tax or any similar tax or
replacement tax imposed by the Government of Canada, or any provincial or municipal
government to the extent that such tax is imposed on the Lessor or is required to be
paid by or collected by the Lessor by reason of the supply of any goods or services by
the Lessor to the Lessee, the Lands, the Building or the Leased Premises or any
payments by the Lessee to the Lessor pursuant to any provision of this Lease.
	 
	 	(oo)	 	“Structural Repairs” means repairs to the foundations, the structural
subfloors, columns and beams and the structural portions of bearing walls and roofs of
the Building. For certainty, “Structural Repairs” do include repairs and replacements
of the roof membrane but do not include maintenance of any kind of the foundations,
structural subfloors, columns and beams unless such maintenance is of a capital nature.
	 
	 	(pp)	 	“Users” shall have the meaning given to it in section 8.3 hereof.exv10w15

 

Exhibit 10.15

	 	 	 	 	 
	 

	 	CUMMINGS PROPERTIES, LLC	 	 
	 

	 	STANDARD FORM
	 	06010326-RSY-E
	 

	 	COMMERCIAL LEASE	 	 

     In consideration of the
covenants herein contained, Cummings Properties,
LLC, hereinafter called LESSOR, does hereby lease to
Westaim Biomedical Inc.(a DE corp.), 1 Hampton Road,
Suite 302, Exeter, NH 03833
hereinafter called LESSEE, the following described premises, hereinafter called
the leased premises; approximately 18,930 leasable square feet (including 1% common
area) at 50-B and M Audubon Road, Wakefield, MA 01880 TO HAVE
AND HOLD the leased
premises for a term of five (5) years commencing at noon on September 1, 2001 and
ending at noon on August 30, 2006 unless sooner terminated as herein provided. LESSOR and
LESSEE now covenant and agree that the following terms and conditions shall govern this lease
during the term hereof and for such further time as LESSEE shall hold the leased premises or any
portion thereof.

     1. RENT. LESSEE shall pay to LESSOR base rent at the rate of four
hundred sixty three thousand seven hundred eighty five (463,785) U.S. dollars per year,
drawn on a U.S. bank, payable in advance in monthly installments of $38,648.75 on the
first day in each calendar month. The first monthly payment*, plus an appropriate fraction -of
a monthly payment for any portion of a month at the commencement of the lease term shall be made
upon LESSEE’s execution of this lease. All payments shall be made to LESSOR or agent at 200 West
Cummings Park, Woburn, Massachusetts 01801, or at such other place as LESSOR shall from time to
time in writing designate. If the “Cost of Living” has increased as shown by the Consumer Price
Index (Boston, Massachusetts, all items, all urban consumers), U.S. Bureau of Labor Statistics,
the amount of base rent due during each calendar year of this lease and any extensions thereof
shall be annually adjusted in proportion to any increase in the Index. All such adjustments shall
take place with the rent due on January 1 of each year during the lease term. The base month from
which to determine the amount of each increase in the Index shall be January 2001,
which figure shall be compared with the figure for November 2001, and each November
thereafter to determine the percentage increase (if any) in the base rent to be paid during the
following calendar year. In the event the Consumer Price Index as presently computed is
discontinued as a measure of “Cost of Living” changes, any adjustment shall then be made on the
basis of a comparable index then in general use.

  

*of rent

     2. SECURITY DEPOSIT. LESSEE
shall pay to LESSOR a security deposit in the amount of One
hundred fifteen thousand nine hundred (115,900) U.S. dollars upon the*
execution-of-this-lease  by LESSEE, which shall be held as security for LESSEE’s performance as
herein provided and refunded to LESSEE without interest at the end of this lease, subject to
LESSEE’s satisfactory compliance with the conditions hereof. LESSEE may not apply the security
deposit to any payment due under the lease. In the event of any default or breach of this lease
by LESSEE, however, LESSOR may elect to apply the security deposit first to any unamortized
improvements completed for LESSEE’s occupancy, then to offset any outstanding invoice or other
payment due to LESSOR, and then to outstanding rent. If all or any portion of the security
deposit is applied to cure a default or breach during the term of the lease, LESSEE shall restore
said deposit forthwith. LESSEE’s failure to remit the full security deposit or any portion
thereof or to restore said deposit when due shall constitute a substantial lease default. Until
such time as LESSEE pays the security deposit and first month’s rent, LESSOR may declare this
lease null and void for failure of consideration.

  

*execution of the amendment referred to in
Paragraph H of the Rider to Lease

     3. USE OF PREMISES. LESSEE shall use the leased premises only for the purpose of
general and administrative offices, laboratory space and bipmedical research space,
including but not limited to animal testing and powder technology pilot plant manufacturing
operations .

     4. ADDITIONAL
RENT. 
LESSEE shall pay to LESSOR as additional rent a proportionate share
(based on square footage leased by LESSEE as compared with the total leaseable square footage of
the building or buildings of which the leased premises are a part (hereinafter called the
building)) of any increase in the real estate taxes levied against the land and building, whether
such increase is caused by an increase in the tax rate, or the assessment on the property, or a
change in the method of determining real estate taxes. LESSEE shall make payment within 30 days
after receipt of any invoice from LESSOR, and any additional rent shall be prorated should the
lease terminate before the end of any tax year. The base from which to determine the amount of any
increase in taxes shall be the rate and the assessment in effect as-of-July 1, 2001 * .

  

*for the period July 1, 2001 to June 30, 2002. During the initial term of the lease, the
maximum cumulative increase in real estate taxes shall not exceed an average of eight per cent per
year of LESSEE’s proportionate share of base year real estate taxes for the building.

     5. UTILITIES. LESSOR shall
 provide equipment per LESSOR’s building standard
specifications to heat the leased premises in season and to cool all office areas between May 1 and
November 1.* LESSEE shall pay all charges for utilities used on the leased premises, including
electricity, gas, oil, water and sewer, and shall use whichever utility service provider LESSOR
shall designate from time to time. LESSEE shall pay the utility provider or LESSOR, as applicable,
for all such utility charges as determined by separate meters serving the leased premises and/or as
a proportionate share of the utility charges for the building if not
separatety metefed. LESSEE
shall also pay LESSOR a proportionate share of any other fees and charges relating in any way to
utility use at the building.

 

*24 hours per day, seven days per week

     6. COMPLIANCE WITH LAWS.
LESSEE acknowledges that no trade, occupation, activity or work
shall be conducted in the leased premises or use made thereof which may be unlawful, improper,
noisy, offensive, or contrary to any applicable statute, regulation, ordinance or bylaw. LESSEE
shall keep all employees working in the leased premises covered by Worker’s Compensation Insurance
and shall obtain any licenses and permits necessary for LESSEE’s use and occupancy. LESSEE shall
be responsible for causing the leased premises* and any alterations by LESSEE allowed hereunder
to be in full compliance with any applicable statute, regulation, ordinance or bylaw.

  

*following delivery of possession by LESSOR

 

     7. FIRE, CASUALTY, EMINENT DOMAIN.
 Should* a substantial portion of the leased
premises, or** of the property of which ***they are a part, be substantially damaged by fire or
other casualty, or be taken by eminent domain,**** LESSOR may elect to terminate this lease. When
such fire, casualty, or taking renders the leased premises substantially unsuitable for their
intended use, a proportionate abatement of rent shall be made, and LESSEE may elect to terminate
this (ease if: (a) LESSOR fails to give written notice within 30 days of intention to restore the
leased premises; or (b) LESSOR fails to restore the leased premises to a condition substantially
suitable for their intended use within 90 days of said fire,
casualty or taking. LESSOR
reserves all rights for damages or injury to the leased premises for any taking by eminent domain,
except for damage to LESSEE’s property or equipment.

  

*more than 35% of any of the laboratory
spaces at 
**a substantial portion
 ***the leased premises 
****either LESSEE or

     8. FIRE INSURANCE. LESSEE shall not permit any use of the leased premises which will
adversely affect or make voidable any insurance on the property of which the leased premises are a
part, or on the contents of said property, or which shall be contrary to any law, regulation or
recommendation from time to time made by the Insurance Services Office (or successor
organization), state fire prevention agency, local fire department, LESSOR’s insurer, or any
similar entity. LESSEE shall on demand reimburse LESSOR and all other tenants all extra insurance
premiums caused by LESSEE’s use of the leased premises* LESSEE shall not vacate the leased
premises or permit same to be unoccupied other than during LESSEE’s customary non-business days or
hours**

  

*for a use other than as provided in Section 3. 
**, unless LESSEE continues to pay rent
and otherwise comply with its obligations under this lease.

