Document:

krys-20201231ex1013_thir

1  Exhibit 10.13  THIRD AMENDMENT TO LEASE AGREEMENT    THIS THIRD AMENDMENT TO  LEASE AGREEMENT (the “Third Amendment”) is made as of the  31st day of May, 2018, by and between Wharton Lender Associates, L.P., (“Landlord”), and Krystal Biotech Inc.  (“Tenant”).    WITNESSETH:    WHEREAS, by Lease dated May 26, 2016 (the “Original Lease”), as amended by First Amendment to  Lease Agreement dated July 26, 2016 and Second Amendment to Lease Agreement dated February 27, 2017 (the  "Second Amendment") (the Original Lease as amended, collectively, the "Lease"), Landlord currently leases to  Tenant and Tenant currently leases from Landlord certain premises consisting of approximately 5,065 rentable  square feet (the “Current Premises”) located on the 7th Floor of the building known as 2100 Wharton Street,  Pittsburgh, Pennsylvania (the “Building”); and    WHEREAS, Landlord and Tenant now desire to amend the Lease so as to (i) expand the Current Premises  by approximately 5,913 rentable square feet of area (the "Expansion Space") thereby increasing Tenant's rentable  area in the Building to a total of 10,978 rentable square feet; (ii) extend the term of the Lease; (iii) provide for updates  and refurbishment of the Current Premises; and, (iv) 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 premises 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 shall have the meaning given to such terms in the Lease. All references  herein to the Lease shall include this Third Amendment.    2. Expansion of Current Premises; Expansion Space Commencement Date.    (a)  Effective as of the Expansion Space Commencement Date (as defined below), the  Premises shall be amended to comprise, in addition to the Current Premises, the Expansion Space, (consisting of  approximately 5,913 rentable square feet of area on the 7th Floor of the Building), for a total of 10,978 rentable  square feet of area, as outlined on Exhibit “A” attached hereto and made a part hereof. Accordingly, effective as of  the Expansion Space Commencement Date (as defined below), the “Premises” shall mean a total of 10,978 rentable  square feet of area on the 7th Floor of the Building, as described on Exhibit “A”.    (b)  Expansion Space Commencement Date. The Term of the Lease for the Expansion Space  and Tenant’s obligation to pay Fixed Rent and additional rent for the Expansion Space shall commence on the date  of November 1, 2018 (the “Expansion Space Commencement Date”)    3. Extended Term of Lease for Premises.    The Term of the Lease for the Premises is hereby extended for an additional period of seven (7)  years and four (4) months (the “Extended Term”), commencing on the Expansion Space Commencement Date and  ending on February 28, 2026 (the "Expiration Date").    4.  Tenant’s Share; Tenant's Percentage; Base Year.    (a)  Commencing as of the 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 “4.85%”, and all references in the Lease to “Tenant’s Share” and "Tenant's Percentage" shall mean  “4.85%”.  

 

2  (b) Commencing as of the Expansion Space Commencement Date, "Base Year" as defined  in Paragraph 1.(m) and 4.A.(v) of the Original Lease shall mean calendar year 2018 and all references in the Lease  to "Base Year" shall mean calendar year 2018.    5. Fixed Rent Current Premises; Fixed Rent for Premises (being the Expansion Space plus the  Current Premises for a total of 10,978 rental square feet).    (a) Fixed Rent for Current Premises. Commencing as of the date hereof and ending on the  Expansion Space Commencement Date, Tenant shall continue to pay Landlord Fixed Rent for the Current Premises  in accordance with the terms of the Second Amendment.    (b) Fixed Rent for Premises (being the Expansion Space and the Current Premises for a total  of 10,978 rentable square feet).    Commencing on the Expansion Space Commencement Date, Tenant shall pay Landlord  Fixed Rent for the Premises (being the Expansion Space and the Current Premises for a total of 10,978 rentable  square feet) as follows:      LEASE PERIOD PREMISES $PER RENTABLE  SQ FT  MONTHLY FIXED  RENT INSTALLMENT  ANNUAL FIXED RENT  AMOUNT  Expansion Space  Commencement  Date - Month 16  10,978 rsf 22.50 $20,583.75 $247,005.00  Months 17 – 28 10,978 rsf 22.95 $20,995.43 $251,945.10  Months 29 – 40 10,978 rsf 23.41 $21,416.25 $256,994.98  Months 41 – 52 10,978 rsf 23.88 $21,846.22 $262,154.64  Months 53 – 64 10,978 rsf 24.36 $22,285.34 $267,424.08  Months 65 – 76 10,978 rsf 24.85 $22,733.61 $272,803.30  Months 77 – 88 10,978 rsf 25.35 $23,188.28 $278,259.28    Fixed Rent shall be payable in equal monthly installments in advance on the first day of each calendar month during  the Term without demand, notice, offset or deduction.    Notwithstanding the above, so long as Tenant is not in default under the terms of this Lease Tenant shall receive an  abatement to its Fixed Rent in the total amount of $44,347.52 applied as a monthly credit of $11,086.88 per month  for the first four (4) months of the Expansion Space Term of the Lease only Such abatement of Fixed Rent shall not  affect Tenant’s obligation to pay additional rent or any other sums payable by Tenant as and when due under the  terms of this Lease.    6. Landlord's Expansion Space Work; Substantial Completion    (a)  Landlord's Expansion Space Work. Notwithstanding anything to the contrary contained  in this Lease, the Expansion Space shall be delivered in its current “as-is” where-is condition except that Landlord,  at its sole cost and expense, agrees to do or otherwise perform the work in or relating to the Expansion Space (the  “Landlord's Expansion Space Work”) necessary to complete the work described in "Exhibit "B". In no event and  under no circumstances will Landlord's 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".    

