Document:

exv10w3

 

Exhibit 10.3

MEMORANDUM OF LEASE AGREEMENT made effective the 1st day of December, 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 Lessee’s
share of Operating Costs (all as hereinafter defined) will be borne by 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
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	Attention: Legal Services

Fax: 780-992-5301
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	With a copy to:
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	The Westaim Corporation

 

 

Page 2

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	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 4,504 square feet of space in the Building, as shown shaded
in green on Schedule “A”
	 
	 	(d)	 	Address of Leased Premises:

10102-114 Street,

Fort Saskatchewan, Alberta

T8L 3W4

	 	(e)	(i)	Term: shall be thirteen months (13) months commencing on
December 1,2005 and ending on December 31, 2006.
	 
	 	 	(ii)	Commencement Date: December 1, 2005.

	 	(f)	 	Basic Rent: $22,520 per annum (calculated based on $5.00 per square foot
of Floor Area of the Leased Premises 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 49 Block 1 Plan 042 4648.

 

 

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     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:

	 	 	 
	       Schedule “A”

	 	Diagrams showing the Leased Premises
	       Schedule “B”

	 	Diagrams showing Building and Complex Common Facilities
	       Schedule “C”

	 	Definitions

	2.3	 	Definitions

     In this Lease, the words, phrases and expressions set forth in Schedule “C” are used with the
meanings defined therein. The definitions contained in Schedule “C” 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 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).

	4.1	 	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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	4.2	 	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 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.

	4.2	 	Option to Roll Leased Premises into Pre-existing Lease

     Provided that the Lessee is not in default under this Lease or the Pre-existing Lease at the
time it gives notice to the Lessor hereunder, the Lessor will, at the expiration of the Term,
pursuant to a request in writing by the Lessee delivered to the Lessor at least sixty (60) days
prior to the expiration of the Term, grant to the Lessee the option to include the Leased Premises
in the remaining term of the Pre-existing Lease, effective on the expiration of the Term of this
Lease. Upon exercise of this option, by notice as aforesaid, all terms and provisions of the
Pre-existing Lease, including any rights of renewal contained therein, will apply mutatis mutandis
to the Leased Premises and the Lessor and Lessee will execute an amending agreement amending the
Pre-existing Lease as required to include the Leased Premises under the terms of the Pre-existing
Lease at the rental rates applicable thereunder. For greater certainty, the amending agreement will
amend the definition of the Leased Premises in the Pre-existing Lease to increase the square footage of the R&D AIMS I Building by 4,504 square feet,
and will address all other consequential amendments including, without limitation, amending the
basic rent under the Pre-existing Lease to reflect the increased square footage associated with the
addition of the Lease Premises and replacing the existing Schedule A-1 with a new Schedule A-1 that
reflects the addition of the Leased Premises hereunder to the diagram of the Leased Premises in the
Pre-existing Lease.

 

 

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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 $22,520.00 payable by equal monthly installments in
the sum of $1,876.66 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 calculated as follows: the sum of $22,520.00 per annum ($1,876.66 per
month) which is calculated at the rate of $5.00 per square foot of the Floor Area of 4,504 square
feet of the Leased Premises.

	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 12), 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.

	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;

 

 

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	 	(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 instalment 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.

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 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

 

 

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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.

ARTICLE 8  — COMMON FACILITIES

	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.

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:

 

 

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	 	(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, and 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;
	 
	 	(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.

 

 

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	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 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.

 

 

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	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 4.2. 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.

	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

 

 

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	 	 	 	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 Section 9.6(b) 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;

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.

 

 

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	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.

ARTICLE 11  — HEATING, VENTILATING AND AIR CONDITIONING & UTILITIES

	11.1	 	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.

	11.2	 	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.

 

 

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ARTICLE 12  — OPERATING COSTS

	12.1	 	Lessee’s Payment of Operating Cost

     The Lessee shall pay to the Lessor in the manner provided in Section 12.2, 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 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.

 

 

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	12.2	 	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 12.1.

The Lessee shall pay to the Lessor on account of its obligations under Section 12.1 the amount so
estimated to be payable in equal monthly instalments throughout such fiscal period on each date for
payment of an instalment 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 12.1,
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 12.2(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
13 — INSURANCE

	13.1	 	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:

	 	(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

 

 

Page 15

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 13.1 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, and shall be without subrogation against the Lessee and those for
whom it is responsible in law. 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.

	13.2	 	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 13.1, 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 13.1) 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.

Insurance effected by the Lessee under this Section 13.2 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 13.2(a)
and 13.2(b) shall be on a full replacement cost basis and in the case of insurance under Section

 

 

Page 16

13.2(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.

	13.3	 	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 14  — ASSIGNMENT, SUBLETTING, SALE OR MORTGAGE

	14.1	 	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.
	 
	 	(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.

 

 

Page 17

	 	(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.

	14.2	 	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.

	14.3	 	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.

	14.4	 	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

 

 

Page 18

Lessee was requested to execute is as set out in such certificate or acknowledgment.

	14.5	 	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.

	14.6	 	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.

ARTICLE 15  — INDEMNITY, LIENS

	15.1	 	Lessee’s Indemnity

     Except as provided in Section 15.5 (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 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.

	15.2	 	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

 

 

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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 15.5(b).

	15.3	 	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.

	15.4	 	Lessor’s Indemnity

     Except as provided in Section 15.5 (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.

	15.5	 	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 13.1 (a),
(b) or (d); and
	 
	 	(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
13.2(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 16  — DEFAULT, REMEDIES, TERMINATION

	16.1	 	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

 

 

Page 20

	 	(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 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

 

 

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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.

