Exhibit 10.6
THIRD AMENDMENT TO LEASE AGREEMENT
Between
ROUTE 206 ASSOCIATES
The Landlord
And
ENZON PHARMACEUTICALS, INC.
The Tenant
For Leased Premises In
000 Xxxxx 000/000, Xxxxxxxxxxx, Xxx Xxxxxx
October 1, 2006
Prepared by:
Xxxx X. Xxxxxxxx
000 Xxxxx 00
X.X. Xxx 0000
Xxxxxxxxxxx, XX 00000
(000) 000-0000
TABLE OF CONTENTS
Page
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1. DEFINITIONS AND EFFECT OF FIRST AMENDMENT........................... 1
2. LEASE OF THE SECOND FLOOR SPACE..................................... 1
3. RENT................................................................ 1
4. TERM................................................................ 2
5. CONDITION OF THE LEASED PREMISES.................................... 2
6. OPTIONS............................................................. 3
7. REPRESENTATIONS..................................................... 4
8. RESERVATION IN FAVOR OF TENANT...................................... 4
9. SEVERABILITY........................................................ 5
10. CAPTIONS............................................................ 5
11. COUNTERPARTS........................................................ 5
12. EXCLUSIVE BENEFIT................................................... 5
13. SUCCESSORS.......................................................... 5
14. AMENDMENTS.......................................................... 5
14. WAIVER.............................................................. 5
15. COURSE OF PERFORMANCE............................................... 6
EXHIBIT DESCRIPTION PAGE
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A LEASED PREMISES FLOOR SPACE DIAGRAM............................ 8
B DEFINITIONS AND INDEX OF DEFINITIONS........................... 9
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THIRD AMENDMENT TO LEASE AGREEMENT (the "Third Amendment"), dated as of October
1, 2006, between ROUTE 206 ASSOCIATES, a New Jersey partnership, with offices at
000 Xxxxx 00, X.X. Xxx 0000, Xxxxxxxxxxx, XX 00000 (the "Landlord"), and ENZON
PHARMACEUTICALS, INC. (F/K/A ENZON, INC.), a Delaware corporation, with an
office at 000 Xxxxx 000/000, Xxxxxxxxxxx, XX 00000 (the "Tenant").
PRELIMINARY STATEMENT:
Landlord and Tenant are parties to a lease agreement (the "Original Lease")
dated Match 27, 2002 for premises on the third floor of 000 Xxxxx 000/000,
Xxxxxxxxxxx, Xxx Xxxxxx (the "Building"), a First Amendment to Lease (the "First
Amendment") dated November 11, 2002 for additional premises on the third floor
of the Building (collectively, the "Third Floor Premises"), and a Second
Amendment to Lease (the "Second Amendment") dated July 22, 2005 for additional
premises on the first floor (the "First Floor Premises") of the Building (the
Original Lease, the First Amendment, and the Second Amendment are collectively
referred to as the "Lease");
In consideration of the premises and for other good and valuable consideration,
Landlord agrees to lease to Tenant, and Tenant agrees to lease from Landlord,
additional premises on the second floor of the Building as shown on Exhibit A
attached hereto (the "Second Floor Space"), and Landlord and Tenant agree to
extend the term of the Lease subject to all the terms and conditions set forth
below, as follows:
1. Definitions and Effect of First Amendment.
Certain terms and phrases used in this Third Amendment (generally those whose
first letters are capitalized) are defined in Exhibit B attached hereto and, as
used in this Third Amendment, they shall have the respective meanings assigned
or referred to in that exhibit. Except as amended by the terms of this Third
Amendment, the terms of the Lease shall otherwise remain in full force and
effect.
2. Lease of the Second Floor Space.
The Landlord shall, and hereby does, lease to the Tenant, and the Tenant shall,
and hereby does, accept and lease from the Landlord, the Second Floor Space
beginning on the Second Floor Expansion Commencement Date hereinafter defined.
