krys-20211231ex1020_nine






 1    NINTH AMENDMENT TO LEASE AGREEMENT      THIS NINTH AMENDMENT TO LEASE AGREEMENT (this “Ninth Amendment”) is  made as of the 4th day of January 2022, by and between Wharton Lender Associates, LP, a  Pennsylvania limited partnership (“Landlord”), and Krystal Biotech, Inc., a Delaware corporation  (“Tenant”).    WITNESSETH:     WHEREAS, by Lease dated May 26, 2016 (the “Original Lease”), as amended by First  Amendment to Lease Agreement dated July 26, 2016, Second Amendment to Lease Agreement  dated February 27, 2017, Third Amendment to Lease Agreement dated May 31, 2018, Fourth  Amendment to Lease Agreement dated October 22, 2018, Fifth Amendment to Lease Agreement  dated December 10, 2018, Sixth Amendment to Lease Agreement/First Amendment to Storage  Space Agreement dated January 13, 2021 (the “Sixth Amendment”), Seventh Amendment to  Lease Agreement dated May 11, 2021 (the “Seventh Amendment”), Reimbursement Agreement  dated June 3, 2021 and Eighth Amendment to Lease Agreement dated July 21, 2021 (the Original  Lease as amended, collectively, the "Lease"), Landlord currently leases to Tenant and Tenant  currently leases from Landlord certain premises consisting of a total of 43,721 rentable square feet  (the “Existing Premises”) located in that certain building known as 2100 Wharton Street,  Pittsburgh, Pennsylvania (the “Building”), being comprised of 18,556 rentable square feet on the  7th Floor of the Building, and 16,892 rentable square feet on the 3rd floor of the Building, and 8,273  rentable square feet on the 6th Floor of the Building; and    WHEREAS, Landlord and Tenant now desire to amend the Lease to: (i) lease to Tenant an  additional 3,507 rentable square feet of office space located on the 6th Floor of the Building, known  as Suite 620, as outlined on Exhibit “A” attached hereto and made a part hereof (the “Sixth Floor  Expansion Space”), thereby increasing Tenant’s rentable area of space in the Building to a total  of 47,228 rentable square feet of space in the Building; and (ii) modify certain other terms of the  Lease, all in accordance with the terms and provisions hereof.     NOW THEREFORE, the parties hereto, in consideration of the mutual promises contained  herein, and intending to be legally bound hereby, do covenant and agree as follows:     1. Recitals.  The foregoing preamble is incorporated by reference herein as if set forth  at length.  Capitalized terms not otherwise defined herein shall have the meaning given to such  terms in the Lease.  All references herein to the Lease shall include this Ninth Amendment.     2. Sixth Floor Expansion Space; Sixth Floor Expansion Space Commencement Date.        (a) Effective as of the Sixth Floor Expansion Space Commencement Date (as  defined below), the Sixth Floor Expansion Space shall become part of the Premises.  Accordingly,  effective as of the Sixth Floor Expansion Space Commencement Date, Premises shall mean 47,228  rentable square feet in the Building.    





 






