Document:

DISTRIBUTION AND OPTION FOR MANUFACTURING AGREEMENT

DISTRIBUTION AND OPTION FOR MANUFACTURING AGREEMENT

This Distribution and Option for Manufacturing Agreement (the "Agreement") is entered into as of this 7th day of January, 2003 the "Effective Date") by Resin Systems Inc., an Alberta corporation ("RSI") and Harwell Hesco Electrical Supply Ltd., an Ontario corporation ("Harwell").

WHEREAS RSI has obtained from an arm's length third party all rights in certain technology necessary to manufacture, market and sell certain composite poles consisting of a proprietary process technology and RSI's own chemical resin technology (the "Product");

AND WHEREAS Harwell wishes to be appointed as RSI's exclusive distributor of the Product in the Province of Ontario, and the non-exclusive distributor of the Product in the Provinces of Quebec, New Brunswick, Nova Scotia, Newfoundland and Prince Edward Island;

AND WHEREAS RSI wishes to grant Harwell an option to manufacture the Product in the Province of Ontario;

AND WHEREAS Harwell wishes to invest $1,000,000 in RSI in exchange for certain securities of RSI pursuant to a subscription agreement to be entered into simultaneously with this Agreement;

AND WHEREAS, the parties, intend to enter into a definitive agreement in the future containing all terms governing the relationship (the "Definitive Agreement"). The parties wish to enter into this preliminary binding Agreement in order to set forth their mutual understanding of the substantive terms to be included in the Definitive Agreement

NOW THEREFORE in consideration of good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

ARTICLE 1

 DISTRIBUTORSHIP

1.1

Grant of Distribution Rights

RSI hereby appoints Harwell, and Harwell hereby accepts the appointment, as RSI's' exclusive distributor of the Product in the Province of Ontario and as RSI's non-exclusive distributor in the Provinces of Quebec, New Brunswick, Nova Scotia and Prince Edward island (the provinces identified herein to be collectively referred to as the "Territory") during the Term (as hereinafter defined);

1.2

Delivery of Product

RSI shall arrange for the delivery of the Product to Harwell or, if mutually agreed upon, to its customers in the Territory, and RSI shall bear all expenses associated with such delivery. Until the physical arrival of the Product at the agreed destination in the Territory, the Product shall at all times be at the risk of RSI and RSI shall insure against all risk of physical loss or damage to the Product while in transit.

1.1

Title to Product

RSI retains all right, title and interest in and to the Product until such times as title passes to Harwell's customer pursuant to Section 1.4 of this Agreement. Until such times, Harwell agrees not to

assign or otherwise transfer possession of the Product, and to keep the Product free from all encumbrances.

1.4

Revenue Share

Revenues generated by the sale of the Product by Harwell shall be shared between RSI and Harwell by:

(i)

taking the entire amount to be paid by Harwell's customer for the order as negotiated by

Harwell and the customer, subject to approval by RSI (the "Purchase Price");

(ii)

subtracting from the Purchase Price the "Cost of Manufacturing" the Product by RSI; 

"Cost of Manufacturing" shall be defined as the aggregate cost to RSI of the raw 

materials and other component parts comprising, or consumed in the course of production 

of, the Product and all costs of manufacturing, assembling, inspecting, warehousing, 

packaging and shipping the Product. The Cost of Manufacturing shall also include utility 

costs incurred, and all salary and benefit costs related to any employee employed, 

exclusively in the production of the Product; all such costs to be calculated according to 

generally accepted accounting principles ("GAAP") in Canada; then

(iii)

splitting the remaining balance equally between RSI and Harwell. Both parties shall be 

responsible for all costs associated with their respective business operations, including 

sales, marketing, after-sales service, and costs not directly related to the Cost of 

Manufacturing the Product. Title to the Product shall transfer to the customer upon 

payment in full to Harwell, whereupon, Harwell shall hold RSI's portion of the purchase 

price, as well as the Cost of Manufacturing the Product, in trust for RSI.