The Second Floor Space consists of 18,778 square feet of gross rentable floor
space on the second floor of 000 Xxxxx 000/000, Xxxxxxxxxxx, Xxx Xxxxxx as more
fully described in the definition of Leased Premises set forth in Exhibit B
attached hereto. From and after the Second Floor Expansion Commencement Date,
the Leased Premises shall become 50,624 square feet of gross rentable floor
space comprised of the First Floor Premises, the Second Floor Premises and the
Third Floor Premises. The Tenant's Share for the First Floor Premises and the
Third Floor Premises shall remain 23.3% in the aggregate. Beginning on May
1, 2007, Tenant's Share for the Second Floor Premises shall be 13.7%.
3. Rent.
3.1. The Tenant shall punctually pay the Rent for the Leased Premises for the
Term to the Landlord in the amounts and at the times set forth below, without
xxxx or other demand and without any offset, deduction or, except as may be
otherwise specifically set forth in this Third Amendment, abatement whatsoever.
3.2. Beginning on the Second Floor Expansion Commencement Date, the Basic Rent
for the Leased Premises during the balance of the Term shall be at the rate per
year set forth below.
PERIOD ANNUAL RATE MONTHLY INSTALLMENTS
----------------- ------------- --------------------
through 1/31/2015 $1,362,798.12 $113,566.51
through 1/31/2018 $1,464,046.08 $122,003.84
3.3. The portion of the Monthly Installment of Basic Rent for the Second Floor
Premises in the sum of $42,125.32 per month is hereby waived for the months of
March and April 2007.
3.4. In addition, Tenant shall pay the rent for the Storage Space in accordance
with section 10 of the Second Amendment.
3.5. Section 9.1 of the Lease is amended to provide that the Tenant Electric
Charges shall be $1.75 per square foot per year, subject to the provisions of
subsection 10.10 of the Lease.
3.6. The annual rate of Basic Rent for the Leased Premises during any Renewal
Term shall be calculated as set forth in subsection 6.1.4 of the Lease for the
Renewal Term.
4. Term.
The Second Floor Expansion Commencement Date shall be March 1, 2007. The Initial
Term for all the Leased Premises including the Storage Space and the Second
Floor Premises shall run through January 31, 2018, unless sooner terminated in
accordance with the terms of the Lease.
5. Condition of the Leased Premises.
5.1. Tenant shall accept the Second Floor Space in its current "AS-IS"
condition.
5.2. Beginning on Xxxxx 0, 0000, Xxxxxx may make any alterations, improvements
and other modifications to the Second Floor Premises in accordance with the
provisions of section 12 of the Lease. Tenant shall be free to engage its own
contractors to perform the work provided that Tenant shall select the heating,
air-conditioning, sprinkler and electrical contractors from a list of qualified
contractors furnished to Tenant by Landlord. The Landlord shall pay to Tenant
the sum of $140,835 for improvements being performed by Tenant in the Second
Floor Premises (the "Allowance"). Landlord shall advance the Allowance at
reasonable intervals within not more than ten (10) days following Tenant's draw
request, as the work progresses.
5.3. Notwithstanding the provisions of section 12 of the Lease, Tenant may
install an internal staircase for the purpose of connecting the Second Floor
Premises and the Third Floor Premises. Landlord shall have the right to review
the construction plans and the location of the staircase and Tenant may proceed
with the work as long as it has not received a notice from the Landlord
reasonably objecting thereto in any respect within ten (10) business days of the
furnishing thereof. Landlord shall not object unreasonably to the plans or the
location. Landlord's failure to object shall not be deemed to constitute
Landlord's affirmative approval of the plans.
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6. Options.
6.1 Any existing options to renew are hereby deleted. Tenant is hereby granted
one option to renew this Lease for all the Leased Premises (the "Option to
Renew") upon the following terms and conditions:
6.1.1 At the time of the exercise of the Option to Renew and at the time of
said renewal, the Tenant shall not be in default following the
delivery of notice and the expiration of any applicable cure periods
in accordance with the terms and provisions of this Lease, and shall
occupy and be in operation at the entire Leased Premises pursuant to
this Lease subject to approved subleases or sublease permitted by the
Lease and subject to arrangements contemplated by section 17.7 of the
Lease.
6.1.2 Notice of the exercise of the Option to Renew shall be sent to the
Landlord in writing at least nine (9) months before the expiration of
the Initial Term.
6.1.3 The Renewal Term shall be for a period of five years to commence at
the expiration of the Initial Term, and all of the terms and
conditions of this Agreement, other than the annual amount of Basic
Rent, shall apply during any such Renewal Term.