     9. MAINTENANCE OF PREMISES. LESSOR will be responsible for all structural maintenance
of the leased premises and for the normal daytime maintenance of all space heating and cooling
equipment, sprinklers, doors, locks, plumbing, and electrical wiring, but specifically excluding
damage caused by the careless, malicious, willful, or negligent acts of LESSEE* or others, chemical,
water or corrosion damage from any source,** and maintenance of any “non-building standard”
leasehold improvements, whether installed by LESSOR, LESSEE or a prior occupant. LESSEE agrees to
maintain at its expense all other aspects of the leased premises in the same condition as they are
at the commencement of the term or as they may be put in with LESSOR’s written consent during the
term of this lease, normal wear and tear and damage by fire or other casualty only excepted, and
whenever necessary, to replace light bulbs and glass, acknowledging that the leased premises are
now in good order and the light bulbs and glass whole. LESSEE shall at all times property control
and vent all solvents, degreasers, radioactive materials, smoke, odors, and any other materials
that may be harmful, and shall not cause the area surrounding the leased premises or any other
common area as defined below to be in anything other than a neat and clean condition, depositing
all waste in appropriate receptacles. LESSEE shall be solely responsible for any damage to
plumbing equipment, sanitary lines, or any other portion of the building which results from the
discharge or use of any substance by LESSEE. LESSEE shall not permit
the leased premises to be
overloaded, damaged, stripped or defaced, nor suffer any waste, and will not keep animals within
the leased premises. If the leased premises include any wooden mezzanine type space, the floor
capacity of such space is suitable only for office use, light storage or assembly work. LESSEE
will protect any carpet with plastic or Masonite chair pads under any rolling chairs. Unless heat
is provided at LESSOR’s expense, LESSEE shall maintain sufficient heat to prevent freezing of
pipes or other damage. Any increase in air conditioning equipment or electrical capacity, or any
installation or maintenance of equipment which is necessitated by some specific aspect of LESSEE’s
use of the leased premises, whether installed by LESSOR, LESSEE or a prior occupant, shall be
LESSEE’s sole responsibility, at LESSEE’s expense and subject to LESSOR’s prior written consent.
All maintenance provided by LESSOR shall be during LESSOR’s normal business hours.

  

*, its agents, employees or invitees
 **except LESSOR’s negligence

     10. ALTERATIONS. LESSEE shall not make structural alterations or additions of any kind to
the leased premises, but may make nonstructural alterations with LESSOR’s prior written consent.*
All such allowed alterations shall be at LESSEE’s expense and shall conform with LESSOR’s
construction specifications. If LESSOR or its agent provides any services or maintenance for
LESSEE in connection with such alterations or otherwise under this lease, including any maintenance
or repairs LESSEE is required but has failed to do, LESSEE will promptiy pay any just invoice.
LESSEE shall not permit any mechanics’ liens, or similar liens, to remain upon the leased premises
in connection with work of any character performed or claimed to have been performed at the
direction of LESSEE and shall cause any such lien to be released or removed forthwith without cost
to LESSOR. Any alterations or additions shall become part of the leased premises and the property
of LESSOR. Any alterations completed by LESSOR or LESSEE shall be LESSOR’s building standard unless
noted otherwise. LESSOR shall have the right at any time to make additions to the building,
change the arrangement of parking areas, stairs, or walkways or otherwise alter common areas as
defined below or the exterior of the building**

  

*, except such consent shall not be required for
nonstructural alterations or additions not exceeding $7,500.

**, provided such changes do not
materially interfere with LESSEE’s use of the leased premises.

     11. ASSIGNMENT OR SUBLEASING. LESSEE shall not assign this lease or sublet or allow any other
entity or individual to occupy the whole or any part of the leased premises without LESSOR’s prior
written consent in each and every instance*. In no case may LESSEE assign this lease or sublet the
leased premises to any other current or prospective tenant of LESSOR, or any affiliate of such
current or prospective tenant. Notwithstanding LESSOR’s consent to any assignment or subleasing,
LESSEE and GUARANTOR shall remain liable to LESSOR for the payment of all rent and for the full
performance of all covenants and conditions of this lease. LESSEE shall pay LESSOR for “legal and
administrative expenses incurred by LESSOR in connection with any consent requested hereunder by
LESSEE.***

  

*which shall not be unreasonably withheld or delayed 
**its reasonable
 ***which expenses shall
not exceed in any one instance $500.

     12. SUBORDINATION. This lease shall be subject and subordinate to any and all mortgages
and other instruments in the nature of a mortgage, now or at any time hereafter, and LESSEE shall,
when requested, promptly execute and deliver such written instruments as shall be necessary to show
the subordination of this lease to said mortgages or other such instruments in the nature of a
mortgage.

     13. LESSOR’s ACCESS. LESSOR and its agents and designees may at any reasonable time enter to
view the leased premises; to show the leased premises to others; to make repairs and alterations as
LESSOR or its designee should elect to do for the leased premises, the common areas, or any other
portions of the building; and without creating any obligation or liability for LESSOR, to make
repairs which LESSEE is required but has failed to do.

     14. SNOW REMOVAL. The plowing of snow from all
roadways and unobstructed parking areas shall be at the sole expense of LESSOR. The control of
snow and ice on all walkways, steps and loading areas serving the leased premises and all other
areas not readily accessible to plows shall be the sole responsibility of LESSEE. Notwithstanding
the foregoing, however, LESSEE shall hold LESSOR and OWNER harmless from any and all claims by
LESSEE’s employees, agents, callers or invitees for damage or personal injury resulting in any way
from snow or ice on any area serving the leased premises.

     15. ACCESS AND PARKING. Unless otherwise provided herein, LESSEE shall have the right
without additional charge to use parking facilities provided for the leased premises in common with
others entitled to the use thereof. Said parking areas plus any stairs, corridors, walkways,
elevators or other common areas (herein collectively called the common areas) shall in all cases be
considered a part of the leased premises when they are used by LESSEE or LESSEE’s employees,
agents, eatters-or invitees. LESSEE will not obstruct in any manner any portion of the building or
the walkways or approaches to the building, and will conform to all rules and regulations now or
hereafter made by LESSOR for parking, and for the care, use, or alteration of the building, its
facilities and approaches. LESSEE further warrants that LESSEE will not permit any employee or
visitor to violate this or

 

any other covenant or obligation of LESSEE. No unattended parking* will be
permitted between 7:00 PM and 7:00 AM without LESSOR’s prior written approval, and from
November 15 through April 15 annually, such parking shall be permitted only in those areas
specifically designated for assigned overnight parking. Unregistered or
disabled vehicles, or storage trailers of any type, may not be parked at any time. LESSOR
may tow, at LESSEE’s sole risk and expense, any misparked vehicle belonging to LESSEE or
LESSEE’s employees, agents, callers or invitees, at any time. LESSOR does not provide and
shall not be responsible for providing any security services.

  

**(i.e. parking where the
driver of a vehicle is not readily available at the leased premises)

     16. LIABILITY. LESSEE shall be solely responsible as between LESSOR and LESSEE for deaths
or personal injuries to all persons whomsoever occurring in or on the leased premises (including
any common areas that are considered part of the leased premises hereunder) from whatever cause
arising, and damage to property, including damage by fire or other casualty, to whomsoever
belonging arising out of the use, control, condition or occupation of the leased premises by
LESSEE*; and LESSEE agrees to indemnify and save harmless LESSOR and OWNER from any and all
liability, including but not limited to costs, expenses, damages, causes of action, claims,
judgments and attorney’s fees caused by or in any way growing out of any matters aforesaid,
except for death, personal injuries or property damage directly resulting from the
sole-negligence** of LESSOR.

  

*(unless arising out of
LESSOR’s negligence)

 **or willful
misconduct

     17. INSURANCE. LESSEE will secure and carry at its own expense a commercial general
liability policy insuring LESSEE, LESSOR and OWNER against any claims based on bodily injury
(including death) or property damage arising out of the condition of the leased premises
(including any common areas that are considered part of the leased premises hereunder) or their
use by LESSEE, including damage by fire or other casualty, such policy to insure LESSEE, LESSOR
and OWNER against any claim up to $1,000,000 in the case of any one accident involving bodily
injury (including death), and $1,000,000 against any claim for damage to property. LESSOR and
OWNER shall be included in each such policy as additional insureds using ISO Form CG 20 26 11 85
or some other form approved by LESSOR, and each such policy shall be written by or with a
company or companies satisfactory to LESSOR.* Prior to occupancy, LESSEE will deliver to LESSOR
certificates and any applicable riders or endorsements showing that such insurance is in force,
and thereafter will provide renewal certificates at least 15 days prior to the expiration of any
such policies. All such insurance certificates shall provide that such policies shall not be
cancelled without at least 10 days prior written notice to each insured. In the event LESSEE
fails to provide or maintain such insurance at any time during the term of this lease, LESSOR
may elect to contract for such insurance at LESSEE’s expense. * Excess liability/umbrella
coverage may satisfy the foregoing coverage requirements, provided it provides primary coverage.

     18. SIGNS. LESSOR authorizes, and LESSEE at LESSEE’s expense agrees to erect promptly upon
commencement of this lease, signage for the leased premises in accordance with LESSOR’s building
standards for style, size, location, etc. LESSEE shall obtain the prior written consent of
LESSOR before erecting any sign on the leased premises, which consent shall include approval as
to size, wording, design and location. LESSOR may at LESSEE’s expense remove and dispose of
any sign not approved, erected, maintained or displayed in
conformance with this lease.

     19. BROKERAGE. LESSEE warrants and represents to LESSOR that LESSEE has dealt with no
broker or third person with respect to this lease,* and LESSEE agrees to indemnify LESSOR
against any brokerage claims arising by virtue of this lease. LESSOR warrants and represents to
LESSEE that LESSOR has employed no exclusive broker or agent in connection with the letting of
the leased premises.

