Document:

exhibit_10-2.htm

    
      

    
EXHIBIT
10.2

     

    Vertigro
Algae Technologies LLC

    
 

    VERTIGRO ALGAE TECHNOLOGIES
LLC

    TECHNOLOGY LICENSE
AGREEMENT

    

     

    TABLE OF
CONTENTS

     

     

     

    
    

     

    
      	 ARTICLE
      I 	 DEFINITIONS	
               2

            
	 	 	 
	 ARTICLE
      II 	 GRANT OF
      LICENSES	
               6

            
	 	 	 
	 ARTICLE
      III 	 CONSIDERATION
      - PAYMENT - REPORTING -RECORDS	
               6

            
	 	 	 
	 ARTICLE
      IV 	 IMPROVEMENTS	
               10

            
	 	 	 
	 ARTICLE
      V  	 PATENT
      APPLICATIONS AND PATENTS	
               11

            
	 	 	 
	 ARTICLE
      VI 	 CONFIDENTIALITY	
               12

            
	 	 	 
	 ARTICLE
      VII  	 INFRINGEMENT
      BY OTHERS; PROTECTION OFPATENTS	
               13

            
	 	 	 
	 ARICLE
      VIII 	 TERM AND
      TERMINATION	
               14

            
	 	 	 
	 ARTICLE
      IX 	 ASSIGNMENT AND
      SALE	
               16

            
	 	 	 
	 ARTICLE
      X	 REPRESENTATION
      AND WARRANTIES	
               17

            
	 	 	 
	 ARTICLE
      XI  	 PRODUCT
      QUALITY AND PRODUCT LIABILITY	
               18

            
	 	 	 
	 ARTICLE
      XII 	 MEDIATION AND
      ARBITRATION	
               19

            
	 	 	 
	 ARTICLE
      XIII  	 GENERAL	
               20

            
	 	 	 

    

     

    
    

    

      
        
           

        

        
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Algae Technologies LLC

        

      

    

    

    TECHNOLOGY LICENSE
AGREEMENT

    

    This
TECHNOLOGY LICENSE AGREEMENT (hereinafter referred to as the "License
Agreement"), by and among PAGIC LP, (“PG”), a company incorporated in the State
of Texas, United States and having an office at 1057 Doniphan Park Circle, Suite
H, El Paso Texas and WEST PEAK VENTURES of CANADA LTD. (“WPV”), a company
incorporated Federally in Canada and having its registered office at 789 West
Pender Street, Vancouver, BC, Canada, (collectively hereinafter referred to as
the "Licensor") and VERTIGRO ALGAE TECHNOLOGIES, LLC., a company incorporated in
the State of Texas, United States and having a place of business at 401 West
Vinton Road, Anthony, Texas 79821 (hereinafter referred to as the
“Licensee”).

    

    

    RECITALS

    

    WHEREAS,
Licensor is the exclusive licensee of certain Algae Biomass Technology and
Intellectual Property, owned by Malcolm Glen Kertz and developed by
Licensor.

    

    WHEREAS,
Licensee desires to license the Algae Biomass Technology and Intellectual
Property to commercialize and exploit the Algae Biomass Technology for all
industrial, commercial, and retail applications, including but not limited to,
bio-fuel, food and health, pharmaceutical and agricultural applications and
Licensee desires to be the exclusive world-wide licensed business developer,
marketer, manufacturer, seller  and operator of the Licensed Products
produced by the Algae Biomass Technology throughout the Territory, all as set
forth in this License Agreement; and;

    

    WHEREAS,
Licensor desires to grant to the Licensee such rights and licenses, all as set
forth in this License Agreement;

    

    NOW,
THEREFORE, in consideration of the promises, mutual covenants and obligations
hereinafter set forth and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

    

    

    ARTICLE
I

    

    DEFINITIONS

    

    Each of
the following terms shall, whenever found in this License Agreement, be used and
understood in accordance with the definition below:

    
      
         

      

      
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Algae Technologies LLC

      

    

    1.1           “Algae
Biomass Technology” shall mean any technologies for the commercial production of
a high yield algae based biomass for industrial, commercial and retail
applications, as more fully described on Exhibit “A”, including but not limited
to, bio-fuel, food, health, pharmaceutical, and agricultural
feedstock.

    

    1.2           "Territory"
shall mean the entire world and each and every country, sovereign nation, and
all jurisdictions therein, with the exception of the State of Nevada,
USA.

    

    1.3           "Licensed
Product" shall mean any goods and/or services sold, transferred, exchanged, or
otherwise disposed by Licensee or Sublicensees, whether by gift or otherwise,
that embody, employ, include or incorporate the Intellectual Property or Elected
Improvements of the Algae Biomass Technology or are produced by apparatus or
methods that embody, employ, include or incorporate the Intellectual Property or
Elected Improvements of the Algae Biomass Technology.  Licensed
Products shall not include goods and/or services sold, transferred, exchanged,
or otherwise disposed by Licensee to a Sublicensee that are not produced by
Licensee using an apparatus or methods that embody, employ, include or
incorporate the Intellectual Property or Elected Improvements of the Algae
Biomass Technology.  The Licensed Product may also be referred to in
the plural and termed Licensed Products.

    

    1.4           "Patent
Rights" shall mean and include patents and patent applications, including the
existing patents and patent applications and the patent applications to be filed
set forth on Exhibit "B", attached hereto and made a part hereof, relating to
the Algae Biomass Technology and/or any divisional application, continuation
application, continued prosecution application, continuation-in-part
application, substitute application, renewal application, reissue application,
reexamination, extension, cautionary notices and any other patent application
that have been or shall be filed in the United States and all foreign countries
on the Algae Biomass Technology and any patent application, filed anywhere, that
claims the benefit of a filing date of any of the Algae Biomass Technology
patents and applications.  The term Patent Rights shall further
include any United States and foreign patents and patent applications covering
the Elected Improvements.

    

    1.5           "Know-How"
shall mean all of the technical know-how, trade secrets, technical information,
and knowledge, directly or indirectly, relating to the Algae Biomass Technology
and/or the manufacture and use of the Licensed Products, including, without
limitation, production processes, production equipment, configurations,
formulas, engineering, materials, scientific and practical information and the
disclosure in the Patent Rights, whether patentable or unpatentable, and all
physical manifestations or embodiments of the Licensed Products including
without limitation all data specifications, prototypes, drawings, schematics,
notes, records and other writings; all such Know-How to be used or practiced or
capable of being used or practiced in the manufacture and use of the Licensed
Product.

    
      
         

      

      
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Algae Technologies LLC

      

    

     

    1.6           "Improvements"
shall mean and include any improvements or new technology relating to the Algae
Biomass Technology and any improvements and modifications to the Licensed
Products, including, without limitation, the materials and configuration of the
Licensed Products; and any machinery or equipment for the manufacture or use of
the Licensed Products, together with any improvements and modifications thereof,
developed by Licensor during the term of this License Agreement.

    

    1.7           "Elected
Improvements" shall mean those Improvements elected by Licensee pursuant to
Paragraph 4.3 hereof.

    

    1.8           "Net
Sales" of the Licensed Products for any given period shall mean the gross amount
from the sale,
transfer, exchange, or other disposition, whether by gift or otherwise, by
Licensee or Licensee’s Sublicensees during the said period in consideration for
the Licensed Products, adjusted for exchanges and returns of the Licensed
Products sold, transferred, exchanged, or otherwise disposed or delivered during
a previous period and excluding monies received by Licensee from Sublicensees
for project and operating licenses, including but not limited to hardware and
software, and  for project and operating services charged by Licensee
to Sublicensees.  Net Sales of Licensed Products transferred,
exchanged, or otherwise disposed, whether by gift or otherwise, shall be the
market value of such Licensed Products.  Net Sales shall not include
any charges for freight, packing, or insurance if such charges are identified
and billed separately and in addition to the list price for the Licensed
Products; nor shall Net Sales include charges for tax or duty on sales or
delivery of the Licensed Products.

    

    1.9           "License
Year" shall mean each successive twelve months commencing on April 1 in which
the License Agreement is effective.

    

    1.10          "Effective
Date" shall mean March 4, 2008, which is the day on which this License Agreement
shall begin effect.

    

    1.11          “Affiliate”
shall mean, with respect to any company, sole proprietorship, partnership, joint
venture, corporation or other legal entity (“Entity”), (i) any company, sole
proprietorship, partnership, joint venture, corporation or other legal entity
directly or indirectly controlling, controlled by, or under common control with
such Entity, (ii) any officer, director, manager, or general partner of such
Entity, or (iii) any person, company, sole proprietorship, partnership, joint
venture, corporation or other legal entity who is an officer, director, manager,
general partner, or trustee of any Entity described in clauses (i) and (ii) of
this sentence.  For purposes of this definition, the term “controls,”
“is controlled by,” or “is under common control with” shall mean the possession,
direct or indirect, of the power to direct or cause the direction of the
management and policies of an Entity, whether through the ownership of voting
securities, by contract or otherwise.

    
      
         

      

      
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Algae Technologies LLC

      

    

     

    

    1.12          “Trademark
Rights” shall mean and include the trademarks set forth on Exhibit
“C”.

    

    1.13           “Intellectual
Property” shall mean and include all proprietary or other rights throughout the
world provided under (i) patent law, including patents and patent applications
therefore pending before any relevant authority worldwide, including, without
limitation, the Patent Rights, (ii) know-how and trade secret law, including,
without limitation, the Know-How, (iii) trademark law, including, without
limitation, the Trademark Rights, (iv) copyright law, (v) design patent or
industrial design law, and (vi) any equivalent right granted under the laws of
any jurisdiction in the world which provides protective or other intellectual
property rights and relating to the Algae Biomass
Technology and Elected Improvements.

    

    1.14          “Adjustment
Royalties” shall mean and include the 2009 Adjustment Royalty of Paragraph 3.7,
the 2010 Adjustment Royalty of Paragraph 3.8, and the Adjusted Royalty of
Paragraph 3.9.

    

    1.15          “Sublicensee”
shall mean any entity granted a sublicense by Licensee pursuant to Paragraph 2.2
under this License Agreement.

    

    1.16          “Royalties”
shall mean and include Advance Royalties, Running Royalties and Adjustment
Royalties.

    

    1.17          “Gross
Receipts” for any given period shall mean all revenues received by the Licensee
during the said period, adjusted for exchanges and returns of goods sold,
transferred, exchanged, or otherwise disposed or delivered during a previous
period.  Gross Receipts of goods and services transferred, exchanged,
or otherwise disposed, whether by gift or otherwise, shall be the market value
of such goods and services.  Gross Receipts shall not include any
Running Royalties paid to Licensee by Sublicensees; any charges for freight,
packing, or insurance if such charges are identified and billed separately and
in addition to the list price for the goods; or any charges for tax or duty on
sales or delivery of the goods and services.

    

    1.18          “Advance
Royalty” shall mean four and one-half percent (4.5%) of the Gross Receipts of
Licensee for a given period from an individual Sublicensee or an individual
entity other than a Sublicensee.

    

    1.19          “Cumulative
Advance Royalty” shall mean Advance Royalties paid by Licensee for prior periods
for Gross Receipts from an individual  Sublicensee or an individual
entity other than a Sublicensee less the amount of Running Royalties credited
toward said Advanced Royalties for said individual Sublicensee or individual
entity other than a Sublicensee during previous periods pursuant to Paragraph
3.4.

    
      
         

      

      
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Algae Technologies LLC

      

    

    ARTICLE
II

    

    GRANT OF
LICENSES

    

    2.1           Licensor
grants to Licensee the exclusive right and license throughout the Territory to
use and employ the Intellectual Property to manufacture, use, operate, offer to
sell, and sell, directly or through sublicensees,  the Licensed
Products for the term hereof and subject to the provisions of this License
Agreement.

    

    2.2           The
rights and licenses granted pursuant to Paragraph 2.1 above shall specifically
include the right of Licensee to grant sublicenses throughout the Territory. Any
sublicense granted by Licensee shall be consistent with the terms of this
License Agreement and shall grant to Licensor rights parallel to those contained
herein including, but not limited to, the right to receive Royalties from
Licensee and Sublicensees in accordance with Article III and Paragraph 8.8
hereof. Any sublicense granted pursuant to this Paragraph 2.2 that varies the
terms of this License Agreement shall require the prior written approval of
Licensor. Licensee shall provide Licensor with copies of all documents or
contracts regarding any sublicense hereunder.

    

    2.3           Within
ten (10) days after execution of this License Agreement, Licensor shall supply
to Licensee, at a mutually agreeable location, without expense to Licensee, all
Know-How, including materials and written information related to the Licensed
Technology not previously delivered.

    

    

    ARTICLE
III

    

    CONSIDERATION
- PAYMENT - REPORTING - RECORDS

    

    3.1           In
consideration of the rights and licenses granted herein, Licensee agrees to pay,
upon the execution of this License Agreement, a one-time, non-refundable license
fee and to have Valcent Products, Inc. and Global Green Solutions Inc., as
equity holders of Licensee, each issue to PG Three Hundred Thousand shares of
their stock in full payment of the one-time, non-refundable license fee
("License Fee").

    

    3.2           In
further consideration of the rights and licenses granted herein, Licensee agrees
to pay a one-time, non-refundable commercialization fee ("Commercialization
Fee") to PG in the amount of Fifty Thousand Dollars ($50,000) upon the Algae
Biomass Technology reaching commercial viability as determined by the Board of
the Licensee and Licensee agrees to pay the Licensor the Royalties set forth
below in this Article III.

    
      
         

      

      
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Algae Technologies LLC

      

    

    3.3           Licensee
agrees to pay an Advance Royalty to Licensor for the term of this License
Agreement in the amount of Four and One Half Percent (4.5%) of the Gross
Receipts from each of the Licensee’s individual Sublicensees or individual
entities other than a Sublicensee.  Advance Royalties shall be
cumulative and without recourse to Licensor except for the Licensor’s agreement
pursuant to Paragraph 3.4 to credit Seventy Percent (70%) of the Running
Royalties due and payable from an individual Sublicensee or an individual entity
other than a Sublicensee to offset and reduce any Advance Royalty for a given
period and any Cu mulative Advance Royalties for prior periods based upon the
Gross Receipts from each of Licensee’s individual Sublicensees or individual
entities other than a Sublicensee.

    

    3.4           Licensee
agrees to pay a Running Royalty to Licensor for the term of this License
Agreement in the amount of Four and One Half Percent (4.5%) of the Net Sales of
the Licensed Product(s) as defined (hereafter "Running Royalty"); provided
however that Seventy Percent (70%) of the Running Royalty to be paid on the Net
Sales of a Sublicensee or entity other than a Sublicensee for a given period
shall be credited against any Advance Royalty and Cumulative Advance Royalty
paid to Licensor based upon Grosse Receipts from such Sublicensee or entity
other than a Sublicensee and not previously credited, thereby reducing the
Running Royalty to be paid to Licensor for said given period.  In no
case will the Cumulative Advance Royalty be less than zero.

    

    3.5           In
the event the amount of the Advance Royalty and Running Royalty causes a project
opportunity with the Licensee or a Sublicensee to be un-economic or
non-competitive or non-commercial, then Licensor agrees to negotiate with
Licensee in good faith, other reasonable terms in an attempt to cause the
project opportunity to be economic or competitive or commercial; provided,
however, that Licensor shall make the final determination of the amount of the
Advance Royalty and Running Royalty and any adjustment in the amount of the
Advance Royalty and Running Royalty set forth in Paragraph 3.4 for such
Sublicensee shall not adversely affect the amount of the Advance Royalty and
Running Royalty paid by other Sublicensees.

    

    3.6           The
amount of the Royalties payable according to Paragraph 3.3 has been negotiated
to include payment of the license for the Intellectual Property without regard
to the patentability of the Patent Rights.

    

    3.7           In
the event that the total Advance Royalty and Running Royalty paid by Licensee to
Licensor according to Paragraphs 3.3 and 3.4 in the Initial License Year ended
March 31, 2009 for the Licensed Product(s), does not exceed Fifty Thousand
Dollars ($50,000) for such Initial License Year for the Licensed Product(s),
then Licensee shall pay to Licensor a minimum royalty amount  equal to
Fifty Thousand Dollars ($50,000) less the total Running Royalty actually paid
for the Licensed Product(s) during such License Year (the “2009 Adjustment
Royalty”).

