Document:

krys-20201231ex1015_fift

Exhibit 10.15  FIFTH AMENDMENT TO LEASE AGREEMENT  THIS FIFTH AMENDMENT TO LEASE AGREEMENT (the "Fifth Amendment") is made as of the 10th  day of December, 2018, by and between Wharton Lender Associates, L.P., a Pennsylvania limited partnership  ("Landlord"), and Krystal Biotech Inc. a Delaware corporation formerly known as Krystal Biotech, LLC, a California  limited liability company, ('"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"), Third Amendment to Lease Agreement dated May 31, 2018 (the "Third Amendment"), and Fourth  Amendment to Lease Agreement dated October 22, 2018 (the ·'Fourth Amendment"') (the Original Lease as amended,  collectively, the "Lease"), Landlord currently leases to Tenant and Tenant currently leases from Landlord certain  premises (the "Existing Premises") consisting of a total of 16,981 rentable square feet, being 10,978 rentable square  feet (the "Seventh Floor Premises") located on the 7th Floor and 6,003 rentable square feet (the 'Sixth Floor Premises")  on the 6th  Floor, all in 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) lease to Tenant an additional  14,398 rentable square feet of area on the 3rd Floor of the Building (the "Third Floor Premises"). thereby increasing  Tenant's rentable area in the Building to a total of 25,376 rentable square feet of office space in the Building (upon  Tenant's vacation of the Sixth Floor Premises); (ii) provide for the termination of the leasing and vacation of the Sixth  Floor Premises; (iii) extend the Term of the Lease; 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 Fifth Amendment.  2. Third Floor Premises; Third Floor Premises Commencement Date.  (a) Effective as of the Third Floor Premises Commencement Date (as defined below) and the Sixth  Floor Vacate Date (as defined below), the Premises shall be amended to comprise, in addition to the Existing Premises,  the Third Floor Premises, consisting of approximately 14,398 rentable square feet of area on the 3rd Floor of the  Building), for a total of 25,376 rentable square feet of area, as outlined on Exhibit “A"  attached hereto and made a  part hereof. Accordingly, effective as of the Third floor Premises Commencement Date (as defined below) and the  Sixth Floor Vacate Date, the “Premises" shall mean a total of 25,376 rentable square feet of area consisting of I 0,978  rentable square feet on the 7111 Floor and 14,398 rentable square feet on the yd floor of the Building, as described on  Exhibit “A".  Tenant shall vacate the 6,003 rentable square feet of the Sixth Floor Premises on the Sixth Floor Vacate  Date as per Section 3 below. During the time period between the Third Floor Premises Commencement Date until the  Sixth Floor Vacate Date, Premises shall mean a total of 31,379 rentable square feet consisting of 10,978 rentable  square feet on the 7th Floor and 14,398 rentable square feet on the 3rd Floor and 6,003 rentable square feet on the  Sixth Floor of the Building.  (b) Third Floor Premises Commencement Date; Expiration Date. The Term of the Lease for the Third  Floor Premises and Tenant's obligation to pay Fixed Rent and additional rent for the Third Floor Premises shall  commence on the date that is one hundred eighty ( 180) days after Landlord has Substantially Completed Landlord's  Base Building Work (as defined below) (the “Third Floor Premises Commencement Date”). Landlord shall provide  written notice to Tenant stating the Third Floor Premises Commencement Date.  

 

3. Vacation of the Sixth Floor Premises.  (a) Notwithstanding anything in the contrary contained in the Lease, (Tenant shall vacate the 6,003  rentable square feet of the Sixth Floor Premises on the Third Floor Commencement Date and leave it in the condition  required under the Lease (the "Sixth Floor Vacation Date'').  Notwithstanding the foregoing sentence, upon prior  written notice to Landlord, Tenant may continue to occupy the Sixth Floor Premises on a month-to-month basis after  the Third floor Premises Commencement Date occurs, in which case, the Sixth Floor Vacation Date shall be the date  that is thirty (30) days after either party gives notice of termination to the other party of the leasing of the Sixth Floor  Premises only. As of the Sixth Floor Vacation Date, the Lease shall be terminated solely as to the Sixth Floor Premises,  and Landlord shall take possession of the Sixth Floor Premises, and Landlord may subsequently lease or otherwise  utilize the Sixth Floor Premises on such terms and conditions as Landlord shall deem proper, in its sole and absolute  discretion, without obtaining the consent of Tenant.   (b) Effective as of the Sixth Floor Vacation Date, the "Premises" shall mean a total of 25,376 rentable  square feet of area in the Building, being 14,398 rentable square feet on the 3rd Floor of the Building and 10,978  rentable square feet on the 7th Floor of the Building.  4. Extended Term of Lease for Premises.  The Term of the Lease for the Premises (beingl4,398 rentable square feet on the 3rd Floor of the Building  and I 0,978 rentable square feet on the 7th Floor of the Building) is hereby extended for an additional period of one  (I) year (the "Extended Term''), commencing on March 1, 2026 (the "Extended Term Commencement Date”) and  ending on February 28, 2027 (“the Expiration Date").  5. Fixed Rent.  (a) Fixed Rent for the Existing Premises. Commencing on the date hereof until the Sixth Floor Vacation  Date, Tenant shall continue to pay Fixed Rent for the Existing Premises (being 16,981 rentable square feet consisting  of 10,978 rentable square feet on the 7th Floor and 6,003 rentable square feet on the 6th floor) in accordance with the  terms of the Original Lease, Third Amendment and Fourth Amendment.   (b) Fixed Rent for the Third Floor Premises. Commencing on the Third Floor Premises Commencement  Date, Tenant shall pay Landlord Fixed Rent for the Third Floor Premises (being 14,398 rentable square feet) as  follows:    

 

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 $111,510.00 applied as a monthly credit of $9,292.50  per month for the first twelve ( 12) months of the Third 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.   (c) Fixed Rent for the Premises. For the Extended Terms, Tenant shall pay to Landlord fixed Rent for  the Premises (being 25,376 rentable square feet consisting of 14,398 rentable square feet on the 3rd Floor and 10,978  rentable square feet on the 7th Floor) at the annual rate(s) as follows:     All 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.  6. Tenant's Share: Tenant's Percentage.  (a) Commencing as of the Third Floor Premises Commencement Date, “Tenant's Percentage" as  defined in Paragraph l .L. of the Original Lease and "Tenant's Share", as defined in Paragraph 4.A.(ii) of the Original  Lease shall mean "9.03%". and all references in the Lease to "Tenant's Share" and "Tenant's Percentage" shall mean  “9.03%''.   (b) Commencing as of the date of January 1, 2020, “Tenant's Percentage" as defined in Paragraph I .L.  of the Original Lease and "Tenant's Share", as defined in Paragraph 4.A.(ii) of the Original Lease shall mean “11.22%",  and all references in the Lease to "Tenant's Share" and "Tenant's Percentage" shall mean “11.22%".   7. Condition of the Premises. Notwithstanding anything contained in the Lease to the contrary, except  solely for Landlord's Base Building Work (as defined below): (i) Landlord shall deliver the Third Floor Premises to  Tenant and Tenant accepts delivery and possession of the Third 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 Third  Floor Premises that is necessary or desired; and (iii) Tenant's continued possession of the Premises shall be in its  current “as-is" where is condition; and (iv) any and all costs for work required in the Premises shall be at Tenant's sole  cost and expense.  8. Landlord's Base Building Work.  A. Notwithstanding anything contained in the Lease to the contrary, the Premises shall be delivered in  its current “as-is" condition except that Landlord agrees to do or otherwise perform that work in or relating to the  Third Floor Premises necessary to complete the work described in Exhibit ”B” attached hereto and made a part hereof  (the "Landlord's Base Building Work"). In no event and under no circumstances will Landlord's 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 Premises other than Landlord’s Work, shall be performed by Tenant at  Tenant's sole cost and expense.   Within ten (10) days after the date of the Lease, Tenant will provide Landlord with all specifications and/or approval  of Landlord's plans that are required for Landlord to perform Landlord's Base Building Work.   

 

B.  The Third Floor Premises 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 the Excluded Landlord Work Items  (as defined below) and: (i) any improvements or work to be performed by Tenant including Tenant's Work; and (ii)  items not completed because of: (a) delay by Tenant in furnishing or receiving any drawings or approvals within the  time set forth in any agreement between Landlord and Tenant; or (b) changes in the work to be performed by Landlord  which are requested by Tenant after approval of Tenant's plans; or (c) delays, not caused by Landlord, in obtaining  materials required for installation or work in the Premises, provided that Tenant shall be notified of Landlord's good  faith estimate of the anticipated delay promptly after discovery thereof by Landlord, and shall be given an opportunity  to specify alternative materials in requirements; or (d) interference by Tenant or any of its employees, agents or  contractors.   Notwithstanding anything to the contrary in the foregoing, Tenant specifically agrees that the following items  are deemed to be “Excluded Landlord Work" Items: (i) all work items that need to be completed in conjunction with  Tenant's Work, or are contingent upon the completion of Tenant's Work; and (ii) any work related to the replacement  of the roof.   Tenant acknowledges and agrees that Landlord's Base Building Work will not be sufficient to allow the Third  Floor Premises to be used for Tenant's purposes. Tenant understands that additional work will be required, and Tenant  agrees to perform all such additional work at Tenant's sole cost and expense.   9. Tenant’s Work. 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 Third Floor Premises (“Tenant’s Work"').   (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 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"). Notwithstanding the foregoing,  Landlord shall provide at Landlord's expense, the test-fit drawings for the non-lab portion of the Third Floor Premises.  All such drawings shall be prepared by Landlord's space planner (the “Space Planner") at Landlord's sole cost and  expense. Tenant's Plans shall be prepared by Tenant and shall be subject to the prior written approval of Landlord.  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 Work.   (b) Tenant's 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 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 29 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 Work shall not interfere with or affect the common areas or structural components of the Building or any  building or any building mechanical systems, HVAC, electrical, plumbing, gas, plumbing, elevator or other building  operating systems serving other tenants and occupants of the Building. Tenant shall perform or cause to be performed  Tenant's 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. Tenant shall commence Tenant's Work within ten  (10) days following Landlord's written approval of Tenant's Plans therefor. All of the cost and expense of Tenant's  Work and other matters relating to work and/or installations to be made at the Premises shall be borne by Tenant.   (c) Notwithstanding anything to the contrary in the forgoing, Landlord shall provide construction  administration services for the non-lab portion of Tenant's Work, subject to a separate statement of work, as approved  by Landlord and Tenant.   

 

10. Vehicle Parking.   Commencing as of the Third Floor Premises Commencement Date, Section 7 of  the Fourth 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:  "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 thirty-seven (37) 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  Terms 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, sixteen ( 16) of the foregoing unreserved  parking spaces shall be provided at no charge."  11. Tenant’s Generator; Insurance. Within thirty (30) days from the date of this Fifth Amendment,  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  generators installed by Tenant 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 generators installed by Tenant. 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 generators installed by  Tenant. Tenant shall deliver to Landlord a certificate of insurance naming Landlord as additional insured and  satisfactory to Landlord covering generators installed by Tenant 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.   12. Broker. Tenant represents to Landlord, that Tenant has not dealt with any real estate broker,  salesperson, or finder in connection with this Fifth 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.   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 Fifth Amendment shall not be further modified or  amended, except in writing signed by both Landlord and Tenant. This Fifth 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 Fifth 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 Fifth 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 Fifth  Amendment shall extend to, and be binding upon and inure to the benefit of, the parties hereto and their respective  heirs, successors and assigns.   

 

15. Confidentiality. Tenant, Tenant's representative, Landlord, and Landlord'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 Fifth Amendment, including without limitation, any information  related to the rental rate, the length of the Term, and any other terms and conditions thereof. Tenant and Landlord  further agree to take commercially reasonable precautions to prevent the unauthorized disclosure of any such  information to any third parties. Tenant's and Landlord's obligations under this Section 14. shall survive the  termination of the Lease.   (SIGNATURE PAGE FOLLOWS)     

 

                        

 

           

 

EXHIBIT “B”  LANDLORD'S BASE BUILDING WORK   Landlord will deliver the Third Floor 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.  •VA V boxes, sprinkler lines will remain.krys-20201231ex1016_nort

EXECUTION COPY     Exhibit 10.16    Certain information indicated with [**] in this document has been omitted from this exhibit because it is both  (i) not material and (ii) would be competitively harmful if publicly disclosed.          LEASE DOCUMENTATION                 TENANT:  KRYSTAL BIOTECH, INC.        ADDRESS:  2100 Wharton Street, Suite 701     Pittsburgh, PA  15203                                                          

 

EXECUTION COPY    {S1415752.1} i     TABLE OF CONTENTS       1.  DEFINITIONS AND CERTAIN BASIC PROVISIONS 1       2.  FUNDAMENTAL EXHIBITS TO LEASE 4       3.  GRANT, PREMISES AND TERM 5       3.1.  GRANT AND PREMISES 5  3.2.  PARK COMMON AREAS 5  3.3.  ROOF 6  3.4.  TERM 6       4.  RENT; ADDITIONAL RENT; OTHER CHARGES 6       4.1.  RENT 6  4.2.  ADDITIONAL RENT 7  4.3.  OPERATING EXPENSES 7  4.4.  TAXES 8  4.5.  INSURANCE 9  4.6.  TENANT’S AUDIT RIGHTS 9  4.7.  UTILITIES 10  4.8.  TAXES – OTHER 10  4.9.  RENEWAL RENT 10       5.  SECURITY DEPOSIT 10       6.  USE AND OCCUPANCY 11       6.1.  USE OF PREMISES 11  6.2.  CONTINUOUS OCCUPANCY 11       7.  LANDLORD’S WORK 11       8.  REPAIRS 12       8.1.  LANDLORD RESPONSIBILITY 12  8.2.  TENANT RESPONSIBILITY 12       9.  ACCESS AND CONFIDENTIALITY 12       9.1.  LANDLORD ACCESS 12  9.2.  TENANT ACCESS 13       10.  ALTERATIONS TO PREMISES; SIGNS 13       11.  DAMAGE OR DESTRUCTION 14       11.1.  DAMAGE OR DESTRUCTION 14  11.2.  RIGHTS OF TERMINATION 14       12.  INDEMNITY AND INSURANCE 15       12.1.  INDEMNITY 15  12.2.  LANDLORD’S INSURANCE 15  12.3.  TENANT’S INSURANCE 15       13.  WAIVER OF SUBROGATION 16       14.  LIENS 16       15.  ASSIGNMENT, SUBLETTING, MORTGAGING 16       16.  PRIORITY OF LEASE 17       17.  QUIET ENJOYMENT 18       18.  ESTOPPEL CERTIFICATE 18       19.  FIXTURES AND PERSONAL PROPERTY; SURRENDER 18       

 

ii  19.1.  SURRENDERING OF PREMISES 18  19.2.  REMOVAL OF TENANT PROPERTY 18       20.  DEFAULT AND REMEDY 19       20.1.  TENANT DEFAULT AND REMEDY 19  20.2.  LANDLORD DEFAULT AND REMEDY 20  20.3.  WARRANT OF ATTORNEY TO CONFESS JUDGMENT 21       21.  NON-WAIVER OF DEFAULTS 21       22.  ENVIRONMENTAL / SITE REPRESENTATIONS AND INDEMNITIES 21       22.1.  HAZARDOUS MATERIAL 21  22.2.  ENVIRONMENTAL LAWS 21  22.3.  CONTAMINATION 21  22.4.  TENANT REPRESENTATIONS 22  22.5.  LANDLORD REPRESENTATIONS 23       23.  HOLD OVER TENANCY 24       24.  CONDEMNATION 25       25.  TENANT’S LIMITED PURCHASE OPTION 25       26.  TENANT’S RIGHT OF FIRST OFFER TO PURCHASE 26       27.  NOTICES 27       28.  RIGHTS RESERVED BY LANDLORD / FORCE MAJEURE 27       29.  MISCELLANEOUS PROVISIONS 28       29.1.  TERM "LANDLORD" 28  29.2.  CAPTIONS OF PARAGRAPHS 28  29.3.  TERMS "LANDLORD" AND "TENANT” 28  29.4.  WORDS "PERSON" AND "PERSONS" 28  29.5.  RIGHTS, OPTIONS, ELECTION, POWERS AND REMEDIES 28  29.6.  FINANCIAL STATEMENTS 28  29.7.  TIME 29  29.8.  PROVISIONS BINDING 29  29.9.  STATE LAW 29  29.10. COVENANTS AND AGREEMENTS 29  29.11. INVALID OR ILLEGAL PROVISIONS 29  29.12. EFFECTIVE DATE OF CONDITIONS, COVENANTS AND AGREEMENTS 29  29.13. LEASE COMMISSIONS 29  29.14. RELATIONSHIP OF LANDLORD AND TENANT 29  29.15. RECORDING OF MEMORANDUM OF LEASE 30  29.16. SUBMISSION OF LEASE 30  29.17. COUNTERPARTS 30  29.18. REPRESENTATIONS ON AUTHORITY OF PARTIES/SIGNATORIES 30  29.19. PERSONAL LIABILITY 30    

 

EXECUTION COPY    {S1415752.1} 1     LEASE AGREEMENT    THIS LEASE AGREEMENT “Lease” is entered into this 26th day of December 2019 (“Effective Date”),  between NORTHFIELD I, LLC, an Ohio limited liability company (“Landlord”) and KRYSTAL BIOTECH, INC.,  a Delaware corporation (“Tenant”).    1. DEFINITIONS AND CERTAIN BASIC PROVISIONS    1.1.  Landlord:   Northfield I, LLC  1.2.  Landlord's Address:   c/o Al. Neyer, LLC       302 West Third Street, Suite 800       Cincinnati, OH 45202       Attn: Legal Services       Email: lkoth@neyer.com           With copy to:   c/o Al. Neyer, LLC       302 West Third Street, Suite 800       Cincinnati, OH  45202       Attn: Asset Management       Email: jcheung@neyer.com         1.3.  Tenant: Krystal Biotech, Inc.         1.4.  Tenant's Address: 2100 Wharton Street, Suite 701       Pittsburgh, PA 15203       Attn:  Tony Riley       Email: triley@krystalbio.com              and              2100 Wharton Street, Suite 701       Pittsburgh, PA 15203       Attn:  Josh Suskin       Email:  jsuskin@krystalbio.com           With copy to:   Jonathan P. Altman, Esq.       Sherrard, German & Kelly, P.C.       535 Smithfield Street, Suite 300       Pittsburgh, PA 15222       Email:  jpa@sgkpc.com           1.5. Premises:  The Property (as defined below), together with a building to be constructed thereon containing  approximately 100,000 rentable square feet of space (currently expected to be comprised of approximately  86,015 rentable square feet of industrial warehouse, production and distribution space and approximately  13,985 rentable square feet of office space) (“Building”), together with all improvements located on the  Property (including, without limitation all utility systems located within or otherwise serving the Building  and a parking lot containing at least 200 parking spaces located on the Property) and all appurtenances  thereto, including but not limited to, rights of ingress, egress and regress to the Premises.  The Premises are  shown on the site plan attached hereto as Exhibit A.  The rentable square footage contained within the  Building shall be subject to confirmation after the Lease Commencement Date in accordance with the  remeasurement provisions set forth in Section 3.1 below.  

