Exhibit 10.2

LEASE AGREEMENT

THIS LEASE AGREEMENT, dated the fifteenth day of October, 2005, by and between
CapGen CHP, Inc., whose address is 10101 - C. Avenue D, Brooklyn, New York,
11236, (hereinafter called “Landlord”), and Capstone Turbine Corporation, whose
address is 21211 Nordhoff Street, Chatsworth, California, 91311 (hereinafter
called “Tenant”).

WHEREAS, the City of New York is the fee owner of the property known as 101 - 01
Avenue D, Brooklyn, New York (the “Property”), as more particularly described in
the Master Lease. The City of New York has heretofore entered into that certain
Subordinate Lease, dated as of September 1,1984, with Laura Realty Co.
(successor in interest to Rentar Development Corporation, and hereinafter
referred to as “LRC”), as tenant (the “Master Lease”).

WHEREAS, LRC further subleased the property to A.P.L. Corporation (predecessor
in interest to Landlord) pursuant to that certain lease dated September 7th,
1967, as amended by that First Amendatory Agreement, dated April 30, 1968, and
that certain Second Amendatory Agreement, dated October 21,1968, and that
certain Agreement pursuant to Section 2.03, dated May 6,1969, and made a part
hereof (said lease and all of the above agreements, as amended, being referred
to as the “Lease”).

For and in consideration of the respective covenants, conditions and agreements
set forth herein Landlord does hereby demise to Tenant approximately 6,000
+/–square feet of space in the Property together with all required or necessary
easements, rights and ways appurtenant thereto, and those portions of Landlord’s
rights, title and interest necessary for access in all public ways adjoining the
same and any buildings, improvements, equipment and fixtures located within the
rental property hereinafter collectively called the “premises”).

Representations. (a) Landlord represents that (1) It has a leasehold interest in
the premises pursuant to the Lease, and that the term of the Lease is equal to
or greater than the lease term hereof, including the renewal term set forth in
paragraph 4 hereof; (2) Landlord has full power and authority to lease the
premises to Tenant; and (3) Landlord covenants the Tenant, upon payment or lease
and performance of the covenants contained herein, shall peaceably and quietly
have, hold and enjoy the premises during term of the lease agreement and any
renewal thereof.

(b) Tenant represents that (1) it has full power and authority to enter into
this agreement and (2) the execution and delivery of this agreement has been
duly authorized by Tenant.

Term. The primary term of this lease agreement shall commence on October 15,
2005, and end upon October 14, 2010 unless modified by an approved sub-lease
prior to the ending date.

Rent. During the term of this Lease agreement, Tenant agrees to pay to Landlord
for the premises, the following sums:

Years 1 and 2

(10/15/05 - 10/14/07)

 

$8,375.00 per month

Years 3 and 4

(10/15/07 - 10/14/09)

 

$8,850.00 per month

Year 5

(10/15/09 - 10/14/10)

 

$9,250.00 per month

 

 

(Tenant shall also have three (3) individual one year options to extend this
lease for year 6 at $9,250.00 per month, year 7 and year 8 at $ 9,750.00 per
month)

(b)  Lease shall commence on October 15, 2005. As used herein the “Year” shall
mean the period from the commencement of the term to the end of the (12th) full
calendar month thereafter; subsequent years shall commence on the first (1st)
day of the next month of the term and on each anniversary thereafter. Tenant
covenants and agrees to pay all lease amounts reserved hereunder to Landlord,
without notice or demand, in advance, on the first (1st) day of each month
during the term of this agreement.

(c)  All payments shall be paid to CapGen CHP, Inc., 10101 - C. Avenue D,
Brooklyn, New York, 11236, or at such other place or to such appointee of the
Landlord as the Landlord may from time to time designate in writing.

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Utilities. Telephone and any other utilities installed and utilized or consumed
in the premises shall be billed directly to Tenant, and Tenant shall be
responsible for payment of said bills. Tenant shall be responsible for the cost
of bringing telephone and other related utilities into the premises and the cost
of their use. Landlord represents that such utilities have been brought to the
premises by landlord and tenant must merely bring same into the demised
premises.

Real Estate Taxes, (a) Landlord shall pay the real estate taxes on the premises.
Tenant shall pay any tax assessed on the personal property, inventory, or
additional equipment used in the operation of his business.

Security Deposits. Upon execution of this lease agreement, Tenant shall deliver
to Landlord the first month payment based on the monthly lease price.