    
      
         

      

      
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    3.8           In
the event that the total Advance Royalty and Running Royalty paid by Licensee to
the Licensor according to Paragraphs 3.3 and 3.4 in the License Year ended March
31, 2010 for the Licensed Product(s), does not exceed an amount of One Hundred
Thousand Dollars ($100,000) for such License Year for the Licensed Product(s),
then Licensee shall pay to the Licensor a minimum royalty amount equal to One
Hundred Thousand Dollars ($100,000) less the total Running Royalty actually paid
for the Licensed Product during such License Year (the “2010 Adjustment
Royalty”).

    

    3.9           Beginning
in the License Year Ending March 31, 2011 and each License Year thereafter, in
the event that the total Advance Royalty and Running Royalty paid by Licensee to
the Licensor according to Paragraphs 3.3 and 3.4 in a License Year for the
Licensed Product(s) does not exceed a minimum royalty in the amount Two Hundred
and Fifty Thousand Dollars ($250,000) (the “Minimum Royalty”) for such License
Year for the Licensed Product(s), then Licensee shall pay to the Licensor an
Adjusted Royalty amount  equal to the Minimum Royalty for such License
Year for the Licensed Product(s) less the total Running Royalty actually paid
for the Licensed Product(s) during such License Year (hereafter “Adjusted
Royalty”).

    

    3.10          Notwithstanding
anything to the contrary contained in this License Agreement and particularly
Article IX, Licensee shall pay thirty three and thirty three one hundredths
percent (33.33%) of all Royalties to WPV or its assigns pursuant to a Royalty
Agreement executed concurrently herewith between PG and WPV and shall pay the
remaining sixty six and sixty seven one hundredths percent (66.67%) of all
Royalties to PG or its assigns. Rights to Royalties shall be governed by and be
subject to this License Agreement.

    

    3.11          In
the event that Licensee fails to pay any Royalties when due, Licensor shall give
Licensee written notice of such failure and request confirmation of Licensee's
intent not to pay such Royalties. If Licensee responds that such failure was not
intentional, then Licensee shall have 30 days after receiving said notice to pay
such Royalties.

    

    3.12          In
the event Licensee intentionally fails to pay the Royalties within the agreed
payment terms period as defined in Paragraph 3.13(d), then Licensor shall have
the right to terminate this License Agreement pursuant to the terms and
conditions as stated in Article VIII. In the event of a dispute between the
parties as to the Royalties, the parties agree to submit the matter to binding
mediation and arbitration pursuant to Article XII. If the matter is submitted to
binding mediation and arbitration pursuant to Article XII, then this License
Agreement shall not be terminated while the arbitration is pending and the
arbitrator's decision has not yet been rendered.

    
      
         

      

      
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    3.13          For
the purposes of computing and paying the Royalties pursuant to this
Article:

    

    (a)           The
Licensed Products(s) shall be deemed sold and Licensor’s Running Royalty thereon
earned upon Net Sales being invoiced by Licensee or Sublicensee for the Licensed
Product(s) or on the date that Licensed Products were transferred, exchanged, or
otherwise disposed by Licensee or Sublicensees, whether by gift or otherwise,
and the Running Royalty shall be due as set out in Paragraphs (c) and (d)
below.

    

    (b)           Payment
of the Royalties shall be in U.S. Dollars by certified check or wire transfer to
bank accounts of WPV and PG as specified by the Licensor. For purposes of
computations of such Royalties, the amount of Royalties due shall be converted
to U.S. Dollars, when necessary, as of the average over the three (3) month
period when the Licensed Product(s) was deemed sold.

    

    (c)           Payment
of the Running Royalty shall be due and paid to the Licensor within sixty (60)
days of the close of each three (3) month period during each Initial License
Year and License Year of the term of this License Agreement.

    

    (d)           Payment
of the Adjustment Royalty shall be due and paid to WPV and PG within sixty (60)
days of the close of each License Year.

    

    (e)           The
Royalties due hereunder shall be calculated using U.S. Generally Accepted
Accounting Principles.

     

    3.14          Together
with each three (3) month period payment, Licensee shall render to the Licensor
a written report stating, for the preceding three-month period covered by such
payment, the volume and Net Sales of Licensed Product(s) sold, transferred,
exchanged, or otherwise disposed, whether by gift or otherwise, by the Licensee
and each Sublicensee, the Royalties received from the Net Sales of the Licensed
Product(s), the Running Royalty and any Adjustment Royalty due to Licensor, and
the Running Royalty paid by Licensee for said three (3) month
period.

    

    3.15          Licensee
and each Sublicense agree to keep records of the Net Sales of Licensed
Product(s) in sufficient detail to enable the Running Royalty payable by it to
Licensor to be determined and further agrees to permit its books and records
pertinent to the Net Sales of Licensed Product(s) to be examined from time to
time by Licensor, but not more often than twice a year, during normal business
hours by providing at least five business days written notice, to the extent
necessary to verify the amount of Royalties payable hereunder.

     

    
      
         

      

      
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    3.16          Pursuant
to Paragraph 3.15, Licensor shall have the right to appoint an independent
certified public accountant ("CPA") at its own expense to determine that the
correct amount of Royalties has been paid by Licensee or a Sublicense. If the
Licensor determines there are discrepancies requiring adjustment in the amount
of Royalties paid by a Sublicensee for the Net Sales of the Sublicensee, then
the Sublicensee shall pay the amount of any underpayment of Royalties within 30
days unless the Licensor, Licensee, and Sublicensee cannot reach agreement
whereby the Licensor, Licensee, and Sublicensee shall subject themselves to
binding mediation and arbitration pursuant to Article XII forthwith. Licensor
shall have the right to terminate the sublicense of the Sublicensee in the event
the Sublicensee fails to pay the amount of the underpayment. If the Licensor
determines there are discrepancies requiring adjustment in the amount of
Royalties paid by the Licensee for the Net Sales of the Licensee or in the
Royalties collected by the Licensee from a Sublicensee, then the Licensee shall
pay the amount of any underpayment of Royalties within 30 days unless the
Licensor and Licensee cannot reach agreement whereby the Licensor and Licensee
shall subject themselves to binding mediation and arbitration pursuant to
Article XII forthwith. Licensor shall have the right to terminate this License
Agreement in the event the Licensee fails to pay the amount of the
underpayment.  Any overpayment of Royalties by the Licensee or a
Sublicensee shall be deducted from the next reporting period Royalty payments
without recourse to the Licensor.

    

    3.17          If
the results of the examination pursuant to Paragraphs 3.15 and 3.16 determine
that the Royalties were underpaid by an amount greater than or equal to 5% of
the actual Royalties calculated over the last four quarters covering Licensee's
fiscal year resulting from matters within Licensee’s control, then Licensee
agrees to pay the cost of the examination plus a penalty equal to 10% of the
amount of the underpayment in Royalties, the amount of the underpayment and the
reimbursement of the costs of examination to be paid within thirty days of
written notice of the underpayment. Further Licensor shall have the right to
examine the calculation of Running Royalties over the succeeding two quarters at
Licensor cost.

    

    

    ARTICLE
IV

    

    IMPROVEMENTS

    

    4.1           Licensor
and Licensee agree that they shall keep each other mutually informed of any
Improvements to any Algae Biomass Technology for producing Licensed Products of
which they become aware during the term hereof, whether they become aware of
such Improvements through their own efforts or efforts of Sublicensees
(“Improvements”).  Licensor and Licensee shall inform one another of
the nature and substance thereof within thirty (30) days following awareness of
such Improvements.

    
      
         

      

      
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    4.2           The
parties hereto agree that Malcolm Glen Kertz shall hold the entire right, title,
and interest in and to any Improvements and all Intellectual Property relating
thereto.

    

    4.3           Licensee
shall have the right, for a period of ninety (90) days following a written
communication to Licensee by Licensor describing the Improvements that have been
reduced to practice, to elect to include such Improvements within the terms of
this License Agreement whereby such Improvements shall become Elected
Improvements.  If Licensee fails or refuses to so elect, Licensee
hereby releases any rights to such Improvements to Licensor and Licensor shall
be free to commercialize such Improvements without accounting to
Licensee.  Should Licensee elect such Improvements and subsequently
commercialize such Improvements, Licensee agrees to pay Royalties on such
Improvements in accordance with Article III.

    

    4.4           Licensor
and Licensee agree to execute any documents or papers deemed necessary to
effectuate the intent of this Article IV and further to execute such documents
or papers as may be necessary for the prosecution of any patents or applications
for patents covering the elected Improvements.

    

    

    ARTICLE
V

    

    PATENT
APPLICATIONS AND PATENTS

    

    5.1           The
parties hereto agree that Malcolm Glen Kertz shall hold the entire right, tide,
and interest in and to the Algae Biomass Technology, including Improvements, to
the Algae Biomass Technology and Intellectual Property, and Licensee agrees to
perform all acts and to execute, acknowledge and deliver all instruments or
writings reasonably requested and necessary for Malcolm Glen Kertz to perfect
title to the Algae Biomass Technology and Intellectual Property.

    

    5.2           Licensor
and Licensee agree that they will procure Patent Rights on the Algae Biomass
Technology and Improvements. Licensor shall have the sole right to prosecute,
control, and pursue such Patent Rights under the patent laws of the United
States and foreign countries. Licensor agrees to prosecute, with good faith and
due diligence, all pending and future patent applications. All fees, costs and
expenses shall be borne by Licensee and the failure of Licensee to pay such
fees, costs and expenses shall constitute a substantial breach of this License
Agreement. Licensee agrees to cooperate with Licensor to whatever extent is
necessary to procure such patent protection.

    

    5.3           In
the event Licensor decides to abandon any pending United States or foreign
patent application or to not pay any annuity or maintenance fee required by any
country, Licensor shall give Licensee thirty (30) days prior written notice of
such decision and shall allow Licensee to become the owner of such United States
or foreign patent or application and to pay such fee. Licensee's decision shall
have no effect on the Royalties.

    
      
         

      

      
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    5.4           Licensor
agrees to keep Licensee fully informed, at Licensee’s expense, of the
prosecution of all U.S. and foreign patent applications including submitting to
the Licensee copies of all official actions and responses thereto.

    

    5.5           Licensee
shall have the right to conduct an audit of the Licensors Patent Rights to
ensure that the Patent Rights are in good standing and that Licensor has
maintained them in good standing during the term of this License Agreement. In
the event that Licensee determines that the Patent Rights are not in good
standing, then Licensee shall have the right to place such Patent Rights in good
standing and if necessary, to seek relief through binding mediation and
arbitration pursuant to Article XII if the failure to maintain the Patent Rights
in good standing may cause or has caused the Licensee damages.

    

    5.6           Licensee
agrees to comply with any marking requirements of Licensor to insure compliance
with 35 U.S.C. §287, and agrees to insure compliance by the sublicensees, if
any.

    

    

    ARTICLE
VI

    

    CONFIDENTIALITY

    

    6.1           Licensee
agrees to protect and safeguard the Algae Biomass Technology, Intellectual
Property, and Improvements ("Confidential Information") against unauthorized
publication or disclosure by the same procedures utilized by Licensee in regard
to its own confidential information, and agrees not to use any of the
Confidential Information except for such purposes and licenses as are authorized
and granted by this License Agreement. Licensee further agrees that the
Confidential Information will be disclosed only to such of Licensee's employees,
sublicensees, agents, or contractors as have need for such Confidential
Information in furtherance of the purposes for which Licensee is authorized to
use it. Licensee will cooperate with Licensor in the enforcement of any secrecy
agreement executed by such persons and will insure that all sublicensees,
employees, and others to whom Licensee discloses Confidential Information
executes such a secrecy agreement.  Failure of Licensee to enforce
such a secrecy agreement shall constitute a substantial breach of this License
Agreement.

    

    6.2           Subject
to the rights of the Licensor and Licensee pursuant to the licenses granted in
Article II, the parties agree to receive and hold in confidence the Confidential
Information . The provisions of this paragraph shall not be applicable with
respect to any portion of the Confidential Information which:

    
      
         

      

      
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    a) is, or shall have been in the
possession of disclosee prior to the first disclosure by discloser thereof to
disclosee;

    

    b) is, or
through no fault of the disclosee, becomes published or otherwise available to
others or the public under circumstances such that such others or the public may
utilize the Confidential Information without any direct or indirect obligation
to Licensor or Licensee;

    

    c) is, or
at any time may be, acquired by the disclosee from any third party rightfully
possessed of the Confidential Information having no direct or indirect
obligation to the discloser with respect to such Confidential Information;
or

    

    d) is,
necessarily disclosed through the sale of the Licensed Products pursuant to this
License Agreement.

    

    

    ARTICLE
VII

    

    INFRINGEMENT
BY OTHERS; PROTECTION OF PATENTS

    

    7.1           Licensor
and Licensee shall each promptly inform the other of any suspected infringement
of any Intellectual Property by a third party, and Licensor and Licensee each
shall have the right to institute an action for infringement of the Patent
Rights against such third party in accordance with the following
procedure:

    

    a)           Licensee
shall have the right to institute suit in its name. Licensee shall bear the
entire cost thereof, including attorneys' fees, and shall be entitled to retain
the entire amount of the recoveries, if any, whether by judgment, award, decree
or settlement, subject to Licensor's right of approval of any provisions
relating to the validity and/or infringement of the Patent Rights and provided,
however, that Licensor shall be paid any Running Royalties for Net Sales
recovered by Licensee in such action. Licensee shall exercise control over such
actions; provided, however, that Licensor may, if it so desires, be represented
by counsel of its own selection, the fees for which counsel shall be borne by
Licensee.

    

    b)           If
Licensee determines not to institute a suit and in the event that Licensor and
Licensee agree to institute suit jointly, the suit shall be brought in both
their names, the cost thereof, including attorneys' fees, shall be borne by
mutual agreement and in the event the parties cannot reach mutual agreement,
then the cost thereof shall be borne equally. The recoveries, if any, whether by
judgment, award, decree or settlement, shall be shared in proportion to the
costs borne by each party. Licensor’s share of the costs of such suit shall be
deducted, at Licensor’s option, from Royalties payable to Licensor pursuant to
Article III.  Licensee shall exercise control over such actions; provided,
however, that Licensor may, if it so desires, be represented by counsel of its
own selection, the fees for which counsel shall be borne by
Licensee.

    
      
         

      

      
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    (c)           In
the absence of agreement to institute a suit jointly and if Licensee determines
not to institute a suit, Licensor may institute suit. Licensor shall bear the
cost of such litigation, including attorneys' fees, and shall be entitled to all
recoveries, if any, whether by way of judgment, award, decree or settlement;
provided, however, in the event Licensor does not recover Licensor’s costs of
such litigation from all recoveries of the suit, Licensee agrees to pay Licensor
the difference between Licensor’s costs of such litigation and the costs of such
litigation recovered by way of judgment, award, decree or settlement in the
suit.

    

    7.2           Should
either party commence a suit under the provisions of Paragraph 7.1 and
thereafter elect to abandon the same, it shall give timely notice to the other
party who may, if it so desires, continue prosecution of such suit; provided,
however, that the sharing of expenses and recovery in such suit shall be agreed
upon between the parties.

    

    

    ARTICLE
VIII

    

    TERM AND
TERMINATION

    

    8.1           This
License Agreement shall continue in full force and effect, unless terminated as
provided in this Article VIII. If the matter is submitted to binding mediation
and arbitration pursuant to Article XII, then this License Agreement shall not
be terminated while the arbitration is pending and before the arbitrator's final
decision has been rendered.

    

    8.2           Notwithstanding
anything to the contrary contained in this License Agreement, Licensee shall
have the absolute right to terminate this License Agreement by notifying
Licensor in writing, discontinuing sales and paying any Royalties
due.

    

    8.3           In
the event Licensee commits a substantial breach of any of the provisions of this
License Agreement, Licensor shall provide written notice of the substantial
breach to Licensee. If such breach is capable of being remedied or made good,
Licensee shall have ninety (90) days to remedy or make good such breach or to
submit the matter to binding mediation and arbitration pursuant to Article XII.
If such breach is remedied within such time period, this License Agreement shall
continue in full force and effect. If such breach is not remedied within such
time period, Licensor may terminate this License Agreement upon a further ten
(10) days written notice. Any dispute as to whether a material breach has
occurred, or whether it has subsequently been cured, shall be referred to
arbitration pursuant to Article XII. If the matter is submitted to binding
mediation and arbitration pursuant to Article XII, then this License Agreement
shall not be terminated while the arbitration is pending and pending the
arbitrator's final decision.