  

*except for David Lefebvre of Shanley Realtors and J. Ryan Blelagus of Cold Stream Real
Estate Advisors. LESSOR agrees to pay such brokers the commission arising out of this lease
per LESSOR’s standard commission schedule.

     20. DEFAULT AND ACCELERATION OF RENT. In the event that: (a) any assignment for the
benefit of creditors, trust mortgage, receivership or other insolvency proceeding shall be made
or instituted with respect to LESSEE or LESSEE’s property; (b) LESSEE shall default in the
observance or performance of any of LESSEE’s covenants, agreements, or obligations hereunder,
and such default shall not be corrected within 10 days after written notice thereof;* or (c)
LESSEE vacates the leased premises,** then LESSOR shall have the right thereafter, while such
default continues and without demand or further notice, to re-enter and take possession of the
leased premises, to declare the term of this lease ended, and to remove LESSEE’s effects,
without being guilty of any manner of trespass or conversion, and without prejudice to any
remedies which might be otherwise used for arrears of rent or other default or breach of the
lease. If LESSEE shall default in the payment of the security deposit, rent, taxes, or
substantial invoice from LESSOR or LESSOR’s agent for goods and/or services or other sum herein
specified, and such default shall continue for 10 days after written notice thereof,
and, because both parties agree that nonpayment of said sums when due is a substantial breach of the
lease, and, because the payment of rent in monthly installments is for the solo bonefit and
convenience of LESSEE , then, in addition to any other remedies,*** the entire balance of rent
due hereunder shall become immediately due and payable as liquidated damages. LESSOR, without
being under any obligation to do so and without thereby waiving any default, may remedy same
for the account and at the expense of LESSEE. If LESSOR pays or incurs any obligations for
the payment of money in connection therewith, such sums paid or obligations incurred, plus
interest and**** costs, shall be paid to LESSOR by LESSEE as additional rent. Any sums received
by LESSOR from or on behalf of LESSEE at any time shall be applied first to any unamortized
improvements completed for LESSEE’s occupancy, then to offset any outstanding invoice or other
payment due to LESSOR, and then to outstanding rent. LESSEE agrees to pay reasonable
attorney’s fees and/or administrative costs incurred by LESSOR in enforcing any or all
obligations of LESSEE under this lease at any time. LESSEE shall pay LESSOR interest at the
rate of 18 percent per annum on any payment from LESSEE to LESSOR which is past due.

  

*or,
in the event such default cannot be cured within said 10-day period, LESSEE shall not have
commenced to cure and be diligently proceeding to cure,
 **without continuing to pay rent and
otherwise comply with its obligations under this lease 
***the present
value of
****
reasonable

     21. NOTICE. Any notice from LESSOR to LESSEE relating to the leased premises or to the
occupancy thereof shall be deemed duly served when left at the leased premises, or served by
constable, or sent to the leased premises or to the last address designated by notice in
accordance with this section, by certified or registered mail, return receipt requested, postage
prepaid, or by recognized courier service with a receipt therefor, addressed to LESSEE.* Any
notice from LESSEE to LESSOR relating to the leased premises or to the occupancy thereof shall be
deemed duly served when served by constable, or delivered to LESSOR by certified or registered
mail, return receipt requested, postage prepaid, or by recognized courier service with a receipt
therefor, addressed to LESSOR at 200 West Cummings Park, Woburn, MA 01801 or at LESSOR’s last
designated address. No oral notice or representation shall have any force or effect. Time is of
the essence in the service of any notice.

  

* with a copy to Joel Bloom, Esq., Mintz, Levin, One Financial Center, Boston, MA 02111

     22. OCCUPANCY. In the event that LESSEE takes possession of the leased premises prior to
the start of the lease term, LESSEE will perform and observe all of its covenants from the date
upon which it takes possession.* LESSEE shall not remove LESSEE’s goods or property from the
leased premises other than in the ordinary and usual course of business, without having first
paid LESSOR all rent which may become due during the entire term of this lease. LESSOR may
require LESSE to relocate to  another similar facility upon prior written notice to
LESSEE and on terms comparable to those herein. ln the event that LESSEE continues to occupy or
control all or any part of the leased premises after the termination of this lease without
the written permission of LESSOR, LESSEE shall be liable to LESSOR for any and all loss,
damages or expenses incurred by LESSOR, and all other terms of this lease shall continue to
apply, except that use and occupancy payments shall be due in full monthly installments at a
rate of 150 percent of the monthly rent due under this lease immediately prior to termination
or at LESSOR’s then current published rent for the leased premises, whichever is greater, it
being understood that such extended occupancy is a tenancy at sufferance, solely for the
benefit and convenience of LESSEE and of greater rental value. LESSEE’s control or occupancy of
all or any part of the leased premises beyond noon on the last day of any monthly rental period
shall

 

constitute LESSEE’s occupancy for an
entire additional month, and increased payment as
provided in this section shall be due and payable immediately in advance. LESSOR’s
acceptance of any payments from LESSEE during such extended occupancy shall not alter LESSEE’s
status as a tenant at sufferance.

  

*of the leased premises

     23. FIRE PREVENTION. LESSEE agrees to use every reasonable precaution against fire, and agrees to
provide and maintain approved, labeled fire extinguishers, emergency lighting equipment, and exit
signs and complete any other modifications within the leased premises as required or
recommended by the Insurance Services Office (or successor organization), OSHA, the local
fire department, LESSOR’s insurer or any similar entity.

     24. OUTSIDE AREA. Any goods, equipment, or things of any type or description held or stored in
any common area without LESSOR’s prior written consent shall be deemed abandoned and may be
removed by LESSOR at LESSEE’s expense without notice. LESSEE shall maintain a building standard
size dumpster* in a location approved by LESSOR, which dumpster shall be provided and serviced at
LESSEE’s expense by whichever disposal firm LESSOR may designate from time to time.
Alternatively, if a shared dumpster or compactor is provided by LESSOR, LESSEE shall pay the
disposal firm or LESSOR, as applicable, LESSEE’s proportionate share of any costs associated
therewith.

  

*adjacent to the leased premises

     25. ENVIRONMENT. LESSEE will so conduct and operate the leased premises as not to interfere
in any way with the use and enjoyment of other portions of the same or neighboring buildings by
others by reason of odors, smoke, exhaust, smells, noise, pets, accumulation of garbage or trash,
vermin or other pests, or otherwise, and will at its expense employ a professional pest control
service if necessary. LESSEE agrees to maintain efficient and effective devices for preventing
damage to plumbing and heating equipment from solvents, degreasers, cutting oils, propellants,
acids, etc, which may be present at the leased premises. No hazardous materials or wastes shall
be stored, disposed of, or allowed to remain at the leased premises at any time,* and LESSEE
shall be solely responsible for any and all corrosion or other damage in any way associated with
the use, storage and/or disposal of same by LESSEE. 

  

*except in full compliance with any
applicable statutes, regulations, bylaws and the like

     26. RESPONSIBILITY. Neither LESSOR nor OWNER shall be held liable to anyone for loss
or damage caused in any way by the use, leakage, seepage or escape of water from any source, or
for the interruption or cessation of any service rendered customarily to the leased premises or
building or agreed to by the terms of this lease, or due to any accident, the making of repairs,
alterations or improvements, labor difficulties, weather conditions, mechanical breakdowns,
trouble or scarcity in obtaining fuel, electricity, service or supplies from the sources from
which they are usually obtained for the building, or due to any change in any utility or service
provider, or any cause beyond LESSOR’s immediate control.

     27. SURRENDER. LESSEE shall at the termination of this lease remove all of LESSEE’s goods
and effects from the leased premises. LESSEE shall deliver to LESSOR the leased premises and all
keys and locks thereto, all fixtures and equipment connected therewith, and all alterations,
additions and improvements made to or upon the leased premises, whether completed by LESSEE,
LESSOR or others, including but not limited to any offices, partitions, window blinds, floor
coverings (including computer floors), plumbing and plumbing fixtures, air conditioning equipment
and ductwork of any type, exhaust fans or heaters, water coolers, burglar alarms, telephone
wiring, telephone equipment, air or gas distribution piping, compressors, overhead cranes, hoists,
trolleys or conveyors, counters, shelving or signs attached to walls or floors, and all electrical
work, including but not limited to lighting fixtures of any type, wiring, conduit, EMT,
transformers, distribution panels, bus ducts, raceways, outlets and disconnects, and furnishings
and equipment which have been bolted, welded, nailed, screwed, glued or otherwise attached to any
wall, floor, ceiling, roof, pavement or ground, or which
have been directly wired to any portion of the electrical system or which have been plumbed
to the water supply, drainage or venting systems serving the leased premises. LESSEE shall
deliver the leased premises fully sanitized from any chemicals or other contaminants, broom
clean, and in* the same condition as they were at the commencement of this lease  or any
prior lease between the parties for the leased premises, or as they were modified during said
term with LESSOR’s written consent, reasonable wear and tear and damage by fire or other
casualty only excepted. Any of LESSEE’s property that remains in the leased premises upon
termination of the lease shall be deemed abandoned and shall be disposed of as LESSOR sees fit,
with no liability to LESSEE for loss or damage thereto, and at the sole risk of LESSEE. LESSOR
may remove and store any such property at LESSEE’s expense; retain same under LESSOR’s control;
sell same at public or private sale (without notice) and apply the net proceeds of such sale to
the payment of any sum due hereunder; or destroy same. In no case shall the leased premises be
deemed surrendered to LESSOR until the termination date provided herein or such other date as
may be specified in a written agreement between the parties, notwithstanding the delivery of any
keys to LESSOR.

