Exhibit 10.1
LEASE FOR
COMBINATION
OFFICE/WAREHOUSE
AT
EAGLEVIEW CORPORATE
CENTER
BUILDING NO.
LANDLORD: THE HANKIN
GROUP
TENANT: ISOLAGEN,
INC.
TABLE OF
CONTENTS
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3
LEASE
LEASE is made this 7 th
day of April, 2005 between THE HANKIN GROUP , a Pennsylvania
limited partnership (“Landlord”), with its office at
Eagleview Corporate Center, 707 Eagleview Boulevard, P.O. Box 562,
Exton, Pennsylvania 19341, and ISOLAGEN, INC. , a Delaware
corporation (“Tenant”), with its office at 2500
Wilcrest, 5 th Floor, Houston, TX 77042.
1.
LEASED SPACE AND
PURPOSE.
(a)
Landlord hereby rents to Tenant
86,500 rentable square feet of space within the building located at
405 Eagleview Boulevard (“Building”), including the
parcel of land known as Lot 10 (the “Land”) within the
center (“Center” or “Eagleview Corporate
Center”) known as Eagleview Corporate Center, Route 100,
Exton, Uwchlan Township, Chester County, Pennsylvania. The
Building and Land are sometimes referred to collectively as the
“Leased Space”. The location of the Leased Space
and the Building is shown on the plan attached hereto as Exhibit
“A”. The Leased Space includes all fixtures,
improvements, additions and other property installed therein at the
Commencement Date (hereafter defined), or at any time during the
term of this Lease (other than Tenant’s movable personal
property and trade fixtures), together with the Land and, in common
with others, all public portions of the Center.
(b)
The Leased Space shall be used and
occupied as a mixed-use facility consisting of general office
space, warehouse space and laboratory space in connection with
Tenant’s Business (hereafter defined) and for no other
purpose. For purposes hereof, Tenant’s Business shall be
deemed to be the development and commercialization of
pharmaceutical products and research activities in connection
therewith.
(c)
Tenant accepts the Leased Space in
its current condition, “as is”.
(d)
This Lease is contingent upon
Landlord’s entering into a termination agreement in form and
substance satisfactory to Landlord in its sole discretion with
Viropharma, Inc., the current tenant of the Leased Space.
Landlord shall notify Tenant in writing when this condition has
been satisfied; in the absence of Tenant’s receipt of such
notice on or before the Commencement Date, this Lease shall be null
and void and neither party shall have any further obligation to the
other hereunder.
2.
TERM.
(a)
The term of this Lease and
Tenant’s obligation to pay rent hereunder shall commence upon
April 1, 2005 (“Commencement Date”).
(b)
The term (“Term”) of
this Lease shall end on March 31, 2013 unless sooner terminated or
renewed in accordance with this Lease. The portion of the term
ending on March 31, 2008 is sometimes referred to herein as
“Initial Period”.
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(c)
Notwithstanding anything contained
in this Lease to the contrary, on or before March 31, 2007, Tenant
shall deliver to Landlord written notice of whether or not Tenant
desires to accelerate the expiration date of the Term to the end of
the Initial Period, being March 31, 2008, or continue in occupancy
until the originally scheduled expiration date, March 31, 2013, in
which latter event the Term of this Lease shall continue as
originally scheduled until March 31, 2013. In the absence of
any notice, Landlord shall issue written notice to Tenant that
Landlord has not received the required notice from Tenant, and
unless within five (5) days thereafter, Tenant by written notice to
Landlord reinstates the Lease and the Term until March 31, 2013,
Tenant shall be deemed to have elected to accelerate the expiration
date to March 31, 2008, and shall vacate the Premises on such
date.
3.
RENT.
(a)
Definitions.
(i)
“Tenant’s Proportionate
Share” is 100%.
(ii)
“Real Estate Taxes”
shall mean all taxes and assessments levied, assessed or imposed at
any time by any governmental authority upon or against the Building
and the land upon which the Building is situate, and also any tax
or assessment levied, assessed or imposed at any time by any
governmental authority in connection with the receipt of income or
rents from said Building or land to the extent that the same shall
be in lieu of (and/or in lieu of an increase in) all or a portion
of any of the aforesaid taxes or assessments upon or against the
said Building and/or land. If, however, any assessment included
within Real Estate Taxes is payable in installments extending
beyond the term of this Lease, Tenant shall only be obligated to
pay those installments coming due during the term of this Lease.
