Document:

<PAGE>
                                                                    EXHIBIT 10.5

                                      LEASE

                            FALSE CREEK RESEARCH PARK

                               1618 STATION STREET

                                 VANCOUVER, B.C.

                              DISCOVERY PARKS INC.

                                  ("Landlord")

                         ANGIOTECH PHARMACEUTICALS, INC.

                                   ("Tenant")
<PAGE>
                                TABLE OF CONTENTS

<TABLE>
<S>     <C>    <C>    <C>    <C>    <C>    <C>
SUMMARY OF LEASE.............................................................1
1.0   DEFINITIONS............................................................1
2.0   PREMISES...............................................................1
3.0   TERM...................................................................2
4.0   BASIC RENT.............................................................2
5.0   OPERATING EXPENSES AND TAXES...........................................4
6.0   ADDITIONAL RENT AND PRO RATA PORTION OF PAYMENTS.......................4
7.0   USE OF DEMISED PREMISES................................................5
8.0   TENANT IMPROVEMENTS AND INSTALLATIONS..................................5
9.0   LEASEHOLD IMPROVEMENT ALLOWANCE........................................6
10.0  COMPLETION.............................................................7
11.0  COVENANTS OF TENANT....................................................7
12.0  COVENANTS OF LANDLORD.................................................11
13.0  ALTERATIONS AND IMPROVEMENTS..........................................13
14.0  SUBORDINATION AND ESTOPPEL CERTIFICATE................................14
15.0  PROPERTY DAMAGE AND INDEMNITY.........................................15
16.0  ENVIRONMENTAL CONSIDERATIONS..........................................15
17.0  DAMAGE TO OR DESTRUCTION OF PREMISES..................................19
18.0  ACCESS TO DEMISED PREMISES............................................20
19.0  DEFAULT...............................................................21
20.0  DISTRESS..............................................................22
21.0  LANDLORD'S EXPENSES ENFORCING LEASE...................................22
22.0  WAIVER................................................................22
23.0  HOLD OVER.............................................................23
24.0  INABILITY TO PERFORM / FORCE MAJEURE..................................23
25.0  RULES AND REGULATIONS.................................................24
26.0  LANDLORD'S RIGHT TO PERFORM...........................................24
27.0  REMEDIES CUMULATIVE...................................................24
28.0  LANDLORD'S LIMIT OF LIABILITY.........................................25
29.0  USE OF COMMON AREAS/PARKING/CHEMICAL STORAGE..........................25
30.0  OPTION TO RENEW.......................................................26
31.0  RIGHT OF FIRST OPPORTUNITY............................................27
32.0  WHOLE OF AGREEMENT....................................................28
33.0  NOTICES AND REGISTRATION..............................................28
34.0  INTERPRETATION........................................................28
35.0  ADDITIONAL PROVISIONS.................................................29
</TABLE>

SCHEDULE "A"  -  Definitions
SCHEDULE "B"  -  Offer to Lease
SCHEDULE "C"  -  Premises
SCHEDULE "D"  -  Building Parking Spaces
SCHEDULE "E" - Landlords' (Base Building) Work
<PAGE>
                                      LEASE
                            FALSE CREEK RESEARCH PARK
                               1618 STATION STREET
                                 VANCOUVER, B.C.

                                SUMMARY OF LEASE

<TABLE>
<S>                          <C>
Landlord:                    DISCOVERY PARKS INCORPORATED
                             602 - 1401 West Broadway
                             Vancouver, B.C. V6H 1H2

Tenant:                      ANGIOTECH PHARMACEUTICALS INC.
                             2620 - 1055 West Georgia Street
                             Vancouver, B.C.  V6E 3R5

Premises:                    3rd, 4th and 5th floors of the Building at 1618
                             Station Street, Vancouver, B.C.

Rentable Area of Premises:   52,100 square feet (subject to Section 4.3)

Term:                        10 years from the Commencement Date

Commencement Date:           June 1, 2002, subject to completion of improvements

Fixturing Period:            Not applicable
</TABLE>

Basic Rent:

<TABLE>
<CAPTION>
                                     Annual Basic Rent        Monthly Basic Rent
                                     -----------------        ------------------
<S>                           <C>                             <C>
Years 1 - 5                                 $1,190,485                $99,207.08
                              ($22.85 per square foot)
Years 6 - 10                                $1,242,585               $103,548.75
                              ($23.85 per square foot)
</TABLE>

Leasehold Improvement

<TABLE>
<S>                 <C>
Allowance:          $50 per sq. ft. of Rentable Area for 4th and 5th flrs.
                    (34,730 sq. ft.)
                    $45 per sq. ft. of Rentable Area for 3rd flr.
                    (17,370 sq. ft.)

Parking:            -70 Surface stalls at $60 per month
                    -47 Covered stalls at $90 per month (being all the
                    parking stalls in the Building)
                    -3 visitors stalls for Tenant's visitors

Renewal Options:    Two Options to Renew for terms of five years each
</TABLE>
<PAGE>
                                      LEASE
                            FALSE CREEK RESEARCH PARK
                               1618 STATION STREET
                                 VANCOUVER, B.C.

            THIS LEASE made effective as of the 20th day of December, 2001.

BETWEEN:

            DISCOVERY PARKS INCORPORATED, duly incorporated under the laws of
            the Province of British Columbia under Incorporation No. 173252 and
            having an office at #602 - 1401 West Broadway, Vancouver, British
            Columbia, V6H 1H6

            (the "Landlord")

AND:

            ANGIOTECH PHARMACEUTICALS, INC., duly incorporated under the laws of
            the Province of British Columbia under Incorporation No. 0374228 and
            having its registered and records office at 2620-1055 West Georgia
            Street, Vancouver, British Columbia, V6E 3R5

            (the "Tenant")

            WITNESSES that in consideration of the rents, covenants and
agreements herein contained the Landlord hereby demises and leases the Premises
to the Tenant on the following terms, conditions and covenants:

1.0         DEFINITIONS

1.1         The definitions in Schedule "A" apply to this Lease.

2.0         PREMISES

2.1         The Landlord hereby leases the Premises, being the third, fourth and
fifth floors of the Building at 1618 Station Street, comprising an estimated
Rentable Area of 52,100 square feet as shown and described in Schedule "C"
attached hereto, to the Tenant and the Tenant leases the Premises from the
Landlord for the Term.
<PAGE>
3.0         TERM

3.1         The term of this Lease shall be ten (10) years commencing on the
Commencement Date.

4.0         BASIC RENT

4.1         The Tenant shall pay the Landlord at its office at #602 - 1401 West
Broadway, Vancouver, B.C., V6H 1H6, or at such other place as the Landlord may
direct in writing, Basic Rent for Premises in the sum set out hereunder together
with applicable goods and services tax, payable in advance on the first day of
each and every month of the Term as follows:

<TABLE>
<CAPTION>
                                                       MONTHLY BASIC
               PERIOD           ANNUAL BASIC RENT          RENT
               ------           -----------------      -------------
<S>                          <C>                       <C>
              Years 1-5           $1,190,485.00          $99,207.08
                               (based on a rate of
                             $22.85 per square foot)

            Years 6 - 10          $1,242,585.00         $103,548.75
                               (based on a rate of
                             $23.85 per square foot)
</TABLE>

Notwithstanding the foregoing:

      (a)   in respect of the 34,730 square feet of Rentable Area of the 4th and
            5th floors of the Premises, the Tenant shall not be obliged to pay
            Basic Rent for the first three (3) full months and the 13th to 15th
            months inclusive of the Term, but shall pay Operating Expenses and
            Taxes during such months; and

      (b)   in respect of the 17,370 square feet of Rentable Area of the 3rd
            floor of the Premises, the Tenant shall not be obliged to pay Basic
            Rent, Operating Expenses and Taxes for the first six (6) full months
            of the Term and shall not be obliged to pay Basic Rent for the 13th,
            14th, 15th, 16th and first one-half of the 17th months of the Term,
            but shall pay Operating Expenses and Taxes during such months.

4.2         The Landlord acknowledges receipt from the Tenant of a deposit of
$206,613.26, which shall be paid to the Landlord on execution of this Lease and,
together with interest, applied on account of the payment of Basic Rent,
Operating Expenses, Taxes and GST for the fourth and last months of the Term.
The deposit shall be placed in an interest bearing account with a Canadian
chartered bank by the Landlord and interest shall be accrued to the Tenant until

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the deposit is applied to the payments of Rent set out in this paragraph 4.2.
Any balance remaining after the last payment is made shall be forthwith paid to
the Tenant.

4.3         The Landlord shall cause the actual Rentable Area of the Building
and the Premises to be determined within 30 days after substantial completion of
the Building by a registered land surveyor appointed by the Landlord. Upon such
determination, the Rent shall be adjusted accordingly on the basis of the actual
Rentable Area of the Premises. The surveyor's determination of Rentable Areas
shall be binding upon the parties for the purpose of this Lease except for
manifest error.

4.4         This Lease shall be an absolutely net lease and the Rent shall be
net to the Landlord and shall be paid without set-off, abatement, deduction or
counterclaim whatsoever. Notwithstanding the generality of the foregoing, the
Tenant shall not be required to pay for or contribute towards any of the
following:

      (a)   corporation capital tax or income tax of the Landlord or other owner
            of the Lands;

      (b)   costs incurred as a result of the negligent act or omission of the
            Landlord or those for whom the Landlord is in law responsible;

      (c)   costs covered by the insurance which the Landlord has effected or is
            required to effect pursuant to this Lease;

      (d)   costs of a structural or capital nature; or

      (e)   payments pursuant to the Landlord's mortgage or payments of any
            ground rentals.

4.5         The Tenant shall not be required to pay Rent prior to the
Commencement Date except to the extent the Tenant at its sole election, is in
occupancy of any and carrying on business in any portion of the Premises and in
which event Rent shall be payable in respect of such portion of the Premises
from the earlier of the date the Tenant takes occupancy or commences business
operations therein. In the event of force majeure as set out in Section 24.0,
the abatement of Rent set out herein shall commence upon the expiration of the
period of force majeure.

                                       3
<PAGE>
5.0         OPERATING EXPENSES AND TAXES

5.1         The Tenant will promptly pay the Tenant's Taxes as they become due
and shall pay goods and services taxes applicable to Rent when due.

5.2         If the Landlord is required by lawful authority or considers it
desirable to pay the Tenant's Taxes which the Tenant fails or neglects to pay,
the Tenant will pay the amount thereof to the Landlord forthwith after written
request thereof.

5.3         The Tenant will pay to the Landlord its Proportionate Share of
Operating Expenses and its Proportionate Share of Taxes in 12 equal monthly
installments concurrently with the monthly payments of Basic Rent as and when
required hereunder. The Landlord may, at its option, from time to time estimate
the amount which may be payable by the Tenant pursuant to this Section 5.3 for
periods no greater than 12 months and the Tenant will pay its Proportionate
Share of such estimated amounts to the Landlord monthly. The Landlord shall,
within 90 days of its year-end, provide the Tenant with annual statements as to
Operating Expenses and Taxes paid by the Tenant during the year. The Landlord
will, at the Tenant's request by written notice given within 6 months after
receipt of such statements , permit the Tenant to review invoices relating to
those Operating Expenses contained in the annual statements at a time or times
convenient to the Landlord, acting reasonably.

