EASTMAN BUSINESS PARK ROCHESTER, NY

EASTMAN BUSINESS PARK ROCHESTER, NY
BUSINESS CASE The Eastman Business Park in Rochester, New York: An optimal location for biopharmaceuticals manufacturing May 2017

03 05 11 18 40 45 Table of Contents page page page page page page
Executive Summary Industry Overview Critical Industry Siting Criteria and EBP/Region’s Position page page page 18 40 45 EBP/Region’s Assets & Opportunities EBP/Region’s Challenges Company Identification

Biopharmaceuticals Executive Summary
The biopharmaceutical industry cluster is a growing industry. This cluster has had very solid growth in recent years in employment, total value of shipments and receipts, value added, and CAPEX. The industry is also expected to continue growing its revenue at a rate of 2% within the next five years. The Eastman Business Park (EBP) and the Rochester, NY Economic Area, where the Park is located, are very well positioned to attract companies from this industry cluster. The diagnostic substances and biopharmaceutical products subclusters represent almost 100% of employment within the biopharmaceutical cluster in the Rochester, NY Economic Area, with diagnostic substances alone being approximately 82%. These two segments have also experienced growth nationally in recent years in employment, total value of shipments and receipts, value added, and CAPEX. Diagnostic substances in particular more than doubled its capital expenditures between 2012 and 2015 with approximately 107% growth. The EBP and the Region offer numerous assets and opportunities around critical site selection criteria such as transportation infrastructure, utilities, real estate product offer, workforce, and operation cost location drivers, that make the Park and Rochester an optimal location for biopharmaceuticals manufacturing. The diagnostic substances and biopharmaceutical products subclusters represent almost 100% of employment within the biopharmaceutical cluster in the Rochester, NY Economic Area, with diagnostic substances alone being approximately 82%.

Biopharmaceuticals Executive Summary
These are the main reasons why the EBP and the Rochester, NY Economic Area are optimal locations for biopharmaceuticals manufacturing: Transportation infrastructure: 17 miles of rail track within the Park, plus two accumulation yards with capacity for delivery and storage of 100 railcars daily 2-5 minutes from interstate highway system Market opportunity: Within 400 miles of an 86.6-million-people market, ~25% of U.S. and Canadian populations Utility infrastructure: Electricity: 117 MW power plant plus 41 MW interconnection with RG&E Water: Permitted to up to 54 MGD from Lake Ontario, and with own industrial water treatment plant Natural gas: ~2,400 Dekatherms/hour, with ~1,100 – 1,200 Dekatherms/hour peak capacity Steam: 1.5M lbs./hour installed capacity, plus 200K lbs./ hour backup capacity. Different nominal pressure levels, from 260 psig. to down to 5 psig. Wastewater: 36 MGD wastewater treatment facility on-site with Title V / RCRA permitted multiple hearth incinerator Real estate product: Several site and building options, ranging from ~1 to up to ~75 acres, and ~46K sq. ft. to up to ~1M sq. ft. Workforce: ~550K labor pool in a 60-minute commute 2,135 workers in the Biopharmaceuticals industry alone, with high specialization Operation cost location drivers: RED-Rochester LLC is owner and exclusive utility provider at the EBP, focused on optimizing costs and services The EBP and the Region offer numerous assets and opportunities around critical site selection criteria such as transportation infrastructure, utilities, real estate product offer, workforce, and operation cost location drivers, that make the Park and Rochester an optimal location for biopharmaceuticals manufacturing.

Industry Overview

Biopharmaceuticals Industry Overview
Pharmaceutical Products Biological Products Diagnostic Substances Products Companies in this industry manufacture and process pharmaceutical products. Market Segments Traditional chemical pharmaceuticals (branded and generic) account for about 75% of industry revenue; biological (cell-based) drugs account for about 15%. Customers Although wholesalers are the largest customers of pharmaceutical manufacturers, doctors are the main marketing target, because the success of a prescription drug depends largely on whether doctors will prescribe it for patients. Cash Flow Cash flow can be highly variable, especially for a small company, with heavy cash outflows when a drug is being developed and high inflows once a drug is on the market. World Market Annual worldwide revenue from pharmaceutical manufacturing is more than $1 trillion and is expected to grow to about $1.4 trillion by 2020.* Worldwide spending on medicines is increasing due to economic growth in developing nations and the rising cost of specialty drugs. The US and the EU remain the largest importers of pharmaceuticals, but manufacturers are targeting emerging economies for growth. U.S. Market The US pharmaceutical manufacturing industry includes about 1,700 companies with combined annual revenue of about $200 billion. *according to market intelligence firm IMS Health

Biopharmaceuticals Market Outlook
Revenue Growth Forecast 2017 – 2021* 2% Growth Growth rating: low Demand is driven by the desire to cure illness Need to discover and market new drugs Risk: New drugs must be approved by FDA and insurers Trends Closer Collaboration with University Research —Universities are increasingly developing drugs to the point of being ready for human trials. Industry Consolidation — The high cost of research and the need for a steady stream of new products have encouraged mergers and acquisitions among drug companies. MCOs Favor Generics — Managed care organizations (MCOs) are increasingly using tiered co-payment systems to discourage patients from buying expensive drugs. Generic Biotech Drugs Gain Approval — Regulatory approvals of copycat versions of biotech drugs are opening the gates for a new market that could help some drug manufacturers but hurt others. Targeted Marketing — Pharmaceutical companies are now marketing themselves to physicians and consumers using new digital marketing tools. More Purchased Research, Licensing —Many drug companies today essentially buy a portion of their research from small companies, either through outright acquisition or licensing arrangements, then apply their expertise in the clinical trial/FDA approval process and in sales/marketing. *Annual compounded rate, between 2017 and 2021, based on changes in physical volume and unit prices.

