Item 1.01 Entry into a Material Definitive Agreement.
Hi Marley Sublease
On
December 6, 2021, Albireo Pharma, Inc. (“Albireo”) and Hi Marley, Inc. (“Hi Marley”), as
subtenant, entered into a sublease agreement (the “Hi Marley Sublease”), pursuant to which Albireo agreed to sublease to Hi
Marley 14,734 rentable square feet of office space located at 10 Post Office Square, Boston, Massachusetts, Albireo’s current principal
executive offices (the “Hi Marley Subleased Premises”). The Hi Marley Sublease is subject and subordinate to that certain
Office Lease Agreement by and between Albireo, as tenant, and NS Boston III PO Owner LLC, as landlord (the “NS Boston III”),
dated February 7, 2017 (as amended, the “Albireo Lease”). Hi Marley agreed to use the Hi Marley Subleased Premises for
general office use.
The
term of the Hi Marley Sublease will commence on the latest to occur of (i) April 1, 2022; (ii) the date on which
Albireo delivers possession of the Hi Marley Subleased Premises to Hi Marley in the required condition as set forth in the Hi Marley Sublease;
and (iii) the date on which NS Boston III delivers its written consent to such sublease (such latest date, the “Hi Marley Commencement
Date”) and will expire on October 31, 2026 (the “Hi Marley Sublease Term”), unless earlier terminated pursuant
to the terms of the Hi Marley Sublease.
Following
a one-month rent abatement period, Hi Marley will be obligated to make monthly rent payments in an amount beginning at approximately
$68,759 and increasing by approximately 2% annually for the term of the Hi Marley Sublease. In addition, Hi Marley is responsible under
the Hi Marley Sublease for specified costs and charges, including certain operating expenses, utilities, taxes and insurance.
In
addition, the Hi Marley Sublease contains customary events of default that entitle Albireo, among other things, to terminate the
Hi Marley Sublease and recover from Hi Marley the rent payments remaining to be paid by Hi Marley for the balance of the Hi Marley Sublease
Term. The specified events of default include, among others, nonpayment of rent or other amounts due and payable by Hi Marley under the
Hi Marley Sublease, an uncured breach of a covenant under the Hi Marley Sublease and certain bankruptcy and insolvency events.
Albireo Sublease
On December 7, 2021,
Albireo and Institute For Healthcare Improvement (“IFHI”) entered into a sublease agreement (the “Albireo Sublease”),
pursuant to which IFHI agreed to sublet to Albireo the approximately 26,962 rentable square feet of office space that IFHI currently leases
at 53 State Street, Boston, Massachusetts, which Albireo plans to use as its principal executive offices (the “Albireo Subleased
Premises”). The Albireo Sublease is subject and subordinate to that certain Office Lease Agreement by and between IFHI, as tenant,
and 53 State Property, L.P., as landlord (“53 State Property”), dated June 29, 2017 (as amended, the “IFHI Lease”).
The Albireo Sublease will
become effective upon receipt of consent from 53 State Property (the “Landlord Consent”). The Albireo Sublease provides that
the term of the Albireo Sublease for the Albireo Subleased Premises will commence upon the earlier of (a) March 1, 2022, and
(b) Albireo’s use of the Albireo Subleased Premises for the permitted use as set forth in the Albireo Sublease (the “Albireo
Commencement Date”); provided, that the Albireo Commencement Date will not occur prior to December 15, 2021, which is the date
upon which IFHI agreed to deliver the Albireo Subleased Premises to Albireo. The term of the Albireo Sublease will expire on January 31,
2030 (the “Albireo Sublease Term”) unless earlier terminated pursuant to the terms of the Albireo Sublease.
Commencing
six (6) months after the Albireo Commencement Date assuming the Albireo Commencement Date is no later than March 1, 2022, Albireo
is obligated to pay IFHI monthly base rent in an amount beginning at approximately $123,576 and increasing by approximately 2%
annually for the term of the Albireo Sublease. In addition, Albireo is responsible under the Albireo Sublease for specified costs and
charges, including certain operating expenses, utilities, taxes and insurance.
The
Albireo Sublease contains customary provisions allowing IFHI to terminate the Albireo Sublease upon the termination of the IFHI Lease.
In addition, the Albireo Sublease contains customary events of default that entitle IFHI, among other things, to terminate the Albireo
Sublease and recover from Albireo the rent payments remaining to be paid for the balance of the Albireo Sublease Term. The specified events
of default include, among others, nonpayment of rent or other amounts due and payable by Albireo under the Albireo Sublease, an uncured
breach of a covenant under the Albireo Sublease and certain bankruptcy and insolvency events.
The
foregoing description of the Hi Marley Sublease and the Albireo Sublease does not purport to be complete and is qualified in its
entirety by reference to the full text of the Hi Marley Sublease and the Albireo Sublease, which will be filed with Albireo’s Annual
Report on Form 10-K for the year ending December 31, 2021.