1.5

Term

The term ("Term") of this Agreement shall commence on the Effective Date and shall continue for a period of two (2) years from the date that the parties reasonably determine that RSI is capable of producing commercial volumes of the Product.  Prior to the expiration of the Term, the parties agree to negotiate in good faith an extension of the Term, including exclusivity in certain territories, based on Harwell meeting reasonable revenue milestones to be determined by mutual agreement of the parties and included in the Definitive Agreement.  Notwithstanding the above, this Agreement may be terminated by either party at any time if

(i)

the other party is in default in any material respect in the performance of any of its obligations under this Agreement or otherwise commits any material breach of this Agreement, and such default continues after 30 days written notice from the non-defaulting party to the defaulting party stating the particulars of such default; or

(ii)

bankruptcy or insolvency proceedings are instituted by or against the other party, or the other party is adjudicated a bankrupt, becomes insolvent, makes an assignment for the benefit of creditors or proposes or makes any arrangements for the liquidation of its debts, or a receiver or manager is appointed with respect to all or any part of the assets of the other party.

 

1.6

RSI Warranties

(a)

RSI warrants that it has full power and authority to execute and perform its obligations under this Agreement, including entering into a Definitive Agreement as contemplated herein

(b)

RSI warrants that all product manufactured by RSI shall be of merchantable quality at the time when it is delivered so that it passes in trade without objection, and in particular, all Product shall:

(i)

be properly manufactured in a good and workmanlike manner;

(ii)

be fit for all uses and purposes to which Product of that type is normally put; and

(iii)

conform to all specifications and descriptions for a period of time representing a 

reasonable warranty period for similar products used under similar conditions, or as 

mutually agreed upon by RSI and Harwell in the Definitive Agreement (the "Warranty 

Period"):

(c)

If any Product fails during normal usage during the Warranty Period, RSI shall repair or replace the defective unit of Product, such repair or replacement to be made without charge, and all liability of RSI under this warranty shall be limited to that repair or replacement.

(d)

The warranties offered in this Section 1.6 (unless and until superceded by the Definitive Agreement) shall be the sole warranties available to Harwell and/or its customers.

1.7

Harwell Warranty

Harwell has full power and authority to execute and perform its obligations under this Agreement, including entering into the Definitive Agreement as contemplated herein.

1.8

Indemnification by RSI

RSI shall defend, indemnify and hold Harwell harmless from any and all damages, liabilities, costs and expenses (including, but not limited to, reasonable legal fees) incurred by Harwell as a result of any action for infringement of any intellectual property rights of any third party with respect to the Product. RSI shall have no obligation to indemnify or hold Harwell harmless with respect to any claim of infringement of intellectual property arising out of either (i) the combination or incorporation of the Product with any other product, end item, or sub-assembly; or (ii) use or incorporation into the Product of any design, technique or specification furnished by Harwell, if the infringement would not have occurred but for such combination, incorporation or use.

19

Indemnification by Harwell

Harwell shall defend, indemnify and hold RSI harmless from any and all damages, liabilities, costs and expenses (including, but not limited to, reasonable legal fees) incurred by RSI a result of any misrepresentation made by Harwell, or any of its employees, agents or contractors with respect to

the quality or performance of the Product, or any warranties offered by Harwell that are inconsistent with the sole warranties provided by RSI in Section 6.1 herein, including the Warranty Period.

 

ARTICLE 2 

OPTION TO BE APPOINTED EXCLUSIVE MANUFACTURER OF THE PRODUCT

2.1

Grant of Option

RSI hereby grants Harwell an option, exercisable at any time during the Term, to become RSI's exclusive agent entitled to manufacture and supply the Product to authorized distributors within the Territory, upon the terms of this Article 2 (the "Option"). Harwell will be responsible for all costs associated with setting up a manufacturing facility in the Territory pursuant to the Option.

2.2

Costs of Manufacturing

Harwell agrees that, in the event it exercises its option pursuant to Section 2.1 above, it shall use the revenue sharing formula set forth in Section 1.4 including the Cost of Manufacturing formula. Notwithstanding, in the event that the Cost of Manufacturing the Product by Harwell exceeds a margin of fifteen per cent (15%) beyond the average Cost of Manufacturing the Product by RSI up to that point, the parties agree that RSI shall have the option to resume manufacturing and supplying the Product to Harwell's customers in the Territory as if the Option have never been exercised.