Biopharmaceuticals Market Outlook
U.S. Market Growth 2012 – 2015 Employment Total Value of Shipments & Receipts Value Added CAPEX Biopharma 6.8% 17.8% 18.7% 47.4% Vs. All Manufacturing -0.4% -2.6% 5.6% 6.4%

Biopharmaceuticals Regional Overview
Diagnostic substances and biopharmaceutical products represent almost 100% of employment within the biopharmaceutical cluster in the Rochester, NY Economic Area, with diagnostic substances alone being approximately 82%. These two segments have also experienced growth nationally in recent years in employment, total value of shipments and receipts, value added, and CAPEX. Diagnostic substances particularly more than doubled its capital expenditures between 2012 and 2015 with a 107% growth approximately. Subcluster U.S. Market Growth*** Employees Total Value of Shipments and Receipts Value added CAPEX Diagnostic Substances 18.6% 4.7% 1.2% 106.9% Biopharmaceutical Products 6.2% 22% 25.7% 41.9% Biological Products 0.9% -7.3% 46.4% Rank in U.S. (Out of 179 Economic Areas) 7 69 70 *Economic Areas with High Employment Specialization in a cluster meet these criteria: a) Location Quotient of Cluster Employment must be greater than the 75th percentile when measured across all Economic areas; b) To differentiate marginal cases, Location Quotient of Cluster Employment must be greater than 1.0, Share of National Cluster Employment greater than the 25th percentile, and Share of National Cluster Establishments greater than the 25th percentile. **U.S. Cluster Mapping ( Institute for Strategy and Competitiveness, Harvard Business School. Copyright © 2014 President and Fellows of Harvard College. All rights reserved. Research funded in part by the U.S. Department of Commerce, Economic Development Administration. ***U.S. Census Bureau’s Annual Survey of Manufactures (ASM)

Biopharmaceuticals Regional Overview
Diagnostic Substances 7 U.S. Rank* 13.39 LQ** Biopharma Products 69 U.S. Rank* 0.43 LQ** Biological Products 70 U.S. Rank* 0.05 LQ** Biopharmaceuticals Subclusters Diagnostic substances has high employment share, meaning that its share of national cluster employment is greater than the 90th percentile when measured across all Economic Areas. Cluster 1.76 Location Quotient High Employment Specialization Employment: 2,135 Rank in U.S.: 25* Average Wage for Industry Cluster Diagnostic Substances: $111,931 Biopharma Products: $61,562 Biological Products: $97,019 New York State*** Vs. Diagnostic Substances: $94,893 Biopharma Products: $95,479 Biological Products: $94,385 National *Out of 179 economic areas in the U.S. **LQ = Location Quotient ***Wage information not available for the Rochester, NY Economic Area. State-wide information use instead. Source: U.S. Cluster Mapping ( Institute for Strategy and Competitiveness, Harvard Business School. Copyright © 2014 President and Fellows of Harvard College. All rights reserved. Research funded in part by the U.S. Department of Commerce, Economic Development Administration.

Critical Industry Siting Criteria and EBP/Region’s Position

Biopharmaceuticals Industry Needs
Transportation infrastructure Utilities Site/building size Workforce Operation cost location drivers Environmental & permitting Site selection criteria for industrial capital investment projects is mainly based on six factors: transportation infrastructure, utilities, real estate product, workforce, operation cost location drivers, and environmental and permitting requirements.

Biopharmaceuticals Industry Needs & EBP/Region’s Position
Transportation May require rail depending upon product Requires proximity to interstate for logistics and distribution – cold chain Requires proximity to interstate or highway network for employment Requires proximity to raw material Requires close proximity to customers EBP Meets Criteria? 17 miles of rail track within the Park, plus two accumulation yards with capacity for delivery and storage of 100 railcars daily 2-5 minutes from interstate highway system EBP is well located near the US NE Coast Within 400 miles of an 86.6-million-people market, ~25% of U.S. and Canadian populations Biopharmaceuticals Industry Needs & EBP/Region’s Position

Utilities High electricity demand Low water demand Low natural gas demand High steam demand Moderate wastewater output EBP Meets Criteria? 117 MW power plant plus 41 MW interconnection with RG&E Permitted to up to 54 MGD from Lake Ontario. Own industrial water treatment plant ~2,400 Dekatherms/hour, with ~1,100 – 1,200 Dekatherms/hour peak capacity 1.5M lbs./hour installed capacity, plus 200K lbs./ hour backup capacity. Different nominal pressure levels, from 260 psig. to down to 5 psig. 36 MGD wastewater treatment facility on-site with Title V / RCRA permitted multiple hearth incinerator Biopharmaceuticals Industry Needs & EBP/Region’s Position

Site Size Moderate facility and equipment requirements EBP Meets Criteria? Several site and building options, ranging from ~1 to up to ~75 acres, and ~46K sq. ft. to up to ~1M sq. ft. Biopharmaceuticals Industry Needs & EBP/Region’s Position Workforce Moderate total employment High demand for specific skills. Workforce with a relatively high proportion of lesser-skilled employees EBP Meets Criteria? ~550K labor pool in a 60-minute commute 2,135 workers in the Biopharmaceuticals industry alone, with high specialization

Operating Costs Location Drivers Raw materials, high Utility costs, primary Logistics, low Labor, high EBP Meets Criteria? EBP is well located in the NE US with good access to transportation infrastructure RED-Rochester LLC is owner and exclusive utility provider at the EBP, focused on optimizing costs and services Excellent highway, rail, and airport interconnectivity for transport Wage advantage in biopharmaceutical products over the rest of the country: $61,562 vs. $95,479 *United States Department of Agriculture, USDA

Environmental/Permitting NJDEP air permits that allows for 24 hours-per-day, 7 day-per-week operation of the solid waste incinerator Ability to permit for BSL-4 may be required Because drugs can be dangerous, the government tightly regulates their development and manufacture. Even labeling and packaging are subject to strict regulation. Lengthy and expensive testing is required before new drugs can be approved by the FDA. Animal testing (preclinical testing) usually precedes clinical trials, which are tests in humans. EBP Meets Criteria? TBD, based on specific project needs

EBP/Region’s Assets & Opportunities

EBP & Regional Assets & Opportunities
Ownership & Site Control Environmental, Permitting & Zoning Industrial Real Estate Product Utility Infrastructure Workforce & Workforce Development Resources Shared Services & Business Support Highway, Rail, Intermodal & Airport Connectivity Market Potential Business Environment & Quality of Life Emergency Protective Services Business Incentives Synergies