  

*substantially

     28. GENERAL. (a) The invalidity or unenforceability of any provision of this lease shall not
affect or render invalid or unenforceable any other provision hereof, (b) The
obligations of this lease shall run with the land, and this lease shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns, except that LESSOR and OWNER shall be liable for obligations occurring only while
lessor or owner of the leased premises, (c) Any action or proceeding arising out of
the subject matter of this lease shall be brought by LESSEE within one year after the
cause of action has occurred and only in a court within the commonwealth of Massachusetts. (d)
If LESSOR is acting under or as agent for any trust or corporation, the obligations
of LESSOR shall be binding upon the trust or corporation, but not upon any trustee, officer,
director, shareholder, or beneficiary of the trust or corporation individually, (e)
If LESSOR is not the owner (OWNER) of the leased premises, LESSOR represents that OWNER
has agreed to be bound by the ierms of this lease unless LESSEE is in default hereof, (f)
This lease is made and delivered in the commonwealth of Massachusetts, and shall be
interpreted, construed, and enforced in accordance with the laws thereof, (g) This lease was
the result of negotiations between parties of equal bargaining strength, and when
executed by both parties shall constitute the entire agreement between the parties,
superseding all prior oral and written agreements, representations, statements and
negotiations relating in any way to the subject matter herein. This lease may not be
extended or amended except by written agreement signed by both parties or as otherwise provided
herein, and no other subsequent oral or written representation shall have any effect
hereon. (h) Notwithstanding any other statements herein, LESSOR makes no warranty, express or
implied, concerning the suitability of the leased premises for LESSEE’s intended use.
(i) LESSEE agrees that if LESSOR does not deliver possession of the leased premises
as herein provided for any reason, LESSOR shall not be liable for any damages to LESSEE for such
failure, but LESSOR agrees to use reasonable efforts to deliver possession to LESSEE
at the earliest possible date. A proportionate abatement of rent, excluding the cost of
any amortized improvements to the leased premises, for such time as LESSEE may be
deprived of possession of the leased premises, except where a delay in delivery is
caused in any way by LESSEE, shall be LESSEE’s sole remedy, (j) Neither the submission of this
lease form or any amendment hereof, nor the prospective acceptance of the security
deposit and/or rent shatl constitute a reservation of or option for the leased premises, or an
offer to lease, it being expressly understood and agreed that neither this lease nor
any amendment shall bind either party in any manner whatsoever unless and until it
has been executed by both parties, (k) LESSEE shall not be entitled to exercise any option
contained herein if LESSEE is at that time in default of any terms or conditions
hereof. (l) Except as otherwise provided herein, neither LESSOR, nor OWNER, nor LESSEE shall
be liable for any special, incidental, indirect or consequential damages, including but
not limited to lost profits or loss of business, arising out of or in any manner connected
with performance or nonperformance under this lease, even if any party has knowledge
of the possibility of such damages, (m) The headings in this lease are for
convenience only and shall not be considered part of the terms hereof, (n) No restriction,
condition or other endorsement by LESSEE on any check nor LESSOR’s deposit of any
full or partial payment shall bind LESSOR in any way or limit LESSOR’s rights under this lease,
(o) LESSOR, LESSEE, OWNER and GUARANTOR hereby waive any and all
rights to a jury trial in any
proceeding in any way arising out of this lease.

 

     29. SECURITY AGREEMENT. LESSEE hereby grants LESSOR a continuing security interest in
all existing or hereafter acquired property of LESSEE in any of LESSOR’s buildings to secure the
payment of rent, the cost of leasehold improvements, and the performance of any other obligations
of LESSEE under this lease or any subsequent lease between the
parties. This provision shall survive termination of this lease,
shall continue under any subsequent lease, and shall not negate or replace any continuing security interest of LESSOR
under any prior lease
between the parties. Default in
the payment or performance of any of LESSEE’s obligations under this lease or any subsequent lease
shall be a default under this security agreement, and shall entitle LESSOR to immediately
exercise all of the rights and remedies of a secured party under the Uniform Commercial Code.
LESSEE agrees to execute a UCC-1 Financing Statement and any other financing agreement as
requested by LESSOR in connection with this security interest.  THIS PARAGRAPH DOES NOT APPLY

     30. WAIVERS, ETC. No consent or waiver, express or implied, by LESSOR to or of any breach of
any covenant, condition or duty of LESSEE shall be construed as a consent or waiver to or of any
other breach of the same or any other covenant, condition or duty. If LESSEE is several persons,
several corporations or a partnership, LESSEE’s obligations are joint or partnership and also
several. Unless repugnant to the context, “LESSOR” and “LESSEE” mean the person or persons, natural
or corporate, named above as LESSOR and as LESSEE respectively, and their respective heirs,
executors, administrators, successors and assigns.

     31. AUTOMATIC
FIVE-YEAR EXTENSIONS. This lease including all terms,
conditions, escalations, etc. shall be automatically extended for
additional sucessseive periods of five years each unless LESSOR or
LESSEE shall serve written notice either party to the other of either
party’s option not to so extend the lease. The time for saving
such written notice shall be not more than 12 months
or less than six months prior to the expiration of the then current lease period. Time is of the
essence.  THIS PARAGRAPH DOES NOT APPLY

     32. ADDITIONAL
PROVISIONS. (Continued on attached rider(s) if necessary.)

- See Attached Rider -

     IN WITNESS WHEREOF, LESSOR and LESSEE have hereunto set their hands and common seals,
intending to be legally bound hereby this 27th day of July, 2001.

	 	 	 	 	 	 	 	 	 	 	 
	LESSOR: CUMMINGS PROPERTIES, LLC	 	LESSEE: WESTAIM BIOMEDICAL INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:	 	/s/ DOUGLAS STEPHENS	 	By:	 	/s/ DON R. SCHICK	 	 
	 	 	 	 	 	 	 	 	 
	 	 	Duly authorized	 	 	 	Duly authorized
	 	 
	 	 	 	 	Print name: DON R.
SCHICK	 	Controller	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	/s/ GLENN A. JOHNSTON	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Duly authorized
	 	 
	 	 	 	 	Print name:GLENN A. JOHNSTON,	Assistant	 	 
	 

	 	 	 	 	 	 	 	Treasurer	 	 

GUARANTY

     IN CONSIDERATION of Cummings
 Properties, LLC making this lease with LESSEE at the
request of the undersigned (GUARANTOR) and in reliance on this guaranty, GUARANTOR hereby
personally guarantees the prompt payment of rent by LESSEE and the performance by LESSEE of all
terms, conditions, covenants and agreements of the lease, any
amendments thereto and any extentions or assignments thereof and the undersigned
promises to pay all expenses, including reasonable attorney’s
fees, incurred by LESSOR in enforcing all obligations of LESSEE under the lease or incurred by LESSOR in enforcing this guaranty.
LESSOR’s consent to any assignments, subleases, amendments and extensions by LESSEE or to any
compromise or release of LESSEE’s liability hereunder, with or without notice to the undersigned,
or LESSOR’s failure to notify the undersigned of any default and/or reinstatement of the tease by
LESSEE, shall not relieve the undersigned from liability as
GUARANTOR.  THIS PARAGRAPH DOES NOT APPLY

     IN WITNESS WHEREOF, the undersigned GUARANTOR has hereunto set his/her/its hand and common
seal, intending to be legally bound hereby this                                         day of                                                                                 ,                                          .

	 	 	 	 	 	 	 
	10/99
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Print name: 	 	 
	 

	 	 	 	 	 	 

 

	 	 	 	 	 
	 

	 	CUMMINGS PROPERTIES, LLC	 	 
	 

	 	STANDARD FORM
	 	 06010326-RSY-15
	 

	 	RIDER TO LEASE	 	 

The following additional provisions are incorporated into and made a part of the attached
lease:

     A. CONFLICTS. In the event of any conflict between any provision of this Rider to Lease
and the attached lease, the provisions of this Rider shall govern.

