Document:

exv10w26

 

EXHIBIT 10.26

INDEMNITY AGREEMENT

THIS AGREEMENT made as of the • day of •, 2005.

BETWEEN:

NUCRYST Pharmaceuticals Corp., a corporation
incorporated under the laws of Alberta (the
“Corporation”);

OF THE FIRST PART

- and -

•, businessman (the “Executive”)

OF THE SECOND PART

           WHEREAS:

A. The Executive is an officer and/or director of the Corporation and/or a subsidiary, or associate
or affiliate (as those terms are defined in the Business Corporations Act (Alberta)) of the
Corporation, or a body corporate of which the Corporation is or was a shareholder or creditor or
any other body corporate of which the Executive is an officer and/or director at the request of the
Corporation (collectively referred to herein as a “Subsidiary”).

B. The Corporation considers it desirable and in the best interests of the Corporation to enter
into this Agreement to set out the circumstances and manner in which the Executive may be
indemnified in respect of certain liabilities which the Executive may incur as a result of his
acting as a director and/or officer of the Corporation or any Subsidiary;

           NOW THEREFORE THIS AGREEMENT WITNESSETH THAT in consideration of the Executive serving as a
director and/or officer of the Corporation or any Subsidiary, and the sum of ONE DOLLAR ($1.00)
paid by the Executive to the Corporation (the receipt and sufficiency of which is acknowledged by
the Corporation) and in consideration of the mutual promises and covenants herein contained, the
parties agree as follows:

1. General Indemnity

1.1 Except in respect of an action by or on behalf of the Corporation or any Subsidiary to procure
a judgement in its favour, the Corporation agrees, to the full extent allowed by law, to indemnify
and hold harmless the Executive, his heirs and legal representatives, from and against any and all
costs, charges, expenses, fees, damages, or liabilities (including legal or other professional
fees), without limitation, and whether

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incurred alone or jointly with others, which the Executive may suffer, sustain, incur or be
required to pay arising out of or incurred in respect of any action, suit, proceeding,
investigation or claim which may be brought, commenced, made, prosecuted or threatened against the
Executive or any of the other directors or officers of the Corporation or any Subsidiary or which
the Executive may be required to participate in or provide evidence in respect of (any of the same
hereinafter being referred to as a ‘Claim’) howsoever arising and whether arising in law, equity or
under statute, regulation or governmental ordinance of any jurisdiction, for or in respect of any
act, deed, matter or thing done, made, permitted or omitted by the Executive arising out of, or in
connection with or incidental to the affairs of the Corporation or any Subsidiary or the exercise
by the Executive of his powers or the performance of his duties as a director or officer of the
Corporation or of any Subsidiary (of which he was in the past, is now, or in the future may become
an officer or director) including, without limitation, any and all costs, charges, expenses, fees,
damages, or liability which the Executive may suffer, sustain or incur or be required to pay in
connection with investigating, initiating, defending, appealing, preparing for, providing evidence
in, instructing and receiving the advice of his own or other counsel, or any amount paid to settle
any claim or satisfy any judgment, fine or penalty, PROVIDED THAT the indemnity provided for herein
will not be available to the extent that it is finally determined by a court of competent
jurisdiction that in so acting:

	 	(a)	 	the Executive was not acting honestly and in good faith with a view
to the best interests of the Corporation or any Subsidiary (as the case may
require); and
	 
	 	(b)	 	in the case of a criminal or administrative action or proceeding that
is enforced by a monetary penalty, the Executive did not have reasonable grounds
for believing that his conduct was lawful.

1.2 With the approval of a competent court having jurisdiction, the Corporation shall indemnify the
Executive, his heirs and legal representatives, in respect of an action by or on behalf of the
Corporation or a Subsidiary to procure a judgment in its favour, to which the Executive is made a
party by reason of being or having been a director or officer of the Corporation or any Subsidiary,
from and against all losses, judgments, costs, charges and expenses, including any amount paid to
settle the action or satisfy any judgment, actually or reasonably incurred by him in connection
with or as a result of the said action provided that:

	 	(a)	 	the Executive was acting honestly and in good faith with a view to
the best interests of the Corporation or any Subsidiary; and
	 
	 	(b)	 	in the case of a criminal or administrative action or proceeding that
is enforced by a monetary penalty, the Executive had reasonable grounds for
believing that his conduct was lawful.