 

EXECUTION COPY  2  1.6. Property: Approximately 10 acres located on International Drive, Findlay Township, Allegheny County,  Coraopolis, Pennsylvania, 15108, more fully described in the Legal Description attached hereto as Exhibit  A-1.    1.7. Lease Term:  The term of this Lease ("Lease Term") shall be for a period of Fifteen (15) years plus a  part of a month, if any, from the Lease Commencement Date (as defined herein) to the first day of the  first full calendar month in the Lease Term.    1.8. Renewal Terms:  Tenant shall have three (3) consecutive renewal options (each a “Renewal Term”), the  first two of which shall be for a period of five (5) years each, and the third of which shall be for a period  of up to a maximum of four (4) years and eleven (11) months.  Each Renewal Term shall be exercisable  upon Tenant providing Landlord with at least nine (9) months prior written notice.  The Base Rent for  each Renewal Term shall be the Base Rent in the last year of the preceding Lease Term plus the increase  in average annual CPI Increases (as defined below) for the prior three (3) years.  The annual escalations  for each Renewal Term shall be equal to the CPI Increases established in the first year of the then current  Renewal Term. The foregoing notwithstanding, in no event shall any Renewal Term Base Rent be less  than the Base Rent in the last year of the preceding Lease Term.  As used herein, the phrase “CPI  Increases” means the annual increase in The United States Department of Labor, Bureau of Labor  Statistics, Consumer Price Index for All Urban Consumers (CPI-U), Midwest – Size Class B/C  (December 1996=100).      1.9. Lease Commencement Date:  The Lease Term shall commence upon the date of Substantial Completion  (“Lease Commencement Date”).  “Substantial Completion” shall mean the date Landlord delivers the  Premises to Tenant with Landlord’s Work (as defined herein) substantially completed in accordance  with the work letter attached hereto and made a part hereof as Exhibit B (“Work Letter”), except for  Punch List Items (as defined in the Work Letter) and otherwise (a) in compliance with all applicable  federal, state and local laws, statutes, ordinances, codes, orders rules, regulations and other requirements  of governmental agencies having authority over the Property (collectively, “Applicable Law(s)”) and (b)  in a condition that is suitable for a certificate of occupancy to be issued, subject only to the completion  of Tenant’s Work. The Lease Commencement Date will be officially established by execution of a  written statement in the form attached hereto as Exhibit C.  The “Estimated Lease Commencement  Date” is November 1, 2020.    Should Landlord fail to (1) deliver the Premises to Tenant with the Initial Delivery Conditions (as defined on Exhibit  B-4 attached hereto) satisfied (as applicable, the “Initial Delivery Date”) by August 24, 2020 (the “Estimated Initial  Delivery Date”) or (2) to achieve Substantial Completion of Landlord’s Work by the Estimated Lease Commencement  Date, in either case for reasons other than Force Majeure (defined in Section 28 below) or a Tenant Delay (defined  below), Tenant shall be entitled to the following abatement rights: (i) one day of Rent for each calendar day of delay  up to and including the sixtieth (60th) day of such delay; (ii) two days of Rent for each calendar day of delay, from the  sixty-first (61st) day of such delay up to and including the one hundred twentieth (120th) day of such delay; and (iii)  three days of Rent for each calendar day of delay from the one hundred twenty-first (121st) day of such delay and  beyond, until the Initial Delivery Date or Lease Commencement Date (as applicable) occurs.    “Tenant Delay” means any actual delay that Landlord encounters in the performance of the Landlord’s Work, to the  extent that such delay is caused by any act or omission by Tenant or its employees, agents, licensees, contractors or  any other party acting on behalf of Tenant which substantially interferes with the performance of Landlord’s Work  such that Landlord is delayed in the performance of Landlord’s Work as a direct result of such act or omission by  Tenant or its employees, agents, licensees, contractors or any other party action on behalf of Tenant.  In order for  Landlord to claim an event of Tenant Delay, Landlord must provide written notice to Tenant within ten (10) days of  the date on which Landlord actually learns of the act or omission and the resulting delay, which notice specifies  Landlord’s reasonable determination of the cause of the delay and (if known and completed) the duration of the delay.   In the event a Tenant Delay causes a delay in the Lease Commencement Date, Tenant shall commence payment of  Rent on the date which would be the Lease Commencement Date if not for Tenant Delay.    

 

EXECUTION COPY  3  1.10. Early Access Period: Upon Tenant’s request to Landlord and Landlord’s approval, which approval shall  not be unreasonably withheld, conditioned or delayed, and provided that Tenant’s access to the Premises  shall not unreasonably interfere with Landlord’s performance of Landlord’s Work, Tenant shall have  access to the Premises prior to the Lease Commencement Date for the purposes of commencing all work  necessary for Tenant to open for business at the Premises (including, without limitation, all of the items  enumerated on Exhibit B-3) (“Tenant’s Work”) including, but not limited to, MEP installation, and  otherwise to install trade fixtures and personal property at the Premises (“Early Access Period”).  Tenant  shall provide proof of Tenant’s Insurance as described in Section 12.3 of this Lease prior to entering the  Premises to conduct any of Tenant’s Work.  No Base Rent or Additional Rent will be payable during the  Early Access Period.    1.11. Base Rent:  Base Rent shall be defined per the following schedule:    TIME PERIOD  (Months)  ANNUAL BASE RENT MONTHLY BASE RENT  1 – 12  $ 763,000.00  $ 63,583.33  13 – 24  $ 778,260.00  $ 64,855.00  25 – 36  $ 793,825.20  $ 66,152.10  37 – 48  $ 809,701.70  $ 67,475.14  49 – 60  $ 825,895.74  $ 68,824.64  61 – 72  $ 842,413.65  $ 70,201.14  73 – 84  $ 859,261.93  $ 71,605.16  85 – 96  $ 876,447.16  $ 73,037.26  97 – 108  $ 893,976.11  $ 74,498.01  109 – 120  $ 911,855.63  $ 75,987.97  121 – 132  $ 930,092.74  $ 77,507.73  133 – 144  $ 948,694.60  $ 79,057.88  145 – 156  $ 967,668.49  $ 80,639.04  157 – 168  $ 987,021.86  $ 82,251.82  169 – 180  $ 1,006,762.30  $ 83,896.86    1.12. Base Rent Commencement Date:  The Base Rent shall commence on the Lease Commencement Date  which is anticipated to be on or before November 1, 2020.      1.13. Additional Rent: Additional Rent for the first year of the Lease Term is estimated to be Two and 24/100  Dollars ($2.24) per rentable square foot per annum, payable in twelve (12) equal monthly installments  as set forth in Section 4.2 of this Lease, and shall commence on the Lease Commencement Date.    1.14. Security Deposit:  One Million Five Hundred Twenty-Six Thousand Dollars ($1,526,000.00).  Provided  that no Tenant Default exists under any of the terms of this Lease, the then-remaining Security Deposit  shall be released to Tenant as follows:    (a) Within fifteen (15) days after the date upon which (i) the Initial Delivery Date has occurred and  (ii) Tenant has caused the portion of the slab required to be installed by Tenant in accordance  with item 17 set forth in Exhibit B-3 attached hereto, Landlord’s specifications therefor and  accepted by Landlord, Landlord shall return Two Hundred Thousand Dollars ($200,000.00) of  the Security Deposit to Tenant;   

 

EXECUTION COPY  4  (b) Within fifteen (15) days after the date upon which Tenant has submitted evidence to Landlord  of Tenant’s achievement  for at least twenty-four (24) consecutive months of (i) a Fixed Charge  Coverage Ratio (as defined below) of at least 1.50 to 1.00 and (ii) a Debt to EBITDA Ratio (as  defined below) of no more than 3.00 to 1.00, Landlord shall return an amount equal to (i) the  Security Deposit remaining less (ii) an amount equal to the following six (6) months of Rent;  and     (c) Any remaining Security Deposit shall be returned to Tenant upon Tenant’s achievement of a  long-term credit rating of Baa3 or above from Moody’s Investor Service and BBB- from  Standard & Poor’s Financial Services for a period of twenty-four (24) consecutive months.    As used herein, “Fixed Charge Coverage Ratio” means, as of the end of each calendar month, (i) the  sum of EBITDA (as defined below) plus fixed charges before tax, divided by (ii) the sum of fixed charges  before tax plus interest expense.    As used herein, “Debt to EBITDA Ratio” means, as of the end of each calendar month, the ratio of (i)  the aggregate amount of Debt divided by (ii) EBITDA.  As used herein, “Debt” means, as of the end of  each calendar month, the aggregate outstanding principal amount of all debt owed by Tenant.  As used  herein, “EBITDA” means, as of the end of each calendar month, Tenant’s net profit before tax plus  interest expense (net of capitalized interest expense), depreciation expense and amortization expense.    Each of the Fixed Charge Coverage Ratio and the Debt to EBITDA Ratio tests shall be calculated on a  semi-annual basis, on June 30th and December 31st. Tenant shall furnish to Landlord within sixty (60)  days of each testing date the calculation for each test, certified in writing by an authorized representative  of Tenant as true, complete and correct.    1.15. Permitted Use:  Tenant and its affiliates shall be permitted to utilize the Premises for any function related  to the production, storage or distribution of pharmaceutical products and products ancillary thereto, and  any administrative functions related thereto; provided such use conforms to all applicable zoning  requirements of the appropriate governmental authority sufficient to entitle Tenant to an occupancy  permit from such governmental authority.  Any use other than this must be approved in advance in  writing by Landlord.  Tenant hereby represents and warrants to Landlord that Tenant will ensure  compliance with all of the terms of this Lease by any Tenant affiliate utilizing the Premises.    Each of the foregoing definitions and basic provisions shall be construed in conjunction with and limited by the  references thereto in the other provisions of this Lease.  2. FUNDAMENTAL EXHIBITS TO LEASE  The following exhibits attached to this Lease are incorporated herein by this reference:    Exhibit A: Site Plan of Premises  Exhibit A-1: Property Legal Description  Exhibit B: Work Letter  Exhibit B-1: Plans and Specifications for Landlord’s Work  Exhibit B-2: Schedule for Landlord’s Work  Exhibit B-3: Description of Tenant’s Work  Exhibit B-4: Initial Delivery Conditions  Exhibit C: Lease Commencement Date Memorandum  Exhibit D: Rules and Regulations  Exhibit E: Landlord Ground Lease  Exhibit F: Form of SNDA  Exhibit G: Form of Landlord Ground Lease NDA  Exhibit H: Form of Memorandum of Lease    

 

EXECUTION COPY  5  3. GRANT, PREMISES AND TERM  3.1. Grant and Premises  Landlord leases to Tenant and Tenant leases from Landlord upon the terms and conditions set forth herein, the  Premises more fully described in Section 1.5 of this Lease. Landlord leases the Property pursuant to a ground lease  between Landlord and The Allegheny County Airport Authority (“Ground Lessor”) of even date herewith, a copy of  which is attached hereto as Exhibit E (“Landlord Ground Lease”).  Tenant agrees that it shall not take any action that  would violate or cause a default under the Landlord Ground Lease.    This Lease is subject to, and contingent upon, Landlord’s ability to obtain committed financing in the amount of at  least $5,929,328 (the “Financing Amount”) for its completion of the Landlord’s Work contemplated herein.  If  Landlord is unable to obtain committed financing equal to or greater than the Financing Amount from a lender on  commercially reasonable terms, Landlord shall have the right to terminate this Lease upon written notice to Tenant,  which notice must be given to Tenant no later than January 15, 2020.  Landlord shall use its best efforts to satisfy this  financing contingency on or before January 15, 2020.  Furthermore, if Landlord is unable to obtain final land use  approvals from Findlay Township, which are required in order for Landlord to proceed with commencing construction  of the Premises as contemplated by this Lease, on or before February 15, 2020, Landlord and/or Tenant shall have the  right to terminate this Lease upon written notice to the other party, which notice must be given to the other party no  later than February 20, 2020.  Landlord shall use its best efforts to satisfy this land use approval contingency on or  before February 15, 2020.  Notwithstanding anything herein to the contrary, if Landlord or Tenant terminates this  Lease in accordance with the terms set forth in this paragraph, (i) Landlord shall, at Tenant’s election, provide Tenant  with a signed copy of a commercially reasonable assignment of the Landlord Ground Lease, within three (3) days  after any written notice of termination is delivered hereunder, (ii) Landlord shall, at Tenant’s election and upon receipt  of a commercially reasonable release and waiver executed by Tenant therefor, assign (or cause the assignment) to  Tenant all plans, drawings and specifications related to Landlord’s Work, (iii) Landlord shall immediately return the  Security Deposit to Tenant, (iv) Landlord shall cause the Escrow Agent (as defined in the Work Letter) to return  Tenant’s Cash Contribution to Tenant within ten (10) business days after the date of such termination, and (v) Landlord  shall (and shall cause its affiliate, Al. Neyer, LLC to) release Tenant from any and all liabilities and obligations  otherwise contemplated by that certain Letter of Indemnification dated October 3, 2019 between Al. Neyer, LLC and  Tenant.  This paragraph shall survive the termination of the Lease.  After construction of the Building, Landlord will direct a third-party architect, who is not affiliated with Landlord and  who shall be jointly selected by Landlord and Tenant, to measure the square footage within Building utilizing the  American National Institute Publication ANSI Z65.1-1998, as promulgated by the Building Owners and Managers  Association. After such measurement is complete and accepted as accurate by Landlord and Tenant, the parties shall  execute the Lease Commencement Date Memorandum in the form of Exhibit C, attached hereto and made a part  hereof, confirming the rentable square footage of the Building, and, if the rentable square footage of the Building is  less than 100,000, the Base Rent schedule (starting with $7.63 rate per RSF, with 2% annual increases) and the  Purchase Price for Tenant’s exercise of the Purchase Option shall be adjusted accordingly.  3.2. Park Common Areas  The Premises are leased together with the rights granted to Landlord under the Landlord Ground Lease to use, in  common with other tenants in the Northfield Industrial Park (“Park”), and their respective agents, invitees and  employees all exterior areas and facilities (including, without limitation, sidewalks, driveways and landscaped areas)  in the Park which are made available by the owner of the Park  to Tenant and other tenants within the Park and/or to  the general public, in common (“Park Common Areas”).    

 

EXECUTION COPY  6  3.3. Roof  Tenant shall have the non-exclusive right to place communications equipment such as an antenna, dish or other device  on the roof of the Building on the following terms and conditions: (a) prior to installation, Landlord shall have the  right to approve Tenant’s plans and proposed location for any such installation in Landlord’s reasonable discretion;  (b) such installation shall not void any warranty relating to the roof of the Building, or if required by the warranty,  Tenant shall use the roof contractor required by the warranty for such installation; and (c) at the end of the Lease  Term, Tenant shall remove Tenant’s communications equipment and repair any damage to the roof of the Building  caused by such removal.  Tenant shall have the right to use the roof of the Building, subject to Applicable Laws (if  any) and subject to Landlord’s prior approval of Tenant’s plans for any such use, such approval not to be unreasonably  withheld, conditioned or delayed, which approval may include a screening plan to be paid for by Tenant.  Landlord  shall not grant any other party the right to use the rooftop for telecommunications equipment other than  Tenant.  Tenant shall be solely responsible for and agrees to promptly make any repairs or replacements to the roof  necessitated by any use of the roof by Tenant or any of Tenant’s agents, employees, contractors or invitees  (collectively, "Tenant’s Agents”) pursuant to this Section 3.3.  In no event shall any party other than Tenant be  permitted to place signage on the Building’s rooftop.  3.4. Term  The Lease Term shall be for the period set forth in Section 1.7 of this Lease and the Lease Term shall begin on the  Lease Commencement Date specified in Section 1.9 of this Lease.  When the Lease Commencement Date has been  established, Landlord and Tenant shall execute, acknowledge and deliver a written statement specifying the dates of  commencement and termination of the Lease Term in the form attached hereto as Exhibit C.    4. RENT; ADDITIONAL RENT; OTHER CHARGES  4.1. Rent  The term “Rent” shall include Base Rent, Additional Rent and any other amount due from Tenant to Landlord.  Tenant  shall pay Base Rent to Landlord without notice of demand and (except as otherwise expressly set forth in this Lease)  without setoff or deduction for any reason at Landlord’s address set forth in Section 1.2 of this Lease or at such other  place, or by wire transfer of immediately available funds, as Landlord may, at its discretion, from time to time  designate, as rental for the Premises.  In addition to the Base Rent, Tenant shall pay as Additional Rent during the  Lease Term and any extension or renewal thereof, all Operating Expenses, Taxes and Landlord’s Insurance (as those  terms are defined below) related to the Premises. In addition, Tenant shall pay any and all sums of money or charges  required to be paid by Tenant under the terms of this Lease whether designated Additional Rent or not, and such  amounts, if not paid when due, shall be collectible with the next installment of Base Rent thereafter falling due as  provided herein and shall be subject to all provisions of this Lease and of Applicable Laws.      Base Rent and Additional Rent shall be payable in advance on the first day of each calendar month during the Lease  Term hereof commencing on the Lease Commencement Date.  Rent for partial months shall be prorated.  The first  monthly payment of Base Rent shall include any prorated rental for the period from the Lease Commencement Date  to the first day of the first full calendar month in the Lease Term.  If Tenant shall fail to timely pay the foregoing Rent  to Landlord and such failure continues for more than ten (10) days after Tenant receives written notice thereof from  Landlord, Landlord may, in addition to all other rights and remedies which Landlord may have, assess a "late charge"  on such past-due amount equal 1.5% of the amount that is past-due for that month; provided, however, that Landlord  shall not be required to give such written notice more than one (1) time per calendar year before assessing any such  late charge.  

 

EXECUTION COPY  7  4.2. Additional Rent  Tenant's obligation to pay Additional Rent shall commence on the Lease Commencement Date. Within ninety (90)  days after the end of each calendar year, Landlord shall furnish Tenant with a statement of the actual amount of  Tenant's Additional Rent reflecting the actually incurred Operating Expenses, Taxes and Landlord’s Insurance  expenses for such period.  If the total amount paid by Tenant under this Section for any calendar year shall be less  than the actual amount due for Tenant for such year as shown on such statement, Tenant shall pay to Landlord the  difference between the amount paid by Tenant and the actual amount due, such deficiency to be paid within thirty (30)  days after the furnishing of each such statement; and if the total amount paid by Tenant hereunder for any such calendar  year shall exceed such actual amount due from Tenant for such calendar year, such excess shall be credited against  the next installment(s) of Additional Rent.  4.3. Operating Expenses  "Operating Expenses" shall mean all expenses, costs and disbursements of every kind and nature which Landlord  shall pay or become obligated to pay because of, or in connection with, the ownership, operation, repair and  maintenance of the Premises, including but not limited to: the maintenance and repair of the landscaping, parking,  sidewalks and roadway facilities and retaining walls located in or on the Property, non-capitalized repairs, line  painting, sealing, and removal of snow, ice, trash, rubbish and refuse from parking and roadway areas, parking area  and walkway lighting and utilities for the same (if separately metered), repair and replacement of parking area lights  (including the repair and replacement of light bulbs and poles) and walkway lights.     Operating Expenses shall include, but not be limited to, all expenses incurred by Landlord in connection with the  Landlord Ground Lease, including, but not limited to, the expenses associated with any detention pond utilized by the  Premises.  Subject in all respects to the Landlord’s Construction Warranties (as defined in Section 7 below) and any  warranties referred to in the Work Letter, Operating Expenses shall include Building-related maintenance, repair,  cleaning, snow and ice removal, planting, replanting, landscaping, painting and power washing of exterior walls, tuck- pointing of exterior walls, glass panel sealing, exterior security lights and utilities for the same (if separately metered),  gutters, downspouts, minor roof repair and maintenance and repair of lawn sprinkler systems, water and sewage  charges for Building maintenance or operation (if separately metered), worker's compensation insurance, wages,  unemployment taxes, social security taxes, employee benefits, personal property taxes, fees for required licenses and  permits, supplies, reasonable depreciation of equipment, and a property management fee equal to two percent (2%) of  the Base Rent payable by Tenant during any calendar year.  Operating Expenses shall further include amortization of  the costs of capital expenditures and reasonable financing charges for (a) items that are primarily for the purpose of  reducing or avoiding increases in Operating Expenses in Landlord’s good faith estimate, (b) replacing, modifying  and/or adding improvements or equipment mandated by any Applicable Laws enacted or which take effect after the  date of this Lease and any repairs, disposals or removals necessitated thereby (including, but not limited to, the cost  of complying with Applicable Laws), or (c) any other cost or expense necessary to carry out Landlord’s maintenance,  repair, replacement and other obligations under this Lease; provided, however, that the cost of any such permitted  capital expenditure shall be amortized on a straight line basis, at a rate of six percent (6%), over the GAAP useful life  thereof, and Landlord shall only pass through the annual amount stemming from such amortization.    Notwithstanding the foregoing, Operating Expenses shall not include any of the following expenses:      (i) costs for which Landlord is entitled to be reimbursed by a third-party (including, without limitation,  by Ground Lessor or any insurer, tenant or condemnor) and is actually reimbursed by such third- party;    (ii) costs incurred in connection with the sale, financing or refinancing (or attempted sale, financing or  refinancing) of the Property or any other portion of the Park including, without limitation,  commissions, marketing costs, interest, principal, points and fees on debts or amortization on any  mortgage or mortgages or any other debt instrument encumbering the Property or any other portion  of the Park or planned to encumber the Property or any other portion of the Park;    

 

EXECUTION COPY  8  (iii) legal fees, accounting expenses, leasing commissions, allowances, buy-out amounts, tenant  improvement costs, advertising expenses, promotional expenses, any management fee in excess of  the amount set forth in the first paragraph of this Section 4.3 above, and other costs of a similar  nature incurred in the leasing of space at the Property or elsewhere at the Park;    (iv) ground rent or any other payments paid under any present or future ground or underlying lease  (including but not limited to the Landlord Ground Lease) and/or grant affecting the Park, Property  and/or the Premises (other than payments which, independent of such ground or underlying lease,  would constitute an Operating Expense hereunder);    (v) depreciation on any aspect or component of the Premises other than as expressly provided in this  Section 4.3;    (vi) legal fees arising out of disputes or negotiations with any tenant, if applicable;    (vii) costs incurred due to a breach of this Lease by Landlord or any violation of any Applicable Laws  by Landlord, unless directly related to Tenant’s use of the Premises;    (viii) costs arising from the presence of any Hazardous Material or violation of Environmental Laws as  of or prior to the Lease Commencement Date or otherwise caused by any party other than Tenant or  any of Tenant’s Agents;    (ix) costs for any structural or foundation repair or replacement that is not a capital repair or replacement  pursuant to the first paragraph of this Section 4.3 above;    (x) costs of roof replacement that is not a capital replacement pursuant to the first paragraph of this  Section 4.3 above;    (xi) tap-in fees, impact fees or fees or charges or which Landlord is solely responsible under this Lease;    (xii) costs related to Landlord’s Work or the satisfaction of Landlord’s Construction Warranties;    (xiii) costs incurred in connection with casualty or condemnation repairs or restorations; and/or    (xiv)  should Landlord fail to maintain the insurance coverages required by this Lease, costs that have not  been reimbursed to Landlord but would have been reimbursed to Landlord by an insurance provider  had Landlord maintained the insurance coverages required by this Lease.  4.4. Taxes  "Taxes" shall mean all taxes, fees, service payments and assessments levied upon the Premises and its  appurtenances and upon the real property upon which the same are constructed, but shall not include: (a) any income,  occupational, franchise, estate, inheritance or other taxes which shall not be denoted specifically as real estate taxes;  or (b) any taxes applicable to a period of time before or after the Lease Term.  If at any time a tax or excise on rents,  or other tax, however described, is levied or assessed against Landlord on account of the rent reserved hereunder, the  same shall be included within the terms "Taxes" for the purposes hereof.  Taxes shall also include all reasonable costs  and expenses incurred by Landlord in seeking a reduction of any taxes and assessments.  Tenant will pay all Taxes  incurred by Landlord with respect to the Property.  Tenant shall have the right to appeal the assessed value of the  Property and/or the Building throughout the Lease Term, at Tenant’s sole cost and expense.  Tenant may initiate  proceedings to contest any Taxes.  If notice of any increased assessment relative to the Property or the Building is sent  to or received by Landlord, Landlord shall immediately, but no later than thirty (30) days after its receipt, forward the  notice to Tenant at both of the addresses set forth in Section 1.4 of this Lease.  If required by Applicable Law, Landlord  shall join in any such proceedings initiated by Tenant, provided that Tenant shall pay all costs and expenses, charges,  interest and penalties in connection therewith, including reasonable costs and expenses incurred by Landlord.  Tenant  shall continue to reimburse Landlord under this Section for all Taxes which Landlord is or becomes obligated to pay  during the pendency of any such proceedings.  Upon conclusion of such proceedings, Tenant shall be entitled to a  credit for Tenant’s share of any Taxes refunded to Landlord as a result of any such proceedings.  