     B. SOUTH ESSEX SEWERAGE DISTRICT. With respect to leases at Cummings Center in Beverly
(only), LESSEE shall fully comply with all regulations of the South
Essex Sewerage District (SESD) now or hereafter in effect,  including prompt
filing with LESSOR of any documents required by SESD regulations, and
LESSEE agrees to indemnify and hold harmless LESSOR and
OWNER from any and all liability arising out of any noncompliance by LESSEE with such
regulations. THIS PARAGRAPH DOES NOT APPLY

     C. ACTIVITY AND USE RESTRICTION.
With respect to leases at Cummings Center in Beverly and
10 and 18 Commerce Way in Wobum (only), and except as provided below, the following
activities and uses are expressly prohibited at the property of which the leased premises
are a part: residential uses (except for facilities for adult congregate care or assisted
living, senior housing, nursing home uses and other adult residential facilities in certain
designated areas of the property); child care, day care, or public or private
elementary or secondary schools, a public park, playground on playing
field, or other
activities involving more than casual contact with the
ground; cultivation out-of-doors of fruits and vegetables destined for human consumption, and
fishing or  swimming in the ponds and other waterways on or adjacent to the property. In
addition, implementation of a health and safety plan is required for construction,
utilities maintenance and other intrusive activities which are likely to involve extensive
exposure to or contact with subsurface soils at the property. Notices of Activity and Use
Limitation providing further information have been recorded at the Essex South Registry of
Deeds and the Middlesex South Registry of Deeds, respectively, as well as recorded
amendments authorizing both child care and a public elementary school in specific locations
at Cummings Center.  THIS PARAGRAPH DOES NOT APPLY

     D. PARKING. LESSEE shall be entitled to use, in common with others, a proportionate share
of the total number of common area parking spaces provided for the building* (based on
square footage leased by LESSEE as compared with the total leasable square footage of the
building)**. The number of spaces used by LESSEE’s employees, agents and invitees shall not
at any time exceed LESSEE’s proportionate share of the total spaces for the building. For
purposes of determining LESSEE’s compliance with this paragraph at any time, the number of
spaces used by LESSEE shall be presumed to equal the number of persons who are then present
at the leased premises.

 

 * and located in the parking lot adjacent to the building

 ** which for purposes of the leased premises shall be
 40 spaces. LESSOR shall also designate
five parking spaces located adjacent to the main entrance of the building for short-term
visitor parking. LESSOR shall have no responsibility for enforcing this restriction.

     E. RECORDING AND SECURITY. Although LESSOR may choose at any time to record
activities at the building with unmonitored remote television cameras, LESSEE acknowledges and
agrees that, as provided in Section 15 above, LESSOR is not thereby or in any other way
providing any security service for LESSEE or its employees, agents, invitees, contractors and
representatives, and that LESSOR has made no representations whatsoever, written or oral,
concerning the safety of the leased premises or the presence,
effectiveness or  operability of
any security devices or security measures, or the safety or security of LESSEE, its employees,
agents, invitees, callers, contractors and representatives, or LESSEE’s property, against the
criminal or wrongful acts of third parties. Additionally, LESSEE accepts full responsibility
for protecting the persons and property of LESSEE and those of its employees, agents,
invitees, callers, contractors and representatives, and (acknowledging that security devices
or measures may fail or be thwarted by criminals, by other third parties or by electrical or
mechanical malfunction), agrees not to rely on any such devices or measures, and to protect
itself, its property, and its employees, agents, invitees, callers, contractors and
representatives as if such devices or measures did not exist.

     F. ELECTRIC SERVICE. With respect to leases at Cummings Center in Beverly (only), LESSEE
agrees that in the
event its average electricity use at the lease promise is expected to exceed 200 per months during the term of this lease,
it will not sell-generate or co-generate at the leased premises
during the terms of this lease or any extension(s) hereof.  THIS PARAGRAPH DOES NOT APPLY

     G. * LESSOR, at

 LESSOR’s cost, shall modify the leased premises according to a
mutually agreed upon plan attached hereto before or about the time LESSEE takes possession of
the leased premises.

     H. LESSOR, if requested to do so by LESSEE and at LESSEE’s sole expense, shall make
alterations necessitated by LESSEE’s use of the leased premises according to a plan to be
mutually agreed upon by both parties. Any such alterations shall be considered “non-building
standard” for maintenance purposes pursuant to Section 9 of the lease. LESSOR and LESSEE
agree that this lease is made expressly contingent upon the execution by LESSOR and LESSEE
of an amendment to this lease, with plans and specifications on or before Friday, July 27,
2001, which addresses any and all construction issues to the satisfaction of LESSOR and
LESSEE.

	 	 	 
	      LESSOR

	 	LESSEE
	 

	 	LESSEE

 

06010326-RSY-15

RIDER
TO LEASE

(Continued)

     I. If LESSOR should make any alterations and amortize the cost thereof under the
preceding paragraph, then LESSEE shall provide LESSOR with additional security in an amount
and form mutually satisfactory to LESSOR and LESSOR’s counsel and LESSEE and LESSEE’s counsel
to ensure payment of all charges to be amortized.

     J. LESSEE may install and maintain at LESSEE’s sole expense an exterior sign on the
building in a mutually agreed upon location in compliance with LESSOR’s design and
construction standards and any and all ordinances, bylaws, and state and local building
codes. In the event LESSEE fails to maintain said sign in good working order and condition,
LESSOR may elect, after 10 days’ written notice to LESSEE, to have said sign repaired or
removed from the building at LESSEE’s sole expense. LESSOR agrees to place LESSEE’s name on
the building directory, to the extent one exists. In addition, prior to commencement of
installation, LESSEE shall obtain at LESSEE’s sole expense, all necessary permits and
LESSOR’s written consent as to size, graphics, construction and the like, which consent shall
not be unreasonably withheld or delayed.

     K. LESSEE may install and maintain at LESSEE’s sole expense, a free-standing sign in a
mutually agreed upon location at 50-B Audubon Road in compliance with LESSOR’s design and
construction standards and any and all ordinances, bylaws, and state and local building
codes. In the event LESSEE fails to maintain said sign in good working order and condition,
LESSOR may elect to have said sign repaired or removed from the building at LESSEE’s sole
expense. In addition, prior to commencement of installation, LESSEE shall obtain at LESSEE’s
sole expense, all necessary permits and LESSOR’s written consent as to size, graphics,
construction and the like, which consent shall not be unreasonably withheld or delayed.

     L. Provided LESSEE is not then in default of this lease or in arrears of any rent or
invoice payment, LESSEE shall have the right to extend this lease, including all terms,
conditions, escalations, etc., for two additional periods of three years each (“the first
and second extended lease terms” respectively) by serving LESSOR with written notice of its
desire to so extend the lease. The time for serving such written notice shall be not more
than 12 months or less than 6 months prior to the expiration of the initial lease term. Time
is of the essence.

     M. Notwithstanding the provisions of Section 1, annual base rent during the extended
lease terms shall be recalculated at 95 percent of LESSOR’s published annual rental rate as
of the commencement of the respective extended lease term for similar laboratory and office
space. As of the execution of this lease, the leased premises are comprised of approximately
8,930 square feet of laboratory space and approximately 10,000 square feet of office space,
and LESSOR’s published annual rental rates are $34.95 per square foot for laboratory space
and $23.95 per square foot for office space. Said recalculation shall use the weighted
average (based on square footage of each respective category of space) of the published
annual rental rates for the categories of space of which the leased premises is then
comprised. During the first extended lease term, the base month from which to determine the
amount of each “Cost of Living” adjustment shall then be changed to January 2006, the
“comparison” month shall be changed to November 2006, and the first adjustment during the
first extended lease term shall take place with the rent due on January 1, 2007. During the
second extended lease term, the base month from which to determine the amount of each “Cost
of Living” adjustment shall then be changed to January 2009, the “comparison” month shall be
changed to November 2009, and the first adjustment during the second extended lease term
shall take place with the rent due on January 1, 2010. Section 1 shall continue to apply in
all other respects during the extended lease terms.

	 	 	 
	        LESSOR

	 	LESSEE
	 

	 	LESSEE

 

06010326-RSY-15

RIDER
TO LEASE

(Continued)

     N. During the initial term of this lease, provided LESSEE is not then in default of
this lease or in arrears of any rent or invoice payments, LESSEE shall have the one-time right
of first lease of approximately 10,181 square feet of additional space at 50-D Audubon Road,
Wakefield, Massachusetts under proportionately the same terms and conditions as this lease as
said space becomes available for lease directly from LESSOR, subject to the right of the
current lessee (if any) to extend or otherwise renegotiate its lease. LESSEE shall have five
business days from receipt of notice from LESSOR of said availability to execute LESSOR’s then
current standard form lease or amendment to lease for said additional space. If LESSOR fails
to notify LESSEE of the availability of said space and leases said space to others, and LESSEE
notifies LESSOR of its desire to lease said space and immediately executes LESSOR’s then
current standard form lease or amendment to lease for said space, LESSOR shall then have 60
days to relocate the other party. If LESSOR fails to relocate the other party within said 60
days and execute the new lease or amendment to lease with LESSEE, then LESSEE may elect, by
serving LESSOR with written notice within 30 days after expiration of the relocation period,
to occupy a similar amount of additional space on a no-charge basis until such time as LESSOR
delivers possession of 50-D Audubon Road. This shall be LESSEE’s exclusive remedy for any
failure by LESSOR to deliver possession of 50-D Audubon Road or any breach by LESSOR of the
provisions of this paragraph. Time is of the essence.