 

3  Notwithstanding anything to the contrary contained in the Lease, Tenant specifically agrees that the following items  are excluded from Landlord's Expansion Space Work and shall be performed at Tenant’s sole cost and expense (i)  all of Tenant's Expansion Space Work (as defined below) (ii) all work items that need to be completed in conjunction  with Tenant's Expansion Space Work or are contingent upon the completion of Tenant's Expansion Space Work;  and (iii) all furniture costs including, but not limited to, moving and installation costs, lab equipment, data service  and telecommunication wiring, cabling and systems (collectively, the "Excluded Items").    (b) Landlord’s Expansion Space Work shall be deemed to be Substantially Completed when  the work shown on Exhibit "B" attached hereto and made a part hereof has been completed 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 Expansion Space reasonably tenantable for Tenant's use as stated herein; and (iii) all  of Tenant's Expansion Space Work and all Excluded Items;  and (iv) 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; or changes in the work to be performed by Landlord which are requested by Tenant after Landlord's  approval of Tenant's plans; or the performance of any work or activity in the 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; or (ii) Tenant otherwise unreasonably delays the Substantial Completion of Landlord's Work. If a  Tenant Delay occurs, Rent shall commence on the date upon which Landlord's Work would have been Substantially  Completed had the above-described delays by Tenant not occurred.    (c) Tenant acknowledges that Landlord’s Expansion Space Work will not be sufficient to  allow the Expansion Space to be used for Tenant’s purposes. Landlord and Tenant understand that additional work  will be required, and Tenant agrees to perform all such additional work at Tenant’s sole cost and expense pursuant  to Paragraph 8 below  (d) Landlord's Expansion Space Work shall be completed within thirty (30) days from full  execution of this Third Amendment. Tenant shall have access to the Expansion Space upon completion of Landlord's  Expansion Space Work.    7. Condition of Premises/Landlord’s Current Premises Work. Notwithstanding anything contained  in the Lease to the contrary, Tenant’s continued possession of the Current Premises for the Extended Term shall be  in its current “as-is” where is condition with the exception that Landlord agrees to do or otherwise perform at its  cost and expense that work in or relating to the Current Premises (the "Landlord's Current Premises Work")  necessary to complete the work described in Exhibit "C". Within ten (10) days from Tenant's execution of this Third  Amendment, Tenant shall relocate all of its business operations from the office portion of the Current Premises to  the Temporary Space (as defined below). Landlord’s Current Premises Work shall be done in a good and  workmanlike manner using the materials set forth in Exhibit "C". In no event and under no circumstances will  Landlord’s Current Premises Work entail or will Landlord be obliged to perform any work or supply any materials  in excess of the work and materials described in Exhibit "C". All work in the Premises other than Landlord's Current  Premises Work and Landlord's Expansion Space Work shall be performed at Tenant's sole cost and expense.    Notwithstanding anything to the contrary contained herein, Landlord shall use commercially reasonable efforts to  Substantially Complete Landlord's Current Premises Work prior to the Expansion Space Commencement Date. In  the event that solely and directly due to Landlord’s Current Premises Work, changes to the common areas are  required and necessary under the applicable laws for ADA compliance, Landlord shall be responsible for such  changes. Notwithstanding the foregoing, if Tenant’s Expansion Space Work triggers or causes modifications to be  performed to the Premises or the common areas to comply with applicable laws and regulations (including fire, ADA  compliance, changes to the corridors, etc.), such modifications shall be performed at Tenant’s sole cost and expense.    8. Tenant's Expansion Space Work. Except for Landlord’s Expansion Space Work as set forth above,  Tenant agrees to do or otherwise perform at Tenant’s sole cost and expense, all work that is necessary in order for  Tenant to open and conduct its business in the Expansion Space (“Tenant’s Expansion Space Work”).  