 

EXECUTION COPY  9  4.5. Insurance  “Landlord’s Insurance” shall mean all premiums for fire and extended coverage, liability and property  damage insurance maintained with respect to the Premises by Landlord pursuant to Section 12.2 below.   Notwithstanding the foregoing provisions, for each calendar year during the Lease Term, Tenant shall reimburse Landlord  for Landlord’s Insurance premiums with respect to the Premises for such calendar year, which shall be paid in accordance  with Section 12.2.  Tenant’s payment obligation for Landlord’s Insurance shall be conditioned upon Landlord’s  delivery to Tenant of a copy of Landlord’s Insurance policies’ respective declaration pages documenting the type,  amount and cost of Landlord’s Insurance being provided (broken out on a per location basis, as and to the extent  necessary), and proof of payment for premiums due thereon.  4.6. Tenant’s Audit Rights  (a) Tenant shall have the right, upon not less than thirty (30) days' written notice to Landlord, and not more than  one time each calendar year, to audit at Tenant's cost, Landlord's books and records with respect to Operating  Expenses, Taxes and/or Landlord’s Insurance for any given calendar year.  Landlord shall cooperate with Tenant in  providing Tenant reasonable access to its books and records at the office where Landlord maintains its records of  Operating Expenses, Taxes and/or Landlord’s Insurance (or shall provide such books and records to Tenant  electronically, at Tenant’s option) during normal business hours for this purpose, upon at least thirty (30) days’ prior  written notice delivered to Landlord.  Tenant shall pay the reasonable fees and expenses related to such audit, unless  the audit determines that Landlord overstated Operating Expenses, Taxes and/or Landlord’s Insurance by more than  four percent (4%), in which case Landlord, within thirty (30) days after demand from Tenant, shall pay such fees and  expenses.    (b) In the event that any audit discloses an underpayment of Operating Expenses, Taxes and/or Landlord’s  Insurance by Tenant, then Tenant, within thirty (30) days of such audit, shall remit the amount of the underpayment  to Landlord.  In the event that any such audit discloses an overpayment by Tenant, then Tenant shall provide Landlord  with a copy of such audit together with written request for Landlord to reimburse Tenant for such overpayment  (together, a “True-Up Request”).  Landlord shall, within thirty (30) days of receiving any such True-Up Request from  Tenant, either (i) remit the amount of overpayment to Tenant, or (ii) notify Tenant in writing (“Contest Notice”) of its  election to contest the audit results set forth in such True-Up Request in accordance with Section 4.6(c) below.    (c) If Landlord timely delivers any Contest Notice in accordance with Section 4.6(b) above, Landlord and Tenant  shall thereafter diligently and in good faith attempt to amicably determine the appropriate payments related to  Operating Expenses, Taxes and/or Landlord’s Insurance with respect to the year for which Tenant has submitted a  True-Up Request, for a period of thirty (30) days after Landlord’s delivery of such Contest Notice.  If, despite the  parties’ diligent and good faith efforts, Landlord and Tenant have not reached agreement with respect to such matters  within the aforementioned 30-day period, Landlord and Tenant shall thereafter proceed to a baseball-style arbitration,  wherein Landlord and Tenant shall apply to the American Arbitration Association for the designation of a qualified  third-party arbitrator (“Arbitrator”).  Within ten (10) days of the designation of the Arbitrator, Landlord and Tenant  shall each submit a written proposal to the Arbitrator setting forth its calculation of the applicable Operating Expense,  Taxes and/or Landlord’s Insurance true-up for the designated calendar year, as well as its calculation methodology for  determining such Operating Expenses, Taxes and/or Landlord’s Insurance.  The Arbitrator shall select either the  Landlord’s or the Tenant’s proposed calculation without modification.  The Arbitrator’s selection shall be final and  binding on both Landlord and Tenant.  The fees of the Arbitrator, and any costs associated with applying the American  Arbitration Association for designation of the Arbitrator, shall be equally split by Landlord and Tenant.  All notices  required to be delivered pursuant to this Section shall be delivered in accordance with the notice requirements set forth  in Section 27 below.    (d) If Landlord fails to remit the entire amount of any such overpayment to Tenant within thirty (30) days after  the date such overpayment has either been deemed accepted by Landlord pursuant to Section 4.6(b) above or finally  determined pursuant to Section 4.6(c) above, then Tenant may offset any such past-due amount set forth in such audit  against the Base Rent payment(s) next coming due, until such past-due amount has been fully recouped by Tenant.  

 

EXECUTION COPY  10  4.7. Utilities   Beginning on the Lease Commencement Date and continuing during the Lease Term, Tenant shall transfer all utility  service to Tenant’s name and Tenant shall be solely responsible for and shall promptly pay all charges for telephone  service, electricity, gas, water, sewage and all other utilities used upon or furnished to the Premises and separately  metered.  To the extent that any utility services supplied to the Premises are billed directly to Landlord, Tenant shall  reimburse Landlord, within thirty (30) days after Landlord’s delivery to Tenant of an invoice therefor, for that portion of  such utility services that is attributable directly to Tenant’s use of the particular utility service.  In no event shall Landlord  be liable in damages or otherwise for any interruption or failure in the supply of such utilities, or if either the quantity  or character of such utilities supplied is changed or is no longer available or suitable for Tenant's requirements.    4.8. Taxes – Other  Tenant shall pay before delinquency any and all taxes and assessments, licenses, sales, business, occupation or other  taxes, fees or charges levied, assessed or imposed upon its business operations in the Premises during the Lease Term.   Tenant shall pay before delinquency any and all taxes and assessments levied, assessed or imposed upon its trade  fixtures, leasehold improvements, merchandise and other personal property in, on or upon the Premises.  In the event  any taxes, fees or charges referred to in this Section shall be assessed, levied or imposed upon or with the business or  property of Landlord, such assessment, fees or charges shall be paid by Tenant to Landlord within thirty (30) days  after receipt of Landlord's written request for such payment (which request shall be accompanied by a detailed invoice  therefor).  4.9. Renewal Rent  If Landlord and Tenant cannot agree on the Base Rent for a Renewal Term within thirty (30) days after negotiations  begin, the parties agree to enter into a “Baseball Arbitration” process in which each will appoint an MAI real estate  appraiser whose instruction shall be to agree to the accurate calculation of CPI Increases (as defined in Section 1.8  above).  Thereafter, if those two (2) appraisers are unable to agree within thirty (30) days on the applicable CPI  Increases to be utilized for the calculation of Base Rent for any applicable Renewal Term, then they will jointly appoint  a third appraiser, subject to the approval of Landlord and Tenant. The value determined by the third appraiser  according to the factors set forth in Section 1.8 will be binding on Landlord and Tenant, unless it is either lower or  higher than the lower or higher respectively of the other two (2) appraisals, in which case, the middle of the three (3)  appraisals will control.  If appraisals are required, Landlord and Tenant will share the cost of all appraisals.  In no  event shall the appraisal process exceed ninety (90) days after Tenant’s initial written notice to Landlord of Tenant’s  election to renew.    5. SECURITY DEPOSIT  Within three (3) business days after the execution of this Lease, Tenant shall pay to Landlord the Security Deposit as  set forth in Section 1.14 as security for the performance of Tenant’s obligations under this Lease, which Security  Deposit shall be subject to scheduled decreases in accordance with Section 1.14.  In the event of a Tenant Default  under this Lease, Landlord may apply such part of the Security Deposit as may be necessary to cure such Tenant  Default.  Should Landlord so apply all or part of the Security Deposit, Landlord shall notify Tenant of such application  at least ten (10) days in advance, and Tenant shall, within fifteen (15) days after receipt of Landlord’s written demand,  redeposit with Landlord an amount equal to that so applied so that Landlord will have the full Security Deposit (less  any amounts previously returned in accordance with Section 1.14 above) on hand.  Within thirty (30) days after any  reduction set forth in Section 1.14 above, and provided a Tenant Default does not then exist, Landlord shall refund to  Tenant the applicable portion of the Security Deposit.  In the event Landlord fails to refund to Tenant such applicable  portion of the Security Deposit within such 30-day period and no dispute exists between Landlord and Tenant with  regard to any Tenant Default and/or the Security Deposit, Tenant may elect to offset an amount equal to the applicable  portion of the Security Deposit to be returned to Tenant against the next installment(s) of Base Rent owed hereunder,  until such amount is fully recouped by Tenant.  In the event of a sale of the Premises, Landlord shall transfer the  Security Deposit to the purchaser.  Following Landlord’s written notice to Tenant accompanied by documentation  signed by Landlord and such purchaser evidencing that the Lease and Security Deposit have been assigned to and  assumed by any such purchaser in writing, Landlord shall thereafter be released by Tenant from any liability for the  return of the Security Deposit.  

 

EXECUTION COPY  11  6. USE AND OCCUPANCY  6.1. Use of Premises  The Premises are to be used solely for the purposes set forth in Section 1.15 of this Lease and for no other business or  purpose without the prior written consent of Landlord.  Tenant shall not do or permit to be done in or about the  Premises anything which is illegal or unlawful.  Other than with respect to Landlord’s Work, Tenant shall obtain all  permits, licenses, certificates or other authorizations and any renewals, extensions or continuances of the same  required in connection with the lawful and proper use of the Premises and shall pay when due all taxes upon its  merchandise, stock, fixtures, equipment and leasehold improvements in the Premises.  Neither a failure on the part of  Tenant to procure such permits, licenses, certificates or other authorizations, nor the revocation of the same, shall in  any way affect the liability of Tenant for payment of Rent herein reserved or the performance or observance of any of  the covenants or conditions herein contained on Tenant's part to be performed and observed.  Tenant shall (and shall  cause its affiliates and their respective employees to) observe the Rules and Regulations attached as Exhibit D or such  other reasonable rules and regulations applicable to the Premises, as the same may be imposed by Landlord from time  to time, but only to the extent that Landlord has provided a written copy of same to tenant at least thirty (30) days in  advance.  Tenant shall comply with all Applicable Laws applicable to the use and occupancy of the Premises and  Property.  Without limiting the generality of the foregoing, except as otherwise expressly permitted under the terms  of this Lease, Tenant shall not display anything outside of the Premises nor operate any loud speakers without the  specific written consent of Landlord.    Tenant shall be permitted to install, at Tenant’s sole cost and expense, access control equipment to limit and monitor  access to the Premises during normal business hours and after-hours, provided, however, that Landlord shall always  retain the ability to access the Premises in the case of an emergency situation.   6.2. Continuous Occupancy  Tenant shall have the right to vacate the Premises so long as Tenant continues to pay Rent as required hereunder and  maintains the Premises in good condition as described in Section 8.2 herein.    7. LANDLORD’S WORK    (a) Landlord shall perform, or cause to be performed, the work contemplated by Exhibits B, B-1 and B-2  (collectively, “Landlord’s Work”) at Landlord’s sole expense (except as otherwise expressly set forth in the Work  Letter), and in compliance with all Applicable Laws.  Landlord shall be responsible, at its sole cost and expense, for  obtaining all necessary permits for the performance of Landlord’s Work in compliance with all Applicable Laws.   Landlord and Tenant shall cooperate with each other in good faith to ensure that mutual access is coordinated between  their agents or contractors in a reasonable manner to allow each to complete its Landlord’s Work and Tenant’s Work,  respectively, without interference or delay.    (b) Landlord hereby warrants the Landlord’s Work as follows (collectively, “Landlord’s Construction  Warranties”): (i) For a period of one (1) year beginning on the Lease Commencement Date, Landlord, at its sole cost  and expense, shall warrant the Landlord’s Work has been constructed in a good and workmanlike manner, in  compliance with the plans and specifications attached hereto and made a part hereof as Exhibit B-1 (“Plans and  Specifications”), and in accordance with the Schedule attached hereto and made a part hereof as Exhibit B-2  (“Schedule”) and the same will be free of all defects; and (ii) For a period of eighteen (18) months beginning on the  Lease Commencement Date, Landlord, at its sole cost and expense, shall warrant the paved areas of the Property from  any defects in construction.  Notwithstanding anything to the contrary contained herein, Landlord’s Construction  Warranties will not include any maintenance which is the responsibility of the Tenant as set forth in Section 8.2 below.      (c) Unless otherwise agreed to in writing by Tenant, it is the Landlord’s responsibility to secure soil borings,  topographical surveys, geotechnical and foundation recommendations and tests from licensed local professionals,  including surveyors and engineers, as shall be necessary or appropriate to construct Landlord’s Work, using the best  engineering practices and conforming to all requirements of Applicable Laws.  

 

EXECUTION COPY  12  8. REPAIRS  8.1. Landlord Responsibility  Landlord, at Landlord’s sole cost and expense, but subject to the provisions of Section 4.3 above and the Work Letter,  shall keep or cause to be kept in as good repair as same are in upon Substantial Completion of Landlord’s Work or,  with respect to the floor slab, upon Substantial Completion of Tenant’s Work (which may include the replacement  of): the foundations, the roof and the structural soundness of the floors, and the exterior walls (excluding the interior  surface of the exterior walls and excluding the exterior and interior portions of all windows, doors, plate glass and  showcase); the exterior water, sewage, gas and electrical services up to the point of entry to the Building; the exterior  areas of the Property including, without limitation, the sidewalks and parking areas; the base building heating and air  conditioning systems (but not specialized HVAC systems installed by Tenant in support of specific business  operations within the Building) whether located inside or outside of the Building, except for ordinary maintenance  and repairs which shall be the responsibility of Tenant, as well as wiring and cabling servicing the Building (but only  to the point where such cabling enters and connects to the Building, and not from such point of connection to the  Tenant’s equipment); and Landlord shall make all repairs and restorations made necessary by fire or other peril  covered by the standard extended coverage endorsement on fire insurance policies as further described in Section 12;  provided, however, that Tenant shall reimburse Landlord upon demand for the cost of repairing any damage to the  Premises or Building caused by the negligence or the willful misconduct of Tenant, its employees, agents or invitees.   Landlord shall cooperate with Tenant in connection with enforcing all third-party warranties on construction, materials  and/or equipment, for the benefit of Tenant.  Notwithstanding the foregoing, (i) Landlord shall only be responsible for  the portion of the floor slab installed by Landlord, and (ii) Landlord shall not be responsible for the repairs to the floor  slab caused by Tenant or anyone acting on Tenant’s behalf.  8.2. Tenant Responsibility  Except (a) to the extent covered pursuant to either of Landlord’s Construction Warranties or any insurance policy  required to be maintained by Landlord pursuant to the terms of this Lease, or (b) repairs caused by the negligence or  willful misconduct by Landlord, any of Landlord’s affiliates, or any of their respective agents, employees, invitees or  contractors: Tenant shall, in all other respects, keep or cause to be kept in good repair and in a neat, clean and  tenantable condition, normal wear, tear and casualty excepted, the interior of the Premises, including but not limited  to the interior surface of the exterior walls, the exterior and interior portions of all windows, doors, plate glass and  showcases, and all plumbing, lighting fixtures, pipes and equipment, floor coverings, ceilings, walls and plasterings.   Tenant shall provide ordinary maintenance for the heating and air conditioning systems and provide for maintenance  service contracts on said systems which are reasonably satisfactory to Landlord; and to make all other repairs not  specifically required to be made by Landlord under Section 8.1.  Landlord represents that, as of the Lease  Commencement Date, the mechanical systems of the Premises installed by Landlord as part of Landlord’s Work shall  be in good working condition and otherwise meet the standards set forth in the Work Letter.  9. ACCESS AND CONFIDENTIALITY  9.1. Landlord Access  Subject to Landlord’s Entrance Requirements (as defined below), Landlord has the right to enter the Premises  periodically and shall have access to the Premises at reasonable hours for inspection or in connection with the  improvement or repair of utility lines and related systems and HVAC systems or equipment serving the Premises.  As  used herein, the phrase “Landlord’s Entrance Requirements” means: except in case of emergency, (a) Landlord shall  provide Tenant with not less than 24 hours’ notice prior to any entrance by Landlord, (b) Landlord shall not materially  interfere with Tenant’s operations on the Premises without first obtaining Tenant’s written consent, (c) Landlord shall  have a Tenant representative escort Landlord or its representative(s) or agent(s) while in the Premises, and (d) at all  times Landlord shall follow Tenant’s protocols established by Tenant to facilitate the physical safety of those in the  Premises and to protect any proprietary information or trade secrets related to Tenant’s operations.  In all events  Landlord shall use commercially reasonable best efforts to minimize any disruption to Tenant’s operations on the  Premises.  All entrances of Landlord and any of its representatives and/or agents shall be subject to Landlord’s  Entrance Requirements.  

 

EXECUTION COPY  13  9.2. Tenant Access  Tenant shall have access to the Premises twenty-four (24) hours a day, seven (7) days a week  10. ALTERATIONS TO PREMISES; SIGNS  (a) Material Structural Alterations.  Tenant shall not make any alterations, additions or improvements to the  Premises which materially or adversely impact the roof or structure of the Building (each, a “Material Structural  Alteration”) without first obtaining Landlord's written consent in accordance with the following:  Tenant shall notify  Landlord of any Material Structural Alteration that Tenant wishes to complete (each, a “Alteration Notice”).  Landlord  shall have ten (10) business days to review any such Alteration Notice and give consent to such Material Structural  Alteration, which consent shall not be unreasonably withheld, conditioned or delayed.  If Landlord fails to provide  Tenant with a written response to any Alteration Notice within the aforementioned 10-business day period, Landlord  shall be deemed to have provided its consent thereto, Tenant may thereafter proceed with such Material Structural  Alteration, and Landlord shall not be permitted to raise subsequent issues or requirements in respect of the Material  Structural Alteration proposed by such Alteration Notice.  Landlord shall be deemed to have acted reasonably in  withholding consent to an Alteration Notice only if the proposed Material Structural Alteration would: (i) void, in  whole or in part, any warranty pertaining to any item for which Landlord is responsible to maintain pursuant to Section  8.1 above, as reasonably determined by Landlord in good faith and substantiated in writing to Tenant (unless Tenant  uses Landlord’s contractor for such work, in which case this clause (i) shall not be a valid basis for Landlord to  withhold, condition or delay consent); (ii) materially or adversely impact the structural soundness of the Building, as  determined by Landlord’s structural engineer and substantiated in writing to Tenant; or (iii) violate any Applicable  Law.    (b) All Other Alterations.  Except as otherwise expressly set forth in Section 10(a) above, Tenant, without  Landlord’s prior consent and at its sole cost and expense, shall have the right, but shall not be obligated, prior to and  during the Lease Term, to improve, alter and renovate the Premises in any manner which Tenant deems necessary or  desirable to adapt the same for the conduct of its business operations, including, without limitation, the following  items (which the parties agree are not Material Structural Alterations): painting; decorating; redecorating; installing  non-load-bearing partitions, pass-through windows, counters, shelving, floor coverings, wall coverings, drop ceilings  and/or light fixtures.  Tenant shall be responsible for ensuring ADA compliance within the Premises.  The parties  further acknowledge and agree that Tenant’s business needs at the Premises may necessitate or otherwise make  desirable the installation of additional HVAC units, installation of one or more generator(s), increasing electrical  service, modifying plumbing service, and/or installing one or more new clean room(s).  Landlord hereby  acknowledges and agrees that Tenant shall not be required to seek or obtain Landlord’s consent with respect to, nor  shall Landlord have any rights in respect of evaluating, any of the items enumerated in the previous sentence, so long  as they would not materially or adversely impact the roof or structure of the Building.    (c) Additional Requirements re: Alterations.  Tenant shall perform (or cause to be performed) all alterations,  additions and improvements to the Premises (whether a Material Structural Alteration or otherwise) in a good and  workmanlike manner, and otherwise in accordance with Applicable Laws.  All alterations, additions and  improvements made by Tenant, whether or not such changes were approved by Landlord, shall become the property  of Landlord upon the making thereof and shall be subject to the terms of Section 19.1 herein upon the expiration or  earlier termination of this Lease.  Except as otherwise expressly set forth in Section 19.2 below, Tenant shall not be  required to remove any alterations, additions or improvements at the expiration or earlier termination of this Lease,  except for the following “Specialized Alterations”: (i) Tenant’s trade fixtures; (ii) Tenant’s interior and exterior  signage; (iii) alterations which penetrate floor slabs by more than two (2) inches, or otherwise adversely affect any of  the MEP systems serving the Building or any structural aspect of the Building; (iv) alterations which are likely to  adversely affect the safety of the Building and/or future occupants; (v) alterations that are prohibited by any ground  lease, mortgage, deed or other instrument encumbering the Premises; (vi) safes or vaults or other installations which  would be unusually difficult or expensive to remove; and (vii) any other alteration, addition or improvement that  Landlord notifies Tenant in writing, prior to the installation thereof, must be removed at the expiration or earlier  termination of this Lease.  Any damage to the Premises in connection with the making of alterations, additions and  improvements by Tenant or in connection with the placement, direction, maintenance, painting or removal of any  signs on the Premises or Property shall be repaired by Tenant at Tenant’s sole cost and expense.  