ARTICLE 3

 BINDING EFFECT AND FORM OF DEFINITIVE AGREEMENT

3.1

Binding Effect

The parties agree that the term of this Agreement shall be legally binding until such time as it is superseded by the Definitive Agreement.

3.2

Form of Definitive Agreement

The parties agree that they shall each use good faith and reasonable commercial efforts to negotiate any additional terms to be included in the Definitive Agreement. In the event that the parties are unable to agree to the balance of the terms of the Definitive Agreement, the terms of this Agreement shall continue to govern the relationship between the parties until mutually agreed otherwise or until terminated as provided for herein.

ARTICLE 4 

MISCELLANEOUS

 4.1

Confidentiality

During the term of this Agreement, or in contemplation thereof, both parties may each have access or be exposed to information about the other party's business or activities that is proprietary or confidential, that may include business, financial, technical, marketing, and other data pertaining to the other party. Each party shall maintain the confidentiality of all such information and shall only make such information available to its employees, agents or contractors on a need to know basis. Information that shall not be included as confidential shall include information that: was known by one party prior to its receipt from the other, is or becomes public knowledge without the fault of the recipient, or is rightfully received by the recipient from a source other than a party to this Agreement.

 

4.2

Notices

Any notices hereunder shall be deemed to have been duly given or served if delivered in person, by prepaid messenger service or by recognized delivery service, or mailed by first class mail, postage prepaid, certified or registered with return receipt requested, or sent by facsimile as follows:

(a)

if to RSI:

Mr. Greg Pendura 

14604 - 1 l 5A Avenue 

Edmonton, Alberta

Fax: (780) 452-8755

Email: greg @resinsystemsinc.com

with a copy to: 

Bumet, Duckworih & Palmer LLP 

Suite 1400, 350 - 7th Avenue S.W. 

Calgary, Alberta T2P 3N9

Attention: James G. Colvin 

Fax: (403) 260-0337

 Email: jgc@bdplaw.com

(b)

if to Harwell:

Harwell Hesco Electrical Supply Ltd 

41 Ossington Avenue

Toronto, Ontario 

M6J 2Z1

Fax: (416) 534-4791

Email: Laurence@harwellhesco.com

with a copy to:

Thompson MacColl & Stacy 

5-1020 Matheson Blvd, E. 

Mississauga, Ontario

L4W 4J9

Attention: Charles R. MacColl

 Fax: (905) 238-3313

Email: emaccoll@tmslaw.com

4.3

Governing Law

This Agreement shall be governed by and construed in accordance with the laws of the Province of Alberta, Canada. Disputes hereunder shall be resolved in the provincial and federal courts of the Province of Alberta.  Each of the parties to this Agreement hereby submits to the jurisdiction of the provincial and federal courts in the Province of Alberta.

4.4

Assignment; Successors

Neither this Agreement nor the rights of the parties hereto shall be assigned by either party hereto without the prior written consent of the other party, such consent not to be unreasonably withheld. This Agreement will be binding upon and enure to the benefit of the legal representatives, successors and permitted assigns of each of the parties.

4.5

Entire Agreement

This Agreement represents the entire agreement between the parties regarding the subject matter hereof, and supersedes all prior written or oral understandings or agreements between the parties.

4.6

Amendments

No amendment or modification of this Agreement shall be deemed effective unless and until executed in writing by the parties hereto.

4.7

Waivers

No term or condition of this Agreement shall be deemed to have been waived nor shall there be any estoppel to enforce any provision of this Agreement except by written instrument of the party charged with such waiver or estoppel.

4.8

Currency

Unless otherwise indicated, any references herein to currency shall refer to Canadian dollars.

4.9

 Severability

All agreements and covenants contained herein are severable and, in the event that any of them shall be held to be invalid by any competent court, this Agreement shall be interpreted as if such invalid agreements or covenants were not contained herein.

4.10 

Headings

Section headings herein are used for convenience only and shall not otherwise affect the provisions of this Agreement.

4.11 Counterparts

This Agreement may be executed in two counterparts, each of which shall be deemed an original, but both of which shall together constitute one and the same instrument.

IN WITNESS WHEREOF the parties hereto have duty executed this Agreement as of the Effective Date.