5.4         Within 30 days after determination of the actual Operating Costs and
Taxes the Landlord will refund to the Tenant the amount of any overpayment by
the Tenant or the Tenant shall pay the Landlord the amount of any underpayment
by the Tenant by reason that the monthly installments paid by the Tenant differ
from the actual amounts payable by the Tenant.

5.5         The certificate of an independent certified accountant appointed by
the Landlord will in the event of a dispute be conclusive and binding upon the
Landlord and the Tenant as to any amount payable from time to time under this
Section 5.0 except for manifest error. If the accountant determines the
Landlords records were in error by greater than 3%, the costs of obtaining such
certificate shall be borne by the Landlord and if the records were correct or in
error by less than 3%, such costs shall be borne by the Tenant.

6.0         ADDITIONAL RENT AND PRO RATA PORTION OF PAYMENTS

6.1         Any money payable by the Tenant to the Landlord hereunder other than
the Basic Rent expressed in Section 4.1 and other than goods and services taxes,
is deemed to be Rent and

                                       4
<PAGE>
is paid as Additional Rent and is collectible as such and, in the absence of any
other provisions hereunder, is payable with the next ensuing monthly installment
of Rent.

6.2         If the Term will commence or cease on a day other than the
commencement or end of any period contemplated herein or if any money is payable
hereunder for a period less than that contemplated in relation thereto, the
Tenant will pay to the Landlord its Pro Rata Portion of the Rent or such payment
for the period.

7.0         USE OF DEMISED PREMISES

7.1         The Tenant will use the Premises for office and wet lab uses
(including kitchen facilities for staff use) and for no other purpose without
the written consent of the Landlord (not to be unreasonably withheld) and,
subject to the provisions of Section 11.11 of this Lease, will not permit any
part of the Premises to be used or occupied by any persons other than the
Tenant, its employees and invitees.

8.0         TENANT IMPROVEMENTS AND INSTALLATIONS

8.1         The Tenant's Work undertaken by the Landlord and any other
improvements undertaken by the Tenant shall be completed in accordance with the
terms of the Offer to Lease and the schedules thereto.

8.2         Without limiting the generality of the foregoing, the Landlord shall
not commence Tenant's Work until the budget, plans and specifications for it and
the list of subtrades to be engaged in constructing the Tenant's Work have been
approved by the Landlord and Tenant in writing. The Landlord and the Tenant
agree to act reasonably and without delay in reviewing such material.

8.3         During the Term and any renewals, the Tenant shall be entitled to
install antennae, satellites and other similar telecommunication devices on the
roof of the Building at no additional charge, and to run necessary cabling
through the Building to service such equipment, provided such location of such
equipment does not interfere with devices previously installed. Any installation
by the Tenant of antennae, receivers, transmitters or other equipment on the
roof or exterior of the Building or any installation of or connections to data
or communications systems in the Building shall be subject to approval by the
Landlord (acting reasonably) as to location, method of instalment, and
satisfactory confirmation from the Tenant and its consultants that no such
installations will cause material interference in the operation of any Building
systems or prior installations made by other tenants in the Building. The Tenant
shall pay the

                                       5
<PAGE>
Landlord the reasonable cost of any technical consulting review required by the
Landlord in respect of such installations. Any installations which cause
material interference with Building systems or prior installations made by other
tenants shall be remedied or removed forthwith upon demand by the Landlord and,
if the Tenant fails to do so, the Landlord may on 7 days notice to the Tenant
cause them to be removed at the Tenant's cost. Access to roof and other Building
areas containing Building systems shall be subject to rules and regulations
established by the Landlord from time to time. The Landlord will not charge rent
or licence fees to the Tenant or the service provider for the use and
installation of equipment and antennae on the roof or extension of the Building
or for providing space for any related connections or supporting equipment.

9.0         LEASEHOLD IMPROVEMENT ALLOWANCE

9.1         The Landlord shall contribute to the cost of the Tenant's Work to a
maximum amount of $50 per square foot of the 34,730 square feet of Rentable Area
of the Premises located on the 4th and 5th floors, and $45 per square foot of
the 17,370 square feet of Rentable Area of the Premises located on the 3rd floor
(the "Leasehold Improvement Allowance"). The Landlord shall make the
contribution by paying the costs of Tenant's Work performed by the Landlord
including third party costs of all plans, permits, materials and labour for
design, construction and installation of Tenant's Work, course of construction
insurance on the Tenant's work (which insurance the Landlord shall affect), and
voice data cabling up to the amount of the Leasehold Improvement Allowance. Any
additional costs incurred in completing Tenant's Work shall be paid by the
Tenant within 30 days after receipt of invoices for such work from the Landlord.

9.2         If the costs of the Tenant's Work is less than the amount of the
Leasehold Improvement Allowance, the unused portion of it shall be credited by
the Landlord to the payment of Basic Rent first due after the Commencement Date
in the form of free rent in addition to any other free rent provided for herein.

9.3         The Landlord shall provide the Tenant with monthly reports on the
progress of completion and state of accounts during the period of constructing
the Tenant's Work and shall provide a full accounting of such costs within 60
days after completion of the Tenant's Work. The Tenant and its authorized
representatives shall have access at all reasonable times to the contracts and
financial records of the Landlord relating to the Tenant's Work for purposes of
verifying the costs thereof. In the event of any dispute as to costs, the
opinion of the Landlord's independent auditor as to costs shall be final and
binding upon the Landlord and Tenant, except for a manifest error.

                                       6
<PAGE>
10.0        COMPLETION

10.1        The Landlord and Tenant acknowledge and agree that the provisions of
paragraph 9 of the Offer to Lease in respect of Late Completion of the
Landlord's (Base Building) Work and the Leasehold Improvements (herein called
Tenant's Work) and the provision's of Section 16 of the Offer, and the
provisions of the 2nd paragraph of Section 12 of the Offer, remain in full force
and effect and binding on the parties and are incorporated by referenced into
this Lease. For purposes of such provisions "Completed for Occupancy" has the
meaning described in Section 31 of the Offer to Lease.

11.0        COVENANTS OF TENANT
            The Tenant covenants with the Landlord:

11.1        To pay Rent as and when due;

11.2        To pay the cost of electricity, gas and other utilities used within
the Premises, such cost to be paid by the Tenant as and when due.

11.3        Subject to Section 17.0, to repair the Premises, reasonable wear and
tear, structural repairs, and damage by fire, lightning and other casualties
against which the Landlord is insured only excepted. Notwithstanding anything
herein contained to the contrary, the Tenant shall not be required to attend to
maintenance or repairs caused by or attributed to any of the following:

      (a)   reasonable wear and tear;

      (b)   the negligent act or omission of the Landlord or those for whom the
            Landlord is in law responsible;

      (c)   structural repairs, replacements or maintenance; or

      (d)   damage covered by the insurance which the Landlord has effected or
            is required to effect pursuant to this Lease.

11.4        That the Landlord may on 3 days notice to the Tenant enter and view
the state of repair and that the Tenant will repair according to notice save as
aforesaid.

                                       7
<PAGE>
11.5        That the Tenant will leave the Premises in good repair, save as
aforesaid.

11.6        That if the Tenant fails to repair in accordance with the provisions
hereof, the Landlord may on 10 days' prior written notice, except in the case of
an emergency enter the Premises and make the required repairs and, for that
purpose, the Landlord may bring and leave on the Premises all necessary tools,
material and equipment and the Landlord will not be liable to the Tenant for any
inconvenience, loss, injury or damages suffered by the Tenant thereby, unless
caused by the negligence of the Landlord or those for whom the Landlord is
responsible at law, and the expense of such repairs will be borne by the Tenant
which will pay it to the Landlord forthwith on demand.

11.7        To restore forthwith at its expense broken or damaged windows on the
Premises from time to time, unless damaged by the Landlord or those for whom it
is in law responsible or as a result of faulty design or installation.

11.8        Not to do, suffer or permit any act or neglect which may in any
manner directly or indirectly cause injury to the Premises or to the Building of
which the Premises form a part or to any fixtures or appurtenances thereof, or
which may be or become a nuisance to any of the occupants of the Building or
which may in the opinion of the Landlord render the Building or any part thereof
less desirable or injure the reputation thereof as a first-class office
building.

11.9        Not to exhibit signs of any nature on exterior walls, doors or
windows of the Premises without the prior written approval of the Landlord, such
approval not to be unreasonably withheld or delayed. Notwithstanding the
foregoing, and subject to Section 12.6, the Tenant will be allowed to display
the Tenant's name in prominent exterior signage on the Building, pedestal
signage adjacent to the entrance of the Building, and on the standard building
directory signage to be provided by the Landlord in the Building lobby in a
manner to be consistent with a first class office building and wet lab. Any
other signage shall be subject to the approval of the Landlord (not to be
unreasonably withheld) and, where applicable, the City of Vancouver or any
governing authorities. Except for standard building directory signage, the
Landlord shall not permit any other tenant to have exterior signage including
(without limitation) exterior signage on the Building or pedestal signage.
Further, except for standard building directory signage, all interior signage
within the ground floor lobby area shall be subject to receipt of the Tenant's
prior consent, such consent not to be unreasonably withheld.

                                       8
<PAGE>
11.10       Not to do or permit anything to be done whereby any policy of
insurance on the Building or any part thereof placed by the Landlord or any
other tenant in the Building may become void or voidable or whereby the premium
thereon may be increased. If the Tenant is in breach hereof and as a result of
such breach any premium of any such policy is increased, the Tenant will
forthwith pay to the Landlord the amount of the increase in such premium,
provided that nothing herein will limit any other remedy of the Landlord or any
other tenant.

11.11       Not to assign or sublet the Premises in whole or in part without the
prior consent in writing of the Landlord, such consent not to be unreasonably or
arbitrarily withheld or delayed. The Tenant, at the time the Tenant requests the
consent of the Landlord shall deliver to the Landlord such information in
writing as the Landlord may reasonably require respecting the proposed assignee
or subtenant. No such assignment or subletting, whether consented to by or not
by the Landlord, will:

            (a)         in any manner release the Tenant from any covenant to be
                        observed or performed by it, and

            (b)         be made to any person, firm, partnership or corporation
                        carrying on any business which the Landlord is obliged
                        to restrict by reasons of any other lease or contract
                        relating to the Building.

The Landlord shall not be entitled to any excess rent obtained from any such
assignment or sublease.

11.12       Notwithstanding anything herein contained to the contrary, the
Tenant may, without the consent of the Landlord, but not before giving notice to
the Landlord, assign or sublet this Lease, as part of or in connection with:

            (a)         an internal corporate reorganization of the Tenant's
                        affairs, provided that this Lease is assigned or sublet
                        to a legal entity associated or affiliated with the
                        Tenant; or

            (b)         as part of a public offering or distribution.