Real Estate Product & Ownership EBP & Regional Assets & Opportunities Ownership Some parcel options are available for sale or lease and some are only available for lease. Buildings may be sold anywhere in the Park. 700 acres, 58% of the total acreage at the Park is owned by Kodak. The remaining 500 acres, 42% of the total, are owned by LiDestri Food and Drink, and Acquest Development. LiDestri is a premier private label and contract manufacturer of food, beverages and spirits. Acquest Development specializes in the acquisition, development, construction and management of a variety of industrial and commercial properties. Ownership is committed and invested in the Park’s and Region’s growth and development. Furthermore, RED-Rochester, LLC that owns and operates the utilities at the Park, is fully committed to the Park’s and the area’s success, as well as to optimizing utilities infrastructure and the tenants’ operations. The Eastman Business Park and RED are motivated to the development of the Park pursuing new investors that are significant utility users and economic development engines. New tenants to the park will not have to deal with multiple landowners and can expect a streamlined acquisition process, saving both time and money. Real Estate Product The Eastman Business Park offers a 1,200-acre campus with 16 million sq. ft. in manufacturing, lab, warehouse & office space, and 400 acres ready for new build. These 400 acres are comprised of 18 parcels, ranging from ~1 to ~28 acres that available for lease and/or sale. Some parcels can be amalgamated to form 55 – 65-acre sites in the northeast section, and 40 – 50-acre sites in the northwest. The largest contiguous property is ~75 acres.

Environmental, Permitting & Zoning Wetlands No wetlands present at the Park. The Genesee River runs on the eastern boundary of the site, and Paddy Hill Creek on the western site boundary, but there are no wetlands within the Park’s boundaries. Floodplain The Park is not in the 100-year flood plain. Environmental In comparison with other brownfield industrial parks, the EBP is in a very good position. The site is not a federal superfund site. All environmental issues have been very well characterized and remedial plans have been completed. Kodak and the State of New York have established a $99 Million dollar environmental trust to address the need to clean up legacy environmental liabilities to the extent they are encountered and to encourage companies to move into the park as both property lessees or owners. There aren’t any unknowns at the Park in terms of recognized environmental conditions. Additionally, PCB’s are not present. Kodak converted transformers to eliminate PCB’s from the buildings. Wastewater RED’s wastewater treatment facility on-site with Title V / RCRA permitted multiple hearth incinerator and NPDES wastewater permit can be leveraged to allow for third party discharges to the industrial wastewater treatment plant without a separate permit. Industrial Water RED is permitted to up to 54 MGD from Lake Ontario. Tenants can leverage this permit for their industrial water needs.

Environmental, Permitting & Zoning EBP Zoning Map Zoning/Use Requirements The EBP is split into five sections: East end (EBPE), central (EBPW), west central (EBPX), northwest (EBPM), and south (EBPS). EBPW and EBPX are zoned M-1. Manufacturing, high-tech or light industrial uses are permitted under zoning M-1. EBPE, EBPW, and EBPX fall under the jurisdiction of the City of Rochester. EBPM and EBPS fall under the jurisdiction of the Town of Greece. EBPM and EBPS are zoned Industrial General (IG). The GI zoning allows for general manufacture, assembly or processing activities. Special permit is needed of uses which may be noxious or injurious due to production or emission of dust, smoke, odor, gases, fumes, solid or liquid waste, noise, light, vibration or nuclear or electromagnetic radiation or due to the likelihood of injury to persons or damage to property if an accident occurs. Current Park’s zoning allows for a broad spectrum of industrial operations. Manufacturing, high-tech or light industrial uses are permitted at the Park. EBPE is zoned PD#12. Permitted uses under PD#12 includes manufacturing activity.

Transport Connectivity EBP & Regional Assets & Opportunities Road Access 2-5 minutes from interstate highway system: I390 borders the Park to the West. I490, 5 minutes to the East on NY 104. Easy access and little traffic or congestion to access both highways. There are a number of roads with access to the Park. Currently entrance to the fenced portion of the Park is available during daytime hours in the East, along Eastman Avenue. On the West, access is available 365/24/7 on Latona Road. Roads are permitted to handle heavy industrial traffic. Public transportation is available through Rochester Transit System (RTS), that provides service to Lake Avenue (Route 1) and West Ridge Road (Routes 14 and 106). Rail Service 17 miles of rail track within the Park. Multiple buildings with direct rail service. Line easy to extend to other parts of the Park. Daily service. Connection to both CSX Transportation and G&W's Rochester & Southern Railroad (RSR), which connects to Norfolk Southern, Canadian National and Canadian Pacific. Ample rail car storage at the Park. Intermodal EBP has two accumulation yards with capacity for delivery and storage of 100 railcars daily. Rochester Switching Services, Inc. (RSS), formerly the Eastman Business Park Railroad, delivers an assortment of products – ranging from food and building products to plastics or metals – to a variety of manufacturing buildings and processes via sixteen miles of continuous track and two large inbound and outbound accumulation yards, operating 6 days per week, 52 weeks per year. Routing choices amongst all eastern “Class 1” railroads. Air Transport Greater Rochester International Airport (ROC) is 9 miles away from the Park. There are 7 airline carriers serving ROC: AirCanada, Allegiant, American, Delta, JetBlue, Southwest, and United.

Utilities Steam 1,500,000 pounds per hours installed capacity from utility-grade boilers, with an additional 200,000 pounds per hour capacity from emergency backup boilers. Utility grade boiler firm capacity is 950, ,100,000 pounds per hour. Approximately 300,000 pounds per hour of available capacity. Generated at 1,400 psig/900°F and supplied at different nominal pressure levels of 260 psig, 140 psig, 70 psig and 5 psig. Robust utility infrastructure throughout. RED- Rochester LLC is owner and exclusive utility provider at the Eastman Business Park Electricity 117 MW power plant producing electricity, steam & chilled water. In addition, RED has a 41 MW interconnection with RG&E. Firm capacity without the largest turbine generator in service is 133 MW. Generated at 13,800 volts and distributed on a small grid with underground redundant feeds to double-ended load centers/substations for highest reliability and quality. Standard delivery is nominal 480 volts, 3 phase alternating current. Current Peak Loads are approximately 60 MW, leaving approximately 73 MW available capacity. Wastewater Industrial sewage treatment; hazardous waste permitted multiple hearth incinerator; and precious metals recovery capabilities. NPDES wastewater permit can be leveraged to allow for third party discharges to the industrial wastewater treatment plant without a separate permit. 36 MGD wastewater treatment facility on-site with Title V / RCRA permitted multiple hearth incinerator. The average flow is 8.7 MGD, with a peak of 18.1 MGD. Average available flow is approximately 18 MGD.