    
      
         

      

      
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    8.4           This
License Agreement shall automatically terminate if Licensee shall become
bankrupt, or if a receiver shall be appointed for all of the property or assets
of Licensee, or if Licensee shall make a general assignment of its obligations
with its creditors, or if Licensee files for bankruptcy protection.

    

    8.5           Licensor
shall have the right to terminate this License Agreement upon the failure of
Licensee to pay the 2009 Adjustment Royalty, 2010 Adjustment Royalty or Adjusted
Royalty pursuant to Paragraphs 3.7-3.9. If the matter is submitted to binding
mediation and arbitration pursuant to Article XII, then this License Agreement
shall not be terminated while the arbitration is pending and until the
arbitrator's final decision.

     

    8.6           Licensor
shall not have the right to terminate this License Agreement for any reason
other than as provided for under this License Agreement.

    

    8.7           Upon
termination of this License Agreement pursuant to the foregoing provisions of
this Article VIII, the license granted hereunder shall terminate, and Licensee
shall have no duty to pay the Royalties pursuant to Article III. Any Royalties
accrued but not paid as of the date of such termination shall be paid to
Licensor within thirty (30) days after such termination.

    

    8.8           Upon
termination of this License Agreement pursuant to the foregoing provisions of
this Article VIII, the rights and licenses granted to Licensee hereunder shall
terminate  and Licensee shall assign to Licensor all sublicenses
granted pursuant to Paragraph 2.2 such that all Royalties to be paid by
Sublicensees thereafter shall be paid directly to Licensor.

    

    8.9           Irrespective
of the existence of an issued and unexpired Patent Rights and upon termination
of this License Agreement, Licensee may complete and sell any Licensed Products
produced or sold by Licensee on hand at the time of termination; provided that
Licensee shall continue to account for and pay Running Royalties thereon as if
the License Agreement had not been terminated. Notwithstanding the above,
Licensee shall have no right and license to sell Licensed Products six months
after the effective date of the termination of this License
Agreement.

    

    8.10          The
duties and obligations of the parties pursuant to Paragraphs 6.1, 6.2, 8.8 and
8.9 shall survive any termination of this License Agreement,

    

    

     

    
      
         

      

      
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    ARTICLE
IX

     

    ASSIGNMENT
AND SALE

    

    9.1           Upon
written notice to Licensee, Licensor shall have the right to sell, transfer or
assign its interest in this License Agreement without the prior written consent
of the Licensee, provided, however, PG and WPV shall have the right to transfer
and assign rights, privileges and interests in this License Agreement to each
other or their Affiliates without the consent of Licensee upon providing
Licensee prior notice. The Royalties payable under Article III of this agreement
are not otherwise transferable by Licensor to a third party during the term of
this License Agreement without the consent of Licensee, which will not be
unreasonably withheld, provided however, that Licensee’s prior written consent
shall be required in the case of a proposed transfer or sale to a current
competitor or existing customer.

    

    9.2           Licensee’s
prior written consent shall be required in the event Licensor desires to offer
to sell or assign all or any part of its rights, privileges and interests in
this License Agreement or to the Intellectual Property to a current competitor
or existing customer.  In the event Licensor desires to sell or assign
to an entity other than PG or WPV or their Affiliates or to a current competitor
or existing customer, all or any part of its rights, privileges and interests in
this License Agreement or to the Intellectual Property, Licensor shall first
offer ("Right of First Offer") such assignment to Licensee by notifying Licensee
in writing of the terms and conditions upon which Licensor would be willing to
make such as assignment; and Licensee shall have the right to acquire said
rights, privileges and interests of Licensor by accepting the offer in
accordance with said terms and conditions or equivalent cash. If within fifteen
(15) days after receipt of Licenser's notice, Licensee advises Licensor of its
acceptance of the offer as stated in the notice, Licensor agrees to promptly
make the assignment to Licensee on the stated terms and conditions and shall
have an additional thirty (30) business days, if the assignment price is less
than $1 Million Dollars and sixty (60) days if the assignment price is over $1
Million Dollars, to pay for the same with delivery against
payment.

     

    9.3           If
within fifteen (15) days after receipt of Licensor's notice, Licensee does not
indicate its acceptance of the offer as stated in the notice, Licensor shall
thereafter have the right, subject to the prior written consent of Licensee, to
make the assignment or sale to another person, firm or corporation on the same
terms and conditions as stated in the notice. Should the Licensee not exercise
its Right of First Offer and should the contemplated assignment or sale not be
completed within ninety (90) days from the date of Licensor's notice, or should
the terms and conditions thereof be altered in any way that results in less
desirable terms than those set forth in the Licensor’s notice, this Right of
First Offer shall be reinstated in any subsequent proposed assignment, or the
altered terms and conditions for the current transaction, must again be offered
by Licensor in accordance with the terms of Paragraph 9.2.

     

    
      
         

      

      
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    9.4           Immediately
prior to Licensor going into bankruptcy, Licensee shall have a Right of First
Offer on any of Licensor's assets at fair market value.

    

    9.5           It
is hereby agreed that prior to sale to a third party contemplated pursuant to
Paragraphs 9.2 and 9.3 above, the third party purchaser shall agree to be fully
bound by the terms of this License Agreement and to assume all of Licensor's
obligations to Licensee thereunder.

    

    9.6           Upon
notice to Licensor, Licensee shall have the right to sell, transfer and/or
assign this License Agreement to an Affiliate without the prior written consent
of the Licensor, which will not be unreasonably withheld, provided however, that
Licensee’s prior written consent shall be required in the case of a proposed
sale, transfer and/or assignment to a current competitor or existing customer of
Licensor, and provided that Licensee is in good standing under this License
Agreement and the transferee or assignee assumes all obligations of Licensee to
Licensor under this License Agreement. written consent of the
Licensor

    

     

    ARTICLE
X

    

    REPRESENTATIONS
AND WARRANTIES

    

    10.1           Licensor
hereby represents and warrants to Licensee that PG is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Texas, USA and  that WPV is a corporation duly organized, validly
existing and in good standing under the laws of Canada. Licensor further
represents and warrants that it has not heretofore made any license, commitment
or agreement, or will Licensor make any license, commitment or agreement for the
term of this License Agreement which is inconsistent with this License Agreement
and the rights granted herein, and that it has full and complete power and
authority to enter into and carry out its obligations under this License
Agreement and under any agreements and documents which may be executed in
connection herewith. Licensor represents and warrants that to the best of its
knowledge, the Patent Rights do not infringe upon the proprietary rights or
patents of any third party. Licensor represents that to the best of its
knowledge, Licensor is not aware of any regulations or laws in the Territory
that might presently apply such that the sales potential of any of the Licensed
Product is limited or reduced through legal violation or potential violation.
Licensor agrees to indemnify and hold Licensee harmless of any liabilities,
costs and expenses (including attorneys' fees and expenses), obligations and
causes of action arising out of or relating to any breach of the representations
and warranties made by Licensor herein.

    

    10.2           Licensor
does not represent and warrant to Licensee that patents will issue or be granted
on any of the Patent Rights; or that any of the marks associated with the
Licensed Product are registrable as a trademark; or that any of the Know-How is
copyrightable. Further Licensor does not represent and warrant to Licensee that
any of the Intellectual Property has commercial value.

    
      
         

      

      
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    10.3           Licensee
hereby represents and warrants to Licensor that Licensee is a corporation duly
organized, validly existing and in good standing under the laws of Texas, USA.
Licensee further represents and warrants that it has not heretofore made any
license, commitment or agreement, or will Licensee make any license, commitment
or agreement for the term of this License Agreement which is inconsistent with
this License Agreement and the rights granted herein, and that it has full and
complete power and authority to enter into and carry out its obligations under
this License Agreement and under any agreements and documents which may be
executed in connection herewith. Licensee represents and warrants that it is
Licensee's policy not to misappropriate or violate the proprietary trade secret
or confidential information of third parties. Licensee agrees to indemnify and
hold Licensor harmless of any liabilities, costs and expenses (including
attorneys' fees and expenses), obligations and causes of action arising out of
or relating to any breach of the representations and warranties made by Licensee
herein.

    

    

    ARTICLE
XI

    

    PRODDUCT
QUALITY AND PRODUCT LIABILITY

    

    11.1          Licensee
agrees that the Licensed Product will be produced in compliance with all
federal, state and local laws of each nation, territory or jurisdiction where
the Licensee or Sublicensees sell or produce the Licensed Product.

    

    11.2          Licensee
shall carry Product liability insurance in an amount commensurate with the risks
connected with the production and sale of the Licensed Product. Such insurance
shall name Licensor and Malcolm Glen Kertz of the Patent Rights as co-insureds.
As proof of insurance, Licensee shall submit to Licensor a certificate of
insurance naming Licensor and the inventors of the Patent Rights as insured
parties and shall require the Licensee's insurer to notify Licensor upon the
failure to pay premiums due under the policy. This submission shall be made
prior to any Licensed Product being distributed or sold.

    

    11.3        
 Licensee agrees to indemnify and hold Licensor harmless against any and
all claims, liabilities, losses, expenses, fees, including without limitation
attorneys' fees, damages, including without limitation amounts of judgment
and/or amounts paid in settlement or costs (all of the foregoing being
collectively called "Costs") incurred by it and arising out of or attributable
to the production and sale of Licensed Product and Ancillary
Products;  provided, however, that such indemnity shall be null and
void as to any cause of action, which can be shown by Licensee that Licensor
knew or should have known and failed to timely inform Licensee of such cause of
action. Promptly after receipt of notice of the commencement of any action or
assertion of any claim against Licensor in respect of which indemnification be
sought, Licensor shall notify Licensee in writing of the commencement of such
action or assertion of such claim. Upon receipt of the notice of commencement of
suit or assertion of such claim, Licensee shall notify Licensor within fifteen
(15) days that Licensee shall appear and defend (including the sole authority to
compromise and settle such claims; provided, however, that such settlement or
compromise does not affect in any way the activities or rights of Licensor)
against any such suit or claim at Licensee's expense, with an attorney of its
choice. In the event Licensee shall fail to give notice of and undertake to
appear and defend within such fifteen (15) day period, then it is hereby
expressly agreed that the right to appear and defend by Licensee has been
waived, and Licensor shall proceed on its sole authority, at Licensee's
expense.

    
      
         

      

      
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    ARICLE
XII

     

    MEDIATION
AND ARBITRATION AGREEMENT

    

    12.1          If
a dispute arises between the parties regarding this Agreement, the parties agree
to resolve the dispute in the following manner:

     

    a)           Negotiation

    

    1) The
parties shall attempt in good faith to resolve any dispute arising out of or
relating to this Agreements promptly by negotiation between executives of the
parties who have authority to settle the controversy. Any party may give the
other party written notice of any dispute not resolved in the normal course of
business. Within 15 days after delivery of the notice, the receiving party will
submit to the other a written response. The notice and the response will include
(i) a statement of each party's position and a summary of arguments supporting
that position, and (ii) the name and title of the executive who will represent
that party and of any other person who will accompany the executive. Within 30
days after delivery of the disputing party's notice, the executives of both
parties will meet at a mutually acceptable time and place, and thereafter as
often as they reasonably deem necessary, to attempt to resolve the dispute. All
reasonable requests for information made by one party to the other will be
honored.

    

    2) All
negotiations pursuant to this clause are confidential and will be treated as
compromise and settlement negotiations for purposes of applicable rules of
evidence.

    

    (b)           Non-binding
Mediation.

     

    If the
dispute has not been resolved by negotiation within 60 days of the disputing
party's notice, or if the parties failed to meet within 45 days, the parties
will endeavor to settle the dispute by mediation under the presently effective
Center for Public Resources ("CPR") Model Procedure for Mediation of Business
Disputes. The neutral third party will be selected from the CPR Panels of
Distinguished Neutrals with the assistance of CPR.

    
      
         

      

      
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    (c) Arbitration.

     

    Any
controversy or claim arising out of or relating to this License Agreement, or
the enforcement, breach, termination or validity thereof, that has not been
resolved by mediation pursuant to the preceding paragraph within 90 days from
the appointment of a neutral third party will be settled by arbitration in
accordance with the CPR Rules for Non-Administered Arbitration of Business
Disputes in effect on the date of this License Agreement, by a sole arbitrator.
If the parties cannot agree upon an arbitrator for a panel recommended by CPR,
then CPR will select the arbitrator. Any other choice of law clause to the
contrary in this License Agreement notwithstanding, the arbitration will be
governed by the United States Arbitration Act, 9 U.S.C. § 1-16, and judgment
upon the award rendered by the Arbitrator may be entered by any court having
jurisdiction thereof. The place of the arbitration will be Houston, Texas.
Insofar as the proceeding relates to patents, it will also be governed by 35
U.S.C. 294, to the extent applicable. The arbitrator is not empowered to award
trebled, punitive or any other damages in excess of compensatory damages, and
each party irrevocably waives any claim to recover any such damages. The
arbitrator will make a reasoned award. If the result achieved in arbitration by
the party instituting the arbitration is not more favorable to that party than
the last offer made by the other party during the mediation, the former party
will reimburse the legal fees, expert fees and other expenses reasonably
incurred by the latter in the arbitration.

    

    

    ARTICLE
XIII

     

    GENERAL

     

    13.1          Binding Agreement.
This License Agreement shall be binding upon the successors and assigns of the
parties hereto.  Nothing contained in this License Agreement shall be
construed to place the parties in the relationship of legal representatives,
partners, or joint venturers.

    

    13.2          Applicable Law. This
License Agreement shall be construed, interpreted and applied in accordance with
the laws of the State of Texas.

    

    13.3          Notices. All notices,
demands or other writings in this License Agreement provided to be given or made
or sent, or which may be given or made or sent, by either party hereto to the
other, shall be deemed to have been fully given or made or sent when made in
writing and deposited in the United States mail, first class, postage prepaid,
sent certified or registered mail, and addressed to the addresses first
hereinabove given or at such other address as either party hereto may specify by
notice given in accordance with this paragraph.

    
      
         

      

      
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    13.4          Waiver. Each party
covenants and agrees that if the other party fails or neglects for any reason to
take advantage of any of the terms hereof providing for the termination of this
License Agreement, or if, having the right to declare this License Agreement
terminated, such other party shall fail to do, any such failure or neglect shall
not be or be deemed or be construed to be a waiver of any subsequently occurring
cause for the termination of this License Agreement, or as a waiver of any of
the terms, covenants or conditions of this License Agreement or the performance
thereof. None of the terms, covenants or conditions of this License Agreement
can be waived except by the written consent of the waiving
party.  Except as otherwise stated herein, each of the parties hereby
waives any claims which it might have against the other prior to the date of
execution of this License Agreement.

    

    13.5          Force Majeure.
Neither party hereto shall be liable to the other party for failure or delay in
the performance of any duties or obligations hereunder or in making shipments of
Licensed Product produced hereunder due to strikes, lockouts, acts of God, acts
of war, fire, flood, explosions, embargo, litigation or labor disputes,
Government or any other laws and regulations, or any other cause beyond the
control or without the fault of such party.

    

    13.6          Scope of Agreement.
This License Agreement constitutes the entire agreement between the parties
pertaining to the subject matter hereof.

    

    13.7          Construction. The
parties acknowledge that each party and its counsel have reviewed and revised
this License Agreement and that the normal rule of construction to the effect
that any ambiguities are to be resolved against the drafting party shall not be
employed in the interpretation of this License Agreement or any amendments or
exhibits hereto.

    

    13.8          Headings. The subject
headings of the paragraphs of this License Agreement are included for purposes
of convenience only, and shall not effect the construction or interpretation of
any of its provisions.

    

    13.9          Counterparts. This
License Agreement may be executed in one or more counterparts, and also executed
shall constitute one agreement, binding on both parties hereto, notwithstanding
that both parties are not signatory to the same counterpart.

    

    13.10        Severability. If any
part or parts of this License Agreement are found to be illegal or
unenforceable, the remainder shall be considered severable, shall remain in full
force and effect, and shall be enforceable.

    

    13.11      
Further
Documents. Each of the parties shall take all necessary actions,
including the execution and delivery of all necessary documents or instruments,
as may be reasonably requested by the other party in order to effectuate the
intent of this License Agreement.