 

4  (a) Tenant’s Plans. Tenant shall provide, at Tenant's sole cost and expense,  all of the plans,  specifications and drawings necessary to design and construct Tenant’s Expansion Space 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").  Tenant’s Plans shall be prepared by Tenant’s architect at Tenant's sole cost and expense. Within ten (10) business  days after Landlord's receipt, Landlord shall in writing approve Tenant’s Plans or deny Tenant's Plans and specify  what changes are necessary for such approval. Landlord’s approval or denial 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 Expansion Work.    (b) Tenant’s Expansion Space 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, but subject to Landlord’s approval, which approval shall not be unreasonably withheld or delayed. Landlord  shall have the right to bid on Tenant’s Expansion Space Work. Landlord shall have the right to approve all  contractors and subcontractors and the performance of Tenant's Expansion Space Work. All contractors and  subcontractors performing the Tenant’s Expansion Space Work shall comply in all respects with all applicable laws,  codes and regulations and with the terms of this Paragraph 8 and the terms of the Lease, Tenant’s Plans, and with  the rules and regulations applicable to the Lease. Landlord reserves the right to specify certain contractors for  structural and mechanical alterations (e.g., roof contractor, electricians, plumbers, etc.). Tenant’s Expansion Space  Work shall not interfere with or affect the common areas or structural components of the Building or any B  mechanical systems, HVAC, electrical, plumbing, gas, elevator or other building mechanical systems serving other  tenants and occupants of the Building. Tenant shall perform or cause to be performed Tenant’s Expansion Space  Work in a manner which shall not commercially unreasonably interfere with or interrupt the business operations or  premises of other tenants in the Building, except as may be approved by Landlord. All of the costs and expense of  Tenant's Expansion Space Work and other matters relating to the work and/or installations to be made at the Premises  shall be borne by Tenant.    9. Expansion Space Tenant Improvement Allowance.    Landlord shall provide Tenant with a construction improvement allowance up to the total amount of Two  Hundred Fifty Thousand and 00/100 Dollars ($250,000.00) (the “Expansion Space Tenant Improvement  Allowance”), to be applied solely toward the cost of design, construction and refurbishment of Tenant’s Expansion  Space and for no other purpose whatsoever. The Tenant Improvement Allowance shall be paid by Landlord, at  Landlord’s option, either (i) directly to Tenant as a reimbursement within thirty (30) days after receipt by Landlord  of paid invoices from the contractor or subcontractors performing Tenant’s Expansion Space Work, lien waivers  and architect’s certification of completion of work; or (ii) directly to the persons or entities performing Tenant’s  Expansion Space Work within thirty (30) days after receipt by Landlord of a written sign- off from Tenant with  attached invoices from the contractor or subcontractors performing Tenant’s Expansion Space Work, lien waivers  and architect’s certification of completion of work. No credit shall be given to Tenant for any unused allowance.    Tenant shall be solely responsible for all costs and expenses of Tenant’s Expansion Space Work, Tenant’s  Plans, fixtures, and for all costs and expenses of Tenant’s furniture, cables, data wiring, telephone, computer  equipment and related equipment, telecommunication, data and computer wiring and all associated work and, in the  event that Landlord is performing Tenant’s Expansion Space Work, to the extent that the cost of Tenant’s Expansion  Space Work is determined by Landlord to be in excess of the Expansion Space Tenant Improvement Allowance,  Tenant shall pay to Landlord, within thirty (30) days of receipt of invoice, all sums in excess of the Expansion Space  Tenant Improvement Allowance. In the event any such sums are not paid by Tenant to Landlord within such ten  (10) day period, Landlord may, in its sole discretion, cause Tenant’s Expansion Space Work to cease until such sums  are paid; provided, however, that Tenant’s obligation to pay Rent shall not be affected and shall continue during any  such periods of cessation of Tenant’s Expansion Space Work.    

