Document:

krys-ex43_128.htm

 

Exhibit 4.3

DESCRIPTION OF Common STOCK

General

Our authorized capital stock consists of 80,000,000 shares of common stock, $0.00001 par value per share, and 20,000,000 shares of preferred stock, $0.00001 par value per share. Our common stock is registered under Section 12(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We have no other securities registered under Section 12 of the Exchange Act. 

The following description summarizes the most important terms of our common stock. Because it is only a summary, it does not contain all the information that may be important to you. The description is intended as a summary, and is qualified in its entirety by reference to our second amended and restated certificate of incorporation (our “Certificate of Incorporation”) and our amended and restated bylaws (our “Bylaws”). For a complete description, you should refer to our Certificate of Incorporation and Bylaws.

Common Stock

Dividend Rights

The holders of our common stock are entitled to receive dividends out of funds legally available if our board of directors, in its discretion, determines to issue dividends and then only at the times and in the amounts that our board of directors may determine. 

Voting Rights

Holders of our common stock are entitled to one vote for each share held on all matters submitted to a vote of stockholders. We have not provided for cumulative voting for the election of directors in our Certificate of Incorporation. Accordingly, holders of a majority of the shares of our common stock will be able to elect all of our directors. Our Certificate of Incorporation has established a classified board of directors, divided into three classes with staggered three-year terms. Only one class of directors will be elected at each annual meeting of our stockholders, with the other classes continuing for the remainder of their respective three-year terms.

No Preemptive or Similar Rights

Our common stock is not entitled to preemptive rights, and is not subject to conversion, redemption or sinking fund provisions.

Right to Receive Liquidation Distributions

Upon our liquidation, dissolution or winding-up, the assets legally available for distribution to our stockholders would be distributable ratably among the holders of our common stock at that time, subject to prior satisfaction of all outstanding debt and liabilities.

Anti-Takeover Provisions

The provisions of Delaware law, our Certificate of Incorporation and our Bylaws could have the effect of delaying, deferring or discouraging another person from acquiring control of our company. These provisions, which are summarized below, may have the effect of discouraging takeover bids. They are also designed, in part, to encourage persons seeking to acquire control of us to negotiate first with our board of directors. We believe that the benefits of increased protection of our potential ability to negotiate with an unfriendly or unsolicited acquirer outweigh the disadvantages of discouraging a proposal to acquire us because negotiation of these proposals could result in an improvement of their terms.

 

 

Delaware Law

We are subject to the provisions of Section 203 of the Delaware General Corporation Law (the “DGCL”), regulating corporate takeovers. In general, Section 203 of the DGCL prohibits a publicly held Delaware corporation from engaging in a business combination with an interested stockholder for a period of three years following the date on which the person became an interested stockholder unless:

	
 
	
•
	
prior to the date of the transaction, the board of directors of the corporation approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder; 

	
 
	
•
	
the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding, but not the outstanding voting stock owned by the interested stockholder: (i) shares owned by persons who are directors and also officers; and (ii) shares owned by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or 

	
 
	
•
	
at or subsequent to the date of the transaction, the business combination is approved by the board of directors of the corporation and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66.67% of the outstanding voting stock that is not owned by the interested stockholder. 

Generally, a business combination includes a merger, asset or stock sale, or other transaction or series of transactions together resulting in a financial benefit to the interested stockholder. An interested stockholder is a person who, together with affiliates and associates, owns or, within three years prior to the determination of interested stockholder status, did own 15% or more of a corporation’s outstanding voting stock. We expect the existence of this provision to have an anti-takeover effect with respect to transactions our board of directors does not approve in advance. We also anticipate that Section 203 of the DGCL may also discourage attempts that might result in a premium over the market price for the shares of common stock held by stockholders.

Second Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws Provisions

Our Certificate of Incorporation and our Bylaws include a number of provisions that could deter hostile takeovers or delay or prevent changes in control of our company, including the following:

	
 
	
•
	
Board of Directors Vacancies. Our Certificate of Incorporation and Bylaws authorizes only our board of directors to fill vacant directorships, including newly created seats. In addition, the number of directors constituting our board of directors may only be set by a resolution adopted by a majority vote of our entire board of directors. These provisions would prevent a stockholder from increasing the size of our board of directors and then gaining control of our board of directors by filling the resulting vacancies with its own nominees. This makes it more difficult to change the composition of our board of directors but promotes continuity of management. 

	
 
	
•
	
Classified Board. Our Certificate of Incorporation and Bylaws provide that our board of directors will be classified into three classes of directors, each with staggered three-year terms. A third party may be discouraged from making a tender offer or otherwise attempting to obtain control of us as it is more difficult and time consuming for stockholders to replace a majority of the directors on a classified board of directors.