   2      (b) Sixth Floor Expansion Space Commencement Date; Expiration Date.  The  Term of the Lease for the Sixth Floor Expansion Space  and Tenant’s obligation to pay Fixed Rent  and additional rent for the Sixth Floor Expansion Space shall commence on the date (the “Sixth  Floor Expansion Space Commencement Date”) which is the earlier to occur of: (i)  the date that  Landlord has Substantially Completed Landlord's Sixth Floor Expansion Space Work (which will  not be earlier than January 3, 2022); or (ii) the date Tenant first occupies and begins conducting  business operations in all or part of the Sixth Floor Expansion Space, which may be prior to  Substantial Completion of Landlord’s Sixth Floor Expansion Space Work but not earlier than  January 3, 2022; provided however, that should the Sixth Floor Expansion Space Commencement  Date fall on any day other than the first day of the month, the anniversary of the Sixth Floor  Expansion Space Commencement Date shall be deemed after the completion of twelve full  calendar months following the Sixth Floor Expansion Space Commencement Date. For the  avoidance of doubt, the parties agree that the Sixth Floor Expansion Space Commencement Date  shall be no earlier than January 3, 2022.  The expiration date of the Term of the Lease for the Sixth  Floor Expansion Space shall be the Expiration Date set forth in the Lease for the Existing Premises  which the parties agree is October 31, 2031.  Upon Landlord’s Sixth Floor Expansion Space Work  being Substantially Completed, Tenant shall, upon Landlord’s request, promptly execute a Sixth  Floor Expansion Space Commencement Date Agreement, which shall specify the Sixth Floor  Expansion Space Commencement Date.      5. Fixed Rent for the Sixth Floor Expansion Space.  Commencing on the Sixth Floor  Expansion Space Commencement Date, Tenant shall pay Landlord Fixed Rent for the Sixth Floor  Expansion Space pursuant to the terms of the Lease and in accordance with the following table at  the rates as follows:     LEASE   PERIOD  PORTION OF  PREMISES   $PER  RENTABLE  SQ FT  MONTHLY   FIXED RENT  INSTALLMENT  ANNUAL   FIXED RENT  AMOUNT   Sixth Floor  Expansion Space  Commencement  Date – 2/28/22  3,507 rsf  Sixth Floor Expansion Space  23.41 $6,841.57 $82,098.87  3/1/22 – 2/28/23 3,507 rsf  Sixth Floor Expansion Space  23.88 $6,978.93 $83,747.16  3/1/23 – 2/29/24 3,507 rsf  Sixth Floor Expansion Space  24.36 $7,119.21 $85,430.52  3/1/24 – 2/28/25 3,507 rsf  Sixth Floor Expansion Space  24.85 $7,262.41 $87,148.95  3/1/25 – 2/28/26 3,507 rsf  Sixth Floor Expansion Space  25.35 $7,408.54 $88,902.45  3/1/26 – 2/28/27 3,507 rsf  Sixth Floor Expansion Space  25.86 $7,557.59 $90,691.02  3/1/27 – 2/29/28 3,507 rsf  Sixth Floor Expansion Space  26.38 $7,709.56 $92,514.66  3/1/28 – 2/28/29 3,507 rsf  Sixth Floor Expansion Space  26.91 $7,864.45 $94,373.37  3/1/29 – 2/28/30 3,507 rsf  Sixth Floor Expansion Space  27.45 $8,022.26 $96,267.15  





 






   3    3/1/30 – 2/28/31 3,507 rsf  Sixth Floor Expansion Space  28.00 $8,183.00 $98,196.00  3/1/31 – 10/31/31 3,507 rsf  Sixth Floor Expansion Space  28.56 $8,346.66 $100,159.92    All Fixed Rent shall be payable in equal monthly installments in advance on the first day of each  month during the Term without demand, notice, offset or deduction.    6. Tenant’s Share; Tenant's Percentage.  Commencing on the Sixth Floor Expansion  Space Commencement Date, “Tenant’s Percentage” as defined in Paragraph 1.L. of the Original  Lease and "Tenant's Share", as defined in Paragraph 4.A.(ii) of the Original Lease shall mean  “20.88%”, and all references in the Lease to “Tenant’s Share” and "Tenant's Percentage" shall  mean “20.88%”.      7. Landlord’s Sixth Floor Expansion Space Work.      A. Notwithstanding anything contained in the Lease to the contrary, Landlord shall  deliver the Sixth Floor Expansion Space to Tenant and Tenant accepts delivery and possession of  the Sixth Floor Expansion Space in its current “as-is” where is condition with the sole exception  that Landlord agrees to do or otherwise perform that certain work in or relating to the Sixth Floor  Expansion Space described in Exhibit “B” (the “Landlord’s Sixth Floor Expansion Space Work”).   In no event and under no circumstances will Landlord’s Sixth Floor Expansion Space Work entail  or will Landlord be obliged to perform any work or supply any materials in excess of the work and  materials described with particularity in Exhibit “B”.  All work in the Sixth Floor Expansion Space  other than Landlord’s Sixth Floor Expansion Space Work shall be performed by Landlord or  Landlord’s contractors at Tenant’s sole cost and expense.    B. The Landlord’s Sixth Floor Expansion Space Work shall be deemed to be  Substantially Completed when the work shown on Exhibit "B" has been completed, which  Landlord estimates shall be substantially completed approximately thirty (30) days from the date  hereof, subject to Force Majeure and Tenant Delay except for:  (i) any improvements or work to  be performed by Tenant; and (ii) such items of finishing and construction of a nature which are  not necessary to make the Sixth Floor Expansion Space reasonably tenantable for Tenant's use as  stated herein; and (iii) items not completed because of delay by Tenant in furnishing or receiving  any drawings or approvals or within the time set forth in any agreement between Landlord and  Tenant; and (iv) changes in the work to be performed by Landlord which are requested by Tenant  after Landlord's approval of Tenant's plans; or (v) the performance of any work or activity in the  Sixth Floor Expansion Space by Tenant or any of its employees, agents or contractors.      The following shall be deemed Tenant’s Delay: (i) Tenant fails to timely provide  the necessary approvals to Landlord’s drawings; or (ii) Tenant otherwise unreasonably delays the  Substantial Completion of Landlord’s Sixth Floor Expansion Space Work. If a Tenant Delay  occurs, Rent for the Sixth Floor Expansion Space shall commence on the date upon which  Landlord’s Sixth Floor Expansion Space Work would have been Substantially Completed had the  above-described delays by Tenant not occurred.      