 

EXECUTION COPY  14    (d) Signs.  Notwithstanding the foregoing, Tenant shall be permitted to install Tenant’s any signage it desires on  the Premises, whether on the interior or outside of the Building (but not outside the Premises), provided (i) such  signage shall comply in all respects with the requirements of Applicable Law and (ii) the size, location, materials,  method of installation and method of removal of such signage shall be approved in advance by Landlord, whose  approval shall not be unreasonably withheld, delayed or conditioned.  Electricity for such signage shall be separately  metered to the Premises and paid by Tenant.  Upon termination of this Lease, Tenant shall be responsible for the  removal of any Tenant signage and Tenant shall responsible for the cost to repair any damage as a result of the removal  of Tenant signage, if applicable.  11. DAMAGE OR DESTRUCTION  11.1. Damage or Destruction  If the Building is damaged or destroyed by fire, earthquake, casualty or other risk required to be insured against  pursuant to Section 12.2 below or as otherwise required by Applicable Law, Tenant shall give Landlord prompt notice  of the occurrence of any such event.  Within thirty (30) days after the date Landlord receives notice from Tenant of  the applicable casualty event, Landlord shall prepare a written estimate of the time period required to repair and restore  the damaged portions of the Core and Shell of the Building (“Estimate”) and deliver such Estimate to Tenant.  Unless  terminated pursuant to Section 11.2 below, this Lease shall remain in full force and effect, and Landlord, at its sole  cost and expense, shall promptly repair the damage or destruction related to the Core and Shell of the Building and  restore the Core and Shell of the Building to substantially that condition existing immediately prior to such damage  or destruction.  If Tenant remains in occupancy of the Premises, Landlord shall exercise such repair and restoration efforts  in a manner so as not to interfere unreasonably with the use and occupancy of the Premises by Tenant for the conduct of  its business operations.  Until the completion of Landlord’s repair and restoration pursuant to this Section, Tenant’s  obligation to pay Rent and other amounts payable by Tenant hereunder shall be abated as of the date of the damage or  destruction in proportion to the extent that the value of the Premises for the use and occupancy thereof by Tenant for the  conduct of its business operations shall be reduced, in Tenant’s reasonable judgment.  As used herein, the term “Core  and Shell” means all items of Landlord’s Work, all external walls or the Building, the roof and roof membrane of the  Building, all  utility lines serving the Building (stubbed into the Building (whether up through the slab or through the  walls or roof of the Building), but not any lines within the interior of the Building), and the floor slab within the  Building.  11.2. Rights of Termination   Landlord’s and Tenant’s respective rights to terminate this Lease pursuant to events described in Section 11.1 above shall  be governed as follows:  (a) If the Premises shall be damaged or destroyed to the extent of more than fifty percent (50%) of the full  replacement cost of the Core and Shell of the Building, and the repair and restoration of any such damage or destruction  shall not be completed within 180 days after the date of the damage or destruction, then either party may elect to terminate  this Lease by delivery of notice to the other party within thirty (30) days after the date of such damage or destruction.  (b) If Landlord fails to deliver an Estimate within the 30-day period set forth in Section 11.1 above, Tenant may  elect to terminate this Lease by delivery of notice to Landlord within thirty (30) days after the expiration of the 30- day period set forth in Section 11.1 above; provided, however, that if Landlord provides an Estimate after such 30- day period set forth in Section 11.1 above but before Tenant exercises its right to terminate hereunder, Tenant shall  not have the right to terminate this Lease pursuant to this Section 11.2(b).  (c) Upon delivery of any notice pursuant to Section 11.2(a) or Section 11.2(b) above, this Lease shall terminate as  of the date of the damage or destruction unless otherwise provided in such notice, and Tenant and Landlord shall have no  further liabilities or obligations hereunder other than Tenant’s obligation to pay Rent accrued hereunder as of the date of  such termination.  

 

EXECUTION COPY  15  12. INDEMNITY AND INSURANCE  12.1. Indemnity  (a) To the fullest extent permitted by Applicable Law, and subject in all respects to Section 13 below, Tenant  shall defend, indemnify and hold harmless the Landlord from and against all claims, losses, costs, expenses, fines,  penalties including attorneys’ fees, court costs, consultant and expert expenses, arising out of or relating to any act,  omission, breach of any provision of this Lease, or negligence or intentional act of Tenant or any of Tenant’s Agents  or subtenants except to the extent that any of the foregoing is attributed to the negligence or intentional act of Landlord  or any of its affiliates or any of their respective agents, employees, invitees or contractors.      (b) To the fullest extent permitted by Applicable Law, and subject in all respects to Section 13 below, Landlord  shall defend, indemnify and hold harmless the Tenant from and against all claims, losses, costs, expenses, fines,  penalties including attorneys’ fees, court costs, consultant and expert expenses, arising out of or relating to any act,  omission, breach of any provision of this Lease, or negligence or intentional act of Landlord or any of Landlord’s  licensees, agents, employees, invitees or contractors except to the extent that any of the foregoing is attributed to the  negligence or intentional act of Tenant or any of its affiliates or any of Tenant’s Agents.      (c) The indemnification obligations created by this Section shall be expressly conditioned upon the indemnified party  (i) delivering to the indemnifying party prompt notice of any event giving rise to such indemnification obligation and (ii)  providing the indemnifying party the opportunity to defend itself from and against any losses which are the subject of such  indemnification obligation.  Landlord and Tenant acknowledge and agree that the indemnification obligations of this  Section shall survive the expiration or earlier termination of this Lease.  12.2. Landlord’s Insurance  Landlord shall maintain throughout the Lease Term the following types of insurance:    a. Commercial General Liability Insurance covering the Premises with limits of no less than $1,000,000 per  occurrence and $2,000,000 aggregate for personal injury, bodily injury, sickness or death or for damage or  destruction of property to the extent directly related to the Premises.    b. All Risk or Special Peril property insurance covering the full replacement cost value of the Premises and the  potential loss of rental income for at least a six-month time period.   Such insurance policies shall be issued by insurance companies authorized to do business in the Commonwealth of  Pennsylvania, and each shall be rated at least A- by AM Best.  Such insurance coverages shall name Tenant as  additional insured.  Landlord’s requirements to provide the aforementioned insurance in no way limits Landlord’s  obligations to indemnify the Tenant pursuant to the indemnity provisions expressly set forth in this Lease.  Landlord  shall furnish to Tenant, not less than fifteen (15) days before the date the insurance is to be obtained by Landlord  hereunder, and thereafter at least fifteen (15) days before the expiration of each policy, evidence of insurance (on  ACORD 25, ACORD 28 or other form reasonably acceptable to Tenant), showing Tenant as an additional insured  thereunder, and evidence of payment of all premiums and other expenses owed in connection with said insurance  policies.  12.3. Tenant’s Insurance   Tenant shall, at its own cost and expense, maintain throughout the Lease Term the following types of insurance:    (a) Automobile Liability including coverage for all owned, leased, hired and non-owned vehicles with a  minimum limit of One Million and xx/100 Dollars ($1,000,000.00) per accident including Landlord, Landlord’s  lender(s), and Al. Neyer, LLC, as additional insureds.  

 

EXECUTION COPY  16  (b) Commercial General Liability including Contractual Liability, Personal Injury Liability and  Products/Completed Operations Liability with minimum limits of One Million and xx/100 Dollars ($1,000,000.00)  per Occurrence, Three Million and xx/100 Dollars ($3,000,000.00) General Aggregate.  The required limit may be  provided in a single policy or in combination with an Umbrella or Excess Liability Policy.  Landlord, Landlord’s  lender(s) and Al. Neyer, LLC shall be included as additional insureds and such insurance shall be primary and non- contributing with any similar insurance available to the Landlord.  (c) All Risk or Special Peril property insurance covering the full replacement cost value of Tenant’s leasehold  improvements and other property including property of others in or about the Premises and Tenant’s potential loss of  income as a result of fire or other casualty.  Such insurance shall include the Landlord, Landlord’s lender(s) and Al.  Neyer, LLC as additional insureds with respect to leasehold improvements made to the Property.  (d) Statutory Workers’ Compensation to comply with the laws of the Commonwealth of Pennsylvania.  Coverage  shall also include Employers’ Liability Insurance with minimum limits of One Million and xx/100 Dollars  ($1,000,000.00) per Occurrence for Bodily Injury, One Million and xx/100 Dollars ($1,000,000.00) per Occurrence  for Bodily Injury by Disease and One Million and xx/100 Dollars ($1,000,000.00) Policy Limit for Disease.  The  policy shall be endorsed to waive subrogation rights against the Landlord and Al. Neyer, LLC.    A certificate of insurance as evidence of the required coverage shall be provided to the Landlord prior to occupancy  of the Premises.  At least ten (10) days prior to the expiration of any required coverage, a new certificate shall be  provided to the Landlord.  The policies shall be endorsed to provide thirty (30) days prior written notice of cancellation,  non-renewal or material change of any of the required coverages.  Such insurance shall be provided by insurance  companies authorized to do business in the Commonwealth of Pennsylvania. The requirements to provide minimum  amount of insurance in no way limit the liability of the Tenant for its obligations to indemnify the Landlord and Al.  Neyer, LLC pursuant to the indemnity provisions expressly set forth in this this Lease.  13. WAIVER OF SUBROGATION  Landlord and Tenant shall have no liability to one another, or to any insurer, by way of subrogation or otherwise, on  account of any loss or damage to their respective property, regardless of whether such loss or damage is caused by the  negligence of Landlord or Tenant, arising out of any of the perils or casualties insured against by the property insurance  policies carried, or required to be carried, by the parties pursuant to this Lease.  The insurance policies obtained by  Landlord and Tenant pursuant to this Lease shall permit waivers of subrogation that the insurer may otherwise have  against the non-insuring party.  14. LIENS  Tenant will keep the Premises and the Property free and clear of all mechanics' and materialmen's liens and other liens  on account of work done for or by Tenant or persons claiming under it. Any such liens filed against the Premises or  the Property shall be discharged by Tenant at its expense within thirty (30) days after Landlord’s notice to Tenant of  either a filing thereof or within thirty (30) days of the actual filing if prior to the filing Landlord notifies Tenant that  it has received a notice of intent to file a mechanics’ lien from Tenant’s contractor or any of its subcontractors.   Should  any such lien be filed against the Premises or the Property, and Tenant has filed to discharge the same in accordance  with the foregoing, Landlord may, upon prior written notice to Tenant, elect to obtain the release of such lien and any  sums expended by Landlord shall be immediately repaid to Landlord by Tenant together with interest at the rate of  eighteen percent (18%) per annum.  15. ASSIGNMENT, SUBLETTING, MORTGAGING  (a) Except as otherwise expressly set forth herein, Tenant shall not voluntarily, involuntarily or by operation of  law, assign, transfer, mortgage or otherwise encumber all or any part of Tenant's interest in this Lease, or sublet the  Premises or any part thereof to a third party without first obtaining Landlord's prior written consent (which consent  shall not be unreasonably withheld, conditioned or delayed), and any attempt to so assign, transfer, mortgage,  encumber or sublet to a third party without Landlord's written consent shall be null and void; and if any such  

 

EXECUTION COPY  17  assignment, transfer, mortgage or encumbrance is made with the written consent of Landlord, Tenant shall  nevertheless remain liable to Landlord for payment of Rent and any other charges according to the terms hereof and  for due performance of all the terms, covenants and conditions of this Lease.  If Tenant is a corporation, then any  transfer of this Lease by merger, consolidation, dissolution, sale, acquisition or liquidation or any change in the  ownership of, or power to vote the majority of, its outstanding voting stock, or a sale of substantially all of Tenant’s  assets, shall constitute an assignment for the purposes of this paragraph and is permitted without consent of Landlord,  but Tenant shall endeavor to provide Landlord with notice of such transfer.  If written consent is once given by  Landlord to any such assignment or subletting, such consent shall not operate as a waiver of the necessity for obtaining  Landlord's written consent to any subsequent assignment or subletting. Any request for Landlord’s consent to any  proposed assignment or sublease (other than a permitted assignment) shall be accompanied by an administrative fee  in the amount of One Thousand and 00/100 Dollars ($1,000.00), payable by Tenant, which shall be deemed sufficient  to cover Landlord’s attorneys’ fees. Said fee shall be due and payable as Additional Rent, whether or not the request  is approved.    Notwithstanding the foregoing, Tenant shall have the right, without Landlord’s consent but upon prior notice to  Landlord to (i) assign this Lease to any affiliate or wholly owned subsidiary with an equal or greater net worth (tested  as of the date of such proposed transfer), and/or (ii) sublet all or any portion of the Premises to an affiliate or wholly  owned subsidiary.    Any profits resulting from a sublet or assignment by Tenant shall be retained 100% by Tenant.    (b) If Landlord conveys the Premises during the Lease Term, Landlord shall inform Tenant by notice given in  accordance with Section 27 hereof. Tenant shall have no obligation to recognize a successor landlord unless and until  such successor landlord shall have provided Tenant with a copy of the assignment and assumption of lease agreement  in which the successor landlord assumes the obligations of the Landlord under the Lease.  Tenant shall have no  obligation to pay to the successor landlord Rent or any other amounts coming due under the Lease unless and until  such successor landlord shall have provided Tenant with a proper notice address and a completed IRS Form W-9, so  that Tenant may make the necessary changes to its accounts payable system and other records to effect the new payee.   Landlord hereby agrees to remit to successor landlord any payments made by Tenant to Landlord subsequent to its  transfer to the successor landlord but prior to Tenant’s modification of its accounts payable system, and indemnifies  Tenant for any such payments made, received by Landlord and not remitted to successor landlord. Landlord hereby  covenants to Tenant that it shall not sell all or any portion of the Premises prior to the Lease Commencement Date,  other than as expressly contemplated in Section 25 below.   16. PRIORITY OF LEASE  Tenant covenants and agrees, on the terms and conditions provided in this Section, that this Lease shall be subordinate to  the lien of any institutional mortgage or deed of trust (“Mortgage”) which may hereafter be made covering the Premises  or any portion or portions thereof, provided that each mortgagee or beneficiary shall execute and deliver to Tenant a  subordination, non-disturbance and attornment agreement (“SNDA”) substantially in the form attached hereto as  Exhibit F, stating (in addition to other reasonable terms, if any) in substance that (a) if no Tenant Default exists  hereunder, the right of possession of Tenant to the Premises shall not be affected or disturbed by any mortgagee in the  exercise of any of its rights under a Mortgage or the note secured thereby, and any sale of the Premises pursuant to  the exercise of any rights and remedies under a Mortgage or otherwise shall be made subject to Tenant’s right of  possession to the Premises under this Lease; and (b) Tenant shall attorn to any mortgagee or purchaser at a foreclosure  sale (a “Purchaser”) upon acquisition of title to the Premises by a mortgagee or Purchaser and notice to Tenant thereof,  and this Lease shall continue in full force and effect between Tenant and such mortgagee or Purchaser.  Upon Tenant’s  receipt and approval of the SNDA from a mortgagee or beneficiary from time to time, Tenant covenants and agrees  to attorn to such mortgagee or beneficiary upon foreclosure and shall use reasonable efforts to execute the SNDA  within thirty (30) days after Landlord’s request.    

 

EXECUTION COPY  18  Without limiting the generality of the foregoing, within ten (10) days after the closing of Landlord’s financing on this  Lease, but in no event later than the Lease Commencement Date, Landlord shall deliver to Tenant (i) an SNDA  executed by Landlord and each mortgagee and beneficiary of each mortgage encumbering the Premises and (ii) a Non  Disturbance and Attornment Agreement in the form attached hereto as Exhibit G (“NDA”) executed by Landlord and  the Ground Lessor with respect to the Landlord Ground Lease.  If Landlord shall fail to obtain the SNDA or the NDA  prior to the expiration of such thirty (30) day period, or if the form thereof shall not be reasonably acceptable to Tenant,  then Tenant may deem such failure a Landlord Default (as defined in Section 20.2 below).   17. QUIET ENJOYMENT  Subject to the terms of the Landlord Ground Lease, Landlord covenants and agrees that Tenant shall have the peaceful and  quiet possession, use and enjoyment of the Premises and every part thereof (not to be abrogated by any ground lease,  mortgage or other matter to which this Lease is or shall become subordinate in accordance with the provisions of Section 16  above) for the conduct of its business operations during the Lease Term, in the whole of the Premises, without hindrance  by Landlord or any party whatsoever.  18. ESTOPPEL CERTIFICATE  Tenant shall from time to time, but not more often than twice per calendar year execute, acknowledge and deliver to  Landlord, its lender(s), ground lessor or a purchaser of the Property, within thirty (30) days of receipt of Landlord’s  written request therefor, a statement in writing certifying:  (a) that this Lease is unmodified and in full force and effect  (or if there has been any modification hereof that the same is in full force and effect as modified and stating the nature  of the modification or modifications); (b) that to the best of its knowledge Landlord is not in default under this Lease  (or if any such default exists the specific nature and extent thereof); (c) the date to which Rent and other charges have  been paid in advance, if any; and (d) any other information regarding this Lease or Tenant's occupancy of the Premises  as required by a commercially reasonable estoppel certificate and reasonably requested by Landlord or its lender(s),  ground lessor or a purchaser of the Property.  In the event Tenant fails to deliver such reasonably requested statement  or estoppel certificate within thirty (30) days of receipt of such request, any such statement or estoppel certificate  previously provided by Landlord in accordance with the above shall be deemed to be correct.  19. FIXTURES AND PERSONAL PROPERTY; SURRENDER  19.1. Surrendering of Premises  Upon the expiration or earlier termination of this Lease, Tenant shall surrender the Premises to Landlord in  substantially the same condition that the Premises was delivered to Tenant as of the date of Substantial Completion  (unless otherwise mutually agreed in writing between Landlord and Tenant) and with the floor slab (including the slab  installed by Landlord and the slab installed by Tenant) in good condition and repair, normal wear and tear and casualty  excepted; provided, however, Tenant agrees that it shall remove from the Premises (i) all movable fixtures, furniture  and equipment as contemplated by Section 19.2 below, and (ii) any Specialized Alterations (whether performed as  part of the Tenant’s Work or afterwards) required to be removed pursuant to Section 10 above.  19.2. Removal of Tenant Property  Trade fixtures, furniture and other personal property installed or placed but not affixed in the Premises at the cost of  Tenant shall be the property of Tenant unless otherwise specified in this Lease and Tenant shall remove the same prior  to the termination of this Lease.  Tenant shall, at its own cost and expense, completely repair any and all damage to  the Premises resulting from or caused by such removal.  If Tenant fails to remove all or any of such property, Landlord  may, at Landlord's option, retain all or any of such property and title thereto shall thereupon vest in Landlord, or  Landlord may remove from the Premises and dispose of in any manner all or any of such property, in which latter  event Tenant shall, upon demand, pay to Landlord the actual expense of such removal and disposition and the cost of  repair of any and all damage to the Premises resulting from or caused by such removal.  

