Exhibit 10

 

FOURTH AMENDMENT TO LEASE

 

This Fourth Amendment to Lease (this “Amendment”) is entered into as of
September 29, 2014 by and between NORTHPARK INDUSTRIAL, a California general
partnership (“Lessor”), and CAPSTONE TURBINE CORPORATION, a California
corporation (“Lessee”).

 

A)                                   Lessor and Lessee are parties to that
certain Standard Industrial/Commercial Single-Tenant Lease—Net dated December 1,
1999, as amended by that certain First Amendment to Lease dated March 10, 2000,
that certain Second Amendment to Lease dated August 27, 2009, and that certain
Third Amendment to Lease dated July 31, 2014 (collectively, the “Lease”),
pursuant to which Lessee leases from Lessor certain premises containing
approximately 98,370 square feet located in the building at 21211 Nordhoff
Street, Chatsworth, California (the “Premises”), as more particularly described
in the Lease.

 

B)                                   The Term of the Lease is currently
scheduled to expire on September 30, 2014. Lessor and Lessee now desire to amend
the Lease to, among other things, extend the term of the Lease, all in
accordance with the terms and conditions set forth below.

 

1)                                     Term of Lease: The Term of the Lease is
hereby extended for a period of five (5) years commencing on October 1, 2014
(the “Renewal Commencement Date”) and expiring on September 30, 2019 (the “New
Expiration Date”). The parties acknowledge and agree that the second (2nd)
sentence of Paragraph 1 of the Third Amendment to Lease is hereby deleted and
shall be of no force or effect.

 

2)                                     Rent: Commencing on the Renewal
Commencement Date, the monthly Base Rent due to Lessor with respect to the
Premises shall as set forth on the following schedule (which Base Rent shall be
due and payable in accordance with the terms of the Lease and in addition to all
other amounts due and owing under the Lease):

 

Period of Term

 

Monthly Base Rent

 

October 1, 2014 — November 30, 2014

 

$39,500.00 per month

 

December 1, 2014 — September 30, 2015

 

$79,000.00 per month

 

October 1, 2015 — September 30, 2016

 

$81,225.00 per month

 

October 1, 2016 — September 30, 2017

 

$83,600.00 per month

 

October 1, 2017 — September 30, 2018

 

$86,000.00 per month

 

October 1, 2018 — September 30, 2019

 

$88,500.00 per month

 

 

In addition to the monthly Base Rent set forth above, Lessee shall be
responsible for paying to Lessor the amount of $8,961.68 per month as Lessor’s
monthly estimate for Lessee’s share of Real Property Taxes and landscaping and
irrigation system maintenance.

 

3)                                     Condition of Premises:

 

(a)                                 Subject to Lessor’s performance of the HVAC
Work in accordance with Paragraph 3(b) below, Lessee shall continue to lease the
Premises “as is,” “with all faults,” and without any representations or
warranties, subject to any obligations to maintain or repair by Landlord set
forth in the Lease. Lessor hereby discloses to Lessee, in accordance with
California Civil Code Section 1938, and Lessee hereby acknowledges, that the
Premises have not undergone an inspection by a Certified Access Specialist
(CASp) to determine whether the Premises meet all applicable
construction-related accessibility standards pursuant to California Civil Code
§55.51 et seq.

 

