exv10w1



 






Exhibit 10.1




THIRD AMENDING LEASE AGREEMENT



WHEREAS THE WESTAIM CORPORATION (“Lessor”) and NUCRYST PHARMACEUTICALS CORP. (“Lessee”) entered
into a Memorandum of Lease Agreement dated July 1, 2005 (the“ Original Lease Agreement”) which was
amended by Letter Agreement dated November 14, 2005 (the “First Amending Lease Agreement”) and by a
second amending lease agreement dated April 27, 2006 (the “Second Amending Lease Agreement”);



AND WHEREAS the parties hereto wish to further amend the Original Lease Agreement and the Second
Amending Lease Agreement;



NOW THEREFORE in consideration of the mutual covenants and agreements herein contained and for
other good and valuable consideration now exchanged by and between the parties (the receipt and
sufficiency of which is hereby irrevocably acknowledged), the parties hereto agree as follows:





	1.	 	Effective as of the 1st day of April, 2006:






	 	(a)	 	The Second Amending Lease Agreement shall be amended by deleting clause 1(a) in its
entirety.






	2.	 	Effective as of the 15th day of June, 2006:






	 	(a)	 	As per Clauses 4.6 and 4.7 of the Original Lease Agreement, the Second Amending Lease
Agreement shall be amended in respect of the MMC Building as follows:






The newly constructed RC-5 area (see Schedule A-3 attached) will be added to the
Leased Premises increasing the square footage of the Leased Premises in the MMC
Building by five thousand nine hundred and one feet to a total of sixty-nine thousand
five hundred and eighty-nine (69,589 sq. ft.) square feet and adjusting the rent
accordingly to recover the Construction Costs associated with the RC-5 area
($1,486,672.88) over the remaining term of the Original Lease Agreement (9.0416 years
as of June 15th, 2006) all effective June 15th, 2006. In that
regard, all terms and provisions of the Lease shall be deemed to be automatically
amended as may be required to give full force and effect to the increase in square
footage of the Leased Premises. Without limitation, the Leased Premises shall be
deemed to include the additional square footage set forth herein and the requirements
for payment of Basic Rent and Additional Rent shall be deemed to include the
requirement for payment of the Basic Rent and Additional Rent for such additional
square footage in the Floor Area of the Leased Premises.




For greater certainty, the total amount of Basic Rent for the Leased Premises in the
MMC Building shall be amended to Six Hundred and Ninety-Four Thousand, Three Hundred
and Ten Dollars and Two Cents ($694,310.02) per annum (or Fifty-Seven Thousand, Eight
Hundred and Fifty-Nine Dollars and Seventeen Cents ($57,859.17) per month).




	 	(c)	 	The following schedules of the Original Lease Agreement shall be amended and replaced
in their entirety by those schedules attached to this Third Amending Lease Agreement:






	 	  (i)	 	Schedule A-2;
	 
	 	  (ii)	 	Schedule A-3;
	 
	 	  (iii)	 	Schedule A-4;
	 
	 	  (iv)	 	Schedule D.




 









 












	3.	 	Except as herein amended, all other provisions, terms and conditions of the Original Lease
Agreement and the Second Amending Lease Agreement shall remain the same and in full force and
effect.






	4.	 	All capitalized terms used herein but not defined shall have the meanings defined therefore
in the Original Lease Agreement.




IN WITNESS WHEREOF the parties have executed this Agreement by the hands of their duly authorized
officers in that regard, whose signatures alone are sufficient to bind the parties to the terms
hereof, the 8th day of August, 2006.




	 	 	 	 	 	 	 
	THE WESTAIM CORPORATION	 	NUCRYST PHARMACEUTICALS CORP.
	 