 

EXECUTION COPY  19  20. DEFAULT AND REMEDY  20.1. Tenant Default and Remedy  If any one or more of the following events shall occur and be continuing (after the expiration of the applicable notice  and cure period), each a “Tenant Default”: (a) Rent and any other charges due under this Lease, or any part thereof,  shall at any time be past due in arrears and unpaid for more than ten (10) business days after receiving written notice  from Landlord describing such failure, provided, however, Landlord shall not be required to give such written notice  more than one (1) time per calendar year before late payment is considered a Tenant Default, or (b) Tenant shall  default in the performance of any of the other covenants and agreements of this Lease, and shall fail to remedy such  default within thirty (30) days after Tenant has received written notice of such default from Landlord, provided,  however, if Tenant exercises good faith diligent efforts within such thirty (30) day period to cure the failure specified  in Landlord’s notice, but shall not be able to do so because of Force Majeure, then any such failure shall not be  considered to be a Tenant Default, so long as Tenant shall continue to exercise in good faith such diligent efforts to  cure such failure and shall do so within a reasonable period of time, or (c) Tenant shall make an assignment for the  benefit of its creditors, or (d) Tenant shall file a voluntary petition in bankruptcy, be adjudicated bankrupt or take the  benefit of any insolvency act, or (e) Tenant shall be dissolved voluntarily or involuntarily, or (f) the interest of Tenant  shall be sold under execution or other legal process, or (g) a receiver or trustee is appointed for the property of Tenant,  then, and in any one or more of such events, Landlord, at its option, may do any one or more or all of the following:  (i) Terminate this Lease and re-enter into and upon the Premises and have, repossess, and enjoy the  same with all of the improvements then located thereon as if this Lease had not been made, in which  event this Lease and everything therein contained on the part of Landlord to be kept and performed  shall cease and be utterly void, without prejudice, however, to Landlord's right of action for unpaid  Rent and/or breach of this Lease.   (ii) Without terminating this Lease, to relet all or any part of the Premises upon such terms as Landlord  may, from time to time, elect, and apply the net proceeds towards Tenant's obligations hereunder;  notwithstanding the foregoing, Tenant agrees, regardless of whether Landlord has relet the Premises,  to (A) immediately vacate the Premises upon request from Landlord and (B) pay to Landlord the  Rent herein agreed to be paid by Tenant, less the proceeds of reletting, if any, plus Landlord’s  documented out-of-pocket cost of tenant improvements, leasing commissions and any and all other  reasonable costs related to reletting the Premises.  Landlord shall be obligated in such event to exercise  in good faith diligent efforts to mitigate its damages by reletting the Premises for the highest rent  reasonably obtainable under the circumstances.  (iii) Charge a late payment fee as expressly contemplated in Section 4.1 above.  (iv) Seek to enjoin such default and/or have the right to invoke any right allowed at law or in equity, by  statute or otherwise, as if re-entry, summary proceedings or other specific remedies were not  provided for in this Lease.  The rights and remedies of Landlord upon a default by Tenant shall be  cumulative and not exclusive of any other right or remedy available to Landlord.  Notwithstanding anything to the contrary set forth in this Lease, in the event of any monetary Tenant Default described  in Section 20.1(a) above, Landlord shall not be permitted to exercise any of the remedies set forth in Sections 20.1(i),  20.1(ii) or 20.1(iv) above unless said Tenant Default remains uncured for more than five (5) business days after  delivery of written notice to Tenant regarding any such Tenant Default.  For the sake of clarity, the aforementioned  5-business day notice and cure period shall apply to each and every monetary Tenant Default, and shall not be limited  to any particular number of monetary Tenant Defaults occurring over the course of any particular period of time.  

 

EXECUTION COPY  20  Notwithstanding anything to the contrary in this Lease, (A) Landlord shall have no right to place a lien on any of  Tenant’s personal property, furniture, fixtures or equipment, and (B) Landlord shall not be permitted to engage in any  self-help remedies (even if permitted by Applicable Laws) to evict or “lock out” Tenant from the Premises, take  possession of any of Tenant’s property or any similar action.  Landlord acknowledges and agrees that it may proceed  to enforce any of its remedies under this Lease with the appropriate notice and cure periods provided herein.  Without limiting any of Landlord’s rights at law or in equity, should this Lease be terminated as provided herein:  (1) Tenant shall pay to Landlord all Rent to the date upon which this Lease is terminated; and  (2) Tenant shall be liable for and will pay to Landlord, as damages, any deficiency between:  (i) the  Rent that would have been payable hereunder for the period which otherwise would have constituted  the unexpired portion of the Lease Term; and (ii) the net amount, if any, of rents collected under  any reletting effected pursuant to this Section 20 for any part of such period (first deducting from  the rents collected under any such reletting all of Landlord's expenses in connection with the  termination of this Lease or Landlord's re-entry, including all repossession costs, brokerage  commissions, legal expenses, attorneys’ fees, alteration costs and other expenses of preparing the  Premises for such reletting).  Such deficiency shall be paid in monthly installments by Tenant on  the days specified in this Lease for the payment of installments of Base Rent, and if Tenant does not  pay such deficiency by the due date, interest shall accrue on such amount (and Tenant shall pay to  Landlord) at the highest rate allowed by law (but not to exceed eighteen percent (18%) per annum).   Landlord will be entitled to recover from Tenant each monthly deficiency as the same will arise and  no suit to collect the amount of the deficiency for any month will prejudice Landlord's right to collect  the deficiency for any prior or subsequent month by a similar proceeding or otherwise.  A suit or  suits for the recovery of such deficiencies may be brought by Landlord from time to time at its  election.  20.2. Landlord Default and Remedy  Landlord shall in no event be in default in the performance of any of the covenants, conditions or provisions in this  Lease unless and until Landlord shall have failed to perform such obligation within thirty (30) days (or such additional  time as is reasonably required to correct any such default and Landlord diligently prosecutes said cure to completion)  after notice by Tenant to Landlord properly specifying wherein Landlord has failed to perform any such covenant,  condition or provision. Upon a Landlord default, Tenant shall have all rights and remedies afforded Tenant hereunder  or by law or equity.  Notwithstanding the foregoing, if any such Landlord default relating to an issue with the roof of  the Building creates a material disruption to Tenant’s business operations at the Premises or otherwise creates a  condition that is dangerous to person or property, following a second written notice to Landlord and email notice to  lkoth@neyer.com, Tenant may, no sooner than twenty-four (24) hours of Landlord cure any such Landlord default  and bill Landlord for its reasonable out-of-pocket costs incurred in connection therewith (the “Cure Costs”).  If, within  thirty (30) days after Landlord’s receipt of Tenant’s invoice for the Cure Costs, Landlord fails to (a) in good faith  dispute the Cure Costs invoiced to Landlord or (b) reimburse Tenant for the Cure Costs, then upon at least fifteen (15)  days’ prior written notice to Landlord, Tenant shall be permitted to offset an amount equal to the Cure Costs against  the next installment(s) of Base Rent owed by Tenant hereunder until such Cure Costs have been fully recouped by  Tenant.  If Landlord does in good faith contest the Cure Costs, then Tenant shall not have the right to offset the  undisputed portion of the Cure Costs until a court of applicable jurisdiction determines the correct amount of such  Cure Costs, provided, however, that all the equitable portion of Tenant’s costs related to such filing with, and  determination of, the court, including reasonable attorney’s fees, (collectively, “Tenant’s Enforcement Costs”) shall  be added to the Cure Costs which Tenant may offset.    

 

EXECUTION COPY  21  20.3. Warrant of Attorney to Confess Judgment  Tenant hereby authorizes and empowers any attorney or attorneys of any Court of the Commonwealth of Pennsylvania,  upon the happening of any Tenant Default hereunder and if such Tenant Default remains uncured for more than fifteen  (15) days after Landlord provides Tenant with a separate written notice that Landlord intends to confess judgement  hereunder, to appear for Tenant and as attorney for Tenant to sign an agreement for entering an amicable action of  ejectment for possession of the Premises, and to confess judgment therein against Tenant in favor of Landlord,  whereupon a Writ of Possession may immediately be issued for the possession of the Premises, without any prior writ  or proceeding whatsoever and for so doing, this Lease or a copy hereof verified by affidavit shall be a sufficient  warrant.  Landlord may bring such amicable action of ejectment before or after the institution of any other litigation  arising out of this Lease.  21. NON-WAIVER OF DEFAULTS  No waiver of any default by Landlord or Tenant hereunder shall be implied from any omission by Tenant or Landlord  to take any action on account of such default if such default persists or is repeated, and no express waiver shall affect  any default other than the default specified in the express waiver, and that only for the time and to the extent therein  stated.  The acceptance by Landlord of Rent, and the payment by Tenant of Rent, in either case with knowledge of the  breach of any of the covenants of this Lease by the other party, shall not be deemed a waiver of any such breach.  One  or more waivers of any breach of any covenant, term or condition of this Lease shall not be construed as a waiver of  any subsequent breach of the same covenant, term or condition.  The consent or approval by Landlord to or of any act  by Tenant requiring Landlord's consent or approval shall not be deemed to waive or render unnecessary Landlord's  consent or approval to or of any subsequent similar acts by Tenant.  22. ENVIRONMENTAL / SITE REPRESENTATIONS AND INDEMNITIES  22.1. Hazardous Material  “Hazardous Material” means: (i) “hazardous substances” or “toxic substances” as those terms are defined by the  Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), 42 U.S.C. ϶ 9601, et seq., or  the Hazardous Materials Transportation Act, 49 U.S.C. ss 1801, all as currently amended and amended after this date;   (ii) “hazardous wastes,” as that term is defined by the Resource Conservation and Recovery Act (RCRA), 42 U.S.C.  ϶϶ 6901, et seq., as currently amended and amended after this date;  (iii) crude oil or any faction thereof which is liquid  at standard conditions of temperature and pressure (60 degrees Fahrenheit and 14.7 pounds per square inch absolute);   (iv) any radioactive material, including any source, special nuclear or by-product material as defined at 42 U.S.C. ϶϶  2011, et seq., as currently amended and amended after this date;  (v) asbestos in any form or condition; and  (vi)  polychlorinated byphenyls (PCB’s) or substances or compounds containing PCB’s.  22.2. Environmental Laws  “Environmental Laws” shall mean all applicable federal, state, and local laws, regulations, and ordinances relating to  public health and safety and protection of the environment, including those statutes, laws, regulation and ordinances  identified in Section 22.1 all as amended and modified from time to time.  22.3. Contamination  “Contamination” means the presence of Hazardous Material(s) in concentrations which require remediation under  applicable Environmental Laws.    

 

EXECUTION COPY  22  22.4. Tenant Representations  Tenant represents, warrants and covenants the following to Landlord that as of the Lease Commencement Date and  during the entre Lease Term:    (a) Other than the initial certificate of occupancy and related permits, Tenant shall have obtained and complied,  and will continue to obtain and comply with, all governmental permits required by applicable Environmental Laws  relating to the use or operation of the Premises.    (b) Tenant shall not have permitted and will not permit to occur any release or disposal of Hazardous Material,  on, in, under, or from the Premises.  Tenant, however, will be permitted to generate, manufacture, store, treat and  transport, in compliance with all Environmental Laws, those Hazardous Materials used in Tenant’s business.  Tenant  agrees to provide Landlord with Material Safety and Data Sheets for all Hazardous Materials used in Tenant’s  business.    (c) Tenant will notify Landlord of all written complaints, claims, citations, demands, inquiries, reports, notices  or spills or releases of Hazardous Materials relating to compliance with Environmental Laws within five (5) business  days of Tenant’s receipt thereof.  To the extent possible, Tenant will promptly cure and resolve any such actions and  proceedings that result from any Contamination caused solely by Tenant or any of Tenant’s Agents.  Tenant will keep  the Premises free of any lien imposed pursuant to any Environmental Law for any Contamination caused solely by  Tenant or Tenant’s Agents.    (d) If Tenant fails to undertake to cure a violation of any of the foregoing warranties, representations, and  covenants within a reasonable time, Landlord may cause the removal of any Contamination from the Premises in  accordance with Environmental Laws.  As to Contamination caused solely by Tenant or Tenant’s Agents, the  reasonable costs of any remediation of said Contamination required by Environmental Laws will be Additional Rent  under this Lease, and such reasonable costs will become due and payable within thirty (30) days after written demand  by Landlord, but only if Tenant fails to undertake to comply with this paragraph within a reasonable time.    (e) Tenant agrees to indemnify, defend, and hold Landlord and Landlord’s affiliates, shareholders, directors,  officers, employees, and agents free and harmless from and against all losses, liabilities, obligations, penalties, claims,  litigation, demands, defenses, costs, judgments, suits, proceedings, damages (including consequential damages),  disbursements or expenses of any kind (including reasonable attorneys’ fees and investigation costs, whether  defending or prosecuting any litigation, claim or proceeding) that may at any time be imposed upon, incurred by, or  asserted or awarded against Landlord in connection with or arising from or out of:    1. any Contamination which has been caused solely by Tenant or Tenant’s Agents on, in, or under or  affecting all or any portions of the Premises;    2. any misrepresentation, inaccuracy or breach of any warranty, covenant or agreement contained  (other than (e)(1) above) or referred to in this Section of the Lease by Tenant;    3. any violation or claim of violation by Tenant or Tenant’s Agents of any Environmental Law (other  than (e)(1) or (e)(2) above) that Tenant does not diligently undertake to resolve within a reasonable  time.    This indemnification shall survive the termination of this Lease and shall be in full force and effect for five (5) years  after the termination of the Lease, after which time, it shall be null, void, and of no force and effect.    The acts set forth in (e)(1), (e)(2), and (e)(3) for which indemnification is provided are hereinafter referred to as  “Predicate Acts”.  To the extent that any of the Predicate Acts are caused, in whole or in part, by the acts or omissions  of Landlord or any other person or party (other than Tenant or Tenant’s Agents), then Tenant’s obligation under this  paragraph providing for indemnity shall be limited to the degree and percent that Tenant’s acts or omissions  contributed to the Predicate Acts and Tenant shall be responsible only for that portion of the costs which would not  otherwise have been incurred were it not for Tenant’s Predicate Acts, and Tenant shall not be liable for any  consequential damages of any kind.  As of execution of the Lease, Landlord represents that to the best of its knowledge  the Premises are not in violation of the above referenced hazards.  

 

EXECUTION COPY  23  22.5.  Landlord Representations  Landlord represents, warrants and covenants to Tenant, and each of its respective officers, directors, employees,  affiliates and successors (collectively, “Tenant Entities”), as follows:     (a) Landlord currently leases the Property pursuant to the Landlord Ground Lease and, upon completion,  Landlord shall own the Building and Improvements pursuant to and subject to the Landlord Ground Lease and the  easements, restrictions and encumbrances of record pertaining to the Property;    (b) Landlord shall timely pay, when and as due, all base rent, additional rent and other charges payable by  Landlord to Ground Lessor under the Landlord Ground Lease.    (c)  Except as otherwise expressly provided herein, Landlord shall fully and timely perform its covenants and  obligations under the Landlord Ground Lease, including, but not limited to keeping in full force and effect all insurance  required of Landlord as tenant under the Landlord Ground Lease.    (d)  Landlord hereby grants to Tenant the right to receive all of the benefits with respect to the Premises which  are to be provided by Ground Lessor under the Landlord Ground Lease (if any). The parties contemplate that Ground  Lessor shall, in fact, perform its obligations under the Landlord Ground Lease and in the event of any default or failure  of such performance by Ground Lessor, Landlord agrees that it will, upon notice from Tenant, make demand upon  Ground Lessor to perform its obligations under the Landlord Ground Lease and Landlord will take appropriate legal  action to enforce the Ground Lease.    (e) Landlord grants and demises to Tenant the non-exclusive use and benefit of all easements, licenses, rights- of-way, and privileges granted to Landlord under the Landlord Ground Lease. Landlord shall not agree to an  amendment or modification to the Landlord Ground Lease which would have a material adverse effect on this Lease,  Tenant’s occupancy of the Premises or its use of the Premises, unless Landlord shall first obtain Tenant’s prior written  approval thereof.  Tenant’s prior written approval shall not be required for an amendment or modification to the  Landlord Ground Lease which would make an immaterial and non-economic change or correct an error. In addition,  in the event an amendment or modification would have any material adverse effect on Tenant, Landlord shall not,  without Tenant’s prior written consent, (i) waive any of its rights under the Landlord Ground Lease, or (ii) grant any  consents thereunder. In no event shall Landlord subordinate the Landlord Ground Lease to any future mortgage, deed  of trust or ground lease, without the prior written consent of Tenant.  Tenant agrees that Landlord may obtain leasehold  financing on the Landlord Ground Lease so long as Tenant receives the NDA as contemplated by Section 16 prior to  closing on any such financing. If Landlord shall default under this Section then, in addition to all other rights and  remedies of Tenant as a result thereof, shall include, without limitation, the right to bring suit in the name of Landlord  and/or Tenant to enforce the Landlord Ground Lease and Landlord shall cooperate with Tenant in so doing.    (f) Landlord has full power and authority to enter into this Lease and to lease the Premises to Tenant.    (g)  The Premises will be suitable for Tenant’s Permitted Use and Landlord’s Work shall be performed in a good  and workmanlike manner in accordance with all Applicable Laws, and in accordance with all applicable zoning  regulations and any covenants binding the owner personally or running with the Property upon which the Building is  to be constructed.     (h)  To the best of Landlord’s knowledge, there is no physical or environmental condition existing in, on, under  or surrounding the Premises that violates applicable Environmental Laws.    (i)  To the best of Landlord’s knowledge, there has been no release or threatened release of Hazardous Materials  in, on, under or onto the Premises.    (j)  To the best of Landlord’s actual knowledge, there is no Contamination in, on, under or surrounding the  Premises, including, without limitation, Contamination relating to the presence of PCBs, solvents, mold or microbial  matter.  

 

EXECUTION COPY  24    (k)  To the best of Landlord’s knowledge, there is no asbestos, asbestos-containing material or lead-based paint  in, on or under the Premises or any of the structures situated thereon.    (l)  To the best of Landlord’s knowledge, there is no condition existing in, on, under or surrounding the Premises  that could reasonably be expected to result in a soil vapor intrusion or other indoor air quality in any present or future  structure(s) on the Premises.    Landlord agrees to indemnify, defend, and hold Tenant and Tenant Entities free and harmless from and against all  losses, liabilities, obligations, penalties, claims, litigation, demands, defenses, costs, judgments, suits, proceedings,  damages (including consequential damages), disbursements or expenses of any kind (including reasonable attorneys’  fees and investigation costs, whether defending or prosecuting any litigation, claim or proceeding) that may be  imposed upon, incurred by, or asserted or awarded against Tenant in connection with or arising from or out of (i) any  physical or environmental condition existing in, on, under or surrounding the Premises as of the Effective Date or the  Lease Commencement Date, including, without limitation the presence of any Contamination or Hazardous Materials,  (ii) any breach by Landlord of any covenant or obligation contained in this Section 22.5 and/or (iii) any Contamination  or violation of any Environmental Law not directly caused by Tenant, the Tenant Entities or one acting on Tenant’s  behalf and at Tenant’s direction.  23. HOLD OVER TENANCY  Provided that no Tenant Default then exists, if, without the execution of a new lease or nine (9) months prior written  extension notice to  Landlord, Tenant shall hold over after the expiration of the Lease Term, Tenant shall have the  right to retain possession of the Premises for up to one hundred thirty-five (135) days after expiration of the Lease  Term without the possibility of eviction and upon the same terms and conditions of the Lease; provided, however, that  during such tenancy, Tenant agrees to pay to Landlord 125% of the monthly installment of Base Rent which was  payable in the month immediately preceding the month in which the expiration or termination occurs (“Preceding  Rent”).  If Tenant remains in possession of the Premises after such 135-day holdover period, Tenant shall pay, as  liquidated damages for each day of such hold over period, 150% of the Preceding Rent and the hold over period will  constitute a month-to-month tenancy which may be terminated by Landlord or Tenant upon thirty (30) days prior  written notice to the other.  Notwithstanding anything herein to the contrary, if: (i) Tenant holds over after the  expiration or termination of the Term for a period of time in excess of the aforementioned 135-day period; and (ii)  Landlord has executed a lease with another tenant (“Replacement Tenant”) whereby Landlord has agreed to lease  some or all of the Premises to such Replacement Tenant; and (iii) Landlord provides written notice to Tenant, prior to  the expiration of the aforementioned 135-day period, that a lease has been fully executed with a Replacement Tenant  for some or all of the Premises; and (iv) such Replacement Tenant terminates its lease with Landlord as a direct  consequence of Tenant’s holding over at the Premises beyond the one hundred thirty-fifth (135th) day after the  expiration or earlier termination of the Term; then, in the event each of the foregoing criteria are met, Tenant shall be  liable to Landlord for liquidated damages in an amount equal to the “base rent” payable by Replacement Tenant to  Landlord for the first six (6) months (without taking into account any free rent or other tenant concessions) of the lease  that was terminated by Replacement Tenant due to Tenant’s holding over at the Leased Premises beyond such 135- day period.  Tenant acknowledges that (x) Landlord shall suffer an adverse impact on its business if a Replacement  Tenant terminates a lease for some or all of the Premises as a result of Tenant’s holding over in excess of such 135- day period, and (y) the resulting damages to Landlord may not be susceptible of precise determination (in particular,  as the period of time that the Premises may remain vacant after a Replacement Tenant terminates its lease, and the  eventual rent to be received by Landlord in a future lease for some or all of the Premises, are unable to be ascertained  with certainty).  Tenant therefore acknowledges that the liquidated damages described above is a reasonable  approximation of Landlord’s damages for such holding over, and such liquidated damages shall not be deemed to be  a penalty.  No such holding over shall be deemed to constitute a renewal or extension of the Lease Term.  