Further the Landlord shall not in any way restrict the Tenants right to sublet
all or a portion of the Premises unless the proposed subtenant is not in the
Landlord's opinion, acting reasonably, a suitable tenant in a biotech or wet-lab
building.

                                       9
<PAGE>
11.13       To keep the Premises free of rubbish and debris at all times and to
provide proper and sufficient receptacles for waste.

11.14       To abide by and comply with all laws, rules and regulations of every
municipal or other authority which in any manner relate to or affect the
business of the Tenant or the use of the Premises by the Tenant.

11.15       To pay the Landlord all charges for maintenance and cleaning of
electrical and lighting fixtures and fittings in the Premises and the same is
included in "Operating Expenses" herein. The Landlord will have the exclusive
right to attend to such maintenance and cleaning and may adopt a system of
periodical renewals on a group basis in accordance with good practice in this
respect, subject to compliance with reasonable maintenance and cleaning protocol
established by the Tenant for both security and operational reasons.

11.16       To maintain at the Tenant's sole expense but for the common benefit
of the Landlord and the Tenant:

      (a)   comprehensive general public liability insurance including bodily
            injury, death and property damage, with respect to the use of the
            Premises and the Tenant's use and occupancy thereof in an amount not
            less than $2,000,000 and such insurance shall include the Landlord
            as an additional insured;

      (b)   "all risks" insurance on the Tenant's improvements and all contents
            of the Premises to 90% of the new replacement cost thereof;

and such insurance to be in form and with insurers acceptable to the Landlord
and the Tenant will deliver promptly to the Landlord a certificate of insurance
for each such policy of insurance if so required by the Landlord.

11.17       To immediately advise the Landlord and do all things necessary to
remove any dangerous condition from time to time existing on the Premises
arising as result of the act of or omission of the Tenant, its agents or
servants.

11.18       To indemnify and hold harmless the Landlord from and against all
actions, causes of action, suits, claims, demands, damage, expense, liens or
rights of lien whatsoever arising out

                                       10
<PAGE>
of the occupancy of the Premises hereunder save for negligence of the Landlord
and those for whom the Landlord is at law responsible and further save for any
loss or damage covered by insurance effected by or required to be effected by
the Landlord.

11.19       To pay to the Landlord interest at 5% per annum above the rate of
interest declared from time to time by the main branch of HSBC Bank Canada as
its `prime rate', compounded annually, on any amount not paid as and when due
hereunder until paid.

12.0        COVENANTS OF LANDLORD
            The Landlord covenants with the Tenant:

12.1        For quiet enjoyment of the Premises.

12.2        To complete the building of which the Premises form a part,
including the Landlord's (Base Building) Work in accordance with the
requirements and the specifications set out or contemplated in Section 11 of the
Offer to Lease, and the Tenant's Work in accordance with the Offer to Lease and
the plans and specifications therefore prepared by the Tenant's designer and
approved by the Landlord and Tenant, diligently and in a good and workmanlike
manner. The Landlord shall use its best efforts to have Completed for Occupancy
the Landlord's (Base Building) Work and Tenant's Work by May 29, 2002 resulting
in a Commencement Date of July 1, 2002. If the Tenant desires to remove from or
alter the Landlord's (Base Building) Work any item or category of items within
the Premises or to the base building systems, the Tenant shall provide the
Landlord with written notice specifying in reasonable detail the requested
change or alteration. The Landlord shall within 7 days of receipt of such
notification, advise the Tenant in writing of the credit or exchange in value
the Landlord is prepared to give to the Tenant in exchange for such requested
change or alteration in the Landlord's (Base Building) Work, and the Tenant
shall have a further 7 days to advise the Landlord whether it accepts such
credit or exchange in value in exchange for the requested change or alteration.
If the parties are unable to agree on the appropriate exchange or credit for the
Tenant's required alteration, then the appropriate exchange or credit shall be
determined by arbitration. Attached as Schedule "E" is a copy of the plans and
scope of work prepared by the Landlord for certain parts of (but not all of) the
Landlord's (Base Building) Work, and agreed upon mechanism for construction of
the Tenant's improvements and certain proposed changes from Clause 11 of the
Offer to Lease (with corresponding identified credits or exchanges yet to be
provided by the Landlord, and yet to be agreed to by the Tenant). Any changes to
the documents and plans identified in Schedule "E" or to the specifications in
clause 11 of the Offer to Lease shall be subject to receipt of the Tenant's

                                       11
<PAGE>
prior written approval. If there is a conflict between the provisions of Section
11 of the Offer to Lease and the plans and scope of work attached as Schedule
"E", the provisions of such Section 11 shall govern, and any item or work
identified in Section 11 and not reflected in the plans and specifications shall
be addressed either by further plans and specifications or by an appropriate
credit or exchange, in both cases subject to the Tenant's consent.

12.3        To supply water and other utilities to the Premises (and to cause
electricity, gas, and if appropriate, water service utilities to be separately
metered to the Premises) for the normal and reasonable requirements of the
Tenant and at the Tenant's expense without, in any case, being liable for any
loss, damage or inconvenience resulting from failure of the supply of utilities
to the Building, unless caused by the negligence of the Landlord or those for
whom it is in law responsible.

12.4        To provide, maintain and operate during Normal Business Hours and
during such other times and days as requested by the Tenant an efficient
heating, ventilating and air conditioning system in the Building.

12.4A       To attend to all repairs to the structure of the Building, all
capital expenditures, all repairs caused by the negligent act or omission of the
Landlord or those for whom the Landlord is in law responsible, and repairs
covered by the Landlord's insurance, all at the Landlord's cost.

12.4B       To provide at all times during the Term and during construction of
the Building, unless otherwise deemed necessary by the Landlord and Tenant, 24
hours per day/ 7 days per week security for the Building and the Lands, and to
permit card access to the Building outside normal business hours by monitored
card access.

12.5        To take out or cause to be taken out and keep or cause to be kept in
full force and effect:

      (a)   "all risk" insurance on the Buildings and improvements in an amount
            such as would be carried out by a prudent owner, subject to such
            deductions and exceptions as the Landlord (acting reasonably) may
            determine, against fire and such other hazards covered by policies
            normally in use from time to time for buildings and improvements of
            a similar nature similarly situated; and

                                       12
<PAGE>
      (b)   comprehensive public liability insurance in respect of the Building
            of a kind and in an amount such as would be carried by a prudent
            owner, subject to such deductions and exceptions as the Landlord may
            determine;

provided that nothing herein shall prevent the Landlord from insuring with
broader coverage. Each of the Landlord and Tenant hereby waives all claims for
recovery from the other for any loss or damage to any of his, her or its
property insured under valid and collectible insurance policies to the extent of
any recovery collectible under such insurance. The parties further agree to use
all reasonable efforts to have any and all material damage insurance which may
be carried endorsed with the following subrogation clause:

            "Any release from liability entered into by the insured prior to
            loss shall not affect the right of the insured to recover."

12.6        To name the Building "The Angiotech Pharmaceuticals Building" or
such other name approved by the Landlord, acting reasonably, as the Tenant may
select from time to time during the Term or any renewal term. The Landlord shall
construct and provide for the Tenant all Building and directory signs (other
than those referenced in Section 11.9) in a manner consistent with a AAA class
office and wet lab building.

12.7        During the Term and any renewals, not to permit a restaurant, cafe
or similar amenities in the Building that attract public traffic without the
Tenant's written consent.

13.0        ALTERATIONS AND IMPROVEMENTS

13.1        Save for the installation of trade fixtures and furnishings and
completion of the Tenant's Work, the Tenant will make no alterations,
installations, removals, additions or improvements in or about the Premises
without the Landlord's prior written consent, which consent will not be
unreasonably withheld or delayed. Unless otherwise herein provided, such work
shall be done at the Tenant's sole expense and at such times and such manner as
the Landlord may reasonably approve. Notwithstanding the foregoing, the
Landlord's consent shall not be required if the alterations, improvements or
additions are non-structural or non-utility in nature and do not exceed
$40,000.00 in any twelve month period.

13.2        The Tenant will not suffer or permit any builders' liens to be filed
against the interest of the Landlord in the Land or the Premises by reason of
work, labour, services or material supplied or claimed to have been supplied to
the Tenant or for which the Tenant may be in any way obligated, and if any such
builders' lien are at any time filed against the Land or the

                                       13
<PAGE>
Premises, the Tenant will cause them to be discharged from title within 20 days
of the date the Tenant has knowledge of such filing.

13.3        All articles of personal property and all business and trade
fixtures, machinery, equipment and furniture owned or installed by the Tenant at
the expense of the Tenant in the Premises will remain the property of the Tenant
and may be removed by the Tenant at any time during the Term, provided that the
Tenant at its expense will repair any damage to the Premises or the Building
caused by such removal of the original installation.

13.4        The Landlord may elect to require the Tenant to remove all or any
part of the business and trade fixtures, machinery and equipment, furniture,
movable partitions, owned or installed by or on behalf of the Tenant after the
commencement of the Term and any unmovable partitions installed by the Tenant
without the Landlord's prior written consent at the expiration of this Lease in
which event such removal is done at the Tenant's expense and the Tenant will, at
its expense, repair any damage to the Premises or to the Building caused by such
removal.

13.5        If the Tenant does not remove the property set out in Section 13.4
forthwith after written demand by the Landlord, such property will, if the
Landlord elects, be deemed to become the Landlord's property and the Landlord
may remove the same at the expense of the Tenant and the cost of such removal
will be paid by the Tenant forthwith to the Landlord on written demand and the
Landlord will not be responsible for any loss or damage to such property because
of such removal.

14.0        SUBORDINATION AND ESTOPPEL CERTIFICATE

14.1        This Lease will, at the request of the Landlord, be made subject and
subordinate to all mortgages which now or hereafter during the Term is recorded
in the appropriate Land Title Office as a mortgage against the Land and
Premises. The Tenant will execute promptly from time to time any assurance the
Landlord may properly require to confirm this subordination with respect to any
mortgage now or hereafter recorded. While the Tenant may be required to
subordinate its rights under this Lease in favour of any mortgagee or other
chargeholder as requested by the Landlord, the Landlord shall first use its best
efforts to obtain a non-disturbance agreement in favour of the Tenant from such
mortgagee or chargeholder on terms and conditions satisfactory to the Tenant
acting reasonably to ensure there is no disturbance of the Tenant's occupation
and possession provided the Tenant is not in default under this Lease.

                                       14
<PAGE>
14.2        Whenever required by any mortgagee or a trustee on behalf of a
Mortgagee of any mortgage contemplated in Section 14.1, the Tenant will attorn
to and become a tenant or licensee of such mortgagee or trustee or any purchaser
from the mortgagee or trustee in the event of an exercise by the Mortgagee or
Trustee of its power of sale in the mortgage set out, for the then unexpired
residue of the Term upon all of the terms and conditions hereof.

14.3        Within 10 business days after each request by the Landlord, the
Tenant will deliver to the Landlord and to any person designated by the
Landlord, a certificate in the form provided by the Landlord stating the
particulars of this Lease and the status of the payments and the performance of
covenants hereunder.