    
      
         

      

      
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    13.12        Entire Agreement.
This License Agreement, including any exhibits hereto, constitutes the entire
agreement of the Parties with respect to the subject matter of this License
Agreement and supersedes all previous communications, representations,
understandings and agreements, whether oral or written, between the Parties with
respect to the subject matter hereof.  For the avoidance of doubt, the
Letter of Agreement between Global Green Solutions Inc., Valcent Products Inc.,
PG and WPV dated June 25, 2007 is hereby superseded and restated in its entirety
as set forth herein, and the Letter of Agreement dated June 25, 2007 is
terminated and of no further force and effect.  Further, the parties
hereto release each other from any obligations under Letter of Agreement dated
June 25, 2007.

     

    

    IN
WITNESS WHEREOF, the parties hereto have executed this License Agreement in
duplicate originals, individually, or by their duly authorized officers or
representatives, as of the date of the last party to execute this Technology
License and Royalty Holders  Agreement.

     

     

    
      
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      Algae Technologies, LLC. 	 	 Valcent
      Products Inc.	 
	 	 	 	 	 	 
	Signed:	
                /s/ 
      Doug Frater  

              	 	Signed:	
                /s/  
      Malcolm Glen Kertz

              	 
	Name:	
                Doug
      Frater  

              	 	Name:	
                Malcolm
      Glen Kertz

              	 
	Title:	
                President
      and CEO  

              	 	Title:	
                President
      and CEO

              	 
	Date:	 	 	Date:	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	Pagic
      LP	 	West
      Peak Ventures of Canada	 
	 	 	 	 
	Signed:	 	 	Signed:	 	 
	Name:	 	 	Name:	 	 
	Title:	 	 	Title:	 	 
	Date:	 	 	Date:	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 

      

ACCEPTANCE
AND AGREEMENT

    

    The first Recital and Paragraphs 4.2,
5.1 and 11.2 are acceptable and agreed to by Malcolm Glen
Kertz.

    Signed: 
/s/   Malcolm Glen
Kertz

    Malcolm
Glen Kertz, Individually

     

    Date:_________________

    

    

    
      
         

      

      
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    EXHIBIT
“A”

    

    DESCRIPTION
OF THE LICENSED TECHNOLOGY

    

    

    The
“LICENSED TECHNOLOGY” shall mean a technology that involves the use of a series
of thin membrane photo-bioreactors that are configured in a manner to facilitate
rapid growth of various forms of micro-algae. Each photo-bioreactor is designed
to allow the proper flow of nutrient rich food source and carbon dioxide
(CO2)
enhanced gases and water through the thin membrane photo-bioreactors. The gas is
mixed in the reactor by the design elements that are employed. Further, the
design of the photo-bioreactor allows the reactors to be closely stacked in a
manner that allows sunlight to penetrate to all levels of the reactor. The
overall design of the system allows the high yield, rapid production of various
forms of algae biomass.

    

    The algae
biomass is then harvested and the target oil extracted. Depending on the species
and strain of algae used, a yield of as much as 50% of the dry weight of the
algae biomass is high quality recoverable oil. The oil is of a quality suitable
as a feedstock for production of bio-diesel and bio-fuels.

    

    The algae
biomass, depending on the species and strain of algae, will produce biomass
which can be used as raw material feedstock for other applications, including
but not limited to, pharmaceutical, health, food, cosmetic and agricultural
applications.

    

    The
Licensee’s initial commercialization and business objective and use of the Algae
Biomass Technology is to be considered as a renewable energy source to deliver
competitive and economic commercial volumes of bio-diesel and standard vegetable
oil feedstock as a primary product in a form that is economically viable. The
Licensee’s economics will also depend on the secondary products produced by the
Algae Biomass Technology comprising the algae biomass.

     

     

     

     

    
      
         

      

      
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    EXHIBIT
“B”

    

    PATENTS
AND APPLICATIONS

    

    
      	
              File
      No.:

            	
              2405-01800

              Country:

              Serial No.:   

              File Date: 

              For:  

            	
               

              United
      States

              60/804,763

              June
      14, 2006

              Method
      and Apparatus for CO2
      Sequestration

            

    

    
    

    
      
        	
                File
      No.:

              	
                2405-01801

                Country:   

                Serial No.:  

                Receipt Date:  

                For:         

              	
                 

                
                  
                    United
      States

                  

                  
                    60/892,331

                    March
      1, 2007

                  

                  
                    Method
      and Apparatus for CO2
      Sequestration

                  

                

              

      

    

    
       

      
        	
                File
      No.:

              	
                2405-01802 (US)

                Country:         

                Serial No.:

                File
      Date:       

                For:               

              	
                 

                
                  
                    United
      States

                  

                  
                    11/762,295

                  

                  
                    June
      13, 2007

                    Method
      and Apparatus for CO2
      Sequestration

                  

                

              

      

    

    
    

    
      
        	
                File
      No.:

              	
                2405-01803

                Country:   

                Serial No.: 

                File Date:   

                For:      

              	
                 

                Patent
      Cooperation Treaty

                
                  
                    PCT/US2007/071165

                    June
      14, 2007

                  

                  
                    Method
      and Apparatus for CO2
      Sequestration

                  

                

              

      

    

    
       

      
        	
                File
      No.:

              	
                2405-01804

                Country:    

                Serial No.: 

                File Date: 

                For:   

              	
                 

                
                  
                    Argentina

                  

                  
                    070102583

                  

                  
                    June
      13, 2007

                    Method
      and Apparatus for CO2
      Sequestration

                  

                

              

      

    

    
    

    
      
        	
                File
      No.:

              	
                2405-01805

                Country:    

                Serial No.: 

                File Date:

                For:                

              	
                 

                GCC
      (Middle East)

                
                  
                    2007/8509

                  

                  
                    June
      13, 2007

                  

                  
                    Method
      and Apparatus for CO2
      Sequestration

                  

                

              

      

    

    
       

      
        	
                File
      No.: 

              	
                2405-01806

                Country:  

                Serial No.:   

                File Date:   

                For:         

              	
                 

                Jamaica

                18/1/4639

                June
      11, 2007

                Method
      and Apparatus for CO2
      Sequestration

              

      

    

    
       

    

    
      
         

      

      
        B-1

        
          

        

      

      
         

        Vertigro
Algae Technologies LLC

      

    

     

    
      	
              File: 

            	
              
                2405-01807

                Country: 

                Serial
      No.:      

                File Date:

                For:                 

              

            	
              
                 

                Malaysia

                PI
      20070930

                June
      12, 2007

                Method
      and Apparatus for CO2
      Sequestration

              

            

    

     

    
      	
              File
      No.:

            	
              2405-01808

              Country:

              Serial No.:

              File Date:

              For: 

            	
               

              
                
                  Panama

                

                
                  87311

                

                
                  August
      7, 2007

                  Method
      and Apparatus for CO2
      Sequestration

                

              

            

    

    
    

    
      
        	
                File
      No.: 

              	
                2405-01809

                For:  

                 

              	
                 

                Method
      and Apparatus for CO2
      Sequestration

                Unfiled

              

      

    

     

    
      	
              File
      No.: 

            	
              2405-02000

              For: 

               

            	
               

              Method and Apparatus
      for Algae
      Separation

              Unfiled

            

    

    
    

    
      	
              File
      No.: 

            	
              2405-02500

              For:  

               

            	
               

              Algae
      Plants

              Unfiled

            

    

     

    
      	
              File
      No.: 

            	
              2405-03200

              For:       

               

            	
               

              Auto-Pipetting
      with Flow Cytometry System

              Unfiled

            

    

    

    

    
      
         

      

      
        B-2

        
          

        

      

      
         

        Vertigro
Algae Technologies LLC

      

    

    EXHIBIT
“C”

     

    

    TRADEMARKS

    

     

    VERTIGRO

     

    Commercialization
Trademark

     

    a)           Licensor
shall file a trademark application to register the “Vertigro”
trademark.

     

    b)           Licensee may
market the Licensed Product using the trademark “Vertigro”.

     

    c)           Licensee
may develop and use other derivations of the “Vertigro” trademark

     

    d)           Licensor
agrees that Licensee can use of the trademark name “Vertigro” and incorporate
the trademark “Vertigro” in the company name, i.e., Vertigro Algae Technologies,
LLC, without claim or recourse.

     

     

     

     

     

     

     

     

     

     

    C-1Nayarit Gold Inc: Exhibit 4.1 - Prepared by TNT Filings Inc.

  

	 	 
	 	Exhibit 4.1
	THIS LEASE is dated the            
    day of	 
	 	 
	 	 
	BETWEEN:	BARRINGTON BROOK HOLDINGS, INC.
	 	 
	 	(the "Landlord")
	 	OF THE FIRST PART
	 	 
	AND:	NAYARIT GOLD INC.
	 	 
	 	(the "Tenant")
	 	OF THE SECOND PART

ARTICLE I 

Leased Premises, Term and 

Acceptance of the Leased Premises 

Section 1.01     Leased
Premise 

The Landlord
leases to the Tenant, and the Tenant leases from the Landlord, premises at
Suite 150, 76 Temple Terrace, Sackville, Nova Scotia.
Included in, but not limited to, the Leased Premise is
the shared use of (i) adjacent outdoor patio; (ii) first floor kitchen; (iii)
first floor boardroom and (iv) gym facilities on the lower level) as outlined in
blue on the Floor Plan attached as Schedule "A". The Rentable Area of the Leased
Premises is 1,480 square feet as outlined in red on the plan annexed
hereto as Schedule "A". The premises shall not be measured during the term or
any extensions or renewals thereof. 

Section 1.02     Use of
the Additional Areas 

The Tenant’s use of
the Leased Premises includes the non-exclusive right of the Tenant and persons
having business with the Tenant in common with the Landlord and all others
entitled, to the use of those Common Areas and Facilities of the Building as are
required incidental to the Tenant’s business operations, subject however to the
maximum use of five (5) parking spots and provisions of this Lease, including
without limitation, Sections 4.01(b) and 14.01. 

Section 1.03     Grant and
Term 

The Tenant
shall, subject to the terms and conditions of this Lease, have and hold the
Leased Premises for a period of five (5) years, commencing November 1,
2007, (the Commencement Date) and expiring on September 30, 2012, 
unless the said term shall sooner be terminated under provisions hereof. 

The Tenant shall have
the right to renew its Lease for a further period of five (5) years,
provided written notice is give at least six (6) months prior to expiry
on the same conditions as herein contained save for the Right to Renew and the
Net Rent which shall be agreed between parties at least four (4) months
prior to the Renewal Term. 

Section 1.04    
Substitution 

At any time the
Landlord may substitute for the Leased Premises other premises in the Building
(the "New Premises") in which event the New Premises shall be deemed to be the
leased Premises for all purposes hereunder, provided that the New Premises shall
be similar in area and appropriateness for the Tenant’s purposes and provided
that any such substitution is effected for the purpose of the floor on which the
Leased Premises are located. If the Tenant is occupying the Leased Premises at
the time of such substitution, the Landlord shall pay the reasonable expense of
moving the Tenant, its property and equipment to the New Premises and shall, at
its sole cost, improve the New Premises with improvements substantially similar
to those located in the Leased Premises. 

	INITIALS	 	 	 	 
	 	Tenant	Landlord

ARTICLE II 

Rent 

Section 2.01     Covenant to Pay 

The Tenant
covenants with the Landlord to pay Basic Rent, Additional Rent and all amounts
regarded as rent in lawful money of Canada without deduction or set off at such
place as the Landlord from time to time designates in writing. 

The surrender or other
termination of this Lease shall not affect the parties’ obligations to make
adjustments to Basic Rent, Additional Rent, and all amounts regarded as rent
which were not determined at the time of surrender or termination unless
otherwise agreed in writing. 

Section 2.02     Basic Rent 

The Tenant will, pay
the Landlord as Basic Rent the following sums annually, payable in consecutive
monthly installments, each in advance, on the first day of each calendar month
of each rental year, based upon the annual rates per square foot as specified
herein per square foot of Rentable Area of the Leased Premises. Basic Rent will
be prorated on a daily basis for any fractional month period at the beginning or
end of the Term. 

	 	Basic	Basic	Per Square
	Lease Year	Annual Rent	Monthly Rent	Foot Rent
	First Lease Year	 	 	 
	(November 1, 2007 -	 	 	 
	September 30, 2008)	
    $21,460.00
	
    $1,788.33
	
    $14.50

	Second Lease Year	
     
	
     
	
     

	(October 1, 2008 -	
     
	
     
	
     

	September 30, 2009)	
    $21,460.00
	
    $1,788.33
	
    $14.50

	Third Lease Year	
     
	
     
	
     

	(October 1, 2009 -	
     
	
     
	
     

	September 30, 2010)	
    $22,940.00
	
    $1,911.67
	
    $15.50

	Fourth Lease Year	
     
	
     
	
     

	(October 1, 2010 -	
     
	
     
	
     

	September 30, 2011)	
    $22,940.00
	
    $1,911.67
	
    $15.50

	Fifth Lease Year	
     
	
     
	
     

	(October 1, 2011 -	
     
	
     
	
     

	September 30, 2012)	
    $23,680.00
	
    $1,973.33
	
    $16

Section 2.03     FIXTURING PERIOD 

The Landlord shall
provide the Premises to the Tenant on September 1, 2007 for a period of one (1)
month free of net and additional rent to complete the Leaseholds and allow the
Tenant to move in. 

Section 2.04     Post-Dated Cheques 

The Tenant
will deliver to the Landlord, at the beginning of each Rental Year throughout
the Term, a series of post-dated cheques for such Rental Year for the aggregate
of the monthly payments of Basic Rent and for any payments of Additional Rent
estimated by the Landlord in advance and any payments required by this Lease to
be paid monthly in advance. 

2

	INITIALS	 	 	 	 
	 	Tenant	Landlord

ARTICLE III 

Taxes and Operating Costs 

Section 3.01     Taxes Payable by the
Landlord 

The
Landlord will, subject to Section 3.02, pay directly to the taxing authority all
Taxes for the Building and Lands. The Landlord may, nevertheless, defer payment
of Taxes to the fullest extent permitted by law, so long as it diligently
prosecutes any contest or appeal of Taxes. 

Section 3.02     Taxes Payable by the
Tenant 

The Tenant will pay to
the Landlord, in accordance with Section 3.06 its Proportionate Share of all
Taxes which are levied or assessed against or in relation to the Building and
Lands. 

Section 3.03     Business Taxes and Other
Taxes of the Tenant 

The Tenant will pay to
the authorities responsible for collection of all business taxes, personal
property tax, license fee, and or other similar rates and assessments levied or
assessed against or in relation to the Tenant’s business, assets, and
improvements in the Leased Premises or those of any other Person occupying the
Leased Premises (collectively, "Business Tax") whether such taxes are included
in the levies on the Landlord or are separately levied on the Tenant. Business
Taxes include all such taxes, fee, rates, and assessments that may in the future
be levied against the Landlord on account of its ownership of or interest in the
Building. 

The Tenant shall pay
all Goods and Services taxes also known as Harmonized Sales Taxes (HST) imposed
with respect to the rent payable under this Lease when such taxes are payable
pursuant to legislation imposing the obligation to pay the said taxes on Tenants
under commercial Leases. 

Section 3.04     Tenant’s Responsibility

The Tenant
will deliver to the Landlord, at least ten (10) days prior to the last day
permitted for filing an appeal, notice of any appeal or contestation which the
Tenant intends to institute with respect to taxes or Business Taxes, and the
Tenant will consult with the Landlord and obtain the prior written approval of
the Landlord with respect to appeal or contestation. The Tenant will indemnify
and hold the Landlord harmless from and against the payment of all losses,
costs, charges, and expenses, including any increase in Taxes or Business Taxes
relating to the Leased Premises or the Building, which arise directly or
indirectly out of any appeal or contestation by the Tenant. 

Section 3.05     Tenant’s Proportionate
Share of Operating Costs 

The Tenant will pay,
in accordance with Section 3.02 and 3.05 its share of building operating costs.
Such share may be estimated by the Landlord and the Tenant agrees to pay to the
Landlord the Tenant’s Proportionate Share as estimated the sum of eleven
thousand eight hundred forty dollars ($11,840.00) annually; payable in
consecutive monthly installments of nine hundred eight six and sixty seven
cents ($986.67) each in advance, on the first day of each calendar month of
each rental year, based upon an estimated annual rate of eight ($8.00) per
square foot of rentable area per annum for the calendar year of 2007.
The Landlord’s estimates may be revised from time to and as soon as the Landlord
has received bills for Taxes, Utilities and Operating Costs, the Landlord may
bill the Tenant for the Tenant’s Proportionate Share thereof and the Tenant will
pay the amounts billed less all amounts previously paid by the Tenant in
accordance with the estimates. The Tenant agrees to pay, over and above the
basic rent, Operating Costs, Realty Tax, Utilities and Business Occupancy Tax
(when applicable). 