 

EXECUTION COPY  25  24. CONDEMNATION  If the whole or any part of the Premises shall be taken under the power of eminent domain, then the Lease shall  terminate as to the part taken on the day when Tenant is required to yield possession thereof, and Landlord, to the  extent of the condemnation award, shall, using its best efforts to minimize the interference with Tenant’s business  operations, make such repairs and alterations as may be necessary in order to restore the part not taken to useful  condition.  The Base Rent shall be reduced proportionately as to the part of the Premises taken, the reduction to be  effective on the date that Tenant is required to yield possession.  If the amount of the Premises so taken is such as to  impair substantially the usefulness of the Premises for the purposes for which the same are hereby leased, then either  party shall have the option to terminate this Lease as of the date when Tenant is required to yield possession. All  compensation awarded for such taking of the fee and the leasehold shall belong to and be the property of Landlord;  provided, however, that Tenant shall be entitled to such award as may be allowed for moving expenses, fixtures and  other equipment installed by it (specifically excluding fixtures, alterations, additions and other components of the  Leased Premises which under this Lease or by law are or at the expiration or earlier termination of the Lease Term  will become the property of Landlord) and any other compensation allowed under the laws of the Commonwealth of  Pennsylvania, but only if such award or other compensation shall be in addition to the award otherwise available to or  for the benefit of Landlord.  25. TENANT’S LIMITED PURCHASE OPTION  (a) So long as a Tenant Default does not then exist, Tenant (or an affiliate of Tenant) shall have the option  (“Purchase Option”) to purchase the Building and the Improvements and take a corresponding assignment of  Landlord’s rights under the Landlord Ground Lease (“Option Property”) for $[**] which Purchase Option may be  exercised by Tenant at any time prior to the date that is [**] ([**]) days after the Initial Delivery Date (the “Outside  Exercise Date”) by delivering written notice of Tenant’s exercise of the Purchase Option (“Purchase Notice”) to  Landlord.  In the event Tenant does not provide a written Purchase Notice on or before the Outside Exercise Date, it  shall be deemed that Tenant has waived its Purchase Option and Landlord shall then have the right to market and sell  or transfer any or all of the Option Property at its sole discretion; provided, however, that Landlord’s right to then  market and sell or transfer any or all of the Option Property is subject in all respects to Tenant’s ROFO described in  Section 26 below.    (b) If Tenant provides Landlord with the Purchase Notice in accordance with Section 25(a) above, Landlord and  Tenant shall, within [**] ([**]) days after Tenant’s delivery of the Purchase Notice, enter into a commercially  reasonable purchase and sale agreement containing typical representations and warranties for the sale of commercial  property to be prepared by Tenant or its counsel and which shall reflect, among other things:    (i) the purchase price set forth in Section 25(a) above;    (ii) that Tenant’s Security Deposit and the dollar value of any Rent abatements rights accrued under the  second paragraph of Section 1.9 above shall be applied toward the purchase price for the Option Property;     (iii) that Landlord shall convey title to the Option Property via commercially reasonable assignment and  sale documents, free and clear of all objectionable title encumbrances as reasonably determined by Tenant and its title  insurer (provided, however, that the Landlord Ground Lease shall not be considered an objectionable title  encumbrance);     (iv) Tenant shall have thirty (30) days after execution of the purchase agreement for the Option Property  to perform due diligence on the Option Property;     (v) that the closing on Tenant’s acquisition of the Option Property shall occur on the later to occur of  (1) the date that is [**] ([**]) days after the conclusion of Tenant’s due diligence period review period set forth in  such purchase and sale agreement and (2) the date upon which Landlord achieves Substantial Completion of the  Landlord’s Work (subject to the completion of any Punch List Items, which may be completed after such closing in  accordance with the terms set forth in the Work Letter);    

 

EXECUTION COPY  26  (vi) that Landlord and Tenant shall each be responsible for one half of any and all transfer taxes incurred  in connection with the closing on Tenant’s acquisition of the Option Property;     (vii) that Landlord and Tenant shall pro rate all Taxes related to the Option Property and other items  customarily pro-rated at the closing of similar real estate transactions in Allegheny County, Pennsylvania; and     (viii)  upon the closing of this sale transaction, this Lease shall terminate and the parties shall have no  further rights, duties or responsibilities hereunder, except as otherwise expressly provided herein.    (c) If Landlord either fails to keep, observe, and perform any terms, covenants, conditions or provisions of this  Section 25, such failure could irreparably harm Tenant’s business interests and shall be deemed to be a “Landlord  Default” under this Lease.  Upon the occurrence of a Landlord Default under this Section 25(c) then, in addition to  the remedies set forth in Section 20.2 above, Tenant shall be entitled to seek specific performance of Landlord’s  obligations set forth in this Section 25, and Landlord shall reimburse Tenant for all costs and expenses incurred in  connection with Tenant’s pursuit of specific performance hereunder.  26. TENANT’S RIGHT OF FIRST OFFER TO PURCHASE  Beginning after the expiration of the [**] ([**]) complete calendar month of the Lease Term and continuing until the  expiration of the Lease Term (“ROFO Period”), so long as a Tenant Default does not then exist, Tenant, together with  its successors, assigns and affiliates, shall have the ongoing right of first offer to assume the Landlord Ground Lease  and purchase the Option Property (“ROFO”) on the following terms and conditions:  (a) If, during the ROFO Period, Landlord decides to offer to sell (or is otherwise in the process of offering or  selling) the Option Property or any portion thereof to a third party (excluding the Landlord Transferees defined herein,  a “Third Party Buyer”) or receives an unsolicited bona fide offer to purchase the Option Property from a Third Party  Buyer, including by means of a sale directly or indirectly of the partnership interests, membership interests, stock, or  other equity interests of Landlord or by means of a merger of Landlord, Landlord shall send written notice to Tenant  (“Offer”), which Offer shall set forth the terms on which Landlord would be willing to consummate the sale of the  Option Property, including all material economic terms and conditions thereof (“Material Terms”), and which  Material Terms shall include, without limitation, the proposed sale price, the proposed timing for sale and the property  which will be offered for sale (as applicable, “Offer Property”).  Landlord agrees to bargain in good faith on any terms  not stated in the Offer.    (b) Within [**] ([**]) days after receipt of the Offer, Tenant shall reply by written notice to Landlord either  accepting to purchase the Offer Property on the Material Terms set forth in the Offer or rejecting the Offer.  Tenant’s  failure to respond within such [**]-day period shall be deemed a rejection of the Offer.  If Tenant timely accepts the  Offer for the Offer Property, then Landlord and Tenant shall endeavor to promptly, but in any case within [**] ([**])  days after Tenant’s notice of acceptance of the Material Terms set forth in the Offer, execute a commercially  reasonable purchase and sale contract incorporating the Material Terms set forth in the Offer.  If Tenant rejects, or is  deemed to have rejected, such Offer, Landlord shall have the right to consummate a sale with a Third Party Buyer for  the Offer Property within the [**]-day period commencing on the date that Tenant rejects (or is deemed to have  rejected) the Offer, upon the Material Terms set forth in the Offer and for a purchase price not less than [**] ([**]) of  the purchase price stated in the Offer, free and clear of Tenant’s ROFO set forth in this Section 26; provided, however,  that any such transfer shall be subject to this Lease.  If, however, a sale of the Offer Property is not consummated with  a Third Party Buyer within the [**]-day period commencing on the date that Tenant rejects (or is deemed to have  rejected) the Offer, Landlord shall provide written notice to Tenant of such fact and Tenant’s ROFO set forth in this  Section 26 shall automatically be revived and thereafter continue in full force and effect, and Landlord shall thereafter  re-offer the applicable Offer Property to Tenant upon any subsequent decision by Landlord to offer to sell the Option  Property or any portion thereof to a Third Party Buyer.  Furthermore, if, during any such [**]-day period, Landlord  offers the Offer Property to a Third Party Buyer (i) for a sales price that is less than [**] ([**]) of the purchase price  stated in the Offer, or (ii) upon terms or conditions that are more favorable to a Third Party Buyer than the Material  Terms set forth in the Offer as determined by Tenant in its reasonable discretion, then in either event Landlord shall  re-offer the Offer Property to Tenant on the terms offered to such Third Party Buyer and said re-offering shall  constitute a new “Offer” and trigger the procedures and timelines set forth above as if said re-offer was a new Offer  for purposes of this Section 26.    

 

EXECUTION COPY  27  (c) In the event Tenant rejects or is deemed to have rejected any Offer provided to Tenant in accordance with  Section 26(b) above, in no event shall such rejection or deemed rejection constitute a waiver with respect to (i)  Tenant’s right to receive written notices from Landlord with respect to a sale not consummated within the [**]-day  period described above or with respect to a re-offering required pursuant to the terms set forth above, or (ii) Tenant’s  ongoing ROFO to purchase all or any portion of the Option Property in accordance with the terms set forth in this  Section 26.  (d) Notwithstanding anything to the contrary in this Section, nothing in this Section shall restrict Landlord from  transferring the Landlord Ground Lease or transferring or selling the entire Option Property at any time to a wholly  owned subsidiary of Landlord or the parent of Landlord, or for purposes of placing a mortgage or deed of trust on the  Premises in connection with financing or refinancing of the Premises by Landlord (any of which is a “Landlord  Transferee”).     (e) If Landlord either fails to keep, observe, and perform any terms, covenants, conditions, or provisions of this  Section 26, such failure could irreparably harm Tenant’s business interests and shall be deemed to be a “Landlord  Default” under this Lease.  Upon the occurrence of a Landlord Default under this Section 26(e) then, in addition to  the remedies set forth in Section 20.2 above, Tenant shall be entitled to seek specific performance of Landlord’s  obligations set forth in this Section 26, and Landlord shall reimburse Tenant for all costs and expenses incurred in  connection with Tenant’s pursuit of specific performance hereunder.   27. NOTICES  Whenever in this Lease it shall be required or permitted that notice, approval, advice, consent or demand be given or  served by either party to this Lease to or on the other, such notice or demand shall not be deemed to have been duly  given or served unless in writing and forwarded by certified or registered mail, or by a nationally recognized overnight  or locally recognized same-day delivery service to the Landlord's and Tenant's addresses set forth in Sections 1.2, and  1.4, respectively, of this Lease (or such other address as may be given by one party to the other pursuant to this  Section), or upon the receipt of an email during normal business hours, addressed in all cases to the party at his or its  address set forth in Section 1.2 and Section 1.4 above.    28. RIGHTS RESERVED BY LANDLORD / FORCE MAJEURE  Subject in all respects to the other terms set forth in this Lease (including, without limitation, in Section 9 above),  Landlord reserves the following rights, each of which Landlord may exercise with notice to Tenant and without  liability to Tenant, and the exercise of any such rights shall not be deemed to constitute an eviction or disturbance of  Tenant's use or possession of the Premises and shall not give rise to any claim for set-off or abatement of Rent or any  other claim:  (a) to retain at all times, and to use in appropriate instances, keys to the main entry doors within and into  the Premises; (b) to inspect the Premises at reasonable times and upon reasonable notice; (c) to install, use and maintain  in and through the Premises, pipes, conduits, wires and ducts serving the Building, provided that such installation, use  and maintenance does not unreasonably interfere with Tenant's use of the Premises; and (d) to take any other  reasonable action in connection with the Landlord’s performance of its obligations set forth in this Lease.    The term “Force Majeure” as used in this Lease means and refers to acts of God, riots, labor strikes (other than strikes  of workers, contractors, and suppliers), acts of a public enemy, governmental embargo restrictions, or other events or  delays that are beyond Landlord’s or Tenant’s (as the case may be) reasonable control, including, but not limited to,  actions or inactions on the part of public utilities or local, state or federal governmental authorities, provided that  Landlord or Tenant (as the case may be) has timely made appropriate applications or requests of and to such authorities  and has diligently pursued the same.  The term Force Majeure will not, however, include any lack of available funds  that may otherwise be required for performance of any obligation hereunder.  

 

EXECUTION COPY  28  29. MISCELLANEOUS PROVISIONS  29.1. Term "Landlord"  The term "Landlord" as used in this Lease so far as covenants or obligations on the part of Landlord are concerned  shall be limited to mean and include only landlord at the time in question of the Premises and in the event of any  transfer or transfers of the title to the Premises, upon Tenant’s receipt of documentation signed by any such new  landlord, evidencing that any such new landlord has assumed, in writing, all of Landlord’s obligations and liabilities  under this Lease, Landlord herein named (and in case of any subsequent transfers or conveyances, the then Landlord)  shall be automatically freed and relieved from and after the date of such transfer or conveyance of all liability as  respect to the performance of any covenants or obligations on the part of Landlord contained in this Lease thereafter  to be performed.  29.2. Captions of Paragraphs  The captions of the paragraphs in this Lease are for convenience only and shall not be considered or referred to in  resolving questions of interpretation or construction.  29.3. Terms "Landlord" and "Tenant”  The terms "Landlord" and "Tenant" wherever used herein shall be applicable to one or more persons, as the case may  be, and the singular shall include the plural, and the neuter shall include the masculine and feminine, and if there be  more than one, the obligations hereof shall be joint and several.  29.4. Words "person" and "persons"  Both the word "person" and the word "persons" wherever used in this Lease shall include individuals, partnerships,  firms, associations and corporations or any other form of business entity.  In the event that two or more individuals,  corporations, partnerships or other business associations (or any combination of two or more thereof) shall sign this  Lease as Tenant, the liability of each such individual, corporation, partnership or other business association to pay  Rent and perform all other obligations hereunder shall be deemed to be joint and several.  In like manner, in the event  that Tenant named in this Lease shall be a partnership or other business association the members of which are, by  virtue of statute or general law, subject to personal liability, then in the event, the liability of each such member shall  be deemed to be joint and several.  29.5. Rights, Options, Election, Powers and Remedies  The various rights, options, elections, powers and remedies contained in this Lease shall be construed as cumulative  and no one of them shall be exclusive of any of the others, or of any other legal or equitable remedy which either party  might otherwise have in the event of breach or default in the terms hereof, and the exercise of one right or remedy by  such party shall not impair its right to any other right or remedy until all obligations upon the other party have been  fully performed.  29.6. Financial Statements  Tenant hereby acknowledges that it has provided Landlord with the ability to publicly access Tenant’s financial  statement(s) prior to the date hereof as a primary inducement to Landlord’s agreement to lease the Premises to Tenant,  and that Landlord has relied on the accuracy of said financial statement(s) in entering into this Lease.  Tenant  represents to the best of its knowledge and belief that the information contained in said financial statement(s) is true,  complete and correct in all material aspects.  Only in the event Tenant is no longer a publicly traded company or  Tenant’s financial statements are not publicly available to Landlord at no cost, during the Lease Term, within ten (10)  business days of receipt by Tenant of Landlord written request therefor, Tenant shall furnish to Landlord a balance  sheet of Tenant as of the end of the most current fiscal period and a statement of income and expense for that same  period, along with a certificate of the chief financial officer, owner or partner of Tenant to the effect that to the best  of their knowledge and belief the financial statements have been prepared in conformity with generally accepted  accounting principles consistently applied and fairly present the financial condition and results of operations of Tenant  as of and for the period covered.  Landlord agrees to keep confidential and not disclose to any person or entity any  financial information furnished by Tenant, except that Landlord may disclose such information to its attorneys,  lenders, potential purchasers, partners and financial advisors.  

 

EXECUTION COPY  29  29.7. Time  Time is of the essence with respect to the performance of each of the covenants and agreements under this Lease.  29.8. Provisions Binding  Each and all the provisions of this Lease shall be binding upon and inure to the benefit of the parties hereto and, except  as otherwise specifically provided elsewhere in this Lease, their respective heirs, executors, administrators, successors  and assigns, subject at all times, nevertheless, to all agreements and restrictions contained elsewhere in this Lease with  respect to the assignment, transfer, encumbering or subletting of all or any part of Tenant's interest in this Lease.  29.9. State Law  This Lease shall be interpreted in accordance with the laws of the Commonwealth of Pennsylvania.  29.10. Covenants and Agreements  This Lease contains all covenants and agreements between Landlord and Tenant relating in any manner to the rental,  use and occupancy of the Premises and the other matters set forth in this Lease.  No prior agreement or understanding  pertaining to the same shall be valid or of any force or effect, and the covenants and agreements of this Lease cannot  be altered, changed, modified or added to except in writing signed by Landlord and Tenant.  No representation,  inducement, understanding or anything of any nature whatsoever made, stated or represented on Landlord's behalf,  either orally or in writing (except as expressly set forth in this Lease), has induced Tenant to enter into this Lease.  29.11. Invalid or Illegal Provisions  Any provision or provisions of this Lease which shall prove to be invalid, void or illegal shall in no way affect, impair  or invalidate any other provision hereof, and the remaining provisions hereof shall nevertheless remain in full force  and effect.  29.12. Effective Date of Conditions, Covenants and Agreements  Except with respect to those conditions, covenants and agreements of this Lease which by their nature could only be  applicable after the commencement of, during or throughout the Lease Term, all of the other conditions, covenants  and agreements of this Lease shall be deemed to be effective as of the Effective Date.  29.13. Lease Commissions  Tenant and Landlord each represents and warrants for the benefit of the other that they have not engaged any broker,  finder or other person, other than CBRE, Inc. (“CBRE”) representing both Landlord and Tenant as a dual agent.   Landlord shall be responsible for the payment of any commission or fee to CBRE in respect of the negotiation,  execution of delivery of this Lease, and Landlord and Tenant shall each indemnify the other against loss, cost, liability  or expense incurred by either party as a result of any claim asserted by any broker, finder or other person on the basis  of any arrangement or agreement made or alleged to have been made by or on behalf of the other party.    29.14. Relationship of Landlord and Tenant  Nothing contained herein will be deemed or construed by the parties hereto, nor by any third party, as creating the  relationship of principal and agent or of partnership or of joint venture between the parties hereto, it being understood  and agreed that neither the method of computation of Rent, nor any other provision contained herein nor any acts of  the parties herein, shall be deemed to create any relationship between the parties hereto other than the relationship of  Landlord and Tenant.  

 

EXECUTION COPY  30  29.15. Recording of Memorandum of Lease  Landlord and Tenant each hereby agrees that it will not record this Lease; however, a Memorandum of Lease in the  form attached hereto as Exhibit H (“MOL”) shall be executed by Landlord and Tenant simultaneously with this Lease  and Landlord will, at its expense, thereafter promptly cause the MOL to be recorded in the Allegheny County  Department of Real Estate (in any case within seven (7) days of the Effective Date).  Failure by Landlord to timely  record such MOL shall be Landlord Default hereunder, without application of any cure period in respect thereof.  29.16. Submission of Lease  The submission of this Lease, whether in blank form or with all or some of the blanks herein completed, shall not vest  in Tenant any rights with respect to the Premises or the Building or be deemed, in any respect, to be binding upon  Landlord.   Until both Landlord and Tenant have executed this Lease, Tenant shall not be deemed to have acquired  any rights with respect to the Premises or the Building.  29.17. Counterparts  This Lease may be executed and delivered in counterparts, each of which shall be deemed an original and all of which,  when taken together, shall constitute one and the same instrument.  Furthermore, the undersigned agree that electronic  transmission of this Lease by e-mail, facsimile or telecopy shall be deemed transmission of the original Lease for all  purposes.    29.18. Representations on Authority of Parties/Signatories  Each person signing this Lease represents and warrants that he or she is duly authorized and has legal capacity to  execute and deliver this Lease. Each party represents and warrants to the other that the execution and delivery of the  Lease and the performance of such party’s obligations hereunder have been duly authorized and that the Lease is a  valid and legal agreement binding on such party and enforceable in accordance with its terms.    29.19. Personal Liability  Landlord, and any person, firm, or corporation comprising Landlord shall not have any personal liability with respect  to any of the provisions of this Lease.  Tenant's sole recourse shall be against the Building, and the real and personal  property comprising the same for the satisfaction of any of the Tenant's claims and remedies.  No partner, member or  shareholder of Tenant, nor any director, officer, employee or other party with interests in Tenant or any such partner,  member or shareholder of Tenant shall be subject to personal liability hereunder.      [SIGNATURE PAGES FOLLOW]       

 

EXECUTION COPY  31  IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease to be effective as of the above  date, but actually on the dates set forth below.    LANDLORD:    NORTHFIELD I, LLC,  an Ohio limited liability company    By: Al. Neyer, LLC    an Ohio limited liability company,    its Manager        By:       Stephanie P. Gaither,      Sr. Vice President & CFO    STATE OF OHIO )   ) SS:  COUNTY OF HAMILTON )    The foregoing instrument was acknowledged before me this ___ day of December, 2019, by Stephanie P.  Gaither, Sr. Vice President & CFO, of Al. Neyer, LLC, an Ohio limited liability company, the Manager of Northfield  I, LLC, an Ohio limited liability company, on behalf of such company.       Notary Public             [TENANT’S SIGNATURE PAGE FOLLOWS]   

 

EXECUTION COPY  32  TENANT:      KRYSTAL BIOTECH, INC.,  a Delaware corporation          By:       Krish S. Krishnan,    President and Chief Executive Officer        STATE OF     )     ) SS:  COUNTY OF   )    The foregoing instrument was acknowledged before me this ____ day of December, 2019, by Krish S.  Krishnan, President and Chief Executive Officer of Krystal Biotech, Inc., a Delaware corporation, on behalf of such  corporation.       Notary Public       

 

EXECUTION COPY  A-1  EXHIBIT A    Site Plan of Premises    [See attached.]          