Utilities Robust utility infrastructure throughout. RED- Rochester LLC is owner and exclusive utility provider at the Eastman Business Park Refrigeration & Water Chilled water: 60,000 tons installed capacity of tri-generation – nominal supply temperature 40°F. 9°F, -95°F Brine High-purity water: 300 gal/min firm capacity of reverse osmosis deionized water - minimum resistivity 2 megohms. Kodak uses it. Film sensitizing, R&D. RED trucks it to few places. Using only ¼ or less. Demineralized water: Treated process water using anion and cation exchangers with maximum conductivity of 4 micromhos. Demineralized water for boiler use, but also provide to Kodak. Refrigeration & Water Industrial water: RED is permitted to up to 54 MGD from Lake Ontario. There are three pipelines (24”, 30”, and 48”) that transport the lake water from RED’s pump house on Lake Ontario four miles south to Eastman Business Park. Current peak demand is approximately 17 MGD, the average is approximately 11 MGD. Approximately 37 MGD of available capacity. Average delivery pressure is approximately 80 psig. 3.5 MM water reservoir under basement of building 56. The other MM water reservoir is under a parking lot to the property on the west Northeast corner. It is used for risk mitigation in case there are issues at Lake Station that impede them from supplying water to customers. Fire protection is supplied from the reservoir.

Utilities EBP’s Existing Utility Assets Robust utility infrastructure throughout. RED- Rochester LLC is owner and exclusive utility provider at the Eastman Business Park Compressed Air 47,000 standard cubic feet per minute installed capacity. Nominal gauge pressure of 75 psig and a maximum dew point of 55°F. Natural Gas Distributed to various customers within EBP by RED. Current line sizing depends on specific location within EBP. RED’s contract with supplier is non-interruptible. There are 2 – 8” – distribution lines coming into the site from the RF&E meter station. Currently there is a 625 Dekatherms/hour capacity and another 1800 is being added. Peak is currently 200 Dekatherms per hour. This will be approx.1,100 – 1,200 Dekatherms per hour, post MACT upgrade. The total natural gas capacity will be approx. 2,400 Dekatherms per hour, post MACT upgrade. Natural gas also used for internal operations. Nitrogen 148,000 standard cubic feet per hour installed on-site plant capacity with equivalent capacity of backup liquid vaporizers. Minimum purity is % with a nominal gauge pressure of 70 psig and a maximum dew point of -100°F.

Workforce & Workforce Development EBP & Regional Assets & Opportunities Biopharmaceuticals 1.76 Location Quotient High Employment Specialization Employment: 2,135 Rank in U.S.: 25* Labor Pool The business park boasts a sizable labor force in the surrounding areas, with 544,276 workers within a 60-minute drive time of the park. Within a 30-minute drive time, there are approximately 43,848 people working in the manufacturing industry alone. At the 45-minute and 60-minute drive times, the manufacturing workforce increases to 56,559 and 68,579, respectively. Workforce in the biopharmaceuticals manufacturing industry cluster amounts to 2,135, exhibiting high specialization, with a 1.76 location quotient, ranking # 25 in the U.S. out of 179 economic areas*. The top employment industry sub-clusters are diagnostic substances and biopharmaceutical products, with diagnostic substances having high employment share, meaning that its share of national cluster employment is greater than the 90th percentile when measured across all Economic Areas. *U.S. Cluster Mapping ( Institute for Strategy and Competitiveness, Harvard Business School. Copyright © 2014 President and Fellows of Harvard College. All rights reserved. Research funded in part by the U.S. Department of Commerce, Economic Development Administration data.

Workforce & Workforce Development EBP & Regional Assets & Opportunities Educational Attainment* Population 25+ by Educational Attainment and Drive Time 30 Minutes 45 Minutes 60 Minutes Total 514,006 631,981 748,988 Less than 9th Grade 3.2% 3.1% 9th - 12th Grade, No Diploma 6.3% 6.2% 6.5% High School Graduate 20.1% 21.3% 22.5% GED/Alternative Credential 4.0% 4.3% 4.7% Some College, No Degree 17.0% 17.3% 17.5% Associate Degree 12.0% 12.2% Bachelor's Degree 20.8% 18.8% Graduate/Professional Degree 16.5% 15.5% 14.5% Workforce Quality The region has highly-skilled and quality workforce with 68% of the population within a 60-minute commute with some college education. Based on 2014 data from the US Department of Education, the Greater Rochester Area ranks at the top in terms of degrees per capita in STEM areas when compared against the 53 largest metros: 1st in physical science, 1st in mathematics, 3rd in engineering and engineering technologies, 3rd in biological and biomedical sciences, and 5th in computer and information sciences and support services. This constitutes an opportunity for attracting high-tech and advanced manufacturing operations to the area. from April 2016, from 1 to 5, with 1 being poor and 5 excellent, the Greater Rochester Area has an average score of 4.1 in work ethics; 4.2 in willingness to work overtime; 4 in productivity compared to that of company’s other sites; 4 in productivity; and 3.8 in punctuality. The Rochester Chamber Annual Turnover/Absenteeism Survey from March reports a rate of 3.3% or 8.3 days in the manufacturing sector; 2.5% or 6.3 days in the service sector; and 2.8% or 7.1 days in all sectors. Additionally, due to legacy industries such as Kodak, Bausch & Lomb, and Xerox, there is a good labor pool in the chemicals, photonics, and food & agriculture sectors. Based on the Rochester Business Alliance - RBA – Employer Survey *Source: U.S. Census Bureau, Census 2010 Summary File 1. Esri forecasts for 2016 and 2021 Esri converted Census 2000 data into 2010 geography.