“Real Estate Taxes” shall not include any penalty or
interest as a result of Landlord’s late payment. Landlord
further agrees to make payment of Real Estate Taxes in a timely
manner so as to take advantage of any applicable discount and to
provide to Tenant copies of receipts for paid Real Estate Taxes not
later than thirty (30) days after the Real Estate Taxes are due.
Failure of Landlord to provide such receipts to Tenant shall permit
Tenant to suspend payment of Tenant’s Proportionate Share of
Real Estate Taxes until such receipts are furnished to
Tenant.
At any time and from time to time
during the term of this Lease, Tenant, at its expense, shall have
the right to institute proceedings challenging the amount of Real
Estate Taxes. Landlord agrees to reasonably cooperate with Tenant
in connection therewith. Any refund awarded shall be reimbursed
first to each party in proportion to the expenses incurred by such
party in prosecuting such appeal, with any balance thereof next
being refunded to Tenant in an amount equal to Tenant’s
Proportionate Share of (A) the balance of such award remaining
after the foregoing cost reimbursements (B) multiplied by a
fraction (1) the numerator of which shall be the number of days
during the tax year for which the refund is awarded for which
Tenant has paid Real Estate Taxes pursuant to this Lease and (2)
the denominator of which is 365.
(iii)
“Operating Expenses”
shall mean that part of any and all expenses reasonably and
actually incurred by Landlord in connection with its ownership,
maintenance and
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operation of the Building, the land upon which
the Building is situate, excluding Real Estate Taxes and interest
or amortization payments on any mortgage, but including, without
limitation, electricity (other than as billed directly to tenants
based on usage); insurance maintained on the Building in accordance
herewith; all direct and indirect labor costs; a management fee for
Landlord’s management of the relationships with contractors
(other than the Association) providing yard and landscape
maintenance, snow clearance and insurance required to be maintained
hereunder if Landlord, upon request of Tenant, is able to place
such insurance at more favorable premium rates than Tenant is able
to obtain, which management fee shall not exceed four percent (4%)
of the annual amount actually paid under such contracts
(“Management Fee”); legal expenses; all repairs
required to be performed by Landlord as provided for in this Lease;
exterior, roof and structural decoration, repairs and maintenance;
snow removal; building supplies; all charges for the exterior of
the Building for electricity; the cost of operating an
identification sign or signs for the Building; replacing of paving,
curbs, walkways, directions or other signs; drainage; maintenance
and monitoring of fire sprinkling systems (if any); the
Building’s proportionate share of common expenses owed to the
Eagleview Corporate Center Association or its successor or any
other similar entity which owns and maintains the common areas of
the Center (collectively, “Association”); and such
other expenses as Landlord may deem necessary and proper in
connection with the operation and maintenance of the exterior, roof
and structure of the Building, excluding any costs which under
generally accepted accounting principles (“GAAP”) are
capital expenditures; provided, however, that Operating Expenses
shall also include the annual amortization (over the anticipated
useful life established in accordance with GAAP) of a capital
improvement falling within any of the following categories: (i) a
labor saving device or improvement which is intended to reduce or
eliminate any other component of Operating Expenses; (ii) an
installation or improvement required by reason of any law,
ordinance or regulation, which requirement did not exist on the
date of this Lease and is generally applicable to similar
buildings; (iii) an installation or improvement which directly
enhances safety of tenants in the Building or Center generally.
Landlord shall have the right to bill Tenant directly for any items
of Operating Expenses which can be attributed directly to
Tenant’s use only.
Notwithstanding any provision to the
contrary, Operating Expenses shall not include:
(A)
any payments (such as salaries or
fees) to the Landlord’s executive personnel or in-house site
managers except for the Management Fee;
(B)
depreciation or interest, except to
the extent permitted above in connection with capital
improvements;
(C)
mortgage or ground lease
payments;
(D)
taxes on the Landlord’s
business (such as income, excess profits, franchise, capital stock,
estate, inheritance) except to the extent same are in lieu of Real
Estate Taxes or increases in Real Estate Taxes;
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(E)
leasing commissions, broker’s
fees or legal fees incurred in connection with leases of space in
the Building;
(F)
legal fees that do not directly
benefit Tenant or the Building (provided that legal fees incurred
in connection with leases of space in the Building or in enforcing
tenant obligations shall not be deemed to benefit the
Building);
(G)
costs to correct defective repairs
or replacements hereinafter provided by or at the direction of
Landlord;
(H)
costs of repairs covered by valid
warranties;
(I)
expenses paid directly by a tenant
for any reason (such as excessive utility use, direct utility
consumption, damage for which such tenant is
responsible);
(J)
costs for improving any
tenant’s space;
(K)
any repair or other work
necessitated by condemnation, or by fire or other insured casualty
in excess of applicable deductibles;
(L)
any costs, fines and the like due to
Landlord’s violation of any law, governmental rule or
authority;
(M)
refinancing costs;
(N)
costs for any conversion of the
heating system to gas heat except to the extent such conversion is
undertaken in an effort to reduce Operating Expenses and the cost
thereof is treated in the same manner as a capital
improvement;
(O)
costs paid to Landlord or its
affiliates other than the Management Fee which exceed those
reasonably charged in arms length transactions with third parties
in the general area of the Building; and
(P)
services, benefits or both provided
to some tenants but not to Tenant.