Stockholder Action; Special Meetings of Stockholders. Our Certificate of Incorporation provides that our stockholders may not take action by written consent, but may only take action at annual or special meetings of our stockholders. As a result, a holder controlling a majority of our capital stock may not amend our restated bylaws or remove directors without holding a meeting of our stockholders called in accordance with our restated bylaws. Further, our Certificate of Incorporation and Bylaws provide that 

 

 

special meetings of our stockholders may be called only by a majority of our board of directors, the chairman of our board of directors, or our Chief Executive Officer, thus prohibiting a stockholder from calling a special meeting. These provisions might delay the ability of our stockholders to force consideration of a proposal or for stockholders controlling a majority of our capital stock to take any action, including the removal of directors. 

	
 
	
•
	
Advance Notice Requirements for Stockholder Proposals and Director Nominations. Our Bylaws provides advance notice procedures for stockholders seeking to bring business before our annual meeting of stockholders or to nominate candidates for election as directors at our annual meeting of stockholders. Our Bylaws also specifies certain requirements regarding the form and content of a stockholder’s notice. These provisions may preclude our stockholders from bringing matters before our annual meeting of stockholders or from making nominations for directors at our annual meeting of stockholders if the proper procedures are not followed. We expect that these provisions may also discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of our company. 

	
 
	
•
	
No Cumulative Voting. The DGCL provides that stockholders are not entitled to the right to cumulate votes in the election of directors unless a corporation’s certificate of incorporation provides otherwise. Our Certificate of Incorporation does not provide for cumulative voting. 

	
 
	
•
	
Directors Removed Only for Cause. Our Certificate of Incorporation provides that stockholders may remove directors only for cause and only by the affirmative vote of the holders of at least two-thirds of our outstanding common stock. 

	
 
	
•
	
Amendment of Charter Provisions. Any amendment of the above expected provisions in our Certificate of Incorporation requires approval by holders of at least two-thirds of our outstanding common stock. 

	
 
	
•
	
Issuance of Undesignated Preferred Stock. Our board of directors has the authority, without further action by the stockholders, to issue up to 20,000,000 shares of undesignated preferred stock with rights and preferences, including voting rights, designated from time to time by our board of directors. The existence of authorized but unissued shares of preferred stock will enable our board of directors to render more difficult or to discourage an attempt to obtain control of us by means of a merger, tender offer, proxy contest or other means. 

	
 
	
•
	
Choice of Forum. Our Certificate of Incorporation provides that the Court of Chancery of the State of Delaware will be the exclusive forum for: any derivative action or proceeding brought on our behalf; any action asserting a breach of fiduciary duty; any action asserting a claim against us arising pursuant to the DGCL, our Certificate of Incorporation or our Bylaws; any action to interpret, apply, enforce or determine the validity of our Certificate of Incorporation or our Bylaws; or any action asserting a claim against us that is governed by the internal affairs doctrine. The enforceability of similar choice of forum provisions in other companies’ certificates of incorporation has been challenged in legal proceedings, and it is possible that a court could find these types of provisions to be inapplicable or unenforceable. 

Transfer Agent and Registrar

The transfer agent and registrar for our common stock is Computershare Trust Company, N.A. The transfer agent’s address is Meidinger Tower, 462 S. 4th Street, Louisville, KY 40202, and its telephone number is 1-502-601-6000. Our shares of common stock were issued in uncertificated form only, subject to limited circumstances.

NASDAQ Capital Market Listing

Our common stock is listed on The NASDAQ Capital Market under the symbol “KRYS.”krys-ex1013_80.htm

 

Exhibit 10.13

THIRD AMENDMENT TO LEASE AGREEMENT

 

THIS THIRD AMENDMENT TO LEASE AGREEMENT (the “Third Amendment”) is made as of the 31st day of May, 2018, by and between Wharton Lender Associates, L.P., (“Landlord”), and Krystal Biotech Inc. (“Tenant”).

 

WITNESSETH:

 

WHEREAS, by Lease dated May 26, 2016 (the “Original Lease”), as amended by First Amendment to Lease Agreement dated July 26, 2016 and Second Amendment to Lease Agreement dated February 27, 2017 (the "Second Amendment") (the Original Lease as amended, collectively, the "Lease"), Landlord currently leases to Tenant and Tenant currently leases from Landlord certain premises consisting of approximately 5,065 rentable square feet (the “Current Premises”) located on the 7th Floor of the building known as 2100 Wharton Street, Pittsburgh, Pennsylvania (the “Building”); and

 

WHEREAS, Landlord and Tenant now desire to amend the Lease so as to (i) expand the Current Premises by approximately 5,913 rentable square feet of area (the "Expansion Space") thereby increasing Tenant's rentable area in the Building to a total of 10,978 rentable square feet; (ii) extend the term of the Lease; (iii) provide for updates and refurbishment of the Current Premises; and, (iv) modify certain other terms of the Lease, all in accordance with the terms and provisions hereof.