Workforce & Workforce Development EBP & Regional Assets & Opportunities Workforce Training Very strong University and college presence in the immediate area. Home to top-tier technical/engineering programs at Rochester Institute of Technology, University of Rochester and SUNY Brockport. Just hours away from renowned programs at Cornell University, SUNY Buffalo, Rensselaer Polytechnic Institute, Syracuse University and Alfred University. manufacturers to provide tailored training to students. One such program example is the Optical Technology program at MCC, which trains students from high school through Associate's Degrees in the optics and photonics fields. Rochester Institute of Technology's Adult & Continuing Education programs also partner with companies to offer custom training and education in STEM processes, manufacturing, and offer talent acquisition services to companies. A total of 19 colleges and universities. 87,500 enrolled students. 19,000 diplomas annually. The area is 1st for degrees in the physical sciences and mathematics fields; 2nd for degrees in biological and life sciences fields; 3rd for degrees in engineering and engineering-related fields; and 6th in computing and information sciences. Additionally, RochesterWorks! serving Monroe County, offers free recruitment, training, and connectivity to job fairs and other programming for area companies. The organization also provides job candidates with connections to employers and new job openings, skills assessment and development programs, and referrals. There are also over 75 Vocational School, Trade School and Technical School programs and institutions in Rochester including - for manufacturing and technology training and certification - the Rochester Education Opportunity Center, Monroe Community College, Rochester Institute of Technology Adult & Continuing Education, the Rochester City School District Family Learning Center, Monroe #1 BOCES, and Edison Career and Technology High School. Certificate programs range from entry-level administrative career training to Lean Six Sigma to mechatronics engineering. Monroe Community College works with Employers and employees at the Eastman Business Park have their own workforce training resources on-site via the Finger Lakes Workforce Development Center created in 2016 by the Monroe Community College (MCC) to offer manufacturing-oriented programs and skilled trades training within classroom and lab space. MCC offers professional development and training solutions for people, businesses and organizations throughout Monroe County and works with area manufacturers to develop custom training programs and degree tracks.

Emergency Protective Services Emergency protective services These services are available onsite, with 24/7 site security and fire department with back-up by Town of Greece Police/Fire Departments and City of Rochester Police/Fire Departments. Onsite site security services include electronic access control at all staffed and un-staffed locations; badging, and auto pass management; Kodak Rochester Control Center (KRCC) which is a full service 911 facility for alarm/CCTV monitoring, emergency dispatching, emergency notification, and trouble call handling (transportation emergencies, maintenance, poison control); mobile and foot patrols for inspections, emergency response, personnel escorts, and traffic violation enforcement; consultation services for security assessments/audits and crime prevention training; emergency preparedness planning to include management of site emergency & crisis management plans, coordinate site & Kodak Rochester Control Center table top drills, and interface with community emergency response organizations Onsite fire department services include emergency medical services for basic and advance life support; special chemical emergency response, morgan lens (eye care), and tox-medic; fire suppression with foam for firefighting and vapor control, fire alarm/maintenance, production support, and blood spill clean up; HAZMAT support for spill containment/cleanup, emergency mitigation, and monitoring; technical Rescue for confined space rescue and machine & vehicle extrication; HSES support for permits, consultation for inspection & permit services; after-hours roving monitoring; notification to federal, state, and local agencies as required of chemical releases to the environment, insurance inspections, and systems coordination.

Synergies Synergies In-house and regional capabilities across an array of industry sectors and technologies present ample opportunities for synergies for new incoming businesses. Whereas sharing best practices, forming strategic alliances, cooperating on specific projects, or directly becoming a customer or supplier, these synergies can provide opportunities to future potential tenants for cost-savings, technology development, risk mitigation, expanded production capacity, etc. Kodak’s Specialty Chemicals operation offers processes and services for pharmaceuticals, agribusiness, personal care, electronics, graphics, and security. The Company’s Solvents Recovery operation on the other hand, offers processes and services for pharmaceuticals; chemicals; steel, copper construction; recovery operations; acetone recovery, hexane, commodity based solvents; industries needing to recycle materials to virgin quality; industries that need purification (e.g. alcohol market); etc. Furthermore, Kodak’s Roll-to-Roll manufacturing capabilities can be used in photovoltaics, as well as in the manufacturing of battery electrodes, fuel cells, window films, membrane technology, medical devices, a variety of films (LED lighting, optical, packaging, and electronic). Legacy industries like Kodak, Bausch and Lomb, and Xerox have helped built the expertise and technical infrastructure for making Rochester a powerhouse in photonics, roll-to-roll manufacturing, specialty chemicals, solvent recovery, pharma, biotech & life sciences, to name a few. These capabilities can be leveraged by a myriad of industries.

Synergies Synergies Additional EBP and regional assets in photonics, energy storage, and food processing and manufacturing open doors for expanded opportunities. Photonics technologies are used in information technology and telecommunications; biophotonics in healthcare and life sciences; optical sensing, lighting, energy and displays; manufacturing machinery optical components; lasers and security devices for national security and defense; among others. The EBP is the new home of the Test, Assembly and Packaging (TAP) manufacturing facility of the American Institute for Manufacturing Integrated Photonics (AIM Photonics). Moreover, the State government recently announced the establishment of a $10 million, multi-year Photonics Venture Challenge in Rochester, which will help position the City as a critical hub for this technology and the industries that benefit from it. prototypes for new energy storage and generation systems, test them, do pilot manufacturing and get products to market. Finally, the Park has over 90 tenants belonging to varied industries, including food processing and manufacturing, imaging sensors, medical components, metallurgical and refining, among many others. These companies provide an excellent basis of know-how and support network for similar industries, or industries that can leverage their expertise. Likewise, the EBP is becoming a hub for the development of critical next generation battery and energy storage technologies designed to improve the reliability and resilience of the Country’s electric grid, as well as support hundreds of new product applications from Li Ion Batteries, to PEM Fuel Cells to Ultracapacitors. Through the BEST Test & Commercialization Center housed at the EBP, companies and universities from around the world are working together to create & Many More Representative Tenants & Owners:

Shared Services & Business Support The EBP has a strong partnership with the economic development organizations in the area including Empire Development Finger Lakes Region, the Finger Lakes Economic Development Council, and the Greater Rochester Enterprise,. These economic development organizations work hand-in-hand to market the available sites and buildings within the business park to new and expanding businesses. These organizations lend their resources to facilitate companies start up and operations. From acting as a liaison through all the network of regulatory and permitting agencies and processes, to Shared Services serving as a facilitator to solve issues, share best practices, connect with varied local and regional resources, and many more, these organizations are a company’s best resource for establishing a solid operation from the get go. The Eastman Business Park offers additional amenities that can be used and enjoyed by its tenants, such a 1,968-seat theater, a conference center, a 13,070 square foot gymnasium, a 14,000 square foot fitness center, dinning room with kitchen that can seat 350 people, and four full service cafeterias. Additionally, the Region offers a strong network of business services (staffing, IT, accounting, etc.) and industrial services (machine shop, tool & die, maintenance & repair, etc.). Business Support Finally, Rochester has a robust network of professional organizations in the area that can help facilitate business recruiting, sharing of best practices, lobbying, etc. Examples of these organizations are: FAME: Finger Lakes Manufacturing Enterprise; Rochester Tooling and Machining Association, RTMA; Rochester Regional Photonics Cluster, RRPC; and the Manufacturing Association of Central NY.