(iv)
The “Base Rent for Adjustment
Purposes” shall mean, for the first year of the Term
following the Initial Period beginning April 1, 2008,
$1,119,310.00, and for each subsequent year during the five year
period beginning April 1, 2008 and expiring March 31, 2013, the
Minimum Annual Rent under this Lease in effect for the immediately
preceding year.
(v)
The “CPI U” shall mean
the Consumer Price Index established by the U.S. Department of
Labor Bureau of Labor Statistics for all urban consumers for the
Philadelphia metropolitan area (CPI-U) (1982-1984 =
100).
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(vi)
The “Base Index” shall
mean, for the initial year following the Initial Period, the CPI U
for March, 2005, and for each subsequent year, the CPI U for the
month of March one year prior to the Comparison Index.
(vii)
The “Comparison Index”
shall mean the CPI U for month of March immediately preceding the
commencement of each year following the Initial Period.
(viii)
The “CPI Adjustment”
shall mean, for each year of the Term following the Initial Period,
an increase in the Base Rent for Adjustment Purposes by the
percentage increase in the Comparison Index over the Base Index,
applicable to such year.
The Base Index and Comparison Index
for each year of the Term following the Initial Period shall
be:
|
Renewal Term Year
|
|
Base Index
|
|
Comparison Index
|
|
|
4/1/08-3/31/09
|
|
March 2005
|
|
March 2008
|
|
|
4/1/09-3/31/10
|
|
March 2008
|
|
March 2009
|
|
|
4/1/10-3/31/11
|
|
March 2009
|
|
March 2010
|
|
|
4/1/11-3/31/12
|
|
March 2010
|
|
March 2011
|
|
|
4/1/12-3/31/13
|
|
March 2011
|
|
March 2012
|
|
(b)
Tenant shall pay Landlord the
minimum annual rent (“Minimum Annual Rent”) during the
Term in the amounts set forth below, which annual amount shall be
paid in equal monthly installments as set forth below on the first
day of each calendar month in advance. All rent shall be payable,
in advance, and without prior notice or demand, at the address of
Landlord set forth in the heading of this Lease or at such other
place, or to such other person, as Landlord may from time to time
direct in written notice to Tenant. During the Initial Period,
Minimum Annual Rent shall be $778,500.00 per year, payable in
monthly installments of $64,875.00 each. Thereafter, for each
year of the Term following the Initial Period, Minimum Annual Rent
shall increase to a sum equal to the Base Rent for Adjustment
Purposes, increased by one half the CPI Adjustment, but in no event
shall such Minimum Annual Rent be (1) less than the Base Rent for
Adjustment Purposes for such year, or (2) during the first year of
the five year period beginning April 1, 2008, greater than
$1,297,500, or (3) during any subsequent year of such five year
period, greater than $1,384,000. Upon the expiration of the
Initial Period, and for each year of the Term thereafter, Landlord
shall notify Tenant of the Minimum Annual Rent in effect for such
year; in the event of any delay in calculation because of a delay
in publication of the applicable Comparison Index, Tenant shall pay
rent on account based upon the Minimum Annual Rent previously in
effect, to be adjusted when the Comparison Index is
published.
(c)
In addition, Tenant shall pay to
Landlord as Additional Rent in equal monthly installments one
twelfth (1/12) of Tenant’s Proportionate Share of annual Real
Estate Taxes and Operating Expenses, at the time of payment of each
monthly installment of Minimum Annual Rent, based upon the most
recent costs of Operating Expenses and Real Estate Taxes
available.