	16.2	 	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.

	16.3	 	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.

 

 

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16.4 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.

16.5
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.

16.6 Additional Rights on Re-Entry

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

	 	(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

 

 

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

16.7 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.

16.8 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.

 

 

Page 24

16.9 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.

16.10 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 17 — ENVIRONMENTAL

17.1 Definitions

	 	(a)	 	“Contaminant” includes but is not limited to, any pollutants, dangerous
substances,
liquid waste, toxic substances, hazardous wastes, hazardous 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 17.1(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;

 

 

Page 25

	 	(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.

17.2 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:

	 	(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

 

 

Page 26

	 	 	 	of the business conducted on the Leased Premises, as regulated and interpreted by any
relevant Environmental Authority.

17.3 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.

17.4 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.

17.5 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 18 — INTERPRETATION AND MISCELLANEOUS

18.1 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.

18.2 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.

 

 

Page 27

18.3
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
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.

18.4  Time of the Essence

     Time shall be of the essence hereof.

18.5 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.

18.6 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.

18.7 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.

18.8 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.

18.9 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,

 

 

Page 28

expenses or outlays of any nature whatever arising from, or relating to, the Leased Premises or
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.

18.10 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.

18.11 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.

18.12 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.

18.13 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 on the 27 day
of April, 2006 to be effective on the day and year first above written.

	 	 	 	 	 	 	 	 	 	 	 
	THE WESTAIM CORPORATION	 	 	 	NUCRYST
PHARMACEUTICALS CORP.  
	 
	 	 	 	 	 	 	 	 	 	 
	Per:

	  /s/ Brian D. Heck
	 	 	 	Per:
	  /s/ Douglas H. Murray	 	 
	 

	 	 	 	 
	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Per:

	  /s/ David C. McDowell
	 	 	 	Per:
	  /s/ Carol L. Amelio	 	 
	 

	 	 	 	 
	 	 

 

 

SCHEDULE “A” — LEASED PREMISES

 

 

SCHEDULE “B” — COMPLEX COMMON FACILITIES

 

 

SCHEDULE “C”

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)	 	“Arbitration Act” means the Arbitration Act (Alberta), and amendments thereto,
or
any like statute in effect from time to time.
	 
	 	(d)	 	“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.
	 
	 	(e)	 	“Building” means the R&D/AIMS I Building including the Common Facilities, all
as the same may be expanded or altered in accordance with this Lease from
time to time.
	 
	 	(f)	 	“Commencement Date” means the date set out in Section 2.1 (e)(ii).
	 
	 	(g)	 	“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.
	 
	 	(h)	 	“Complex Common Facilities” means the lunch room and lobby located adjacent
to the Building on the Lands, all as shown shaded in yellow on Schedule “B”.
	 
	 	(i)	 	“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.
	 
	 	(j)	 	“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.
	 
	 	(k)	 	“Governmental Requirements” means any and all applicable laws, rules, regulations,
ordinances or orders of a municipality or other governmental authority.
	 
	 	(l)	 	“Gross Leaseable Area” of the Building or any specified portion thereof means the aggregate,
from time to time, of the Floor Area of all interior leaseable areas in the Building or any
specified portion thereof.
	 
	 	(m)	 	“High Volume Air Flow Area” means the portions of the Building which are served by a make-up
air unit system.
	 
	 	(n)	 	Lands” means the lands described in Section 2.1(g).
	 
	 	(o)	 	“Leased Premises” means the portion of the Building comprising approximately 4,504 square
feet of Floor Area as shown shaded in green on Schedule “A” attached hereto.
	 
	 	(p)	 	“Lessee” means the Party described in Section 2.1(b) and the successors and permitted
assigns thereof.
	 
	 	(q)	 	“Lessor” means the Party described in Section 2.1(a) and the successors and assigns
thereof.
	 
	 	(r)	 	“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.
	 
	 	(s)	 	“Operating Costs” means those operating costs associated with the Building and the Lands as
described and set forth in Article 12.
	 
	 	(t)	 	“Other Areas” means the portion of the Buildings which are not High Volume Air Flow Areas.
	 
	 	(u)	 	“Parties” means the Lessor and Lessee and “Party” means either the Lessor or the Lessee as
the context requires.

 

 

	 	(v)	 	“Pre-Existing Lease” means the lease agreement entered into between the Lessor and the
Lessee dated effective July 1, 2005, as amended from time to time, regarding the lease to
the Lessee of other space in the Building and the MMC Building (as that term is defined in
the Pre-existing Lease).
	 
	 	(w)	 	“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.
	 
	 	(x)	 	“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 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 one thousand dollars ($1,000.00);

	 	(y)	 	“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.exv4w8

 

Exhibit
4.8

Comments
for United States readers on differences between Canadian and
United States reporting standards

The
compilation report on the pro forma consolidated financial
statements dated April 25, 2006 included within the Business
Acquisition Report dated April 25, 2006 that is incorporated by
reference in this registration statement on Form F-9, which
compilation report is provided solely pursuant to Canadian
requirements, is expressed in accordance with standards of reporting
generally accepted in Canada. To report in conformity with
United States standards on the reasonableness of the
pro forma adjustments and their application to the
pro forma financial statements requires an examination or review
substantially greater in scope than the review we have conducted.
Consequently, we are unable to express an opinion in accordance with
standards of reporting generally accepted in the United States
with respect to the compilation of the unaudited pro forma
information incorporated by reference.

/s/ KPMG LLP

Chartered
Accountants

Calgary,
Canada

May 10, 2006

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