Business Environment & Quality of Life Business Environment & Quality of life When compared to neighboring communities and other mid-sized cities, Rochester has an edge due to a very vibrant high-tech presence in the area. of life, and spurring entrepreneurship via startups in industries such as food, software development, gaming, etc. Additionally, Rochester’s affordability makes it easier for people to move to the area. The City’s cost of living index is 89, compared to 122 of New York State, and 100 of the U.S.* Home sales prices are 42% more affordable than the national average**. Aspects like the easy commute and exceptional quality of schools are strong attributes. The Brighton Central, Penfield Central, and West Irondequoit school districts are highly rated by Neighborhood Scout, with a 10 out of 10 for district quality compared to New York State, and district quality compared to the U.S. The area is also very competitive in terms of wages, when compared with other mid-sized, high-tech areas, making it an attractive proposition for employers. Efforts like the construction of the Innovation Zone, led by the Rochester Downtown Development Corporation, are creating the environment to attract not only young newcomers, but also Rochester’s diaspora that is feeling compelled to come back to the City. These efforts, are helping develop a very vibrant Downtown, that is calling the attention of high-tech talent, while enhancing the quality *City of Rochester, Area Vibes-Council for Community and Economic Research. **Based on National Association of Home Builders – NAHB – Housing Opportunity Index from the third quarter of 2016.

Market Potential EBP & Regional Assets & Opportunities Market Potential The Rochester, NY economic area is within 400 miles of an 86.6-million- people market, one-quarter of the U.S. and Canadian populations. This market is characterized by a median age of 39.7 years, a $59,294 median household income, a 2.52-person average household size. Major Metropolitan Area Miles from Rochester, NY Population (In Million) Toronto, ON 171 6.4 Ottawa, ON 252 1.3 Cleveland, OH 260 2.0 Montreal, QC 309 4.0 Detroit, MI 328 4.3 New York City, NY 337 8.5 Philadelphia, PA 344 6.0 Washington, D.C. 385 Columbus, OH 396 Boston, MA 397 4.6 Supply Chain The Rochester, NY area is strategically located in the Northeastern United States with ready access to the major US population centers and the major cities of Southern Canada. *Esri Business Analyst

Business Incentives Business Incentives* Business incentives are provided by economic development agencies at the State, regional, and local levels to encourage business investments that that generate new jobs and contribute to economic growth. Incentives are based on total capital investment and job creation and/or retention by a company over a three to five-year period. Programs are available individually or bundled as part of a comprehensive package for larger capital investments that retain or create jobs as well as projects that create may high paying jobs. Incentives may apply to companies: Acquiring land, buildings or machinery and equipment Constructing or renovating buildings for business operations, including lease-hold improvements Constructing or improving infrastructure required for new location or expansion. Training new or existing employees Incentives generally fall into one of four categories: Grants Loans Tax exemptions, tax credits and incentives Special incentives, included power related *Sources: Greater Rochester Enterprise and Empire State Development

Business Incentives Tax exemptions, Tax credits & Incentives Level of Funding Incentive Overview State Excelsior Jobs Tax Credit Credit of 6.85% of wages per net new job. Excelsior Investment Tax Credit Valued at 2% of qualified investments Excelsior Research and Development Tax Credit Credit of 50% of the Federal Research and Development credit up to six percent of research expenditures in NYS Excelsior Real Property Tax Credit Available to firms locating in certain distressed areas and to firms in targeted industries that meet higher employment and investment thresholds Employee Training Incentive Program Employee Training Incentive Program: a credit of 50% of eligible training costs, up to $10,000 per employee receiving eligible training from an approved, 3rd party training provider. Internship Program: a credit of 50% of the stipend paid to an intern, up to $3,000 per intern. START-UP NY Offers new and expanding businesses the opportunity to operate tax-free for 10 years on or near eligible university or college campuses in New York State. No business, corporate, sales, state or local taxes and no franchise fees. And no income tax for the company or its employees. Empire State Jobs Retention Program Jobs tax credit of 6.85 percent of wages per impacted job that is retained in NYS for business operations impacted by natural disaster Economic Development Fund (EDF) Financial assistance for projects that promote New York State’s economic health by facilitating job creation and/or retention, or increased business activity in the state. Regional Council Capital Fund Program (ESD Grants – REDC) Funds may be used for: Acquisition or leasing of land, buildings, machinery and/or equipment; acquisition of existing business and/or assets; demolition and environmental remediation; new construction, renovation or leasehold improvements; acquisition of furniture and fixtures; soft costs up to twenty-five (25%) of total project costs; planning and feasibility studies related to a capital project County Real Property Tax Abatement Tax abatements on improvements to property over ten or more years Sales and Mortgage Tax Abatements Sales and mortgage tax exemption on construction materials and equipment, and/or mortgage *Sources: Greater Rochester Enterprise, Empire State Development, Monroe County Economic Development, County of Monroe Industrial Development Agency (COMIDA), Finger Lakes Hired, City of Rochester