 

NOW THEREFORE, the parties hereto, in consideration of the mutual premises contained herein, and intending to be legally bound hereby, do covenant and agree as follows:

 

1.Recitals. The foregoing preamble is incorporated by reference herein as if set forth at length. Capitalized terms not otherwise defined shall have the meaning given to such terms in the Lease. All references herein to the Lease shall include this Third Amendment.

 

2.Expansion of Current Premises; Expansion Space Commencement Date.

 

(a) Effective as of the Expansion Space Commencement Date (as defined below), the Premises shall be amended to comprise, in addition to the Current Premises, the Expansion Space, (consisting of approximately 5,913 rentable square feet of area on the 7th Floor of the Building), for a total of 10,978 rentable square feet of area, as outlined on Exhibit “A” attached hereto and made a part hereof. Accordingly, effective as of the Expansion Space Commencement Date (as defined below), the “Premises” shall mean a total of 10,978 rentable square feet of area on the 7th Floor of the Building, as described on Exhibit “A”.

 

(b) Expansion Space Commencement Date. The Term of the Lease for the Expansion Space and Tenant’s obligation to pay Fixed Rent and additional rent for the Expansion Space shall commence on the date of November 1, 2018 (the “Expansion Space Commencement Date”)

 

3.Extended Term of Lease for Premises.

 

The Term of the Lease for the Premises is hereby extended for an additional period of seven (7) years and four (4) months (the “Extended Term”), commencing on the Expansion Space Commencement Date and ending on February 28, 2026 (the "Expiration Date").

 

4. Tenant’s Share; Tenant's Percentage; Base Year.

 

(a) Commencing as of the Expansion Space Commencement Date, “Tenant’s Percentage” as defined in Paragraph 1.L. of the Original Lease and "Tenant's Share", as defined in Paragraph 4.A.(ii) of the Original Lease shall mean “4.85%”, and all references in the Lease to “Tenant’s Share” and "Tenant's Percentage" shall mean “4.85%”.

1

 

(b)Commencing as of the Expansion Space Commencement Date, "Base Year" as defined in Paragraph 1.(m) and 4.A.(v) of the Original Lease shall mean calendar year 2018 and all references in the Lease to "Base Year" shall mean calendar year 2018.

 

5.Fixed Rent Current Premises; Fixed Rent for Premises (being the Expansion Space plus the Current Premises for a total of 10,978 rental square feet).

 

(a)Fixed Rent for Current Premises. Commencing as of the date hereof and ending on the Expansion Space Commencement Date, Tenant shall continue to pay Landlord Fixed Rent for the Current Premises in accordance with the terms of the Second Amendment.

 

(b)Fixed Rent for Premises (being the Expansion Space and the Current Premises for a total of 10,978 rentable square feet).

 

Commencing on the Expansion Space Commencement Date, Tenant shall pay Landlord Fixed Rent for the Premises (being the Expansion Space and the Current Premises for a total of 10,978 rentable square feet) as follows:

 

 

	
LEASE PERIOD
	
PREMISES
	
$PER RENTABLE SQ FT
	
MONTHLY FIXED RENT INSTALLMENT
	
ANNUAL FIXED RENT AMOUNT

	
Expansion Space

Commencement

Date - Month 16
	
10,978 rsf
	
22.50
	
$20,583.75
	
$247,005.00

	
Months 17 – 28
	
10,978 rsf
	
22.95
	
$20,995.43
	
$251,945.10

	
Months 29 – 40
	
10,978 rsf
	
23.41
	
$21,416.25
	
$256,994.98

	
Months 41 – 52
	
10,978 rsf
	
23.88
	
$21,846.22
	
$262,154.64

	
Months 53 – 64
	
10,978 rsf
	
24.36
	
$22,285.34
	
$267,424.08

	
Months 65 – 76
	
10,978 rsf
	
24.85
	
$22,733.61
	
$272,803.30

	
Months 77 – 88
	
10,978 rsf
	
25.35
	
$23,188.28
	
$278,259.28

 

Fixed Rent shall be payable in equal monthly installments in advance on the first day of each calendar month during the Term without demand, notice, offset or deduction.

 

Notwithstanding the above, so long as Tenant is not in default under the terms of this Lease Tenant shall receive an abatement to its Fixed Rent in the total amount of $44,347.52 applied as a monthly credit of $11,086.88 per month for the first four (4) months of the Expansion Space Term of the Lease only Such abatement of Fixed Rent shall not affect Tenant’s obligation to pay additional rent or any other sums payable by Tenant as and when due under the terms of this Lease.