15.0        PROPERTY DAMAGE AND INDEMNITY

15.1        The Landlord will not be liable for any injury or damage to persons
or property resulting from fire, explosions, failing plaster, steam, gas,
electricity, water, rain, snow or leaks from any part of the Building or from
pipes, appliances or plumbing works or from the roof, street or subsurface or
from any other place unless caused by the negligence of the Landlord, its
servants or agents, or those for whom the Landlord is responsible at law.

15.2        Except to the extent covered by insurance effected or required to be
effected by the Landlord, the Tenant will reimburse and indemnify and save
harmless the Landlord for and from all expense, damages, loss or fines incurred
or suffered by the Landlord by reason of any breach, violation or nonperformance
by the Tenant of any covenant or provision of this Lease or by reason of damage
which is caused by the Tenant, its servants or agents.

15.3        The Tenant will give the Landlord immediate notice in case of fire
or accident in the Premises or in the Building of which the Tenant is aware.

16.0        ENVIRONMENTAL CONSIDERATIONS

16.1        The Tenant must not at any time cause or allow any Hazardous
Substance to be generated, created, used, stored, treated, transferred,
transported or disposed of on the Premises except in compliance with all Laws
and the Tenant's Environmental Management Plan and shall not use the Premises in
any manner which, in whole or in part, would cause the Land to be a contaminated
site or similar designation under any Law.

16.2        Prior to the Commencement Date, the Tenant shall prepare and deliver
to the Landlord the Tenant's Environmental Management Plan.

                                       15
<PAGE>
16.3        The Tenant shall provide the Landlord with a copy of any Tenant
Protocol required by the Tenant's Environmental Management Plan.

16.4        If there is a Release of a Hazardous Substance on or about the
Premises as a result of an act or omission of the Tenant, the Tenant will follow
the remedial procedures set out in the applicable Tenant Protocol. If the
Release has the potential to Pollute the Land or poses a risk to persons in or
about the Land, the Tenant will forthwith notify the Landlord of the Release and
the remedial action being taken by the Tenant.

16.5        If the Landlord (acting reasonably) has reason to believe that the
Tenant has caused any Release of a Hazardous Substance on or about the Premises,
and in any event within 60 days of the second and every alternate anniversary of
the Commencement Date during the Term and any renewal thereof, if requested by
the Landlord in writing, and within 60 days of the expiry of the Term, the
Tenant will cause an Audit to be performed and deliver a copy of that Audit of
the Premises to the Landlord. If the Audit includes remedial measures to be
followed by the Tenant to ensure future compliance with the Tenant Protocols,
the Tenant will be obliged to enact such remedial measures.

16.6        The Tenant shall be responsible at its sole expense for remediation
of any Pollution of the Land or Building caused by a Release by the Tenant of a
Hazardous Substance. The Tenant will indemnify and save harmless the Landlord
from any cost, damage, loss or liability reasonably incurred, or suffered, by
the Landlord as a result or in respect of any Pollution of the Land or Building
caused by the Tenant. This indemnity will survive the expiry or earlier
termination of this Lease.

16.7        The Landlord shall be responsible at its sole expense for
remediation of any Existing Pollution, in a reasonable and timely manner and the
Tenant shall promptly notify the Landlord of the presence of any Existing
Pollution in the Premises of which it is aware. The Landlord will indemnify and
save harmless the Tenant from any cost, damage, loss or liability reasonably
incurred, or suffered, by the Tenant as a result or in respect of any Existing
Pollution. This indemnity will survive the expiry or earlier termination of this
Lease.

16.8        If there is an intermingling of Pollution caused by the Tenant and
Existing Pollution, the Landlord and the Tenant will share the costs of
remediating such intermingled

                                       16
<PAGE>
Pollution based on a reasonable allocation determined in accordance with the
allocation principles in the Waste Management Act.

16.9        If the Landlord is required by any Authority to determine whether
the Land and Building are Polluted or to take Remedial Action regarding
Pollution of the Land or Building:

      (a)   the Landlord shall notify the Tenant and provide it with a copy of
            all materials received from the Authority with respect to the
            Pollution and Remedial Work;

      (b)   the Landlord and the Tenant, each acting reasonably, shall cooperate
            with each other to challenge any aspect of the order of the
            Authority which either party reasonably believes is incorrect or
            unjustified and to negotiate with the Authority Remedial Action that
            is acceptable to the Landlord and the Tenant, each acting
            reasonably;

      (c)   if the Pollution has been caused by the Tenant, the Tenant shall
            take any Remedial Action which the Authority ultimately requires be
            taken; and

      (d)   if the Pollution has not been caused by the Tenant, the Landlord
            shall take any Remedial Action which the Authority ultimately
            requires be taken.

16.10       If the Landlord is required by any Authority to take Remedial Action
regarding Pollution of the Land or Building not caused by the Tenant, the
Landlord or its respective employees and agents may enter the Premises and may:

      (a)   perform any audits, investigations and surveys the Landlord or any
            Authority considers necessary to determine better the nature and
            extent of the Pollution and the necessary Remedial Action; and

      (b)   take any Remedial Action any Authority requires be taken and the
            Tenant must permit the Landlord, its employees and agents including
            the Landlord's Consultant to have that access to the Premises which
            is reasonably necessary in the opinion of the Landlord to enable it
            to comply with the requirements of any Authority and to take
            Remedial Action,

provided that the Landlord will take all reasonable steps to minimize the effect
of such work on the Tenant and its business. The Landlord shall not enter the
Premises for any such purpose without providing at least 48 hours' written
notice and specifying a particular time when it

                                       17
<PAGE>
proposes to enter the Premises so that the Tenant may arrange any appropriate
escort. The provisions of Section 11.6 of this Lease shall apply to any entry
into the Premises permitted by this Section 16.10.

            Notwithstanding anything herein to the contrary, during any period
of repair or alteration by the Landlord to the Premises or the Building, Annual
Basic Rent and Additional Rent payable hereunder shall abate if the Tenant is
prevented from carrying on business from the Premises for more than one business
day.

            In exercising the foregoing rights, the Landlord shall use its best
efforts:

      (i)   not to reduce convenient access to the Premises;

      (ii)  not to unreasonably interfere with the business operations of the
            Tenant in the Premises;

      (iii) to complete its work as expeditiously as possible under the
            circumstances and during non-business hours wherever possible;

      (iv)  expect in the case of an emergency, to provide the Tenant with
            reasonable prior written notice of the exercise of any rights which
            are likely to interfere with the Tenant's quiet enjoyment of the
            Premises; and

      (v)   to ensure there is no interruption with the supply of utilities and
            services.

16.11       The Tenant shall cooperate with the Landlord in the provision of
such information at the times and in the form required by the Landlord, acting
reasonably, to ensure the proper monitoring and supervision of the Land and
Building with respect to Pollution.

16.12       At the expiry or earlier termination of this Lease the Tenant shall
remove at its sole cost and expense any Hazardous Substances which the Tenant
has stored within the Premises.

16.13A      Landlord's Representations and Warranties - The Landlord represents
and warrants to the Tenant that as of the Commencement Date, the Lands and the
Building shall be free of Hazardous Substances, except in amounts which are
permissible under environmental laws. The Landlord shall deliver to the Tenant
within 7 days of the execution of this Lease a

                                       18
<PAGE>
copy of all environmental audits and other similar reports in the Landlord's
possession respecting the Lands.

16.13B      Landlord's Covenants and Indemnity - The Landlord covenants and
agrees as follows:

      (a)   not to use the Lands or permit the Lands to be used for the sale,
            storage, manufacture, handling, disposal, treatment, use or any
            other dealing with any Hazardous Substances, except in compliance
            with environmental laws;

      (b)   at its own cost, to cause the Lands to comply with environmental
            laws and to use its best efforts to cause any tenants or other
            occupants of premises at the Lands to comply with environmental laws
            in the use and occupancy of their premises at the Lands; and

      (c)   to indemnify the Tenant and its shareholders, directors, officers,
            employees, agents, subtenants, successors and permitted assigns,
            from any and all liabilities, actions, damages, claims, remediation
            cost recovery claims, losses, costs, orders, fines, penalties and
            expenses whatsoever ( including all consulting and legal fees and
            expenses on a solicitor-client basis and the cost of remediation of
            the Premises or any adjacent property) arising from or in connection
            with:

            (i)   any breach of or non-compliance with the provisions of this
                  Article by the Landlord; or

            (ii)  any release or alleged release of any Hazardous Substances at
                  or from the Lands related to or as a result of any
                  pre-existing Hazardous Substances at or migrating from the
                  Lands prior to or at the Commencement Date, the operations of
                  the Landlord at the Lands or any act or omission of the
                  Landlord, other tenants or occupants of premises at the Lands
                  or any person for whom it is in law responsible.

The obligations of the Landlord under this Article shall survive the expiry or
earlier termination of this Lease. The obligations of the Landlord under this
Article are in addition to, and shall not limit, the obligations of the Landlord
contained in other provisions of this Lease.

17.0        DAMAGE TO OR DESTRUCTION OF PREMISES

17.1        If the Premises are damaged by fire or other casualty or if the
Building is so damaged thereby restricting the use of the Premises then the Rent
will abate in whole or in part

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<PAGE>
according to the portion of the Premises which is non-usable by the Tenant until
such damage is repaired and the Tenant is able to operate its business
therefrom.

17.2        Except as provided in Section 17.3 if the Premises is damaged by
fire or other casualty, the damages to the Premises will be repaired by the
Landlord at its expense except that repairs to alterations or improvements made
by the Tenant will be performed by the Tenant at the expense of the Tenant
(except if covered by the Landlord's insurance) and the Tenant will at its own
expense make all repairs and replacements of property which the Tenant is
entitled to remove pursuant to Section 13.3. All repairs which the Landlord is
required to make hereunder will be made with due diligence provided that the
Landlord will not be liable to the Tenant for any loss or damage suffered by the
Tenant as a result of any reasonable delay which may arise by reason of
adjustment of insurance on the part of the Landlord on account of labour
troubles or any other cause beyond the Landlord's control.

17.3        If the Premises are rendered untenantable by fire or other casualty
or the Building is so damaged, that the Building or the Premises cannot be
restored within six months of such damage, then in any of such events, the
Landlord may elect not to restore the same, within 45 days after such fire or
other casualty, by giving the Tenant a notice in writing of such decision.
Within 30 days thereafter either the Landlord or Tenant may elect to terminate
this Lease by notice in writing and the Tenant will forthwith vacate the
Premises and surrender the same to the Landlord. If the Landlord does not give
notice as aforesaid and the Premises or the Building, as the case may be, are
not restored within six months from the time of the fire or other casualty
causing the damage (subject to such time period being extended by the length of
any reasonable delay which may arise by reason of adjustment of insurance on the
part of the Landlord, on account of labour troubles or any other cause beyond
the Landlord's control) the Tenant may at its option, to be exercised within 10
days of the expiry of said period of six months (or such later period as
extended hereby) by notice in writing, terminate this Lease forthwith. Upon the
termination of this Lease under the conditions provided in this clause the
Tenant's liability for Rent will cease as of the day following the fire or
casualty.