 






   4     C. Notwithstanding anything contained in the Lease to the contrary, Tenant’s  continued possession of the Premises shall be in its current “as-is” where is condition and, except  as otherwise specifically set forth herein, any and all costs for work required in the Premises shall  be at Tenant’s sole cost and expense.     9. Seventh Floor HVAC.  Tenant shall purchase and install, at Tenant’s sole cost and  expense, except as otherwise specifically set forth in this Paragraph 9, upon the terms and  conditions in this Paragraph 9 a new HVAC unit for the 7th Floor, such unit shall be either the  exact York unit or exact Rheem unit specified and set forth in Exhibit “C” attached hereto and  made a part hereof(the “Seventh Floor HVAC Unit”).      (a) Tenant’s Plans.  Tenant shall provide, at Tenant's sole cost and expense, all of the  plans, specifications and drawings for the Seventh Floor HVAC Unit necessary to design and  install the Seventh Floor HVAC Unit in Exhibit “C” (the “Tenant’s HVAC Work”), including all  required mechanical, electrical and plumbing drawings, the location and installation of all  equipment, risers, disconnects, ducts, utility and HVAC distribution, and other Tenant installations  (collectively, the "Tenant's Plans"). For the sake of clarity, the Tenant’s Plans shall include all the  plans, specifications and drawings for either the Rheem or York unit that is specified in Exhibit C.   Tenant’s Plans shall be prepared by Tenant and shall be subject to the prior written approval of  Landlord, which shall not be unreasonably withheld or delayed.  Landlord’s review of Tenant’s  Plans shall not impose any obligation or liability on Landlord, its agents or representatives, and  Landlord’s approval of Tenant’s Plans shall not serve as a representation or warranty as to the  accuracy of Tenant’s Plans or as to compliance with any laws, codes, regulations or ordinances.   Landlord shall approve Tenant's Plans prior to Tenant commencing any of Tenant’s HVAC Work.      (b)   Tenant’s HVAC Work shall be performed, at Tenant’s sole cost and expense, by a  bona fide union general contractor and bona fide union subcontractors, architects and engineers  selected by Tenant.  Landlord shall have the right to approve all contractors and subcontractors,  and the performance of Tenant’s HVAC Work, and all such contractors and subcontractors  performing such work, shall comply in all respects with all applicable laws, codes and regulations  and with the terms of this Paragraph 9 and the terms of Paragraph 12 of the Original Lease,  Tenant’s Plans, and with the rules and regulations attached to the Lease; provided, however, that  Landlord will not unreasonably withhold approval of said contractors and subcontractors if proof  of proper licensure and insurance is demonstrated to Landlord.  Tenant’s HVAC Work shall not  interfere with or affect the common areas or structural components of the Building or any Building  mechanical systems, HVAC, electrical, plumbing, gas, elevator or other Building operating  systems serving other tenants and occupants of the Building.  Tenant shall perform or cause to be  performed Tenant’s HVAC Work in a manner which shall not interfere with or interrupt the  business operations or premises of other tenants in the Building, except as may be approved by  Landlord, which approval shall not be unreasonably withheld or delayed.  Tenant shall diligently  pursue the performance and completion Tenant’s HVAC Work following Landlord’s written  approval of Tenant’s Plans therefor and the parties will agree on a schedule for the completion of  Tenant’s HVAC Work upon Landlord’s approval of Tenant’s Plans, provided, however, that in no  event shall Tenant’s HVAC Work be completed later than March 10, 2022, time being of the  essence.  All of the cost and expense of and relating to Tenant’s HVAC Work and installations  thereof shall be borne by Tenant except solely as follows:   





 






