Exhibit 10.24

 

Basic Lease Information

14501 Princeton Avenue, Moorpark, CA

The following is a summary of lease information that is referred to in the Lease
(as defined below).  To the extent there is any conflict between the provisions
of this summary and any more specific provision of the Lease, such more specific
provision shall control.

 

 

 

LEASE EFFECTIVE DATE:

    

March 28, 2018

 

 

 

LANDLORD:

 

PRINCETON AVENUE HOLDINGS, LLC,
a California limited liability company 

 

 

 

ADDRESS OF LANDLORD:

 

c/o Nearon Enterprises

101 Ygnacio Valley Road

Suite 450

Walnut Creek, CA  94596

With a copy to:
CBRE

8521 Fallbrook Avenue, Suite 150

West Hills, CA 91304
Attn: Property Manager

 

 

 

TENANT:

 

AEROVIRONMENT, INC.,

a Delaware corporation

 

 

 

ADDRESS OF TENANT:

 

At the Premises

 

With a copy to:

AeroVironment, Inc.

900 Innovators Way

Simi Valley, CA 93065

Attn:  General Counsel

 

 

 

GUARANTOR:

 

None

 

 

 

PREMISES:

 

Suite 200, as depicted on Exhibit A-2 attached hereto, containing approximately
94,280 square feet of floor area.

 

 

 

BUILDING:

 

14501 Princeton Avenue, Moorpark, CA 93021

 

 

 

TERM:

 

Approximately sixty three (63) months, commencing on the Commencement Date,
subject to extension in accordance with the Extension Option for one (1) thirty
six (36) month period. 

 

 

 

COMMENCEMENT DATE:

 

Upon the Substantial Completion of Landlord’s Work.

 

 

 

EXPIRATION DATE:

 

The last day of the calendar month in which the day that is sixty three (63)
months after the Commencement Date occurs.

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BASE RENT:

    

(i)           For the period commencing on the Commencement Date (subject to
Paragraph 5(d)) through the day immediately preceding the first day of the
calendar month in which the first (1st) annual anniversary of the Commencement
Date occurs (the “1-Year Anniversary”);

    

$70,710.00 (per month);
$848,520.00 (per year);

 

 

 

 

 

 

 

(ii)          For the period commencing on the 1‑Year Anniversary through the
day immediately preceding the first day of the calendar month in which the
second (2nd) annual anniversary of the Commencement Date occurs (the “2‑Year
Anniversary”);

 

$72,477.75 (per month);
$869,733.00 (per year);

 

 

 

 

 

 

 

(iii)         For the period commencing on the 2‑Year Anniversary through the
day immediately preceding the first day of the calendar month in which the third
(3rd) annual anniversary of the Commencement Date occurs (the “3‑Year
Anniversary”);

 

$74,289.69 (per month);
$891,476.33 (per year);

 

 

 

 

 

 

 

(iv)         For the period commencing on the 3‑Year Anniversary through the day
immediately preceding the first day of the calendar month in which the fourth
(4th) annual anniversary of the Commencement Date occurs (the “4‑Year
Anniversary”);

 

$76,164.94 (per month);
$913,763.23 (per year);

 

 

 

 

 

 

 

(v)          For the period commencing on the 4‑Year Anniversary through the day
immediately preceding the first day of the calendar month in which the fifth
(5th) annual anniversary of the Commencement Date occurs (the “5‑Year
Anniversary”);

 

$78,050.61 (per month);
$936,607.31 (per year);

 

 

 

 

 

 

 

(vi)         For the period commencing on the 5‑Year Anniversary through the day
immediately preceding the last day of the sixty third (63rd) calendar month of
the Term

 

$80,001.87 (per month);
$90,022.44 (per year);

 

 

 

PERMITTED USE:

 

Designing, engineering, testing and manufacturing of unmanned aircraft systems,
and other related administrative activities as well as any and all other
allowable industrial and/or office uses, subject to Paragraph 6 of the Lease.

 

 

 

TENANT’S PERCENTAGE SHARE:

 

65.48% (based on a fraction, the numerator of which is the square footage of the
Premises (approximately 94,280 square feet), and the denominator of which is the
square footage of the Building (approximately 143,973 square feet)).

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SECURITY DEPOSIT:

    

None.

 

 

 

UNRESERVED PARKING SPACES

 

A number equal to Tenant’s Percentage Share of parking stalls located in the
Common Areas adjacent to the Premises in a location to be agreed by Landlord and
Tenant.

 

 

 

LANDLORD’S BROKER:

 

Lee & Associates LA North Ventura, Inc.

 

 

 

TENANT’S BROKER:

 

Cresa.

 

 

 

ATTACHMENTS:

 

Exhibit A-1

Exhibit A-2

Exhibit B

Exhibit C

Exhibit D

Exhibit D-1

Exhibit D-2

Exhibit E

Rider No. 1

–

 

–

–

–

–

–

–

–

 

Site Plan

Premises Plan

Operating Expenses and Taxes

Rules And Regulations

Work Letter

Base Landlord Work Space Plan

Full Scope Space Plan

Commencement Letter

Early Termination/Extension Option

 

 

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TABLE OF CONTENTS

1.

LEASE EFFECTIVE DATE AND PARTIES.

1

2.

PREMISES, COMMON AREAS AND PARKING.

1

3.

TERM.

2

4.

DELIVERY OF POSSESSION.

2

5.

RENT.

3

6.

USE.

5

7.

OPERATING EXPENSES.

6

8.

RULES AND REGULATIONS.

7

9.

ASSIGNMENT AND SUBLETTING.

