Document:

exv10w18

 

EXHIBIT 10.18

LEASE OF INDUSTRIAL SPACE

SINGLE TENANT INDUSTRIAL BUILDING

THIS LEASE made as of the • day of • , 2007.

BETWEEN:

	 	 	 
	Name:
	 	ATS AUTOMATION TOOLING SYSTEMS INC.
	 
	 	 
	Address:
	 	250 Royal Oak Road, Cambridge, Ontario, N3H 4R6
	 
	 	 
	Facsimile:
	 	519-650-6520
	 
	 	 
	(the “Landlord”)

	 
	 	 
	 
	 	 
	- a n d -

	 
	 	 
	 
	 	 
	Name:
	 	PHOTOWATT TECHNOLOGIES INC.
	 
	 	 
	Address:
	 	25 Reuter Drive, Cambridge, Ontario, N3E 1A9
	 
	 	 
	Facsimile:
	 	519-650-6519
	 
	 	 
	(the “Tenant”)

          IN CONSIDERATION of the mutual covenants contained herein, the Landlord and the Tenant hereby
agree as follows:

ARTICLE 1

DEFINITIONS

1.1     Definitions. In this Lease the following terms shall have the following meanings:

	 	(a)	 	“Authorities” means all applicable federal, provincial, municipal and other
governmental authorities (including suppliers of public utilities), departments, boards
and agencies having jurisdiction, and “Authority” shall have a corresponding meaning;
	 
	 	(b)	 	“Automatic Renewal Period” has the meaning set out in Section 3.3(c);

 

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	 	(c)	 	“Building” means the buildings, structures and improvements from time to time
during the Term erected in, upon or under the Leased Premises and all alterations and
additions thereto and replacements thereof, including the building with an office area
comprising a Rentable Area of approximately 26,000 square feet and a plant area
comprising a Rentable Area of approximately 167,000 square feet;
	 
	 	(d)	 	“Capital Tax” means the applicable amount of any tax or taxes payable under the
legislation of a province or to any political subdivision within a province by the
Landlord or by each of any entity constituting the Landlord (each such entity or the
Landlord severally referred to as the “taxpayer”), based upon or computed by reference
to the paid-up capital or place of business of the taxpayer, as determined for the
purposes of such tax or taxes; provided that for purposes hereof, the “applicable
amount” of such tax or taxes shall mean the amount thereof that would be payable if the
Leased Premises were the only establishment of the taxpayer in that province or any
other establishment of the taxpayer therein were located outside that province;
provided further that if the tax or taxes payable by the taxpayer are for a fiscal year
of the taxpayer not coinciding with the Fiscal Year, the amount of such tax or taxes of
such taxpayer payable by the Tenant hereunder shall be that amount payable by such
taxpayer in respect of any fiscal year of the taxpayer ending during the Fiscal Year;
	 
	 	(e)	 	“Claims” means claims, losses, damages, suits, judgments, causes of action,
legal proceedings, executions, demands, penalties or other sanctions of every nature
and kind whatsoever, and any and all costs arising in connection therewith, including
reasonable legal fees and disbursements on a substantial indemnity basis (including all
such reasonable legal fees and disbursements in connection with any and all appeals);
	 
	 	(f)	 	“Commencement Date” means • , 2007;
	 
	 	(g)	 	“Compliance Audit” means a systematic and documented assessment, conducted by
an Environmental Consultant, of the compliance of the business and other operations of
the Tenant relating to the Leased Premises with all Environmental Laws;
	 
	 	(h)	 	“Environmental Claim” means all claims, losses, costs, expenses, fines,
penalties, payments and/or damages (including, without limitation, all solicitors’ fees
on a substantial indemnity basis) relating to, arising out of, resulting from or in any
way connected with the Release in, on, over, upon or from the Leased Premises of any
Hazardous Substance including, without limitation, all costs and expenses of any
remediation or restoration of the Leased Premises and/or any property adjoining or in
the vicinity of the Leased Premises;
	 
	 	(i)	 	“Environmental Consultant” means a licensed environmental engineer or other
environmental professional selected by the Landlord, in its sole discretion, and

 

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	 	 	 	acceptable to the Tenant, acting reasonably, to perform a Compliance Audit or Phase
I Environmental Audit;

	 	(j)	 	“Environmental Laws” means any law, by-law, order, ordinance, ruling,
regulation, certificate, approval, consent or directive of any applicable federal,
provincial or municipal government, governmental department, agency or regulatory
authority or any court of competent jurisdiction, relating to environmental matters
and/or regulating the import, storage, distribution, labelling, sale, use, handling,
transport or disposal of Hazardous Substance;
	 
	 	(k)	 	“First Renewal Period” has the meaning set out in Section 3.3(a);
	 
	 	(l)	 	“First Renewal Right” has the meaning set out in Section 3.3(a);
	 
	 	(m)	 	“Fiscal Year” means a 12-month period, all or part of which falls within the
Term, from time to time determined by the Landlord, at the end of which the Landlord’s
accounts in respect of the Leased Premises are balanced for auditing or bookkeeping
purposes;
	 
	 	(n)	 	“Hazardous Substance” means any contaminant, pollutant, dangerous substance,
noxious substance, toxic substance, hazardous waste, flammable or explosive material,
radio-active material, urea formaldehyde foam insulation, asbestos, polychlorinated
biphenyls, polychlorinated biphenal waste, polychlorinated biphenal related waste, and
any other substance or material now or hereafter declared, defined or deemed to be
regulated or controlled in or pursuant to the Environmental Laws;
	 
	 	(o)	 	“Land” means those lands legally described in Schedule “A” and municipally
identified as 25 Reuter Drive, Cambridge, Ontario, N3E 1A9, which consist of
approximately 41.23 acres and are identified on the plan attached hereto as Schedule
“B”;
	 
	 	(p)	 	“Lease” means this lease and all Schedules attached hereto which are referred
to in this lease, and every properly executed instrument which by its terms amends,
modifies or supplements this lease;
	 
	 	(q)	 	“Leased Premises” means the portion of the Land which consists of approximately
13.5 acres and is identified on the plan attached hereto as Schedule “B”, and the
Building;
	 
	 	(r)	 	“Market Rent” means the annual amount of Minimum Rent which an arm’s length
third party would pay as Minimum Rent (without any tenant inducements) for premises of
comparable size, age and location to the Leased Premises located in the Guelph,
Cambridge and Kitchener-Waterloo area (but excluding any adjustment for any value or
cost attributable to the Leased Premises on account of the Tenant’s Specialized
Equipment and any leasehold improvements installed by

 

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	 	 	 	or on behalf of the Tenant after the Commencement Date or the cost of removal
thereof) in their condition as of the time in question taking into consideration all
of the terms of this Lease such that the amount of Rent payable pursuant to this
Lease at the point in time in question would total the amount of rent which an arm’s
length third party would then pay;

	 	(s)	 	“Minimum Rent” means the amount set out in Section 4.1(a) payable in respect of
each year of the Term;
	 
	 	(t)	 	“Other Taxes” means any and all taxes, levies, duties and assessments imposed
on the Landlord with respect to any or all of Rent, this Lease or goods or services
supplied by the Landlord or which the Landlord is responsible to provide in accordance
with the terms of this Lease, whether characterized as a goods and services tax, sales
tax, multi-stage sales tax, value-added tax, consumption tax or any other similar tax
calculated:

	 	(i)	 	as if the Landlord owned no property other than
the Leased Premises;
	 
	 	(ii)	 	as if there is no sale or other dealing with
the Leased Premises by the Landlord either before, during or following
the Term; and
	 
	 	(iii)	 	as if the Landlord is not entitled to any
input tax credits, set-offs, exceptions, exemptions or deductions from
such taxes or in the calculation of such taxes;

	 	(u)	 	“Person” means an individual, a partnership, a corporation, a trust, an
unincorporated organization, a government or any department or agency thereof and the
heirs, executors, administrators or other legal representatives of an individual;
	 
	 	(v)	 	“Phase I Environmental Audit” means a report prepared by an Environmental
Consultant in accordance with the requirements of standard Z768-01, “Phase I
Environmental Site Assessment”, published by the Canadian Standards Association, as
amended, at the date of the Phase I Environmental Audit;
	 
	 	(w)	 	“Photowatt Technologies Group” means Photowatt Technologies Inc. and each
Person that Photowatt Technologies Inc. directly or indirectly controls, within the
meaning of the Securities Act (Ontario);
	 
	 	(x)	 	“Prime Rate” means the rate of interest per annum established from time to time
by Bank of Nova Scotia at its head office in Toronto, Ontario as the reference rate of
interest to determine interest rates it will charge on Canadian dollar loans to its
Canadian customers and which it refers to as its “prime rate”;

 

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	 	(y)	 	“Realty Taxes” means all taxes, rates, levies, duties and assessments
whatsoever whether municipal, school, provincial, parliamentary or otherwise levied,
imposed or assessed against the Land or any part thereof or upon the Landlord in
respect thereof or from time to time levied, imposed or assessed in the future in lieu
thereof, including those levied, imposed or assessed for education, school and local
improvements, or other similar taxes imposed upon the Landlord or the Tenant, and
including all business taxes, if any, from time to time payable by the Landlord or
levied against the Landlord on account of its ownership or operation of the Land, and
including all costs and expenses (including legal fees on a substantial indemnity basis
and other professional fees and interest and penalties on deferred payments) incurred
by the Landlord in good faith in contesting, resisting or appealing any such taxes,
rates, levies, duties or assessments but excluding income or profits taxes upon the
income of the Landlord;
	 
	 	(z)	 	“Release” means any release, spill, emission, leakage, pumping, injection,
deposit, disposal, discharge, dispersal, leaching or migration;
	 
	 	(aa)	 	“Rent” means the aggregate of all amounts payable by the Tenant to the Landlord
under this Lease;
	 
	 	(bb)	 	“Rentable Area” means an area determined in accordance with Section 4.10;

	 
	 	(cc)	 	“Sales Tax” has the meaning set out in Section 4.8(o);
	 
	 	(dd)	 	“Second Renewal Period” has the meaning set out in Section 3.3(b);
	 
	 	(ee)	 	“Second Renewal Right” has the meaning set out in Section 3.3(b);
	 
	 	(ff)	 	“Spheral Solar” means light weight, flexible crystalline solar products based
on a technology which incorporates thousands of silicon spheres, bonded between thin,
flexible aluminum foil substrates to form solar cells;
	 
	 	(gg)	 	“Tenant’s Employees” means the Tenant’s directors, officers, employees,
servants, agents, contractors, and those for whom the Tenant is responsible at law;
	 
	 	(hh)	 	“Tenant’s Specialized Equipment” means any equipment including, without
limitation, cabling, ducting, piping, supplementary HVAC, water treatment equipment and
specialized leasehold improvements installed by or on behalf of the Tenant prior to or
during the Term on the roof of, or elsewhere in, the Building;
	 
	 	(ii)	 	“Term” means the initial term of this Lease specified in Section 3.1 unless
sooner terminated, and as this Lease may be renewed pursuant to Section 3.3(a), 3.3(b)
or 3.3(c); and
	 
	 	(jj)	 	“Unleased Premises” means that part of the Land that are not part of the Leased
Premises.

 

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1.2     Consultants. Any reference in this Lease to the Landlord’s accountant, auditor, architect,
engineer, surveyor or other consultant shall be deemed to be such duly qualified consultant
appointed by the Landlord in its absolute discretion.

ARTICLE 2

GRANT OF LEASE AND GENERAL COVENANTS

2.1     Grant. The Landlord hereby leases to the Tenant and the Tenant hereby leases from the Landlord
the Leased Premises, to have and to hold during the Term, subject to the terms and conditions of
this Lease.

2.2     Landlord’s General Covenants. The Landlord covenants with the Tenant:

	 	(a)	 	for quiet enjoyment of the Leased Premises; and
	 
	 	(b)	 	to observe and perform all the covenants and obligations of the Landlord
herein.

2.3     Tenant’s General Covenants. The Tenant covenants with the Landlord:

	 	(a)	 	to pay Rent; and
	 
	 	(b)	 	to observe and perform all the covenants and obligations of the Tenant herein.

ARTICLE 3

TERM AND POSSESSION

3.1     Term. The Term of this Lease is two (2) years and shall begin on the Commencement Date and end
on • , 2009 unless terminated earlier as provided in this Lease.

3.2     Condition of Leased Premises. The Tenant agrees to accept the Leased Premises in the condition
which exists on the Commencement Date.

3.3     Rights to Renew.

	 	(a)	 	First Renewal — The Tenant shall have the right to renew this Lease for
a further term of five (5) years (the “First Renewal Right”) commencing on • ,
2009 and expiring on • , 2014 (the “First Renewal Period”), subject to the
following terms and conditions:

	 	(i)	 	the Tenant shall not be entitled to the First
Renewal Right if, at the time of the giving of the notice of exercise
thereof: (A) the Tenant has received written notice from the Landlord
that it is in default under this Lease and all applicable notice and
cure periods have expired; or (B) the Tenant is no longer using,
occupying and operating in the Leased Premises for the purposes of the

 

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	 	 	 	development
and manufacturing of Spheral Solar and ancillary purposes or for the
solar business as it is currently being conducted by the Photowatt
Technologies Group;

	 	(ii)	 	the First Renewal Right shall be exercisable by
notice by the Tenant to the Landlord by no later than six (6) months
prior to the expiry of the initial term of this Lease;
	 
	 	(iii)	 	provided the Tenant has properly exercised the
First Renewal Right, this Lease shall be renewed for the First Renewal
Period on the same terms and conditions as are contained in this Lease,
except that the Minimum Rent during the First Renewal Period will be as
stipulated in subsection (iv) and there shall be no further right to
renew (other than the Second Renewal Right set out below in Section
3.3(b));
	 
	 	(iv)	 	the annual Minimum Rent during the First
Renewal Period shall be the Market Rent for the Leased Premises based
on the Rentable Area of the Building as of the commencement date of the
First Renewal Period and, based on this, shall be negotiated in good
faith by the Landlord and the Tenant and, failing agreement by three
(3) months before the commencement date of the First Renewal Period,
shall be determined by a single arbitrator in accordance with the
provisions of the attached Schedule “C” and the Arbitration Act, 1991
(Ontario); and
	 
	 	(v)	 	as soon as reasonably possible after the
Landlord receives notice from the Tenant pursuant to Section
3.3(a)(ii), the Landlord’s architect, whose decision shall be final and
binding on the Landlord and the Tenant, shall measure the Rentable Area
of the Building in accordance with the provisions of Section 4.10 of
this Lease, and the Landlord and the Tenant shall sign an
acknowledgment as to the Rentable Area of the Building.