6.1.4. Subject to the last sentence of this paragraph, the amount of annual
Basic Rent to be paid during the Renewal Term shall equal the Market
Rental Rate of the Leased Premises if the same were available for
lease to the public. If the parties are unable to agree on the Market
Rental Rate of the Leased Premises, the parties shall each appoint one
appraiser who shall in turn appoint a third independent appraiser and
the determination of said three appraisers shall be binding on the
parties.
6.2. Any existing rights of first offer are hereby deleted. If Landlord learns
that any space in the Building will become available or otherwise free from
lease obligations existing as of the date of this amendment (it being understood
that the Landlord will not enter into any new or extended lease obligations on
such space without first complying with the Right of First Offer described
herein) and (i) if no Event of Default shall have occurred or (ii) if an Event
of Default shall have occurred, the Tenant shall have previously cured it in
full or the Landlord shall have waived it, it shall first offer the same to
Tenant by written notice. This is the "Right of First Offer". The notice shall
contain the terms upon which the space is offered including the basic rent, the
commencement date, the term, the allowance, if any, and any other terms which
Landlord proposes. If Tenant wishes to lease the space on the terms offered, it
shall notify the Landlord in writing within ten (10) business days of Tenant's
receipt of such written notice setting forth all of the above-required
information, and, thereupon, Tenant shall be bound to lease the same on the same
terms as are set forth in this Agreement modified by the specific terms which
are set forth in Landlord's notice. Tenant shall execute a lease amendment to
incorporate these terms including an obligation to execute a Commencement Date
certificate and estoppel certificates. If Tenant fails to serve the written
acceptance of the offer within the ten (10) business day period, the Right of
First Offer on the subject space being offered shall thereupon expire and be of
no further force and effect. Notwithstanding the provisions of the preceding
sentence, the Right of First Offer shall revive if Landlord does not consummate
a lease with another tenant within five (5) months after the expiration of the
Right of First Offer as above provided or if Landlord proposes to enter into a
lease with another tenant on terms which are materially more favorable than the
terms offered to Tenant. For this purpose, the terms shall be considered
materially more favorable if the net effective rent offered to the other tenant
is ninety-two and one-half (92.5%) percent, or less, than the net effective rent
offered to Tenant or if the term offered to the other tenant is eighty percent,
or less, of the term offered to Tenant. With respect to any further offers
required under this provision, if Tenant fails to serve a written acceptance of
the offer within a five (5) business day period following receipt of Landlord's
written offer, the Right of First Offer shall, with
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respect to such offer, thereupon expire and be of no further force and effect.
6.3. Notwithstanding anything to the contrary that may be set forth in this
Agreement, (i) if no Event of Default shall have occurred or (ii) if an Event of
Default shall have occurred, the Tenant shall have previously cured it in full
or the Landlord shall have waived it, Tenant is granted the one time option to
terminate this lease by a written notice served on or before January 31, 2012 to
be effective at the close of business on January 31, 2013. This is the "Option
to Cancel". If this option is not exercised in a timely manner it shall
thereupon expire.
6.4. The option set forth in subsection 6.2.2 of the Lease shall remain in
force.
7. Tenant Representations.
The Tenant hereby represents and warrants that:
7.1. no broker or other agent has shown the Second Floor Space or the Building
to the Tenant, or brought either to the Tenant's attention, except Xxxxxxx &
Wakefield (the "Broker"), which commission the Tenant understands will be paid
by the Landlord directly to the Broker;
7.2. the execution and delivery of, the consummation of the transactions
contemplated by and the performance of all its obligations under, this Third
Amendment by the Tenant have been duly and validly authorized; and no other
approval, partnership, corporate, governmental or otherwise, is required to
authorize any of the foregoing or to give effect to the Tenant's execution and
delivery of this Third Amendment; and
7.3. the execution and delivery of, the consummation of the transactions
contemplated by and the performance of all its obligations under, this Third
Amendment by the Tenant will not result in a breach or violation of, or
constitute a default under, the provisions of any statute, charter, certificate
of incorporation or bylaws or partnership agreement of the Tenant or any
Affiliate of the Tenant, as presently in effect, or any indenture, mortgage,
lease, deed of trust, other agreement, instrument, franchise, permit, license,
decree, order, notice, judgment, rule or order to or of which the Tenant or any
Affiliate of the Tenant is a party, a subject or a recipient or by which the
Tenant, any Affiliate of the Tenant or any of their respective properties and
other assets is bound.