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2. Specific Indemnity for Statutory Obligations

           Without limiting the generality of the provisions of Section 1 hereof, the Corporation agrees,
to the full extent permitted by law, to indemnify and save the Executive harmless from and against
any and all costs, charges, expenses, fees, and liabilities arising by operation of statute and
incurred by or imposed upon the Executive in relation to the affairs of the Corporation or any
Subsidiary in the Executive’s capacity as director or officer thereof, including but not limited
to, all statutory obligations to creditors, employees, suppliers, contractors, subcontractors, and
any government or any agency or division of any government, whether federal, provincial, state,
regional, or municipal.

3. Taxation Indemnity

           Without limiting the generality of the provisions of Section 1 hereof, the Corporation agrees
that the payment of any indemnity to or reimbursement of the Executive hereunder shall include any
amount the Executive may be required to pay on account of applicable income or goods or services
taxes arising out of the payment of such indemnity or reimbursement, provided however that any
amount required to be paid with respect to such taxes shall be payable by the Corporation only upon
such Executive remitting or being required to remit any amount payable on account of such taxes.

4. Partial Indemnification

           If the Executive is determined to be entitled under any provisions of this Agreement to
indemnification by the Corporation for some or a portion of the costs, charges, expenses, fees,
damages, or liabilities incurred in respect of any Claim, but not for the total amount thereof, the
Corporation shall nevertheless indemnify the Executive for the portion hereof to which the
Executive is determined by a court of competent jurisdiction to be entitled.

5. No Presumption as to Absence of Good Faith

           The determination of any Claim by judgment, order, settlement or conviction, or upon a plea of
“nolo contendere” or its equivalent, shall not, of itself, create any presumption for the purposes
of this Agreement that the Executive did not act honestly and in good faith with a view to the best
interests of the Corporation or, in the case of a criminal or administrative action or proceeding,
that he did not have reasonable grounds for believing that his conduct was lawful (unless the
judgment or order of the Court specifically finds otherwise) or that the Executive had committed
willful neglect or gross default.

6. Determination of Right to Indemnification

           If the payment of an indemnity hereunder requires the approval of a court, under the
provisions of the Business Corporations Act (Alberta) or otherwise, either the Corporation
or the Executive may apply to a court of competent jurisdiction for an order approving such
indemnity by the Corporation of the Executive pursuant to this Agreement.

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7. Pre-payment of Expenses

           Costs, charges, expenses, and fees incurred by the Executive in investigating, defending,
appealing, preparing for, providing evidence in, instructing and receiving the advice of his
counsel in regard to any Claim or other mater for which the Executive may be entitled to an
indemnity or reimbursement hereunder shall, at the request of the Executive, be paid or reimbursed
by the Corporation in advance or forthwith upon such amount being due and payable, it being
understood and agreed that if it is ultimately determined by a court of competent jurisdiction that
the Executive was not entitled to be so indemnified, or was not entitled to be fully so
indemnified, then the Executive shall indemnify and hold harmless the Corporation, for such amount,
or the appropriate portion thereof, so paid or reimbursed.

8. Other Rights and Remedies Unaffected

           The indemnification and payment provided in this Agreement shall not derogate from or exclude
any rights to which the Executive may be entitled under any provision of the Business Corporations
Act (Alberta) or otherwise at law, the articles or by-laws of the Corporation or any Subsidiary,
this Agreement, any applicable policy of insurance, guarantee or third-party indemnity, any vote of
shareholders of the Corporation, or otherwise, both as to matters arising out of his capacity as a
director and/or officer of the Corporation or a Subsidiary, or as to matters arising out of any
other capacity in which the Executive may act for or on behalf of the Corporation or any
Subsidiary.

9. Insurance

           Subject to availability at a reasonable cost to the Corporation, the Corporation shall, at its
cost, purchase and maintain standard directors’ and officers’ liability insurance for the benefit
of the Executive against any liability incurred by him,

	9.1	 	in his capacity as a director or officer of the Corporation, except where the liability
relates to his failure to act honestly and in good faith with a view to the best interests of
the Corporation, or
	 
	9.2	 	in his capacity as a director or officer of a Subsidiary, except where the liability relates
to his failure to act honestly and in good faith with a view to the best interests of that
body corporate.