   5    (i) Tenant shall provide Landlord with receipt of the cost of the Seventh Floor HVAC Unit and  Landlord shall promptly, within (30) days of receipt of Tenant’s invoice therefor, reimburse Tenant  for an amount up to the cost of the Seventh Floor HVAC Unit that Landlord would have paid and  that the parties agree is the amount of Ten Thousand Nine Hundred Sixty-nine and 87/100 Dollars  ($10,969.87) ; and (ii) Tenant, at Tenant’s sole cost and expense, shall perform and manage the  installation of the Seventh Floor HVAC Unit and purchase all associated controls; all such work  and controls shall be subject to Landlord’s prior written approval (not to be unreasonably withheld,  conditioned or delayed); provided, however, that Landlord will contribute Twenty Thousand and  00/100 Dollars ($20,000.00) towards the cost of installation of the Seventh Floor HVAC Unit  within fifteen (15) days after Tenant provides proof of payment and completes the installation of  the HVAC Unit; and (iii) Landlord agrees to install a controls system for the Seventh Floor HVAC  Unit, at the Tenant’s sole cost and expense with the sole exception that the Landlord shall pay the  lower of: (i)Two Thousand Five Hundred and 00/100 Dollars ($2,500.00); or (ii) fifty percent of  the installation cost of installation of the controls (the “Controls Cost”), and the Tenant shall pay  the remaining amount of the Controls Cost to Landlord as additional rent within fifteen (15) days  of receipt of Landlord’s invoice therefor; (iv) if Tenant leases the Offer Space (as defined in the  Seventh Amendment), then commencing with the first Rent payment for the Offer Space, Landlord  agrees to provide a Rent abatement to Tenant in an amount equal to Twenty Five Thousand and  00/100 ($25,000).     10.  Vehicle Parking.  Effective as of the Sixth Floor Expansion Space Commencement  Date, Paragraph 6 of the Eighth Amendment is hereby deleted in its entirety and replaced with the  following:    "Subject to the Parking Rules set forth in Exhibit B to the Original Lease, as  modified by Landlord from time to time (the "Rules"), Tenant shall be entitled to  use up to one hundred eight (108) unreserved parking spaces in the parking facility  of the Property, at the rate of One Hundred Forty and 00/Dollars ($140.00) per  month per parking space.  Tenant shall pay Landlord, as additional rent, without  demand, notice, offset or deduction, the foregoing rate per parking space per month  for each month of the remainder of the Term hereof for each of the parking spaces  utilized by Tenant.  Notwithstanding the foregoing, so long as Tenant is not in  material default under the terms of the Lease beyond the expiration of all applicable  notice and cure periods, if any, twenty-eight (28) of the foregoing unreserved  parking spaces shall be provided at no charge. Landlord shall use commercially  reasonable efforts to accommodate Tenant’s future parking spaces requirements,  subject to availability of parking spaces (the “Additional Spaces”) and pursuant to  the Rules, at the then current prevailing rate per month per parking space.  Tenant  shall pay Landlord, as additional rent, without demand, notice, offset or deduction,  the then current prevailing rate(s) per parking space per month for each month of  the Term for each of the Additional Spaces used, utilized or requested by Tenant.”     11. Additional Modifications to Lease.  Paragraph 9 of the Seventh Amendment shall  be amended so as to delete the sentence “In the event Tenant exercises its option to lease the Offer  Space, Tenant shall have the right to terminate its lease with respect to the Additional Third Floor  Space (as defined in the Sixth Amendment)” (in sub-section 9(a) of the Seventh Amendment) shall  





 