	 	(b)	 	Second Renewal — The Tenant shall have the right to renew this Lease
for a second further term of five (5) years (the “Second Renewal Right”) commencing on
• , 2014 and expiring on • , 2019 (the “Second Renewal Period”), subject to
the following terms and conditions:

	 	(i)	 	the Tenant shall not be entitled to the Second
Renewal Right if, at the time of the giving of the notice of exercise
thereof: (A) the Tenant has received written notice from the Landlord
that it is in default under this Lease and all applicable notice and
cure periods have expired; or (B) the Tenant is no longer using,
occupying and operating in the Leased Premises for the purposes of the
development and manufacturing of Spheral Solar and ancillary 

 

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	 	 	 	purposes
or for the solar business as it is currently being conducted by the
Photowatt Technologies Group;

	 	(ii)	 	the Second Renewal Right shall be exercisable
by notice by the Tenant to the Landlord by no later than six (6) months
prior to the expiry of the First Renewal Period;
	 
	 	(iii)	 	provided the Tenant has properly exercised the
Second Renewal Right, this Lease shall be renewed for the Second
Renewal Period on the same terms and conditions as are contained in
this Lease, except that the Minimum Rent during the Second Renewal
Period will be as stipulated in subsection (iv) and there shall be no
further right to renew; and
	 
	 	(iv)	 	the annual Minimum Rent during the Second
Renewal Period shall be the Market Rent for the Leased Premises based
on the Rentable Area of the Building as of the commencement date of the
Second Renewal Period and, based on this, shall be negotiated in good
faith by the Landlord and the Tenant and, failing agreement by three
(3) months before the commencement date of the Second Renewal Period,
shall be determined by a single arbitrator in accordance with the
provisions of the attached Schedule “C” and the Arbitration Act, 1991
(Ontario).

	 	(c)	 	Automatic Renewal - If the Tenant does not exercise the First Renewal
Right or the Second Renewal Right as provided for in Section 3.3(a) or 3.3(b) at the
end of the initial term of this Lease specified in Section 3.1 or the First Renewal
Period (as the case may be), then, unless the Tenant delivers to the Landlord written
notice to the contrary at least six (6) months before the expiry of the initial term of
this Lease specified in Section 3.1 or the First Renewal Period, as the case may be,
the Term shall be automatically renewed for a period (the “Automatic Renewal Period”)
equal to the lesser of (A) six (6) months, and (B) the period required by the Tenant to
perform its obligations under Sections 14.1 and 14.2. During such renewal, all of the
terms and conditions of this Lease shall continue to apply except that:

	 	(i)	 	the rights to renew set out in Section 3.3 and
the provisions of Section 14.3 shall not apply; and
	 
	 	(ii)	 	the monthly instalment of the Minimum Rent
payable by the Tenant during the Automatic Renewal Period shall be
Ninety Six Thousand Five Hundred Dollars ($96,500.00) (in respect of
the Automatic Renewal Period commencing at the end of the initial term
of this Lease) or the monthly instalment of the annual Minimum Rent
payable by the Tenant during the First Renewal

 

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	 	 	 	Period (in respect of the Automatic Renewal Period commencing at the
end of the First Renewal Period).

ARTICLE 4

RENT

4.1     Rent. The Tenant shall pay, without notice or demand, to the Landlord as Rent for the Leased
Premises the aggregate of:

	 	(a)	 	Minimum Rent in respect of: (i) the initial term of this Lease, payable in
advance on the Commencement Date; and (ii) the First Renewal Period and the Second
Renewal Period, if applicable, payable in advance in monthly instalments on the first
day of each calendar month, as follows:

	 	 	 
	Period	 	Per Annum
	Years 1 and 2

	 	$1.00 (which amount the Landlord acknowledges has
been paid)
	 
	 	 
	First Renewal Period

	 	Market Rent (as provided for in Section 3.3(a)(iv))
	 
	 	 
	Second Renewal Period

	 	Market Rent (as provided for in Section 3.3(b)(iv))

	 	 	 	and (iii) the Automatic Renewal Period, if applicable, payable in advance in monthly
instalments on the first day of each calendar month, in the amount as provided for
in Section 3.3(c);
	 
	 	(b)	 	all Realty Taxes and Other Taxes at the times and in the manner provided in
Sections 4.6 and 4.7, respectively; and
	 
	 	(c)	 	all amounts (other than payments under provisions (a) and (b) above) payable by
the Tenant to the Landlord under this Lease, at the times and in the manner provided in
this Lease or, if not so provided, as reasonably required by the Landlord.

4.2     Minimum Rent. With respect to the Minimum Rent set out in Section 4.1(a), the Tenant
and the Landlord hereby acknowledge and agree that the Minimum Rent payable in respect of the
initial term of this Lease is a nominal rate in consideration of, among other things, (i) the
Tenant’s covenant to use its best efforts to use, occupy and operate in the Leased Premises for the
purposes of the development and manufacturing of Spheral Solar and ancillary purposes or for the
solar business as it is currently being conducted by the Photowatt Technologies Group; (ii) the
Tenant’s acceptance of the Leased Premises in an “as is, where is” condition, as set out in Section
6.4; (iii) the Tenant’s clean-up or remediation obligations set out in Section 5.7, and the
Tenant’s environmental indemnity set out in Section 5.7(n); and (iv) the Tenant’s restoration
obligations upon the expiration or other termination of the Term set out in Section 14.1.

 

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4.3     Intent. It is the stated purpose and intent of the Landlord and the Tenant that this Lease
shall be fully net and carefree to the Landlord.

4.4     Payment of Rent. All amounts payable by the Tenant to the Landlord pursuant to this Lease
shall be deemed to be Rent and shall be payable and recoverable as Rent in the manner herein
provided and the Landlord shall have all rights against the Tenant for default in any such payment
as in the case of arrears of Rent. Rent shall be paid to the Landlord in lawful money of Canada,
without deduction or set-off, at the address of the Landlord set out on page 1 of this Lease or to
such other Person or such other address as the Landlord may from time to time designate in writing.
The Tenant’s obligation to pay Rent shall survive the expiration or earlier termination of this
Lease. Any Rent or other sum received by the Landlord from or for the account of the Tenant while
the Tenant is in default under this Lease may be applied at the Landlord’s option to the
satisfaction in whole or in part of any of the obligations of the Tenant then due under this Lease
in such manner as the Landlord sees fit regardless of any designation or instruction of the Tenant
to the contrary.

4.5     Partial Months Rent. If the Commencement Date is a day other than the first day of a calendar
month, the instalment of Rent payable on the Commencement Date shall be that proportion of Rent
which the number of days from the Commencement Date to the last day of the month in which the
Commencement Date falls is of 365. If the Term ends on a day other than the last day of a calendar
month, the instalment of Rent payable on the first day of the calendar month in which the last day
of the Term falls shall be that proportion of Rent which the number of days from the first day of
such last calendar month to the last day of the Term is of 365.

4.6     Payment of Realty Taxes.

	 	(a)	 	In this section, “separate assessment” means the provision of information by
the assessor which ascribes separate assessed market values to the Leased Premises and
the Unleased Premises, whether or not under separate roll numbers and whether on the
notice of assessment or on supplementary information provided by the assessor.
	 
	 	(b)	 	Payment — The Tenant shall pay Realty Taxes to the Landlord at the
times and in the manner as directed by the Landlord but in any event prior to the dates
upon which the payment of such taxes in instalments are due. If the Landlord so
directs the Tenant in writing, the Tenant shall pay Realty Taxes directly to the taxing
authority on or before their due date and shall provide proof of payment to the
Landlord immediately thereafter. Realty Taxes in respect of the first and last years
of the Term shall be adjusted between the Landlord and the Tenant.
	 
	 	(c)	 	Separate Assessment — The Tenant acknowledges that there is at the date
of the making of this Lease no separate assessment for Realty Taxes with respect to the
Leased Premises. If the Leased Premises and the Unleased Premises are separately
assessed, the Tenant shall be responsible to pay the Realty Taxes attributable to the
assessment of the Leased Premises and the Landlord shall be

 

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	 	 	 	responsible to pay the Realty Taxes attributable to the assessment of the Unleased
Premises;

	 	(d)	 	Tenant’s Proportionate Share of Realty Taxes — Unless and until there
is a separate assessment of the Leased Premises, the Tenant and the Landlord shall be
responsible to pay those shares of the Realty Taxes which are determined by the
following principles:

	 	(i)	 	The Tenant shall pay, as additional rent, all
of that portion of the Realty Taxes attributable to the value of the
improvements on the Leased Premises from time to time;
	 
	 	(ii)	 	The Landlord shall be responsible for all of
that portion of the Realty Taxes attributable to the value of the
improvements on the Unleased Premises from time to time;
	 
	 	(iii)	 	As long as the Leased Premises and the
Unleased Premises are assessed in the same property tax classification:

	 	(A)	 	the Tenant shall pay, as
additional rent, the percentage of the Realty Taxes
attributable to the land value (less any value of
improvements) that the area of the Leased Premises bears to
the area of the Land;
	 
	 	(B)	 	the Landlord shall be
responsible for the percentage of the Realty Taxes
attributable to the land value (less any value of
improvements) that the area of the Unleased Premises bears to
the area of the Land;

	 	(iv)	 	The Landlord shall use reasonable commercial
efforts to obtain the working and other papers of the taxing or
assessment authority and shall provide copies of such papers to the
Tenant; and
	 
	 	(v)	 	The Tenant acknowledges that the Unleased
Premises may be eligible for a vacancy rebate and any such rebate in
any year will in any event be for the sole benefit of the Landlord.

	 	(e)	 	Increase — If the Leased Premises are at any time during the Term
assessed for the support of separate schools (as a result of any action taken by the
Tenant) or if the Realty Taxes are increased by reason of any installations made in or
upon or any alterations made in or to the Leased Premises by the Tenant or by the
Landlord on behalf of the Tenant, or as a result of the issuance of any omitted or
corrected assessment, the Tenant shall pay the amount of such increase forthwith to the
Landlord upon receipt of notice thereof.

 

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	 	(f)	 	Decrease — If the Realty Taxes attributable to the Leased Premises are
refunded to the Landlord as a result of any successful appeal or request for
reconsideration or other change to the assessment or tax rate, the Landlord shall
promptly pay such refund to the Tenant.

4.7     Payment of Other Taxes. The Tenant shall pay to the Landlord the amount of all Other Taxes
within five days of receipt of notice from the Landlord specifying the amount of such Other Taxes.
The Landlord may, at its option, estimate the amount of Other Taxes allocable to each month and
require that the Tenant pay such estimated amount monthly on the first day of each calendar month
during the Term. Any necessary adjustment shall be paid by the Tenant or credited by the Landlord,
as the case may be, whenever required after determination of Other Taxes.

4.8     Occupancy Costs. The Tenant shall be responsible for all costs and expenses incurred during
the Term whether incurred by the Tenant directly or by or on behalf of the Landlord or any manager
or agent of the Landlord in or with respect to the occupancy, complete decoration, repair,
administration, maintenance, improvement, replacement and operation of the Leased Premises
calculated in accordance with generally accepted accounting principles and including, without
limiting the generality of the foregoing, but without duplication and without profit:

	 	(a)	 	all charges for the cost of heating, cooling and ventilating the Building, hot
and cold water and all charges for electricity, gas and all other similar services and
utilities provided to the Leased Premises;
	 
	 	(b)	 	the cost of providing, maintaining and replacing as necessary landscaping and
gardening and the cost of snow and refuse removal, if requested by the Tenant;
	 
	 	(c)	 	the cost of cleaning services to the Leased Premises, including the cost of
window cleaning, if requested by the Tenant;
	 
	 	(d)	 	the cost of all repairs and replacements (save and except structural repairs or
replacements) to or with respect to the Leased Premises as well as the cost of any
improvement or repair which is required to be made to the Leased Premises by any change
in the laws, rules, regulations or orders of any governmental authority having
jurisdiction;
	 
	 	(e)	 	the cost of all insurance maintained by the Landlord pursuant to Section 9.1;
and
	 
	 	(f)	 	the annual amortization including interest at the Prime Rate on the unamortized
amount (on a straight-line basis over the useful life or such other period as
reasonably determined by the Landlord in accordance with generally accepted accounting
principles) of the cost of any modifications, replacements or additions of a capital
nature to the Leased Premises and/or the machinery and equipment (but not including the
machinery and equipment used in the operation of the solar business) therein and
thereon, where in the reasonable opinion of the Landlord

 

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	 	 	 	such modifications, replacements or additions are intended to have the effect of
reducing occupancy costs or resulting in energy savings or resulting in increased
security, or any additional equipment or improvements required by legal requirements
not in effect at the Commencement Date of the Lease and not to remedy any
construction inadequacy or non-compliance with legal requirements in effect at the
Commencement Date, or which in the Landlord’s reasonable opinion are for the benefit
or safety of users of the Land.

Notwithstanding the foregoing, occupancy costs shall exclude the following, except if specifically
included above:

	 	(g)	 	interest and principal payments on financing of the Landlord, and any other
debt costs or ground lease rent of the Landlord;
	 
	 	(h)	 	costs or expenses incurred with respect to the acquisition, development and
construction and landscaping of the Leased Premises and any expansion thereof;
	 
	 	(i)	 	depreciation;
	 
	 	(j)	 	costs and expenses relating to structural repairs or replacements of the Leased
Premises;
	 
	 	(k)	 	costs or expenses resulting from any inadequacy in the design or construction
of the Leased Premises or with respect to poor workmanship or materials in connection
with such construction;
	 
	 	(l)	 	any administrative, management and overhead costs of the Landlord;
	 
	 	(m)	 	all costs incurred in connection with the rectification of any work done by the
Landlord in the Leased Premises which did not comply with and conform to every
applicable statute, law, by-law, and regulation as of the Commencement Date;
	 
	 	(n)	 	income taxes and other taxes personal to the Landlord;
	 
	 	(o)	 	the amount of any sales tax, goods and services tax, value added tax or any
similar tax (“Sales Tax”) paid or payable by the Landlord on the purchase of goods and
services included in occupancy costs which is available to the Landlord as a credit in
determining the Landlord’s net tax liability or refund on account of Sales Tax, but
only to the extent that Sales Tax is included in occupancy costs;
	 
	 	(p)	 	the cost of any insurance premiums relating to risks or amounts which are not
normally insured against by reasonably prudent owners of similar buildings;
	 
	 	(q)	 	Capital Tax;
	 
	 	(r)	 	any cost which would otherwise be included in occupancy costs, but consists of
an amount paid to a corporate affiliate, parent or subsidiary of the Landlord, to the

 

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	 	 	 	extent that such amount is in excess of the fair market value of the said item or
service were the expense incurred in an arm’s-length transaction; and

	 	(s)	 	any costs which are above market costs.