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(b)                                 Lessor, at Lessor’s sole cost and expense
(except as expressly provided in this Paragraph 3(b) below), agrees to perform,
on a one-time basis only, only those HVAC repairs and improvements expressly
listed on Exhibit A attached hereto (the “Lessor HVAC Work”). The Lessor HVAC
Work shall be performed in a good workmanlike manner, in compliance with all
applicable laws and codes, and using Lessor’s project-standard materials,
guidelines, specifications and procedures (unless otherwise designated on
Exhibit A). Lessor shall engage its contractor for the Lessor HVAC Work promptly
after the mutual execution of this Amendment by Lessor and Lessee, and Lessor
shall use commercially reasonable efforts to complete the Lessor HVAC Work on or
before March 31, 2015. In addition, Lessee shall be solely responsible for all
costs and expenses associated with any other work or improvements performed in
the Premises whether by Lessor or Lessee, including, without limitation, any
carpeting, paint, additional HVAC repairs or improvements (other than those
listed specifically listed on Exhibit A) and any other upgrades or alterations
to the Premises. Lessee shall not (and Lessee shall ensure that its agents do
not) interfere with the performance of the Lessor HVAC Work and shall cooperate
with Lessor in connection with the performance of the Lessor HVAC Work,
including, without limitation, by moving any equipment and other personal
property which Lessor or its contractors may request be moved. Except to the
extent caused by the negligence or willful misconduct of Lessor or Lessor’s
agents, employees, contractors and licensees (but in any event subject to the
waiver of subrogation set forth in Section 8.6 of the Lease), Lessor shall have
no responsibility for, or for any reason be liable to, Lessee for any direct or
indirect injury to or interference with Lessee’s business arising from the
performance of the Lessor HVAC Work. Lessee shall be responsible for any
increase in the costs of the Lessor HVAC Work resulting from an act or omission
of Lessee or any agents, employees, contractors, licensees or invitees of
Lessee.

 

4)                                     Option to Extend:

 

(a)                                 In lieu of any renewal or extension options
contained in the existing Lease (all of which are hereby deleted in their
entirety), Lessor hereby grants Lessee one (1) option (“Option”) to extend the
Term of the Lease for the entire Premises for a period of five (5) years
immediately following the New Expiration Date (the “Option Term”), which Option
shall be exercisable only by written notice delivered by Lessee to Lessor as set
forth below. The rights contained in this Paragraph 4 shall be personal to the
Lessee named in this Amendment and to an affiliate assignee of Lessee (as
defined in Paragraph 71 of the Lease) and may not be exercised by any assignee,
sublessee or other transferee of Lessee’s interest in the Lease except for an
affiliate assignee of Lessee (as defined in Paragraph 71 of the Lease).

 

(b)                                 The Option shall be exercised by Lessee only
in the following manner: (i) Lessee shall not be in default beyond all
applicable notice and cure periods, and shall not previously have been in
default beyond all applicable notice and cure periods under the Lease more than
once, on the delivery date of the Interest Notice and the Acceptance Notice (as
such terms are defined below); (ii) Lessee shall deliver written notice (the
“Interest Notice”) to Lessor not more than nine (9) months nor less than six
(6) months prior to the expiration of the Term, stating that Lessee is
interested in exercising the Option; (iii) within thirty (30) days of Lessor’s
receipt of the Interest Notice, Lessor shall deliver written notice (the “Option
Rent Notice”) to Lessee setting forth the Initial Option Rent (as defined below)
and the applicable monthly Base Rent for the remainder of the Option Term; and
(iv) if Lessee desires to proceed with its exercise of the Option upon the terms
set forth in the Option Rent Notice, Lessee shall deliver written notice (the
“Acceptance Notice”) to Lessor within fifteen (15) business days of Lessee’s
receipt of Option Rent Notice. Lessee’s failure to deliver the Interest Notice
or Acceptance Notice on or before the dates

 

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specified above shall be deemed to constitute Lessee’s election not to exercise
the Option and the termination of the Option. If Lessee properly exercises the
Option within the dates specified above, the Term of the Lease shall be extended
for the Option Term upon all of the terms and conditions set forth in the Lease,
except that the monthly Base Rent for the Option Term shall be as indicated in
the Option Rent Notice, and Lessee and Lessor shall promptly execute a Lease
amendment to document said Option Term.