     O. The parties acknowledge and agree that, as of the execution of this lease, not all of
the perimeter walls of the leased premises have been built. Accordingly, after completion of
the modifications provided for herein, LESSOR shall carefully measure the entire leased
premises in accordance with LESSOR’s standard measurement procedure (measuring to the
midpoint of any shared demising walls and to the outside of any exterior walls), and if the
size including common area does not equal the total number of square feet set forth in the
initial paragraph of this lease, LESSOR shall notify LESSEE in writing of the actual revised
square footage and the corresponding increase or decrease in rent, which change shall not
exceed five percent, based on the same rate per square foot used in this lease, and said
actual square footage and adjusted rent shall be substituted for the figures in this lease.

     P. In lieu of the $115,900 cash security deposit provided in Section 2 above, LESSEE may
substitute an Irrevocable Letter of Credit negotiable on sight in the amount of $115,900, provided
said Letter of Credit is issued by a commercial bank agreeable to LESSOR with a letter of credit
paying office in Boston, Massachusetts; provides for payment to LESSOR immediately and on sight
upon LESSOR’s delivery to the bank of a statement that the drawing represents actual amounts due
to LESSOR from LESSEE under this lease; terminates no earlier than 30 days after the termination
of the lease; and is otherwise in a form acceptable to counsel for LESSOR. In addition, the
Letter of Credit shall provide that LESSOR shall be entitled to draw on said Letter of Credit and
hold the proceeds as a cash security deposit on presentation of a statement that LESSOR feels
insecure about the continuing solvency of the issuing bank, and LESSOR agrees to give LESSEE
written notice of its insecurity about the issuing bank and its intent to draw the Letter of
Credit, and the opportunity for LESSEE to substitute a Letter of Credit from a different bank, if
LESSOR believes in its sole judgment, that there is sufficient time for notice and/or
substitution. In the event LESSOR draws on the Letter of Credit, LESSOR will promptly notify
LESSEE of the rationale for said draw, and LESSEE may substitute a new Letter of Credit that
complies with this paragraph. Either the Letter of Credit or the cash security deposit for which
it is being substituted shall be delivered to LESSOR upon execution of the amendment referred to
in Paragraph H above. If the cash security deposit is paid, LESSOR shall then refund it to LESSEE
upon delivery to LESSOR of a Letter of Credit that fully complies with this paragraph. LESSEE
shall pay LESSOR for legal and administrative expenses incurred by LESSOR in connection with this
Letter of Credit not to exceed $500.

	 	 	 
	        LESSOR

	 	LESSEE
	 

	 	LESSEE

 

06010326-RSY-15

RIDER
TO LEASE

(Continued)

     Q. With reference to Section 25 above, no hazardous materials or hazardous wastes shall
be used, processed, stored, or disposed of by LESSEE or its employees, agents, contractors or
suppliers, in any manner or form within the leased premises or any extension thereof in violation
of any applicable local, state, or federal law, rule or regulation. LESSEE shall be solely
responsible for and shall indemnify and hold LESSOR harmless from any and all liability, damage
or personal injury associated with any use, processing, storage, or disposal of such materials by
LESSEE or its employees, agents, contractors or suppliers.

     R. Prior to the termination date of this lease, LESSEE, at LESSEE’s sole expense, shall
engage an independent and certified industrial hygienist (“the CIH”) to prepare a decontamination
work plan if necessary for the leased premises in accordance with all appropriate standards as
determined by the CIH and all applicable laws to address all conditions arising out of LESSEE’s
tenancy. LESSEE shall submit said plan to LESSOR for LESSOR’s review and consent. LESSEE shall
then complete all measures specified in said plan, including testing and cleaning of all surfaces
and other building components recommended therein. The CIH shall certify that as of the
termination date of this lease, the entire leased premises and any extension thereof used in any
way by LESSEE are free from any harmful chemical, biological or other contamination arising out of
LESSEE’s tenancy, in accordance with all applicable standards as described above and all
applicable laws. Said certification shall confirm the clean condition of all ductwork, plumbing
fixtures, drains, tanks, mechanical systems, cabinetry, casework, all other surfaces, and the
indoor air quality at the leased premises, and shall specify that there are no restrictions on
future use and occupation by others. This certification and any required and recommended cleaning
shall be completed prior to the termination of this lease. Time is of the essence. LESSOR shall
provide LESSEE with a copy of the health and safety assessment provided by the previous occupant
of the leased premises.

     S. LESSEE’s maintenance obligations as provided in Section 9 above shall specifically
include, without limitation, periodic inspections of all acid neutralization, pH adjustment and
other wastewater treatment tanks and equipment; drain lines into which said tanks and equipment
discharge; backflow preventers; air filters; and all other exhaust and intake fan components,
including belts. LESSEE shall be responsible for all maintenance and repairs of said equipment,
both routine and otherwise, including periodic cleaning and replenishment of neutralizing
materials in pH adjustment tanks. LESSEE acknowledges and agrees that the plumbing, electrical,
heating and cooling systems provided and maintained by LESSOR are intended and sized only for
office use, and any maintenance or additional equipment necessitated by LESSEE’s use of and
operation at the leased premises shall be at LESSEE’s sole expense. LESSEE agrees that all
wastewater discharged from the leased premises, including deionized water, shall be neutralized
to a pH of 7.0 ± and shall fully comply with all applicable state and local statutes, codes,
regulations and/or ordinances.

     T. LESSEE shall periodically notify LESSOR in writing during the lease term and 30 days
prior to the expiration of the lease term of LESSEE’s compliance with its inspection and
maintenance obligations as stated above. The frequency of inspections, maintenance and reporting
under this paragraph and the preceding paragraph shall be governed by any applicable laws and
regulations.

     U. * The preceding two paragraphs regarding LESSEE’s maintenance responsibility are a key
consideration of this lease.

     V. Notwithstanding anything to the contrary contained in Section 11 of the lease, LESSEE
shall be entitled to assign the lease or sublease the leased premises
without LESSOR’s consent
upon the following terms and conditions, provided LESSEE serves LESSOR with prior written notice
of said assignment or sublease:

	 	 	 
	        LESSOR

	 	LESSEE
	 

	 	LESSEE

 

06010326-RSY-15

RIDER
TO LEASE

(Continued)

	 	1.	 	assign or otherwise transfer the leasehold estate created by the lease to any
“affiliate” of LESSEE, which for purposes of this lease shall include without
limitation any entity under common control with LESSEE, or to the parent, any
franchisee or any subsidiary or successor corporation of LESSEE;
	 
	 	2.	 	merge into or consolidate with any corporation, provided, following
such merger or consolidation, the net worth of the surviving entity shall be
reasonably equivalent to, or in excess of, that of LESSEE as of the date hereof; and
	 
	 	3.	 	assign or otherwise transfer the leasehold estate created by this lease to a
purchaser of all or substantially all of the assets of LESSEE, provided that in such
instance the acquiring entity, immediately following such acquisition, assumes
directly to LESSOR the obligation to perform and be bound by the lease for all
payments and performance accruing from and after the date of such acquisition and has
a net worth that is reasonably equivalent to, or in excess of, that of LESSEE as of
the date hereof.

No transfer, assignment, sale or issuance of existing or new shares of LESSEE shall be regarded as
an assignment or transfer of the leasehold estate created by the lease to which LESSOR’s consent
shall be required. No consent of LESSOR shall be required to any pledge or assignment of the lease
or LESSEE’s interest therein in connection with the general corporate financing or a pledge or
assignment of all or substantially all of LESSEE’s assets, leases or leasehold interest.

     W. In the event LESSOR approves a sublease or an assignment of the lease, LESSEE shall pay
LESSOR on the first of each month during the period of the sublease or assignment, 50 percent of
any amount by which the payments due to LESSEE under the sublease or assignment exceed the rent
payment due from LESSEE to LESSOR for that month, less LESSEE’s expenses involved in the
sublease. Such amount shall, however, be calculated on a proportionate basis in the case of a
sublease of only a portion of the leased premises.

     X. LESSOR shall at all times during the term procure and maintain in full force and effect
one or more policies of property damage insurance, satisfactory in all respects to LESSOR’s
institutional first mortgagee, if any, provided that as long as this lease shall be in effect,
LESSOR shall carry at least so-called all-risk property damage insurance with a 100% replacement
cost endorsement, including without limitation damage arising from earthquake, and coverage
against increased costs of reconstruction due to compliance with laws.

     Y. LESSOR hereby represents, warrants and covenants that as of the commencement of the
lease, the portions of the building that directly serve the leased premises, including without
limitation structural members, such as but not limited to the roof, load-bearing wails,
foundations and slabs are in good condition and repair and in full accordance with applicable
building codes. In addition, LESSOR agrees to carry out its maintenance obligations under this
lease in a good and workerlike manner.

	 	 	 
	       LESSOR

	 	LESSEE
	 

	 	LESSEE

 

06010326-RSY-15

RIDER TO LEASE

(Continued)

     Z. LESSOR covenants and agrees to obtain for LESSEE from each lender, mortgagee,
trustee under a deed of trust, beneficiary under a deed of trust, underlying LESSOR or other
party whose title is now or might hereafter become superior to the title of LESSOR, or who may
have perfected or may perfect any title that might otherwise cause a termination of this lease, a
written agreement, in form and substance reasonably satisfactory to LESSEE, providing that
LESSEE’s use, occupancy and possession of the leased premises, and other rights under this lease,
will not be disturbed so long as LESSEE shall not be in default hereunder beyond any applicable
grace period for curing the same at the time any such superior party (or anyone taking under such
superior party) shall succeed to the interest of LESSOR hereunder.