 

6.Landlord's Expansion Space Work; Substantial Completion

 

(a) Landlord's Expansion Space Work. Notwithstanding anything to the contrary contained in this Lease, the Expansion Space shall be delivered in its current “as-is” where-is condition except that Landlord, at its sole cost and expense, agrees to do or otherwise perform the work in or relating to the Expansion Space (the “Landlord's Expansion Space Work”) necessary to complete the work described in "Exhibit "B". In no event and under no circumstances will Landlord's Expansion Space Work entail or will Landlord be obliged to perform any work or supply any materials in excess of the work and materials described with particularity in Exhibit "B".

 

2

 

Notwithstanding anything to the contrary contained in the Lease, Tenant specifically agrees that the following items are excluded from Landlord's Expansion Space Work and shall be performed at Tenant’s sole cost and expense (i) all of Tenant's Expansion Space Work (as defined below) (ii) all work items that need to be completed in conjunction with Tenant's Expansion Space Work or are contingent upon the completion of Tenant's Expansion Space Work; and (iii) all furniture costs including, but not limited to, moving and installation costs, lab equipment, data service and telecommunication wiring, cabling and systems (collectively, the "Excluded Items").

 

(b)Landlord’s Expansion Space Work shall be deemed to be Substantially Completed when the work shown on Exhibit "B" attached hereto and made a part hereof has been completed except for: (i) any improvements or work to be performed by Tenant; and (ii) such items of finishing and construction of a nature which are not necessary to make the Expansion Space reasonably tenantable for Tenant's use as stated herein; and (iii) all of Tenant's Expansion Space Work and all Excluded Items;  and (iv) items not completed because of delay by Tenant in furnishing or receiving any drawings or approvals or within the time set forth in any agreement between Landlord and Tenant; or changes in the work to be performed by Landlord which are requested by Tenant after Landlord's approval of Tenant's plans; or the performance of any work or activity in the Expansion Space by Tenant or any of its employees, agents or contractors .

 

The following shall be deemed Tenant’s Delay: (i) Tenant fails to timely provide the necessary approvals to Landlord; or (ii) Tenant otherwise unreasonably delays the Substantial Completion of Landlord's Work. If a Tenant Delay occurs, Rent shall commence on the date upon which Landlord's Work would have been Substantially Completed had the above-described delays by Tenant not occurred.

 

(c)Tenant acknowledges that Landlord’s Expansion Space Work will not be sufficient to allow the Expansion Space to be used for Tenant’s purposes. Landlord and Tenant understand that additional work will be required, and Tenant agrees to perform all such additional work at Tenant’s sole cost and expense pursuant to Paragraph 8 below

(d)Landlord's Expansion Space Work shall be completed within thirty (30) days from full execution of this Third Amendment. Tenant shall have access to the Expansion Space upon completion of Landlord's Expansion Space Work.

 

7.Condition of Premises/Landlord’s Current Premises Work. Notwithstanding anything contained in the Lease to the contrary, Tenant’s continued possession of the Current Premises for the Extended Term shall be in its current “as-is” where is condition with the exception that Landlord agrees to do or otherwise perform at its cost and expense that work in or relating to the Current Premises (the "Landlord's Current Premises Work") necessary to complete the work described in Exhibit "C". Within ten (10) days from Tenant's execution of this Third Amendment, Tenant shall relocate all of its business operations from the office portion of the Current Premises to the Temporary Space (as defined below). Landlord’s Current Premises Work shall be done in a good and workmanlike manner using the materials set forth in Exhibit "C". In no event and under no circumstances will Landlord’s Current Premises Work entail or will Landlord be obliged to perform any work or supply any materials in excess of the work and materials described in Exhibit "C". All work in the Premises other than Landlord's Current Premises Work and Landlord's Expansion Space Work shall be performed at Tenant's sole cost and expense.

 

Notwithstanding anything to the contrary contained herein, Landlord shall use commercially reasonable efforts to Substantially Complete Landlord's Current Premises Work prior to the Expansion Space Commencement Date. In the event that solely and directly due to Landlord’s Current Premises Work, changes to the common areas are required and necessary under the applicable laws for ADA compliance, Landlord shall be responsible for such changes. Notwithstanding the foregoing, if Tenant’s Expansion Space Work triggers or causes modifications to be performed to the Premises or the common areas to comply with applicable laws and regulations (including fire, ADA compliance, changes to the corridors, etc.), such modifications shall be performed at Tenant’s sole cost and expense.

 

8.Tenant's Expansion Space Work. Except for Landlord’s Expansion Space Work as set forth above, Tenant agrees to do or otherwise perform at Tenant’s sole cost and expense, all work that is necessary in order for Tenant to open and conduct its business in the Expansion Space (“Tenant’s Expansion Space Work”).