	 	 	 	 	 	 
	Per:
	 	/s/ Brian D. Heck	 	Per:	 	/s/ Eliot Lurier
	 
	 	 	 	 
	Name:
	 	Brian D. Heck	 	 	 	Eliot M. Lurier
	Title:
	 	Vice President, General Counsel &	 	 	 	Vice President, Finance & Administration, CFO
	 
	 	Corporate Secretary	 	 	 	 
	 
	 	 	 	 	 	 
	Per:
	 	/s/ Douglas Murray	 	Per:	 	/s/ Carol L. Amelio
	 
	 	 	 	 
	Name:
	 	Douglas Murray	 	 	 	Carol L. Amelio
	Title:
	 	Assistant Corporate Secretary	 	 	 	General Counsel & Corporate Secretary






 









 





Schedule A2


LEASED PREMISES

MMC Building










 








 








Schedule A3


LEASED PREMISES

MMC Building









 









 







Schedule A4


LEASED PREMISES

MMC Building










 










 







Amended SCHEDULE “D”




DEFINITIONS




     In this Lease, the following words, phrases and expressions are used with the meanings defined
as follows:




	 	(a)	 	“Agreement” or “Lease” means this Lease as the same may be amended from time to
time in accordance with the terms hereof and the expressions “herein”, “hereof”,
“hereto”, “above”, “below” and similar expressions used in any paragraph, subparagraph,
section or article of this Lease refer and relate to the whole of this Lease and not to
that paragraph, subparagraph, section or article only, unless otherwise expressly
provided.
	 
	 	(b)	 	“Additional Rent” means the Additional Rent payable by the Lessee to the Lessor
pursuant to this Lease as provided for in Section 5.2 hereof.
	 
	 	(c)	 	“Additional Space” means the Expansion Additional Space or the Lease Option
Additional Space, as applicable in the circumstances.
	 
	 	(d)	 	“Alberta CPI” or “CPI” means the All-Items Consumer Price Index for Alberta as
published by Statistics Canada or other department or agency of the Canadian federal
government from time to time.
	 
	 	(e)	 	“Arbitration Act” means the Arbitration Act (Alberta), and amendments thereto,
or any like statute in effect from time to time.
	 
	 	(f)	 	“Basic Rent” means the rent set out in Section 2.1(f), as may be amended from
time to time by the incorporation of Additional Space into the Leased Premises pursuant
to the terms of this Lease. For greater certainty “Basic Rent” does not include any
goods and services tax (G.S.T.) which is payable by the Lessee in addition to Basic
Rent.
	 
	 	(g)	 	“Building” means the MMC Building or the R&D/AIMS I Building, as applicable in
the circumstances, including the Common Facilities, all as the same may be expanded or
altered in accordance with this Lease from time to time.
	 
	 	(h)	 	“Building Expansion” shall have the meaning given to it in section 4.6(a).
	 
	 	(i)	 	“Capital Improvement Costs” means any and all planning, design, project
management and construction costs associated with improvements to the Unleased Space
and any and all fees and expenses and costs associated with such activities payable to
contractors, subcontractors, consultants and the municipality relating thereto, plus
fifteen (15%) percent on all of such amounts.
	 
	 	(j)	 	“Commencement Date” means the date set out in Section 2.1(e)(ii).
	 
	 	(k)	 	“Common Facilities” means the Complex Common Facilities and all lands,
improvements, facilities, utilities, installations, and equipment forming part of the
Building and the Lands other than parts of those lands, improvements, facilities,
utilities, installations and equipment designated by the Lessor for leasing to tenants
of the Building or for exclusive use by the Lessor or tenants.




 









 






	 	(l)	 	“Complex Common Facilities” means the cafeteria located adjacent to the
R&D/AIMS I Building on the lands legally described as Lot 49, Block 1, Plan 042 4648
and the front lobby, and cafeteria of the MMC Building located on the Lands, all as
shown on Schedule “B-1” and “B-2” attached.
	 
	 	(m)	 	“Construction Costs” means any and all costs and expenses of planning, design,
development, demolition, project management and construction relating to the Building
Expansion and the Expansion Additional Space in accordance with agreed upon plans and
specifications and any and all fees and expenses and costs associated with such
activities payable to contractors, subcontractors, consultants and the municipality
relating thereto, plus fifteen (15%) percent on all of such amounts.
	 