 

5  10. Leasing of Temporary Space. Notwithstanding anything in Paragraph  2.(a) above to the contrary,  in order to accommodate Tenant’s requirement for office space prior to the Expansion Space Commencement Date,  Tenant shall have the right to lease, temporary office space consisting of approximately 9,000 rentable square feet  on the 3rd Floor of the Building described as Suite 310 (the “Temporary Space”). Tenant shall have the right to  occupy the Temporary Space for the period commencing on the date of this Third Amendment, provided, however,  that Landlord shall have the right to relocate the Temporary Space to another space in the Building upon ten (10)  days prior written notice to Tenant. The Tenant’s leasing of the Temporary Space shall be under the same terms and  conditions of this Lease, except that: (i) Fixed Rent for the Temporary Space shall be abated solely for the first three  (3) months only commencing on the date that is earlier to occur of: (a) the date that is ten (10) days from the date of  Tenant's execution of this Third Amendment; or (b) the date Tenant commences occupying all or a portion of the  Temporary Space (the "Temporary Space Commencement Date"); and (ii) the Temporary Space shall be delivered  to Tenant in its current “as-is”, “where is” condition. In addition, Tenant shall be responsible, at Tenant’s sole cost  and expense, for the costs of all utilities and janitorial expenses for the Temporary Space.  Notwithstanding the  foregoing, in the event that Tenant elects to remain in the Temporary Space beyond the date that is three (3) months  from the date of the Temporary Space Commencement Date, Tenant shall pay Landlord Fixed Rent for the  Temporary Space in advance on the first day of each calendar month of Tenant's occupancy of the Temporary Space,  without demand, notice, offset or deduction in the amount of $9,000.00 per month for each of the months 4, 5 and  6, and $18,000.00 per month for each of the months 7 until the date that Tenant vacates the Temporary Space,  provided that in the event that Landlord has not Substantially Completed Landlord's Current Premises Work except  due to any Tenant's Delay, Tenant shall continue to pay $9,000.00 per month for each of months 7 until the date that  Landlord has Substantially Completed Landlord's Current Premises Work. Unless otherwise agreed by the parties  in writing, Tenant shall vacate the Temporary Space no later than fifteen (15) days from the date of Substantial  Completion of Landlord's Current Premises Work and Landlord's Expansion Space Work. Upon Tenant's vacation  of Temporary Space, Tenant shall deliver such space to Landlord in the same condition in which it was delivered to  Tenant except for normal wear and tear. Notwithstanding anything contained in this Lease, Tenant’s leasing of the  Temporary Space does not affect the Term of the Lease and Tenant shall take possession of the Expansion Space  upon the Expansion Space Commencement Date.    11. Assignment and Subletting. Effective as of the Expansion Space Commencement Date, the  following words shall be added in the first sentence, on the third line of Section 15.A of the Original Lease after the  word "consent" and before the words "(a) assign, which shall not be commercially unreasonably withheld or delayed  for office use only".    12. Vehicle Parking. Commencing as of the Expansion Space Commencement Date, Section 5 of the  Second Amendment shall be deleted in its entirety, and the same shall be null and void and of no force or effect, and  shall be replaced with the following:    "During the Extended Term, 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 seventeen (17) unreserved parking spaces in the parking facility of the Property, subject to  availability, 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 Expansion Space Term  hereof for each of the Parking Spaces utilized by Tenant. Notwithstanding the foregoing, so long  as Tenant is not in default under the terms of the Lease, seven (7) of the foregoing unreserved  parking spaces shall be provided at no charge."    13. Broker. Tenant represents to Landlord, that Tenant has not dealt with any real estate broker,  salesperson, or finder in connection with this Third Amendment except for Hanna Langholz Wilson Ellis and CBRE,  Inc., (“Broker”) 600 Grant Street, Suite 4800, Pittsburgh, PA 15219.  Unless otherwise agreed by the parties,  Landlord shall be responsible for the payment of commission to the Broker based upon Landlord's separate  agreement with such Broker. Landlord and Tenant hereby 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.    