3

 

(a)Tenant’s Plans. Tenant shall provide, at Tenant's sole cost and expense,  all of the plans, specifications and drawings necessary to design and construct Tenant’s Expansion Space Work, including all required mechanical, electrical and plumbing drawings, the location and installation of all equipment, risers, disconnects, ducts, utility and HVAC distribution, and other Tenant installations (collectively, the "Tenant's Plans"). Tenant’s Plans shall be prepared by Tenant’s architect at Tenant's sole cost and expense. Within ten (10) business days after Landlord's receipt, Landlord shall in writing approve Tenant’s Plans or deny Tenant's Plans and specify what changes are necessary for such approval. Landlord’s approval or denial shall not be unreasonably withheld or delayed. Landlord’s review of Tenant’s Plans shall not impose any obligation or liability on Landlord, its agents or representatives, and Landlord’s approval of Tenant’s Plans shall not serve as a representation or warranty as to the accuracy of Tenant’s Plans or as to compliance with any laws, codes, regulations or ordinances. Landlord shall approve Tenant's Plans prior to Tenant commencing any of Tenant's Expansion Work.

 

(b)Tenant’s Expansion Space Work shall be performed, at Tenant’s sole cost and expense, by a bona fide union general contractor and bona fide union subcontractors, architects and engineers selected by Tenant, but subject to Landlord’s approval, which approval shall not be unreasonably withheld or delayed. Landlord shall have the right to bid on Tenant’s Expansion Space Work. Landlord shall have the right to approve all contractors and subcontractors and the performance of Tenant's Expansion Space Work. All contractors and subcontractors performing the Tenant’s Expansion Space Work shall comply in all respects with all applicable laws, codes and regulations and with the terms of this Paragraph 8 and the terms of the Lease, Tenant’s Plans, and with the rules and regulations applicable to the Lease. Landlord reserves the right to specify certain contractors for structural and mechanical alterations (e.g., roof contractor, electricians, plumbers, etc.). Tenant’s Expansion Space Work shall not interfere with or affect the common areas or structural components of the Building or any B mechanical systems, HVAC, electrical, plumbing, gas, elevator or other building mechanical systems serving other tenants and occupants of the Building. Tenant shall perform or cause to be performed Tenant’s Expansion Space Work in a manner which shall not commercially unreasonably interfere with or interrupt the business operations or premises of other tenants in the Building, except as may be approved by Landlord. All of the costs and expense of Tenant's Expansion Space Work and other matters relating to the work and/or installations to be made at the Premises shall be borne by Tenant.

 

9.Expansion Space Tenant Improvement Allowance.

 

Landlord shall provide Tenant with a construction improvement allowance up to the total amount of Two Hundred Fifty Thousand and 00/100 Dollars ($250,000.00) (the “Expansion Space Tenant Improvement Allowance”), to be applied solely toward the cost of design, construction and refurbishment of Tenant’s Expansion Space and for no other purpose whatsoever. The Tenant Improvement Allowance shall be paid by Landlord, at Landlord’s option, either (i) directly to Tenant as a reimbursement within thirty (30) days after receipt by Landlord of paid invoices from the contractor or subcontractors performing Tenant’s Expansion Space Work, lien waivers and architect’s certification of completion of work; or (ii) directly to the persons or entities performing Tenant’s Expansion Space Work within thirty (30) days after receipt by Landlord of a written sign- off from Tenant with attached invoices from the contractor or subcontractors performing Tenant’s Expansion Space Work, lien waivers and architect’s certification of completion of work. No credit shall be given to Tenant for any unused allowance.

 

Tenant shall be solely responsible for all costs and expenses of Tenant’s Expansion Space Work, Tenant’s Plans, fixtures, and for all costs and expenses of Tenant’s furniture, cables, data wiring, telephone, computer equipment and related equipment, telecommunication, data and computer wiring and all associated work and, in the event that Landlord is performing Tenant’s Expansion Space Work, to the extent that the cost of Tenant’s Expansion Space Work is determined by Landlord to be in excess of the Expansion Space Tenant Improvement Allowance, Tenant shall pay to Landlord, within thirty (30) days of receipt of invoice, all sums in excess of the Expansion Space Tenant Improvement Allowance. In the event any such sums are not paid by Tenant to Landlord within such ten (10) day period, Landlord may, in its sole discretion, cause Tenant’s Expansion Space Work to cease until such sums are paid; provided, however, that Tenant’s obligation to pay Rent shall not be affected and shall continue during any such periods of cessation of Tenant’s Expansion Space Work.