8. Landlord Representations.
The Landlord hereby represents and warrants that:
8.1. the Landlord shall pay, directly to the Broker, the entire commission that
Broker is entitled to in respect of the transactions contemplated hereby
pursuant to a separate agreement;
8.2. the execution and delivery of, the consummation of the transactions
contemplated by and the performance of all its obligations under, this Third
Amendment by the Landlord have been duly and validly authorized; and no other
approval, partnership, corporate, governmental or otherwise, is required to
authorize any of the foregoing or to give effect to the Landlord's execution and
delivery of this Third Amendment; and
8.3. the execution and delivery of, the consummation of the transactions
contemplated by and the performance of all its obligations under, this Third
Amendment by the Landlord will not result in a breach or violation of, or
constitute a default under, the provisions of any statute, charter, certificate
of incorporation or bylaws or partnership agreement of the Landlord or any
Affiliate of the Landlord, as presently in effect, or any indenture, mortgage,
lease, deed of trust, other agreement, instrument, franchise,
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permit, license, decree, order, notice, judgment, rule or order to or of which
the Landlord or any Affiliate of the Landlord is a party, a subject or a
recipient or by which the Landlord, any affiliate of the Landlord or any of
their respective properties and other assets is bound.
9. Reservation in Favor of Tenant.
Neither the Landlord's forwarding a copy of this document to Tenant nor any
other act on the part of the Landlord prior to execution and delivery of this
Third Amendment by the Landlord shall give rise to any implication that Tenant
has a reservation, an option to lease or an outstanding offer to lease any
premises.
10. Severability.
In the event that any provision of this Third Amendment, or the application of
any provision in any instance, shall be conclusively determined by a court of
competent jurisdiction to be illegal, invalid or otherwise unenforceable, such
determination shall not affect the validity or enforceability of the balance of
this Third Amendment.
11. Captions.
Captions have been inserted at the beginning of each section of this Third
Amendment for convenience of reference only and such captions shall not affect
the construction or interpretation of any such section of this Third Amendment.
12. Counterparts.
This Third Amendment may be executed in more than one counterpart, each of which
shall constitute an original of this Third Amendment but all of which, taken
together, shall constitute one and the same Third Amendment.
13. Exclusive Benefit.
Except as may be otherwise specifically set forth in this Third Amendment, this
Third Amendment is made exclusively for the benefit of the parties hereto and
their permitted assignees and no one else shall be entitled to any right, remedy
or claim by reason of any provision of this Third Amendment.
14. Successors.
This Third Amendment shall be binding upon the parties hereto and their
respective successors and assigns.
15. Amendments.
This Third Amendment contains the entire agreement of the parties hereto,
subsumes all prior discussions and negotiations and, except as may otherwise be
specifically set forth in this Third Amendment, this Third Amendment may not be
amended or otherwise modified except by a writing signed by all the parties to
this Third Amendment.
16. Waiver.
Except as may otherwise be specifically set forth in this Third Amendment, the
failure of any party at any time or times to require performance of any
provision of this Third Amendment shall in no manner affect the right at a later
time to enforce the same. No waiver by any party of any condition, or of the
breach of
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any term, covenant, representation or warranty set forth in this Third
Amendment, whether by conduct or otherwise, in any one or more instances shall
be deemed to be or construed as a further or continuing waiver of any such
condition or breach, or as a waiver of any other condition or of the breach of
any other term, covenant, representation or warranty set forth in this Third
Amendment. The Landlord's acceptance of, or endorsement on, any partial payment
of Rent or any late payment of Rent from the Tenant shall not operate as a
waiver of the Landlord's right to the balance of the Rent due on a timely basis
regardless of any writing to the contrary on, or accompanying, the Tenant's
partial payment or the Landlord's putative acquiescence therein.
17. Course of Performance.
No course of dealing or performance by the parties, or any of them, shall be
admissible for the purpose of obtaining an interpretation or construction of
this Third Amendment at variance with the express language of the Third
Amendment itself.