10. Notices of the Proceedings

           The Executive shall give reasonable notice, in writing, to the Corporation upon his being
served with any statement of claim, writ, notice of motion, indictment, subpoena, investigation
order, or other document commencing or continuing any Claim involving the Corporation or the
Executive. The Corporation agrees to notify the Executive, in writing, forthwith upon it or any of
its Subsidiaries being served with any statement of claim, writ, notice of motion, indictment,
subpoena, investigation order, or other document commencing or continuing any Claim involving the
Executive.

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11. The Corporation and Executive to Cooperate

           The Corporation and the Executive shall, from time to time, provide such information and
cooperation to the other, as the other may reasonably request, in respect of all matters hereunder.

12. Effective Timing

           This Agreement shall be deemed to have effect as and from the first date that the Executive
became a director and/or officer of the Corporation or of any Subsidiary.

13. Extensions, Modifications

           This Agreement is absolute and unconditional and the obligations of the Corporation shall not
be affected, discharged, impaired, mitigated, or released by the extension of time, indulgence or
modification which the Executive may extend or make with any person regarding any Claim against the
Executive in connection with his duty as director or officer of the Corporation or any Subsidiary
or in respect of any liability incurred by him as a director or officer of the Corporation or any
Subsidiary.

14. Insolvency

           The liability of the Corporation under this Agreement shall not be affected, discharged,
impaired, mitigated, or released by reason of the discharge or release of the Executive in any
bankruptcy, insolvency, receivership, or other similar proceeding of creditors.

15. Multiple Proceedings

           No action or proceeding brought or instituted under this Agreement and no recovery pursuant
thereto shall be a bar or defense to any further action or proceeding which may be brought under
this Agreement.

16. Modification

           No modification of this Agreement shall be valid unless the same is in writing and signed by
the Corporation and the Executive.

17. Termination

           The obligations of the Corporation shall not terminate or be released upon the Executive
ceasing to act as a director or officer of the Corporation or any Subsidiary at any time or times.
The Corporation’s obligations may be terminated or released only by a written instrument executed
by the Executive.

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18. Notices

           Any notice to be given by one party to the other shall be sufficient if delivered by hand,
deposited in any post office in Canada or the United States, registered, postage prepaid, or sent
by means of electronic transmission, addressed, as the case may be:

	 	 	 
	(a)

	 	to the Corporation at its registered office, which as of the date hereof is:
	 
	 	 
	 

	 	NUCRYST Pharmaceuticals Corp.
	 

	 	10102 — 114th Street
	 

	 	Fort Saskatchewan, Alberta
	 

	 	Canada T8L 3W4
	 

	 	Attention: President
	 

	 	Fax: •
	 
	 	 
	 

	 	with a copy to:
	 
	 	 
	 

	 	NUCRYST Pharmaceuticals Corp.
	 

	 	50 Audubon Road
	 

	 	Wakefield, Massachusetts 01880
	 

	 	U.S.A.
	 
	 	 
	 

	 	Attention: President
	 

	 	Fax no.: 781-246-6032
	 
	 	 
	(b)

	 	to the Executive at his most current address shown in the records of
the Corporation, which as of the date hereof is:
	 
	 	 
	 

	 	•
	 

	 	Tel: (•) •
	 

	 	Fax: (•) •

or at such other address of which notice is given by the parties pursuant to the provisions of this
section. Such notice shall be deemed to have been received when delivered, if delivered, and if
mailed, on the fifth business day (exclusive of Saturdays, Sundays and statutory holidays) after
the date of mailing. Any notice sent by means of electronic transmission shall be deemed to have
been given and received on the day it is transmitted, provided that if such day is not a business
day then the notice shall be deemed to have been given and received on the next business day
following. In the case of an interruption of the postal service, all notices or other
communications shall be delivered or sent by means of electronic transmission as provided above.

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19. Governing Law

           This Agreement shall be governed by and construed in accordance with the laws of the Province
of Alberta and all disputes arising under this Agreement shall be referred to and the parties hereto irrevocably attorn to the jurisdiction of the courts of Alberta. Any rule of
construction to the effect that any ambiguity is to be resolved against the drafting party shall
not be applicable in the interpretation of this Agreement.

20. Further Assurances

           The Corporation and the Executive agree that they shall do all such further acts, deeds or
things and execute and deliver all such further documents as may be necessary or advisable for the
purpose of assuring and conferring on the Executive the rights hereby created or intended, and of
giving effect to and carrying out the intention or facilitating the performance of the terms of
this Agreement.