     AA. * LESSEE shall reasonably and quietly have, hold and enjoy the leased premises for the
term hereof without hindrance or molestation from LESSOR, provided LESSEE is not in arrears of
any rent or invoice payment and is in full compliance with all terms, conditions and obligations
of this lease.

     BB. For the purposes of this Lease, the following terms shall have the meanings specified:

1) “Hazardous Materials” means hazardous wastes, hazardous substances, toxic substances,
oil, petroleum products and their by-products, asbestos, polychlorinated biphenyl
(PCBs), radon, pollutants, and contaminants, as those terms are defined by the
Environmental Laws, and any other substance that is regulated by or forms the basis of
liability under the Environmental Laws or constitutes a hazard to human health or the
environment including, but not limited to medical and dental products, by-products and waste
and biologically and chemically active substances and materials;

2) “Environmental Laws” means all laws, ordinances, statutes, regulations, rules, orders and
decrees of any federal, state or local governmental agency relating to the protection of
human health or the environment including, but not limited to Massachusetts General Laws,
Chapter 21C et seq. the Comprehensive Environmental Response, Compensation and Liability
Act, 42 U.S.C. 9601 et seq., the Resource Conservation and Recovery Act 42 U.S.C. 6901 et
seq., the Toxic Substances Control Act, 15 U.S.C. 2601 et seq., the Clean Air Act, 42 U.S.C.
7401 et seq., the Coastal Zone Management Act, 16 U.S.C. 1451 et seq., and the Flood
Disaster Protection Act, 42 U.S.C. 4001 et seq.

     CC. With respect to any condition existing prior to the commencement of LESSEE’s occupancy
under this lease, LESSOR shall hold LESSEE harmless from any and all suits, judgments, or
liabilities, for any “release,” as defined in Section 101(22) of the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (“CERCLA”) or in Mass. G. L c. 21E,
§2 (“c. 21E”), of any Hazardous Materials as a result of any activity on the property of which
the leased premises are a part occurring prior to LESSEE’s occupancy and not caused in any way
by LESSEE.

     DD. * LESSOR and LESSEE agree, upon written request of the other party, to execute a Notice
of Lease pursuant to Mass. G. L. c. 183, §4 for recording in the appropriate registry of deeds.

     EE. * LESSOR represents that, to the best of its knowledge and belief, the use of the
leased premises for the purposes set forth in Section 3 above is permitted under the
Massachusetts General Laws and the Wakefield Zoning Bylaws. In the event, however, that LESSOR
is unable to obtain a building permit for the modifications at the leased premises, LESSOR shall
have the right, at its sole expense, to appeal any such decision. If LESSOR declines to
prosecute said appeal or if any such decision is upheld after all applicable appeals have been
exhausted, then LESSEE may cancel this lease by serving LESSOR with one full calendar month’s
prior written notice to that effect, and neither party shall have any further obligation

	 	 	 
	     LESSOR

	 	LESSEE
	 

	 	LESSEE

 

06010326-RSY-15

RIDER
TO LEASE

(Continued)

to the other. Cancellation of the lease shall be LESSEE’s exclusive remedy for any
breach by LESSOR of this representation or otherwise in connection with this paragraph.

     FF. * LESSOR agrees that all work to be performed by LESSOR as set forth in the
plan attached hereto shall be completed in a good and workerlike manner.

     GG. LESSOR represents that, to the best of its knowledge and belief, the common areas
serving the leased premises are in compliance with current requirements of the Americans
with Disabilities Act of 1991 (“ADA”) for LESSEE’s use as set forth in Section 3 above. If
LESSEE receives written notice from any enforcement authority at any time, however, that any
of said common areas are not in compliance with the ADA as now written, then LESSEE shall
serve LESSOR with written notice thereof. LESSOR shall then have a reasonable period of time
not to exceed 60 days to correct any noncomplying element, and if LESSOR fails to complete,
or to be diligently pursuing completion of, any necessary corrective action within said
period, then LESSEE may elect to cancel this lease without penalty by serving LESSOR with 30
days’ prior written notice. Cancellation of the lease shall be LESSEE’s exclusive remedy for
any failure by LESSOR to comply with this paragraph.

     HH. In the event LESSOR shall default in the performance of any of its obligations
hereunder, and such default shall continue for 30 days after notice thereof from LESSEE, or
longer if the default cannot reasonably be cured in 30 days, and LESSOR commences to cure
the default within the 30-day period but then fails to diligently proceed with a cure (or,
in the event of an emergency, such shorter period as may be reasonable under the
circumstances), then LESSEE shall have the right to perform such work or cure such default,
and LESSOR shall promptly reimburse LESSEE for reasonable and necessary costs and expenses
paid by LESSEE to any third party to cure such default. If LESSOR does not so reimburse
LESSEE within 30 days after demand (which shall be accompanied by a reasonably detailed
back-up for such costs), then LESSEE shall have the right, upon notice to LESSOR of its
intent to do so, to deduct such amount from the next succeeding installment(s) of rent or
other sums due hereunder, unless LESSOR notifies LESSEE that LESSOR disputes such amount.

     II. In the event this lease is terminated and LESSOR obtains a judgment for full
accelerated rent in accordance with the provisions of Section 20 herein, LESSOR agrees to
make reasonable efforts to re-let the leased premises and otherwise mitigate its damages
resulting from such termination. LESSOR shall credit LESSEE for any rents actually received
by LESSOR over the balance of the lease term minus any costs incurred by LESSOR in
re-letting the premises. LESSOR’s failure to re-let the leased premises despite LESSOR’s
reasonable efforts shall not limit LESSEE’s liability hereunder.

     JJ. With respect to Sections 9 and 13 of the lease, LESSOR shall provide LESSEE at
least 24-hour notice, except in the case of an emergency, in advance of entering the leased
premises for the purposes of repairs, maintenance, alterations or for any other purpose, and
shall not unreasonably interfere with LESSEE’s operations.

     KK. * LESSEE shall have access to the leased premises seven days per week, 24 hours per
day. LESSEE acknowledges and agrees that LESSOR has no responsibility for providing any
security services for the leased premises, and LESSEE assumes any and all risks arising out
of this unlimited access provision.

     LL. Wherever in the lease, either party is obligated to reimburse the other for costs
or expenses incurred or borne by the other, the reimbursing party shall be responsible for
costs and expenses actually and reasonably incurred and the party requesting reimbursement
shall, on request, provide reasonable evidence of such costs or expenses.

 
	 	 	 
	     LESSOR

	 	LESSEE
	 

	 	LESSEE

 

06010326-RSY-15

RIDER
TO LEASE

(Continued)

     MM. Wherever in the lease, the consent or approval of any party is
required or provided for, such consent or approval shall not be unreasonably
withheld, conditioned or delayed.

     NN. LESSOR hereby represents, warrants and covenants that upon completion of
all modifications by LESSOR, all electrical, plumbing, sprinkler, mechanical
(including, without limitation, all heating, ventilation and air conditioning
systems) and other systems and facilities servicing the leased premises, including
any or all portions of such systems located outside of the leased premises, comply
with all laws, ordinances, requirements, orders, directions, rules and regulations
of the federal, state, county and municipal governments and of all other
governmental authorities having or claiming jurisdiction over the leased premises
and/or over the property of which the leased premises are a part, and of all of
their respective departments, bureaus and officials.

     OO. LESSOR shall further promptly observe and comply with all present and
future laws, ordinances, notices, orders, rules, regulations, directions and
requirements of all federal, state, county and municipal governments and the
appropriate departments, commissions, boards and officers thereof including, but
not limited to, Environmental Laws (excluding, however, any Environmental Laws
that apply solely due to the presence of Hazardous Materials brought onto the
leased premises by LESSEE), as well as any and all notices, orders, rules and
regulations of the National Board of Fire Underwriters, or any other body now or
hereafter constituted and exercising similar functions, all to the extent LESSEE
is not so obligated to comply.

	 	 	 	 	 	 	 	 	 
	LESSOR: CUMMINGS PROPERTIES, LLC	 	LESSEE: WESTAIM BIOMEDICAL INC.	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ DOUGLAS STEPHENS
	 	By:
	 	/s/ DON R. SCHICK	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	Duly authorized 
	 	 	 		Duly authorized 
	Date: 7/27/01	 	Print Name: DON R. SCHICK 	Controller	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ GLENN A. JOHNSTON	 	 
	 

	 	 	 	 	 		 	 
		 	Print Name: Glenn A. Johnston 	Duly authorized 
	 

	 	 	 	 	Assistant Treasurer	 01/01

 

 

					
	 	 	 	 	 
	 
	 	CUMMINGS PROPERTIES, LLC

STANDARD FORM
	 	LESSEE

12030659-CMA-H

LEASE EXTENSION

     In connection with a lease currently in effect between the parties at 50-B and M Audubon
Road, Wakefield, Massachusetts, fully executed on July 27, 2001 and terminating August 30, 2006,
and in consideration of the mutual benefits to be derived herefrom, Cummings Properties, LLC,
LESSOR, and NUCRYST Pharmaceuticals Inc., LESSEE, hereby agree, effective August 1, 2004,
to amend said lease as follows:

	 	1.	 	The lease is hereby extended for an additional term of two (2) years and eleven (11)
months ending at noon on
July 30, 2009.
	 