 

EXECUTION COPY  A-1-1  EXHIBIT A-1    Property Legal Description    All that certain lease area being a part of lands now or formerly of The Allegheny County Airport Authority, situate  in the Township of Findlay, County of Allegheny and Commonwealth of Pennsylvania, being more particularly  bounded and described as follows:    Beginning at a point on the southerly line of Halverson Road, a sixty-eight (68) foot road, said point being the northerly  corner of the parcel herein conveyed and intersection with lands now or formerly of The Allegheny County Airport  Authority; thence from beginning through lands now or formerly The Allegheny County Airport Authority the  following four (4) courses and distances:    1. S 84°13’31” E a distance of 76.33 feet to a point;    2. S 03°26’54” E a distance of 921.81 feet to a point;    3. N 86°26’37” W a distance of 558.89’ feet to a point;    4. N 03°26’54” E a distance of 723.36 feet to a point on the southerly line of Halverson Road;    thence along Halverson Road S 86°33’46” E a distance of 192.68 feet to a point; thence by same with an arc having a  curve to the left, having a radius of 309.00 feet, an arc length of 375.10 feet to a point the northerly corner of the  parcel, at the point of beginning.    Containing an area of 10 acres.  

 

EXECUTION COPY  B-1  EXHIBIT B    WORK LETTER  The terms, definitions, and other provisions of the Lease are hereby incorporated into this Work Letter by  reference as if set forth in full. In the event of any inconsistencies between this Work Letter and the provisions of the  Lease, the provisions of this Work Letter shall control. Capitalized terms used herein but not otherwise defined herein  shall have the meanings ascribed to such terms in the Lease.  IN CONSIDERATION OF the execution of the Lease and the mutual covenants and conditions hereinafter  set forth, the parties agree that this Work Letter and the terms hereof shall apply to the completion of Landlord’s  Work.  1. CONSTRUCTION OF THE BUILDING  Landlord, by and through Al. Neyer, LLC, an Ohio limited liability company (“Contractor”), shall promptly  construct the Building in an effort to achieve Substantial Completion on or before the Estimated Lease  Commencement Date.  2. LANDLORD’S WORK  Landlord’s Work shall include the planning, designing and construction of the Landlord’s Work, including  the Building, in accordance with the Plans and Specifications attached hereto as Exhibit B-1 and in accordance with  all Applicable Laws including, but not limited to, all applicable building codes.  In addition, Landlord’s Work shall  include the (i) procurement of all permits and approvals necessary for the development and construction of the  Landlord’s Work required by any governmental agency having jurisdiction over the development and construction of  the Landlord’s Work; (ii) coordination of architectural and engineering services necessary for the construction of the  Building; (iii) site preparation, construction and providing labor, supplies, materials and equipment and such other  services required to be furnished and performed in accordance with the Plans and Specifications necessary to complete  the Landlord’s Work; and (iv) if not precluded by the scope of Tenant’s Work remaining to be completed as of the  time Landlord has achieved Substantial Completion of Landlord’s Work, procurement of a certificate of occupancy  from the applicable governmental authorities permitting Tenant to occupy the Premises upon Substantial Completion  of the Landlord’s Work.  3. COST OF LANDLORD’S WORK  Landlord’s Work shall be completed at Landlord’s sole cost and expense, except that Tenant shall fund  Tenant’s Cash Contribution (as defined below) in accordance with the following:  a. On or before the date Landlord closes on its construction loan with respect to the Premises,  and in any case upon no less than ten (10) days’ prior written notice from Landlord to Tenant, Tenant shall deposit  with TriState Capital Bank (the “Escrow Agent”) the sum of Two Million Four Hundred Thousand Dollars  ($2,400,000.00) (“Tenant’s Cash Contribution”), which amount shall be applied against the first $2,400,000.00 of  hard costs associated with Landlord’s Work.  b. Landlord and Tenant agree that, on or before the date Landlord closes on its construction  loan with respect to the Premises, Landlord, Tenant and the Escrow Agent shall enter into a commercially reasonable  escrow agreement (the “Escrow Agreement”) pursuant to which an escrow account shall be established with the  Escrow Agent, for the collection of Tenant’s Cash Contribution and disbursement thereof for the first $2,400,000.00  of hard costs associated with Landlord’s Work.  In no event shall Tenant be obligated to make Tenant’s Cash  Contribution until the Escrow Agreement has been fully executed by Landlord, Tenant and the Escrow Agent, and a  fully executed copy thereof has been provided to Tenant.  The Escrow Agreement shall provide, among other things,  the manner in which draws may be made from the escrow account established thereby.  c. Landlord and Tenant hereby acknowledge and agree that Tenant’s Cash Contribution shall  not cover the entire cost of Landlord’s Work, but rather is intended to reduce the amount of Landlord’s equity and  debt required in order to accomplish the construction of Landlord’s Work hereunder.  

 

EXECUTION COPY  B-2  4. PLANS; CHANGES TO PLANS  a. Construction Plans: Landlord’s Work shall be constructed in accordance with the Plans  and Specifications.  b. Changes to Plans and Specifications:   i. No material change to the Plans and Specifications shall be made by Landlord or  Tenant unless such change is first approved in writing by both parties, which approval shall not be unreasonably  withheld, conditioned or delayed (“Change Order”).   Provided a Change Order is reasonably acceptable to Landlord,  Landlord shall prepare and submit promptly to Tenant a memorandum setting forth the impact on cost and the  Schedule resulting from said Change Order ("Change Order Memorandum").  Tenant shall, within three (3) days  following Tenant's receipt of a Change Order Memorandum, either (a) execute and return the Change Order  Memorandum to Landlord, (b) retract its request for the Change Order, or (c) revise the original request for the Change  Order.    ii. At Landlord's option, Tenant shall pay to Landlord (or Landlord's designee),  within thirty (30) days following Landlord's request, any increase in the cost of Landlord’s Work resulting from a  Change Order, as set forth in the applicable Change Order Memorandum.  iii. In the event of any decrease in the cost of Landlord’s Work resulting from a  Change Order, as set forth in the applicable Change Order Memorandum, Base Rent will proportionately adjust to  account for any such decreases, which adjustment shall be equal to the product of (x) a rent constant equal to Eight  and 25/100 Percent (8.25%) multiplied by (y) the amount of the actual decrease to the cost to perform Landlord’s  Work due to any such Change Order.  All adjustments to Base Rent resulting from Change Orders that decrease the  cost of Landlord’s Work – as well as the corresponding adjustment to the Purchase Price for Tenant’s exercise of the  Purchase Option – shall be memorialized in the Lease Commencement Date Memorandum attached to the Lease as  Exhibit C.  iv. Landlord shall not be obligated to commence any work set forth in a Change Order  until such time as Tenant has delivered to Landlord the executed Change Order Memorandum associated with such  Change Order and Tenant has paid Landlord in full, at Landlord’s discretion, for said Change Order.  v. Upon receipt of a request from Tenant to Landlord to make a material change to  the Plans and Specifications (“Proposed Tenant Change”), Landlord shall cause the Contractor, within fourteen (14)  days of receipt of same, to promptly estimate the effect on cost and schedule in completing the Proposed Tenant  Change, if any, and to report such estimate to Landlord who is responsible for in turn reporting the estimate to Tenant.  Prior to Landlord implementing a Change Order for the purpose of effectuating a Proposed Tenant Change, Tenant  must agree, in writing, within three (3) business days after delivery of the estimated cost and delay from Landlord, to  pay any increased costs of Landlord’s Work associated with such Proposed Tenant Change.  Contractor shall proceed  with Landlord’s Work, excluding any Proposed Tenant Change, pending the consideration of said Proposed Tenant  Change. Any actual delay in Landlord’s Work caused by a Proposed Tenant Change shall constitute a Tenant Delay.  No Proposed Tenant Change shall be deemed approved until Tenant notifies Landlord in writing of Tenant’s  willingness to accept responsibility for a Tenant Delay, if any, which arises from such Proposed Tenant Change as  specifically delineated by Landlord. Tenant shall have the right to withdraw any requested Proposed Tenant Change  if Tenant is unwilling to pay any increased costs or accept responsibility for a Tenant Delay associated with the  Proposed Tenant Change.  vi. If a Change Order is necessitated by Landlord’s failure to complete the Landlord’s  Work in accordance with the Plans and Specifications or any other act or omission of Landlord or Contractor, Landlord  shall be responsible for all of the reasonable costs associated with such Change Order and the delay resulting from  such Change Order, if applicable.  

 

EXECUTION COPY  B-3  4. PUNCHLIST  The term “Punch List Items” shall mean details of construction, decoration, and mechanical adjustment  which, in the aggregate, are minor in character and do not interfere with the Tenant’s use or enjoyment of the Premises.   Punch List Items shall be identified by Tenant within a reasonable time after Substantial Completion and completed  by Landlord as soon as reasonably practical and no later than thirty (30) days after Tenant identifies the Punch List  Items.  Landlord shall be granted reasonable rights of access to the Premises after Substantial Completion for the  purposes of completing such Punch List Items provided that Landlord shall use its reasonable efforts to cause as little  interference with Tenant’s Work, and otherwise with Tenant’s use and occupancy of the Premises, as reasonably  possible. All Punch List Items shall be completed by Landlord (or Contractor, at Landlord’s direction) to the  reasonable satisfaction of Tenant, irrespective of whether said Punch List Items have been completed as of the date  upon which Tenant closes on its acquisition of the Option Property in accordance with Section 25 of the Lease, if  applicable.    5. COOPERATION  Throughout the entire process of completing the construction of the Building, Landlord and Tenant shall  cooperate with the other to promptly provide any additional information and details and to respond promptly to any  requests reasonably requested by the other party regarding such construction. Each party shall consider reasonable  alternatives and solutions to any disputed elements in the construction and act in a timely manner with reasonable  cooperation to provide maximum flexibility in completing the construction.  6. DRAWINGS AND AUTOCAD FILES  Landlord shall provide Tenant with electronic files of all architectural, construction and subcontractor  drawings of the leased Premises within Sixty (60) days following the Commencement Date.  These files may be used  solely in connection with the Building and the Premises. Landlord shall provide Tenant with a complete set of the  Plans and Specifications and as-built drawings (including space planning, architectural, mechanical, engineering,  electrical and plumbing) with respect to the Premises within thirty (30) day of the Lease Commencement Date.  

 

EXECUTION COPY  B-1-1  EXHIBIT B-1    Plans and Specifications for Landlord’s Work    Items defined below as specific scope items relative to the Base Building are considered scope that is included  in Base Building cost and not part of the $60/SF TI Office Allowance.  Any unused portion of allowance could  be used to offset other Tenant related FFE.    Included in this project are the following:    1. Complete plans and specifications.  a. Architectural (for Base Building – TI Design will be part of TI Allowance)  b. Structural engineering  c. Civil engineering  d. Design build mechanical and electrical engineering (for Base Building – TI Design will be part of TI  Allowance)    2. Building permit and tap fees for potable and sanitary service.  Additional Electrical and Gas related fees (if  any) associated with Utility Company evaluation/installation of enhanced Gas or Electric Service are not  included.    3. General condition items:  a. Field and office supervision  b. Temporary facilities and controls  c. Progress and final clean up  d. Liability insurance including Builder’s Risk  e. Layout    4. Excavation & Site Utilities  a. Al. Neyer will perform all cut/fill soil operations and fine grading to bring grades from existing  condition to proposed grades.  b. On site utilities   1) Storm piping and structures piped to existing storm detention system.  2) Water (for fire protection and domestic) shall enter the building at a point to be determined by the  engineer.  3) Sanitary sewer shall enter the building from existing sanitary manhole on site. Invert Elevation for  Sanitary will allow for Sanitary to be run approximately midway through the building at 1% slope.   More remote sanitary can be accommodated with 8 inch line run at 0.5% slope. Final design to be  coordinated with Tenant.  4) Gas piping to be extended by the service provider into the building. People’s Gas – See note above  on fees.  5) Electric and phone/data shall enter the building on the dock side.    5. Asphalt paving  a. Heavy duty for main drive and entire paved dock area.  Heavy duty design is made of 8” of limestone  subbase + 4” asphalt binder course + 1.5” asphalt wearing course.  b. Light duty is included for the parking lot and road connecting to main drive. Light duty design is made  of 6” of limestone subbase + 2.5” asphalt binder course + 1.5” asphalt wearing course.      6. Landscaping per Township requirements.    7. Concrete building foundations shall consist of conventional perimeter strip footings, and isolated column  pads using 3,000psi concrete.    

 

EXECUTION COPY  B-2    8. Exterior concrete.  a. 7” unreinforced concrete over 4” of compacted gravel base extending 60’ from the dock wall of the  building.  b. 4” concrete sidewalk with turn down curb as shown.  c. Asphalt wedge curb at car parking lot only.  There are no curbs around perimeter of concrete paving.  d. Concrete Equipment Pad 52’ x 52’, including concrete drive aisle as well as a 12’ tall privacy fence  and access via two-man gates and two large equipment swing gates – Design of Slab will support  23,000 lb storage tank.      9. The building slab-on-grade at the office space includes 7” concrete reinforced with poly fibers at a rate of  1.5 #/cy on a 6” compacted limestone base. The SOG will receive an Ashford Sealer or equal 10 mil vapor  barrier at the office areas. 13,985 sf of concrete is included for the office area.  The rest of the slab on grade  will be left out for future installation by tenant.  The cement stabilized subbase will be prepared at 13  inches below finished floor to allow for Tenant utility rough in work followed by 6” of stone and 7’ inches  of concrete by Tenant     10. Load bearing nominal 8” precast concrete wall panels per elevations finished with a textured paint system  on exterior face.  Interior face of concrete walls to remain unpainted.  All exposed exterior wall joints shall  be caulked.  Exterior precast walls to have R-13 insulation and Building envelope will be designed to meet  current Energy Code (Fabcon verscore + green panels).    11. Conventional steel framing system consisting of steel columns, girders, joists and deck; using  approximately 50’-0” x 50’-0” bay spacing or as shown on floor plans:  a. Single slope roof draining to dock side.   b. Tube columns.  c. Bar joists and joist girders.  d. Metal roof deck (underside) to be prime painted white.  e. 40’ clear height in warehouse area (40 ft clear height will begin 61 ft in from dock wall – or 39’-0”  clear from dock wall to, one-foot past speed bay column line).   f. Joists are designed as KCS for allowance of up to 30psf worth of hanging loads. The 30PSF collateral  can be applied up to a 2,000-pound point from bottom chord of joist. The quantity of points loads on  an individual joist can exceed the uniform 30 PSF load. 30 PSF design applied to entire building with  exception of current and future office area location and at dock bay.  g. Four (4) roof frames for HVAC rooftop units.  h. One (1) roof ladder with cage to be coordinated with Tenant at an interior location.  i. Bollards to protect drive-in doors.  j. (2) two galvanized dock stairs.  k. (3) three dock pit frames.    12. The roof shall be a mechanically fastened .060” mechanically attached EPDM roof membrane system with  a manufacturer’s 15-year material and labor warranty over R-30 (or, as required by code) 3.8” polyiso  insulation.  Roofing shall include prefinished gutters and downspouts draining at rear dock elevations as  indicated on drawings.     13. Exterior insulated hollow metal egress doors and frames with medium duty hardware as shown on plans.   Doors requiring vision lights to be coordinated with Tenant.    14. Aluminum framed storefront system as shown on elevations consisting of anodized aluminum finish,  medium stile, and 1” tempered clear glass. Approximately 2,300 SF of glass is included.    

 

EXECUTION COPY  B-3  15. Painting includes:  a. Exterior of precast wall panels to include one (1) coat of LOXON primer + one (1) coat of textured medium  Sherwin Williams finish paint.  b. Paint all HM doors and frames.    16. Overhead doors and equipment include:  a. Five (5) 9’ x 10’ insulated manual overhead dock door capable of air curtain in the future.  b. Two (2) 12’ x 14’ insulated automatic overhead drive in doors.  c. Three (3) dock seals.  d. Three (3) 40” double arm incandescent dock lights.  e. Three (3) 6’ x 8’, 30,000 lb mechanical dock levelers.  f. Three (3) dock locks.    17. Plumbing system includes:  a. Approximately 600 lineal feet of 8” sanitary piping run underground along 1st interior column bay with  clean outs every 50 feet.  Final configuration TBD.  b. Approximately 660 lineal feet 4” insulated water line run overhead from a point 1’-0” AFF in the  meter room located on the south side and then extended up to the underside of the roof deck above.   Includes two hose bibs.  Final configuration TBD.    c. Gas piping, 3 “ (3 psig)  run from the meter inside the building, up to the roof.    18. Fire protection system shall be installed in the new warehouse as an ESFR K-17 system with a fire pump.  A fire hydrant is included on the office side of the building and a wall hydrant is included for the dock side  of the building. Fire protection for Office space will be part of TI Allowance  a. Water storage tank for increased water pressure is not included.    19. Warehouse Heating and Ventilation:  a. Provide unit heaters (Reznor type or equivalent) adequate to maintain 50 deg F indoor air temperature  with 0 deg F outside air temperature.  b. Includes gas piping to heaters.    20. Electric consists of the following:  a. Electric service to be 5,000 amp, 480/277V, 3 phase, 4-wire service with copper conductors from the  utility in the street to the main electrical distribution panel located in the building.  Ground bar to be  provided. Provide a separate panel for exterior lighting.   b. Primary and secondary conduit to consist of (2) 5” conduit for electric, and (3) 5” for data/phone.  c. Warehouse interior lighting shall consist of one hi bay fixture per bay based on an open floor plan.  d. Power for unit heaters.  e. Power for two (2) overhead door operators.    f. Exterior lighting consisting of wall packs to meet zoning requirements and will be controlled by  photocell.  Light poles are included on the parking side of the building as required by code and  controlled by Photocell and/or timer.  g. Emergency and exit lighting as required by code.  h. Fire alarm and/or sprinkler monitoring system as required by code.    Tenant Specifications for Krystal Biotech included:    a. 100,000 SF Warehouse which includes 13,985 sf interior office fit-out.  b. 200 car parking spots.  c. Office finish allowance of $839,100 included.  d. Pipe bollard protection included at overhead doors.  e. Levelers, bumpers, seals included on dock doors.  f. 5,000 amps at 277/480 volt - 3 phase power to be provided.  

 

EXECUTION COPY  B-4  g. Clear height of 40 feet  h. LED Lighting included in warehouse, at 1 fixture per bay.  i. Unit heaters included in warehouse sufficient to heat entire building including above office space.    Clarifications  1. No interior tenant improvements other than outlined above.   2. Auxiliary Power Systems (UPS and Generator) are not included.  3. No special process related items are included.  4. Phone and data wiring are considered part of TI costs – Landlord provided TI will include Phone/data  conduit rough in to be coordinated with Tenant.      

 

EXECUTION COPY  B-5          

 

EXECUTION COPY  B-2-1  EXHIBIT B-2    Schedule for Landlord’s Work    [See attached.]      

 

EXECUTION COPY  B-3-1  EXHIBIT B-3    Description of Tenant’s Work    Tenant’s work in the Building shall generally include (but not be limited to) the construction or installation of the  following items:    1. Approximately 15,000 – 20,000 square feet of structural steel mechanical mezzanine with walkable  ceiling system.    2. Approximately 300 lineal feet of internal demising walls separating Tenant’s Phase I build out area  from the future planned Phase II expansion area.    3. Secondary employee entrance with access control system.    4. Production employee locker rooms, gowning area, and break room; and three restrooms for each  such area.    5. Production team offices as needed.    6. Clean room structures.    7. Dry fire suppression system in process areas.    8. Air handling equipment and air filtration systems.    9. Water purification and distribution system.    10. Potable and sanitary water system.    11. Effluent purification system.    12. UPS and backup generator systems.    13. Process gas and LN2 tanks and piping.    14. Air compressor and air line systems.    15. Boiler system.    16. Trash compactor.    17. Concrete floor slab in areas of the Building other than the office area being constructed by Landlord.  