 

6  14. 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 Third Amendment shall not be further modified  or amended, except in writing signed by both Landlord and Tenant. This Third 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 under  the Lease or this Third Amendment. Landlord and Tenant hereby ratify and affirm all of the remaining terms and  conditions of the Lease. Landlord and Tenant hereby acknowledges that, as of the date of this Third Amendment,  neither party is not in default of any of the terms and conditions of the Lease.    15. Provisions Binding. All rights and liabilities herein given to or imposed upon the parties to this  Third Amendment shall extend to, and be binding upon and inure to the benefit of, the parties hereto and their  respective heirs, successors and assigns.    16. Confidentiality. Tenant and Tenant’s representative agree that it shall maintain in confidence and  shall not divulge to any third party (except as may be required by law) any of the items, covenants and conditions  of the Lease and this Third 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.    [SIGNATURE PAGE FOLLOWS]  

 

7    IN WITNESS WHEREOF, the parties hereto have executed this Third Amendment to Lease  Agreement on the day and year first above written.      LANDLORD:    WHARTON LENDER ASSOCIATES, LP,    a Pennsylvania Limited Partnership By:    WHARTON LENDER PROPERTIES,    LLC, a Pennsylvania Limited Liability    Company, its General Partner      By:  /s/ Larry walsh  Name: Larry Walsh  Title:  Chief Operating Officer            TENANT:    KRYSTAL BIOTECH INC., a Delaware  Company      By:     /s/ Tony Riley  Name:    Tony Riley  Title:     Chief Financial Officer        

 

  EXHIBIT A        

 

11  EXHIBIT B  LANDLORD’S EXPANSION SPACE WORK    Landlord will deliver the Expansion Premises in shell condition with the following work Complete:  • The ceiling, lighting, flooring, base and any interior wall will be removed.  • All electrical will be removed back to the junction box.  • VAV boxes, sprinkler lines will remain.    

 

12    Exhibit C  Landlord’s Existing Space Work        Entrance Doors:  Existing entry doors shall remain.    Demising Partitions:  Drywall construction consisting of 3-5/8" steel studs 24" off center with one layer 5/8" gypsum wall board on  each side of steel stud. Partitions shall extend to underside of structure and shall include sound attenuating batt  insulation.    Interior Partitions:  Drywall construction consisting of 3-5/8" steel studs at 24" on-center with one layer 5/8" wall board on each  side extending 6 inches through the acoustical ceiling grid to separate room from open ceiling area. Partitions  shall include sound attenuating batt insulation.    Interior Doors & Glass Sidelites/ Glass Partitions:  New 7’ solid core wood veneer stained doors (stain color T.B.D.) with hollow metal door jambs shall be installed  for Conference Room, Two Small Offices and single Office.  Provide tempered glass partition Two Small Offices and single Office. Glass partitions shall have 1” top and  bottom channel with clear glass caulked into opening and between glass panes. Office doors and Conference  Rooms shall receive tempered glass lite. All doors shall have building standard non-locking stainless steel lever  pulls, except for wood entrance doors and Storage Rooms. Notwithstanding the forgoing, Tenant shall indicate  which, if any, doors need locking mechanisms.    Ceilings:  Existing ceilings shall be removed in Open Café, Open Office, Office and Small Offices. No new acoustical  ceilings will be installed. Structural deck shall be exposed along with ductwork, conduit, wires, cabling, support  items, etc.- all will be painted.    Lighting:  

 

13  Lighting in Office area shall receive Finelite Series 16 LED direct/ indirect linear pendant fixtures. New  undercabinet LED strip lighting shall be installed on one wall of casework within Existing Lab. Existing direct/  indirect linear pendant fixtures in the Lab shall be relamped with new brighter LED lamps.    Carpet:  Carpet to be selected by Tenant from Building Standard Carpet Tile selections: Building Standard Carpet Tile  Selections:    Style Style # Style Style #  basic tile 5T121 captivate tile 59554  primary tile 5T123 link tile 59105  catalyst tile 59579 linage tile 59106  hybrid tile 59580 undertone tile 5T157  transparent tile 59563 gradient tile 59534  diffuse tile 59575 simplicity tile 59344  disperse tile 59576 rotate tile 5T105  tangle tile 5T018 copy tile 5T103  tempt tile 5T019 construct tile 5T104  shine tile 59328 prisma tile 59463  glimmer tile 59329 connect tile 59342  clear tile 59564 color form tile 5T112  centric tile 5T124 augment tile 5T064  surround tile 5T125 hype tile 5T065  allure tile 59327 peto II 26 tile 59371  glaze tile 59562 repartee tile 59387  reverse tile 5T069 color frame tile 5T081  shape tile 5T070 mirror image tile 59466  direction tile 5T071 focus tile 59455  vast tile 5T009 emotion tile 59343  infinite tile 5T010 balance tile 59340  scape tile 5T080 beam of light tile 59465  realm tile 5T078 applied tile 5T004  momentum iv tile 59502 vibrant tile 5T001  straightforward tile 59224 visible tile 5T002  wander tile 5T039 absorbed tile 5T003  embark tile 5T040 charisma tile 59561  field tile 5T079 fringe tile 5T038  peto II 20 tile 59369 trace tile 5T005  tinge tile 5T156 sculpt tile 5T007  byline tile 59113 mesh tile 5T044  intrigue tile 59558 achromatic tile 5T107    