   6    be deleted in its entirety, null and void and of no further force or effect.  Tenant specifically  acknowledges and agrees that Tenant does not have any rights to terminate the lease of the  Additional Third Floor Space (as defined in the Sixth Amendment) whatsoever. The following  sentence is added to the end of Section 9 (a) of the Seventh Amendment:  If Tenant exercises its  option to lease the Offer Space pursuant to this Section 9(a), Landlord agrees to provide a Fixed  Rent abatement to Tenant in an amount equal to Twenty Five Thousand and 00/100 ($25,000) to  be credited against the Fixed Rent due for the Offer Space as Tenant’s sole and exclusive  abatement, improvement allowance and/or other credit for the Offer Space whatsoever.  Notwithstanding anything to the contrary in the foregoing and/or the Lease, Tenant shall have no  right whatsoever to terminate the lease of the Additional Third Floor Space whatsoever.    12. Broker.  Landlord and Tenant each hereby represents and warrants to the other that  it has not dealt with any real estate broker, sales person, or finder in connection with this Ninth  Amendment except for Landlord's Broker, CBRE, Inc. (“Broker”).  Landlord shall be responsible  for the payment of any commission owed to the Broker based upon Landlord's separate agreement  with such Broker.  Landlord and Tenant each agree to indemnify and hold harmless the other party  and their respective agents and employees, from and against any and all liabilities and claims for  commissions and fees arising out of a breach of the foregoing representation (including without  limitation, any other broker claiming to have been engaged by such indemnifying party in  connection with this Ninth Amendment).     13. Full Force and Effect.  Except as specifically set forth herein, the terms, covenants  and conditions of the Lease shall remain in full force and effect.  The Lease and this Ninth  Amendment shall not be further modified or amended, except in writing signed by both Landlord  and Tenant.  This Ninth Amendment sets forth the entire understanding of the parties with respect  to the matters set forth herein and there are no other rights, including but not limited to, any  renewals, extensions, expansions, purchases, rights of first refusal, allowances, etc., granted to  Tenant other than those expressly set forth in the Lease that have not been deleted or otherwise  nullified or this Ninth Amendment.  Landlord and Tenant hereby ratify and affirm all of the  remaining terms and conditions of the Lease not modified or supplemented by this Ninth  Amendment.  Tenant hereby acknowledges that, as of the date of this Ninth Amendment, Landlord  is not in default of any of the terms and conditions of the Lease.    14. Provisions Binding.  All rights and liabilities herein given to or imposed upon the  parties to this Ninth Amendment shall extend to, and be binding upon and inure to the benefit of,  the parties hereto and their respective successors and assigns.    15. Confidentiality.  Tenant agrees that it shall maintain in confidence and shall not  divulge to any third party (except to its employees, brokers, attorneys, accountants or other  professional service providers as needed, or as may otherwise be required by the Securities and  Exchange Commission or applicable law) any of the items, covenants and conditions of the Lease  and this Ninth Amendment, including without limitation, any information related to the rental rate,  the length of the Term, and any other terms and conditions thereof.  Tenant further agrees to take  commercially reasonable precautions to prevent the unauthorized disclosure of any such  information to any third parties.  Tenant’s obligations under this Section 15 shall survive the  termination of the Lease.  





 






   7      16. Counterparts; Delivery.  This Ninth Amendment may be executed in any number  of counterparts, and by each of the parties on separate counterparts, each of which, when so  executed, shall be deemed an original, but all of which shall constitute but one and the same  instrument provided that all parties execute and deliver a counterpart to the other party. Delivery  of an executed counterpart of this Ninth Amendment by electronic delivery shall be equally as  effective as delivery of a manually executed counterpart of this Ninth Amendment. Any party  delivering an executed counterpart of this Ninth Amendment by electronic delivery shall also  endeavor to deliver a manually executed counterpart of this Ninth Amendment, but the failure to  deliver a manually executed counterpart shall not affect the validity, enforceability or binding  effect of this Ninth Amendment.      [SIGNATURE PAGE FOLLOWS]  





 






 8      IN WITNESS WHEREOF, the parties hereto have executed this Ninth Amendment to  Lease Agreement on the day and year set forth below.        LANDLORD:    WHARTON LENDER ASSOCIATES, LP,   a Pennsylvania Limited Partnership    By: WHARTON LENDER PROPERTIES, LLC,  a Pennsylvania Limited Liability Company,   its General Partner    By:             Name: Larry Walsh           Title: COO            Date:   January 4, 2022          TENANT:    KRYSTAL BIOTECH, INC.,   a Delaware corporation        By:             Name: Kathryn Romano          Title:   Chief Accounting Officer         Date: January 4, 2022                            





 






    EXHIBIT "A"    Sixth Floor Expansion Space      





 






  EXHIBIT "B"    Landlord’s Sixth Floor Expansion Space Work        Landlord will deliver the Expansion Space in its existing ‘as-is’ ‘where-is’ condition with  all of the current tenant’s property removed and in broom-clean condition with all lights  and plugs in good working order, plus complete the below work using building standard  materials at no cost to Tenant.  • Cove base will be repaired where needed  • Broken ceiling tiles will be replaced  • Walls will be painted a maximum of 2 colors selected by Tenant        Existing partitions and doors will remain in their current locations and conditions  except for:  o Any damaged dry wall will be patched and repaired  o 2nd door to the floor corridor (not the main entrance door) will be  removed and replaced with dry wall to seal the opening  o New door created between the Expansion Space and Suite 625A  (already part of Tenant’s Premises). Door will have a hollow metal frame,  wood door to match with a tempered glass insert with a lock and the  ability to accommodate key fob locking mechanism supplied by tenant.         Demo Door- infill with  metal studs and  drywall- finish, paint  and install base to  match; both sides  Demo section of  existing partition and  install a new hollow  metal door frame with  wood door to match  expansion space with  clear tempered glass  lite.  Install locking  hardware.  Tenant shall  install electric strike &  card reader/ card access  system.  





 






  Exhibit C          





 






   B-1          





 






   B-1        





 






   B-1    





 






   B-1          





 






   B-1