3

	INITIALS	 	 	 	 
	 	Tenant	Landlord

After the end of the
period for which the estimated payments have been made, the Landlord will
determine and advise the Tenant of the exact amount of the Tenant’s
Proportionate Share of Taxes and Operating Costs, and if necessary, an
adjustment will be made between the parties within 15 days after the Tenant has
been advised of the actual amounts. 

	 	 	 	Est.	 	 	Net	 
	 	 	 	CAM	 	Net	Monthly	Gross Monthly Rent
	 	Square	Net Rent	without	Net Annual	Monthly	Rent Plus	(Net Rent plus CAM)
	Lease Year	Footage	per Sq. Ft.	HST	Rent	Rent	HST	including HST
	 	 	 	 	 	 	 	 
	First Lease Year	 	 	 	 	 	 	 
	(October 1, 2007 -	 	 	 	 	 	 	 
	September 30, 2008)	
    1,480
	
    $14.50
	
    $8.00
	
    $21,460.00
	
    $1,788.33
	
    $2,038.70
	
    $3,163.50

	 	
     
	
     
	
     
	
     
	
     
	
     
	
     

	Second Lease Year	
     
	
     
	
     
	
     
	
     
	
     
	
     

	(October 1, 2008 -	
     
	
     
	
     
	
     
	
     
	
     
	
     

	September 30, 2009)	
    1,480
	
    $14.50
	
    $8.00
	
    $21,460.00
	
    $1,788.33
	
    $2,038.70
	
    $3,163.50

	 	
     
	
     
	
     
	
     
	
     
	
     
	
     

	Third Lease Year	
     
	
     
	
     
	
     
	
     
	
     
	
     

	(October 1, 2009 -	
     
	
     
	
     
	
     
	
     
	
     
	
     

	September 30, 2010)	
    1,480
	
    $15.50
	
    $8.00
	
    $22,940.00
	
    $1,911.67
	
    $2,179.30
	
    $3,304.10

	 	
     
	
     
	
     
	
     
	
     
	
     
	
     

	Fourth Lease Year	
     
	
     
	
     
	
     
	
     
	
     
	
     

	(October 1, 2010 -	
     
	
     
	
     
	
     
	
     
	
     
	
     

	September 30, 2011)	
    1,480
	
    $15.50
	
    $8.00
	
    $22,940.00
	
    $1,911.67
	
    $2,179.30
	
    $3,304.10

	 	
     
	
     
	
     
	
     
	
     
	
     
	
     

	Fifth Lease Year	
     
	
     
	
     
	
     
	
     
	
     
	
     

	(October 1, 2011 -	
     
	
     
	
     
	
     
	
     
	
     
	
     

	September 30, 2012)	
    1,480
	
    $16
	
    $8.00
	
    $23,680.00
	
    $1,973.33
	
    $2,249.60
	
    $3,374.40

ARTICLE IV 

Control and Services 

Section 4.01     Control of the Building

(a) 

The Landlord will operate and maintain the Building as would a prudent Landlord,
acting reasonably, of a similar office building having regard to size, age and
location. 

(b) 

The Building and the Lands are at all times subject to the exclusive control,
management, and operation of the Landlord. The Landlord has the right, in its
control, management and operation of the Building and the Lands, to perform all
acts which, in the use of good business judgment, the Landlord determines
advisable for the efficient and proper operation of the Building and the Lands.

(c) 

The Landlord will in the exercise of its rights conferred under Section 14.01,
proceed as expeditiously as possible to minimize interference with the Tenant’s
business. 

ARTICLE VI 

Use of the Leased Premises 

Section 6.01     Use of the Leased
Premises 

The Leased Premises will be used
solely for office related use. The Tenant acknowledges that it is only
one of the many tenants in the building and accordingly will conduct its
business in the Leased Premises in a reputable and first-class manner, and in
the best interests of the Building as a whole. 

4

	INITIALS	 	 	 	 
	 	Tenant	Landlord

Section 6.02     Observance of Law 

The Tenant shall, at its expense:

(a) 

comply with all provisions of law including, without limitation, all statutes,
regulation, by-laws, ordinances, and other requirements of municipal,
provincial, federal, and other governmental bodies, agencies or departments,
which now or hereafter pertain to or affect the Leased Premises; 

(b) 

obtain all necessary permits, licenses, and approvals relating to the use of the
leased Premises and the conduct of business therein, including, without
limitation, those required under applicable provincial and federal legislation;

Section 6.03     Tenant’s Conduct of
Business 

(a) 

The Tenant will conduct business on or from the Leased Premises under the name
of Nayarit Gold Inc. and will not change the advertised name of the business
conducted on the Leased Premises without the prior written consent of the
Landlord; 

(b) 

The Tenant will not commit or permit a nuisance or anything that may disturb the
quiet enjoyment of any other Tenant in the Building whether or not the nuisance
arises out of the use of the Leased Premises by the Tenant for a purpose
permitted by this Lease. 

ARTICLE VII 

Insurance and Indemnity 

Section 7.01     Tenant’s Insurance 

(a) 

The Tenant will, at its expense, take out and maintain in full force and effect
and in the names of the Tenant, the Landlord and the Mortgagee as their
respective interests may appear, the following insurance: 

(i) 

comprehensive general liability insurance in amounts and with
policies in form satisfactory from time to time to Landlord and with insurers
acceptable to the Landlord, the comprehensive general liability insurance in no
event to be for less than two million dollars ($2,000,000.00) inclusive limits
and all risks insurance on furniture, fixtures, and Improvements in an amount
equal to the full insurable value thereof. Copies of each insurance policy shall
forthwith upon execution be delivered to Landlord. Each such policy shall name
Landlord as an additional insured as its interest may appear and the
comprehensive general liability policy shall contain a cross liability clause.
The cost or premium for each and every such policy shall be paid by Tenant.
Tenant shall obtain from the insurers under such policies, undertakings to
notify Landlord in writing at least ten (10) days prior to any cancellation
thereof. 

(ii) 

business interruption insurance in such amount as will reimburse
the Tenant for direct or indirect loss of earnings and for such risks as would
be carried by prudent Tenants. 

(b) 

The Tenant’s policies will: (i) contain the Mortgagee’s standard mortgage clause
(ii) be taken out with insurers reasonable acceptable to the Landlord and in a
form reasonably satisfactory to the Landlord (iii) be noncontributing with and
apply only as primary and not as excess to any other insurance available to the
Landlord (iv) not be invalidated as respects the interests of the Landlord and
the Mortgagee by reason of breach or violation of any warranties,
representations, declarations, or conditions, contained in the policies; and (v)
contain an undertaking by the insurers to notify the Landlord and the Mortgagee
in writing not less than thirty (30) days prior to any material change,
cancellation, or termination. The Tenant agrees that certificates of insurance
in a form acceptable to the Landlord will be delivered to the Landlord as soon
as practicable after the placing of the required insurance. 

5

	INITIALS	 	 	 	 
	 	Tenant	Landlord

(c) 

Tenant shall comply with the rules and requirements of the Insurer’s Advisory
Organization of Canada or any successor body, and with the requirements of all
insurance companies having policies of any kind whatsoever in effect covering
the Building, including policies insuring against tort or delictual liability.

Tenant shall not do or
commit any act upon the Premises or bring in to or keep upon the Premises any
article that will affect the fire risk or increase the rate of fire insurance or
other insurance on the Building. Should the rate of any type of insurance on the
Building be increased by reason of any violation of this lease by Tenant,
Landlord, in addition to all other remedies, may pay the amount of such
increase, and the amount so paid shall be come due and payable immediately by
Tenant and collectible as additional rent. 

Section 7.02     Cancellation of
Insurance 

If any insurance
policy in respect of the Building is cancelled or threatened by the insurer to
be cancelled, or the coverage reduced by the insurer by reason of the use and
occupation of the Leased Premises and if the tenant fails to remedy the
condition giving rise to cancellation, threatened cancellation or reduction of
coverage within forty-eight (48) hours after notice by the Landlord, the
Landlord may, at its option, either (a) exercise its rights of re-entry
including termination under Article XIII, or (b) at the Tenant’s expense, enter
upon the Leased Premises and remedy the condition giving rise to the
cancellation, threatened cancellation, or reduction. 

Section 7.03     Landlord’s Insurance

The Landlord shall at
all times throughout the Term carry; (a) insurance on the Building (excluding
the foundations and excavations) and the equipment contained in or servicing the
Building against damage by fire and extended perils; (b) public liability and
property damage insurance with respect to the Landlord’s operations in the
Building; and (c) other forms of insurance considered advisable by the Landlord
and its Mortgagee, in each case, in such reasonable amounts and with such
reasonable deductions as would be carried by a prudent owner of a similar office
building. The Landlord will have the option to self-insure for any of the
occurrences or forms of insurance contemplated in this Section 7.03.
Notwithstanding the Landlord’s covenant and the Tenant’s contribution to the
cost of the Landlord’s insurance premiums, (i) the Tenant is not relieved of any
liability arising from or contributed to by its negligence or its willful acts
or omissions, (ii) no insurable interest or other benefit (including an implied
waiver of subrogation from the Landlord’s insurers) is conferred upon the Tenant
under the Landlord’s insurance policies, and (iii) the Tenant has no right to
receive proceeds from the Landlord’s insurance policies. 

Section 7.04     Indemnification of the
Landlord 

The Tenant
will indemnify the Landlord and save it harmless from and against all loss
(including loss of rentals), claims, actions, damages, costs, liability, and
expenses in connection with loss of life, personal injury, damage to property
(including any portion of the Building and its equipment, machinery, services
and improvements), or any other loss or injury whatsoever arising from or out of
this Lease, or any occurrence in the Leased Premises, or the Tenant’s occupancy
of the Leased Premises or the Building, or occasioned wholly or in part by any
act or omission of the Tenant or by any one permitted to be on the Leased
Premises or the Building by the Tenant. The Tenant’s indemnity, however, will
not extend to any matters to the extent contributed to by the negligence of the
Landlord or those for whom the Landlord is in law responsible. If the Landlord
is, without fault on its part, made a party to any litigation commenced by or
against the Tenant, then the Tenant will protect, indemnify, and hold the
Landlord harmless and pay all expenses and reasonable legal fees incurred or
paid by the Landlord in connection with the litigation. The Tenant will also pay
all costs, expenses, and legal fees (on a solicitor and his client basis) that
may be incurred or paid by the Landlord in enforcing the terms, covenant, and
conditions in this Lease. 

6

	INITIALS	 	 	 	 
	 	Tenant	Landlord

ARTICLE VIII 

Maintenance, Repairs, and Alterations 

Section 8.01     Maintenance, Repairs, and Alterations

The Tenant will at all
times, at its expense, maintain the whole of the Leased Premises and all
equipment in an appurtenances of the Leased Premises and improvements to the
Leased Premises in good order, first-class condition and repair, as determined
by the Landlord, and the Tenant will make all needed repairs and replacements
with due diligence and dispatch. 

At the expiration or
earlier termination of the Term, the Tenant will surrender the Leased Premises
to the Landlord in as good a condition as the Tenant is required to maintain
them throughout the Term. 

Section 8.02     Landlord’s Approval of
the Tenant’s Repair and Alterations 

(a) 

The Tenant will not make any repairs, alterations, replacements, or improvements
("Alterations") to any part of the Leased Premises without first obtaining the
Landlord’s written approval. The Tenant will submit: (a) details of the proposed
work including professionally prepared drawings and specifications, (b) any
indemnification against liens which the Landlord reasonably requires; and (c)
evidence satisfactory to the Landlord that the Tenant has obtained, at its
expense, all necessary consents, permits, licenses, and inspections from the
governmental and regulatory authorities having jurisdiction. All Alterations
will be performed: (i) at the Tenant’s expense; (ii) by drawings and
specifications approved by the Landlord; and (v) subject to the reasonable
regulations, controls, and inspection of the Landlord. 

(b) 

Any Alterations made by the Tenant without the prior consent of the Landlord or
not made in accordance with the drawings and specifications approved by the
Landlord will, if requested by the Landlord, be promptly removed by the Tenant
at the Tenant’s expense. No Alterations may be permitted, if the Landlord
determines that they may weaken or endanger the structure of the Building,
adversely affect the operation of or diminish the value of the Building, affect
the Landlord’s coverage for zoning purposes or cause the Landlord to buy out or
provide additional parking spaces. 

(c) 

If however, the proposed Alterations or any of them affect part of the Structure
of the Building or any of the electrical, mechanical, or other base building
systems, the Alterations (or the appropriate portion of them) will be performed
only by the Landlord, at the Tenant’s expense, and the Tenant will promptly
reimburse the Landlord for the cost of the Alterations (including architectural
and other consulting fees) plus fifteen percent (15%) of the total cost
representing the Landlord’s overhead. 

Section 8.03     Maintenance, Repairs, and
Alteration by the Landlord 

7

	INITIALS	 	 	 	 
	 	Tenant	Landlord

(a) 

The Landlord will maintain and repair the structure of the Building including,
without limitation, the foundations, exterior wall assemblies including weather
walls, sub-floor, roof, bearing walls, and structural columns and beams of the
Building, as would a prudent owner of a similar office building. The cost of
this will be included in Operating Costs except to the extent excluded in
paragraph 139b) (vii) of Schedule "E". 

(b) 

If any mechanical or base building equipment, facilities, or systems servicing
the Building are damaged or destroyed or get out of repair, the Landlord will
have a reasonable time in which to make the required repairs or replacements
necessary for the resumption of the services to the Leased Premises (to the
extent of the Landlord’s obligations under this Lease), and the Tenant is not
entitled to any compensation or damages, but if any of the foregoing items had
become impaired, damaged, or destroyed in any circumstances referred to in
Section 8.03 (c), then the Tenant will be responsible for the cost of repairing,
restoring, or making good the damage in accordance with the provisions of
Section 8.03(c). 

(c) 

If the Building or any part of it, or any equipment, machinery, facilities, or
improvements of the Building, or the roof or outside walls of the Building, or
any other structural portions of the Building require repair or replacement or
become damaged or destroyed through the negligence, carelessness, misuse, or
other act of the Tenant or those for whom the Tenant is in law responsible, then
the cost of the resulting repairs, replacements, or alterations plus the sum
equal to fifteen percent (15%) of the cost will be paid by the Tenant to the
Landlord within five (5 ) days after presentation of an account. 

Section 8.04     Removal and Restoration
by the Tenant 

(a) 

All alterations, decoration, additions, and improvements made by the Tenant or
made by the Landlord on the Tenant’s behalf (other than the Tenant’s trade
fixtures) immediately become the property of the Landlord upon affixation or
installation and will not be removed from the Leased Premises at any time unless
permitted or required by the Landlord. The Landlord is under no obligation to
repair, maintain, or insure these alterations, decorations, additions, or
improvements. 

(b) 

For greater certainty, the Tenant’s trade fixtures exclude: (i) heating,
ventilating, or air-conditioning systems (ii) floor covering affixed to the
floor of the Leased Premises; (iii) light fixtures; (iv) internal stairways,
partitioning wall, and doors; if any, and (v) any fixtures, facilities,
equipment, or installations installed by or at the expense of the Landlord
pursuant to Schedule "B"; all of which are deemed to be leasehold improvements.

Section 8.05     Tenant to Discharge all
Liens 

The Tenant shall
promptly pay all of its contractors and others supplying materials or performing
work on its behalf in respect of the Leased Premises and will do all things
necessary to ensure that no lien is registered against the Lands, Building, or
the Tenant’s leasehold interest. If any construction or similar lien is made,
filed, or registered against title to the Lands (or part of it), the Building or
against the Tenant’s leasehold interest, as a result of any work, materials, or
services supplied or performed by or on behalf of the Tenant or otherwise in
respect of the Leased Premises, the Tenant will discharge it forthwith at the
Tenant’s expense. If the Tenant fails to discharge the lien, then in addition to
any other right or remedy of the Landlord, the Landlord may elect to discharge
the lien by paying the amount claimed to be due, and any additional amounts as
may be required at law or otherwise, into Court or directly to the lien claimant
and the amount paid by the Landlord and all costs and expenses including all
solicitor’s fees incurred as a result of the lien including without limitation
procuring its discharge will be immediately paid by the Tenant to the Landlord.