 

EXECUTION COPY  B-4-1  EXHIBIT B-4    Initial Delivery Conditions    Each of the following aspects of Landlord’s Work shall be completed in accordance with the Plans and Specifications:    1. Building shell complete, including all exterior walls, roof and roof membrane fully installed and in  working condition sufficient to allow Tenant to commence (or cause the commencement of) Tenant’s  Work.    2. Landlord shall have completed the portion of interior slab on grade related to the office portion of the  Premises as described in Exhibit B-1; Landlord shall have completed the remainder of the Premises with  subbase prepared in accordance with Exhibit B-1.    3. All exterior doors and aluminum façade of the Building installed so the Building is capable of being  secured.      

 

EXECUTION COPY  C-1  EXHIBIT C    Commencement Date Memorandum     THIS COMMENCEMENT DATE MEMORANDUM is entered into on _______________, 202__ between  NORTHFIELD I, LLC, an Ohio limited liability company (“Landlord”) and KRYSTAL BIOTECH, INC., a Delaware  corporation (“Tenant”).    On December ___, 2019 Landlord and Tenant entered into a lease ("Lease") covering certain Premises  described in the Lease.    In accordance with Sections 3.1 and 3.4 of the Lease, Landlord and Tenant are executing, acknowledging  and delivering this Agreement for the purposes of specifying (a) the dates of the commencement and termination of  the Lease Term[ and][,] (b) the final rentable square footage of the Building[, (c) an updated Base Rent table, and  (d) an updated Purchase Price for the Option Property, relative to Tenant’s Purchase Option].  Any terms  capitalized herein, but no defined herein shall have the meanings ascribed to them in the Lease.    1. The Lease Term commenced on __________, 202__ (“Lease Commencement Date”), and shall terminate  on ____________________.    2. The approximate number of square feet of the Building is ________ rentable square feet.    3. Tenant's Base Rent obligation under the Lease shall commence on the Lease Commencement Date.     4. [The Base Rent table set forth in Section 1.11 of the Lease is hereby amended and restated as follows:]    TIME PERIOD  (Months)  ANNUAL BASE RENT MONTHLY BASE RENT  1 – 12 $     [________]  $     [________]  13 – 24 $     [________] $     [________]  25 – 36 $     [________] $     [________]  37 – 48 $     [________] $     [________]  49 – 60 $     [________] $     [________]  61 – 72 $     [________] $     [________]  73 – 84 $     [________] $     [________]  85 – 96 $     [________] $     [________]  97 – 108 $     [________] $     [________]  109 – 120 $     [________] $     [________]  121 – 132 $     [________] $     [________]  133 – 144 $     [________] $     [________]  145 – 156 $     [________] $     [________]  157 – 168 $     [________] $     [________]  169 – 180 $     [________] $     [________]    5. [The Purchase Price set forth in Section 25(a) of the Lease is hereby amended and restated to be  $[______].]    6. Payment of Additional Rent shall commence on the Lease Commencement Date.    

 

EXECUTION COPY    {S1415752.1} C-2       7. The Landlord has Substantially Completed all of Landlord’s Work in accordance with the Work Letter, and  has fulfilled all other items designated as Landlord’s obligation under the Lease which were to be completed  prior to the Lease Commencement Date (excluding punch list items as agreed upon by Landlord and Tenant),  and Tenant has accepted the Premises as of the Lease Commencement Date.    8. The execution of this memorandum shall not constitute the exercise by Tenant of any option it may have to  extend the Lease Term.    9. The Lease is in full force and effect and is hereby ratified and confirmed.      [SIGNATURE PAGE FOLLOWS]      

 

EXECUTION COPY  C-3  IN WITNESS WHEREOF, Landlord and Tenant have executed two (2) originals hereof on the above date.    LANDLORD:    NORTHFIELD I, LLC,   an Ohio limited liability company      By: Al. Neyer, LLC    an Ohio limited liability company,    its Manager        By:     Name:     Title:      Date:      TENANT:    KRYSTAL BIOTECH, INC.,  a Delaware corporation      By:    Name:    Title:    Date:          

 

EXECUTION COPY  D-1  EXHIBIT D    RULES AND REGULATIONS    Tenant covenants and agrees to comply with the following rules and regulations as they may be modified or  amended during the Lease Term.    1. The sidewalks, entrances and passages of the Park Common Areas shall not be obstructed by Tenant  or used for any purpose other than ingress and egress to and from the Premises.   2. Tenant shall be responsible for maintaining ADA compliance within the Premises.   3. Tenant shall not use handbills for advertising at the Property.  4. Landlord agrees that at any time during Tenant's occupancy, Tenant shall have the right to install &  maintain an antenna or communications device or similar equipment on the roof of the Premises or  at any other location at the Property; in-building wireless antennas; an uninterruptible power supply  (UPS) in the Premises; and any generator and generator pad necessary for Tenant’s operations in  the Premises so long as such installation and maintenance does not in any way void, in whole or in  part, the roof warranty or any other warranty for the Premises.  Prior to vacating the Premises,  Tenant must remove Tenant’s equipment which has been installed on the roof and make repairs to  the roof as necessary to bring it back to its original condition in accordance with Section 3.3 of the  Lease.  5. Tenant shall not suffer, allow, or permit any vibration, light, or other effect to emanate from the  Premises, or from any machine or other installation therein, or otherwise suffer, allow, or permit the  same to constitute a nuisance or otherwise interfere with the safety, comfort, or convenience of other  tenants at the Park.  Upon notice by Landlord to Tenant that any of the aforesaid is occurring, Tenant  agrees to forthwith remove or take reasonable steps to control the same.  6. Canvassing, soliciting and peddling in the Park Common Areas are prohibited and Tenant shall  cooperate to prevent the same.  7. Tenant shall, at Tenant’s cost, use such pest extermination contractor as Landlord may direct at such  intervals as Landlord may reasonably require, provided the cost thereof is competitive to any similar  service available to Tenant.   8. Tenant, upon termination of its tenancy, shall deliver to the Landlord all keys of offices, rooms and  toilet rooms which have been furnished to Tenant or which Tenant shall have had made, or in the  event of loss of any such keys so furnished, shall pay Landlord therefor.  Tenant shall provide  Landlord with a key to access the main entrance of the Premises in accordance with Section 9 of the  Lease.   9. Smoking is prohibited anywhere inside the Building.  Smoking shall be permitted only in the  exterior “designated smoking” areas, where refuse receptacles have been made available for the  proper disposal of all discarded tobacco products.  Tenant and its authorized representatives or  invitees shall not throw litter of any kind in or about the Building, except in receptacles placed in it  for that purpose.  10. No animals or birds may be brought in or kept in or about the Building or Premises, except for bona  fide service animals.  11. Disposal of trash and other materials shall be done in compliance with all governmental  requirements.  12. No foreign substances shall be disposed of in toilets, urinals, or wash bowls.  Any expense incurred  by Landlord resulting from violation of this rule shall be borne by Tenant.  13. In order to maintain an environment that is safe and free of violence, except for professionally  licensed security personnel hired by Landlord or Tenant, Landlord prohibits the wearing,  transporting, storage, presence or use of weapons on any part of the Property, regardless of whether  the person is licensed to carry the weapon. Tenant shall at all times observe this policy and take all  actions necessary or appropriate to enforce this policy with respect to its employees, agents,  contractors, subcontractors, invitees, licensees and customers.  Tenant must further ensure that: (i)  any agent, employee, contractor or subcontractor who violates this policy will be subject to  disciplinary action, up to and including dismissal, and (ii) any of Tenant’s agents, employees,  

 

EXECUTION COPY  D-2  contractors, subcontractors, invitees, licensees or customers who violate this policy will be  immediately removed from the Property and reported to the police authorities.  Landlord shall have  no obligation to ensure, and Tenant shall be solely responsible for ensuring, that said Tenant and its  respective agents, employees, contractors, subcontractors, invitees, licensees and customers comply  with this policy and any further rules and regulations with respect to the presence of a weapon on  the Property.  The terms and provisions of this section shall be in accordance with 18 PA C.S.A.  sec.6102 et seq.  14. Landlord may waive any one or more of these rules and regulations, but no waiver by Landlord will  be construed as a waiver of those rules and regulations as a whole, nor prevent Landlord from  enforcing any rules and regulations.  15. Landlord may, at Landlord's option, amend or add new rules and regulations for the use and care of  the Premises, but only to the extent that Landlord has provided a written copy of same to Tenant at  least thirty (30) days in advance.      

 

EXECUTION COPY  E-1  EXHIBIT E    Landlord Ground Lease    [See attached.]      

 

EXECUTION COPY  F-1  EXHIBIT F    Form of SNDA    [To be provided.]        

 

EXECUTION COPY  G-1  EXHIBIT G    Form of Landlord Ground Lease NDA      GROUND LANDLORD'S NON-DISTURBANCE AGREEMENT    The undersigned, Allegheny County Airport Authority, a body politic, organized under the Municipal Authorities Act  of 1945 ("Ground Landlord"), for good and valuable consideration, the receipt and sufficiency of which is hereby  acknowledged, and intending to be legally bound hereby, represents, warrants, covenants and agrees to and with  KRYSTAL BIOTECH, INC., a Delaware corporation ("Tenant") as follows with respect to that certain Lease  Agreement between Tenant and NORTHFIELD I, LLC, an Ohio limited liability company ("Landlord"), dated  December 26, 2019 ("Lease") pertaining to the lease of certain real property consisting of approximately 10 acres  located on that certain land in Findlay Township, Pennsylvania described on Exhibit A attached hereto, together with  all rights, privileges and easements appurtenant thereto and a building to be constructed thereon, as more particularly  described in the Lease (collectively, "Premises"):    1. Ground Landlord and Landlord are parties to that certain Ground Lease Agreement, dated December 26,  2019 ("Ground Lease"), of which the Lease is subject and subordinate.    2. Tenant shall not be disturbed in its possession of the Premises by Ground Landlord, or any person acting by,  through or under Ground Landlord, for so long as Tenant is not in default under the Lease.  3. In the event that the Ground Lease is repudiated, disclaimed, or terminated at any time prior to the expiration  or earlier termination of the term of the Lease, including without limitation as a result of Landlord's default,  bankruptcy, insolvency or dissolution, and Tenant is not then in default of its obligations under the Lease, then Ground  Landlord agrees that the Lease shall automatically continue in full force and effect, and Ground Landlord shall  continue to honor the terms of the Ground Lease and Lease, as modified by, and with respect to, this Landlord's  Consent, as though Tenant were the direct tenant of Ground Landlord, and Tenant's interest in the Premises shall  continue without interruption.    4. Landlord forever waives (i) any right provided by law or otherwise to obtain, foreclose upon, execute upon or  otherwise benefit from a lien or other encumbrance against the Personal Property (as defined in the Lease) located at the  Premises for rent or other sums due Ground Landlord, whether under the Ground Lease or Lease, or any other obligation  of Tenant to Ground Landlord, and (ii) any right provided by law or otherwise to distraint or distress the Personal Property  of Tenant located on the Premises.          5. With respect to the Lease, Ground Landlord represents, warrants and covenants to Tenant as follows:   (A) Tenant's intended use of the Premises for industrial manufacturing, warehouse, distribution, storage,  office and ancillary uses related to the foregoing uses is permitted under the Ground Lease.  (B) The term of the Ground Lease expires on ________________.  (C) The Ground Lease is presently in full force and effect.  (D) Landlord is in possession and full occupancy of all of the Premises.  (E) To Ground Landlord's knowledge, Landlord has not subleased or licensed to any other person or  entity any of the Premises.  (F) As of the Effective Date, no "Lessor" or "Lessee" default is continuing under the terms of the Ground  Lease, and no event has occurred which with notice or the passage of time or both would constitute a "Lessor" or  "Lessee" default under the terms of the Lease.  (G) All obligations on the part of Landlord as "Lessee" under the terms of the Ground Lease through  the Effective Date have been fully performed to the satisfaction of Ground Landlord.      6. Ground Landlord represents and warrants to Tenant that it has full power and authority to enter into and grant  this Non-Disturbance Agreement.  This Non-Disturbance Agreement shall be binding upon and shall inure to the  benefit of Tenant and Tenant's successors and assigns.    [SIGNATURE PAGE FOLLOWS]  

 

EXECUTION COPY  G-2    IN WITNESS WHEREOF, the Ground Landlord has signed this Non-Disturbance Agreement this ____ day  of December, 2019.      GROUND LANDLORD:  ATTEST/WITNESS: THE ALLEGHENY COUNTY AIRPORT     AUTHORITY    By:    By:    Name:   Name:   Title:    Title:    Date:  December ___, 2019  Date:  December ___, 2019    APPROVED AS TO FORM:  ______________________________  Jeffrey W. Letwin, Esquire, Solicitor    COMMONWEALTH OF PENNSYLVANIA   )     ) SS:  COUNTY OF    )      The foregoing instrument was acknowledged before me this ___ day of December, 2019, by  __________________, the __________________ of The Allegheny County Airport Authority, a body politic under  the Municipal Authorities Act of 1945.       Notary Public     

 

EXECUTION COPY  G-4  EXHIBIT A  TO  GROUND LANDLORD'S NON-DISTURBANCE AGREEMENT    Legal Description of the Property    All that certain lease area being a part of lands now or formerly of The Allegheny County Airport Authority, situate  in the Township of Findlay, County of Allegheny and Commonwealth of Pennsylvania, being more particularly  bounded and described as follows:    Beginning at a point on the southerly line of Halverson Road, a sixty-eight (68) foot road, said point being the northerly  corner of the parcel herein conveyed and intersection with lands now or formerly of The Allegheny County Airport  Authority; thence from beginning through lands now or formerly The Allegheny County Airport Authority the  following four (4) courses and distances:    1. S 84°13’31” E a distance of 76.33 feet to a point;    2. S 03°26’54” E a distance of 921.81 feet to a point;    3. N 86°26’37” W a distance of 558.89’ feet to a point;    4. N 03°26’54” E a distance of 723.36 feet to a point on the southerly line of Halverson Road;    thence along Halverson Road S 86°33’46” E a distance of 192.68 feet to a point; thence by same with an arc having a  curve to the left, having a radius of 309.00 feet, an arc length of 375.10 feet to a point the northerly corner of the  parcel, at the point of beginning.    Containing an area of 10 acres.      

 

EXECUTION COPY  H-1  EXHIBIT H    Form of Memorandum of Lease    MEMORANDUM OF LEASE    THIS MEMORANDUM OF LEASE is made and entered into as of the ____ day of December 2019, between  NORTHFIELD I, LLC, an Ohio limited liability company (the “Landlord”), and KRYSTAL BIOTECH, INC., a  Delaware corporation (the “Tenant”).    RECITALS    A. Pursuant to that certain Lease Agreement dated as of December ___, 2019 between Landlord and  Tenant (the “Lease”), Landlord leased and demised to Tenant, and Tenant leased from Landlord, the Premises (as  hereinafter defined).    B. Landlord and Tenant desire to enter into this Memorandum of Ground Lease pursuant to the  provisions of the Act of June 2, 1959, P.L. 454 (21 P.S. §404 et seq.).    C. Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the  Lease.    NOW, THEREFORE, intending to be legally bound, Landlord and Tenant hereby set forth the following  information with respect to the Lease and the Premises:    1. The name of the Landlord is NORTHFIELD I, LLC, an Ohio limited liability company.      2. The name of the Tenant is KRYSTAL BIOTECH, INC., a Delaware corporation.    3. The addresses set forth in the Lease as addresses of the parties are as follows:    

 

EXECUTION COPY      Landlord's Address:  c/o Al. Neyer, LLC      302 West Third Street, Suite 800      Cincinnati, OH 45202      Attn: Legal Services      Email: lkoth@neyer.com           with copy to:  c/o Al. Neyer, LLC      302 West Third Street, Suite 800       Cincinnati, OH  45202       Attn: Asset Management       Email: jcheung@neyer.com         Tenant's Address:  2100 Wharton Street, Suite 701      Pittsburgh, PA 15203      Attn:  Tony Riley      Email: triley@krystalbio.com            and             2100 Wharton Street, Suite 701      Pittsburgh, PA 15203      Attn:  Josh Suskin      Email: jsuskin@krystalbio.com          with copy to:    Jonathan P. Altman, Esq.      Sherrard, German & Kelly, P.C.       535 Smithfield Street, Suite 300       Pittsburgh, PA 15222       Email:  jpa@sgkpc.com        4. The Lease is dated as of December ___, 2019.    5. The description of the “Premises” leased from Landlord to Tenant under the Lease is (a) the Property  described on Exhibit A attached hereto, together with (b) all improvements located on the Property (including, without  limitation, a Building to be constructed containing approximately 100,000 rentable square feet of space, and all utility  systems located within or otherwise serving the Building, and a parking lot containing at least 200 parking spaces), and (c)  all appurtenances thereto, including but not limited to, rights of ingress, egress and regress to the Property and the Building.    6. The initial Term of the Lease shall commence upon Substantial Completion of the Landlord’s Work  (the “Lease Commencement Date”) and shall expire on the last day of the one hundred eightieth (180th) complete  calendar month thereafter.    7. The Tenant shall have three (3) consecutive renewal options, the first two of which shall be for a  period of five (5) years each, and the third of which shall be for a period of up to a maximum of four (4) years and  eleven (11) months.  

 

EXECUTION COPY      8. As more particularly set forth in the Lease, the Tenant has an option to purchase the Building and  Improvements and take a corresponding assignment of Landlord’s rights under the Landlord Ground Lease, to be  exercised at any time prior to the date that is thirty (30) days after the Initial Delivery Date (as defined in the Lease).     9. As more particularly set forth in the Lease, commencing after the expiration of the twenty-fourth  (24th) complete calendar month after the Lease Commencement Date, and continuing until the expiration of the Lease  Term, Tenant shall have an ongoing right of first offer to purchase the Building and Improvements and take a  corresponding assignment of Landlord’s rights under the Landlord Ground Lease; provided, however, that Tenant’s  right of first offer shall not apply to any sale of the Premises to an Affiliate of Landlord, but Tenant’s right of first  offer shall continue in full force and effect for any subsequent sale by any and all such Affiliates of Landlord.    10. It is the intention of this instrument to give notice of the existence of the Lease and certain terms  and conditions thereof, and is not intended to supersede, diminish, add to or change any of the terms or conditions of  the Lease.  All of the terms and conditions of the Lease are incorporated herein by this reference to the same extent as  if set forth herein at length, and the failure to include any such terms or conditions shall not prejudice the rights of the  Landlord or Tenant with respect thereto.    11. This Memorandum may be executed in counterparts or with counterpart signature pages, all of  which taken together shall constitute one integrated agreement.      [SIGNATURE PAGES FOLLOW]    

 

EXECUTION COPY    IN WITNESS WHEREOF, the parties hereto have executed this Memorandum of Lease as of the day and  year first above written.    LANDLORD:    NORTHFIELD I, LLC,  an Ohio limited liability company    By: Al. Neyer, LLC    an Ohio limited liability company,    its Manager        By:       Stephanie P. Gaither,      Sr. Vice President & CFO    STATE OF OHIO  )      ) SS:  COUNTY OF HAMILTON  )     The foregoing instrument was acknowledged before me this ___ day of December, 2019, by Stephanie P.  Gaither, Sr. Vice President & CFO, of Al. Neyer, LLC, an Ohio limited liability company, the Manager of Northfield  I, LLC, an Ohio limited liability company, on behalf of such company.    Notary Public     [LANDLORD’S SIGNATURE PAGE TO MEMORANDUM OF LEASE]      

 

    IN WITNESS WHEREOF, the parties hereto have executed this Memorandum of Lease as of the day and  year first above written.    TENANT:      KRYSTAL BIOTECH, INC.,  a Delaware corporation          By:       Krish S. Krishnan,    President and Chief Executive Officer      STATE OF     )     ) SS:  COUNTY OF   )        The foregoing instrument was acknowledged before me this ___ day of December, 2019, by Krish S.  Krishnan, President and Chief Executive Officer of Krystal Biotech, Inc., a Delaware corporation, on behalf of such  corporation.       Notary Public                       [TENANT’S SIGNATURE PAGE TO MEMORANDUM OF LEASE]      

 

    EXHIBIT A  TO  MEMORANDUM OF LEASE    Legal Description of the Property    All that certain lease area being a part of lands now or formerly of The Allegheny County Airport Authority, situate  in the Township of Findlay, County of Allegheny and Commonwealth of Pennsylvania, being more particularly  bounded and described as follows:    Beginning at a point on the southerly line of Halverson Road, a sixty-eight (68) foot road, said point being the northerly  corner of the parcel herein conveyed and intersection with lands now or formerly of The Allegheny County Airport  Authority; thence from beginning through lands now or formerly The Allegheny County Airport Authority the  following four (4) courses and distances:    1. S 84°13’31” E a distance of 76.33 feet to a point;    2. S 03°26’54” E a distance of 921.81 feet to a point;    3. N 86°26’37” W a distance of 558.89’ feet to a point;    4. N 03°26’54” E a distance of 723.36 feet to a point on the southerly line of Halverson Road;    thence along Halverson Road S 86°33’46” E a distance of 192.68 feet to a point; thence by same with an arc having a  curve to the left, having a radius of 309.00 feet, an arc length of 375.10 feet to a point the northerly corner of the  parcel, at the point of beginning.    Containing an area of 10 acres.

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