4.9     Estimates of Expenses and Resolution of Disputes. Any expense payable by the Tenant hereunder
may be estimated by the Landlord on whatever reasonable basis the Landlord may select if and to the
extent that the Landlord cannot ascertain the actual amount of the expense. The Tenant shall pay
the amount of such expense to the Landlord forthwith after receipt of notice specifying such
amount. If there is any disagreement as to the amount or propriety of any amount so notified, a
certificate of the auditor of the Landlord, acting reasonably, shall be conclusive as to the amount
of such expense for any period to which the certificate relates.

4.10     Rentable Area. The Rentable Area of the Building shall be determined by measuring from and
to the inside finish of permanent outer Building walls or from the glass line, whichever extends
further and no deduction shall be made for columns, projections, stairs, elevator shafts, stacks,
pipe shafts, vertical ducts, washrooms, air conditioning rooms, fan rooms or any other service
facilities within the Building. For clarity, Rentable Area shall include basement or other below
grade areas or mezzanine areas.

4.11     Area Determination. The Landlord may from time to time as it deems necessary cause the
Rentable Area of the Building or any part thereof to be recalculated or remeasured and the cost
thereof shall be payable by the Tenant to the Landlord forthwith upon demand. If any calculation
or determination by the Landlord of the Rentable Area of the Building is disputed or called in
question, it shall be calculated or determined by the Landlord’s architect or surveyor from time to
time appointed for that purpose, whose certificate shall be conclusive and binding upon the parties
hereto. If the Tenant disputes the Landlord’s calculation, the Tenant shall pay the full cost of
such calculation or determination forthwith upon demand.

ARTICLE 5

USE AND OCCUPATION

5.1     Use of Leased Premises. The Tenant covenants to use its best efforts to use, occupy and
operate in the Leased Premises for the purposes of the development and manufacturing of Spheral
Solar and ancillary purposes during the initial term of this Lease, and for such other purposes as
may be permitted by applicable laws and approved by the Landlord, which approval may not be
unreasonably withheld. The Landlord hereby acknowledges and confirms that the Tenant may use,
occupy and operate the Leased Premises for the solar business as it is currently being conducted by
the Photowatt Technologies Group.

5.2     Compliance with Laws. The Tenant shall comply at its expense with all present and future laws,
regulations and orders (including, without limitation, zoning bylaws) relating to the occupation or
use of the Leased Premises, the installation and condition of the leasehold improvements, trade
fixtures, furniture, machinery and equipment installed by the Tenant

 

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therein, the making by the Tenant of any repairs, changes or improvements therein and the
conduct of any business in the Leased Premises. If alterations or improvements are necessary to
comply with any of the foregoing or with the requirements of insurance carriers, the Tenant shall
forthwith complete such work to the extent that it can be done within the Leased Premises and in
any event shall pay the entire cost of any alterations or improvements so required.

5.3     Prohibited Uses. The Tenant shall not commit, cause or permit any nuisance or any waste or
injury to the Leased Premises or any of the leasehold improvements or fixtures therein or any
overloading of the floors of the Leased Premises. Without limiting the generality of the
foregoing, the Tenant shall not use or permit the use of any portion of the Leased Premises for any
dangerous, illegal, noxious, odorous or offensive trade, business or occurrence. The Tenant shall
keep the Leased Premises free of debris or anything of a dangerous, noxious, odorous or offensive
nature or which could create a fire hazard (through undue load on electrical circuits or otherwise)
or undue vibration, heat or noise. The Tenant shall not use equipment or machinery in the Leased
Premises in a manner that results in it being seen or heard outside the Leased Premises. The
Landlord acknowledges and agrees that the Tenant’s use of the Leased Premises as carried on at the
time of the Commencement Date does not contravene any of the foregoing.

5.4     Hazardous Use. The Tenant shall not do, omit to do or permit to be done anything which will
cause or shall have the effect of causing the cost of the Landlord’s insurance in respect of the
Leased Premises or any part thereof to be increased at any time during the Term or any policy of
insurance on or relating to the Leased Premises to be subject to cancellation. Without waiving the
foregoing prohibition, the Landlord may demand and the Tenant shall pay to the Landlord upon
demand, the amount of any increase in the cost of insurance caused by anything so done or omitted
to be done. The Tenant shall forthwith upon the Landlord’s request comply with the reasonable
requirements of the Landlord’s insurers, cease any activity complained of and make good any
circumstance which has caused any increase in insurance premiums or the cancellation of any
insurance policy. In determining the amount of increased premiums for which the Tenant is
responsible, a schedule or statement issued by the Person which computes the insurance rates for
the Landlord showing the components of the rate shall be conclusive evidence of the items that make
up the rate. If any policy of insurance in respect of the Leased Premises or any part thereof is
cancelled or becomes subject to cancellation by reason of anything so done or omitted to be done,
the Landlord may without prior notice terminate this Lease and re-enter the Leased Premises.

5.5     Permitted Signs. The Tenant shall use only such identification signs as are permitted by the
Landlord, acting reasonably, from time to time and as comply with all applicable by-laws,
regulations and codes as to size, location, arrangement, type of lettering, colour, appearance and
design. Such signs shall contain only the name under which the Tenant carries on business from
time to time.

5.6     Prohibited Signs. Except with the prior written consent of the Landlord, which consent may be
arbitrarily withheld or rescinded in the Landlord’s sole discretion, or as provided in Section 5.5,
the Tenant shall not paint, display, inscribe, place or affix any sign, symbol, notice,
advertisement, display or direction of any kind anywhere outside the Leased Premises or

 

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on the interior of any glass windows or doors or elsewhere within the Leased Premises
so as to be visible from the outside of the Leased Premises.

5.7     Tenant’s Environmental Covenants and Indemnity. The Tenant covenants and agrees that during
the Term or as otherwise specified herein:

	 	(a)	 	the Tenant and the Tenant’s Employees (which includes for the sake of clarity,
its invitees who enter into the Leased Premises) shall not bring into the Leased
Premises or the Land, any Hazardous Substances, except in accordance with all
applicable Environmental Laws. If the Tenant or any Tenant’s Employee shall bring or
create upon the Leased Premises or the Land any Hazardous Substances, then such
Hazardous Substances shall be and remain the sole property of the Tenant and the Tenant
shall remove the same at its sole cost at the expiration of the Term or sooner to the
extent such removal is directed by any Authority or such removal is required to effect
compliance with any Environmental Laws;
	 
	 	(b)	 	comply in all respects with all Environmental Laws relating to the Leased
Premises or the use of the Leased Premises by the Tenant or the Tenant’s Employees;
	 
	 	(c)	 	neither the Leased Premises nor the Land shall be used for the purpose of a
waste site by the Tenant or the Tenant’s Employees other than waste from production
which shall be stored and disposed of pursuant to all applicable Environmental Laws;
	 
	 	(d)	 	no Hazardous Substance will be located or stored on the Leased Premises or the
Land by the Tenant or the Tenant’s Employees, except in accordance with all
Environmental Laws relating thereto, and the Tenant and the Tenant’s Employees shall
comply with all Environmental Laws, including, but not limited to, matters relating to
air pollution, noise control, on-site or off-site waste, Hazardous Substance handling,
discharge, disposal or recovery, whether products or waste;
	 
	 	(e)	 	the Tenant and the Tenant’s Employees shall comply in full with the regulations
of the Environmental Laws applicable to any releases into the environment (including,
without limitation, into the Leased Premises) of any Hazardous Substance (a “Spill”)
during the Term and caused by the Tenant or the Tenant’s Employees with respect to the
notification of the Ministry of Environment and shall be responsible for Claims for
costs of any clean-up or remediation as such clean-up or remediation is required by the
applicable Authority and Environmental Laws, or for compensation for damage or injury
suffered as a result of any such Spills;
	 
	 	(f)	 	all containers containing Hazardous Substance waste products which the Tenant
or the Tenant’s Employees have introduced onto the Leased Premises shall be removed
from the Leased Premises by means of delivery to a carrier licensed under the laws of
the Province of Ontario and disposed of to a waste disposal site

 

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	 	 	 	licensed under the applicable laws of the Province of Ontario (the Tenant hereby
acknowledging and confirming that it has knowledge of the Hazardous Substance waste
products which have been brought or introduced onto the Leased Premises up to and
including the Commencement Date);

	 	(g)	 	the processing, storage and handling of chemicals or chemical wastes by the
Tenant or the Tenant’s Employees on the Leased Premises shall be conducted, in
accordance with all laws;
	 
	 	(h)	 	if any Authority shall require the clean-up or remediation of any Hazardous
Substance pursuant to Environmental Laws:

	 	(i)	 	held in, released from, abandoned and placed
upon the Leased Premises or the Land by the Tenant or the Tenant’s
Employees; or
	 
	 	(ii)	 	released or disposed of by the Tenant or the
Tenant’s Employees,

	 	 	 	then the Tenant shall at its own expense carry out all such required work of such
applicable Authority and within the time required by such Authority, including
preparing all necessary studies, plans and approvals and providing all bonds and
other security required by such Authority, and shall provide all written reports
prepared by environmental engineers with respect to all such work to the Landlord;
	 
	 	(i)	 	promptly notify the Landlord in writing of any written notice received by the
Tenant by any Authority alleging a possible violation of or with respect to any matter
involving any Environmental Laws relating to operations in the Leased Premises relating
to any Person for whom it is in law responsible or any written notice from any other
party concerning any Release or alleged Release of any Hazardous Substance by the
Tenant or the Tenant’s Employees on the Leased Premises;
	 
	 	(j)	 	promptly notify the Landlord of the existence of any Hazardous Substance in or
on the Leased Premises which the Tenant or the Tenant’s Employees have introduced onto
the Leased Premises and such existence is in violation of Environmental Laws and
provide to the Landlord a copy of any environmental site assessment of the Leased
Premises conducted by or for the Tenant at any time during the Term within thirty (30)
days of the Tenant receiving same;
	 
	 	(k)	 	permit the Landlord upon reasonable notice during normal business hours at its
own sole cost and expense and its own risk accompanied by a representative of the
Tenant provided Landlord’s entry does not materially interfere with the Tenant’s use of
the Leased Premises to:

 

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	 	(i)	 	enter to inspect the Leased Premises and
operations conducted therein for the purpose of conducting
environmental tests, assessments and appraisals;
	 
	 	(ii)	 	conduct environmental tests and environmental
assessments or appraisals for which the Tenant may be present and may
take its own samples;
	 
	 	(iii)	 	remove samples from the Leased Premises for
which the Tenant may be present and may take its own samples; and
	 
	 	(iv)	 	examine and make copies of any documents or
records required to be maintained by the Tenant pursuant to
Environmental Laws,

	 	 	 	and the Landlord shall promptly repair any damage caused by such entry at its own
expense;
	 
	 	(l)	 	the Landlord may from time to time during the Term, during normal business
hours and upon reasonable notice to the Tenant at its own sole cost and expense and its
own risk accompanied by a representative of the Tenant:

	 	(i)	 	enter the Leased Premises for the purpose of
causing an environmental audit of the Leased Premises to be carried
out, the scope and extent of such audit to be determined by the
Landlord in its sole discretion. The Tenant may be present at such
audit and take its own samples, provided that in any event Landlord’s
entry shall not materially interfere with the Tenant’s reasonable use
of the Leased Premises and Landlord shall promptly repair any damage
caused by such audit at its own expense; and
	 
	 	(ii)	 	if any such audit, or in the case of any such
audit done in the last year of the Term or at the expiry, repudiation
or earlier termination of the Lease (which audit shall be carried out
by the Tenant at its own sole cost and expense and its own risk) and
any and all of which shall be performed by a licensed environmental
engineer selected by the Landlord, in its sole discretion: (a)
concludes that an environmental condition in violation of Environmental
Laws exists, howsoever caused, and such environmental condition existed
at any time from and after •, 2003; and (b) such licensed environmental
engineer recommends a clean-up or remediation or such clean-up or
remediation is required to meet standards for industrial lands as set
out in Environmental Laws, then the Tenant shall have liability for the
clean-up or remediation and the Tenant, at its own sole cost and
expense, shall immediately take such steps as are necessary so as to
perform the clean-up or remediation;

 

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	 	(m)	 	notwithstanding the provisions of Section 5.7(l), the Tenant shall, at its own
sole cost and expense and its own risk:

	 	(i)	 	conduct a Phase I Environmental Audit and any
subsequent work (including, without limitation, a Phase II
environmental site assessment) recommended by the Phase I Environmental
Audit, and a Compliance Audit of the Leased Premises at each of the
following times:

	 	(I)	 	if the Tenant does not exercise
the First Renewal Right, on or as soon as reasonably possible
after the expiry or earlier termination of the Automatic Renewal
Period occurring at the end of the initial term of this Lease;
and
	 
	 	(II)	 	if the Tenant exercises the First
Renewal Right, on or as soon as reasonably possible prior to or
after the expiry of the initial term of this Lease; and
	 
	 	(III)	 	if the Tenant exercises the
First Renewal Right, but does not exercise the Second Renewal
Right, prior to or on or as soon as reasonably possible after
the expiry or earlier termination of the Automatic Renewal
Period occurring at the end of the First Renewal Period; and
	 
	 	(IV)	 	if the Tenant exercises the First
Renewal Right and exercises the Second Renewal Right, prior to
or on or as soon as reasonably possible after the expiry:

	 	A.	 	of the First
Renewal Period; and
	 
	 	B.	 	or earlier
termination of the Second Renewal Period.

	 	 	 	All such audits shall be conducted by an Environmental Consultant;
	 
	 	(ii)	 	the Landlord and the Tenant shall be promptly
provided with copies of all interim and final correspondence, test
results, reports and assessments issued by such Environmental
Consultant in connection with the audits;
	 
	 	(iii)	 	if any such audit:

	 	(I)	 	concludes that an environmental
condition in violation of Environmental Laws exists, or
Hazardous Substances are in, on, under or from the property in
exceedance of standards published pursuant to Environmental
Laws,

 

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	 	 	 	howsoever caused, and such environmental condition existed at
any time from and after •, 2003; and

	 	(II)	 	such Environmental Consultant
recommends a clean-up or remediation or clean-up or remediation
is required pursuant to applicable Environmental Laws or in
order to meet standards published pursuant to Environmental
Laws,

	 	 	 	then the Tenant shall have liability for the clean-up or remediation
and the Tenant, at its own sole cost and expense, shall immediately
take such steps as are necessary so as to perform the clean-up or
remediation; and

	 	(n)	 	any breach of any of the foregoing covenants and undertakings shall constitute
a breach of this Lease by the Tenant, entitling the Landlord to pursue its rights and
remedies hereunder subject to the applicable cure period set forth in Section 11.4. In
addition, the Tenant shall indemnify and save the Landlord and its directors, officers,
employees, servants, agents, contractors, successors and assigns harmless from and
against any and all Claims, as a result of any breach of the obligations of the Tenant
set out above in Sections 5.7(a) to 5.7(m), including without limitation, any
Environmental Claim, which indemnity shall survive the expiration or termination of
this Lease.