18.0        ACCESS TO DEMISED PREMISES

18.1        The Tenant will permit the Landlord to erect, build, use and
maintain unexposed pipes, ducts and conduits in and through the Premises. The
Landlord its servants and agents will have the right to enter the Premises at
reasonable times upon 48 hours' written notice to examine the same and make such
repairs, alterations, improvements or additions as the Landlord may deem
necessary or desirable in the Premises or as the Landlord may be required to
make by law

                                       20
<PAGE>
or in order to repair and maintain the Building, and the Landlord will be
allowed to take all material into the Premises that may be required therefor
without the same constituting eviction of the Tenant in whole or in part and the
Rent reserved will in no way abate while said repairs, alterations,
improvements, or additions are being made by reason of interruption of the
business of the Tenant provided the Tenant is not prevented from conducting
business from the Premises for more than one day. The Landlord will exercise
reasonable diligence as to minimize the disturbance or interruptions of the
Tenant's operations.

18.2        During the three months prior to the expiration of the Term or any
renewal term, the Landlord may exhibit the Premises during Normal Business Hours
to prospective tenants upon a minimum of 48 hours notice to the Tenant and for
such purposes the Landlord will have the right of entry to the Premises at any
reasonable time and the Tenant at its option may have any servant or agent
present at the time of such entry.

19.0        DEFAULT

19.1        The Tenant covenants with the Landlord that if:

      (a)   the Tenant violates or neglects any material covenant, agreement or
            stipulation herein contained on its part to be kept, performed or
            observed and any such default on the part of the Tenant continues
            for 15 days after written notice thereof to the Tenant by the
            Landlord (provided that if such default cannot reasonably be
            remedied within 15 days, then the Tenant shall not be in default if
            the Tenant commences to remedy the default within such 15-day period
            and proceeds with all reasonable diligence);

      (b)   any payments of Rent or any part thereof, are not paid within 10
            days after written demand by the Landlord.

then and in any such case the Landlord in addition to any other remedy now or
hereafter provided by law, may at its option cancel and terminate this Lease
forthwith and may re-enter the Premises and remove all persons and property. The
Landlord may use such force and assistance in making such removal as the
Landlord may deem advisable to recover at once full and exclusive possession of
the Premises and such re-entry will not operate as a waiver or satisfaction in
whole or in part of any right, claim or demand arising out of or connected with
any breach or violations by the Tenant of any covenant or agreement on its part
to be performed.

                                       21
<PAGE>
19.2        If the Term or any renewal thereof or any of the goods or chattels
of the Tenant are at any time seized or taken in execution or attachment by any
creditor of the Tenant, or if the Landlord makes any assignment for the benefit
of creditors or becomes bankrupt or insolvent or takes the benefit of any
bankruptcy or insolvency legislation, the then current month's Rent together
with the Rent accruing for the next three months will immediately become due and
payable, and the Term or any renewal thereof will at the option of the Landlord
become forfeit and void. It shall be lawful for the Landlord at any time
thereafter to re-enter into or upon the Premises or any part thereof in the name
of the whole and the same to have again, repossess and enjoy as of its former
estate, notwithstanding anything herein contained to the contrary and neither
this Lease nor any interests therein nor any estate hereby created will pass or
enure to the benefit of any trustee in bankruptcy or any receiver or assignee
for the benefit of creditors or otherwise by operation of law.

20.0        DISTRESS

20.1        Whenever the Landlord is entitled to levy distress against the goods
and chattels of the Tenant it may use such force as it may deem necessary for
the purpose and for gaining admission to the Premises without being liable for
any action in respect thereof or for any loss or damage occasioned thereby and
the Tenant hereby expressly releases the Landlord from all action, proceedings,
claims or demand whatsoever for or on account or in respect of any such forcible
entry or any loss or damage sustained by the Tenant in connection therewith.

21.0        LANDLORD'S EXPENSES ENFORCING LEASE

21.1        If it is necessary for the Landlord to retain the services of a
solicitor or any other proper person for the purpose of assisting the Landlord
in enforcing any of its rights hereunder in the event of default on the part of
the Tenant which is substantiated by a court of law, it is entitled to collect
from the Tenant the cost of all such services including all necessary court
proceedings at trial or on appeal on a solicitor and own client basis as if the
same were Rent reserved and in arrears hereunder.

22.0        WAIVER

22.1        The failure of either party to insist upon strict performance of any
covenant or condition contained in this Lease or to exercise any right or option
hereunder will not be construed as a waiver or relinquishment for the future of
any such covenant, condition, right or option.

                                       22
<PAGE>
22.2        The acceptance of any Rent from or the performance of any obligation
hereunder by a person other than the Tenant will not be construed as an
admission by the Landlord of any right, title or interest of such person as a
sub-Tenant, assignee, transferee or otherwise in the place and stead of the
Tenant.

22.3        The acceptance by the Landlord of part payment of any sums required
to be paid hereunder will not constitute waiver or release of the right of the
Landlord to payment in full of such sums.

23.0        HOLD OVER

23.1        If at the expiration of the Term the Tenant continues occupation
with the consent of the Landlord, the tenancy of the Tenant thereafter will, in
the absence of written agreement to the contrary, be from month-to-month only at
a Rent per month equal to 110% of the monthly Rent payable for the year
immediately proceeding such expiration, payable monthly in advance on the first
on the first day of each lease month and will be subject to all other terms and
conditions of this Lease.

24.0        INABILITY TO PERFORM / FORCE MAJEURE

24.1        The Landlord and the Tenant do not warrant that any obligation,
service or facility provided or to be performed by it hereunder will be free
from interruptions caused or required by strikes, riots, insurrections, labour
controversies, force majeure, act of God or other cause or causes beyond the
such party's reasonable care and control. No such interruptions will be deemed
an eviction or disturbance of the Tenant's enjoyment of the Premises nor render
the Landlord or the Tenant (as the case may be) liable in damages to the other
nor relieve the parties from their obligations under this Lease provided that
both parties will, without delay, take all reasonable steps to remove the cause
of such interruption and minimize the delays.

24.2        All of the dates and payment obligations will be extended because of
force majeure for the purposes hereof. Force majeure means any delays by the
Landlord or the Tenant in completing any of the terms, obligations, or
conditions contained in the Offer to Lease, which delay is directly or
indirectly caused by labour strikes, power failures, restrictive government laws
or regulations not in place at the time of signing the Offer to Lease, riots,
insurrections, sabotage, war, rebellion or acts of God or other causes beyond
the Landlord's or the Tenant's reasonable control. No such interruption shall
render the Landlord or the Tenant liable in damages to the other, nor relieve
either party from its obligations under this Lease, provided that both parties
shall, without delay, take all reasonable and practical steps within its power
to

                                       23
<PAGE>
remove the cause of such interruption and minimize the delays. This clause does
not excuse delays caused by normal weather patterns within the Vancouver area.

25.0        RULES AND REGULATIONS

25.1        The Tenant and its servants, employees and agents will observe
faithfully and comply strictly with such rules and regulations as the Landlord
may from time to time adopt, acting reasonably and provided at least 30 days'
prior written notice of any such rules and regulations shall be given to the
Tenant provided such rules and regulations are not inconsistent with the
provisions of this Lease and are applied on a non-discriminatory basis. Nothing
in this Lease contained will be construed to impose upon the Landlord any duty
or obligation to enforce the rules and regulations or the terms, covenants or
conditions in any other lease against any other tenant of the Building, and the
Landlord will not be liable to the Tenant for violation of the same by any other
tenant, its servants, employees, agents, visitors or licensees.

26.0        LANDLORD'S RIGHT TO PERFORM

26.1        If the Tenant fails to perform any of the covenants or obligations
of the Tenant under or in respect of this Lease the Landlord may, upon giving a
minimum of 7 days notice to the Tenant, perform or cause to be performed any of
such covenants or obligations or any part thereof. For such purpose, the
Landlord may do such things as may be requisite and may enter upon the Premises
to do such things and all expenses incurred and expenditures made by or on
behalf of the Landlord will be paid forthwith by the Tenant to the Landlord. If
the Tenant fails to pay the same, the Landlord may add the same to the Rent and
recover the same by all remedies available to the Landlord for the recovery of
Rent in arrears provided that if the Landlord commences or completes either the
performance or the causing to be performed of any of such covenants or
obligations or any part thereof, the Landlord will not be obliged to complete
such performance of causing to be performed or be later obliged to act in like
fashion.

27.0        REMEDIES CUMULATIVE

27.1        No remedy conferred upon or reserved to the Landlord herein by
statute or otherwise is considered exclusive of any other remedy but the same is
cumulative and is in addition to every other remedy available to the Landlord
and all such remedies and powers of the Landlord may be exercised concurrently
and from time to time and often as may be expedient by the Landlord.

                                       24
<PAGE>
28.0        LANDLORD'S LIMIT OF LIABILITY

28.1        The term "Landlord" as used in this Lease so far as covenants or
obligations on the part of the Landlord are concerned is limited to mean the
Landlord as herein before set out, while it retains its interest in the Land and
Premises but upon a transfer of that interest, the Landlord is automatically
relieved after the date of such transfer of all personal liability arising out
of the requirement for performance of any obligations on the part of the
Landlord herein contained (except to the extent incurred prior to such
transfer), provided that this release from liability will become effective only
if a transferee will expressly assume, subject to the limitations of this
Section, all of the terms of this Lease to be performed on the part of the
Landlord, it being intended hereby that the obligations contained in this Lease
on the part of the Landlord is binding upon the Landlord, its successors and
assigns, only during and in respect of the respective successive periods of
their interest in the Land and Premises.

29.0        USE OF COMMON AREAS/PARKING/CHEMICAL STORAGE

29.1        On respect of the Common Areas and parking:

      (a)   the Landlord grants to the Tenant for the Term as an appurtenant
            part of this Lease, for use by the Tenant and its agents, invitees,
            servants, employees, licensees and customers, in common with the
            Landlord and other tenants of the Building and their respective
            agents, invitees, servants, employees, licensees and customers, the
            non-exclusive right and licence to use the Common Areas of the
            Building and the Land (the "Development") for the purposes as
            provided herein and in accordance with good business practice, upon
            and subject to the covenants and conditions hereinafter expressed
            and in particular, without limiting the generality of the foregoing,
            such right, servitude, right-of-way and licence of use hereby
            granted to the Tenant shall include the right to use the Parking
            Areas (including the means of pedestrian and vehicular access and
            the entrances and exits to and from the Development included
            therein, but excluding those portions thereof which constitute any
            areas allocated to a tenant or licensee on a seasonal or temporary
            basis while used and occupied) for the purposes of pedestrian and
            vehicular access to and from the Development and the parking of
            vehicles in parking spaces provided therein;

      (b)   the Tenant may rent at its option from time to time from the
            Landlord up to 2.25 parking stalls for each 1000 square feet of
            Rentable Area with the Tenant having all the 47 parking stalls in
            the Building and the balance being 70 regular sized surface stalls
            immediately adjacent to the Building at the following rates:

                                       25
<PAGE>
            (i)   $60 per month per stall for the surface stalls; and

            (ii)  $90 per month per stall for Building Parking Stalls.