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	INITIALS	 	 	 	 
	 	Tenant	Landlord

Section 8.06     Signs and Advertising

The Tenant will be
permitted exterior signage in accordance with the Landlord’s criteria for the
building, however Tenant will not place or permit any notice, lettering, or
other signage on any part of the outside of the Building or the Leased Premises
or anywhere in the interior of the Leased Premises which is visible from the
outside of the Building or the Leased Premises without the prior written
approval of the Landlord. At the expiration of this Lease, the Tenant will
remove all signs, pictures, advertisements, notices, letterings, or decorations
from the Leased Premises at the Tenant’s expense and will promptly repair all
damage cause by its installation and removal. 

ARTICLE IX 

Damage of the Leased Premises 

Section 9.01     Destruction of the Leased Premises 

(a) 

If in the reasonable opinion of Landlord, the damage or destruction is such that
the premises are rendered wholly unfit for occupancy or it is impossible or
unsafe to use and occupy them, and if in either event the damage, in the further
opinion of Landlord (which shall be given by written notice to Tenant within
thirty (30) days of the happening of such damage or destruction) cannot be
repaired with reasonable diligence within one hundred and twenty (120) days from
the happening of such damage or destruction, either landlord or Tenant may
within five (5) days next succeeding the giving of Landlord’s opinion as
aforesaid, terminate this lease by giving to the other notice in writing of such
termination, in which event the term of this lease shall cease and be at an end
as of the date of such destruction or damage and the rent and all other payments
for which Tenant is liable under the terms of this lease shall be apportioned
and paid in full to the date of such destruction or damage. In the event that
neither Landlord nor Tenant so terminates this lease, rent shall abate from the
date of the happening of the damage until the damage shall be made good to the
extent of enabling Tenant to use and occupy the Premises. 

(b) 

If the damage be
such that the Premises are wholly unfit for occupancy, or if it is impossible or
unsafe to use or occupy them but if in either event the damage, in the opinion
of the Landlord (which shall be given to Tenant within thirty (30) days from the
happening of such damage), can be repaired with reasonable diligence within one
hundred and twenty (120) days of the happening of such damage, rent shall abate
from the date of the happening of such damage until the damage shall be made
good to the extent of enabling Tenant to use and occupy the Premises; 

(c) 

If in the opinion
of the Landlord, the damage can be made good as aforesaid within one hundred and
twenty (120) days of the happening of such destruction or damage, and the damage
is such that the Premises are capable of being partially used for the purpose
for which leased, until such damage has been repaired, rent shall abate in the
proportion that the part of the Premises rendered unfit for occupancy bears to
the whole of the Premises. 

Section 9.02     Destruction of the
Building 

(a) 

If the building is partially destroyed or damaged as so to affect twenty percent
(20%) or more of the rentable area of the building containing the Premises, or
in the opinion of the Landlord the Building is rendered unsafe, and whether or
not the Premises are affected, and the opinion of Landlord (which shall be given
by written notice to Tenant within thirty (30) days of the happening of such
damage or destruction), cannot be repaired with reasonable diligence within one
hundred and twenty (120) days from the happening of such damage or destruction,
Landlord may within five (5) days next succeeding the giving of Landlord’s
opinion as aforesaid, terminate this lease by giving to Tenant notice in writing
of such termination, in which event the term of this lease shall cease and be at
the end as of the date of such destruction or damage and the rent and all other
payments for which the Tenant is liable under the terms of this lease shall be
apportioned and paid in full to the date of such destruction or damage. 

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	INITIALS	 	 	 	 
	 	Tenant	Landlord

(b) 

In the event of the termination of this lease as hereinabove provided all
insurance proceeds excluding those relating to Tenant’s property to the extent
Tenant is not indebted to Landlord under the provisions of this lease, shall be
and remain the absolute property of Landlord. 

(c) 

If any damage or destruction by fire or other cause to the Building or Premises,
either partial or not, is due to the fault or neglect of Tenant, its officer,
agents, employees, servant, visitors, or licensees, without prejudice to any
other rights and remedies of Landlord and without prejudice to the rights of
subrogation of Landlord’s Insurer: 

(i) 

Tenant shall be
liable for all cost and damages; 

(ii) 

the damages may
be repaired by Landlord at Tenant’s expense; 

(iii) 

Tenant shall
forfeit its right to terminate lease as provided in Article 9.01 (a); 

(iv) 

Tenant shall
forfeit any abatement of rent provided in this Article 9 and rent shall not
abate. 

(d) 

If any part of the Building is destroyed or damaged and the Landlord does not
elect to terminate this Lease, the Landlord will commence diligently to restore
the Building, but only to the extent of the Landlord’s responsibilities pursuant
to the terms of responsibilities set out therein. If the Landlord elects to
restore the Building, the Landlord may restore it according to plans and
specifications and working drawings other than those used in the original
construction of the Building. 

Section 9.03     Expropriation 

If the whole or any
part of the Premises, or the whole of the Building, or so much there of as shall
be expropriated, condemned, or taken by competent authority for any purpose
whatsoever, Landlord shall have the right at its discretion to terminated this
claim in damages or otherwise against Landlord relating to or arising out of the
expropriation or condemnation, or arising out of the cancellation of this lease,
nor shall Landlord be obliged to contest any expropriation proceedings. 

ARTICLE X 

Transfer and Sale 

Section 10.01     Assignment and
Subletting 

(a) 

The Tenant will not: (I) assign this Lease, (II) sublet, share or part with
possessions of all or any part of the Leased Premises, nor (iii) mortgage or
encumber this Lease or the Leased Premises, to or in favor of any Person
(collectively, a "Transfer") without the prior written consent of the Landlord
which consent will not be unreasonably withheld. However, notwithstanding any
statutory provisions to the contrary, it will not be considered unreasonable for
the Landlord to take into account the following factors in deciding whether to
grant or withhold its consent: 

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	INITIALS	 	 	 	 
	 	Tenant	Landlord

(1) 

whether the Transfer is contrary to an covenants or restrictions
granted by the Landlord to other existing or prospective tenants or occupants of
the Building; 

(2) 

whether in the Landlord’s opinion the financial background, business history and
capability of the Transferee is satisfactory; 

Any action brought by the Tenant for the
unreasonable withholding of consent is limited to an action for specific
performance and does not extend to or include an action for damages. The consent
by the Landlord to any Transfer will not constitute a waiver if the necessity
for consent to any subsequent Transfer. 

(b) 

If the Tenant intends to effect a Transfer, then the Tenant will give prior
written notice to the Landlord of such intent, specifying the proposed assignee,
subtenant, occupant, or other person taking the Transfer (collectively, a
"Transferee") and providing additional information including, without
limitations, information concerning financial or business information relating
to the Transferee. The Landlord will, within thirty (30) days after having
received notice and all necessary information, notify the Tenant in writing
either that (i) it consents or does not consent to the Transfer, or (ii) it
elects to cancel this Lease in preference to giving consent. If the Landlord
elects to cancel this Lease, the Tenant will notify the Landlord in writing
within fifteen (15) days thereafter of the Tenant’s intention either to refrain
from the Transfer or to accept the cancellation of this Lease. If the Tenant
fails to deliver its notice within the fifteen (15) day period, this Lease will
be terminated upon the expiration of the fifteen (15) day period. If the Tenant
advises the Landlord it intends to refrain from the transfer, then the
Landlord’s election to cancel this Lease will be void. 

(c) 

If there is a permitted Transfer, the Landlord may collect Rent from the
Transferee and apply the net amount collected to the Rent required to be paid
pursuant to this Lease, but no acceptance by the Landlord of any payments by a
Transferee will be a waiver of this covenant, or the acceptance of the
Transferee as the Tenant, or a release of the Tenant from the further
performance by the Tenant of its covenants or obligations. Any document
evidencing the Transfer will be prepared by the Landlord or is solicitors, will
contain an agreement on behalf of the Transferee whereby it covenants directly
with the Landlord to be bound by all of the terms, covenants, and obligations in
the Lease to be observed by the Tenant, and all legal cost will be paid by the
Tenant to the Landlord or its solicitors as Additional Rent. Notwithstanding a
Transfer, the Tenant will be jointly and severally liable with the Transferee on
this Lease and will not be released from performing any of its obligations.

Section 10.02     Permitted Transfer

Notwithstanding
Section 10.01, the Tenant may without the consent of the Landlord (but on prior
written notice to the Landlord) effect a Transfer of this Lease to a corporation
which is a subsidiary body corporate of the Tenant or the holding body corporate
of the Tenant, or a corporation which is affiliated with the Tenant (as those
terms are defined in the (Canada Business Corporations Act) so long as in each
case the Transferee corporation retains that status.

Section 10.03     Assignment by the
Landlord 

If there is
a sale, lease or other disposition by the Landlord of the Building and/or the
Lands or any part thereof, or assignment by the Landlord of this Lease or any
interest of the Landlord hereunder, then to the extent that the purchaser or
assignee assumes the covenants and obligations of the Landlord hereunder, the
Landlord will, thereupon and without further agreement, be relieved of all
further liability with respect to its covenants and obligations. 

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	INITIALS	 	 	 	 
	 	Tenant	Landlord

ARTICLE X1 

Access and Alternations 

Section 11.01     Right of
Entry 

The
Landlord and its agents have the right to enter the Leased Premises at all
reasonable times (except in the event of any emergency, when the Landlord can
enter at any time) to show them to prospective purchaser, lessees or mortgagees,
and to examine them and make repairs, alterations or changes to the Leased
Premises or Building as the Landlord considers necessary including, without
limitation, repairs, alterations, or changes to the pipes, conduits, wiring,
ducts, and other installations in the Leased Premises and may have access to the
under floor ducts and access panels to mechanical shafts and the Landlord has
the right to check, calibrate, adjust, and balance controls and other parts of
the heating, ventilating, and air-conditioning. The Rent will not abate while
any repairs, alterations, or changes are being made due to loss of interruption
of the business of the tenant or otherwise, and the Landlord will not be liable
for any damage, injury, or death caused to any Person, or to the property of the
Tenant or of others located on the Leased Premises as a result of the entry. If
the Tenant is not present to permit an entry into the Leased Premises at the
time that the entry is necessary, then the Landlord may, in the case of any
emergency, forcibly enter the Leased Premises to exercise its rights under this
Section. 

ARTICLE XII 

Status Statement, Attornment, and Subordination 

Section 12.01     Status Statement 

Within ten (10) days after written
request by the Landlord, the Tenant will deliver in a form supplied by the
Landlord, a status statement or a certificate (which will be certified by the
Tenant to be accurate) to any proposed purchaser, assignee, lessor, or
mortgagee, or to the Landlord, which will contain such acknowledgments and
information as customarily called for in status statements and estoppel
certificates delivered in conjunction with commercial tenancies together with
any additional acknowledgments and information as the Mortgagee requires. 

Section 12.02    
Subordinates an Attornment 

This Lease and the
Tenant’s rights hereunder are, and will at all times be, subordinate to
Encumbrances or any renewals or extensions thereof from time to time in
existence against the Lands and the Building (or part thereof). Upon request,
the Tenant will subordinate this Lease in such form as the Landlord requires to
any Encumbrance and, if requested, the Tenant will attorn to the Encumbrancer.

The Tenant will, if
possession is taken under, or any proceedings are brought for possession under
the foreclosure of, or in the event of the exercise of the power of sale under,
any Encumbrance, attorn to the Encumbrancer or the purchaser upon any such
foreclosure sale or other proceeding and recognize the Encumbrancer or the
purchaser as the Landlord under this Lease. 

Section 12.03     Attorney

The Tenant will, upon
request of the Landlord, execute and deliver promptly any statements,
instrument, and certificates required to carry out the intent of Section 12.01
or 12.02. If ten (10) days after the date of a request by the Landlord, the
Tenant has not executed the same, the Tenant hereby irrevocably appoints the
Landlord as the Tenant’s attorney with full power and authority to execute and
deliver in the name of the Tenant the instruments or certificates. 

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	INITIALS	 	 	 	 
	 	Tenant	Landlord

Section 12.04     Financial Information

The Tenant will, upon
request, provide the Landlord with such information as to the Tenant’s or the
Indemnifier’s financial standing and corporate organization as the Landlord or
the Mortgagee requires. 

ARTICLE XIII 

Default 

Section 13.01     Right to Re-Enter 

If and whenever: 

a) 

The Tenant fails to pay any Basic Rent or Additional Rent on the day or dates
appointed for payment (provided the Landlord first gives five (5) days written
notice to the Tenant of the Tenant’s failure); or 

b) 

The Tenant fails to observe any other of the terms, covenants, or conditions of
this Lease to be observed or performed by the Tenant (other than the terms,
covenants or conditions set out below in subparagraph (c) for which no notice
shall be required), provided the Landlord first gives the Tenant ten (10) days,
or such shorter period of time as is otherwise provided in this Lease, written
notice of the Tenant’s failure and the Tenant within the ten (10) days period
fails to commence diligently and thereafter to proceed diligently to cure its
failure; or 

(c) 

The Tenant or any indemnifier becomes bankrupt or insolvent or takes the benefit
of any act now or hereafter in force for bankrupt or insolvent debtors or files
any proposal or makes any assignment for the benefit of creditors or any
arrangement or compromise; a receiver or a receiver-manager is appointed for all
or a portion of the Tenant’s or the Indemnifier’s property; any steps are taken
or any action or proceedings are instituted by the tenant or by any other party
to dissolve, wind-up, or liquidate the Tenant or its assets; the Tenant makes a
sale in bulk of its assets on the Leased Premises other than a bulk sale to a
permitted Transferee in compliance with the applicable bulk sales legislation;
the Tenant abandons the Leased Premises, or sells, or disposes of the trade
fixtures, goods, or chattels of the Tenant 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 Tenant on the Leased
Premises subject to distress to satisfy all Rent due or accruing hereunder for a
period of at least three (3) months; the Leased Premises become and remain
vacant for a period of five (5) consecutive days; the Tenant’s effects or any of
the Tenant’s assets are taken under any writ of execution; or re-entry is
permitted under any other terms of this Lease, then the Landlord in addition to
any other rights or remedies available to it, has the immediate right of
re-entry upon the Leased Premises and it may repossess the Leased Premises and
enjoy them as of its former estate and may expel all Persons and remove all
property from the Leased Premises and such property may be removed and sold or
disposed of by the Landlord as it deems advisable or may be stored in a public
warehouse or elsewhere at the cost and for the account of the Tenant, all
without service of notice or resort to legal process and without the Landlord
being considered guilty or trespass or becoming liable for any loss or damage
which may be occasioned. 

Section 13.02    
Right to Re-Let 

a) 

If the Landlord elects to re-enter the Leased Premises, 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 without terminating this
Lease make any alterations and repairs as are necessary in order to re-let the
Leased Premises. Upon each re-letting all rent received by the Landlord will be
applied, first to the payment of any indebtedness other than Basic Rent or
Additional Rent due hereunder from the Tenant to the Landlord; second, to the
payment of any costs and expenses of re-letting including brokerage fees and
solicitor’s fees and the costs of alterations and repairs; third, to the payment
of Basic Rent and Additional Rent due and unpaid hereunder; and the residue, if
any will be held by the Landlord and applied in payment of future rent as it
becomes payable hereunder. If the rent received from a re-letting during any
month is less than that payable by the Tenant under the terms of this Lease,
then the Tenant will pay the deficiency in advance on the first day of each
month. No re-entry or taking possession of the Leased Premises will be construed
as an election on its part to terminate this Lease unless a written notice of
that intention is given to the Tenant. Notwithstanding any re-letting without
termination, the Landlord may at any time thereafter terminate this Lease for
the previous breach. 

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	INITIALS	 	 	 	 
	 	Tenant	Landlord

(b) 

If the Landlord terminates this Lease, in addition to other remedies available,
it may recover from the Tenant all damages the Landlord incurs by reason of the
Tenant’s breach, including the cost of recovering the Leased Premises, and the
amount of Basic Rent and Additional Rent required to be paid pursuant to this
Lease, for the remainder of the stated Term, all of which amounts will be
immediately due and payable by the Tenant to the Landlord. 