21. Interpretation

           Wherever the singular or masculine are used in this Agreement, the same shall be construed as
meaning the plural or the feminine or body corporate and whenever the plural is used in this
Agreement the same shall be construed as meaning the singular.

22. Invalid Terms Severable

           If any term, provision, covenant or condition of this Agreement is held by a court of
competent jurisdiction to be invalid, void or unenforceable, then the offending provision(s) shall
be read down to the extent necessary to make it or them valid and enforceable or, if not capable of
being read down, shall be severed from the balance of this Agreement and the remainder of this
Agreement shall remain in full force and effect and shall in no way be affected, impaired or
invalidated by the offending provisions, provided that the Agreement remains substantially capable
of performance without adversely affecting the rights of the parties.

23. Binding Effect

           All of the agreements, conditions and terms of this Agreement shall extend to and be binding
upon the Corporation and its successors and assigns, including any entity continuing as a result of
any reorganization of the Corporation (such as amalgamation, merger or arrangement) and shall enure
to the benefit of and may be enforced by the Executive and his heirs, executors, administrators,
and other legal representatives, successors and assigns.

24. Independent Legal Advice

           The Executive acknowledges that he has been advised to obtain independent legal advice with
respect to entering into this Agreement, that he has obtained such independent legal advice or has
expressly waived such advice, and that he is entering into this Agreement with full knowledge of
the contents hereof, of his own free will and with full capacity and authority to do so.

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25. Power and Authority of the Corporation

           The Corporation represents and warrants to the Executive that this Agreement, when executed
and delivered by the Corporation, will constitute a legal, valid and binding obligation of the
Corporation and, subject to the provisions of the Business Corporations Act (Alberta) and to any
approval of the Court required thereunder, that this Agreement and the obligations hereunder are
enforceable against the Corporation in accordance with the terms hereof and that the execution and
delivery of this Agreement and the performance thereof by the Corporation has been duly and
properly authorized by all necessary corporate action.

26. Legal Fees

           Any reference in this Agreement to “fees” shall without limitation include legal fees, and
legal fees shall without limitation include all court costs and expenses and all reasonable legal
fees and disbursements on a solicitor and own client full indemnity basis. If any action is
instituted by the Executive under this Agreement to enforce or interpret any terms hereof then the
Executive shall be entitled to be paid all fees incurred by the Executive with respect to such
action, unless as part of such action, the court of competent jurisdiction determines that the
assertions made by the Executive as a basis for such action are not made in good faith or were
frivolous.

           IN WITNESS WHEREOF the Corporation and the Executive have hereunto set their hands and seals
effective as of the day and year first above written.

	 	 	 	 	 	 	 
	 	 	 	 	NUCRYST PHARMACEUTICALS CORP.
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Per:	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	Witness

	 	 	 	 	 	•

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Exhibit 10.27

CHANGE OF CONTROL AGREEMENT

THIS AGREEMENT made effective as of the 6th day of December, 1999.

BETWEEN:

WESTAIM BIOMEDICAL INC., a corporation incorporated under the laws of
Delaware,

(the “Corporation”)

AND:

SCOTT H. GILLIS, of the City of Shelton, in the State of Connecticut,

(the “Executive”)

RECITALS:

	1.	 	The Executive is a senior employee of the Corporation and is considered by the
Corporation to be a valued employee of the Corporation.
	 
	2.	 	The Corporation recognizes that it is essential and in the best interests of the Corporation
and its shareholders that the Corporation retain the continuing dedication of the Executive
to his employment.

NOW THEREFORE in consideration of these premises and the mutual covenants herein contained and in
consideration of the Executive continuing in the employment of the Corporation (or a Subsidiary or
Affiliate of the Corporation), the Corporation and the Executive hereby covenant and agree as
follows:

1. Definitions

	 	 	In this Agreement,

 

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“Affiliate” and “Associate” have the meaning ascribed to such terms in the Business Corporations
Act (Alberta) as the same may be amended from time to time and any successor legislation thereto;

“Agreement” means this agreement as it may be amended or supplemented from time to time, and the
expressions “hereof, “herein”, “hereto”, “hereunder”, “hereby”, and similar expressions refer to
this agreement and, unless otherwise indicated, references to sections are to sections in this
agreement;

“Annual Allowance” means the annual allowance in lieu of perquisites payable to the Executive by
the Corporation pursuant to the Employment Agreement;