            Landlord shall monitor and police the use of the parking stalls on
            the Lands. Parking rates shall be subject to applicable Provincial
            Sales and Federal Goods and Services Taxes. The Tenant shall be
            entitled to park motorcycles and store bicycles in designated areas
            at no charge. The parking stalls rented by the Tenant shall be
            designated.

29.2        In addition to the 2.25 stalls per 1,000 square feet, marked for the
Tenant's exclusive use, three (3) ticketed or metered visitor parking stalls
shall be made exclusively available to the Tenant's customers. At the Tenant's
option, the Tenant may elect to pay $60 per month per stall for the 3 visitor
parking stalls as an alternative to them being ticketed or metered.

29.3        The parties acknowledge that the Tenant shall not be using any
portion of the Building's designated chemical storage room, and the Landlord
confirms that the area of such chemical storage room shall not form a part of
the Common Area of the Building, and the Tenant shall not be required to
contribute in any way to any costs, charges or expenses in relation to such
chemical storage area.

30.0        OPTION TO RENEW

30.1        If the Tenant is not then in material default of this Lease, the
Landlord shall grant to the Tenant, upon six months' written notice prior to the
expiration of the term, a renewal lease for a term of five years upon the same
terms and conditions contained herein, save as to Basic Rent, free rent,
Landlord's (Base Building) Work, Leasehold Improvement Allowance, and parking
rates, and including an option to further renew this lease for a second term of
five years. Basic Rent and Parking rates for each renewal term shall be agreed
upon between the parties and shall be based on the fair market rental for
premises of similar size, quality, leasehold improvements (except for those
improvements paid for by the Tenant in addition to the Leasehold Improvement
Allowance provide by the Landlord), and location at time of renewal. The
Landlord and Tenant shall attempt to agree on the fair market rental for the
renewal term during the six-month period immediately preceding the expiry of the
Term or renewal term as the case may be. Failing agreement as to the rental rate
by the date 30 days prior to expiry of the Term or renewal term, the rate shall
be determined by a single arbitrator under the Commercial Arbitration Act of
British Columbia.

                                       26
<PAGE>
31.0        RIGHT OF FIRST OPPORTUNITY

31.1        The Tenant shall have an ongoing first right of opportunity
throughout the Term or any renewal terms to lease a portion or all of any space
10,000 square feet or larger that becomes available for lease within the project
developed by the Landlord known as False Creek Research Park (the "Additional
Space") on terms that the Landlord proposes to lease to the market. This right
of first opportunity shall apply:

      (a)   to the Lands at all times during the Term or any renewal thereof;

      (b)   to lands adjacent to the Lands so long as the landlord of the Lands
            and the adjacent lands is the same or is an affiliate; and

      (c)   to the adjacent lands so long as the landlord of the adjacent lands
            is Discovery Parks Incorporated or an affiliate (irrespective of who
            is the requested owner of the Lands at that time).

The Landlord's notice of proposed terms shall set out Basic Rent per square
foot, term, inducements and other applicable provisions. If either Basic Rent is
reduced or inducements are increased from the previous notice, the Tenant shall
receive renewed notice and first opportunity to lease the then available
Additional Space at the revised terms. The Landlord shall notify the tenant when
space becomes available or when there is a change in the terms from the previous
notice to the Tenant by the Landlord. The Tenant shall have 10 business days to
provide written notice of its acceptance of the rent, term, inducements, set out
in the Landlord's notice and indicating which portion (and the approximate area
in square feet which may be less than 10,000 square feet, and the required
configuration) of the Additional Space in respect of which the Tenant is then
exercising its first right of opportunity. The Tenant acknowledges that if it
elects to take less than all of the Additional Space offered, the Additional
Space shall be demised in a way acceptable to the Landlord and Tenant, acting
reasonably, such that the remainder of the Additional Space is commercially
leaseable as a typical multi-tenant floor. If the Tenant does not provide
written notice to the Landlord of its intention to lease such space within the
10 day period, the Landlord shall be free to lease within 120 days of notice
from the Landlord to the Tenant that portion of the Additional Space to any
third party at terms no more favorable to the proposed tenant than those
outlined in said notice to Tenant. If a period of 120 days has passed between
the date that the Landlord provided said written notice to the Tenant of such
Additional Space the Landlord shall be required to continue to provide renewed
notice to the Tenant for its right of first opportunity to lease so that not
more than 120 days passes between the Tenant obtaining said written notice and
waiving its right of opportunity and the Landlord agreeing to lease said portion
of the Additional Space to a third party.

                                       27
<PAGE>
32.0        WHOLE OF AGREEMENT

32.1        The Tenant agrees that the Premises are leased by the Tenant without
any representations or warranties other than as contained in this Lease and
Offer to Lease and that no representative or agent of the Landlord is or is
authorized or permitted to make any representations with reference hereto or to
vary or modify this Lease in any way, except in writing under seal, and that
this Lease and the Offer to Lease contain all of the agreements and conditions
made between the parties hereto.

33.0        NOTICES AND REGISTRATION

33.1        Any notice required or contemplated by any provision of this Lease
or which the Landlord or Tenant may desire to give to the other is sufficiently
given by personal delivery or by registered letter, postage prepaid and mailed
in one of the Canada Post Offices in the City of Vancouver, British Columbia,
and addressed to the party to whom such notice is to be given at the address of
such party as given in this Lease or at such other address as either party may
notify the other of in writing during the Term, if to the Tenant, addressed to
the Premises and any such notice is effective as of the day of such personal
delivery or as of the day four days following the date of such posting as the
case may be.

33.2        If the Tenant wishes to register this Lease in the appropriate Land
Title Office, the Tenant may do so at the Tenant's sole cost.

34.0        INTERPRETATION

34.1        This Indenture is construed in accordance with laws of British
Columbia.

34.2        Where required the singular number is deemed to include the plural
and the neuter gender the masculine or feminine and the captions herein are for
convenience only and will not constitute a part of this Lease.

34.3        The definition of any words used in any Section of this lease will
apply to such words when used in any other Section hereof whenever the context
is consistent.

34.4        In case of more than one Tenant, the said grants, covenants,
conditions, provisos, agreements, rights, powers, privilege and liabilities is
construed and held to be several as well as joint.

                                       28
<PAGE>
34.5        THIS INDENTURE will enure to the benefit of and be binding upon the
parties hereto and their respective heirs, executors, administrators, successors
and permitted assigns.

35.0        ADDITIONAL PROVISIONS

35.1        Except as otherwise specifically provided, whenever any consent,
approval, designation, requirement, opinion, judgment or discretion is required
of either the Landlord or the Tenant under the terms of this Lease, the same
shall be granted, determined, required or exercised reasonably and without
delay.

35.2        Prior to entering into a binding agreement to lease or lease with a
third party for any premises in the Building, the Landlord shall advise the
Tenant in writing of the identity of the intended Tenant, the proposed use and
the location of the premises to be leased to such intended tenant. The Landlord
shall make reasonable efforts to ensure that the Building is only leased for
office and wet lab uses and that tenant's uses do not materially impact in a
negative way on the physical, chemical or biological environment of the
Premises, interfere with any of the building services being provided to the
Premises, or have an adverse effect on the reputation of the Building or the
reputation of the Tenant (considering especially that the name of the Building
is associated with the Tenant). Notwithstanding the foregoing, the Landlord
shall not permit any portion of the Building to be used as a vivarium or other
facility that uses live animals in their procedures or processes without the
Tenant's express written consent, which consent may be arbitrarily or
unreasonably withheld.

            IN WITNESS WHEREOF each of the parties hereto has affixed its hand
or corporate seal to these presents on the day and year first above written.

            THIS LEASE is not valid unless countersigned by the Landlord.

THE COMMON SEAL of DISCOVERY
PARKS INCORPORATED was hereunto
affixed in the presence of:

                                                          C/S
/s/ Illenaa Buckley
-------------------------------
Authorized Signatory

/s/ Marina Reyes
-------------------------------
Authorized Signatory

                                       29
<PAGE>
THE COMMON SEAL of ANGIOTECH
PHARMACEUTICALS, INC. was hereunto
affixed in the presence of:
                                                          C/S

/s/ William L. Hunter
-------------------------------
Authorized Signatory

-------------------------------
Authorized Signatory

                                       30
<PAGE>
                                  SCHEDULE "A"

                                   DEFINITIONS

In this Lease, unless otherwise stated, the following terms will have the
following meanings:

            "Additional Rent" means the amounts payable by the Tenant to the
            Landlord as described in Section 6.1 hereof and includes, without
            limitation, Operating Expenses and Taxes;

            "Audit" means a review by the Tenant's Consultant of the Tenant's
            practices with respect to Hazardous Substances for the prior year to
            ensure that all applicable Tenant Protocols have been followed, and
            which will itemize any incidents where a Tenant Protocol has not
            been followed and set out remedial measures to be taken by the
            Tenant in the upcoming year to avoid further breaches of the Tenant
            Protocol;

            "Authority" means any government agency, body, corporation,
            organization, department or authority responsible for administering
            or enforcing any Law;

            "Basic Rent" means the annual rent described in Section 4.0 hereof;

            "BOMA Standard" for measuring floor area in multi-tenant office
            buildings adopted in 1989 by the Building Owners and Managers'
            Association;

            "Building" means the building being constructed by the Landlord at
            1618 Station Street, Vancouver, B.C., and in which the Premises are
            situated and expressly excludes the Phase 2 Building;

            "Building Parking Stalls" means the parking stalls shown on Schedule
            "D"

            "Building Rentable Area" means the total of all Rentable Areas in
            the Building measured in accordance with BOMA Standards;

            "Business Days" means the Monday to Saturday inclusive in each week,
            save and except any such day that be declared, by lawful authority,
            a holiday;
<PAGE>
            "Commencement Date" means the later of (i) June 1, 2002; and (ii)
            the first day of the calendar month following the date that is 30
            days after the Landlord's (Base Building) Work and Tenant's Work
            have been Completed for Occupancy;

            "Common Areas" means all lands, improvements, facilities, amenities,
            utilities, installations, and equipment forming part of or being for
            the use of the Building other than forming a part of a Rentable
            Area;

            "Completed for Occupancy" and "Completion for Occupancy" shall be
            determined by the Tenant's architect in accordance with the
            definition contained in Section 31 of the Offer to Lease.