ARTICLE 6

OBLIGATIONS OF THE LANDLORD

6.1     The Leased Premises. The Landlord shall make the Leased Premises available to the Tenant on
the Commencement Date, it being understood that the Landlord shall not be responsible for providing
any improvements to the Leased Premises during the Term or for providing any services which are
stated in this Lease to be the responsibility of the Tenant.

6.2     Systems. The operation of all systems within the Leased Premises shall be the sole
responsibility of the Tenant and the Landlord shall have no responsibility for any inadequacy of
performance of any systems within the Leased Premises or for the interruption or disturbance of any
utility or other service normally available to the Leased Premises.

6.3     Access by Landlord. The Tenant shall permit the Landlord to enter the Leased Premises at any
time outside normal business hours in case of an emergency and otherwise during normal business
hours accompanied by a representative of the Tenant where such will not unreasonably disturb or
interfere with the Tenant’s use of the Leased Premises or operation of its business, to examine,
inspect and show the Leased Premises for purposes of leasing, sale or financing, to provide
services or make repairs, replacements, changes or alterations as provided for in this Lease and to
take such steps as the Landlord may deem necessary for the safety, improvement or preservation of
the Leased Premises. The Landlord shall give reasonable notice to the Tenant prior to entry but no
such entry shall constitute an
eviction or a breach of the Landlord’s covenant for quiet enjoyment or entitle the Tenant to any
abatement of Rent.

 

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6.4     Condition of Leased Premises. The Tenant agrees that it has entered into this Lease on the
express understanding that all improvements to the Leased Premises shall be performed at the sole
expense of the Tenant in accordance with the terms of this Lease. The Tenant shall accept the
Leased Premises “as is, where is” in their state and condition existing at the Commencement Date
including, without limitation, any environmental contamination of the Land or the Leased Premises.

ARTICLE 7

SERVICES, MAINTENANCE, REPAIR AND ALTERATIONS BY THE TENANT

7.1     Utilities. The Tenant shall be solely responsible for the cost of all utilities supplied to or
for the Leased Premises including, without limitation, the cost of all electricity, gas, hot and
cold water, telephone and all other utilities, services and facilities. The cost of all such
utilities shall be paid to the utility supplier by the Tenant on or before their due date.

7.2     Lights, Etc. The Tenant shall be solely responsible for replacing at its expense all
fluorescent tubes, light bulbs and ballasts and for the cleaning, maintaining and servicing of
same, all in accordance with the standards required by the Landlord from time to time.

7.3     Heating, Ventilation and Air-Conditioning. The Tenant shall be solely responsible for the cost
of all heating, ventilation and air-conditioning required in the Leased Premises or any part
thereof and shall maintain therein conditions of reasonable temperature and comfort so as to
prevent damage to the Leased Premises caused by the elements or otherwise.

7.4     Alterations by Tenant. The Tenant may from time to time at its own expense make changes,
additions and improvements to the Leased Premises to better adapt the same to its business,
provided that any change, addition or improvement shall:

	 	(a)	 	comply with the requirements of any governmental authority having jurisdiction;
	 
	 	(b)	 	be made only after detailed plans and specifications therefor have been
submitted to the Landlord and received the prior written consent of the Landlord,
acting reasonably, all at the expense of the Tenant, including the reasonable cost of
the Landlord’s consultants, if any; and
	 
	 	(c)	 	be carried out in a good and workmanlike manner and only by Persons selected by
the Tenant and approved in writing by the Landlord, acting reasonably, who shall if
required by the Landlord deliver to the Landlord before commencement of the work,
performance and payment bonds as well as proof of workers’ compensation and public
liability and property damage insurance coverage, with the Landlord named as an
additional insured, in amounts, with companies and in form
reasonably satisfactory to the Landlord, which shall remain in effect during the
entire period in which the work will be carried out,

 

- 22 -

provided that if any such changes, additions or improvements require modification to the heating,
ventilation or air-conditioning systems in the Building, the Tenant shall be solely responsible for
the cost of such modifications.

7.5     Tenant’s Work. The Tenant may install in the Leased Premises its usual fixtures and personal
property in a proper manner; provided that no installation or repair shall interfere with or damage
the mechanical or electrical systems or the structure of the Building. If the Tenant is not then
in default hereunder, the fixtures and personal property installed in the Leased Premises by or on
behalf of the Tenant may be removed by the Tenant from time to time in the ordinary course of the
Tenant’s business or in the course of reconstruction, renovation or alteration of the Leased
Premises by the Tenant, provided that the Tenant promptly repairs at its own expense any damage to
the Leased Premises and the Building resulting from the installation and removal and provided
further that in the event of removal of fixtures, the Tenant shall promptly replace such fixtures
with fixtures of equal or greater quality and value.

7.6     Condition of Premises. The Tenant shall, at its expense, maintain the Leased Premises and all
improvements therein in the same repair, order and condition as existing on the Commencement Date,
subject to reasonable wear and tear, including, without limitation:

	 	(a)	 	cleaning and removal of debris and garbage;
	 
	 	(b)	 	repainting the Leased Premises and cleaning windows and floor coverings at
reasonable intervals as reasonably required by the Landlord;
	 
	 	(c)	 	making repairs and replacements as needed to the Leased Premises and all
systems located therein including, without limitation, to heating, air-conditioning and
ventilation equipment, glass, doors, hardware, partitions, walls, fixtures, lighting
and plumbing fixtures, wiring, piping, ceilings, floors and thresholds;
	 
	 	(d)	 	providing and maintaining landscaping, gardening and snow removal;
	 
	 	(e)	 	making repairs and replacements, whether structural or otherwise to the
Building and Leased Premises including, without limitation, to the roof or any parking
area or facility; and
	 
	 	(f)	 	keeping the Leased Premises in a condition so as to comply with the
requirements of any governmental authority having jurisdiction,

all to such standards and condition as would a careful and prudent owner of a property similar to
the Leased Premises in the area in which the Leased Premises are located.

7.7     Failure to Maintain. If the Tenant fails to perform any obligation under this Article 7, then
on not less than fifteen (15) days’ notice to the Tenant, the Landlord may
enter the Leased Premises and perform the obligation without liability to the Tenant for any loss
or damage to the Tenant thereby incurred. The Tenant shall, promptly after receiving the

 

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Landlord’s invoice therefor, reimburse the Landlord for all costs incurred by the Landlord in
performing the obligation.

7.8     Liens. The Tenant shall pay promptly when due all costs for work done or caused to be done by
the Tenant in the Leased Premises which could result in any lien or encumbrance on the Landlord’s
interest in the Leased Premises or any part thereof, shall keep the title to the Leased Premises
and every part thereof free and clear of any lien or encumbrance in respect of the work and shall
indemnify and hold harmless the Landlord against any claim, loss, cost, demand and legal or other
expense, whether in respect of any lien or otherwise, arising out of the supply of materials,
services or labour for the work. The Tenant shall immediately notify the Landlord of the lien,
claim of lien or other action of which it has or reasonably should have knowledge and which affects
the title to the Land, the Building or the Leased Premises or any part thereof and shall cause the
same to be removed within fifteen (15) days (or such additional time as the Landlord may consent to
in writing), failing which the Landlord may take such action as the Landlord deems necessary to
remove same and the entire cost thereof shall immediately become due and payable by the Tenant to
the Landlord.

ARTICLE 8

TAXES

8.1     Landlord’s Taxes. The Landlord shall pay promptly when due (but subject to contribution by the
Tenant as required hereunder) any tax, rate, levy, assessment, fee and other charge (except for
taxes payable by the Tenant under this Lease) which is imposed, levied, assessed or charged by a
taxing or other authority having jurisdiction and which is payable in respect of the Term or any
part thereof upon or on account of the Leased Premises.

8.2     Tenant’s Taxes. In addition to taxes payable by the Tenant under Sections 4.6 and 4.7, the
Tenant shall pay promptly when due every tax, rate, levy, assessment, fee and other charge which is
imposed, levied, assessed or charged to or for the account of the Tenant or the Leased Premises by
a taxing authority having jurisdiction and which is payable upon or on account of:

	 	(a)	 	operations at, occupancy of, or conduct of business in and from the Leased
Premises by or with permission of the Tenant; and

	 	(b)	 	fixtures, improvements or personal property in the Leased Premises which do not
belong to the Landlord;

provided that if the Landlord so elects by notice to the Tenant, the Tenant shall pay any such
taxes payable by it under this Lease in monthly instalments to the Landlord and the Landlord shall
remit the amounts to the appropriate authorities. The Tenant agrees that if, at any time and from
time to time throughout the Term, any additional tax, rate, levy, assessment, fee, charge, cost,
expense, penalty, fine or interest is imposed, levied, assessed or charged to or for the account of
the Landlord by a taxing authority having jurisdiction and which is payable upon or
on account of the Minimum Rent in respect of the initial term of this Lease, the Tenant shall

 

- 24 -

forthwith pay fifty percent (50%) of such additional tax, rate, levy, assessment, fee, charge,
cost, expense, penalty, fine or interest to the Landlord.

8.3     Right to Contest. Each of the Landlord and the Tenant (provided the Tenant is legally entitled
to do so) shall have the right to contest in good faith the validity or amount of any tax, rate,
levy, assessment, fee or other charge which it is responsible to pay under this Article 8 and to
defer payment of such taxes to the extent permitted by law; provided that no contest by the Tenant
shall involve the possibility of forfeiture, sale or disturbance of the Landlord’s interest in the
Leased Premises and that, upon the final determination of any contest by the Tenant, the Tenant
shall immediately pay and satisfy the amount found to be due, together with any costs, penalties
and interest. If as a result of any contest by the Tenant, any tax, rate, levy, assessment, fee or
other charge is increased, the Tenant shall be responsible for the full amount of such increase in
respect of the period to which the contest relates and to any subsequent tax periods which commence
during the Term.

8.4     Notice of Taxes. The Tenant shall promptly give to the Landlord all assessment notices, tax
bills and any other notices relating in any way to the Leased Premises forthwith after receipt
thereof by the Tenant.

ARTICLE 9

INSURANCE & LIABILITY

9.1     Landlord’s Insurance. During the Term, the Landlord shall place insurance coverage on the
Leased Premises, which coverage shall include the following:

	 	(a)	 	all risks insurance for the full reconstruction value of the Building
(including the value of the foundations) as determined by the Landlord, acting
reasonably;
	 
	 	(b)	 	as an extension to the insurance maintained pursuant to Section 9.1(a),
insurance on the rental income derived by the Landlord from the Leased Premises on a
gross rental income form with a period of indemnity of not less than the period as
estimated by the Landlord from time to time which would be required to rebuild the
Leased Premises in the event of complete destruction thereof;
	 
	 	(c)	 	comprehensive boiler and unfired pressure vessels insurance, including repair
or replacement and rental income coverages;
	 
	 	(d)	 	comprehensive general bodily injury and property damage liability insurance;
and
	 
	 	(e)	 	such other insurance which is or may become customary or reasonable for owners
of buildings similar to the Building to carry in respect of loss of or damage to the
Building or liability arising therefrom.

The insurance referred to in this Section 9.1 shall be carried in amounts determined by the
Landlord and shall be obtained from a company or companies and be of a type and form
satisfactory to the Landlord, acting reasonably. The insurance shall be written in the name of the

 

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Landlord with loss payable to the Landlord and to any mortgagee (including any trustee under a deed
of trust and mortgage) of the Leased Premises from time to time if required by the Landlord. The
policies of insurance referred to in Sections 9.1(a), (b) and (c) shall contain a waiver of the
insurer’s right of subrogation as against the Tenant. The Landlord hereby waives its right of
recovery against the Tenant, its employees and those for whom the Tenant is in law responsible with
respect to occurrences required to be insured against by the Landlord hereunder, but only to the
extent that the Landlord receives proceeds of insurance from its insurer or insurers with respect
to same after making reasonable efforts to collect. All insurance required to be placed by the
Landlord under the terms of this Lease shall be at the expense of the Tenant and the Tenant shall
pay to the Landlord the reasonable cost of all such insurance forthwith upon demand therefor. The
cost of insurance shall be adjusted between the Landlord and the Tenant on the Commencement Date
and at the expiry of the Term. Notwithstanding any contribution by the Tenant to insurance
premiums as provided for in this Lease, no insurable interest is conferred upon the Tenant under
policies carried by the Landlord. Except as specifically provided in this Lease, the Landlord
shall in no way be accountable to the Tenant regarding the use of the insurance proceeds arising
from any claim. Nothing contained in this Lease shall require the Landlord to insure any of the
Tenant’s equipment, machinery, stock, leasehold improvements, fixtures or any other property owned
or brought onto or into the Leased Premises by the Tenant whether affixed to the Building or not.