Assignment and Subletting. Tenant shall not have the right to assign this
agreement or sub-lease or to sublet all or any portion of the rental premises,
without Landlord’s consent which shall not be unreasonably withheld or delayed.

Use of Premises. Tenant shall use the premises for office space to support sales
of its products and services. Tenant shall not change the use of the premises
without the prior written consent of the Landlord which shall not be
unreasonably withheld or delayed. No hazardous waste or hazardous material shall
be stored, disposed of or used on the premises. Tenant agrees to comply with all
applicable zoning and other laws and regulations, and provide and install at its
own expense any additional equipment or alterations required to comply with all
such laws and regulations as required from time to time. Tenant further
covenants and agrees (1) to use the premises in a manner which does not
interfere with the rights of quiet enjoyment of any other tenants of the
building and which is not a nuisance, and (ii) not to make any objectionable use
of the premises to generate any objectionable odor therefrom. Notwithstanding
the portioning Landlord represents premises to have a valid Certificate of
Occupancy for Tenant’s use of this premise.

Parking. Tenant shall have a non-exclusive use of the parking lot or parking
areas. Tenant shall abide by the terms and conditions as stated for In the
Non-Exclusive use of the Common Area of the parking lot, but will enjoy
exclusive use of those areas designated for parking in the additional Warehouse
& Manufacturing spaces lease.

Compliance with Laws: Environmental.

(a)  Tenant covenants and agrees that it will, at its own expense, observe,
comply with and execute all laws, orders, rules, requirements and regulations of
any and all governmental departments, bodies, bureaus, agencies and officers,
and all rules, directions, requirements recommendations of local board of fire
underwriters and the fire insurance rating organizations having jurisdiction
over the area In which the premises are situated, or other bodies or agencies
now or hereinafter exercising similar functions in the area in which the
premises are situated, (collectively “Laws”), in any way pertaining to the
premises or the use and occupancy of the premises except that Landlord shall be
responsible for the Certificate of Occupancy and structural repairs. In the
event tenant shall fail or neglect to comply with any of the Laws, Landlord or
its agents may enter the premises and take all such action and do all such work
in or to the premises as may be necessary in order to cause compliance with such
laws, orders, rules, requirements or recommendations, and Tenant covenants and
agrees to reimburse Landlord promptly upon demand for the expense incurred by
Landlord in taking such action performing such work, which may be the
responsibility of Tenant.

(b)  Tenant will not do, or suffer to be done, anything in or about the premises
contrary to use clause herein, or keep anything in or about the premises,
contrary to use clause herein, which will contravene or affect any policy of
insurance against loss by fire or other hazards, including, but not limited to,
public liability, now existing or which the Landlord may hereafter place
thereon, or which will prevent the Landlord from procuring such policies in
companies acceptable to Landlord at standard rates.

(c)  Tenant shall use and operate the premises, at all times during the term
hereof, under and in compliance with all federal and State of New York laws and
regulations, and in compliance with all applicable Environmental Legal
Requirements. “Environmental Legal Requirements” shall mean any applicable law
relating to public health, safety, or the environment, including, without
limitation, relating to releases, discharges or omissions to air, water, land or
groundwater, to the withdrawal or use Of groundwater, to the use and handling of
polychlorinated biphenyls (“PCB’s”) or asbestos, or asbestos containing
products, to the

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disposal, treatment storage or management of solid or other hazardous or harmful
wastes or to exposure to toxic, hazardous or other harmful materials
(collectively Hazardous Substances”) to the handling, transportation, discharge
or release of gaseous or liquid substance and any regulation or final order or
directive issues pursuant to such statute or ordinance, in each case applicable
to the premises, the building or its operation, construction or modification,
including without limitation the following: the Clean Air Act, the Federal Water
Pollution Control Act (“FWPCA”), the Safe Drinking Water Act, the Toxic
Substances Control Act, the Comprehensive Environmental Response Compensation
and Liability Act, as amended by the Solid and Hazardous Waste Amendments of
1984 (“RCRA”), the Occupational Safety and Health Act, the Emergency Planning
and Community Right-to-Know Act of 1936, the Solid Waste Disposal Act, and any
state statutes addressing similar matters, and any state statute providing for
financial responsibility for clean-up or other actions with respect to the
release or threatened release of any the above-referenced substances.