RESIN SYSTEMS INC. 

Per: __________________________________

Name: 

Title:

HARWELL HESCO ELECTRICAL SUPPLY LTD.

Per: ___________________________________

Name: 

Title:OFFER TO LEASE

OFFER TO LEASE

TO:

J.J. BARNICKE EDMONTON LTD.

SUITE 2380 10129 - 99 ST

EDMONTON, ALBERTA T5J 3H1

Central Precision Limited:

Care of  Delco Remy  America Inc. (hereinafter called "the Sub-Landlord") of the Former Engine Rebuiders space (hereinafter called “the Building”) described herein:

Resin Systems Inc. (hereinafter called “the Sub-Tenant”), having inspected the Building (and/or plans) located on a parcel of land legally described as Lot(s) 6, Block 3, Plan 4990H W and municipally known as 14650 - 112 Avenue, Edmonton, Alberta herby offers to Sub-Lease the floor area on the main comprising 29,900 square feet, more or less, (hereinafter called the "Demised Premises"), on the following terms and conditions:

Primary Sub-Lease Terms

The Sub-Lease term ("Term") " commence April 1, 2002 

and terminate the 31st day of October 2005.

Basic Rent:

The annual Basic Rent rate forgo Sub-Lease term shall 

be:

April 2, 1003 – May 31, 2004

$3.25 per square foot

April  1, 2004 - October 31, 2005

$3.75 per square foot

Upon full occupancy of all the Sub-Lease areas the Rent 

shall be payable in monthly installments due on or before 

the first day of each month of the Sub-Lease term.

Fixturing Period:

The Tenant shall receive occupancy of the Sub-Lease 

space to complete the improvements as indicated under 

"Sub-Tenant's Work: upon acceptance of this Offer to 

Sub-Lease.

Additional Rent:

The Tenant shall pay its proportionate 

share of all expenses incurred in operating the 

building based on the ratio of its Demised 

Premises in the total leasable aim of the Building. These 

expenses include but are not necessarily 

limited to the following:

a)  Property taxes

b)  Building insurance

c)  Building maintenance and repair 

d)  Building management and administration fines 

Presently these costs (excluding Utilities) are estimated 

at $.1.50 per square foot per annum for 2003, exclusive 

of G.S.T.

Structural Repairs:

The Tenant shall not be responsible, proportionately or 

otherwise for any Structural repairs during the Sub-Lease 

Term.

Early Occupancy:

Sub Tenant to have immediate occupancy upon 

acceptance of lease and to receive the first two months 

on a gross free rental basis (net rent plus operating costs) 

except for utilities

Sub-Lease Termination:

The Sub-Tenant shall have the right to terminate this Sub-Lease 

agreement at anytime during the Sub-Lease term with a six (6) month 

notice.

Parking and Loading:

The Tenant shall have the exclusive use of one half parking stalls and 

loading area’s to the east of the Sub-Leased area.

Use::

Manufacturing and assembly of Composites Power-poles

Tenant's Responsibility:

Tenant shall be responsible for:

a) Business access and licenses and tenant liability insurance

b) Telephone equipment installation and/or rental 

c) Natural gas, electricity and water

d) Janitorial services in demised premises

e) All leasehold improvements in the demised premises other 

than those listed under Landlord’s/Sub-Landlord’s 

Responsibility. All plans for leaseholds to be submitted to the 

Sub-Landlord for approval (approval not to be unreasonably 

withheld) prior to construction commencement.

f) Payment of all sales tax, goods and services tax, or any like 

tax imposed on the Landlord by any governmental authority on 

any rent payable by the Tenant.

Sub-Tenant’s Work::

The following work is to be  completed as per schedule "A" at the 

sole cost of the Sub-Tenant.

a) Remove existing walls and rooms within warehouse, including 

but not limited to demising walls and partial walls as 

indicated on Schedule “A”.

b) Convert Grade loading area at the south of building back to 

Dock

c) At termination of sub-lease the Sub-Tenant will restore building 

as currently composed

Sub-Landlord/

Landlord’s Work:

The following work is to be completed by the Sub-

Landlord/Landlord:

a) Power to the Sub-Lease am shall be no less than 600 

amps/208 Volts 3 phase and shall be separately metered.