 

14  LVT  Luxury Vinyl Tile shall be installed in Lunch Areas and Server Closet and in areas or in rooms (such as a section  of the Training Room) as directed by tenant. Tile shall be selected from Building Standard selections: Shaw  Native Origins, Emerge, Jeogori and Crete.    Lab Flooring:  Existing flooring to remain in Lab.    Base:  New 4” vinyl base shall be installed in Office Areas in a color T.B.D. to coordinate with flooring and paint  finishes.    Paint:  Premises shall receive two (2) coats eggshell finish in colors approved by Tenant. No more than ten (10) colors  shall be used within Suite Premises.    Casework:  New plastic laminate custom casework shall installed in Open Cafe. Pulls shall be Berenson 0802-2BPN-P.  New plastic laminate coat rod and shelves shall be installed in Coat Rooms.    Switches:  New occupancy sensor switches shall be installed in rooms and overhead occupancy sensors shall be installed  in open areas and corridors.    Duplex Outlets/ Floor Outlets:  Provide one (1) floor outlet in each Conference room under conference room table. Install duplex outlets within  partitions in all rooms and open areas to work with tenant equipment and furniture layout. Outlets shall be on  common shared circuits- except for copiers, microwaves, lab equipment and refrigerators. Furniture feeds shall  be installed in office area to feed workstations.    Data/ Telephone Outlets:  Tenant is responsible for phone and data cabling and system. Lessee-installed phone system must use fire rated  telephone cable. Cabling will need to be concealed in areas receiving Open Ceilings.    Window Treatment:  All existing blinds shall be removed. New roller shades shall be install throughout.    Plumbing:  Landlord to provide and install new sink (Elkay CR2521) and faucet (American Standard 4275.551.295 with  separate sprayer) in Open Cafe. Water lines shall be installed for refrigerators and dishwashers. Appliances shall  be purchased by Tenant and delivered to building.    HVAC:  Existing ductwork shall remain and be reworked/ supplied with new as needed to work with new floor plan.  Thermostats shall be placed to work with new floor plan and furniture layout.    Fire Protection:  Existing sprinkler system shall remain and be adjusted to work with new floor plan and new exposed ceiling.    Fire Alarm system:  Fire alarm locations shall be adjusted to work with new floor plan. New locations shall be coordinated with new  floor plan and furniture layout.    

 

15  Signage:  Tenant’s name shall be lettered on Building’s First Floor Directory adjacent to elevators and on the 7th Floor  directory. Tenant shall be permitted to install signage either on entry doors or adjacent to entry doors. Signage  needs to be reviewed and approved by Landlord prior to fabrication and installation.    Notes:  1. A construction supervision fee will apply to all nonstandard work not identified as part of Exhibit C  shown above.  2. No credit will be given for items listed in Exhibit C but not used on project.  3. Landlord shall provide Construction Drawings for review, approval and comment within twenty (20)  business days of fully executed lease document. Construction Drawings will further detail items covered in  Exhibit C of this lease and include Partition Plan, Reflected Ceiling Plan, Power and Communication Plan,  Finish Plan and all necessary Interior Elevations and Details. Tenant will review Construction Drawings within  five (5) business days. If Tenant does not provide any changes within five (5) business days from the date  Landlord has provided these drawings to Tenant, Landlord deems the drawings approved by Tenant. Any and  all changes requested by Tenant shall be consistent with this Exhibit C.  4. Equipment, furniture and workstations are shown on this drawing for reference and coordination  purposes only. All equipment, furniture and workstations shall be installed at Tenant’s sole cost and expense.krys-20201231ex1014_four