(d)  Tenant hereby indemnifies and saves landlord harmless from all liabilities
and claims arising from the use, storage or placement of any Hazardous
Substances upon the premises or elsewhere within the property of the Landlord
related to the premises.of Landlord (if brought or placed thereon by Tenant, its
agents, employees, contractors or invitees); and Tenant shall (i) within fifteen
(15) days after written notice thereof, take or cause to be taken, at its sole
expense, such actions as may be necessary to comply with all Environmental Legal
Requirements and (ii) within fifteen (15) days after written demand therefore,
reimburse Landlord for any amounts expended by Landlord to comply with any
Environmental Requirements with respect to the premises or with respect to any
other portions of Landlord’s property related to the premises as the result of
the placement or storage of Hazardous Substance by Tenant, its agents,
employees, contractors or invitees, or in connection with any judicial or
administrative investigation or proceeding relating thereto, including, without
limitation, reasonable attorneys’ fees, fines or the penalty payments.

(e)  For purposes of this provision, Tenant shall be conclusively deemed to have
violated the Environmental Legal Requirements if (i) any notice or orders
directed to either Landlord or Tenant by any governmental agency, body, or court
alleging that such violation by Tenant has occurred; or (ii) if Landlord obtains
and delivers to Tenant a certified report prepared by an engineer or other party
engaged in the business of testing for determining the existence of Hazardous
Substances, which report states that there are Hazardous Substances used, stored
or placed upon the premises by Tenant.

Indemnification.   (a) Tenant shall defend all actions against and shall pay,
protect, indemnify and hold harmless the Landlord or any officer, director,
employee or shareholder of Landlord, from and against any and all liabilities,
losses, damages, costs, expenses (including, without limitation, reasonable
attorneys’ fees and expenses), causes of action, suits, claims, demands or
judgments of any nature (but excepting such as may be due to the negligence of
Landlord) arising out of (a) any breach by tenant of any warranty,
representation or covenant contained in this Rental agreement; (b) the violation
of the permitted specified occupancy or use of the premises by tenant. The
foregoing indemnification shall survive the expiration or sooner termination of
the lease agreement.

(b) Landlord shall defend all actions against and shall pay, protect, indemnify
and hold harmless the Tenant or any officer, director, employee or shareholder
of Tenant, from and against any and all liabilities, losses, damages, costs,
expenses (including, without limitation, reasonable attorneys’ fees and
expenses), causes of action, suits, claims, demands or judgments of any nature
(but excepting such as may be due to the negligence of Tenant) arising out of
any breach by Landlord of any warranty, representation or covenant contained in
the rental agreement. The foregoing indemnification shall survive the expiration
or sooner termination of the rental agreement.

Tenant shall be responsible for any legal requirements made necessary by any act
or work performed by Tenant or by the particular nature of Tenant’s use of the
premises except for Landlords Certificate of Occupancy obligation. Landlord
shall be responsible for any legal requirements made necessary by and act or
work performed by Landlord or its agents. Any legal requirement not meeting
either of the above criteria shall be the responsibility of Tenant if such
requirements relate to a non-structural item and apply to the premises (but not
to other portions of the property of Landlord or any easement area) and shall be
the responsibility of Landlord if such requirements relate to a structural item
as they pertain to the premises or relate to a structural or non- structural
item as they pertain to any other portions of Landlord’s property excluding the
premises (including any easement area).

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Maintenance and Repairs and Work by Landlord. Throughout the Term, Landlord
shall be responsible for all repairs, maintenance or replacement of structural
portions of the premises, all easement areas, the roof, building systems,
parking lot, sidewalks, exterior of the building, facade, all other areas other
than the nonstructural portions of the premises and any damage caused by the
negligence of Landlord, its agents, contractors, employees, invitees or
licensees. Landlord’s obligations to repair, maintain or replace shall not apply
with respect to any damage caused by the negligence of Tenant, its agents,
contractors, employees, invitees or licensees.

Maintenance, Repairs and Work by Tenant.

(a)  Tenant shall be responsible for all other repairs not expressly reserved to
Landlord. Tenant shall obtain certificates of insurance from any contractors
performing work on the premises as reasonably required by Landlord, Laura Realty
Company and/or the City of New York.

(b)  Tenant shall submit in advance to Landlord details of plans for any work
which will be reviewed by Landlord, and is reasonably acceptable to Landlord
shall be submitted to CapGen, CHP Inc. Food Professionals, Inc. SETCO, LRC and
the City of New York for consent. Tenant shall not begin such work or any other
renovation or work without the prior written reasonable consent. of Landlord,
Setco, LRC, and the City of New York. Upon receipt of such consents, Tenant may
commence the work provided that such work is material in conformance with the
approved scope work and is performed in compliance with all applicable laws and
codes.