First Right of Refusal:

The Tenant shall have first right of refusal on the remaining 

12,321 square feet located directly to the north of the Sub-Lease 

area and shall have first right of Refusal an the 12,298 square fee 

drive through area located to the west of the Sub-Lease area, if 

not already sub-leased to others

Assignment and Subletting:

The Tenant covenanents that it will not assign or sublet the demised 

premises without the prior written consent of the Sub-Landlord. This 

consent not to be unreasonably reasonably withheld.

Standard Sub-Lease

Agreement:

The Sub-Landlord, at its option and expense, shall prepare and 

present to the Sub-Tenant the Sub-Landlord's standard Sub-

Lease Agreement, complete with all of the terms contained in 

this OFFER, and with such amendments as are requested by the 

Sub-Tenant's solicitor and agreed to by the Landlord's solicitor, 

all parties acting reasonably. The Tenant shall forthwith execute 

and return to the Landlord the completed Lease Agreement 

within fourteen (14) days of when it is presented to the Tenant.

Real Estate Commission:

A real estate commission shall be payable to J.J.

Barnicke 

Edmonton Ltd. by the Sub-Landlord in the amount of five (5%) 

percent of the net rentals payable without deductions for free rent 

or other incentives over the term of the lease plus the applicable 

G.S.T. and shall be due and payable on the commencement date 

of the Lease Term.

Signage:

The Tenant shall have the right to place signage above the office 

area of the Sub-Leased Premises at their sole cost. The Sub-

Tenant shall provide the Landlord with their signage 

specifications and receive the Landlord's written approval prior 

to installation with such approval no to be unreasonably 

withheld.

Deposit:

Upon Commencement of Lease term the Tenant shall deliver a 

cheque for $15,329.97 (the "Deposit") payable to J.J. Barnicke 

Edmonton Ltd., to be deposited into a non-interest bearing Trust 

account upon receipt of this OFFER, and to be applied against 

the first and last months rentals accruing of the Sub-Lease term, 

including the applicable G.S.T. at 7%. These funds act as 

security for the due performance of the Sub-Tenant's obligations 

herein if this OFFER is accepted by the Landlord.

a) If this OFFER is not accepted within the time herein limited 

for Acceptance, the Deposit cheques will be returned to the 

Tenant.

b) If this OFFER is accepted by the Sub-Landlord and the

Sub-Tenant subsequently fails to perform according to the terms 

of this OFFER or fails to take possession of the demised 

premises through no fault of the Landlord then the entire Deposit 

shall be forfeited to J.J. Barnicke Edmonton Ltd. who will retain 

50% but not greater than the agreed commissions payable had 

the Sub-Lease been consummated and pay the balance of the 

forfeited proceeds to the Landlord; such forfeited Deposit shall 

not limit or preclude the Landlord's right of action for damages 

or breach of provisions herein.

Time shall be of essence in all matters relating to this OFFER.

Notification by facsimile transmission is acceptable.

DATED BY THE  SUB-TENANT at Edmonton, 2nd. Alberta as of March 2003.

Resin Systems Inc.

Per: /s/  Greg Pendura

DATED BY THE SUB-LANDLORD at Edmonton, Alberta as of this 12 day of March, 2003

Central Precision Limited:

Care of Delco Remy America Inc.

Per: /s/__________________________

OFFER TO LEASE

TO:

J.J. BARNICKE EDMONTON LTD.

SUITE 2300, 10123 - 99 STREET, 

EDMONTON, ALBERTA T5J 3H1

Alger Management and Investments Limited. (hereinafter called "the Landlord") of the Former Engine Rebuilders space (hereinafter called "the Building") described herein:

Resin Systems Inc. (hereinafter called "the Tenant"), having inspected the Building (and/or plans) located on a parcel of land legally described as Lot(s) 6, Block 3, Plan 4990HW, and municipally known as 14650 - 112 Avenue, Edmonton, Alberta hereby OFFERS TO LEASE the floor area on the main floor comprising 29,900 square feet, more or less, along with the additional second floor office area of approximately 3,000 square feet (hereinafter called the "Demised Premises"), on the following terms and conditions:

Primary Lease Term:

The Lease term ("Term") shall commence November 1, 2005 

and terminate the 31st day of October 2010.