 

(c) The monthly Base Rent set forth in the Option Rent Notice and payable by
Lessee during the first (1st) year of the Option Term (“Initial Option Rent”)
shall be equal to the greater of (i) the Fair Market Rent (as defined below), or
(ii) one hundred three percent (103%) of the monthly Base Rent for the Premises
in effect immediately prior to the commencement of the Option Term. On the one
(1) year anniversary of the commencement of the Option Term and on each
anniversary of such date thereafter during the Option Term, the monthly Base
Rent shall be increased by three percent (3%). The “Fair Market Rent” shall mean
the applicable monthly Base Rent, including any rental abatement and any other
monetary concessions (such as tenant improvements allowances) being provided to
tenants by other landlords in comparable transactions, all common area operating
expenses, additional rent and other charges at which tenants, as of the
commencement of the Option Term, are entering into leases or renewals for
non-sublease space which is not encumbered by expansion rights and which is
comparable in size, location and quality to the Premises in renewal transactions
for a term comparable to the Option Term which comparable space is located in
the Project, taking into consideration the value of the existing improvements in
the Premises to Lessee, as compared to the value of the existing improvements in
such comparable space, with such value to be based upon the age, quality and
layout of the improvements and the extent to which the same could be utilized by
Lessee with consideration given to the fact that the improvements existing in
the Premises are specifically suitable to Lessee.

 

5)                                     Security Deposit: The parties acknowledge
that Lessor currently holds a Security Deposit in the amount of $72,930.38
pursuant to the existing Lease. Concurrently with Lessee’s execution of this
Amendment, Lessee shall deposit with Lessor an additional $20,069.62 such that
the total Security Deposit held by Lessor under the Lease is equal to
$93,000.00, which amount Lessor shall continue to hold in accordance with the
terms and conditions of the Lease.

 

6)                                     Warranty of Authority: If Lessor or
Lessee signs as a corporation, partnership or limited liability company, each of
the persons executing this Amendment on behalf of Lessor and Lessee hereby
covenants and warrants the following: (i) that the entity executing herein is a
duly authorized and existing entity that is qualified to do business in
California; (ii) that the person(s) signing on behalf of either Lessor or Lessee
have full right and authority to enter into this Amendment; and (iii) that each
and every person signing on behalf of either Lessor or Lessee are authorized to
do so.

 

7)                                     Brokers: Lessee represents and warrants
to Lessor that it has not dealt with any brokers with respect to this Amendment
except for Delphi Business Properties, Inc., as Lessor’s broker, and Cresa Los
Angeles, as Lessee’s broker (collectively, the “Brokers”). Lessor shall pay a
fee to the Brokers in connection with this Amendment pursuant to a separate
agreement between Lessor and Lessor’s Broker. If Lessee has dealt with any
broker or finder with respect to this Amendment other than the Brokers, Lessee
shall be solely responsible for the payment of any fees due said broker or
finder and Lessee shall protect, indemnify, hold harmless and defend Lessor from
any liability with respect thereto. Lessee acknowledges and agrees that Lessor
shall have no obligation to pay any fees or commissions to any broker
representing Lessee in connection with any extension or renewal of the Term of
the Lease beyond the New Expiration Date (including,

 

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without limitation, as a result of Lessee’s exercise of the Option), and Lessee
shall be solely responsible for any such fees or commissions.

 

8)                                     Facsimile/PDF; Counterparts: Each party
hereto, and their respective successors and assigns, shall be authorized to rely
upon the signatures of all parties hereto which are delivered by facsimile or in
PDF format as constituting duly authorized, irrevocable, actual and current
delivery of this Amendment with original ink signatures. This Amendment may be
executed in counterparts, each of which shall be deemed an original part and all
of which together shall constitute a single instrument.

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9)                                     Original Lease in Full Force: Except for
those provisions which are inconsistent with this Amendment and those terms,
covenants and conditions for which performance has heretofore been completed,
all other terms, covenants and conditions of the Lease shall remain unmodified
and in full force and effect. In the event of a conflict between the terms of
this Amendment and the Lease, the terms of this Amendment shall prevail.