(The balance of this page is left blank intentionally.)
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IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to be
executed as of the date first above written.
LANDLORD:
ROUTE 206 ASSOCIATES
By: /s/ Xxxxxx Xxxxxxxxx
------------------------------------
Xxxxxx Xxxxxxxxx Vice President
Route 206 Corp., General Partner
TENANT:
ENZON PHARMACEUTICALS, INC.
By: /s/ Xxxxx del Xxxxx
------------------------------------
Xxxxx del Campo, Executive Vice
President Technical Operations
By: /s/ Xxxx Xxxxx
------------------------------------
Xxxx Xxxxx, Executive Vice
President Human Resources
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EXHIBIT A
LEASED PREMISES FLOOR SPACE DIAGRAM
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EXHIBIT B
DEFINITIONS AND INDEX OF DEFINITIONS
In accordance with section 1 of the Third Amendment of which this exhibit is a
part, throughout the Third Amendment the following terms and phrases shall have
the meanings set forth or referred to below:
1. "Allowance" is defined in subsection 5.2 of this Third Amendment.
2. With respect to the First Floor Premises and the Third Floor Premises,
"Base Year" shall mean the full calendar year 2002 with respect to
Operational Expenses (adjusted in accordance with the definition of Base
Year Operational Expenses in the Lease) and Taxes. With respect to the
Second Floor Premises, "Base Year" shall mean the full calendar year 2007
with respect to Operational Expenses (adjusted in accordance with the
definition of Base Year Operational Expenses in the Lease) and Taxes.
3. "Basic Rent" is defined in section 3 of this Third Amendment.
4. "Broker" is defined in subsection 7.1 of this Third Amendment.
5. "First Floor Premises" is defined in the Preliminary Statement to this
Third Amendment.
6. "Initial Term" means the period designated in section 4 of this Third
Amendment.
7. Beginning on the Second Floor Expansion Commencement Date, the "Leased
Premises" means that portion of the interior of the Building (as viewed
from the interior of the Leased Premises) bounded by the interior sides of
the unfinished floor and the finished ceiling on the floor (as the floors
have been designated by the Landlord) of the Building, the centers of all
Common Walls and the exterior sides of all walls other than Common Walls,
the outline of which floor space is designated on the diagram set forth in
Exhibit A attached hereto, which portion contains 24,526 square feet of
gross rentable floor space on the third floor of the Building, 7,320 square
feet of gross rentable floor space on the first floor of the Building, and
18,778 square feet of gross rentable floor space on the second floor of the
Building. If the present square footage of the cafeteria is reduced, then
the Gross Footage of the Leased Premises shall be adjusted downward and the
Basic Rent shall be re determined by multiplying the Adjusted Gross Footage
by the Basic Rent per foot which would otherwise be due under this Third
Amendment. To determine the Adjusted Gross Footage, the number of usable
square feet of floor space which is added to the Building's net rentable
area (by reason of the elimination of some or all of the cafeteria) shall
be added to determine the Revised Usable Footage. A new factor shall be
calculated (the "New Multiplier") which, when multiplied by the Revised
Usable Footage, produces a product of 137,139 square feet. The Adjusted
Gross Footage shall equal the product of the Usable Footage multiplied by
the New Multiplier (the "Adjusted Gross Footage"). Similar adjustments
shall be made each time the size of the cafeteria is adjusted but the Gross
Footage shall not be increased to more than 50,624 square feet.
8. "New Multiplier" is defined in definition 7 of this Third Amendment.
9. With respect to the Second Floor Premises, "No Pass Through Period" means,
in the context of Operational Expenses and Taxes, the period beginning on
the Commencement Date and ending on March 31,2008.
10. "Right of First Offer" is defined in subsection 6.2 of this Third
Amendment.
11. "Option to Cancel" is defined in subsection 6.3 of this Third Amendment.
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12. "Option to Renew" is defined in subsection 6.1 of this Third Amendment.
13. "Second Floor Premises" is defined in the Preliminary Statement to this
Third Amendment.
14. "Second Floor Expansion Commencement Date" is defined in section 4 of this
Third Amendment.
15. "Third Amendment" is defined in the preamble to this document.
16. "Third Floor Premises" is defined in the Preliminary Statement to this
Third Amendment.
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