9.2     Tenant’s Insurance. At its expense, the Tenant shall take out and thereafter maintain in force
at all times during the Term insurance policies as follows:

	 	(a)	 	all risks insurance on all property of every description, nature and kind owned
by the Tenant or for which the Tenant is legally liable, or installed in the Leased
Premises by or on behalf of the Tenant or which is located or situate within the Leased
Premises including, without limitation, all leasehold improvements and Tenant’s
fixtures in an amount not less than the full replacement cost thereof without deduction
for depreciation. Such insurance shall be subject to replacement cost endorsement and
shall include a stated amount co-insurance clause;
	 
	 	(b)	 	comprehensive broad form boiler, machinery and equipment insurance for the full
replacement cost value of all boilers, pressure vessels, air-conditioning and other
equipment located on the Leased Premises;
	 
	 	(c)	 	business interruption insurance in such amounts as will reimburse the Tenant
for direct or indirect loss of earnings attributed to all perils commonly insured
against by prudent tenants or attributable to prevention of access to the Leased
Premises or to the Building as a result of such perils;
	 
	 	(d)	 	comprehensive general bodily injury and property damage liability insurance and
tenant’s legal liability insurance in the minimum amount of Ten Million Dollars
($10,000,000.00) and in a form satisfactory to the Landlord, acting reasonably, and
including owners and contractors protective, products and completed
operations, personal injury, intentional acts, employer’s liability, occurrence

 

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	 	 	 	property damage (broad form), blanket contractual and non-owned automobile liability
extensions. Such insurance shall include a cross liability and severability of
interest clause; and

	 	(e)	 	any other form or forms of insurance as the Tenant or the Landlord or the
mortgagees of the Landlord reasonably require from time to time in form, in amounts and
for insurance risks against which a prudent tenant would protect itself, provided such
form of insurance and amounts of coverage are generally available on terms which the
Tenant, acting reasonably, considers to be reasonable commercial terms,

but subject to such higher limits as the Tenant, the Landlord, acting reasonably, or any mortgagee
of the Landlord’s interest in the Leased Premises may require from time to time and against such
additional risks as a prudent tenant would insure. The insurance policies referred to in this
Section 9.2 shall contain a waiver of the insurer’s right of subrogation as against the Landlord,
the Landlord’s directors, officers, employees, servants, agents, contractors, successors and
assigns and any Person for whom the Landlord may in law or by agreement be responsible or for whom
the Landlord may have agreed to obtain such a waiver. Any and all deductibles shall be at the
expense of the Tenant. The Tenant shall provide to the Landlord at the commencement of the Term,
30 days prior to the renewal of all insurance referred to in this Section 9.2 and promptly at any
time upon request, a certificate of insurance evidencing the insurance coverages maintained by the
Tenant in accordance with this Section 9.2, such certificates to be in a form acceptable to the
Landlord, acting reasonably. The delivery to the Landlord of a certificate of insurance or a
certified copy of an insurance policy or any review thereof by or on behalf of the Landlord shall
not limit the obligation of the Tenant to provide and maintain insurance pursuant to this Section
9.2 or derogate from the Landlord’s rights if the Tenant shall fail to fully insure. All policies
of insurance placed under this Section 9.2 shall be placed with a company or companies reasonably
satisfactory to the Landlord. All policies shall provide that the insurance shall not be cancelled
or changed to the prejudice of the Landlord without at least 30 days’ prior written notice given by
the insurer to the Landlord.

9.3     Placement of Tenant’s Insurance by Landlord. If the Tenant fails to place or maintain all or
any of the insurance coverages referred to in Section 9.2, the Landlord may, at its option, place
all or any part of such insurance in the name of or on behalf of the Tenant and the Tenant shall
pay to the Landlord upon demand all costs incurred by the Landlord in so doing, including the
premium or premiums for such insurance.

9.4     Cancellation of Insurance. The Tenant covenants that nothing will be done or omitted to be
done whereby any policy of insurance obtained by the Landlord pursuant to Section 9.1 shall be
cancelled or the Leased Premises rendered uninsurable.

9.5     Limitation of Landlord’s Liability. The Landlord and its directors, officers, employees,
servants, agents, contractors, successors and assigns shall not be liable even if grossly negligent
for any damage to the Leased Premises or any property located therein caused by any latent defect
or by steam, water, rain or snow which may leak into, issue or flow
from any part of the Leased Premises or from the water, steam, sprinkler or drainage pipes or
plumbing

 

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works of the same or from any other place or from any damage caused by or attributable to
the condition or arrangement of any electrical or other wiring or for damage caused by interruption
or failure of any service or utility or for damage however caused to books, records, files, money,
securities, negotiable instruments, papers or other valuables.

9.6     Indemnity. The Tenant shall indemnify and save harmless the Landlord and its directors,
officers, employees, servants, agents, contractors, successors and assigns from any and all
liabilities, damages, costs, claims, suits or actions growing or arising out of:

	 	(a)	 	any breach, violation or non-performance of any covenant, condition or
agreement in this Lease set forth and contained on the part of the Tenant to be
fulfilled, kept, observed and performed;
	 
	 	(b)	 	any damage to property while the property is in or about the Leased Premises;
and
	 
	 	(c)	 	any injury to person or persons including death resulting at any time therefrom
occurring in or about the Leased Premises.

9.7     Survival of Obligations and Indemnities. All obligations of the Tenant which arise during the
Term pursuant to this Lease and which have not been satisfied and the indemnities and other
obligations of the Tenant contained in Section 9.6 shall survive the expiration or other
termination of this Lease.

ARTICLE 10

DAMAGE AND DESTRUCTION

10.1     Limited Damage to Leased Premises. If during the Term, the Leased Premises or any part
thereof shall be destroyed or damaged by any hazard against which the Landlord is obligated to
insure or has insured hereunder, the Landlord, if permitted by law so to do, shall proceed with
reasonable diligence to rebuild and restore or repair the Leased Premises or comparable premises in
conformance with current laws but only to the extent of insurance proceeds received. The covenants
of the Tenant to repair shall not include any repairs of damage required to be made by the Landlord
under this Section 10.1. Rent payable by the Tenant from the date of such damage or destruction
until the Leased Premises are restored, shall abate to the extent of all amounts which the Landlord
may receive from loss of rental insurance. If less than all of the Leased Premises is destroyed or
damaged as contemplated in this Section 10.1, Minimum Rent payable by the Tenant shall abate from
the date of such damage or destruction until the Leased Premises are restored, in the same
proportion as the Rentable Area of the Leased Premises so damaged or destroyed is of the total
Rentable Area of the Leased Premises.

10.2     Major Damage to Leased Premises. Notwithstanding anything in this Lease contained, if in the
opinion of the Landlord’s architect or engineer given within 30 business days of the happening of
damage or destruction, the Leased Premises shall be damaged or destroyed by any hazard against
which the Landlord is obligated to insure or has insured as provided for hereunder to the extent
that the Leased Premises shall be incapable of being rebuilt
or repaired or restored with reasonable diligence within six months after the occurrence of such
damage or

 

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destruction, then, either the Landlord or the Tenant may, at its option, terminate this
Lease by notice in writing to the other given within 15 days after the giving of the opinion by the
Landlord’s architect or engineer. If notice is given by the Landlord or the Tenant under this
Section 10.2, then this Lease shall terminate from the date of such damage or destruction and the
Tenant shall immediately surrender the Leased Premises and all interest therein to the Landlord and
the Rent shall be apportioned and shall be payable by the Tenant only to the date of such damage or
destruction and the Landlord may thereafter re-enter and repossess the Leased Premises.

10.3     No Abatement. Except as specifically provided in this Article 10, there shall be no
reduction of Rent and the Landlord shall have no liability to the Tenant by reason of any injury to
or interference with the Tenant’s business or property arising from fire or other casualty,
howsoever caused, or from the making of any repairs resulting therefrom or to any portion of the
Building or the Leased Premises.

10.4     Notify. The Tenant shall immediately notify the Landlord of any accident or defect in the
Leased Premises or any systems thereof, and as well of any matter or condition which may cause
injury or damage to the Building or any person or property located therein.

ARTICLE 11

DEFAULT

11.1     Interest. The Tenant shall pay monthly to the Landlord interest at a rate equal to the lesser
of the Prime Rate plus five per cent per annum and the maximum rate permitted by applicable law,
upon all Rent required to be paid hereunder from the due date for payment thereof until the same is
fully paid and satisfied.

11.2     Costs of Enforcement. The Tenant shall indemnify the Landlord against all costs and charges
(including legal fees on a substantial indemnity basis) reasonably incurred in enforcing payment of
Rent hereunder and in obtaining possession of the Leased Premises after default of the Tenant or
upon expiration or earlier termination of this Lease or in enforcing any covenant, proviso or
agreement of the Tenant herein contained. All such costs and charges shall be paid by the Tenant
to the Landlord forthwith upon demand.

11.3     Performance of Tenant’s Obligations. All covenants and agreements to be performed by the
Tenant under any of the terms of this Lease shall be performed by the Tenant, at the Tenant’s sole
cost and expense, and without any abatement of Rent. If the Tenant fails to perform any act to be
performed by it hereunder, and the failure continues for ten (10) days following notice thereof,
the Landlord may (but shall not be obligated to) perform the act without waiving or releasing the
Tenant from any of its obligations relative thereto. All sums paid and costs incurred by the
Landlord in so performing the act, together with interest thereon at the rate set out in Section
11.1 from the date payment was made or such cost incurred by the Landlord, shall be payable by the
Tenant to the Landlord on demand.

11.4     Events of Default. If and whenever:

 

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	 	(a)	 	all or any part of the Rent hereby reserved is not paid when due and default
continues for five (5) days after written notice thereof; or
	 
	 	(b)	 	the Term or any goods, chattels or equipment of the Tenant is seized or is
taken or exigible in execution or in attachment or if a writ of execution is issued
against the Tenant or if a creditor takes possession thereof; or
	 
	 	(c)	 	the Tenant or any person or corporation bound to perform the obligations of the
Tenant hereunder either as guarantor or indemnifier or as one of the parties
constituting the Tenant takes any steps or suffers any order to be made for its
winding-up or other termination of its corporate existence or becomes insolvent or
commits an act of bankruptcy or becomes bankrupt or takes the benefit of any statute
that may be in force for bankrupt or insolvent debtors or becomes involved in voluntary
or involuntary winding-up proceedings or if a receiver or receiver/manager shall be
appointed for the business, property, affairs or revenues of the Tenant or such person
or corporation; or
	 
	 	(d)	 	the Tenant makes a bulk sale of its goods or moves or commences, attempts or
threatens to move its goods, chattels and equipment out of the Leased Premises (other
than in the normal course of its business) or ceases to conduct business from the
Leased Premises; or
	 
	 	(e)	 	the Tenant vacates or abandons the Leased Premises in whole or in part or fails
to actively carry on business therein; or
	 
	 	(f)	 	the Tenant fails to observe, perform and keep each and every of the covenants,
agreements, provisions, stipulations and conditions herein contained to be observed,
performed and kept by the Tenant (other than payment of Rent) and persists in the
failure after fifteen (15) days’ written notice by the Landlord requiring the Tenant to
remedy, correct, desist or comply (or if any breach would reasonably require more than
fifteen (15) days to rectify, unless the Tenant commences rectification within the
fifteen (15) day notice period and thereafter promptly and effectively and continuously
proceeds with the rectification of the breach),

then the Landlord shall be entitled to any or all of those remedies set out in Section 11.5.

11.5     Remedies on Default. The Landlord may, at its option, in any of the cases set out in Section
11.4 and in addition to and without prejudice to all rights and remedies of the Landlord available
to it either by any other provision of this Lease or by statute or the general law:

	 	(a)	 	be entitled to the full amount of the current month’s and the next ensuing
three months’ instalments of Rent which shall immediately become due and payable and
the Landlord may immediately distrain for the same, together with any arrears then
unpaid;

 

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	 	(b)	 	without notice or any form of legal process, forthwith re-enter upon and take
possession of the Leased Premises or any part thereof in the name of the whole and
re-let the Leased Premises or any part thereof on behalf of the Tenant or otherwise as
the Landlord sees fit and remove and sell the Tenant’s goods, chattels and trade
fixtures therefrom, any rule of law or equity to the contrary notwithstanding;
	 
	 	(c)	 	seize and sell such goods, chattels and equipment of the Tenant as are in the
Leased Premises and may apply the proceeds thereof to all Rent to which the Landlord is
then entitled under this Lease. Any such sale may be effected by public auction or
otherwise, and either in bulk or by individual item, or partly by one means and partly
by another, all as the Landlord in its sole discretion may decide;
	 
	 	(d)	 	terminate this Lease by leaving upon the Leased Premises notice in writing of
the termination, and termination shall be without prejudice to the Landlord’s right to
damages; it being agreed that the Tenant shall pay to the Landlord on demand as damages
the loss of income of the Landlord to be derived from the Leased Premises for the
unexpired portion of the Term had it not been terminated; or
	 
	 	(e)	 	re-enter into and upon the Leased Premises or any part thereof in the name of
the whole and repossess and enjoy the same as of the Landlord’s former estate, anything
herein contained to the contrary notwithstanding,

and the Tenant shall pay to the Landlord forthwith upon demand all expenses of the Landlord in
re-entering, terminating, re-letting, collecting sums due or payable by the Tenant or realizing
upon assets seized including tenant inducements, leasing commissions, legal fees on a substantial
indemnity basis and all disbursements and the expense of keeping the Leased Premises in good order,
repairing the same and preparing them for re-letting.

11.6     Availability of Remedies. The Landlord may from time to time resort to any or all of the
rights and remedies available to it in the event of any default by the Tenant, either by any
provision of this Lease or by statute or the general law, all of which rights and remedies are
intended to be cumulative and not alternative, and the express provisions hereunder as to certain
rights and remedies are not to be interpreted as excluding any other or additional rights or
remedies available to the Landlord by statute or the general law.

11.7     Waiver. If the Landlord shall overlook, excuse, condone or suffer any default, breach or
non-observance by the Tenant of any obligation hereunder, this shall not operate as a waiver of the
obligation in respect of any continuing or subsequent default, breach or non-observance and no such
waiver shall be implied but shall only be effective if expressed in writing.

11.8     Waiver of Exemption and Redemption. Notwithstanding anything contained in any statute now or
hereafter in force limiting or abrogating the right of distress, none of the Tenant’s goods,
chattels or trade fixtures on the Leased Premises at any time during the Term

 

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shall be exempt from levy by distress for Rent in arrears, and upon any claim being made
for exemption by the Tenant or on distress being made by the Landlord, this agreement may be
pleaded as an estoppel against the Tenant in any action brought to test the right to the levying
upon of any such goods as are named as exempted in any such statute, the Tenant hereby waiving all
and every benefit that could or might have accrued to the Tenant under and by virtue of any such
statute but for this Lease. The Tenant hereby expressly waives any and all rights of redemption
and relief from forfeiture granted by or under any present or future laws in the event of the
Tenant being evicted or dispossessed for any cause, or in the event of the Landlord obtaining
possession of the Leased Premises, by reason of the violation by the Tenant of any of the terms or
conditions of this Lease or otherwise.

ARTICLE 12

ASSIGNMENT AND SUBLETTING

12.1     Assignment. Provided no default has occurred under this Lease, the Tenant may assign this
Lease:

	 	(a)	 	to an assignee who is a purchaser of all or substantially all of the business
of the parent company of the Tenant, an affiliate (as defined in the Business
Corporations Act (Ontario)) of the Tenant, a corporation which results from the
reconstruction, consolidation, amalgamation or merger of the Tenant, or a trust or
partnership in which the Tenant has a substantial interest, with the Landlord’s prior
written consent, which consent shall not be unreasonably withheld; or

	 	(b)	 	to any other assignee who, in the Landlord’s sole opinion, will not be an
undesirable tenant, with the Landlord’s prior written consent, which consent may be
unreasonably withheld.