 

4

 

10.Leasing of Temporary Space. Notwithstanding anything in Paragraph  2.(a) above to the contrary, in order to accommodate Tenant’s requirement for office space prior to the Expansion Space Commencement Date, Tenant shall have the right to lease, temporary office space consisting of approximately 9,000 rentable square feet on the 3rd Floor of the Building described as Suite 310 (the “Temporary Space”). Tenant shall have the right to occupy the Temporary Space for the period commencing on the date of this Third Amendment, provided, however, that Landlord shall have the right to relocate the Temporary Space to another space in the Building upon ten (10) days prior written notice to Tenant. The Tenant’s leasing of the Temporary Space shall be under the same terms and conditions of this Lease, except that: (i) Fixed Rent for the Temporary Space shall be abated solely for the first three (3) months only commencing on the date that is earlier to occur of: (a) the date that is ten (10) days from the date of Tenant's execution of this Third Amendment; or (b) the date Tenant commences occupying all or a portion of the Temporary Space (the "Temporary Space Commencement Date"); and (ii) the Temporary Space shall be delivered to Tenant in its current “as-is”, “where is” condition. In addition, Tenant shall be responsible, at Tenant’s sole cost and expense, for the costs of all utilities and janitorial expenses for the Temporary Space.  Notwithstanding the foregoing, in the event that Tenant elects to remain in the Temporary Space beyond the date that is three (3) months from the date of the Temporary Space Commencement Date, Tenant shall pay Landlord Fixed Rent for the Temporary Space in advance on the first day of each calendar month of Tenant's occupancy of the Temporary Space, without demand, notice, offset or deduction in the amount of $9,000.00 per month for each of the months 4, 5 and 6, and $18,000.00 per month for each of the months 7 until the date that Tenant vacates the Temporary Space, provided that in the event that Landlord has not Substantially Completed Landlord's Current Premises Work except due to any Tenant's Delay, Tenant shall continue to pay $9,000.00 per month for each of months 7 until the date that Landlord has Substantially Completed Landlord's Current Premises Work. Unless otherwise agreed by the parties in writing, Tenant shall vacate the Temporary Space no later than fifteen (15) days from the date of Substantial Completion of Landlord's Current Premises Work and Landlord's Expansion Space Work. Upon Tenant's vacation of Temporary Space, Tenant shall deliver such space to Landlord in the same condition in which it was delivered to Tenant except for normal wear and tear. Notwithstanding anything contained in this Lease, Tenant’s leasing of the Temporary Space does not affect the Term of the Lease and Tenant shall take possession of the Expansion Space upon the Expansion Space Commencement Date.

 

11.Assignment and Subletting. Effective as of the Expansion Space Commencement Date, the following words shall be added in the first sentence, on the third line of Section 15.A of the Original Lease after the word "consent" and before the words "(a) assign, which shall not be commercially unreasonably withheld or delayed for office use only".

 

12.Vehicle Parking. Commencing as of the Expansion Space Commencement Date, Section 5 of the Second Amendment shall be deleted in its entirety, and the same shall be null and void and of no force or effect, and shall be replaced with the following:

 

"During the Extended Term, subject to the Parking Rules set forth in Exhibit B to the Original Lease, as modified by Landlord from time to time (the "Rules"), Tenant shall be entitled to use up to seventeen (17) unreserved parking spaces in the parking facility of the Property, subject to availability, at the rate of One Hundred Forty and 00/Dollars ($140.00) per month per parking space. Tenant shall pay Landlord, as additional rent, without demand, notice, offset or deduction, the foregoing rate per parking space per month for each month of the Expansion Space Term hereof for each of the Parking Spaces utilized by Tenant. Notwithstanding the foregoing, so long as Tenant is not in default under the terms of the Lease, seven (7) of the foregoing unreserved parking spaces shall be provided at no charge."

 

13.Broker. Tenant represents to Landlord, that Tenant has not dealt with any real estate broker, salesperson, or finder in connection with this Third Amendment except for Hanna Langholz Wilson Ellis and CBRE, Inc., (“Broker”) 600 Grant Street, Suite 4800, Pittsburgh, PA 15219.  Unless otherwise agreed by the parties, Landlord shall be responsible for the payment of commission to the Broker based upon Landlord's separate agreement with such Broker. Landlord and Tenant hereby agree to indemnify and hold harmless the other party and their respective agents and employees, from and against any and all liabilities and claims for commissions and fees arising out of a breach of the foregoing representation.

 

5

 

14.Full Force and Effect. Except as specifically set forth herein, the terms, covenants and conditions of the Lease shall remain in full force and effect. The Lease and this Third Amendment shall not be further modified or amended, except in writing signed by both Landlord and Tenant. This Third Amendment sets forth the entire understanding of the parties with respect to the matters set forth herein and there are no other rights, including but not limited to, any renewals, extensions, expansions, purchases, rights of first refusal, allowances, etc., granted under the Lease or this Third Amendment. Landlord and Tenant hereby ratify and affirm all of the remaining terms and conditions of the Lease. Landlord and Tenant hereby acknowledges that, as of the date of this Third Amendment, neither party is not in default of any of the terms and conditions of the Lease.

 

15.Provisions Binding. All rights and liabilities herein given to or imposed upon the parties to this Third Amendment shall extend to, and be binding upon and inure to the benefit of, the parties hereto and their respective heirs, successors and assigns.