1   Exhibit 10.14  FOURTH AMENDMENT TO LEASE AGREEMENT    THIS FOURTH AMENDMENT TO LEASE AGREEMENT (the “Fourth Amendment”) is made as of the  22nd day of October, 2018, by and between Wharton Lender Associates, L.P., (“Landlord”), and Krystal Biotech Inc.,  (“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 (the "Second  Amendment") and Third Amendment to Lease Agreement dated May 31, 2018 (the "Third Amendment") (the Original  Lease as amended, collectively, the "Lease"), Landlord currently leases to Tenant and Tenant currently leases from  Landlord certain premises consisting of approximately 10,978 rentable square feet (the “Seventh Floor Premises”)  located on the 7th Floor of the building known as 2100 Wharton Street, Pittsburgh, Pennsylvania (the “Building”); and    WHEREAS, Landlord and Tenant now desire to amend the Lease so as to (i) expand the Seventh Floor  Premises by approximately 6,003 rentable square feet of area (the "Sixth Floor Premises") thereby increasing Tenant's  rentable area in the Building to a total of 16,981 rentable square feet; 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 premises 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 shall have the meaning given to such terms in the Lease. All references herein  to the Lease shall include this Fourth Amendment.    2. Expansion of Seventh Floor Premises; Sixth Floor Premises Commencement Date.    (a) Effective as of the Sixth Floor Premises Commencement Date (as defined below), the  Premises shall be amended to comprise, in addition to the Seventh Floor Premises, the Sixth Floor Premises,  (consisting of approximately 6,003 rentable square feet of area on the 6th Floor of the Building), for a total of 16,981  rentable square feet of area, as outlined on Exhibit “A” attached hereto and made a part hereof. Accordingly, effective  as of the Sixth Floor Premises Commencement Date (as defined below), the “Premises” shall mean a total of 16,981  rentable square feet of area consisting of 10,973 rentable square feet on the 7th Floor and 6,003 rentable square feet on  the 6th Floor of the Building, as described on Exhibit “A”.    (b) Sixth Floor Premises Commencement Date; Expiration Date. The Term of the Lease for  the Sixth Floor Premises and Tenant’s obligation to pay Fixed Rent and additional rent for the Sixth Floor Premises  shall commence on the date that Landlord's delivers possession of the Sixth Floor Premises to the Tenant (the “Sixth  Floor Premises Commencement Date”). The expiration date of the Sixth Floor Premises Term shall be February 28,  2026 (the “Expiration Date”).    3. Condition of Sixth Floor Premises. Notwithstanding anything contained  in the Lease to the contrary:  (i) Landlord shall deliver the Sixth Floor Premises to Tenant and Tenant accepts delivery and possession of the Sixth  Floor Premises in its current “as- is” where is condition; and (ii) Tenant shall perform, at Tenant's sole cost and  expense, all work and modifications to the Sixth Floor Premises that is necessary or desired; and (iii) any  and all costs for work required in the Premises shall be at Tenant’s sole cost and expense.    4. Tenant’s Share; Tenant's Percentage. Commencing as of the Sixth Floor Premises 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 “7.51%”, and all references in the Lease to “Tenant’s  Share” and "Tenant's Percentage" shall mean “7.51%”.    

 

2   5. Fixed Rent for the Sixth Floor Premises. Commencing on the Sixth Floor Premises Commencement  Date, Tenant shall pay Landlord Fixed Rent for the Sixth Floor Premises (being 6,003 rentable square feet) as follows:    LEASE PERIOD PORTION OF   PREMISES  $PER   RENTABLE   SQ FT  MONTHLY FIXED   RENT   INSTALLMENT  ANNUAL FIXED   RENT AMOUNT  Sixth Floor Premises  Commencement   Date to 2/29/20  6,003 rsf   Sixth Floor   Premises  22.50 $11,255.63 $135,067.50  3/1/20 – 2/28/21 6,003 rsf   Sixth Floor   Premises  22.95 $11,480.74 $137,768.85  3/1/21 – 2/28/22 6,003 rsf   Sixth Floor   Premises  23.41 $11,710.85 $140,530.23  3/1/22 – 2/28/23 6,003 rsf   Sixth Floor   Premises  23.88 $11,945.97 $143,351.64  3/1/23 – 2/29/24 6,003 rsf   Sixth Floor   Premises  24.36 $12,186.09 $146,233.08  3/1/24 – 2/28/25 6,003 rsf   Sixth Floor   Premises  24.85 $12,431.21 $149,174.55  3/1/25 – 2/28/26 6,003 rsf   Sixth Floor   Premises  25.35 $12,681.34 $152,176.05    Fixed Rent shall be payable in equal monthly installments in advance on the first day of each calendar month during  the Term without demand, notice, offset or deduction.    Notwithstanding the above, so long as Tenant is not in material default under the terms of this Lease, Tenant shall  receive an abatement to its Fixed Rent in the total amount of $45,022.52 applied as a monthly credit of $11,255.63  per month for the first four (4) months of the Sixth Floor Premises Term of the Lease only. Such abatement of Fixed  Rent shall not affect Tenant’s obligation to pay additional rent or any other sums payable by Tenant as and when due  under the terms of this Lease.    6. Utilities; Janitorial; Cleaning. Notwithstanding anything to the contrary contained in the Lease,  Tenant shall be responsible, at Tenant's sole cost and expense, for providing: (i) cleaning and janitorial services in a  first class manner and keeping with the standards of the Building, including but not limited to garbage and rubbish  removal on a daily basis and the costs of dumpsters and services thereof, in the entire portion of the Premises that is  used or occupied for non-administrative office uses including laboratory functions; and (ii) all extraordinary utilities  usage, costs and expenses (e.g., above standard office usage) used in the entire portion of the Premises that is used for  non- administrative office uses including laboratory functions.    7. Vehicle Parking. Commencing as of the Sixth Floor Premises Commencement Date, Section 12 of  the Third Amendment shall be deleted in its entirety, and the same shall be null and void and of no force or effect, and  shall be replaced with the following:  