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For the period from the Commencement Date until
the issuance of a statement pursuant to subparagraph 3(d) below,
such monthly installment shall be equal to $26,742.92.
(d)
Within ninety (90) days of the
expiration of each calendar year Landlord shall furnish Tenant with
a written statement of the actual Operating Expenses and Real
Estate Taxes incurred for such year itemizing the expenses claimed
by Landlord in reasonable detail. Within ten (10) days of the
rendition of such statement, Tenant shall pay any amounts in excess
of those collected pursuant to the payments on account of Real
Estate Taxes and Operating Expenses pursuant to paragraph 3(c)
hereof, and any overpayments shall be credited against the next
installment(s) of rent due under this Lease or, at Tenant’s
option, refunded to Tenant. In the event the first and/or last
years of the Term of this Lease shall not be full calendar years,
then Tenant’s obligation for Operating Expenses and Real
Estate Taxes attributable to such years shall be pro rated. Tenant
may, at its own cost and expense, after full payment of all sums
due and owing, audit Landlord’s books and records not more
than once each year within sixty (60) days after Landlord’s
delivery of its annual statement of Operating Expenses, which books
and records shall be maintained in accordance with GAAP.
Notwithstanding the foregoing, if any said review of
Landlord’s books and records reveals that any item(s) were
incorrectly included in Operating Expenses, Tenant shall have the
right to inspect Landlord’s books and records with respect to
such items for each prior lease year and an adjustment, if any,
shall be made in accordance herewith. If Tenant’s audit
determines that Landlord’s total charges for Operating
Expenses or Real Estate Taxes for a given lease year exceed by more
than 5% the total amount properly chargeable to Tenant under this
Lease for such year, Landlord, in addition to reimbursing Tenant
such excess amount, shall pay Tenant an amount equal to the cost of
the audit.
(e)
On or before the Commencement Date,
Tenant shall establish with a commercial bank approved by Landlord
(which approval shall not be unreasonably withheld or delayed), an
interest bearing account, into which Tenant shall deposit the sum
of $3,298,245 (representing Minimum Annual Rent and estimated
Operating Expenses and Real Estate Taxes for the Initial Period)
(the “Rent Account”). Tenant shall instruct the
bank in which the Rent Account is established (the “Rent
Bank”) that there shall be wired into Landlord’s
account pursuant to wiring instructions issued by Landlord the sum
of $91,618 on the first day of each month beginning on the
Commencement Date through and including March 1, 2008, and that
such instructions shall be irrevocable absent written instructions
(1) from Landlord alone with respect to either (A) an assignment of
this Lease and the rights to the Rent Account, instructing the Rent
Bank to make payments to Landlord’s assignee, or (B) a
request for payment of the balance remaining in the Rent Account,
if such request is made after the occurrence of an Event of
Default, and such request is accompanied by certification from
Landlord that a material Event of Default has occurred, notice of
the Event of Default has been properly delivered to Tenant, the
grace or notice period required under the Lease and stated in the
notice of the default has expired, and the Event of Default has not
been cured; or (2) with respect to any other instructions modifying
the amount or timing of payment, by Landlord and Tenant
jointly. Landlord shall send to Tenant in the manner for
delivering notices under this Lease a copy of the request,
certification and notice of the Event of Default attached to the
certification referred to in clause (B) of the preceding sentence
when it is sent or delivered to the Rent Bank. Such
disbursements shall be credited
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against Tenant’s rent obligations as they
come due, and in the event any additional sums are due and owing
from Tenant to Landlord, by reason of annual Operating Expense or
Real Estate Tax adjustments, or otherwise, the same shall be paid
directly by Tenant to Landlord as billed. Tenant hereby
grants to Landlord a security interest in the Rent Account, as
security for Tenant’s performance of all of its obligations
under this Lease, and Tenant shall execute (and cause the Rent Bank
to execute) a control agreement and such further documents and
instruments reasonable or necessary to perfect such security
interest in favor of Landlord, having priority over any claims that
may be made by any other party (including those of the Rent
Bank). If this Lease terminates pursuant to Section 18(e) or
19, the foregoing security interest shall terminate upon Tenant
satisfying any accrued and unpaid rent obligations, and the balance
in the Rent Account shall be returned to Tenant. Accrued
interest on the Rent Account shall be disbursed to Tenant
periodically in accordance with the rules established by the Rent
Bank for disbursing interest from similar accounts.
4.
ADDITIONAL
RENT.