Basic Rent:

The annual Basic Rent rate for the Lease term shall be:

Years 1+2

$3.25 per square foot

Years 3+4

$3.50 per square foot

Year 5

$3.75 per square foot

Upon full occupancy of all the Lease areas the Rent shall be 

payable in monthly installments due on or before the first day of 

each month of the Lease term.

Additional Rent:

The Tenant shall pay its proportionate share of all expenses 

incurred in operating the building based on the ratio of its 

Demised Premises to the total leaseable area of the Building. 

These expenses include but are not necessarily limited to the 

following:

a) Property taxes.

b) Building insurance.

c) Building maintenance and repair.

d) Building management and administration fees

Presently these costs (excluding Utilities) are estimated at $1.50 

per square foot per annum for 2003, exclusive of G.S.T.

Structural Repairs:

The Tenant shall not be responsible, proportionately or otherwise 

for any Structural repairs during the Lease term.

Parking and Loading:

The Tenant shall have the exclusive use of all parking stalls and 

loading area's to the east of the Leased area.

Use:

Manufacturing and assembly of Composite Power Poles

Tenant's Responsibility:

The Tenant shall be responsible for:

a) Business taxes and licenses and tenant liability insurance. 

b) Telephone equipment installation and/or rental.

c) Natural gas, electricity and water.

d) Janitorial services in demised premises.

e) All leasehold improvements in the demised premises other 

than those listed under Landlord's/Sub-Landlord's 

Responsibility. All plans for leaseholds to be submitted to the 

Landlord for approval (approval not to be unreasonably 

withheld) prior to construction commencement.

e) Payment of all sales tax, goods and services tax, or any like 

tax imposed on the Landlord by any governmental authority on 

any rent payable by the Tenant.

Tenant's Work:

The Tenant shall receive a leasehold improvement allowance of 

$50,000. In the event the full improvement allowance is not used 

to improve the lease space. The remaining amount shall be 

applied to the net rent.

First Right of Refusal:

The Tenant shall have first right of refusal on the remaining 

12,321 square feet located directly to the north of the Sub-Lease 

area and shall have first right of Refusal on the 12,298 square 

feet drive through area located to the west of the Sub-Lease area.

Assignment and Subletting.

The Tenant covenants that it will not assign or sublet the 

demised premises without the prior written consent of the 

Landlord. This consent not to be unreasonably withheld.

Standard Lease

Agreement:

The Landlord, at its option and expense, shall prepare and 

present to the Tenant the Landlord's standard Lease Agreement

complete with all of the terms contained in this OFFER, and with 

such amendments as are requested by the Tenant's solicitor and 

agreed to by the Landlord's solicitor, all parties acting 

reasonably. The Tenant shall forthwith execute and return to the

Landlord the completed Lease Agreement within fourteen (14) 

days of when it is presented to the Tenant.

Real Estate Commission:

A real estate commission shall be payable to J.J.

Barnicke 

Edmonton Ltd. by the Landlord in the amount of five (5%) 

percent of the net rentals payable without deductions for free rent 

or other incentives over the term of the lease plus the applicable 

G.S.T. and shall be due and payable on the commencement date 

of the Lease Term.

Signage:

The Tenant shall have the right to place signage above the office 

area of the Leased Premises at their sole cost. The Tenant shall 

provide the Landlord with their signage specifications and 

receive the Landlord's written approval prior to installation with 

such approval no to be unreasonably withheld.

Deposit:

Upon Commencement of Lease term the Tenant shall deliver a 

cheque for $18,622.58 (the "Deposit") payable to J.J. Barnicke 

Edmonton Ltd., to be deposited into a non-interest bearing Trust 

account upon receipt of this OFFER, and to be applied against 

the first and last months rentals accruing of the Lease term, 

including the applicable G.S.T. at 7%. These funds act as 

security for the due performance of the Tenant's obligations 

herein if this OFFER is accepted by the Landlord.

b) If this OFFER is accepted by the Landlord and the Tenant 

subsequently fails to perform according to the terms of this 

 to take possession of the demised premises through no fault of 

the Landlord then the entire Deposit shall be forfeited to J.J. 