 

3     "Commencing as of the Sixth Floor Premises Commencement Date until the Expiration  Date, 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 twenty-six (26) unreserved parking spaces in the parking facility of the Property,  subject to availability, 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 Expansion Space 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, eleven (11) of the foregoing unreserved parking spaces  shall be provided at no charge."    8. Tenant’s Generator; Insurance. Within thirty (30) days from the Sixth Floor Commencement Date,  Landlord and Tenant agree to execute a mutually satisfactory separate Generator License Agreement for the existing  and additional electrical generator to be installed by Tenant in or near the Building. It is understood that there will not  be a license fee charged by Landlord for the generators, but that all costs, expenses, and liability with regards to the  generators shall be at Tenant’s sole cost, expense and liability and Tenant releases, remises, discharges and acquits  the Landlord along with their agents, representatives, assigns, predecessors, successors, insurers, sureties and  mortgage lenders from any and all claims which the Tenant may have against any of them arising from the generators.  In addition, Tenant agrees to indemnify, defend and hold harmless Landlord and their respective representatives  from and against all claims, actions, losses, liabilities, costs and expenses of any nature whatsoever (including  attorneys’ and other legal fees and costs) arising from or relating to the generators. Tenant shall deliver to Landlord a  certificate of insurance naming Landlord as additional insured and satisfactory to Landlord covering the generators  and Tenant’s contractual obligations of indemnification with respect to the generators. The Generator License  Agreement will set forth the specific terms and conditions relating to the location, permits, approvals, operation,  removal, insurance, and liability associated with the electrical generators.    9. Broker. Tenant represents to Landlord, that Tenant has not dealt with any real estate broker,  salesperson, or finder in connection with this Fourth Amendment except for Landlord's Broker, CBRE, Inc.,  (“Broker”) 600 Grant Street, Suite 4800, Pittsburgh, PA 15219. Unless otherwise agreed by the parties, Landlord shall  be responsible for the payment of commission to the Broker based upon Landlord's separate agreement with such  Broker. Tenant hereby agrees to indemnify and hold harmless the Landlord and its 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.    10. 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 Fourth Amendment shall not be further modified or  amended, except in writing signed by both Landlord and Tenant. This Fourth 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 under the  Lease or this Fourth Amendment. Landlord and Tenant hereby ratify and affirm all of the remaining terms and  conditions of the Lease. Tenant hereby acknowledges that, as of the date of this Fourth Amendment, Landlord is not  in default of any of the terms and conditions of the Lease.    11. Provisions Binding. All rights and liabilities herein given to or imposed upon the parties to this  Fourth Amendment shall extend to, and be binding upon and inure to the benefit of, the parties hereto and their  respective heirs, successors and assigns.    12. Confidentiality. Tenant and Tenant’s representative agree that it shall maintain in confidence and  shall not divulge to any third party (except as may be required by law) any of the items, covenants and conditions of  the Lease and this Fourth 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 12. shall survive the termination of the Lease.    

 

4    [SIGNATURE PAGE FOLLOWS]    IN WITNESS WHEREOF, the parties hereto have executed this Fourth Amendment to Lease Agreement  on the day and year first above written.    LANDLORD:  WHARTON LENDER ASSOCIATES, LP,  a Pennsylvania Limited Partnership By:  WHARTON LENDER PROPERTIES,  LLC, a Pennsylvania Limited Liability  Company, its General Partner    By: /s/ Larry Walsh  Name: Larry Walsh  Title: COO    TENANT:  KRYSTAL BIOTECH INC., a Delaware Corporation    By: /s/ Tony Riley  Name: Tony Riley  Title: CFO    

 

5   EXHIBIT "A"        6th Floor Premises    

 

6         7th Floor Premises

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