12.2     Subleasing. With the Landlord’s prior written consent, which consent shall not be
unreasonably withheld, delayed or conditioned, the Tenant may, provided no default has occurred
under this Lease, sublet all or any part of the Leased Premises. Notwithstanding anything else to
the contrary provided in this Lease and/or any act or rule of law or regulation now or hereafter in
force to the contrary, the Landlord may, in its sole and absolute discretion, refuse to give its
consent to any transfer or subletting by the Tenant of less than the whole of the Leased Premises
resulting in more than three (3) separate premises therein. It is expressly understood and agreed
by the Tenant that except as permitted above in this Section, no further sub-subletting or parting
with possession of all or any part of the Leased Premises in any way, or use or occupation of all
or any part of the Leased Premises by any other Person, is permitted.

12.3     Request for Consent.Any request for the consent of the Landlord to any assignment, transfer,
pledge or subletting shall be in writing and accompanied by full particulars of the terms of the
proposed assignment, transfer, pledge or subletting, as the case may be, and shall contain detailed
information as to the identity, business and financial status of the proposed assignee, transferee,
pledgee or subtenant. The Landlord shall be deemed to be acting reasonably in withholding its
consent to any proposed assignment or sublease if the Landlord determines, without limitation,
that:

 

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	 	(a)	 	the Landlord would be unable to secure the consent of any mortgagee or other
Person who may have the right to approve the assignment or sublease, on terms
satisfactory to the Landlord;
	 
	 	(b)	 	the business experience, financial background or creditworthiness of the
proposed assignee or subtenant or its principals is insufficient or unsatisfactory;
	 
	 	(c)	 	the Landlord, acting reasonably, did not receive sufficient information,
material, books or records from the Tenant or the proposed assignee or subtenant,
including its principals, to enable the Landlord to make a determination concerning any
of the matters set out above.

If the Tenant is of the opinion that any consent has been wrongfully withheld, its remedies in
respect thereof shall not include any loss, injury or damage arising therefrom or termination of
this Lease. All reasonable costs associated with considering or the giving of such consents and
the preparation of necessary documentation as provided herein, including the Landlord’s reasonable
legal fees on a substantial indemnity basis, shall be payable by the Tenant to the Landlord
forthwith upon demand.

Provided, however, and it is made a condition to any assignment, transfer, subletting or use or
occupation of the Leased Premises by any other Person that:

	 	(d)	 	the proposed assignee, transferee, subtenant or user or occupant of the Leased
Premises, jointly and severally with the Tenant, shall agree in writing with the
Landlord to assume and perform all of the obligations, terms, covenants, conditions and
agreements by this Lease imposed upon the Tenant herein in a form to be approved by the
solicitor for the Landlord and shall obtain occupancy approval from the local building
and fire departments, if necessary, and provide evidence thereof to the Landlord prior
to taking occupancy of the Leased Premises;
	 
	 	(e)	 	the assignee, transferee, subtenant or user or occupant of the Leased Premises
shall also waive any rights which it may have at common law in respect of relief from
forfeiture and any rights it may have pursuant to Sections 21 and 39(2) of the
Commercial Tenancies Act (Ontario), as amended from time to time;
	 
	 	(f)	 	the acceptance by the Landlord of Rent from an assignee, transferee, subtenant
or user or occupant of the Leased Premises without the Landlord’s consent shall not
constitute a waiver of the requirement of such consent nor shall it constitute an
acceptance of such party as the Tenant;
	 
	 	(g)	 	the Landlord may, at its option, cancel the First Renewal Right and the Second
Renewal Right;
	 
	 	(h)	 	the Leased Premises, at the time of the assignment, transfer, subletting or use
or occupation of the Leased Premises by such other Person shall comply in all

 

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	 	 	 	respects with the standard of repair and maintenance required of the Tenant pursuant
to this Lease;

	 	(i)	 	with respect to a sublease having a term expiring in the last twelve (12)
months of the Term, the Landlord shall have received from the Tenant or the assignee,
transferee, subtenant or user or occupant of the Leased Premises a cash deposit equal
to the last three (3) months’ Minimum Rent hereunder (pro-rated in the case of a
request relating to a portion only of the Leased Premises), as security for the
performance of the repair and maintenance obligations of the Tenant and the assignee,
transferee, subtenant or user or occupant of the Leased Premises, to be held by the
Landlord pending delivery up of the Leased Premises (or the portion thereof which is
subject to the assignment, transfer, subletting or use or occupation of the Leased
Premises by such other Person) by the assignee, transferee, subtenant or user or
occupant of the Leased Premises in the condition and to the standard required
hereunder;
	 
	 	(j)	 	if the assignment, transfer, subletting or use or occupation of the Leased
Premises by such other Person does not take place within sixty (60) days of the giving
of consent by the Landlord, the consent shall, at the Landlord’s option, expire and
become null and void; and
	 
	 	(k)	 	if the Lease is disaffirmed, disclaimed or terminated by any trustee in
bankruptcy of an assignee, transferee, subtenant or user or occupant of the Leased
Premises, the original Tenant named in this Lease will be deemed on notice from the
Landlord given within sixty (60) days from the date of such disaffirmation, disclaimer
or termination to have entered into a lease with the Landlord containing the same terms
and conditions as in this Lease.

12.4     Excess Rent. In the event that the Minimum Rent payable under any assignment, transfer,
subletting or use or occupation of the Leased Premises by any other Person during any renewal
period is in excess of the Minimum Rent reserved hereunder or is in excess of the proportionate
Minimum Rent reserved in the event of a sublease of part of the Leased Premises, whether the excess
be in the form of cash, goods or services from the assignee, transferee, subtenant or user or
occupant of the Leased Premises or anyone acting on its behalf, the Tenant shall pay all of such
excess to the Landlord immediately upon receipt thereof; in the event that such excess is
represented by goods or services rendered to the Tenant, the value of those goods or services shall
be determined by the Landlord and the Tenant and that value shall be paid in cash to the Landlord
immediately upon such determination. For greater certainty, this Section shall not apply during the
initial term of this Lease specified in Section 3.1, but shall only apply during any renewal
period.

12.5     Limitation. Except as specifically provided in this Article 12, the Tenant shall not assign,
sublet, pledge or transfer this Lease or any interest therein or in any way part with possession of
all or any part of the Leased Premises, or permit all or any part of the Leased Premises to be used
or occupied by any other Person. Any transfer or other dealing with any of the shares of the
Tenant having the effect of altering the identity of the shareholder or

 

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shareholders having the right to exercise a majority of the votes in an election of directors or
otherwise changing control, directly or indirectly, of the Tenant, shall be deemed to be an
assignment of this Lease which requires the prior approval of the Landlord as set out herein. The
provisions of this Section 12.5 shall not apply where the Tenant’s shares are listed on a North
American Stock Exchange. Any assignment, transfer or subletting or purported assignment, transfer
or subletting except as specifically provided herein shall be null and void and of no force and
effect. The rights and interests of the Tenant under this Lease shall not be assignable by
operation of law without the Landlord’s prior written consent, which consent shall not be
unreasonably withheld, delayed or conditioned.

12.6     Documentation. No assignment, transfer, subletting or use or occupation of the Leased
Premises by any other Person which is permitted under this Article 12 shall release or relieve the
Tenant of its obligations under this Lease including, without limitation, the obligation to pay
Rent, unless the release or relief is specifically granted by the Landlord to the Tenant in
writing.

12.7     Subsequent Assignments. The Landlord’s consent to an assignment, transfer, subletting or use
or occupation of the Leased Premises by any Person other than the Tenant shall not be deemed to be
a consent to any subsequent assignment, transfer, subletting or use or occupation.

12.8     Advertising Leased Premises. The Tenant shall not advertise or allow the Leased Premises or a
portion thereof to be advertised as being available for assignment, sublease or otherwise without
the prior written approval of the Landlord as to the form, size, content and location of such
advertisement, which approval shall not be unreasonably withheld, provided that no such advertising
shall contain any reference to the Rent for the Leased Premises.

ARTICLE 13

TRANSFERS BY LANDLORD

13.1     Sale, Conveyance and Assignment. Nothing in this Lease shall restrict the right of the
Landlord to sell, convey, assign, pledge or otherwise deal with the Leased Premises subject only to
the rights of the Tenant under this Lease.

13.2     Effect of Transfer. A sale, conveyance or assignment of the Leased Premises by the Landlord
shall operate to release the Landlord from liability from and after the effective date thereof in
respect of all of the covenants, terms and conditions of this Lease, express or implied, except as
they may relate to the period prior to the effective date, and the Tenant shall thereafter look
solely to the Landlord’s successor in interest and to this Lease.

13.3     Subordination. Subject to Section 13.4, this Lease is and shall be subject and subordinate in
all respects to any and all mortgages (including deeds of trust and mortgage) now or hereafter
placed on the Building or the Land and all advances thereunder, past, present and future, and to
all renewals, modifications, consolidations, replacements and extensions thereof; provided that the
Landlord obtains from such mortgagees an agreement not to disturb the Tenant’s possession so long
as the Tenant is not in default under this Lease beyond the period of

 

- 35 -

time permitted for rectification of default. The Landlord agrees to use its reasonable commercial
efforts to obtain any such non-disturbance agreement from such existing mortgagees. The Tenant
agrees to execute promptly and in any event within ten (10) days after request therefor an
instrument of subordination as may be requested in a form satisfactory to it, acting reasonably.

13.4     Attornment. The Tenant agrees, whenever requested by any mortgagee (herein called the
“Purchaser”) by reason of foreclosure or other proceedings for enforcement of any mortgage or deed
of trust, or by delivery of a deed in lieu of such foreclosure or other proceedings, to attorn to
such Purchaser as a tenant under all of the terms of this Lease. The Tenant agrees to execute
promptly and in any event within ten (10) days after a request by any Purchaser an instrument of
attornment as may be required of it.

13.5     Effect of Attornment. Upon attornment pursuant to Section 13.4, this Lease shall continue in
full force and effect as a direct lease between the Purchaser and the Tenant, upon all of the same
terms, conditions and covenants as are set forth in this Lease except that, after attornment, the
Purchaser and its successors in title shall not be:

	 	(a)	 	liable for any act or omission of the Landlord, or
	 
	 	(b)	 	subject to any offsets or defenses which the Tenant might have against the
Landlord, or
	 
	 	(c)	 	bound by any prepayment by the Tenant of more than one month’s instalment of
Rent or by any previous modification of this Lease, unless the prepayment or
modification shall have been approved in writing by the Purchaser or any predecessor of
the Purchaser’s former interest as mortgagee in the Leased Premises.

ARTICLE 14

SURRENDER AND EXPROPRIATION

14.1     Possession. Upon the expiration or other termination of the Term, the Tenant shall
immediately quit and surrender possession of the Leased Premises and all leasehold improvements in
substantially the condition in which the Tenant is required to maintain the Leased Premises
excepting only reasonable wear and tear and damage covered by Landlord’s insurance under Section
9.1; provided that, notwithstanding the foregoing, the Landlord shall have the right, at its sole
option upon the expiration or other termination of the Term, to require that the Tenant:

	 	(a)	 	remove, dismantle or cause to be removed or dismantled at the Tenant’s cost all
leasehold improvements in the Leased Premises, including without limitation, the
Tenant’s Specialized Equipment, whether or not installed by or on behalf of the Tenant;

 

- 36 -

	 	(b)	 	restore the Leased Premises to base Building standard, as more particularly set
out in Schedule “D” hereto; and
	 
	 	(c)	 	decommission the Leased Premises.

Upon surrender, all right, title and interest of the Tenant in the Leased Premises shall cease.

14.2     Tenant’s Trade Fixtures and Personal Property. At the expiration or other termination of the
Term, if the Tenant is not in default hereunder, it may remove, at its expense, all of its trade
fixtures, personal property and improvements, provided that the Tenant shall forthwith repair any
damage to the Leased Premises resulting from such removal. After the expiration or other
termination of the Term, all of the Tenant’s trade fixtures, personal property and improvements
remaining in the Leased Premises shall be deemed conclusively to have been abandoned by the Tenant
and may be appropriated, sold, destroyed or otherwise disposed of by the Landlord without notice or
obligation to compensate the Tenant or to account therefor, and the Tenant shall pay to the
Landlord upon written demand all of the costs incurred by the Landlord in connection therewith.

14.3     Overholding. If the Tenant continues to occupy the Leased Premises after the expiration or
other termination of the Term without any further written agreement, the Tenant shall be a monthly
tenant at an annual basic rent equal to one and a half times the Minimum Rent but subject to all
other provisions in this Lease to the extent that the same are applicable to a month-to-month
tenancy, and a tenancy from year to year shall not be created by implication of law. Nothing
contained in this Section shall preclude the Landlord from exercising all of its rights set out in
this Lease including, without limitation, the taking of any action for recovery of possession of
the Leased Premises. For greater certainty, this Section shall not apply during the Automatic
Renewal Period, if any, pursuant to Section 3.3(c).

14.4     Expropriation.

	 	(a)	 	Taking of Leased Premises — If during the Term, all or a substantial
part of the Leased Premises are taken for any public or any quasi-public use under any
statute or by right of expropriation, or purchased under threat of such taking, this
Lease shall, at the option of the Landlord, automatically terminate on the date on
which the condemning authority takes possession of the Leased Premises (the “date of
taking”).
	 
	 	(b)	 	Surrender — On any date of termination under Section 14.4(a), the
Tenant shall immediately surrender to the Landlord the Leased Premises and all interest
therein under this Lease. The Landlord may re-enter and take possession of the Leased
Premises and remove the Tenant and the Rent shall abate on the date of taking. After
such termination and on notice from the Landlord stating the Rent then owing, the
Tenant shall pay the Landlord such Rent.
	 
	 	(c)	 	Partial Taking of Leased Premises — If any portion of the Leased
Premises (but less than the whole) is so taken and no rights of termination herein
conferred are

 

- 37 -

	 	 	 	exercised, the Term of this Lease shall expire with respect to the portion so taken
on the date of taking. In such event, the Rent payable hereunder with respect to
the portion taken shall abate on the date of taking and the Rent thereafter payable
with respect to the remainder shall be adjusted pro rata by the Landlord to account
for the resulting reduction in the Rentable Area of the Leased Premises.

	 	(d)	 	Awards — None of the provisions of this Section 14.4 shall have the
effect of derogating from the rights of the Landlord or the Tenant to claim any award
with respect to any taking or purchase. Upon any taking or purchase, the Landlord
shall be entitled to receive and retain the entire award or consideration for the
affected part of the Leased Premises and the Tenant shall not have or advance any claim
against the Landlord for the value of its property or its estate or the unexpired Term
of the Lease or for costs of removal or relocation or business interruption expense or
any other damages arising out of the taking or purchase. Nothing herein shall give the
Landlord any interest in or preclude the Tenant from seeking and recovering on its own
account from the condemning authority any award or compensation attributable to the
taking or purchase of the Tenant’s improvements, chattels or trade fixtures or the
removal or relocation of its business and effects or the interruption of its business.
If any award made or compensation paid to either party specifically includes an award
on account of the other, the party first receiving the award shall promptly account
therefor to the other party.