(c)  Tenant at its cost shall have the right to place, construct and maintain
interior signs and, subject to Landlord’s reasonable consent, exterior signs on
the premises and the Building in compliance with all applicable laws, codes and
governmental regulations.

(d)  Tenant further agrees that it will maintain the premises at its own expense
in a clean, orderly and sanitary condition, free of insects, rodents, vermin,
and other pests; and that it will not permit undue accumulation of garbage,
trash, rubbish or other refuse, but will remove the same at its own expense and
will keep such refuse in proper containers within the interior of the premises
until called for to be removed.

Insurance. Tenant at its sole cost and expense, shall provide and keep in force
comprehensive general liability insurance against claims for bodily injury,
death or property damage occurring in or about the premises, operation and
control of the premises, including, but not limited to contractual liability in
connection with the indemnification of Landlord, in a combined single event of
not less than $ 2,000,000.00 (Two million dollars.) Such Insurance shall be
provided by an insurance company or Company’s licensed to do business in the
State of New York and reasonably acceptable to Landlord. Tenant shall cause
Landlord to be named as an additional insured on said liability insurance and
shall provide Landlord with a certificate evidencing such coverage. Landlord
shall maintain fire, casualty and extended risk insurance coverage on the
Building. Landlord represents and warrants that at all times during the term
hereof it will maintain such insurance in full force and effect.

Miscellaneous. It is understood and agreed that all prior understandings and
agreements between the parties hereto are merged in this instrument, which alone
fully and completely expresses their agreement, with neither party relying upon
any statement or representation made by the other which is not embodied in these
instruments. These instruments may not be changed or terminated orally. The
terms, covenants, and conditions of this rental agreement shall be binding upon,
and inure to the benefit of each of the parties hereto, their heirs, personal
representatives, successors and assigns, and shall run with the land. Whenever
used herein, the singular number shall include the plural, the plural the
singular and the use of any gender shall be applicable to all genders. At the
request of either party, and at the expense of the requesting party, both
parties shall execute recordable instruments evidencing this rental agreement.

Notices. All notices required hereunder shall be sent by certified mail, return
receipt requested, or by recognized overnight delivery service to the following:
To Landlord: at 10101-C Avenue D, Brooklyn, NY 11236. To Tenant: 21211 Nordhoff
Street, Chatsworth, California, 91311.

Waiver of Jury Trial. THE LANDLORD AND THE TENTANT WAIVE ALL RIGHTS TO A TRIAL
BY JURY IN ANY ACTION, COUNTERCLAIM, OR PROCEEDING BASED UPON, OR RELATED TO,
THE SUBJECT MATTER OF THIS RENTAL AGREEMENT. THIS WAIVER APPLIES TO ALL CLAIMS
AGAINST ALL

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PARTIES TO SUCH ACTIONS AND PROCEEDINGS, INCLUDING PARTIES WHO ARE NOT PARTIES
TO THIS RENTAL AGREEMENT. THIS WAIVER IS KNOWINGLY, INTENTIONALLY, AND
INVOLUNTARILY MADE BY THE TENANT AND THE TENANT ACKNOWLEDGES THAT NEITHER THE
LANDLORD, NOR ANY PERSON ACTING ON BEHALF OF THE LANDLORD HAS MADE ANY
REPRESENTATIONS OF FACT TO INDUCE THIS WAIVER OF TRIAL BY JURY OR IN ANY WAY
MODIFY OR NULLIFY ITS EFFECTS.

IN WITNESS WHEREOF, the parties hereto have caused this rental agreement to be
executed, and their respective seals affixed thereto, as of the date first above
written.

Capstone Turbine Corporation

 

By

/s/ John R Tucker

 

Date:

12/01/05

 

John R. Tucker, CEO and President

 

CapGen CHP, Inc.