Business Incentives Workforce Training & Development Level of Funding Incentive Overview Local Recruitment - RochesterWorks! Post Job Openings Free jobs posting at RochesterWorks! Hot Jobs section and Jobs Central Recruitment - RochesterWorks! Recruitment Services Recruiting ‘Round Rochester, Recruiting on the Road, Annual Career Conference & Job Fair, and Summer Job Fair Recruitment - RochesterWorks! Candidate Assessment Tools - Career Readiness Credential (CRC) Career credential that certifies that job seekers have the core employability skills required across multiple industries and occupations around: Applied Mathematics, Reading for Information, and Locating Information. County Recruitment - Monroe Manufactures Jobs Connects graduates of the Monroe Community College Applied Technology Center with local manufacturing companies by providing both the employer and employee a $1,500 bonus. Training - RochesterWorks! Customized Grants Provide training for current, full-time employees earning $10.00 – $25.00 per hour to help them achieve transferable skill upgrades. The grant reimburses up to $5,000 in training costs for training that must be completed within six (6) months. A minimum 50% match is required for this program. Training - RochesterWorks! On-the-Job Training Grants The OJT program reimburses businesses between 50-75% of total wages paid to a new hire who is being trained by another member of the company’s team and gaining the skills needed or their job. The maximum award amount per OJT contract is $5,000. Businesses are limited to three OJTs per year. Training - Monroe on the Job Available to companies participating in qualified certification programs which lead to an industry recognized certification or transferable credential. Program expenses are eligible for reimbursement, up to $4,000 per employee or $16,000 per company. Employers must match at least 50% of the total program cost. Regional Training - Work Experience 'Tryout' Program Supports local employers willing to consider an applicant who may have barriers to employment; to observe their skills and work habits and determine that they are the right fit for the job. Fully subsidized program. Training - Finger Lakes Hired Grant Can reimburse companies for 50% to 90% of their new hire’s wages during their training period. State Training - JOBS Now Financial assistance for major business expansion and attraction efforts that will create or attract significant numbers of permanent, full-time private sector jobs in New York State. There are three categories of funding: Economic Development Loans and Grants; Job Creation Grants; and Workforce Training Grants. *Sources: Greater Rochester Enterprise, Empire State Development, Monroe County Economic Development, County of Monroe Industrial Development Agency (COMIDA), Finger Lakes Hired, City of Rochester

Business Incentives Innovation Development Support New York State offers resources designed to enable new and existing businesses to become more competitive through the use of innovative technologies. Empire State Development's Division of Science, Technology and Innovation (NYSTAR) programs and centers emphasize the importance of working with industry as a way to leverage New York State’s technology strengths to produce new products. * A number of centers for advanced technology and centers of excellence are located throughout the state at universities and research institutions to help spur innovation and collaboration between the industry and the academy. Life sciences; biotechnology; biomedical and bioengineering; additive manufacturing and multifunctional printing; advanced technology in nanomaterials and nanoelectronics; advanced systems and engineering; automation technologies; energy systems; and advanced materials processing, are examples of the centers available. Specifically in Rochester, the Rochester Institute of Technology has the Additive Manufacturing and Multifunctional Printing (AMPrint) Center and the Center of Excellence in Advanced & Sustainable Manufacturing (COE-ASM). Likewise, the University of Rochester has the Center for Emerging and Innovative Sciences (CEIS) and the Center of Excellence in Data Science Other Incentives Utility Infrastructure and Energy Efficiency support Low Cost Power Allocations Low Interest Loans and Interest Subsidies Foreign Trade Zone Grants Bond Financing *Empire State Development **Sources: Greater Rochester Enterprise, Empire State Development, Monroe County Economic Development, County of Monroe Industrial Development Agency (COMIDA), Finger Lakes Hired, City of Rochester.

EBP/Region’s Challenges

EBP & Regional Challenges
Zoning & Future Planned Zoning Kodak’s consideration of making the east end of the site a mixed- use-type of development may be a deterrent to future potential industrial tenants. Quality of life The perception of Rochester as an old industrial town, may be a deterrent for attracting professional employees to the area. Additionally, the fact that a portion of the Park falls under the City of Rochester and another one under the Town of Greece, may add perception of complexity for permitting, operative, and fiscal processes, among others. This needs to be investigated further. Taxes High taxation in New York State may be a deterrent to attract talent from more affordable and less-tax burdened areas. New York State is the state with the highest taxation in the country, with a state and local tax burden of 12.7% and an effective state tax rate ($50,000 taxable income) of 5.8%.* Air Quality & Environmental The Park in a non-attainment area for 8h-ozone. Credits are available on the open market, Kodak does not have available credits that can be used. Additionally, stringent environmental regulations and permitting processes in the State of New York may be a deterrent for potential heavy industry users. *Forbes, March 2016

Right to Work States Right-To-Work The fact the New York State is a non right-to-work state, may offer comparative disadvantages specially when competing against right- to-work states. In our experience, clients usually take the right-to- work status for granted, and do not usually discuss this topic exhaustively; however, right-to-work often comes up as a must-to have or desired attribute among the list of criteria to benchmark site options against.

Workforce Availability & Quality While the suburbs exhibit strength in terms of workforce quality, the City’s quality of schools and crime represent a weakness; therefore, workforce coming from the area may present challenges for employers. Employers interviewed, also reported that there is a challenge to retain high level technical and engineering talent in the area, as there is a natural draw for recent/upcoming graduates to move to larger markets. They also reported limited availability of mid-tiered talent: e.g. machinist, tool & dye operators. Neighborhood Scout reports that the area has a crime index of 7, meaning that its is safer than only 7% of the cities in the U.S. Rochester has crimes per 1,000 residents on average, compared to 3.8 of New York State, and 3.8 of the whole country. Likewise, property crime rate in Rochester is reported at per 1,000 residents, compared to of the State, and of the U.S. Crimes per square mile in the area are reported at 275 on average, in comparison to 41 in New York, and 32 of the country. Additionally, there is an aging population problem in the area. Population 60+ grew 14% between 2010 and 2016, from 19.7% to 22.5%, respectively, and it is expected to reach 25.2% by Also, a large workforce that were part of the “big three” (Kodak, Bausch & Lomb, Xerox) at the back end of their careers On the other hand, in terms of education, the Rochester City School District’s quality has a score of 1, with 10 being best, meaning that the District is better than only 1.4% of NY school districts, and 4.5% than U.S. school districts. Reading and math proficiency is reported at 7%, versus 35% of the Stat

EBP’s Lot Options Lot options Sites/building size & configuration Neighboring operations Sites available are small in size which may limit the options for bringing in sizable heavy-utility industrial operations, and/or for expansion in the future. Options for amalgamating parcels to make larger sites may be constrained by development limitations such as existing structures with high demolition costs, intersecting roads, utility easements, active rail line, etc. Existing buildings product inventory is dated and may require retrofitting. Location of the Park within City limits and in close proximity to residential areas, may be disadvantageous for some industrial operations, and in comparison with more opened and unencumbered industrial parks. Environmental The heavy industrial/brownfield look and feel of the Park may be a deterrent to some looking for greener and more open-type of environment. Additionally, the stigma of perceived environmental contamination may be a deterrent for some.