Barnicke Edmonton Ltd. who will retain 50% but not greater 

than the agreed commissions payable had the Lease been 

consummated and pay the balance of the forfeited proceeds to 

the Landlord; such forfeited Deposit shall not limit or preclude 

the Landlord's right of action for damages or breach of 

provisions herein.

Time shall be of the essence in all matters relating to this OFFER 

Notification by facsimile transmission is acceptable.

DATED BY THE TENANT at Edmonton, Alberta as of this 7 day of January, 2003. 

Resin Systems Inc.

Per: /s/ Greg Pendura

DATED BY THE LANDLORD at Edmonton, Alberta as of this

_______day of January, 2003. -

Alger Management and Investments Limited.

Per: /s/ __________________________

January 6, 2003

Ellen Campbell

N.G. Campbell Holdings Ltd. 

Box 138

Bowen Island, BC 

VON I GO

Subject:

FIRST RIGHT OF REFUSAL

Dear Ellen:

This Letter is to inform you that Resin Systems Inc. hereby decline their first right of refusal on the adjacent space at this time. Should the space become available again for Lease during our tenancy at 14604 - 115A Avenue, we would like to continue our first right of refusal to lease the adjacent bay.

Sincerely,

OFFER TO LEASE

TO:

J.J. BARNICKE EDMONTON LTD. 

SUITE 2300,10123 - 99 STREET, 

EDMONTON, ALBERTA TSJ 3111

Central Precision Limited:

Care of Delco Remy America, Inc. (hereinafter called "the Sub-Landlord") of the Former Engine Rebuilders space (hereinafter called "the Building") described herein:

Resin Systems Inc. (hereinafter called "the Sub-Tenant"), having inspected the Building (and/or plans) located on a parcel of land legally described as Lot(s) 6, Block 3, Plan 4990HW, and municipally known as 14650 - 112 Avenue, Edmonton, Alberta hereby OFFERS TO SUB-LEASE the floor area on the main floor comprising 29,900 square feet, more or less, (hereinafter called the "Demised Premises"), on the following terms and conditions:

Primary Sub-Lease Term:

The Sub-Lease term ("Term") shall commence April 1, 2002 and 

terminate the 31d day of October 2005.

Basic Rent:

The annual Basic Rent rate for the Sub-Lease term shall be:

April 1, 2003 - May 31, 2004

$2.75 per square foot

April 1, 2004 - October 31, 2005

$3.00 per square foot

Upon full occupancy of all the Sub-Lease areas the Rent shall be 

payable in monthly installments due on or before the first day of 

each month of the Sub-Lease term.

Fixturing Period:

The Tenant shall receive occupancy of the Sub-Lease space to 

complete the improvements as indicated under "Sub-Tenant's 

Work" upon acceptance of this Offer to Sub-Lease.

Additional Rent:

The Tenant shall pay its proportionate share of all expenses 

incurred in operating the building based on the ratio of its 

Demised Premises to the total leaseable area of the Building. 

These expenses include but are not necessarily limited to the 

following:

a) Property taxes.

b) Building insurance.

c) Building maintenance and repair.

d) Building management and administration fees

Presently these costs (excluding Utilities) are estimated at $1.50 

per square foot per annum for 2003, exclusive of G.S.T.

Structural Repairs:

The Tenant shall not be responsible, proportionately or otherwise 

for any Structural repairs during the Sub-Lease term.

Sub-Lease Termination:

The Sub-Tenant shall have the right to terminate this Sub-Lease 

agreement at anytime during the Sub-Lease term with a six (6) 

month notice.

Parking and Loading:

The Tenant shall have the exclusive use of all parking stalls and 

loading area's to the east of the Sub-Leased area.

Use:

Manufacturing and assembly of Composite Power poles

Tenant's Responsibility:

The Tenant shall be responsible for:

a) Business taxes and licenses and tenant liability insurance. b) 

b) Telephone equipment installation and/or rental.

c) Natural gas, electricity and water.

d) Janitorial services in demised premises.

e) All leasehold improvements in the demised premises other 

than those listed under Landlord's/Sub-Landlord's 

Responsibility. All plans for leaseholds to be submitted to the 

Sub-Landlord for approval (approval not to be unreasonably 

withheld) prior to construction commencement.

e) Payment of all sales tax, goods and services tax, or any like 

tax imposed on the Landlord by any governmental authority on 

any rent payable by the Tenant.