 

16.Confidentiality. Tenant and Tenant’s representative agree that it shall maintain in confidence and shall not divulge to any third party (except as may be required by law) any of the items, covenants and conditions of the Lease and this Third Amendment, including without limitation, any information related to the rental rate, the length of the Term, and any other terms and conditions thereof. Tenant further agrees to take commercially reasonable precautions to prevent the unauthorized disclosure of any such information to any third parties. Tenant’s obligations under this Section 15 shall survive the termination of the Lease.

 

[SIGNATURE PAGE FOLLOWS]

 

6

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Third Amendment to Lease Agreement on the day and year first above written.

 

	
 
	
 
	
LANDLORD:

	
 
	
 
	
WHARTON LENDER ASSOCIATES, LP,

	
 
	
 
	
a Pennsylvania Limited Partnership By:

	
 
	
 
	
WHARTON LENDER PROPERTIES,

	
 
	
 
	
LLC, a Pennsylvania Limited Liability

	
 
	
 
	
Company, its General Partner

	
 
	
 
	
 

	
By:
	
 
	
/s/ Larry walsh

	
Name:
	
 
	
Larry Walsh

	
Title:
	
 
	
Chief Operating Officer

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
TENANT:

	
 
	
 
	
KRYSTAL BIOTECH INC., a Delaware

	
Company

	
 
	
 
	
 

	
By:
	
 
	
   /s/ Tony Riley

	
Name:
	
 
	
   Tony Riley

	
Title:
	
 
	
   Chief Financial Officer

 

 

 

 

7

 

EXHIBIT A

 

 

 

 

 

EXHIBIT B

LANDLORD’S EXPANSION SPACE WORK

 

Landlord will deliver the Expansion Premises in shell condition with the following work Complete:

	
•
	
The ceiling, lighting, flooring, base and any interior wall will be removed.

	
•
	
All electrical will be removed back to the junction box.

	
•
	
VAV boxes, sprinkler lines will remain.

 

 

11

 

 

Exhibit C

Landlord’s Existing Space Work

 

 

Entrance Doors:

Existing entry doors shall remain.

 

Demising Partitions:

Drywall construction consisting of 3-5/8" steel studs 24" off center with one layer 5/8" gypsum wall board on each side of steel stud. Partitions shall extend to underside of structure and shall include sound attenuating batt insulation.

 

Interior Partitions:

Drywall construction consisting of 3-5/8" steel studs at 24" on-center with one layer 5/8" wall board on each side extending 6 inches through the acoustical ceiling grid to separate room from open ceiling area. Partitions shall include sound attenuating batt insulation.

 

Interior Doors & Glass Sidelites/ Glass Partitions:

New 7’ solid core wood veneer stained doors (stain color T.B.D.) with hollow metal door jambs shall be installed for Conference Room, Two Small Offices and single Office.

Provide tempered glass partition Two Small Offices and single Office. Glass partitions shall have 1” top and bottom channel with clear glass caulked into opening and between glass panes. Office doors and Conference Rooms shall receive tempered glass lite. All doors shall have building standard non-locking stainless steel lever pulls, except for wood entrance doors and Storage Rooms. Notwithstanding the forgoing, Tenant shall indicate which, if any, doors need locking mechanisms.

 

Ceilings:

Existing ceilings shall be removed in Open Café, Open Office, Office and Small Offices. No new acoustical ceilings will be installed. Structural deck shall be exposed along with ductwork, conduit, wires, cabling, support items, etc.- all will be painted.

 

Lighting:

12

 

Lighting in Office area shall receive Finelite Series 16 LED direct/ indirect linear pendant fixtures. New undercabinet LED strip lighting shall be installed on one wall of casework within Existing Lab. Existing direct/ indirect linear pendant fixtures in the Lab shall be relamped with new brighter LED lamps.

 

Carpet:

Carpet to be selected by Tenant from Building Standard Carpet Tile selections: Building Standard Carpet Tile Selections:

 

				
	