Company Identification

Biopharmaceuticals Matching Target Companies
49 Companies identified in diagnostic substances; biopharmaceutical products; and biological products industry subclusters, exhibiting: Over $50 million in sales, ~20% annual sales growth, and low and medium risk. The biopharmaceutical industry cluster has been growing at such a fast pace, that the criteria to filter companies had to be more constrained in comparison to the other three target industry clusters. 35% of the companies are located in California, followed by 14% in Massachusetts Industries Companies Biological products, except diagnostic 6 Cytology and histology diagnostic agents 1 Drugs acting on the central nervous system & sense organs Drugs acting on the respiratory system 2 Pharmaceutical preparations 37 Veterinary pharmaceutical preparations Vitamins, natural or synthetic: bulk, uncompounded Hoovers.com

78% of companies have sales between $50M - $500M Hoovers.com

57% of companies have between 100 – 499 employees Hoovers.com

The following slides contain the list of 49 companies identified in diagnostic substances; biopharmaceutical products; and biological products industry subclusters, exhibiting: Over $50 million in sales, ~20% annual sales growth, and low and medium risk. The biopharmaceutical industry cluster has been growing at such a fast pace, that the criteria to filter companies had to be more constrained in comparison to the other three target industry clusters. Company Name Location Sales ($ Mil) Employees Industries CELGENE CORPORATION Summit NJ 11,229.20M 7,132 Pharmaceutical preparations Vertex Pharmaceuticals Incorporated Boston MA 1,702.18M 2,150 Opko Health, Inc. Miami FL 1,221.66M 6,041 BIOMARIN PHARMACEUTICAL INC. San Rafael CA 1,116.85M 2,293 Incyte Corporation Wilmington DE 1,105.72M 980 Horizon Pharma, Inc. Lake Forest IL 981.12M 1,050 MEDIVATION, INC. San Francisco CA 943.26M 628 Mylan Specialty L.P. Morgantown WV 814.75M 1,000 Drugs acting on the respiratory system Albany Molecular Research, Inc. Albany NY 570.45M 3,085 Biological products, except diagnostic Lannett Company, Inc. Philadelphia PA 542.49M 1,149 Amag Pharmaceuticals, Inc. Waltham MA 532.09M 545 Depomed, Inc. Newark CA 455.90M 490 Drugs acting on the central nervous system & sense organs Hoovers.com

Company Name Location Sales ($ Mil) Employees Industries SEATTLE GENETICS, INC. Bothell WA 418.15M 890 Biological products, except diagnostic Ionis Pharmaceuticals, Inc. Carlsbad CA 346.62M 435 Pharmaceutical preparations IRONWOOD PHARMACEUTICALS, INC. Cambridge MA 273.96M 674 Sucampo Pharmaceuticals, Inc. Rockville MD 230.06M 139 SUPERNUS PHARMACEUTICALS, INC. 215.00M 363 EAGLE PHARMACEUTICALS, INC. Woodcliff Lake NJ 189.48M 77 VANDA PHARMACEUTICALS INC. Washington DC 146.02M 142 Merrimack Pharmaceuticals Inc 144.27M 294 Array Biopharma Inc. Boulder CO 137.88M 177 Retrophin, Inc. San Diego CA 133.59M 135 Innoviva, Inc. Brisbane CA 133.57M 14 Drugs acting on the respiratory system Heska Corporation Loveland CO 130.08M 327 Veterinary pharmaceutical preparations Hoovers.com

Company Name Location Sales ($ Mil) Employees Industries Ani Pharmaceuticals, Inc. Baudette MN 128.62M 143 Pharmaceutical preparations VIVUS, INC. Campbell CA 124.26M 65 ARENA PHARMACEUTICALS, INC. San Diego CA 123.98M 106 Avanir Pharmaceuticals, Inc. Aliso Viejo CA 115.03M 484 NATURAL ALTERNATIVES INTERNATIONAL, INC. Carlsbad CA 114.20M 285 Vitamins, natural or synthetic: bulk, uncompounded Momenta Pharmaceuticals, Inc. Cambridge MA 109.62M 290 LIGAND PHARMACEUTICALS INCORPORATED 108.97M 22 CYTOKINETICS, INCORPORATED South San Francisco CA 106.41M 127 Repligen Corporation Waltham MA 104.54M 236 Biological products, except diagnostic Xtant Medical Holdings, Inc. Belgrade MT 90.00M 257 Xencor, Inc. Monrovia CA 87.52M 83 NANOSTRING TECHNOLOGIES, INC. Seattle WA 86.49M 407 Hoovers.com

Company Name Location Sales ($ Mil) Employees Industries PTC THERAPEUTICS, INC. South Plainfield NJ 82.71M 304 Pharmaceutical preparations Anacor Pharmaceuticals, Inc. New York NY 82.36M 110 Corcept Therapeutics Incorporated Menlo Park CA 81.32M 103 Threshold Pharmaceuticals Inc South San Francisco CA 76.92M 15 Allos Therapeutics, Inc. Westminster CO 76.05M 241 PROGENICS PHARMACEUTICALS, INC. 69.43M 58 Recro Pharma, Inc. Malvern PA 69.34M 196 TELIGENT, INC. Buena NJ 66.88M 153 Veracyte, Inc. 65.09M 216 Cytology and histology diagnostic agents PFENEX INC. San Diego CA 60.19M 63 Osiris Therapeutics, Inc. Columbia MD 59.87M 217 Biological products, except diagnostic CTI BIOPHARMA CORP. Seattle WA 57.41M 104 Juniper Pharmaceuticals, Inc. Boston MA 54.57M 139 Hoovers.com

Woody Hydrick Managing Principal Global Location Strategies Tel Catalina Valencia Senior Consultant Global Location Strategies Tel Gideon Gradman Managing Director Integrated Energy Advisors Tel

EASTMAN BUSINESS PARK ROCHESTER, NY

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