ARTICLE 15

GENERAL

15.1     Certificates. The Tenant shall, whenever requested by the Landlord, a prospective purchaser
or any mortgagee (including any trustee under a deed of trust and mortgage) promptly and in any
event within ten (10) days after request, execute and deliver to the Landlord or to any party
designated by the Landlord a certificate in writing as to the then status of this Lease, including
as to whether it is in full force and effect, is modified or unmodified, confirming the Rent
payable hereunder and the then state of the accounts between the Landlord and the Tenant, the
existence or non-existence of defaults, and any other matters pertaining to this Lease in respect
of which the Landlord shall request a certificate, and provide such other information as may
reasonably be required, including a copy of the Tenant’s most recent audited financial statements.

15.2     Entire Agreement. There is no promise, representation or undertaking by or binding upon the
Landlord except such as are expressly set forth in this Lease, and this Lease including the
Schedules forming part hereof contains the entire agreement between the parties hereto.

15.3     Registration. The Tenant acknowledges the confidential nature of this Lease and agrees with
the Landlord not to register this Lease. If the Tenant wishes to register a caveat or notice of
this Lease, the Landlord agrees to execute, at the expense of the Tenant, an acknowledgment or
short form of lease sufficient for such purpose in such form as the Landlord

 

- 38 -

shall have approved and which shall preserve the confidentiality of the Rent and other financial
terms of this Lease; provided that, if there is a conflict between the provisions of such notice or
short form of lease and this Lease, the provisions of this Lease shall govern. The Tenant shall,
on or before the expiration or earlier termination of the Term, discharge at its cost any
registration made against the Building or the Land providing notice of its interest under this
Lease.

15.4     “For Lease” and “For Sale” Signs.

	 	(a)	 	At any time upon: (i) the termination of the Lease by either party; (ii) the
failure of the Tenant to deliver notice to the Landlord pursuant to Section
3.3(a)(ii)or Section 3.3(b)(ii); (iii) the delivery by the Tenant of notice to the
Landlord indicating that the Term will not be renewed; or (iv) in the case of the
Second Renewal Period, during the last six (6) months thereof, the Landlord shall have
the right to place upon the Leased Premises a notice of reasonable dimension stating
that the Leased Premises are “for lease” and the Tenant shall not obscure or remove
such notice or permit the same to be obscured or removed.
	 
	 	(b)	 	At any time and from time to time throughout the Term, the Landlord shall have
the right to place upon the Leased Premises a notice of reasonable dimension stating
that the Land is “for sale” and the Tenant shall not obscure or remove such notice or
permit the same to be obscured or removed.

15.5     Unavoidable Delays. If the Landlord or the Tenant shall be delayed, hindered or prevented
from the performance of any of its covenants under this Lease by any cause not within its control
(excluding lack of finances), the performance of the covenant shall be excused for the period
during which performance is rendered impossible and the time for performance thereof shall be
extended accordingly, but this shall not excuse the Tenant from the prompt payment of Rent or any
of its obligations under this Lease.

15.6     Notice. Any notice required or contemplated by any provision of this Lease shall be given in
writing and shall be sufficiently given if delivered or if sent by telecopy or similar form of
immediate transmission and if to the Landlord, delivered to an executive officer of the Landlord at
the Landlord’s head office as specified on page 1 of this Lease and if to the Tenant, either
delivered to the Tenant personally (or to a partner or officer of the Tenant if the Tenant is a
firm or corporation) or left at the Leased Premises (whether or not the Tenant has departed from,
vacated or abandoned the same) or delivered or sent to the address specified on page 1 of this
Lease. Any notice shall be deemed to have been received on the day following the date of delivery
or sending. The Landlord or the Tenant may from time to time by notice in writing to the other
designate another address or addresses in Canada as the address to which notices are to be sent.

15.7     Planning Act. It is an express condition of this Lease that the provisions of Section 50 of
the Planning Act, R.S.O. 1990, c. P.13, and any amendments thereto or any successor statutory
provisions thereof, be complied with if applicable in law. Until any necessary consent to this
Lease is obtained, the Term and the Tenant’s rights and entitlement

 

- 39 -

granted by this Lease shall be deemed to extend for a period only of 21 years less one day from the
Commencement Date. The Tenant shall apply diligently to prosecute such application for such
consent, and the Tenant shall be responsible for all costs, expenses, taxes and levies imposed,
charged or levied as a result of such application and in order to obtain such consent. The Tenant
shall at all times keep the Landlord informed of its progress in obtaining such consent and the
Landlord shall co-operate with the Tenant with respect to such application. Notwithstanding the
foregoing provisions of this Section 15.7, the Landlord reserves the right at any time, at the
Tenant’s expense, to apply for such consent in lieu of the Tenant and the Tenant’s application is
hereby expressly made subject to any application which the Landlord intends to make.

15.8     Relationship of Parties. Nothing contained in this Lease shall create any relationship
between the parties hereto other than that of landlord and tenant.

15.9     Governing Law. This Lease shall be construed and enforced in accordance with, and the rights
of the parties shall be governed by, the laws of the Province of Ontario.

15.10     Amendment. No amendment, modification or supplement to this Lease shall be valid or binding
unless set out in writing and executed by the Landlord and the Tenant with the same degree of
formality as the execution of this Lease.

15.11     Legal Costs. The Tenant shall indemnify the Landlord against all legal fees (on a
substantial indemnity basis) and disbursements incurred by the Landlord or by its agents in
connection with the negotiation, preparation and execution of this Lease, and any renewal,
amendment, assignment, approval or consent in connection with this Lease. All such costs and
charges shall be paid by the Tenant to the Landlord forthwith upon demand.

15.12     Construction. All of the provisions of this Lease are to be construed as covenants and
agreements. If any provision of this Lease is illegal or unenforceable, it shall be considered
separate and severable from the remaining provisions of this Lease, which shall remain in force and
be binding as though the provision had never been included.

15.13     Captions and Headings. The captions and headings contained in this Lease are for convenience
of reference only and are not intended to limit, enlarge or otherwise affect the interpretation of
the Articles, Sections or parts thereof to which they apply.

15.14     Interpretation. Wherever necessary or appropriate in this Lease, the plural shall be
interpreted as singular, the masculine gender as feminine or neuter and vice versa and when there
are two or more parties bound by the Tenant’s covenants herein contained, their obligations shall
be joint and several.

15.15     Time of the Essence. Time shall be of the essence hereof.

15.16     Successors and Assigns. Subject to specific provisions contained in this Lease to the
contrary, this Lease shall enure to the benefit of and be binding upon the successors and assigns
of the Landlord and the permitted successors and assigns of the Tenant.

 

- 40 -

15.17     Counterparts. This Lease may be executed in counterparts and the counterparts together shall
constitute an original.

15.18     Facsimile Execution. The parties agree that this Lease may be executed by either party and
forwarded to the other by facsimile transmission and receipt by facsimile transmission of a copy of
this Lease executed by a party shall bind the party so sending the facsimile transmission. Each of
the parties agrees that forthwith after execution and forwarding by facsimile, it will forward an
executed copy of this Lease by delivery to the other party.

          IN WITNESS WHEREOF the Landlord and the Tenant have executed this Lease as of the date first
set forth above.

	 	 	 	 	 
	 	ATS AUTOMATION TOOLING SYSTEMS INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 	 	I/We have authority to bind the Corporation.  
	 
	 
	 
	 	PHOTOWATT TECHNOLOGIES INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 	 	I/We have authority to bind the Corporation.
	 

Schedules

“A” — Land

“B” — Plan

“C” — Arbitration

“D” — Base Building Standard

 

 

SCHEDULE “A”

LAND

Firstly: Part Lot 22, 27 Concession Beasley’s Broken Front, Township of Waterloo,
designated as Parts 2, 4, 5, 6, 7 and 8 on Plan 58R-8875, save and except Parts 1 and 2 on Plan
58R-13705; subject to Instrument No. 1579993; Cambridge

Being PIN 03768-0264 (LT); and

Secondly: Part Lot 23, 26 Concession Beasley’s Broken Front, Township of Waterloo,
designated as Part 1 WDR 60, except Part 1 on Plan 67R-2561, Part 4 on Plan 67R-880 and Part 1 on
Plan 58R-13862; subject to Instrument No. 1579993; Cambridge

Being PIN 03768-0516 (LT).

 

 

SCHEDULE “B”

PLAN

Please see the attached plan

 

 

SCHEDULE “C”

ARBITRATION

	1.	 	Appointment of Arbitrator: Either the Landlord or the Tenant may have the Market
Rent of the Leased Premises submitted to arbitration pursuant to Section 3.3 of the Lease by
giving written notice to the other. The notice shall state the name of a proposed arbitrator.
Within 10 days after delivery of such notice, the recipient shall respond either by agreeing
to the proposed arbitrator or by proposing an alternative one. If the recipient fails to
respond within such period then the arbitrator shall be the one proposed in the notice. If
the parties do not agree on the arbitrator, then either the Landlord or the Tenant may apply
to the court under the Arbitration Act, 1991 (Ontario), after giving five (5) days’ notice to
the other of its intention to make such an application. The provisions of the Arbitration
Act, 1991 (Ontario) shall apply to any such selection. The arbitrator appointed pursuant to
this Schedule is referred to as the “arbitrator”.

	2.	 	Qualification of Arbitrator: The arbitrator shall be an experienced and accredited
appraiser qualified by experience, education and training to determine the Market Rent in the
locality of the Leased Premises.

	3.	 	Hearing: The arbitrator shall proceed immediately to determine the Market Rent.
Each party shall have the right to make representations to the arbitrator concerning the
Market Rent. The decision and reasons for it of the arbitrator shall be made within 30 days
after the appointment of the arbitrator, subject to any reasonable delay due to unforeseen
circumstances. Despite the foregoing, if the arbitrator fails to make a decision within 45
days after his or her appointment, either the Landlord or the Tenant may proceed anew with
arbitration as if none had previously been proceeded with.

	4.	 	Decision and Reasons: The decision and reasons for it of the arbitrator shall be in
writing and signed by the arbitrator and shall be delivered to each of the parties and shall
be final and binding upon the parties on the question of the Market Rent and the parties shall
be bound by such decision.

	5.	 	Costs: Unless otherwise determined by the arbitrator at the request of either of the
parties, the compensation and expenses of the arbitrator shall be shared and paid in equal
shares by the Landlord and the Tenant.

	6.	 	Arbitration Act, 1991: Except as otherwise expressly provided in this Lease
(including this Schedule), the arbitration shall be governed by the Arbitration Act, 1991
(Ontario).

 

 

SCHEDULE “D”

BASE BUILDING STANDARD

Upon the expiration or other termination of the Term and the surrender of possession of the
Leased Premises by the Tenant, the Tenant shall, at its own sole cost and expense, remove or
cause to be removed the following items from the Building and perform or cause to be performed
the following work:

	•	 	all retention pits in the basement shall be brought up to basement floor level and
finished as per standard floor with coating

	•	 	all chemical carrying and drain pipes shall be removed from the entire Building main
level and basement

	•	 	all chemicals shall be disposed of off-site in an acceptable method approved by
governmental authorities

	•	 	all exhaust ducting shall be removed from the Building along with exterior drive system
and vertical stacks with platforms

	•	 	exterior Nitrogen tanks, generators and associated equipments shall be removed

	•	 	the fire sprinkler system shall be put back to original coverage after removal of
equipment

	•	 	all emergency shower units shall be removed along with floor curbing and entire chemical
alarm system

	•	 	the roof shall be repaired after all penetrations are removed, c/w deck, insulation,
EPDM and ballasting

	•	 	after all penetrations are removed, the exterior walls shall be repaired and refinished,
c/w insulation, and the interior wall surfaces shall be repaired, smooth sanded and prime
painted

	•	 	the floors shall be repaired and patched flush with the floor surface, and otherwise
refinished after all penetrations are removed

 

 

ATS AUTOMATION TOOLING SYSTEMS INC.

- and -

PHOTOWATT TECHNOLOGIES INC.

 

LEASE OF INDUSTRIAL SPACE

SINGLE TENANT INDUSTRIAL BUILDING

 

Blake, Cassels & Graydon LLP

Box 25, Commerce Court West

Toronto, Ontario

M5L 1A9

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	 	 	Page
	ARTICLE 1	 	DEFINITIONS
	 	1
	1.1	 	Definitions
	 	1
	1.2	 	Consultants
	 	6
	ARTICLE 2	 	GRANT OF LEASE AND GENERAL COVENANTS
	 	6
	2.1	 	Grant
	 	6
	2.2	 	Landlord’s General Covenants
	 	6
	2.3	 	Tenant’s General Covenants
	 	6
	ARTICLE 3	 	TERM AND POSSESSION
	 	6
	3.1	 	Term
	 	6
	3.2	 	Condition of Leased Premises
	 	6
	3.3	 	Rights to Renew
	 	6
	ARTICLE 4	 	RENT
	 	9
	4.1	 	Rent
	 	9
	4.2	 	Minimum Rent
	 	9
	4.3	 	Intent
	 	10
	4.4	 	Payment of Rent
	 	10
	4.5	 	Partial Months Rent
	 	10
	4.6	 	Payment of Realty Taxes
	 	10
	4.7	 	Payment of Other Taxes
	 	12
	4.8	 	Occupancy Costs
	 	12
	4.9	 	Estimates of Expenses and Resolution of Disputes
	 	14
	4.10	 	Rentable Area
	 	14
	4.11	 	Area Determination
	 	14
	ARTICLE 5	 	USE AND OCCUPATION
	 	14
	5.1	 	Use of Leased Premises
	 	14
	5.2	 	Compliance with Laws
	 	14
	5.3	 	Prohibited Uses
	 	15
	5.4	 	Hazardous Use
	 	15
	5.5	 	Permitted Signs
	 	15
	5.6	 	Prohibited Signs
	 	15

-i-

 

TABLE
OF CONTENTS

(continued)