“Annual Base Salary” means the annual base salary payable to the Executive by the Corporation
pursuant to the Employment Agreement;

“Annual Compensation on Termination” means the Annual Base Salary and Annual Allowance of the
Executive as at the end of the month immediately preceding the month in which any termination of
employment to which section 3 hereof applies takes effect;

“Change of Control” means:

	(a)	 	For that period of time that the Executive is employed by a Wholly Owned Subsidiary of The
Westaim Corporation, the occurrence of a transaction or series of transactions, either alone
or in conjunction with any other events or transactions, as a result of which:

	 	(i)	 	any Person (other than the Executive or any of his Associates) acquires or
becomes the beneficial owner of, or a combination of Persons (not including the
Executive or any of his Associates) acting jointly or in concert acquires or becomes
the beneficial owner of, directly or indirectly, more than 50% of the Voting
Securities of The Westaim Corporation, whether through the acquisition of previously
issued and outstanding Voting Securities, or of Voting Securities that have not been
previously issued, or any combination thereof, or any other transaction having a
similar effect;

 

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	 	(ii)	 	more than 50% of the issued and outstanding Voting Securities of The Westaim
Corporation become subject to a voting trust in which neither the Executive nor any
of his Associates participate; or
	 
	 	(iii)	 	a majority of the directors of The Westaim Corporation are removed from
office at any annual or special meeting of shareholders called for such purpose, and
the vacancies created thereby are either (A) not filled by appointments made by the
remaining members of the Board, or (B) are filled by nominees proposed by any Person
other than the Executive or any of his Associates;

For greater certainty, the foregoing transactions shall not constitute a Change of Control
for purposes of this Agreement if the Executive is no longer employed by a Wholly Owned
Subsidiary of The Westaim Corporation.

	(b)	 	For that period of time that the Executive is employed by the Employer Subsidiary, the
occurrence of a transaction or series of related transactions, the result of which The Westaim
Corporation sells, from its holdings, in a private sale or series of private sales, more than
50% of the total outstanding Voting Securities of either the Employer Subsidiary or any
Subsidiary of The Westaim Corporation that is the parent (directly or indirectly) of the
Employer Subsidiary, (for greater certainty, calculated including all Voting Securities held
by The Westaim Corporation and any other Person) to one Person (not including the Executive or
any of his Associates) or a group of Persons (not including the Executive or any of his
Associates) acting jointly or in concert; PROVIDED HOWEVER for greater certainty, a sale of
Voting Securities by way of public offerings or distributions of securities (whether by means
of a secondary distribution of the shares of either the Employer Subsidiary or any Subsidiary
of The Westaim Corporation that is the parent (directly or indirectly) of the Employer
Subsidiary, by The Westaim Corporation or a primary offering of securities by the Employer
Subsidiary or any Subsidiary of The Westaim Corporation that is the parent (directly or
indirectly) of the Employer Subsidiary, or a combination of both) shall not constitute a
Change of Control for purposes of this Agreement.

 

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	 	 	“Disability” means the mental or physical state of the Executive such that:

	 	(a)	 	the directors of the Corporation, other than the Executive if he is a director,
determine that the Executive has been unable, due to illness, disease, mental
disability or similar cause, to fulfil his obligations as an employee of the
Corporation either for any consecutive seven (7) month period or for any period
of twelve (12) months (whether or not consecutive) in any consecutive twenty-four (24) month period; or
	 
	 	(b)	 	a court of competent jurisdiction has determined that the Executive is mentally
incompetent or incapable of managing his affairs;

	 	 	and the date on which written notice of any such determination is given to the Executive shall be
the effective date of such determination;
	 
	 	 	“Employer Subsidiary” means the Subsidiary of The Westaim Corporation which employs the Executive,
which as of the date hereof is the Corporation;
	 
	 	 	“Employment Agreement” means the employment agreement dated concurrently with the date of this
Agreement between the Executive and the Corporation with respect to the terms and conditions of
the Executive’s employment by the Corporation, and any amendment or supplement thereto or any
agreement in replacement thereof;
	 
	 	 	“Just Cause” has the meaning ascribed to such term in the Employment Agreement;
	 
	 	 	“Person” includes an individual, partnership, association, body corporate, trustee, executor,
administrator, legal representative and any national, provincial, state or municipal government;
	 
	 	 	“Subsidiary” in respect of a body corporate, means that it is a subsidiary of another body
corporate if that other body corporate owns, directly or indirectly, more than 50% of its Voting
Securities;

 

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	 	 	“Voting Securities” means any securities of the Corporation or a Subsidiary ordinarily
carrying the right to vote at elections of directors and any securities immediately
convertible into or exchangeable for such securities; and
	 
	 	 	“Wholly Owned Subsidiary” in respect of a body corporate, means that it is a wholly owned
subsidiary of another body corporate if that other body corporate owns, directly or
indirectly, 100% of its Voting Securities, excluding however any Voting Securities acquired
by employees of the body corporate as a result of the exercise of options to purchase
Voting Securities granted to such employees by the body corporate.
	 