 

 

By:

/s/ Dennis Lane

 

Date:

12/06/05

 

Dennis Lane, Vice President

 

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Addendum 1 to the Commercial Lease between CapGen CHP, Inc and Capstone Turbine
Corporation

This addendum (“Addendum”) to the commercial lease effective October 15, 2005
between CapGen CHP, Inc (signed in December, 2005) herein called Lessor, and
Capstone Turbine Corporation, herein called Lessee, is entered into for the
purpose of changing the monthly rent to accommodate additional square footage as
follows:

Rent Paragraph of the lease is revised from:

Rent.   During the term of this Lease agreement, Tenant agrees to pay to
Landlord for the premises, the following sums:

Years 1 and 2

(10/15/05 - 10/14/07)

 

$8,375.00 per month

Years 3 and 4

(10/15/07 - 10/14/09)

 

$8,850 00 per month

Year 5

(10/15/09 - 10/14/10)

 

$9,250 00 per month

 

(Tenant shall also have three (3) individual one year options to extend this
lease for year 6 at $9,250 00 per month, year 7 and year 8 at $ 9.750 00 per
month)

TO:

Rent   During the term of this Lease agreement, Tenant agrees to pay to Landlord
for the premises, the following sums:

Year 1

(10/15/05 - 09/30/06)

 

$8,375 00 per month

 

Year 2

(10/01/06 - 10/14/07)

 

$45,850 00 per month

 

Years 3 and 4

(10/15/07 - 10/14/09)

 

$ 47,250 00 per month

 

Year 5

(10/15/09 - 10/14/10)

 

$48,250 00 per month

 

 

(Tenant shall also have three (3) individual one year options to extend this
lease for year 6 at $ 49,250 00 per month, year 7 and year 8 at $ 51,500 00 per
month)

Assignment and Subletting  Paragraph of the lease is revised from:

Assignment and Subletting  Tenant shall not have the right to assign this
agreement or sub-lease or to sublet all or any portion of the rental premises,
without Landlord’s consent which shall not be unreasonably withheld or delayed.

TO:

Assignment and Subletting Tenant shall not have the right to assign this
agreement or sub-lease or to sublet all or any portion of the rental premises,
without Landlord’s consent which shall not be reasonably withheld or delayed. 
Because of the multiple occupancies and tenants within the building and their
respective usage and utilization of the building, and Tenant’s overlap of those
adjoining occupancy spaces, additional documents and/or amendments to this lease
may be required by the Landlord and Tenant in the future.

 

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Use of Premises Paragraph of the lease is revised from:

Use of Premises  Tenant shall use the premises for and as non-retail office
space.  Tenant shall not change the use of the premises without the prior
written consent of the Landlord which shall not be unreasonebly withheld or
delayed.   No hazardous waste or hazardous material shall be stored, disposed of
or used on the premises.  Tenant agrees to comply with all applicable zoning and
other laws and regulations, and provide and install at its own expense any
additional equipment or alterations required to comply with all such laws and
regulations as required from time to time.  Tenant further covenants and agrees
(1) to use the premises in a manner which does not interfere with the rights of
quiet enjoyment of any other tenants of the building and which is not a
nuisance, and (ii) not to make any objectionable use of the premises to generate
any objectionable odor therefrom.   Notwithstanding the portioning Landlord
represents premises to have a valid Certificate of Occupancy for Tenant’s use of
this premise.

TO:

Use of Premises  Tenant shall use the premises for office space (approximately
5,000 sf), warehousing (approximately 17,500 sf), manufacturing and light
component assembly work (approximately 25,000 sf), for an approximate aggregate
total of 47,500 square feet.  Tenant shall not change the use of the premises
without the prior written consent of the Landlord which shall not be
unreasonably withheld or delayed.   No hazardous waste or hazardous material
shall be stored, disposed of or used on the premises.  Tenant agrees to comply
with all applicable zoning and other laws and regulations, and provide and
install at its own expense any additional equipment or alterations required to
comply with all such laws and regulations as required from time to time.  Tenant
further covenants and agrees (1) to use the premises in a manner which does not
interfere with the rights of quiet enjoyment of any other tenants of the
building and which is not a nuisance, and (ii) not to make any objectionable use
of the premises to generate any objectionable odor therefrom. Notwithstanding
the portioning Landlord represents premises to have a valid Certificate of
Occupancy for Tenant’s use of this premise.

Signed this 27 day of September 2006

LESSEE:

CAPSTONE TURBINE CORPORATION

 

 

LESSOR:
CAPGEN CHP, INC,

BY:

/s/ Mark Gilbreth

 

BY:

/s/ Dennis Lane

 

 

 

 

 

NAME:

Mark Gilbreth

 

NAME

Dennis Lane

 

 

 

 

 

TITLE: 

President & CEO/COO

 

TITLE: 

Vice President

 

 

 

 

 

DATE:

9/27/06

 

DATE:

9/27/06

 

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