Section 13.03     Expenses

If legal action is
brought for recovery of possession of the Leased Premises, for the recovery of
Basic Rent and Additional Rent or any other amount due under this Lease, or
because of the breach of any other of the Tenant’s obligations, the Tenant will
pay to the Landlord all expenses incurred therefore, including a solicitor’s fee
(on a solicitor and his client basis), unless a court otherwise awards. 

Section 13.04     Waiver
of Exemption from Distress 

The Tenant agrees that
notwithstanding any statutory provisions or rule of law to the contrary from
time to time, none of the goods and chattels of the Tenant which are on or have
at any time been on the Leased Premises will be exempt from levy by distress for
Basic Rent or Additional Rent in arrears by the Tenant. 

Section 13.05    
Landlord’s Rights 

If the Tenant fails to
pay when due any Rent which is payable to third parties, the Landlord, after
giving five (5) days notice in writing to the Tenant, may but will not be
obligated to, pay all or any part of the same. If the Tenant is in default in
the performance of any of its other covenants or obligations under this Lease,
including without limitation, (a) the Tenant’s insurance obligations under
Article VIII, the Landlord may, but will not be obligated to, after giving such
notice as it considers sufficient (or without notice in the case of emergency),
perform or cause to be performed any of the unperformed covenants or obligation,
and if necessary the Landlord will be entitled to enter into the Leased Premises
without further notice. All expenses incurred and expenditures made by the
Landlord plus sum equal to fifteen percent (15%) representing the Landlord’s
overhead will be paid by the Tenant as Additional Rent within five (5) days
after demand. If the Tenant is in default in the payment of any amounts or
charges comprising Additional Rent, then the amounts will, if not paid when due,
be paid to the Landlord within five (5) days after demand. The Landlord may, at
its option, apply or allocate any sums received from or due to the Tenant
against any amounts due and payable under this Lease in any manner which the
Landlord deems advisable. 

Section 13.06     Rent
Past Due 

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	INITIALS	 	 	 	 
	 	Tenant	Landlord

If the Tenant fails to
pay Basic Rent or Additional Rent when due, the unpaid amounts bear interest
from the due date to the date of payment at an annual rate of three (3)
percentage points above the account overdraft rate current at that time, that
would be charged by Bank of Montreal to the landlord, calculated and
compounded monthly. 

Section 13.07     Deposit 

Prior to
the commencement of this Lease, the Tenant shall pay a deposit of two thousand
nine hundred ninety two dollars ($3,163.50) including HST (the "Deposit")
payable to the Landlord, in Trust, to be applied in payment of the first rents
due hereunder. 

Section 13.08 
    Remedies Generally 

Mention in this
Lease of any particular remedy of the Landlord does not preclude the Landlord
from any other remedy, whether available at law or in equity or by statute or
expressly provided for in this Lease. No remedy will be exclusive or dependent
upon any there remedy, and the Landlord’s remedies are cumulative and not
alternative. 

ARTICLE XIV 

Miscellaneous 

Section 14.01     Rules and Regulations

The Rules and
Regulations adopted and promulgated by the Landlord from time to time including,
without limitation, those set out in Schedule "D", are made a part of this Lease
as if they were embodied herein, and the Tenant will comply with and observe
them as though they were covenants. The Landlord reserves the right from time to
time to amend or supplement the Rules and Regulations applicable to the Leased
Premises or the Building as are, in the Landlord’s judgment, acting reasonably
and in such manner as would a prudent Landlord of a similar office building,
from time to time needed for the safety, care, cleanliness, and efficient
operation of the Building. Notice of the Rules and Regulations and amendments
and supplements, if any, will be given to the Tenant and the Tenant will
thereupon comply with and observe them, provided that they do not contradict any
terms, covenants, and conditions of this Lease. The Landlord is not under any
obligation to enforce the Rules and Regulations against other Tenants and is not
responsible if other Tenants fail to observe them. 

Section 14.02     Intent and
Interpretation 

Net Lease 

The Tenant
acknowledges that it is intended that this Lease is a completely net lease to
the Landlord, except as expressly herein set out, that the Landlord is not
responsible during the Term for any costs, charges, expenses, and outlays of any
nature whatsoever arising form or relating to the Leased Premises or the use and
occupancy thereof and the Tenant will pay all charges, impositions, costs, and
expenses of every nature and kind relating to the Leased Premises except as
expressly herein set out. 

Obligations as Covenants 

Each obligation or
agreement of the Landlord or the Tenant expressed in this Lease, even though not
expressed as a covenant, is considered to be a covenant for all purposes. 

 

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	INITIALS	 	 	 	 
	 	Tenant	Landlord

Captions and Sections Numbers

The captions, section
numbers, article numbers and Table of Contents appearing in this Lease are
inserted only as a matter of convenience and in no way define, limit, construe,
or describe this scope or intent of such sections or article of this Lease nor
in any way affect this Lease. 

Extended Meanings 

The words, "hereof",
"hereunder" and similar expression used in any Section or Subsection of this
Lease relate to the whole of this Lease and not to that Section or Subsection
only, unless otherwise expressly provided. The use of the neuter singular
pronoun to refer to the Landlord or the Tenant is deemed a proper reference even
though the Landlord or the Tenant is an individual, a partnership, a
corporation, or a group of two or more individuals, partnerships, or
corporations. The necessary grammatical changes required to make the provisions
of this Lease apply in the plural sense where there is more than one Landlord or
Tenant and to either corporations, males or females, shall in all instances be
assumed as though in each case fully expressed. 

Partial Invalidity 

If any term, covenant,
or condition of this Lease or the application thereof to any Person or
circumstance, is to any extent held or rendered invalid, unenforceable, or
illegal, then that term, covenant or condition (i) is deemed to be independent
of the remainder of this Lease and to be servable and divisible therefore, and
its invalidity, unenforceability or illegality does not affect, impair, or
invalidate the remainder of the Lease or any part thereof; and (ii) continues to
be applicable to and enforceable to the fullest extent permitted by law against
any Person and circumstances other than those as to which it has been held or
rendered invalid, unenforceable, or illegal. Neither party is obliged to enforce
any term, covenant, or condition of this Lease against any Person, if, or to the
extent by so doing, such party is caused to be in breach of any laws, rules,
regulations, or enactments from time to time in force. 

Entire Agreement 

This Lease and the
Schedules and Riders, if any attached, together with the Rules and Regulations,
set forth, all covenants, promises, agreements, conditions, and understandings
between the Landlord and the Tenant concerning the Leased Premises constitute
the entire agreement and there are no other covenants, promises, agreements,
conditions, or understandings, either oral or written, between them. The titles
of sections and articles are not intended to describe or otherwise define or
limit the scope of intent of the sections or articles or any other parts of this
Lease. No alteration or amendment to this Lease will be binding upon the
Landlord or the Tenant unless in writing and signed by the Tenant and by the
Landlord. 

Governing Law 

This Lease will be constructed in
accordance with and governed by the laws of the Province in which the Building
is located. 

Time of the Essence 

Time is of the essence of this Lease
and of every part of it. 

Section 14.03     Over-holding – No Tacit
Renewal 

If the
Tenant remains in the possession of the Leased Premises after the end of the
Term without having signed a new lease or an extension of Term Agreement, there
is no tacit renewal of this Lease or the Term, notwithstanding any statutory
provisions or legal presumptions to the contrary, and the Tenant will be deemed
to be occupying the Leased Premises as a tenant from month-to-month at a monthly
Basic Rent equal to the monthly amount of Basic Rent payable during the last
month of the Term, and otherwise, upon the same terms, covenants, and conditions
as are set forth in this lease (including the payment of Additional Rent) so far
as these are applicable to a monthly tenancy. 

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	INITIALS	 	 	 	 
	 	Tenant	Landlord

Section 14.04     Successors 

All rights and
liabilities under this lease extend to and bind the successors and assigns of
the Landlord and the heirs, executors, administrators, and permitted successors,
and assigns of the Tenant, as the case may be. No rights however will enure to
the benefit of any Transferee of the Tenant unless the Transfer has been
consented to or is permitted. If there is more than one Tenant, they are bound
jointly and severally. 

Section 14.05     Tenant Partnership

If the Tenant is a
Partnership ("the Tenant Partnership") each Person who is presently a member of
the Tenant Partnership, and each Person who subsequently becomes a member of any
successor Tenant Partnership will be and continue to be liable jointly and
severally for the full and complete performance of, and will be and continue to
be subject to, the terms, covenants, and conditions of this Lease, whether or
not the Person ceases to be a member of the Tenant Partnership or successor
Tenant Partnership. 

Section 14.06     Waiver 

The waiver by either
party of any breach of the other is not deemed to be a waiver of any subsequent
breach of the same or of any other term, covenant, or condition. The subsequent
acceptance of Basic Rent or Additional Rent by the Landlord is not deemed to be
a waiver of any preceding breach at the time of acceptance of the Rent. No term,
covenant, or condition of this Lease is deemed to have been waived by the other
party unless the waiver is in writing. 

All Basic Rent and
Additional to be paid by the Tenant to the Landlord will be paid without any
deduction, abatement, set-off, or compensation whatsoever (except to the extent
it may be abated pursuant to Section 9.01), and the Tenant hereby waives the
benefit of any statutory or other rights in respect of abatement, set-off, or
compensation in it’s favor at the time hereof or at any future time. 

Section 14.07     Accord and Satisfaction

No payment by or
receipt by the Landlord of a lesser amount than the monthly payment of Basic
Rent or Additional Rent stipulated is deemed to be other than on account of the
earliest stipulated Basic Rent or Additional Rent, nor is any endorsement or
statement on any cheque or any letter accompanying any cheque or payment as Rent
deemed an acknowledgement of full payment or accord and satisfaction, and the
Landlord my accept and cash any cheque or payment without prejudice to the
Landlord’s right to recover the balance of the Rent due or pursue any other
remedy provided in this Lease. 

Section 14.08     Force Majeure 

Not withstanding
anything in this Lease, if either party is bona fide delayed or hindered in or
prevented from the performance of any term, covenant, or act required hereunder
by reason of strikes, labour troubles, inability to procure materials or
services, power failure, restrictive governmental laws or regulations, riots,
insurrection, sabotage, rebellion, war, act of God, or other reason whether of a
like nature or not which is not the fault of the party delayed in performing
work or doing acts required under the terms of this Lease, then the performance
of that term, covenant, or act is excused for the period of the delay and the
party delayed will be entitled to perform that term, covenant, or act within the
appropriate time period after the expiration of the period of the delay.
However, the provisions of this Section do not operate to excuse the Tenant from
the prompt payment of Rent. 

17

	INITIALS	 	 	 	 
	 	Tenant	Landlord

Section 14.09     Notices 

Any notice, demand,
request, or other instrument which may be or is required to be given under this
Lease will be delivering in person or sent by registered mail postage prepaid
and will be addressed (a) if to the Landlord, to: c/o 
Barrington Brook Holdings Inc. , 76 Temple Terrace, Sackville 
or to such other Person or at such other address as the Landlord
designates by written notice, and (b) if to the Tenant, at the Leased Premises.
Any notice, demand, request, or consent is conclusively deemed to have been
given or made on the day upon which it is delivered, or, if mailed then
seventy-two (72) hours following the date of mailing, as the case may be. Each
party may give written notice of any change of its address and; thereafter, the
new address is deemed to be the address of that party for the giving of notices.
If the postal service is interrupted or is subsequently delayed, any notice,
demand, request, or other instrument will be delivered in person. 

Section 14.10     Registration 

Neither the Tenant nor
any one on the Tenant’s behalf or claiming under the Tenant will register this
Lease against the Lands or any part thereof comprising the Building or the
Leased Premises. 

Section 14.11     Exterior Signage 

The Tenant will be entitled to
exterior signage in accordance with the Landlord’s criteria for the building
pursuant to Section 8.06. 

Section 14.12     Accrual of Basic Rent
and Additional Rent 

Basic Rent and
Additional Rent will be considered as annual and accruing from day-to-day and
where it becomes necessary for any reason to calculate Rent for an irregular
period of less than one (1) year, an appropriate apportionment and adjustment
will be made. 

Section 14.13     Quiet Enjoyment 

If the Tenant pays the
Basic Rent and Additional Rent and observes and performs all of its terms,
covenants, and conditions, the Tenant will peaceably and quietly hold and enjoy
the Leased Premises for the Term herby demised without hindrance or interruption
by the Landlord or any other Person lawfully claiming by, through or under the
Landlord, unless otherwise permitted under the terms of this Lease. The Tenant
acknowledges that the exercise by the Landlord of any of the rights conferred on
the Landlord under this Lease will not be deemed to be a constructive or actual
eviction of the Tenant and will not be considered a breach of the Landlord’s
covenant for quiet enjoyment. 

18

	INITIALS	 	 	 	 
	 	Tenant	Landlord

	IN WITNESS WHEREOF, Landlord and
    Tenant have signed and sealed this Lease.
	 	 	 
	SIGNED, SEALED, AND DELIVERED	)	BARRINGTON BROOK HOLDINGS INC.
	 	)	 
	In the presence of	)	(Landlord)
	 	)	 
	/s/ Sharon Grandy               
    	)	Per  "Barrington Brook Holdings Inc." 
	    Sharon Grandy	)	 
	 	)	NAYARIT GOLD INC.
	 	)	(Tenant)
	 	)	 
	 	)	Per  /s/ Colin P. Sutherland                   
    
	 	)	         
    Colin P. Sutherland
	 	 	I/We have the authority to bind the
	 	 	Company.

19

	INITIALS	 	 	 	 
	 	Tenant	Landlord

SCHEDULE "A" 

FLOOR PLAN 

20

	INITIALS	 	 	 	 
	 	Tenant	Landlord

SCHEDULE "B" 

LANDLORD / TENANT WORK 

The Landlord offers and the Tenant accepts the Premises in an
as-is, where-is condition. 

Any changes, additions, and improvements shall be with the
prior written consent of the Landlord. 

The Landlord agrees to comply with and perform
at its cost, work hereafter described as "Landlord’s Work", prior to the
Commencement Date. The Landlord’s work shall include, and be consistent with
Shirebrook’s Leaseholds located on the same floor: 

i)      
Installation of HVAC; 

ii)      Installation of lighting including side lights
in all offices; 

iii)     Installation of laminate flooring; 

iv)     Construction of a new reception area; 

v)      Construction of two (2) new offices in addition
to existing offices; 

vi)     Construction of one (1) boardroom and 

vii)    Installation of building standard lock sets for each
office. 

All such work shall be performed in compliance with all
requirements of applicable municipal by-laws, building codes, fire, health, and
other regulations and all relevant provincial and federal legislation and
regulations there under. 

The Landlord will use their best efforts to substantially
complete the leaseholds prior to the lease commencement date. All additional
work shall be at the Tenant’s expense and subject to prior approval by the
Landlord. 

21

	INITIALS	 	 	 	 
	 	Tenant	Landlord

SCHEDULE "D" 

RULES AND REGULATIONS 

1. 

The Tenant will not place or permit any debris, garbage, trash, or refuse to be
placed or left in or upon any part of the building outside of the Leased
Premises. 

2. 

The Landlord will permit the Tenant and the Tenant’s employees and all Persons
lawfully requiring communication with them to have the use during Normal
Business Hours in common with others entitled thereto of the main entrance and
the stairways, corridors, elevators, or other mechanical means of access leading
to the Leased Premises together with the Common Areas and Facilities located on
the Tenant’s floor of the Building as required incidental to the Tenant’s
business operations. At times other than during Normal Business Hours the Tenant
and its employees will have access to the Building and to the Leased Premises
only in accordance with the Rules and Regulations and will be required to
satisfactorily identify themselves and to register in any book which may, at the
Landlord’s option, be kept by the Landlord for that purpose, failing which the
Landlord may deny entry to the Building, and may in any event deny entry to the
Leased Premises to any Person not having a key to the Leased Premises. 

3. 

The Landlord will permit the Tenant and its employees in common with others
entitled, to use the boardroom, kitchen, outdoor patio and washrooms on the
Tenant’s floor of the Building, as well as the gym facilities on the lower level
of the Building. 

4. 

The Tenant will
permit window cleaners to clean the windows of the Leased Premises during Normal
Business Hours. 

5. 