Style
	
Style #
	
Style
	
Style #

	
basic tile
	
5T121
	
captivate tile
	
59554

	
primary tile
	
5T123
	
link tile
	
59105

	
catalyst tile
	
59579
	
linage tile
	
59106

	
hybrid tile
	
59580
	
undertone tile
	
5T157

	
transparent tile
	
59563
	
gradient tile
	
59534

	
diffuse tile
	
59575
	
simplicity tile
	
59344

	
disperse tile
	
59576
	
rotate tile
	
5T105

	
tangle tile
	
5T018
	
copy tile
	
5T103

	
tempt tile
	
5T019
	
construct tile
	
5T104

	
shine tile
	
59328
	
prisma tile
	
59463

	
glimmer tile
	
59329
	
connect tile
	
59342

	
clear tile
	
59564
	
color form tile
	
5T112

	
centric tile
	
5T124
	
augment tile
	
5T064

	
surround tile
	
5T125
	
hype tile
	
5T065

	
allure tile
	
59327
	
peto II 26 tile
	
59371

	
glaze tile
	
59562
	
repartee tile
	
59387

	
reverse tile
	
5T069
	
color frame tile
	
5T081

	
shape tile
	
5T070
	
mirror image tile
	
59466

	
direction tile
	
5T071
	
focus tile
	
59455

	
vast tile
	
5T009
	
emotion tile
	
59343

	
infinite tile
	
5T010
	
balance tile
	
59340

	
scape tile
	
5T080
	
beam of light tile
	
59465

	
realm tile
	
5T078
	
applied tile
	
5T004

	
momentum iv tile
	
59502
	
vibrant tile
	
5T001

	
straightforward tile
	
59224
	
visible tile
	
5T002

	
wander tile
	
5T039
	
absorbed tile
	
5T003

	
embark tile
	
5T040
	
charisma tile
	
59561

	
field tile
	
5T079
	
fringe tile
	
5T038

	
peto II 20 tile
	
59369
	
trace tile
	
5T005

	
tinge tile
	
5T156
	
sculpt tile
	
5T007

	
byline tile
	
59113
	
mesh tile
	
5T044

	
intrigue tile
	
59558
	
achromatic tile
	
5T107

 

13

 

LVT

Luxury Vinyl Tile shall be installed in Lunch Areas and Server Closet and in areas or in rooms (such as a section of the Training Room) as directed by tenant. Tile shall be selected from Building Standard selections: Shaw Native Origins, Emerge, Jeogori and Crete.

 

Lab Flooring:

Existing flooring to remain in Lab.

 

Base:

New 4” vinyl base shall be installed in Office Areas in a color T.B.D. to coordinate with flooring and paint finishes.

 

Paint:

Premises shall receive two (2) coats eggshell finish in colors approved by Tenant. No more than ten (10) colors shall be used within Suite Premises.

 

Casework:

New plastic laminate custom casework shall installed in Open Cafe. Pulls shall be Berenson 0802-2BPN-P. New plastic laminate coat rod and shelves shall be installed in Coat Rooms.

 

Switches:

New occupancy sensor switches shall be installed in rooms and overhead occupancy sensors shall be installed in open areas and corridors.

 

Duplex Outlets/ Floor Outlets:

Provide one (1) floor outlet in each Conference room under conference room table. Install duplex outlets within partitions in all rooms and open areas to work with tenant equipment and furniture layout. Outlets shall be on common shared circuits- except for copiers, microwaves, lab equipment and refrigerators. Furniture feeds shall be installed in office area to feed workstations.

 

Data/ Telephone Outlets:

Tenant is responsible for phone and data cabling and system. Lessee-installed phone system must use fire rated telephone cable. Cabling will need to be concealed in areas receiving Open Ceilings.

 

Window Treatment:

All existing blinds shall be removed. New roller shades shall be install throughout.

 

Plumbing:

Landlord to provide and install new sink (Elkay CR2521) and faucet (American Standard 4275.551.295 with separate sprayer) in Open Cafe. Water lines shall be installed for refrigerators and dishwashers. Appliances shall be purchased by Tenant and delivered to building.

 

HVAC:

Existing ductwork shall remain and be reworked/ supplied with new as needed to work with new floor plan. Thermostats shall be placed to work with new floor plan and furniture layout.

 

Fire Protection:

Existing sprinkler system shall remain and be adjusted to work with new floor plan and new exposed ceiling.

 

Fire Alarm system:

Fire alarm locations shall be adjusted to work with new floor plan. New locations shall be coordinated with new floor plan and furniture layout.

 

14

 

Signage:

Tenant’s name shall be lettered on Building’s First Floor Directory adjacent to elevators and on the 7th Floor directory. Tenant shall be permitted to install signage either on entry doors or adjacent to entry doors. Signage needs to be reviewed and approved by Landlord prior to fabrication and installation.

 

Notes:

1.A construction supervision fee will apply to all nonstandard work not identified as part of Exhibit C shown above.

2.No credit will be given for items listed in Exhibit C but not used on project.

3.Landlord shall provide Construction Drawings for review, approval and comment within twenty (20) business days of fully executed lease document. Construction Drawings will further detail items covered in Exhibit C of this lease and include Partition Plan, Reflected Ceiling Plan, Power and Communication Plan, Finish Plan and all necessary Interior Elevations and Details. Tenant will review Construction Drawings within five (5) business days. If Tenant does not provide any changes within five (5) business days from the date Landlord has provided these drawings to Tenant, Landlord deems the drawings approved by Tenant. Any and all changes requested by Tenant shall be consistent with this Exhibit C.

4.Equipment, furniture and workstations are shown on this drawing for reference and coordination purposes only. All equipment, furniture and workstations shall be installed at Tenant’s sole cost and expense.

15

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00306-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00306-of-00352.parquet"}]]