	 	2.	 	Base rent is hereby changed to four hundred forty seven thousand seven hundred seven
(447,707) dollars per year or $37,308.91 per month.
	 
	 	3.	 	The base month from which to determine the amount of each annual increase
in the “Cost of Living” shall be November 2003, which figure shall be compared with the figure
for November 2004, and each November thereafter to determine the percentage increase (if any) in
the base rent to be paid during the following calendar year.
	 
	 	4.	 	(THIS PARAGRAPH DOES NOT APPLY) Upon execution of this Lease Extension, the security
deposit shall be increased by $                     from $                     to a new total of $                    . LESSEE shall pay this
increase upon LESSEE’s execution of this Lease Extension.
	 
	 	5.	 	(THIS PARAGRAPH DOES NOT APPLY) The lease, including all terms, conditions, escalations, etc.
shall be automatically extended for additional successive periods of                     
years each unless LESSOR or LESSEE shall serve written notice, either
party to the other, of
either party’s desire not to so extend the lease. The time for serving such written notice shall be not more than twelve months or less than six months prior to the expiration of the then current lease period. Time is of the essence.
	 
	 	6.	 	Notwithstanding Section 20 of the lease, in the event the entire balance of rent due
under the lease becomes due and payable as liquidated damages, said amount shall be discounted to
its net present value as of the date of LESSOR’s notice of default, using the published prime rate
then in effect. Furthermore, LESSEE’s covenants under the lease shall be independent of LESSOR’s
covenants, and LESSOR’s failure to perform any of its covenants under the lease, including a
covenant constituting a significant inducement to LESSEE to enter into the lease, shall not excuse
the payment of rent or any other charges by LESSEE or allow LESSEE to terminate the lease.
	 
	 	7.	 	In the event either party has employed a real estate broker, tenant representative, or other
third party on its behalf in connection with this Lease Extension and/or any future extension,
renewal, or expansion of the lease, then payment of any and all fees or commissions shall be the
sole responsibility of the party engaging any such broker, representative, or third party. LESSEE
and LESSOR agree that the party who so engages any broker, representative, or other third party
shall indemnify the other against any and all claims for any such fees or commissions.
Notwithstanding the above, LESSOR agrees to pay a brokerage commission of $8,442.32 on LESSEE’s
behalf to John Butterworth of Meredith & Grew Incorporated, on account of this Lease Extension.
LESSEE warrants
that this is the total commission to be paid by LESSOR on account of this Lease Extension.
	 
	 	8.	 	To the extent any inconsistency exists between this Lease Extension and the lease, including
any prior amendments, the conditions contained herein shall control and supersede any earlier
provisions. Neither the submission of this Lease Extension, nor the prospective acceptance of any
increase in the security deposit, shall constitute a reservation of or option for the leased
premises, it being expressly understood and agreed that this Lease Extension shall not bind either
party in any manner whatsoever until it has been executed by both parties.
	 
	 	9.	 	* The size of the leased premises is hereby increased by approximately 4,737 square feet
(including 1% common area), from approximately 18,830 square feet (including 1% common area), to a
new total of approximately 23,567 square feet (including 1% common area) with the addition of 50-S
Audubon Road (“50-S”).
	 
	 	10.	 	Notwithstanding the effective date of this Lease Extension, the parties acknowledge and agree
that 50-S is presently under lease to a third party whose lease terminates on or about September
30, 2004. Upon full execution of this Lease Extension, LESSOR will use reasonable efforts to obtain
possession of said premises from the existing tenant prior to the termination of its lease. In the
event that LESSOR fails for any reason to obtain possession of said premises by the effective date
of this Lease Extension, LESSEE may deduct $4,425.15 from each monthly rental payment (to be
apportioned for any partial month) until such time as LESSOR obtains possession of said premises.
This rent deduction shall be LESSEE’s sole remedy for any delay in obtaining possession of said
premises.

	 	 	 
	 

	 	ENA LESSOR
	 

	 	SHG LESSEE

 

 

LEASE EXTENSION

(Continued)

	 	11.	 	LESSOR, at LESSOR’s cost, shall modify 50-S according to the mutually agreed upon plan
attached hereto within 60 days after LESSOR obtains possession of 50-S and receives a building
permit.
	 
	 	12.	 	The maximum cumulative “Cost of Living” increase during the period August 1, 2004 to July 30,
2009 (only) shall not exceed an average of 2.5 percent per calendar year.
	 
	 	13.	 	Paragraph L of the Rider to Lease is hereby deleted and the following shall now apply.
Provided LESSEE is not then in default of the lease or in arrears of any rent or invoice payment,
LESSEE shall have the right to extend the lease, including all terms, conditions, escalations,
etc., for two additional periods of five years each (“the first extended lease term” and “the
second extended lease term,” respectively) by serving LESSOR with written notice of its desire to
so extend the lease. The time for serving such written notice shall be not more than 12 months or
less than 6 months prior to the expiration of the then current lease term. Time is of the essence.
	 
	 	14.	 	At any time prior to July 30, 2009 (only), provided LESSEE is not then in default of this
lease or in arrears of any rent or invoice payments, LESSEE shall have the one-time right of first
lease on each of the following suites at 50-60 Audubon Road (all of which include 1% common area);
50-V (approximately 3,256 square feet), 50-D (approximately 8,058 square feet), 50-P (approximately
2,288 square feet), and 60 (approximately 20,530 square feet) at 95% of
LESSOR’s then current published rental rate for each space as it becomes available for lease
directly from LESSOR, subject to the right of the current lessees (if any) to extend their leases,
exercise pre-existing rights of first lease on 50-D and 50-P, or otherwise renegotiate their
leases. LESSEE shall have 48 hours from receipt of notice from LESSOR of the availability of any
one of these spaces to execute LESSOR’s then current standard form lease or amendment to lease for
said additional space. If LESSOR fails to notify LESSEE of the availability of any of said spaces
and leases said space to others, and if LESSEE notifies LESSOR of its desire to lease said space
and immediately executes LESSOR’s then current standard form lease for said space, LESSOR shall
then have 60 days to relocate the other party. If LESSOR fails to relocate the other party within
said 60 days and execute the new lease or amendment to lease with LESSEE, then LESSEE may elect, by
serving LESSOR written notice within 30 days after expiration of the relocation period, to occupy a
similar amount of additional space on a no-charge basis until such time as LESSOR delivers
possession of said space. This shall be LESSEE’s exclusive remedy for any failure by LESSOR to
deliver possession of any of said spaces as provided herein or any breach by LESSOR of the
provisions of this paragraph. Time is of the essence.
	 
	 	15.	 	Paragraph M of the Rider to Lease shall apply to the options set forth in Section 13 above,
except that for purposes of recalculating the rental rates, the leased premises shall now be
comprised of approximately 8,973 square feet of laboratory space and approximately 14,594 square
feet of office space. In addition, during the first extended lease term, the base and comparison
months shall be changed to January 2009 and November 2009 respectively, with the first adjustment
to take place with the rent due on January 1, 2010, and during the second extended lease term, the
base and comparison months shall be changed to January 2014 and November 2014 respectively, with
the first adjustment during the second extended lease term to take place with the rent due on
January 1, 2015.
	 
	 	16.	 	The parties acknowledge and agree that, as of the execution of this Lease Extension, not all
of the perimeter walls of 50-S have been built. Accordingly, upon completion of the modifications
provided for herein, LESSOR shall carefully measure 50-S (only), and if the size including common
area does not equal the number of square feet set forth in Section 9 above, LESSOR shall notify
LESSEE in writing of the actual revised square footage and the corresponding increase or decrease
in rent, based on the same rate per square foot used in this Lease Extension, and said actual
square footage and adjusted rent shall be substituted for the figures herein.
	 
	 	17.	 	If LESSEE exercises its right to remove telephone equipment as provided in Section 9 of
Amendment to Lease #1, then if requested to do so by LESSOR, LESSEE shall also remove all wiring
associated with such equipment prior to the termination of the lease.

     All other terms, conditions and covenants of the lease shall continue to apply. In Witness
Whereof, LESSOR and LESSEE have hereunto set their hands and common seals this 25th day of May,
2004.

(duplicate of original signed May 20, 2004)

	 	 	 	 	 	 	 	 	 
	LESSOR: CUMMINGS PROPERTIES, LLC	 	 	 	LESSEE: NUCRYST PHARMACEUTICALS INC.
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ E.N. Aquresti Sr.
	 	 	 	By:
	 	/s/ Scott H. Gillis
	 

	 	 
	 	 	 	 	 	 
	 

	 	6/2/04           Duly Authorized
	 	 	 	 	 	Duly Authorized
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Print Name: Scott H. Gillis

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