	 	 	 	 	 
	 	 	 	 	Page
	5.7	 	Tenant’s Environmental Covenants and Indemnity
	 	16
	ARTICLE 6	 	OBLIGATIONS OF THE LANDLORD
	 	20
	6.1	 	The Leased Premises
	 	20
	6.2	 	Systems
	 	20
	6.3	 	Access by Landlord
	 	20
	6.4	 	Condition of Leased Premises
	 	21
	ARTICLE 7	 	SERVICES, MAINTENANCE, REPAIR AND ALTERATIONS BY
THE TENANT
	 	21
	7.1	 	Utilities
	 	21
	7.2	 	Lights, Etc.
	 	21
	7.3	 	Heating, Ventilation and Air-Conditioning
	 	21
	7.4	 	Alterations by Tenant
	 	21
	7.5	 	Tenant’s Work
	 	22
	7.6	 	Condition of Premises
	 	22
	7.7	 	Failure to Maintain
	 	22
	7.8	 	Liens
	 	23
	ARTICLE 8	 	TAXES
	 	23
	8.1	 	Landlord’s Taxes
	 	23
	8.2	 	Tenant’s Taxes
	 	23
	8.3	 	Right to Contest
	 	24
	8.4	 	Notice of Taxes
	 	24
	ARTICLE 9	 	INSURANCE & LIABILITY
	 	24
	9.1	 	Landlord’s Insurance
	 	24
	9.2	 	Tenant’s Insurance
	 	25
	9.3	 	Placement of Tenant’s Insurance by Landlord
	 	26
	9.4	 	Cancellation of Insurance
	 	26
	9.5	 	Limitation of Landlord’s Liability
	 	26
	9.6	 	Indemnity
	 	27
	9.7	 	Survival of Obligations and Indemnities
	 	27
	ARTICLE 10	 	DAMAGE AND DESTRUCTION
	 	27

-ii-

 

TABLE
OF CONTENTS

(continued)

	 	 	 	 	 
	 	 	 	 	Page
	10.1	 	Limited Damage to Leased Premises
	 	27
	10.2	 	Major Damage to Leased Premises
	 	27
	10.3	 	No Abatement
	 	28
	10.4	 	Notify
	 	28
	ARTICLE 11	 	DEFAULT
	 	28
	11.1	 	Interest
	 	28
	11.2	 	Costs of Enforcement
	 	28
	11.3	 	Performance of Tenant’s Obligations
	 	28
	11.4	 	Events of Default
	 	28
	11.5	 	Remedies on Default
	 	29
	11.6	 	Availability of Remedies
	 	30
	11.7	 	Waiver
	 	30
	11.8	 	Waiver of Exemption and Redemption
	 	30
	ARTICLE 12	 	ASSIGNMENT AND SUBLETTING
	 	31
	12.1	 	Assignment
	 	31
	12.2	 	Subleasing
	 	31
	12.3	 	Request for Consent
	 	31
	12.4	 	Excess Rent
	 	33
	12.5	 	Limitation
	 	33
	12.6	 	Documentation
	 	34
	12.7	 	Subsequent Assignments
	 	34
	12.8	 	Advertising Leased Premises
	 	34
	ARTICLE 13	 	TRANSFERS BY LANDLORD
	 	34
	13.1	 	Sale, Conveyance and Assignment
	 	34
	13.2	 	Effect of Transfer
	 	34
	13.3	 	Subordination
	 	34
	13.4	 	Attornment
	 	35
	13.5	 	Effect of Attornment
	 	35
	ARTICLE 14	 	SURRENDER AND EXPROPRIATION
	 	35
	14.1	 	Possession
	 	35

-iii-

 

TABLE
OF CONTENTS

(continued)

	 	 	 	 	 
	 	 	 	 	Page
	14.2	 	Tenant’s Trade Fixtures and Personal Property
	 	36
	14.3	 	Overholding
	 	36
	14.4	 	Expropriation
	 	36
	ARTICLE 15	 	GENERAL
	 	37
	15.1	 	Certificates
	 	37
	15.2	 	Entire Agreement
	 	37
	15.3	 	Registration
	 	37
	15.4	 	“For Lease” and “For Sale” Signs
	 	38
	15.5	 	Unavoidable Delays
	 	38
	15.6	 	Notice
	 	38
	15.7	 	Planning Act
	 	38
	15.8	 	Relationship of Parties
	 	39
	15.9	 	Governing Law
	 	39
	15.10	 	Amendment
	 	39
	15.11	 	Legal Costs
	 	39
	15.12	 	Construction
	 	39
	15.13	 	Captions and Headings
	 	39
	15.14	 	Interpretation
	 	39
	15.15	 	Time of the Essence
	 	39
	15.16	 	Successors and Assigns
	 	39
	15.17	 	Counterparts
	 	40
	15.18	 	Facsimile Execution
	 	40

-iv-EXHIBIT 10.01(b)

                                 AMENDMENT NO. 2
                                       TO
                              MANAGEMENT AGREEMENT

      WHEREAS, MORGAN STANLEY CHARTER ASPECT L.P., a Delaware limited
partnership (the "Partnership"), DEMETER MANAGEMENT CORPORATION, a Delaware
corporation (the "General Partner"), and ASPECT CAPITAL LIMITED, a limited
liability company registered in England and Wales (the "Trading Advisor"), have
agreed to amend the Management Agreement, by and among the Partnership, the
General Partner, and the Trading Advisor, dated as of October 16, 2006, as
amended by an Amendment No. 1 to the Management Agreement dated as of December
20, 2006 (together, the "Management Agreement") to amend Exhibit B of the
Management Agreement. Terms used and not otherwise defined herein have the
meanings ascribed to such terms in the Management Agreement.

      WHEREAS, all provisions contained in the Management Agreement remain in
full force and effect and are modified only to the extent necessary to provide
for the amendments set forth below;

      NOW, THEREFORE, the parties hereto hereby amend the Management Agreement
as follows:

            1. Exhibit B to the Management Agreement is hereby deleted in its
entirety and replaced with Exhibit B attached hereto.

            2. The foregoing amendment shall take effect as of the 29th day of
January 2007.

            3. This Amendment may be executed in one or more counterparts, each
of which shall be deemed an original but all of which together shall constitute
the same agreement.

            4. This Amendment No. 2 shall be governed and construed in
accordance with the laws of the State of New York.

            5. Each party represents and warrants, with respect to itself only,
that it has taken all action required to be taken in order to authorize and
effect this Amendment No 2. This Amendment No. 2 constitutes a legal, valid and
binding and enforceable obligation of the respective parties.

            6. Save as herein provided, the parties agree that the Management
Agreement shall continue in full force and effect.

<PAGE>

            IN WITNESS WHEREOF, this Amendment No. 2 to the Management Agreement
has been executed for and on behalf of the undersigned as of the 29th day of
January 2007.

                              MORGAN STANLEY CHARTER ASPECT L.P.

                              By:  Demeter Management Corporation,
                                      General Partner

                              By:     /s/ Walter Davis
                                  ----------------------------------
                                  Name:   Walter Davis
                                  Title:  President

                              DEMETER MANAGEMENT CORPORATION

                              By:     /s/ Walter Davis
                                  ----------------------------------
                                  Name:   Walter Davis
                                  Title:  President

                              ASPECT CAPITAL LIMITED

                              By:     /s/ Simon Rockall
                                  ----------------------------------
                                  Name:   Simon Rockall
                                  Title:  Company Secretary

<PAGE>

                                                                       EXHIBIT B

                            Futures Interests Traded

                         The Aspect Diversified Program

             Agriculturals
-----------------------------------------
Canola              (WCE)
-----------------------------------------
Cattle Feeder       (CME)
-----------------------------------------
Cocoa               (CSCE)
-----------------------------------------
Coffee 'C'          (CSCE)
-----------------------------------------
Corn                (CBT)
-----------------------------------------
Cotton No. 2        (NYCE)
-----------------------------------------
Frozen Orange Juice (FCOJ-1)(NYBOTX)
-----------------------------------------
Frozen Pork Bellies (CME)
-----------------------------------------
Hard Red Spring     (MGE)
Wheat
-----------------------------------------
Hard Red Winter     (KCB)
Wheat
-----------------------------------------
Lean Hogs           (CME)
-----------------------------------------
Live Cattle         (CME)
-----------------------------------------
Lumber (Random      (CME)
Length)
-----------------------------------------
No. 7 Cocoa (LFE)
-----------------------------------------
Oats                (CBT)
-----------------------------------------
Robusta Coffee      (LIF)
-----------------------------------------
Soy Bean Oil        (CBT)
-----------------------------------------
Soya Beans          (CBT)
-----------------------------------------
Soybean Meal        (CBT)
-----------------------------------------
Sugar               (CSCE)
-----------------------------------------
Wheat               (CBT)
-----------------------------------------
White Sugar         (LIF)
-----------------------------------------
                Energies
-----------------------------------------
Brent Crude Oil     (IPE)
-----------------------------------------
Crude Oil           (OTC)
-----------------------------------------
Crude Oil           (NYMEX)
-----------------------------------------
Gas Oil             (IPE)
-----------------------------------------
Gasoline            (TOCOM)
-----------------------------------------
Heating Oil         (NYMEX)
-----------------------------------------
Kerosene            (TOCOM)
-----------------------------------------
Natural Gas         (NYMEX)
-----------------------------------------
Unleaded Gas        (NYMEX)
-----------------------------------------

<PAGE>

-----------------------------------------
                 Metals
-----------------------------------------
Aluminum (High      (LME)
Grade)
-----------------------------------------
Copper (High Grade) (COMEX)
-----------------------------------------
Copper              (LME)
-----------------------------------------
Gold (100 Oz)       (COMEX)
-----------------------------------------
Gold                (TOCOM)
-----------------------------------------
Lead (High Grade)   (LME)
-----------------------------------------
Nickel (High Grade) (LME)
-----------------------------------------
Palladium           (NYMEX)
-----------------------------------------
Palladium           (TOCOM)
-----------------------------------------
Platinum            (NYMEX)
-----------------------------------------
Platinum            (TOCOM)
-----------------------------------------
Silver              (NYMEX)
-----------------------------------------
Zinc (High Grade)   (LME)
-----------------------------------------
                 Bonds
-----------------------------------------
Australian 10 Year  (SFE)
Government Bond
-----------------------------------------
Australian 3 Year   (SFE)
Government Bond
-----------------------------------------
British Long Gilt   (LIF)
-----------------------------------------
Canadian 10 Year    (ME)
Government Bond
-----------------------------------------
Euro Bobl           (EUREX)
-----------------------------------------
Euro Bund           (EUREX)
-----------------------------------------
Euro Schatz         (EUREX)
-----------------------------------------
Five Year Euro      (LIF)
Swapnote
-----------------------------------------
Japanese 10 Year    (TSE)
Government Bond
-----------------------------------------
Japanese 10 Year    (SIMEX)
Government Bond
Mini
-----------------------------------------
Swiss Federation    (EUREX)
Long Term Bond
-----------------------------------------
Ten Year Euro       (LIF)
Swapnote
-----------------------------------------
Two Year Euro       (LIF)
Swapnote
-----------------------------------------
US 10 Year Agency   (CBT)
Note
-----------------------------------------
US 10 Year          (CBT)
Treasury Note
-----------------------------------------
US 2 Year Treasury  (CBT)
Note
-----------------------------------------
US 30 Year          (CBT)
Treasury Bond
-----------------------------------------
US 5 Year Treasury  (CBT)
Note
-----------------------------------------
             Interest Rates
-----------------------------------------
30 Day Interbank    (SFE)
Cash Rate
-----------------------------------------
90 Day Sterling     (LIF)
Libor
-----------------------------------------
Australian 90 Day   (SFE)
Bank Bills
-----------------------------------------
Canadian Bankers    (ME)
Acceptance
-----------------------------------------

<PAGE>

-----------------------------------------
Euribor             (LIF)
-----------------------------------------
Eurodollar          (CME)
-----------------------------------------
Euroswiss           (LIF)
-----------------------------------------
Euroyen (3 Month)   (TIF)
-----------------------------------------
New Zealand 90 Day  (SFE)
Bank Bills
-----------------------------------------
US 30 Day Federal   (CBT)
Funds
-----------------------------------------
               Currencies
-----------------------------------------
Australian Dollar
-----------------------------------------
British Sterling
-----------------------------------------
Canadian Dollar
-----------------------------------------
Czech Koruna
-----------------------------------------
Danish Krone
-----------------------------------------
Euro
-----------------------------------------
Hungarian Forint
-----------------------------------------
Japanese Yen
-----------------------------------------
Mexican Peso
-----------------------------------------
New Zealand Dollar
-----------------------------------------
Norwegian Krone
-----------------------------------------
Polish Zloty
-----------------------------------------
Singapore Dollar
-----------------------------------------
South African Rand
-----------------------------------------
Swedish Krona
-----------------------------------------
Swiss Franc
-----------------------------------------
US Dollar
-----------------------------------------
             Stock Indices
-----------------------------------------
Amsterdam           (EURONEXT)
Exchanges Index
-----------------------------------------
Australian SPI-200  (SFE)
Index
-----------------------------------------
Canadian S&P/TSE    (ME)
60 Index
-----------------------------------------
DJ Euro Stoxx 50    (EUREX)
-----------------------------------------
Dow Jones           (CBT)
Industrial Average
-----------------------------------------
Dow Jones           (CBT)
Industrial Average
E-Mini
-----------------------------------------
French CAC 40 Index (MATIF)
-----------------------------------------
FTSE 100 Index      (LIF)
-----------------------------------------
German DAX Index    (EUREX)
-----------------------------------------
Hang Seng China     (HKFE)
Enterprises
(H-Shares) Index
-----------------------------------------
Hong Kong Hang      (HKFE)
Seng Index
-----------------------------------------
Italian MIB/S&P 40  (MIL)
Index
-----------------------------------------
Italian MIB/S&P 40  (MIL)
Index Mini
-----------------------------------------
Japanese NIKKEI     (SIMEX)
Index
-----------------------------------------
Japanese NIKKEI     (CME)
Index
(Yen-Denominated)
-----------------------------------------
Japanese TOPIX      (TSE)
Index
-----------------------------------------
MSCI Pan Euro Index (LIF)
-----------------------------------------
MSCI Singapore      (SGX)
Index
-----------------------------------------
NASDAQ 100          (CME)
-----------------------------------------
NASDAQ 100 E-Mini   (CME)
-----------------------------------------
OMX Stock Index     (SOM)
Standardized
Futures Contract
-----------------------------------------
Russell 1000 E-Mini (CME)
-----------------------------------------
Russell 2000 Index  (CME)
E-Mini
-----------------------------------------
S&P 500             (CME)
-----------------------------------------
S&P 500 E-Mini      (CME)
-----------------------------------------
S&P Midcap 400      (CME)
Index E-Mini
-----------------------------------------
South African       (SAF)
FTSE/JSE Top 40
Index
-----------------------------------------
Spanish IBEX 35     (MEFFRV)
Index
-----------------------------------------
Taiwanese MSCI      (SIMEX)
Index
-----------------------------------------

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00116-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00116-of-00352.parquet"}]]