	2.	 	Scope of Agreement
	 
	 	 	The parties hereto intend that this Agreement set out their respective rights and
obligations on the termination of employment of the Executive subsequent to a Change of
Control, other than as a result of the death or Disability of the Executive. This Agreement
does not purport to provide for any other terms of the Executive’s employment with the
Corporation and creates no rights or obligations of the parties hereto prior to a Change of
Control. In the event of a Change of Control, then the provisions of this Agreement shall
govern and supersede any provision of the Employment Agreement to the contrary. Except to
the extent that the Employment Agreement is superseded by this Agreement in accordance with
the foregoing, the Employment Agreement shall continue to govern the other terms of the
Executive’s employment by the Corporation in the event of a Change of Control of the
Corporation.
	 
	3.	 	Termination of Employment
	 
	 	 	If there is a Change of Control, the Executive may, at any time within ninety (90) days of
learning of the same, give notice to the Corporation that he is leaving its employment,
effective immediately. If the Executive terminates employment in accordance with the
foregoing right, or if the Executive’s employment is terminated for any other reason by the
Corporation within ninety (90) days after a Change of Control, other than as a result of
Just Cause or the death or Disability of the Executive, then in each case the Executive
shall be entitled to be paid and to receive from the Corporation the amounts and benefits
provided in section 4 hereof upon such termination. In addition, in the event that the

 

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	 	 	Executive is terminated without Just Cause or other than as a result of death or Disability
within ninety (90) days prior to the occurrence of a Change of Control, such termination
shall, upon the occurrence of a Change of Control, be deemed to be governed by this
Agreement and the Executive shall be entitled to the amounts provided under section 4
hereof reduced by any amounts otherwise received in lieu of notice in connection with his
termination of employment.
	 
	4.	 	Compensation Upon Termination
	 
	 	 	If the Executive’s employment is terminated by the Executive or by the Corporation in the
circumstances described in section 3 hereof, the following provisions shall apply:

	 	(a)	 	the Executive shall be entitled to receive, and the Corporation shall pay to
the Executive or as the Executive may direct, promptly, but in no event later than the
30th day following the date of termination, a lump sum cash amount equal
to the Annual Compensation on Termination less any required statutory deductions;
	 
	 	(b)	 	the Executive shall be entitled to receive the same benefits (if any) from the
Corporation as he was receiving at the time of termination of employment, and
remain on the Corporation’s benefit plans for the first to occur of:

	 	(i)	 	a period of twelve (12) months following termination; or
	 
	 	(ii)	 	the day when the Executive commences employment with a new
employer and is eligible to receive benefits from such new employer; and

	 	(c)	 	the Executive shall be entitled to receive reimbursement of expenses relating
to outplacement services, to a maximum of $10,000, payable immediately upon
submission of receipts for such services, provided that such expenses are incurred
by the Executive within twelve (12) months of termination of employment.

 

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	5.	 	No Obligation to Mitigate
	 
	 	 	The Executive shall not be required to mitigate the amount of any payment or benefit
provided for in this Agreement by seeking other employment or otherwise, nor shall the
amount of any payment provided for in this Agreement be reduced by any compensation earned
by the Executive as a result of employment by another employer after termination or
otherwise.
	 
	6.	 	Binding on Successors
	 
	 	 	This Agreement shall enure to the benefit of and be enforceable by the Executive’s heirs,
executors, estate trustees, successors or legal representatives but otherwise it is not
assignable.
	 
	7.	 	Expenses
	 
	 	 	The Corporation agrees to pay all reasonable legal fees and expenses incurred by the
Executive in reasonably seeking to obtain or enforce any right or benefit provided by this
Agreement, if the Executive is substantially successful in such obtaining or enforcement.
	 