            "Environment" has the meaning given to it in the Canadian
            Environment Protection Act (Canada) from time to time;

            "Existing Pollution" means Pollution of the Land or Building which
            has not been caused by the Tenant;

            "GST" means goods and services taxes exigible under the Excise Tax
            Act;

            "Hazardous Substances" means any hazardous material or matter,
            whether in liquid, solid, or gas or other form, that is prohibited,
            regulated, controlled or licensed by any Laws;

            "Land" means that certain parcel or tract of land situate in Burnaby
            and more particularly known as a portion of:

                  PID: 025-009-702;
                  LOT C OF LOT H, DISTRICT LOT 2037, GROUP 1, NWD, PLAN LMP49701

            "Landlord's Architect" means Chernoff Thompson Architects or such
            other architect designated in writing by the Landlord;

            "Landlord's (Base Building) Work" means the work to be attended to
            by the Landlord for completion of the building of which the Premises
            form a part in accordance with the specifications in Clause 11 of
            the Offer to Lease, and in accordance with the plans and
            specifications agreed to by the parties pursuant to Section 26(a) of
            the Offer to Lease and pursuant to Section 12.2 hereof;

                                       2
<PAGE>
            "Law" means any Federal, Provincial, Municipal, and other
            governmental laws and regulations relating to protection of the
            Environment or its Pollution including, without limitation, the
            Canadian Environmental Protection Act (Canada) and the Waste
            Management Act (British Columbia) and the regulations made under
            them and includes any amendment, revision, re-enactment or
            replacement of any such Law, regulation, or by-law;

            "Leasehold Improvement Allowance" means the amount set forth in
            Section 9.1 and in the Offer to Lease to be paid by the Landlord on
            account of the costs incurred in completing the Tenant's Work;

            "Normal Business Hours" means the hours on Business Days from 7:30
            a.m. to 6:00 p.m. from Monday to Friday inclusive and such other
            hours as the Landlord may reasonably determine from time to time;

            "Offer to Lease" means the offer to lease dated June 6, 2001 as
            amended June 25, 2001 made by the Tenant and accepted by the
            Landlord a true copy of which is attached hereto as Schedule "B";

            "Operating Expenses" means, without duplication, all expenses
            chargeable against income in connection with the operation,
            maintenance and repair of the Building, including all Common Area,
            amenity areas, the parking areas, and the Land and, without
            restricting the generality of the foregoing, includes;

            (i)         expenses incurred in cleaning, heating, and ventilating
                        the Building and providing all utilities including
                        water, natural gas, electrical service, and sanitary and
                        storm sewer services;

            (ii)        expenses incurred in cleaning and maintenance, including
                        waste collection and disposal, recycling programs and
                        snow removal;

            (iii)       costs of cleaning and maintaining the sidewalks, roads,
                        street lights, paving, and landscaping on the Land;

            (iv)        special taxes and licenses (other than the Taxes or
                        Tenant's Taxes or taxes on income or profits) required
                        for the Building and the Lands;

            (v)         salaries and wages (including employees' benefits,
                        worker's compensation and other items of a similar
                        nature) and the cost of service contracts incurred in
                        the cleaning, maintenance, repair of the Building and
                        the Land

                                       3
<PAGE>
                        and payments made for security services, but
                        specifically excluding such costs incurred for
                        administration, property management, asset management
                        and similar services;

            (vi)        the cost of building and cleaning supplies;

            (vii)       the cost of painting and refurbishing interior areas,
                        not normally rented to tenants and costs of painting and
                        otherwise maintaining and repairing the outside of the
                        Building and of operating, maintaining, and repairing
                        the parking areas;

            (viii)      the costs of rental equipment, signs, building supplies,
                        materials and tools;

            (ix)        an allowance for administration and overhead expenses of
                        the Landlord not to exceed $0.75 per annum per square
                        foot of Rentable Area of the Premises for the first
                        calendar year of the Term and thereafter such maximum
                        cap to be increased annually by the rate of inflation as
                        defined by the Consumer Price Index for British Columbia
                        for the first calendar year of the Term;

            (x)         the Landlord's costs of obtaining and maintaining all
                        property insurance including but not limited to
                        liability, fire and other casualties in respect of the
                        Land and Building;

            (xi)        audit, accounting, and other professional and consulting
                        fees and disbursements incurred in determining the costs
                        comprising a portion of Operating Expenses;

            provided always that Operating Expenses shall not include leasing
            commissions, corporation capital tax or other capital taxes,
            depreciation, cost of structural repairs to the Building, interest
            on debt, or capital retirement of debt or any amounts directly
            chargeable by the Landlord to any tenant or tenants as otherwise
            provided in this Lease;

            For greater certainty the Operating Expenses shall not include the
            following:

            (a)         costs of alterations or improvements to the Premises
                        (unless requested in writing by the Tenant) or to the
                        premises of other tenants;

                                       4
<PAGE>
            (b)         costs of correcting structural defects or inadequacy of
                        the initial design or construction of the Building and
                        costs due to the Landlord's violation of any law,
                        regulation or requirement of any governmental authority
                        having jurisdiction;

            (c)         expenses directly resulting from the negligence of the
                        Landlord, its agents, servants or employees, or others
                        for whom it is in law responsible;

            (d)         legal fees, space planners', real estate brokers'
                        leasing commission, take-over costs, advertising
                        expenses and all other leasing expenses incurred in
                        connection with the original development or original
                        leasing of the Building or future leasing of the
                        Building;

            (e)         any bad debt loss, rent loss or reserves for bad debts
                        or rent loss;

            (f)         the expense of services (other than standard services
                        provided to all tenants in the Building) provided to
                        other tenants of the Building which are not provided to
                        the Tenant;

            (g)         costs associated with the operation of the business of
                        the entity which constitutes the Landlord as the same
                        are distinguished from the costs of operation of the
                        Building, including accounting and legal matters, costs
                        of defending any lawsuits with any mortgagee (except as
                        the actions of the Tenant may be in issue) costs of
                        selling, syndicating, financing, mortgaging or
                        hypothecating any of the Landlord's interest in the
                        Building, costs of any disputes between the Landlord and
                        its employees (if any) not engaged in the operation of
                        the Building, disputes of the Landlord with the
                        management of the Building, or fees or costs paid in
                        connection with disputes with other tenants;

            (h)         the wages of any employee of the Landlord who does not
                        devote substantially all of his/her time to the
                        Building;

            (i)         fines, penalties and interest not arising as a result of
                        any act or omission of the Tenant;

            (j)         any damage or loss resulting from any casualty normally
                        insured against by owners of a first class buildings
                        except to the extent of customary deductibles;

                                       5
<PAGE>
            (k)         costs related directly or indirectly to compliance by
                        other tenants, with environmental laws, regulations or
                        ordinances of any governmental authority having
                        jurisdiction with respect to this Lease;

            (l)         costs relating directly or indirectly to upgrading
                        requests or orders of any government having jurisdiction
                        with respect to the Lease (unless such cost so required
                        is a result of any activity of the Tenant or any
                        assignee, subtenant, agent, employee, contractor,
                        invitee or licensee of the Tenant);

            (m)         Corporation Capital Tax and Large Corporation Tax
                        payable by the Landlord;

            (n)         alterations, additions, repairs and replacements of a
                        capital nature determined in accordance with generally
                        accepted accounting practices; and

            (o)         any Operating Expenses relating the Phase 2 Building or
                        the parties of the lands and improvements on which the
                        Phase 2 Building is constructed.

            "Phase 2 Building" means the second building proposed to be
            constructed on the Lands by the Landlord of similar size, design and
            purpose and includes that portion of the lands on which the second
            building and associated parking, landscaping and other surface
            improvements are constructed;

            "Premises" means that portion of the Building described in Section
            1.0 and shown and described in Schedule "C";

            "Pollute" is a verb which means to Release into or unto the
            Environment of any Hazardous Substance that:

            (i)         alters the physical, biological, or chemical nature of
                        that Environment in excess of applicable environmental
                        laws;

            (ii)        alters the capacity in excess of that permitted by
                        environmental laws of the Environment to support any
                        living thing whether animal or plant life;

            (iii)       injures or is capable of injuring the health or safety
                        of a person in or near the Environment;

                                       6
<PAGE>
            (iv)        injures or is capable or injuring property or any life
                        form in or near the Environment;

            (v)         interferes with or is capable of interfering with
                        visibility or the dispersion of light or any
                        photochemical activity within the Environment;

            (vi)        interferes with or is capable of interfering with normal
                        conduct of business in, on near or from the Environment;

            (vii)       causes or is capable of causing physical discomfort to a
                        person in, on or near the Environment in excess of that
                        permitted by environmental laws;

            (viii)      damages or is capable of damaging the Environment in
                        excess of that permitted by environmental laws; or

            (ix)        is Special Waste,

           and such Release is prohibited under any Law, or regulated,
           controlled or licensed under any Law if such Release exceeds the
           acceptable standard prescribed by such Law and "Polluted" is an
           adjective and "Pollution" and "Pollutant" are nouns which have
           meanings that correspond to the meaning contained in this clause.
           "Proportionate Share" means the ratio which the Rentable Area of the
           Premises bears to the Building Rentable Area;

           "Pro Rata Portion" as applied to any amount means the proportionate
           share for the time for which the calculation is made as a fraction of
           whole of the period contemplated in the Lease;

           "Release" includes release, spill, leak, pump, pour, dump, abandon,
           emit, empty, discharge, spray, inoculate, deposit, seep, throw,
           place, exhaust, inject, escape, leach, dispose, infuse or introduce
           other than in accordance with the applicable Tenant Protocol;

           "Rent" means the Basic Rent, Additional Rent and all other sums
           payable to the Landlord hereunder;

                                       7
<PAGE>
            "Rentable Area" has the meaning ascribed to it in the 1989 BOMA
            Standard modified to include a portion of the ground floor entrance
            lobby and chemical storage room in the Building equal to the
            proportion that the Tenant's Rentable Area bears to the Rentable
            Area of the Building;

            "Taxes" mean all taxes, rates and assessments, whether general or
            special, levied or assessed by the municipal authority for such
            purposes payable by the Landlord in respect of the Building and the
            Land and include any other taxes, rates and assessments payable by
            the Landlord which are imposed in substitution of the foregoing
            taxes, rates and assessments as finally determined for each calendar
            year as a result of assessment, appeal or judicial review and
            include any reasonable legal fees or appraiser's fees incurred by
            the Landlord in respect of such final determination. Notwithstanding
            the foregoing, Taxes shall not include:

            (a)         any inheritance, estate, succession, transfer, gift,
                        franchise, or capital provincial or federal tax;

            (b)         any income tax arising out of or related to ownership or
                        operation of income producing real estate;

            (c)         any excise tax imposed upon the Landlord based upon
                        gross or net rentals or other income received by it;

            (d)         penalties related to the late payment of property taxes
                        except when incurred when contesting such taxes in good
                        faith; or

            (e)         any portion of the taxes attributable to the Phase 2
                        Building or that portion of the Lands on which the Phase
                        2 Building and associated landscaping parking and other
                        surface improvements are constructed provided that any
                        portion of taxes relating to common areas serving both
                        buildings shall be pro-rated between the buildings in
                        proportion to the Rentable Areas of both buildings.