 

IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first written above.

 

 

 

 

 

LESSOR:

 

 

LESSEE:

 

 

 

 

NORTHPARK INDUSTRIAL, a California general partnership

 

CAPSTONE TURBINE CORPORATION, a California corporation

 

 

 

 

 

By:

Northwest Industrial Center LLC, a California limited

 

By:

 

 

liability company, its general partner

 

Name:

 

 

 

 

Its:

 

 

By:

/s/ Murray Siegel

 

 

 

 

 

Murray Siegel, Manager

 

 

 

 

 

 

 

By:

 

 

By:

/s/ Gary Siegel

 

Name:

 

 

 

Gary Siegel, Manager

 

Its:

 

 

 

 

 

By:

Northpark Industrial-Leahy Division LLC, a California limited liability company,
its general partner

 

 

 

 

 

 

 

By:

West America Construction Corporation, a California corporation, its Manager

 

 

 

 

 

 

 

 

 

By:

/s/ Nicholas M. Brown

 

 

 

 

 

Nicholas M. Brown, President

 

 

 

 

 

 

 

 

 

 

By:

/s/ Thomas L. Harner

 

 

 

 

 

Thomas L. Harner, Secretary

 

 

 

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EXHIBIT A

 

SCOPE OF LESSOR WORK

 

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Air Conditioning Solutions

2223 El Sol Ave

Altadena Co, 91001

(626) 797-0547

Fax (626) 797-1372

 

September 16, 2014

 

Northpark Industrial

c/o Tom Harner

West America Construction

3340 Ocean Park Blvd. Suite 1040

Santa Monica, CA 90405

 

RE: Chiller and Boiler Replacements

 

Hello Tom,

 

Thank you for the opportunity to provide the following proposal to replace
(1) Chiller and (3) Boilers at the Capstone facility at 21211 Nordhoff. The
following scope of work is our recommendation based on our assessment and
experience with the HVAC equipment. Please review the following proposal and
qualification and contact us if you have any question or concerns.

 

Chiller Replacement Scope of Work (Base Bid)

 

1.              Provide detailing and coordination removal and replacement of
one Centrifugal chiller

2.              Safe off and disconnect the chiller from the central plant.

3.              Recover the refrigerant and oil from the chiller handle per EPA
guidelines.

4.              Provide rigging and trucking for the project.

5.              Provide and install (1) ZOO ton Smardt Frictionless Chiller.

6.              Provide the required piping modification to support the
equipment.

7.              Provide new thermal insulation were piping was modified to
support the new chiller.

8.              Furnish and Install all of the required electrical conduits and
wire to support the project.

9.              Provide start up and commissioning of the new chiller.

10.       Provide close out documentation and customer training for the new
chiller.

 

The price to perform the above scope of work will be $237,.000.00 Taxes included

 

Boiler Replacements Scope or Work

 

1.              Safe off and disconnect the existing hydronic heating boiler
from operations.

2.              Remove and properly dispose of the existing boilers.

3.              Replace (2) Hydronic heating boilers and (1) Domestic Water
boilers with (3) new Low NOX Standard efficiency boilers.

4.              Repipe the hydronic piping to support the new boilers.

5.              Provide and install (1) new domestic water tank and primary
secondary piping utilizing the existing hot water pumps.

6.              Provide and install new thermal insulation were piping has been
modified.

7.              Repipe the gas lines and relief lines to the boilers.

8.              Reconnect the electrical and associated controls.

9.              Provide and install flue piping to support the new boilers.

10.       Provide start, commissioning and testing of the new boilers.

 

The price to perform the above scope of work will be $105,000.00 taxes included

 

1 | Air Conditioning Solutions | 2223 El Sol Ave | Altadena, Ca. 91001 | License
#863580 | 626-797-0547

 

EXHIBIT A

 

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