	8.	 	Entire Agreement
	 
	 	 	This Agreement, together with the Employment Agreement, constitutes the entire agreement
between the parties hereto pertaining to the subject matter hereof and thereof. No
amendment or waiver of this Agreement shall be binding unless executed in writing by the
party to be bound thereby. For greater certainty, this Agreement supersedes and replaces
the section titled “Change of Control” of the offer of
employment letter dated November 1, 1999 made by The Westaim Corporation to the Executive.
	 
	9.	 	Severability
	 
	 	 	If any term, provision, covenant or condition of this Agreement is held by a court of
competent jurisdiction to be invalid, void or unenforceable, then the offending
provision(s) shall be read down to the extent necessary to make it or them valid and
enforceable or, if not capable of being so read down, shall be severed from the balance of

 

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	 	 	this Agreement and the remainder of this Agreement shall remain in full force and effect
and shall in no way be affected, impaired or invalidated by the offending provision(s),
provided that the Agreement remains substantially capable of performance without adversely
affecting the rights of the parties.
	 
	10.	 	Confidential Information
	 
	 	 	The Executive agrees to keep confidential all information of a confidential or proprietary
nature concerning the Corporation, its Subsidiaries, Associates and Affiliates and their
respective operations, assets, finances, business and affairs and further agrees not to use
such information for personal advantage, provided that nothing herein shall prevent
disclosure of information which is in the public domain or which is required to be
disclosed under appropriate statutes, rules of law or legal process.
	 
	11.	 	Governing Law
	 
	 	 	This Agreement shall be governed and interpreted in accordance with the laws of the
Province of Alberta and the federal laws of Canada applicable therein.
	 
	12.	 	Notices
	 
	 	 	Any notice or other communication required or permitted to be given hereunder shall be in
writing and shall be given by prepaid first-class mail, by facsimile or other means of
electronic communication (if, in the case of the Executive, a facsimile number has been
provided or other electronic communication can be received in hard copy form at his address
for notice) or by hand-delivery as hereinafter provided. Any such notice or other
communication, if mailed by prepaid first-class mail at any time other than during a general
discontinuance of postal service due to strike, lockout or otherwise, shall be deemed to
have been received on the fourth business day after the post-marked date thereof, or if sent
by facsimile or other means of electronic communication, shall be deemed to have been
received on the business day following the sending, or if delivered by hand shall be deemed
to have been received at the time it is delivered to the applicable address noted below
either to the individual designated below or to an individual at such address having
apparent authority to accept deliveries on behalf of the addressee. Notice

 

-9-

	 	 	of change of address shall also be governed by this section. In the event of a general
discontinuance of postal service due to strike, lock-out or otherwise, notices or other
communications shall be delivered by hand or sent by facsimile or other means of electronic
communication and shall be deemed to have been received in accordance with this section.
Notices and other communications shall be addressed as follows:

	 	(a)	 	if to the Executive to the most current address of the Executive shown in the
records of the Corporation or in any notice to the Corporation by the Executive,
which address as of the date of this Agreement is:
	 
	 	 	 	154 High Hill

Shelton, CT 06484

USA
	 
	 	(b)	 	if to the Corporation:
	 
	 	 	 	Suite 1010, 144 –
4th
Avenue S.W.

Calgary, Alberta T2P 3N4

Canada

	 	 	 
	Attention:

	 	Senior Vice President, General Counsel
and Corporate Secretary
	 
	 	 
	Telecopier No.:

	 	(403) 237-8181

	13.	 	Counterparts
	 
	 	 	This Agreement may be signed in counterparts and by facsimile transmission and each of such
counterparts shall constitute an original document and such counterparts, taken together,
shall constitute one and the same instrument.
	 
	14.	 	Copy of Agreement
	 
	 	 	The Executive hereby acknowledges receipt of a copy of this Agreement duly signed by the
Corporation.

 

-10-

     IN
WITNESS WHEREOF the parties hereto have duly executed and delivered this Agreement.

	 	 	 	 	 
	 	WESTAIM BIOMEDICAL INC.

 	 
	 	By:  	Illegible 	 
	 	 	 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	Illegible
 	 
	 	 	 	 
	 	 	 	 
	 

	 	 	 	 	 
	WITNESS:

	 	)

)

)
	 	/s/ Scott H. Gillis
	 

	 	 	 	 
	 

	 	)	 	SCOTT H. GILLIS

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