            "Tenant's Architect" means Chernoff Thompson Architects or such
            other architects designated in writing by the Tenant;

            "Tenant's Consultant" means any qualified environmental consultant
            designated in writing by the Tenant acceptable to the Landlord,
            acting reasonably;

                                       8
<PAGE>
            "Tenant's Environmental Management Plan" means a written plan
            prepared by the Tenant's Consultant addressing how the Tenant shall
            manage any environmental risks including any Hazardous Substances
            involved in its business in the Premises during the Term;

            "Tenant's Protocol" means, with respect to a Hazardous Substance, a
            written procedure prepared by the Tenant's Consultant in accordance
            with the Tenant's Environmental Management Plan detailing how the
            Hazardous Substance will be transported, received, handled, stored,
            used and disposed of, including procedures to be followed if there
            is a Release of Hazardous Substance other than in accordance with
            the Tenant Protocol;

            "Tenant's Taxes" means all taxes, licenses, rates, duties and
            assessment imposed or levied by lawful authority covering any period
            during the Term and relating to or in respect of the business or
            profession of the Tenant or relating to or in respect of
            improvements, fixtures, machinery or chattels or equipment brought
            onto the Premises by the Tenant or being the property of the Tenant
            or relating to or in respect of improvements to the Premises built,
            made or installed by the Tenant or at the Tenant's request, or being
            any special or additional taxes, licenses, rates, duties and
            assessments which the Tenant or any sub-Tenant or licensee of the
            Tenant shall elect or cause to have the Premises or any part thereof
            assessed or charged with, whether any such taxes, licenses, rates,
            duties and assessments are payable in law by the Tenant or by the
            Landlord and whether such taxes, licenses, rates, duties and
            assessments are included by the taxing authority in the taxes,
            licenses, rates, duties and assessments or levied on or with respect
            to the Building;

            "Tenant's Work" means the Tenant's Leasehold Improvements as
            described in the Offer to Lease; and

            "Term" means the term of this Lease described in Section 3.0 and any
            renewals thereof.

                                       9
<PAGE>
                                  SCHEDULE "B"

                                 OFFER TO LEASE
<PAGE>
                                  SCHEDULE "C"

                                    PREMISES
<PAGE>
                                  SCHEDULE "D"

                             BUILDING PARKING STALLS
<PAGE>
                                  SCHEDULE "E"

                         LANDLORD'S (BASE BUILDING) WORK<PAGE>

                                                                    EXHIBIT 10.6

                              Employment Agreement

This Agreement is made as of the 31st day of October, 1994, between ANGIOGENESIS
TECHNOLOGIES INC., a British Columbia company (the "Company") and DR. WILLIAM
HUNTER (the "Employee").

WHEREAS the Company and its affiliate companies are carrying on the business of
a biomedical company specializing in the treatment of angiogenesis dependent
diseases (the "Business") and the Company wishes to engage the Employee to
provide services to the Company in connection with the Business on the terms and
conditions hereinafter set out.

NOW THEREFORE THIS AGREEMENT WITNESSES:

1. ENGAGEMENT - Subject to the terms and conditions of this Agreement, the
Company agrees to engage the Employee to provide the Services (as defined in
Section 3.1 of this Agreement) and the Employee accepts such engagement from the
Company.

2. OBLIGATIONS OF THE EMPLOYEE - The Employee agrees with the Company (a) to
faithfully, honestly and diligently provide the Services to the Company; (b) to
protect the interest of the Company and the Business to the best of his or her
ability and judgment and in a manner consistent with standards prevailing in
similar businesses; and (c) in addition to the foregoing, to perform the
Services set out in Schedule "A" to this Agreement; at all times subject to the
lawful direction of the officers and directors of the Company.

3. COMPENSATION - The Company agrees with the Employee that the compensation
payable to the Employee shall be as set out in Schedule "B" to this Agreement.

4. COMPETITION - The Employee agrees with the Company not to, at any time during
his employment and for a period of 2 years thereafter, either directly,
indirectly, individually, in partnership, jointly or in conjunction with any
person or persons (including without limitation any individual, trustee, firm,
association, syndicate, company, corporation or other business enterprise)
(collectively a "Person") or as principal, agent, shareholder, officer, employee
or in any other manner whatsoever:

(a) carry on, be engaged in, be concerned with, be interested in, advise, lend
money to, guarantee the debts or obligations of or permit his or her name to be
used or employed by any Person engaged in, concerned with or interested in
(within Canada) any business or part thereof that is the same as or
substantially similar to the Business (the term "Business" meaning the business
carried on by the Company from time to time, and includes the business of the
Company and its affiliate companies as described in the Preamble to this
Agreement) or any part thereof;

(b) solicit or endeavor to entice away from the Company any customer of the
Company, if such soliciting or enticement assists or is related to any business
or part thereof that is the same as or substantially similar to the Business or
any party thereof, or any employee or agent of the Company; or

(c) solicit or endeavor to entice away from the Company any employee or agent of
the Company.

5. CONFIDENTIAL INFORMATION - Except as authorized by the Company, the Employee
shall not, directly or indirectly, now or in the future (unless required to do
so by the laws of Canada), use,

<PAGE>

                                        2

disseminate, disclose, lecture upon, publish, make copies of or otherwise
summarize any Confidential Information (the term "Confidential Information"
meaning all information, know-how and data (which may be oral, written, graphic,
demonstrative, machine recognizable or otherwise) disclosed to the Employee as a
consequence of or through the engagement of the Employee by the Company, and not
generally known in the industry in which the Company is or may become engaged,
including without limitation the research, products, methods, formulas,
processes, services, customers and technology of the Company and any such
information, know-how or data of a third party which may be disclosed to the
Company under obligations of confidentiality. The Employee shall abide by the
terms and conditions of all agreements entered into by the Company with third
parties relating to Confidential Information of the third party.

6. INVENTIONS - With respect to inventions made or contributed to by the
Employee, the Employee agrees as follows:

(a) Any Invention (the term "Invention" meaning any discoveries, concepts, ideas
and developments, whether or not they may be patented, copyrighted or otherwise
protected, including without limitation processes, methods, formulas, procedures
and techniques, including improvements and modifications thereto) made,
conceived, developed or worked upon by the Employee, whether alone or jointly
with others, prior, during or after the Term, where the Invention was developed
through the use of Confidential Information, relates directly to the Business or
to the Company's demonstrably anticipated research or development or results
from any work performed by the Employee for the Company, is developed on behalf
of and constitutes the sole property of the Company. The ownership of the
Company shall extend to all property, title, interest, right, copyright, patent,
trademark, trade name, trade secret and other rights in any such Invention.

(b) The Employee shall promptly disclose and deliver to the Company all
Inventions that constitute the property of the Company, together with any
documentation and materials that relate thereto and any explanations that may be
necessary in connection with any registrations that may be made to obtain
patent, trade mark, trade name, industrial design, copyright or other protection
relating to the Inventions.

(c) To the extent a formal transfer of any rights of the Employee in any
Invention is required or the consent of the Employee to the registration of any
right in any Invention is required, the Employee shall execute and deliver any
documentation reasonably required by the Company to effect the transfer or
registration within 7 days from the presentation of the same to the Employee for
execution. In the event the Employee fails, neglects or refuses to execute and
deliver the necessary documentation within the period referred to above or
cannot be located by the Company, then the Employee hereby irrevocably grants
and appoints any duly authorized signatory of the Company with a power of
attorney to execute and deliver any such documentation on behalf of the
Employee.

7. TERMINATION - During the initial 90 day probationary period after the
commencement of employment, the Company may terminate this Agreement and the
employment of the Employee without notice or cause, and without compensation in
lieu of notice. Thereafter, the Company may terminate this Agreement:

(a) Upon written notice to the Employee for cause, which shall include without
limitation the following events: (i) The breach by the Employee of the terms and
conditions set out in this Agreement or

<PAGE>

                                       3

in any employment policy established by the Company for the employees of the
Company; (ii) The bankruptcy or insolvency of the Employee; and (iii) The
Employee being charged and convicted of any criminal or quasi-criminal offence.

(b) Upon written notice or payment of a sum of money equivalent to the amount
the Employee would have earned during such notice period as follows: (i) After
the probationary period referred to above and during the 1st three consecutive
years of employment of the Employee, 2 weeks notice or payment in lieu thereof;
and (ii) During each subsequent consecutive year of employment of the Employee,
2 weeks notice or payment in lieu thereof; plus an additional 1 weeks notice or
payment in lieu thereof for each additional consecutive year that the Employee
is employed by the Company after the first three consecutive years of
employment, to a maximum of 8 weeks notice or payment in lieu thereof.

(c) The sole recourse and remedy of the Employee upon the termination of this
Agreement and the employment of the Employee without cause pursuant to paragraph
(b) above shall be the receipt by the Employee of the appropriate notice as set
out above or, at the option of the Company, the payment in lieu of notice of a
sum of money equivalent to the amount the Employee would have earned during such
notice period. For greater certainty, upon the expiration of the applicable
notice period set out above or upon payment of the appropriate amount of money
in lieu of notice, the Company and its officers, managers, employees, agents,
successors and assigns shall be released and forever discharged of and from any
and all manner of actions, causes of action, suits, claims, contracts, debts,
demands and damages of every nature and kind whatsoever, at law or in equity,
known as well as unknown or anticipated, which the Employee ever had, then has
or may have by reason of, arising out of or in any way connected with this
Agreement, and the remuneration and benefits provided to the Employee, in the
course of his or her employment.

8. SURVIVAL OF PROVISIONS - The obligations set out in Sections 4, 5 and 6 shall
survive the termination or expiration of this Agreement.

9. MISCELLANEOUS

9.1 This Agreement constitutes the whole agreement between the parties, there
being no terms, conditions, covenants, agreements, representations or warranties
except as expressly set out herein.

9.2 In case any one or more of the provisions of this Agreement, or any parts
thereof, are held to be illegal or invalid, such illegality or invalidity shall
not affect any other provision hereof, or party thereof, but this Agreement
shall be construed and enforced as if such illegal or invalid provision, or part
thereof, had never been contained herein.

9.3 This Agreement shall be governed and interpreted in accordance with the laws
of British Columbia and the general laws of Canada applicable therein.

9.4 This Agreement shall enure to the benefit of and be binding upon the parties
hereto and their respective heirs, legal personal representatives, successors
and assigns.

ANGIOGENESIS TECHNOLOGIES INC.

/s/  Kenneth Mellquist                      /s/ Dr. William Hunter
---------------------------------          -------------------------------------
Kenneth Mellquist                           Dr. William Hunter

<PAGE>

Schedule "A" - Duties and Responsibilities

The Services to be provided by the Employee shall be as follows:

Act as the Medical Director of the Company, and as such be responsible for the
overall management of the scientific programs of the Company, together with all
such other services as the directors or officers of the Company shall direct
from time to time, in accordance with the policies and procedures established by
the Company from time to time. At the option of the Company, the Employee shall
from time to time perform services on behalf of the affiliates of the Company
and will accept a transfer of his or her employment to any such affiliate at the
request of the Company.

Schedule "B" - Compensation

The compensation payable to the Employee in consideration of the provision of
the Services shall be as follows:

1. $72,000 Cdn. per annum commencing on the commencement of the Term, subject to
increase from time to time at the discretion of the Company (and in such event
the terms and conditions of this Agreement shall continue to apply to the
Employee).

2. Reimbursement for all reasonable and approved expenses incurred by the
Employee on behalf of the Company.

3. Entitlement to such health care, extended health care, dental and other
benefits as may be established by the Company from time to time for the benefit
of its employees.

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