Tenant shall pay to Landlord as
“Additional Rent” (in addition to sums payable pursuant
to paragraphs 3 (c) and 3(d)) the following:
(a)
Expenses Incurred by Landlord as
a Result of Tenant’s Default . All sums which may become due by reason of
Tenant’s failure to comply with any of the terms, conditions
and covenants of this Lease to be kept and observed by Tenant, and
any and all damages, costs and expenses (including without
limitation thereto reasonable attorney’s fees) which Landlord
may suffer or incur by reason of any default of Tenant and any
damage to the Building or the real estate of which the Building is
a part caused by any negligence or willful misconduct of Tenant or
violation of Tenant’s covenants in Section 5(a) below,
together with interest to the date of payment (whether before or
after entry of judgment and issuance of execution thereon) at a
rate equal to five percent (5%) above the prime interest rate (or
similar rate if the prime interest rate is no longer published) of
Wachovia Bank or its successor, in effect on the date during the
period said payment is due (“Default Rate”), which
shall continue to accrue interest at the Default Rate after entry
of judgment and issuance of execution thereon until paid in
full.
(b)
Use and Occupancy
Taxes . All use and
occupancy taxes imposed by any governmental body allocable to the
Leased Space.
(c)
Utilities . All charges for heat, gas, water, electric,
trash and sewage disposal for the Leased Space, whether billed
directly by the providers of the same to Tenant or by Landlord as
the owner of the Building, which charges shall not exceed the
charges actually incurred by Landlord therefor.
(d)
For purposes of this Lease, the term
“Rent” or “rent” shall be deemed to refer
to Minimum Annual Rent and Additional Rent.
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5.
NEGATIVE COVENANTS OF TENANT:
HAZARDOUS SUBSTANCES.
(a)
Tenant will not:
(i)
damage the Leased Space or any other
part of the Building;
(ii)
bring into or permit to be kept in
the Leased Space any dangerous, explosive or obnoxious substances
except as may be used in Tenant’s Business which use Tenant
shall undertake in compliance with all applicable laws regulating
same;
(iii)
conduct itself or permit its agents,
servants, employees or invitees to conduct themselves in a manner
that in Landlord’s judgment reasonably exercised is improper
or unsafe except that the operation of, or activities related to,
Tenant’s Business shall not be deemed to violate this
provision, provided same are undertaken in compliance with all
applicable laws;
(iv)
manufacture any commodity other than
in the course of Tenant’s Business or prepare or dispense any
food or beverages in the Leased Space, except for consumption in
the Leased Space by Tenant, its employees or invitees;
(v)
remove, attempt to remove or
manifest any intention to remove Tenant’s goods or property
from the Leased Space other than in the ordinary course of
business;
(vi)
do or suffer to be done, any act,
matter or thing objectionable to Landlord’s fire insurance
companies or Board of Underwriters whereby the fire insurance or
any other insurance now in force or hereafter to be placed by
Landlord on the Leased Space or the Building or Center shall become
void or suspended, or whereby the same shall be rated as a more
hazardous risk than at the Commencement Date. Tenant agrees to pay
to Landlord as Additional Rent, any and all increases in premiums
for insurance carried by Landlord on the Leased Space, or on the
Building, caused in any way by the occupancy of Tenant.
(b)
Tenant’s Responsibility
Regarding Hazardous Substances.
(i)
The following definitions shall
apply herein:
(A)
Hazardous Substances
. The term “Hazardous
Substances,” as used in this Lease, shall include, without
limitation, flammables, explosives, radioactive materials,
asbestos, polychlorinated biphenyls (PCB’s), chemicals known
to cause cancer or reproductive toxicity, pollutants, contaminants,
hazardous wastes, toxic substances or related materials, petroleum
and petroleum products, and substances declared to be hazardous or
toxic under any law or regulation now or hereafter enacted or
promulgated by any governmental authority.
(B)
Tenant Responsible
Parties . The term
“Tenant Responsible Parties” as used in this Lease
shall mean Tenant, its employees, agents, contractors and/or
invitees.
(ii)
Tenant’s Restrictions. Tenant
shall not cause or permit to occur:
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(A)
Any violation of any federal, state,
or local law, ordinance, or regulation now or hereafter enacted,
related to environmental conditions on, under, or about the Leased
Space or Center, arising from the use or occupancy of the Leased
Space by any Tenant Responsible Party, including, but not limited
to, soil and ground water conditions; or
(B)
The use, generation, release,
manufacture, ref