Sub-Tenant's Work:

The following work is to be completed as per schedule "A" at the 

sole cost of the Sub-Tenant:

a) Remove existing walls and rooms within warehouse, 

including but not limited to demising walls and partial walls as 

indicated on Schedule "A".

b) Convert Grade loading area at the south of building back to 

Dock.

Sub-Landlord /

Landlord's Work:

The following work is to be completed by the Sub-Landlord / 

Landlord:

a) Power to the Sub-Lease area shall be no less than 600 amps/ 

208 Volts 3 phase and shall be separately metered.

First Right of Refusal:

The Tenant shall have first right of refusal on the remaining 

12,321 square feet located directly to the north of the Sub-Lease 

area and shall have first right of Refusal on the 12,298 square 

feet drive through area located to the west of the Sub-Lease area.

Assignment and Subletting:

The Tenant covenants that it will not assign or sublet the 

demised premises without the prior written consent of the Sub-

Landlord. This consent not to be unreasonably withheld.

Standard Sub-Lease

Agreement:

The Sub-Landlord, at its option and expense, shall prepare and 

present to the Sub-Tenant the Sub-Landlord's standard Sub-

Lease Agreement, complete with all of the terms contained in 

this OFFER, and with such amendments as are requested by the 

Sub-Tenant's solicitor and agreed to by the Landlord's solicitor, 

all parties acting reasonably. The Tenant shall forthwith execute 

and return to the Landlord the completed Sub-Lease Agreement 

within fourteen (14) days of when it is presented to the Tenant.

Real Estate Commission:

A real estate commission shall be payable to J.J. Barnicke 

Edmonton Ltd. by the Sub-landlord in the amount of five (5%) 

percent of the net rentals payable without deductions for free rent 

or other incentives over the term of the lease plus the applicable 

G.S.T. and shall be due and payable on the commencement date 

of the Sub­Lease Term.

Signage:

The Sub-Tenant shall have the right to place signage above the 

office area of the Sub-Leased Premises at their sole cost. The 

Sub­Tenant shall provide the Landlord with their signage 

specifications and receive the Landlord's written approval prior 

to installation with such approval no to be unreasonably 

withheld.

Deposit:

Upon acceptance of this offer the Tenant shall deliver a cheque 

for $15,329.97 (the "Deposit") payable to J.J. Barnicke 

Edmonton Ltd., to be deposited into a non-interest bearing Trust 

account upon receipt of this OFFER, and to be applied against 

the first and last months rentals accruing of the Sub-Lease term, 

including the applicable G.S.T. at 7%. These funds act as 

security for the due performance of the Sub-Tenant's obligations 

herein if this OFFER is accepted by the Landlord.

a) If this OFFER is not accepted within the time herein limited 

for Acceptance, the Deposit cheque will be returned to the 

Tenant.

b) If this OFFER is accepted by the Sub-Landlord and the Sub­

Tenant subsequently fails to perform according to the terms of 

this OFFER or fails to take possession of the demised premises 

through no fault of the Landlord then the entire Deposit shall be 

forfeited to J.J. Barnicke Edmonton Ltd. who will retain 50% but 

not greater than the agreed commissions payable had the Sub-

Lease been consummated and pay the balance of the forfeited 

proceeds to the Landlord; such forfeited Deposit shall not limit 

or preclude the Landlord's right of action for damages or breach 

of provisions herein.

Time shall be of the essence in all matters relating to this OFFER. 

Notification by facsimile transmission is acceptable.

DATED BY THE SUB-TENANT at Edmonton, Alberta as of this 7 day of January, 2003.

Resin Systems Inc.

Per:

DATED BY THE SUB-LANDLORD at Edmonton, Alberta as of this ______ day of January, 2003.

Central Precision Limited:

Care of Delco Remy America, Inc.

Per: /s/ _____________________

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