	 	(n)	 	“CPI at End of Term” means any of the following as applicable in the
circumstances:






	 	(i)	 	For a First Renewal Term, the Alberta CPI on the last day of the
month which is six months prior to the last day of the initial Term;
	 
	 	(ii)	 	For a Second Renewal Term, the Alberta CPI on the last day of the
month which is six months prior to the last day of the First Renewal Term;
	 
	 	(iii)	 	For a Third Renewal Term, the Alberta CPI on the last day of the
month which is six months prior to the last day of the Second Renewal Term;
	 
	 	(iv)	 	In the event that the Lessee has accelerated the exercise of its
renewal rights pursuant to section 4.5(b)(iv) or section 4.6(g) hereof (the
“accelerated renewal”), a number which is extrapolated to be the CPI at the
expiry date of the then current term of the lease (without considering the
accelerated renewal) on the basis that the rate of change in the Alberta CPI
from the first day of the then current Term or renewal, as applicable, until the
last day of the then current Term or renewal, as applicable, shall be the same
as the rate of change in the Alberta CPI from the first day of the then current
Term or renewal, as applicable, until the date of exercise of the accelerated
renewal.






	 	(o)	 	“Environmental Costs” shall mean any and all costs and expenses incurred by the
Lessor associated with disposal of effluent from the Buildings and adjacent lands.
	 
	 	(p)	 	“Expansion Additional Space” shall have the meaning given to it in section 4.6
hereof.
	 
	 	(q)	 	“Floor Area” means the area, expressed in square feet or such other unit as the
Lessor may determine, of all floors and mezzanines of all storeys in each interior
leasable space in the Building or any specified portion thereof, calculated by
measuring from the exterior surfaces of the exterior walls and of all walls adjoining
Common Facilities, from the centre line of party or demising walls separating two (2)
or more interior leasable premises and from the lease line separating any interior
leasable premises from other areas in the Building (as the case may be) where no wall
exists, all without deduction or exclusion for any space occupied by or used for
columns, stairs, elevators, escalators or other interior construction or equipment or
for any storefront or doorway areas recessed from the lease line, and when used in
respect of the Leased Premises means the area of all floors and mezzanines of all
storeys in the Leased Premises, calculated as aforesaid.
	 
	 	(r)	 	“Governmental Requirements” means any and all applicable laws, rules,
regulations, ordinances or orders of a municipality or other governmental authority.




 









 






	 	(s)	 	“Gross Leaseable Area” of the Buildings or any specified portion thereof means
the aggregate, from time to time, of the Floor Areas of all interior leaseable areas in
the Buildings or any specified portion thereof.
	 
	 	(t)	 	“High Volume Air Flow Area” means the portions of the Buildings which are
served by a make-up air unit system.
	 
	 	(u)	 	“Lab Area” means the portion of Floor Area in the Buildings used from time to
time for laboratory purposes.
	 
	 	(v)	 	Lands” means the lands described in Section 2.1(g).
	 
	 	(w)	 	“Leased Premises” means the portion of the MMC Building comprising
approximately 69,589 square feet of Floor Area as shown cross-hatched in red on
Schedules “A-2”, “A-3” and “A-4” attached hereto and the portion of the R&D/AIMS I
Building comprising approximately 8,130 square feet of Floor Area as shown
single-hatched in green on Schedules “A-1” attached hereto.
	 
	 	(x)	 	“Lessee” means the Party described in Section 2.1(b) and the successors and
permitted assigns thereof.
	 
	 	(y)	 	“Lessor” means the Party described in Section 2.1(a) and the successors and
assigns thereof.
	 
	 	(z)	 	“MMC Building” means the building located on the lands legally described as Lot
3 Plan 912 0367.
	 
	 	(aa)	 	“Notice” includes requests, demands, designations, statements or other writings
in this Lease required or permitted to be given by the Lessor to the Lessee or by the
Lessee to the Lessor and all writs, originating notices of motion, affidavits and any
other ancillary documents in support of all legal proceedings.
	 
	 	(bb)	 	“Operating Costs” means those operating costs associated with the Building and
the Lands as described and set forth in Article 13.
	 
	 	(cc)	 	“Option Additional Space” shall have the meaning given to it in section 4.5
hereof.
	 
	 	(dd)	 	“Other Areas” means the portion of the Buildings which are not High Volume Air
Flow Areas.
	 
	 	(ee)	 	“Parking Lands” means the lands legally described as Lot 27, Plan 962 3802.
	 