The sidewalks, entrances, passages, escalators, elevators, and staircases will
not be obstructed or used by the Tenant, its agents, servants, contractors,
invitee’s, or employees for any purpose other than ingress to and egress from
the Leased Premises or the Building. 

6. 

The Tenant, it’s agents, servants, contractors, invitees, or employees, will not
bring in or take out, position, construct, install, or move any safe or heavy
machinery or equipment or anything liable to injure or destroy any part of the
Building without first obtaining the written consent of the Landlord. The
Landlord will have the right to prescribe the weight permitted and the position
thereof, and the use and design of planks, skids, or platforms, to distribute
weight. All damage done to the Building by moving or using any heavy equipment
or other office equipment or furniture will be repaired at the expense of the
Tenant. The moving of all heavy equipment or other office equipment or furniture
will occur only by prior arrangement with the Landlord. Safes and other heavy
office equipment and machinery will be moved through the halls and corridors
only upon steel bearing places. No freight or bulky matter of any description
will be received into the Building or carried in the elevators except during
hours approved by the Landlord. 

7. 

The Tenant will not place or cause to be placed any additional locks upon any
doors of the Leased Premises without the approval of the Landlord and subject to
any conditions imposed by the Landlord. All locks will be standard to permit
access by the Landlord’s master key. All keys shall be delivered to the Landlord
at the end of the Lease Term. No extra keys shall be made without the Landlord’s
prior written consent. If the Building has a security card system, the Tenant
will comply with all the rules and regulations adopted and promulgated by the
Landlord from time to time with respect to the use of the system. 

8. 

The Tenant will not permit any cooking in the Leased Premises without the
written consent of the Landlord, this does not include the possible use of a
microwave in the shared kitchen. 

9. 

Canvassing,
soliciting, and peddling in or about the Building are prohibited. 

22

	INITIALS	 	 	 	 
	 	Tenant	Landlord

10. 

The Tenant will not place or maintain supplies, merchandise, signs, or other
inappropriate articles in any vestibule or entry of the Leased Premises, on the
foot-walks adjacent thereto or elsewhere on the exterior of the Leased Premises
or elsewhere in the Building. 

11. 

The Tenant will not permit or allow any odors, vapors, steam, water, vibrations,
noises, or other undesirable effects to emanate from the Leased Premises or any
equipment or installation therein which in the Landlord’s opinion, are
objectionable or cause any interference with the safety, comfort, or convenience
of the Building by the Landlord or the occupants and tenants thereof or their
agents, servants, invitees, or employees. 

12. 

The Tenant will not receive or ship articles of any kind except through
facilities and designated doors and at hours designated by the Landlord and
under the supervision of the Landlord. 

13. 

The Tenant shall not install any equipment which will exceed or overload the
capacity of any utility, electrical, or mechanical facilities in the Leased
Premises, as determined by the Landlord. If any equipment installed by the
Tenant requires additional utility, electrical, or mechanical facilities, the
Landlord may, in its sole discretion, if they are available, elect to install
them at the tenant’s expense. 

14. 

The Tenant will not bring into the Building any machinery, equipment article or
thing that by reason of its weight, size, or use might in the opinion of the
Landlord damage the Building and shall not at any time overload the floors of
the Leased Premises. 

15. 

The Tenant will, for the purpose of loading and unloading goods and other
deliveries, use only the areas and entrances designated by the Landlord and then
only at the times designated by the Landlord. The Tenant will pay the Landlord
such reasonable charges for storage, delivery, and other services in connection
with the loading area as the Landlord from time to time requires. 

16. 

The skylights and windows that reflect or admit light into the passageways and
Common Areas and Facilities of the Building shall not be covered or obstructed
without the written consent of the Landlord. 

17. 

The water closets and other water apparatus shall not be used for any purpose
other than those for which they were constructed and no sweepings, rubbish,
rags, ashes, or other substances shall be thrown therein. No one shall let the
water run unless in actual use or deface any part of the Building. 

18. 

The Tenant shall not do anything in the Leased Premises or being or keep
anything therein which will in any way increase the risk of fire, or obstruct,
or interfere with the rights of other Tenants, or violate or act at variance
with the laws relating to fires or with regulations of the Fire Department or
the Board of Health. 

19. 

Nothing shall be
thrown out of doors, windows, skylights, or down the passages or elevator shafts
of the Building. 

20. 

No birds or
animals shall be kept in or about the Leased Premises. 

21. 

No one shall use the Leased Premises for sleeping apartments or residential
purposes, or for the storage of personal effects or articles other than those
required for general office business purposes, or for any public or private
auction. 

23

	INITIALS	 	 	 	 
	 	Tenant	Landlord

22. 

No inflammable
oils or other inflammable, dangerous, or explosive materials shall be kept or
permitted to be kept in the Leased Premises. 

23. 

Nothing shall be
placed on the outside of window sills, projections, or balconies. 

24. 

Furniture, effects, and supplies shall not be taken into or removed from the
Leased Premises, except at such time and in such manner as my be previously
approved by the Landlord. 

25. 

No bicycles or
other vehicles except wheelchairs shall be brought into the building. 

26. 

No smoking at all
will be permitted within the building, this includes the Leased Premises and the
common areas. 

27. 

Prompt notice shall be given to the Landlord or any accident to or any defect in
the Plumbing, heating, air-conditioning, mechanical, or electrical apparatus or
any other part of the building. 

28. 

No machine dispensing goods for sale shall be installed in the Leased Premises
or the building and no food or beverage shall be delivered to the Leased
Premises without the approval of the Landlord. 

29. 

No one shall mark, paint, or drill into or in any way deface the walls, doors,
windows, ceilings, partitions, floors, or other parts of the Leased Premises and
the Building except with the prior written consent of the Landlord and as the
Landlord may direct. 

30. 

The lining of all window drapes facing the interior surface of exterior windows
shall be subject to the prior approval of the Landlord as to colour and material
and no draperies shall be hung which in the Landlord’s opinion do not conform to
any uniform scheme of window coverings established for the Building. 

31. 

No telephone, telegraph, electric, or other connections shall be made or wires
installed other than with the consent of the Landlord and in places and manner
designated by the Landlord. 

                  
                
              
            
          
        
      
    
  

24

	INITIALS	 	 	 	 
	 	Tenant	Landlord

SCHEDULE "E" 

DEFINITIONS 

In this Lease and in the Schedules: 

1. 

"Additional Rent"
means all sums of money or charges required to be paid by the Tenant under this
Lease (except Basic Rent) whether or not designated "Additional Rent" and
whether or not payable to the Landlord or any other Person. 

2. 

"Architect" means the architect from time to time named by the Landlord. The
decision of the Architect whenever required by this Lease (or requested by the
Landlord) and any related certificate will be final and binding. 

3. 

"Basic Rent"
means the annual rent payable by the Tenant pursuant to and in the manner set
out in Section 2.02 of this Lease. 

4. 

"Building means the integrated commercial and office project known as 76
Temple Terrace, Sackville, Nova Scotia, including the Common Area and
Facilities, and the areas and facilities serving the Building or having utility
in connection therewith, as determined by the Landlord, whether or not located
directly under the Building. 

5. 

"Common Areas and Facilities" means those area, facilities, utilities,
improvements, equipment, and installations in or serving the Building which,
from time to time, are not designated or intended by the Landlord to be leased
to Tenants of the Building, are designated by the Landlord as Common Areas and
Facilities or are provided or designated by the Landlord for the used or benefit
of the Tenants, their employees, customers, and other invitees in common with
others entitles to their use or benefit. 

Without limiting the
generality of the foregoing, Common Areas and Facilities include the roof,
exterior wall assemblies (including weather walls), exterior and interior
structural elements and bearing walls in the Building; the parking areas of the
Building; pedestrian sidewalks; service areas; corridors; underground tunnels
and pedestrian overpasses to adjoining lands; equipment, furniture, furnishings,
and fixtures; stairways, escalators, ramps, and elevators and other
transportation equipment and systems; tenant common and public washrooms;
electrical, telephone, meter, valve, mechanical, mail, storage, service, and
janitorial rooms; communication systems; general sign; columns; pipes,
electrical, plumbing, drainage, mechanical, and all other installations,
equipment, or services located therein or related thereto as well as the
structures housing the same (including, without limitation, the heating,
ventilating, and air conditioning systems of the Building). 

6. 

"Indemnifier"
means the Person who has executed or agreed to execute the Indemnity Agreement
as outline in section 7.04 of this Lease. 

7. 

"Landlord" means the party of the First Part. Wherever the word "Landlord" is
used in this Lease, it is deemed to have the same meaning as "Lessor", and
includes the Landlord and its duly authorized representatives. 

8. 

"Lands means the lands underneath, adjacent, and appurtenant to the Building, or
as such Lands may be altered, expanded, or reduced from time to time. 

9. 

"Leased Premises"
means the premises leased to the Tenant as referred to and described in Section
1.01. 

10. 

"Mortgagee" means any mortgagee or chargee (including any trustee for
bondholders), or the Landlord’s or the owners of the Building’s or the Land’s
interest in them. The security documents held by Mortgagees and any ground or
underlying leases affecting the Lands of the Building are referred to as
"encumbrances" or "Encumbrance" as the case may be and the holder is referred to
as the "Encumbrancer". 

25

	INITIALS	 	 	 	 
	 	Tenant	Landlord

11. 

"Net Usable Area" of any portion of the Building means the area expressed in
square feet. 

12. 

"Normal Business Hours" means the hours from 7 am to 10 pm five (5) days per
week unless any such days is a holiday or such other hours as designated by the
Landlord. 

13. 

(a) 

"Operating Costs" means the total amounts incurred, paid or payable whether by
the Landlord or by others on behalf of the Landlord for the maintenance,
operation, repair, replacement, managing, and administration for the Building
and the Lands, calculated as if the Building were at least ninety percent (90%)
occupied and operational during each Rental Year of the Term. 

(b) 

Operating Costs include, without limitation and without duplication, the
aggregate of: 

(i) 

the total annual costs and expenses of insuring the Lands, the Building, and the
improvements and equipment and other property servicing the Building from time
to time, owned or operated by the Landlord or for which the Landlord is legally
liable, in such manner and form, with such companies and such coverage
(including, without limitation, insurance coverage loss of gross profits
including Basic Rent and Additional Rent) and in such amounts as the Landlord,
or the Mortgagee, from time to time determines; 

(ii) 

snow-removal, landscaping, garbage and waste collection and disposal, and the
costs of cleaning and painting attributable to Common Areas and Facilities;

(iii) 

the aggregate of the costs and amounts paid for (1) all fuel used in heating;
(2) all electricity furnished by the Landlord to the Building; (3) all hot and
cold water; (4) heating, air-conditioning and ventilating the building and
individual premises; (5) telephone and other utility costs, used in the
maintenance and operation of the Building; (6) installing energy conservation
equipment and safety or life support systems in any portion of the Building; (7)
elevator maintenance, operation, repairs, and replacement; (8) security
services; and (9) replacing building standard light fixtures, ballasts, tubes,
starters, lamps, and light bulbs; 

(iv) 

salaries, wages, and other amounts paid or payable for all personnel including
the Building Manager and related staff, superintendent, operating, and
maintenance staff, including contributions and premiums towards fringe benefits,
unemployment and Workmen’s Compensation insurance, pension plan contributions,
and the total charges of any independent contractors or managers engaged in the
repair, care, maintenance, and cleaning of the Building and any portion of the
Lands; 

(v) 

the cost of the rental of any equipment and signs, and the cost of supplies used
by the Landlord in the maintenance and operation of the Building and the Lands;

(vi) 

audit fees and the cost of accounting services incurred in the preparation of
the certificates referred to in this Lease and related financial statements, and
in the computation of the rents and charges payable by tenants of the Building;

(vii) 

all repairs (including major repairs and, except to the extent set out in the
following sentence, structural repairs) and replacements to and maintenance and
operation of the Building, and the systems, facilities, and equipment serving
the Building. Notwithstanding the foregoing, Operating Costs will not include
any costs or expenses incurred in repairing and replacing structural portions of
the Building which function as support elements of the Building (as determined
by the Landlord or its engineers), such as by way of example, footings and
foundations, load bearing walls, structural sub-floors, and structural beams;

26

	INITIALS	 	 	 	 
	 	Tenant	Landlord

(viii) 

depreciation or amortization of (1) the costs and expenses including repair and
replacement, of all maintenance and cleaning equipment and master utility meters
and all other fixtures, equipment and facilities serving or comprising the
Building (including, without limitation, the heating, ventilating, air
conditioning systems serving the Building) which by their nature, require
periodic or substantial repair or replacement, unless, pursuant to Paragraph
13(b)(vii), they are charged fully in the Rental Year in which they are
incurred, in accordance with sound accounting principles, and (2) the costs of
improvements properly charged to capital account which substantially reduce
Operating Costs, amortized over their useful life, as determined by the Landlord
in accordance with sound accounting principles; 

(ix) 

a fee of fifteen
percent (15%) of all Operating Costs for the administration and management of
the Building; 

From the total of the above costs, there is deducted: 

(aa) 

all net recoveries which reduce Operating Costs received by the Landlord from
tenants or by reason of a breach by such tenants of provisions in their
respective leases (other than recoveries from such tenants of provisions in
their respective leases requiring their contribution to Operating Costs); 

(bb) 

net proceeds received by the Landlord from insurance policies taken out by the
Landlord to the extent that the proceeds related to Operating Costs); 

(cc) 

mounts chargeable directly to specific tenants by reason of their excess
consumption of water, electricity, or other utilities to the extent that such
amounts are included in Operating Costs; and 

14. 

"Person", if the context allows, includes any person, firm, partnership, or
corporation, or any group of persons, firms, partnerships, or corporation or any
combination thereof. 

15. 

"Proportionate Share" means a fraction which has as its numerator the Rentable
Area of the Leased Premises and as its denominator the Total Rentable Area of
the Building. 

16. 

"Rent" means all
Basic Rent and Additional Rent. 

17. 

"Rentable Area" of any portion of the Building means the area expressed in
square feet. The rentable area shall be based on the actual square feet of the
leased space plus the common area factor for the building. 

18. 

"Rentable Year" means a period of time, the first Rental Year commencing on the
first day of the Term hereof, and ending on the 30th day of September 
next following; thereafter Rental Years consists of consecutive periods of
twelve (12) calendar months. If however, the Landlord considers it necessary or
convenient for the Landlord’s accounting purposes, the Landlord may at any time
and from time to time, by written notice to the Tenant, specify an annual date
form which each subsequent Rental Year is to commence, and, in that event, the
then current Rental Year will terminate on the day preceding the commencement of
the new Rental Year. The last Rental Year of the Term will end upon the
expiration or earlier termination of this Lease. 

27

	INITIALS	 	 	 	 
	 	Tenant	Landlord

19. 

"Rules and Regulations" means the rules and regulations adopted and promulgated
by the Landlord from time to time as contemplated under Section 14.01, and they
include the initial Rules and Regulations appearing in Schedule "D". 

20. 

"Taxes" means all real property taxes, capital taxes, rates, duties, and
assessments (including local improvement taxes), value added taxes, impost
charges or levies, whether general or special, that are levied, rated, charged,
or assessed against the Building and the Lands or any part thereof from time to
time by any lawful taxing authority, whether federal, provincial, municipal,
school, or otherwise, and any taxes or other amounts which are imposed in lieu
of, or in addition to, any real property taxes whether of the foregoing
character or not and whether in existence at the Commencement Date or not, and
any such real property taxes levied or assessed against the Landlord or the
owners on account of its interest in the Building and the Lands or any part
thereof, or their ownership thereof, as the case may be, calculated on the basis
of the Building and the Lands being assessed as a fully leased and operational
building. 

21. 

"Tenant" means the party of the Second Part and is deemed to include the word
"Lessee" and to mean each and every Person mentioned as the Tenant in this
Lease, whether one or more. If there is more than one Tenant, any notice
required or permitted by this Lease may be given by or to any one of them and
has the same force and effect as if given by or to all of them. Any reference to
"Tenant" includes where context allows, the servants, employed, agents,
invitees, and licensees of the Tenant and all other over whom the Tenant may
reasonably be expected to exercise control. 

22. 

"Total Rentable Area of the Building" means the aggregate Rentable Area of all
portions of the Building leased or available for lease, plus the identified
common areas of the building. 

28

	INITIALS	 	 	 	 
	 	Tenant	Landlord

29

	INITIALS	 	 	 	 
	 	Tenant	Landlord

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