	 	(ff)	 	“Parking Spaces” shall have the meaning given to it in section 8.3 hereof.
	 
	 	(gg)	 	“Parties” means the Lessor and Lessee and “Party” means either the Lessor or
the Lessee as the context requires.
	 
	 	(hh)	 	“Planning Costs” means any and all costs and expenses incurred by the Lessor in
planning, budgeting, engineering, consulting, designing and otherwise considering the
Lessee’s requirements for the Expansion Additional Space and all activities necessarily
incidental, plus fifteen (15%) percent.
	 
	 	(ii)	 	“Property Taxes” means all general, special, local improvement, school and
water taxes, levies, rates and charges from time to time imposed against the Building
and the Lands, or any part thereof, by municipal or other governmental authorities
having jurisdiction, together




 









 






	 	 	 	with the costs of contesting or negotiating the same, but exclusive of income taxes,
business taxes, place of business taxes, estate, inheritance, succession, capital
levy or transfer tax. (Should it be found that due to changes in the method of
levying or collection of any tax, levy, rate or charge to be imposed upon the
Building or the Lands, or any part thereof, or should any new tax, levy, rate or
charge be levied or imposed in lieu of or in addition to those contemplated by the
above definition, the Lessor and the Lessee hereby agree to negotiate an amendment
or new provision to this Lease as is necessary to deal with such tax, levy, rate or
charge, in an equitable manner so as to obviate any injustice or inequity which shall
have arisen and should the Lessor and the Lessee fail to agree on such amendment or
new provision the same shall be settled by arbitration in accordance with the
Arbitration Act.
	 
	 	(jj)	 	“Proportionate Share” means:






	 	(i)	 	in the case of Operating Costs (excluding natural gas costs)
relating to the Building, the proportion that the Floor Area of the portion of
the Leased Premises in the Building bears to the Gross Leaseable Area of the
Building;
	 
	 	(ii)	 	in the case of natural gas costs comprised in Operating Costs,
the Lessor’s Proportionate Share thereof shall be calculated separately from
other Operating Costs for the Building on the basis of the general principle
that High Volume Air Flow Areas in the Building consumes 2.5 times the amount of
natural gas as an Other Areas in the Building; provided that it is acknowledged
that the Lessor shall not be entitled to recover more than 100% of the natural
gas costs incurred by it;
	 
	 	(iii)	 	in the case of Section 8.2(d) and Operating Costs relating to
the Complex Common Facilities and the Lands, the sum of five thousand dollars
($5,000.00);
	 
	 	(iv)	 	in the case of Environmental Costs relating to the Building, the
proportion that the Lab Area of Leased Premises bears to the aggregate of all of
the Lab Area in the MMC Building and the R&D/AIMS I Building.






	 	(kk)	 	“Ratable Share” shall have the meaning given to it in section 8.3 hereof.
	 
	 	(ll)	 	“R&D/AIMS I Building” means the three storey administrative and laboratory
building known as the “R&D/AIMS I Building” which is located on the Lands as shown on
Schedule “B” attached.
	 
	 	(mm)	 	“Reserved Parking Stalls” means the 33 motor vehicle parking spaces located on
the Lands and highlighted in pink on Schedules “A-6” and “A-7”.
	 
	 	(nn)	 	“Sales Tax” means the goods and services tax and any other sales tax,
consumption tax, business transfer tax, value added tax or any similar tax or
replacement tax imposed by the Government of Canada, or any provincial or municipal
government to the extent that such tax is imposed on the Lessor or is required to be
paid by or collected by the Lessor by reason of the supply of any goods or services by
the Lessor to the Lessee, the Lands, the Building or the Leased Premises or any
payments by the Lessee to the Lessor pursuant to any provision of this Lease.
	 
	 	(oo)	 	“Structural Repairs” means repairs to the foundations, the structural
subfloors, columns and beams and the structural portions of bearing walls and roofs of
the Building. For certainty, “Structural Repairs” do not include repairs and
replacements of the roof membrane and do not include maintenance of any kind of the
foundations, structural subfloors, columns and beams unless such maintenance is of a
capital nature.




 









 






	 	(pp)	 	“Users” shall have the meaning given to it in section 8.3 hereof.