7

10.

LIABILITY OF LANDLORD.

8

11.

MAINTENANCE AND REPAIRS.

9

12.

SERVICES.

10

13.

ALTERATIONS.

10

14.

INSURANCE, INDEMNIFICATION AND EXCULPATION.

12

15.

DESTRUCTION.

14

16.

ENTRY.

15

17.

EVENTS OF DEFAULT.

15

18.

TERMINATION UPON DEFAULT.

15

19.

CONTINUATION AFTER DEFAULT.

16

20.

OTHER RELIEF.

16

21.

ATTORNEYS’ FEES.

16

22.

NOTICES.

17

23.

EMINENT DOMAIN.

17

24.

LATE CHARGE/RETURNED CHECKS.

18

25.

SECURITY DEPOSIT.

18

26.

SIGNAGE.

18

27.

ESTOPPEL CERTIFICATE.

18

28.

SURRENDER.

18

29.

HOLDING OVER.

19

30.

SUBORDINATION.

19

31.

INABILITY TO PERFORM.

19

32.

MISCELLANEOUS.

19

33.

BROKER.

21

34.

ROOF EQUIPMENT.

21

35.

EARLY TERMINATION.

RIDER NO. 1

36.

EXTENSION OPTION.

RIDER NO. 1

 

 

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1.            LEASE EFFECTIVE DATE AND PARTIES.

This Lease (this “Lease”) is dated as of the Lease Effective Date provided in
the Basic Lease Information, which shall be the date upon which this Lease is
fully executed by each of Landlord and Tenant.  PRIOR TO THE DATE THIS LEASE IS
EXECUTED BY LANDLORD AND TENANT, THE TERMS OF THIS LEASE SHALL NOT BE BINDING ON
LANDLORD OR TENANT AND, UNTIL SIGNED BY LANDLORD, THIS DOCUMENT SHALL BE
CONSTRUED ONLY AS AN OFFER BY TENANT TO LEASE THE PREMISES.  UNTIL SIGNED BY
LANDLORD, LANDLORD SHALL HAVE NO OBLIGATION OF ANY KIND TO ANY OF THE PARTIES
INVOLVED IN MAKING THIS OFFER TO LEASE THE PREMISES.

This Lease is made and entered into as of the Lease Effective Date provided in
the Basic Lease Information by and between Princeton Avenue Holdings, LLC, a
California limited liability company (“Landlord”), and AeroVironment, Inc., a
Delaware limited liability company (“Tenant”).

2.            PREMISES, COMMON AREAS AND PARKING.

(a)          Landlord does hereby lease to Tenant, and Tenant does hereby lease
from Landlord, for the Term (as defined below) and subject to the covenants and
conditions hereinafter set forth, to all of which Landlord and Tenant agree,
those certain premises (“Premises”) identified in the Basic Lease Information
and outlined on Exhibit A-2 attached to this Lease and hereby made a part
hereof, and located in the Building identified in the Basic Lease
Information.  The Premises, the Building, the Common Areas (defined below), the
land upon which the same are located, along with all other buildings and
improvements thereon or thereunder, are herein collectively referred to as the
“Project” and are depicted on the Site Plan attached as Exhibit A-1 to this
Lease and hereby made a part hereof.  Tenant shall have the right to use, in
common with others (to the extent not otherwise restricted by this Lease), all
areas and facilities inside or outside the Building and/or within the exterior
boundary line of the Project that are provided and designated by Landlord from
time to time for the general non-exclusive use of Landlord, Tenant and other
occupants of the Project, and their respective employees, suppliers, shippers,
customers, contractors and invitees, including but not limited to the existing
parking areas (to the extent not otherwise restricted by this Lease), loading
and unloading areas, trash areas, roadways, sidewalks, walkways, ramps,
driveways and landscaped areas (the “Common Areas”).  Landlord may add to,
remove and/or eliminate Common Areas from time to time in its sole discretion,
provided Tenant’s use of and access to the Premises is not materially adversely
affected and Tenant’s parking rights hereunder are not materially
diminished.  The exterior walls of the Building and any space in the Premises
and the ceiling plenum used for shafts, stacks, pipes, conduits, ducts, electric
or other utilities, or other Building facilities, and the use thereof and access
thereto through the Premises for the purposes of operation, maintenance and
repairs, are reserved to Landlord.

(b)          The rentable square footage of the Premises and of the Building has
been determined in accordance with BOMA’s Standard Method of Measuring Floor
Area in Office Buildings (ANSI/BOMA Z.65.1–1996), as modified by Landlord for
uniform use in the Building.  Tenant’s Percentage Share has been determined by
taking the quotient arrived at by dividing the number of rentable square feet of
the Premises provided in the Basic Lease Information by the number of the
rentable square feet of the Building determined in accordance with the BOMA
Standard, and multiplying said quotient by 100.  Tenant acknowledges that the
rentable square footage under the BOMA Standard includes a common area “load
factor” added to the usable square footage of the Premises.  The square footage
figures contained in this Lease shall be final and binding on the parties.

(c)          So long as no uncured Event of Default (as defined in Paragraph 17
below) has been declared hereunder and subject to the Project Rules (as defined
in Paragraph 8), Tenant shall be entitled to the non-exclusive use of a number
of automobile parking spaces equal to Tenant’s Percentage Share located in those
portions of the Common Areas designated from time to time by Landlord for
parking (the "Parking Facility").  Tenant shall not use more parking spaces than
said number.  Said parking spaces may be used for parking (provided, overnight
parking is expressly precluded) of Tenant’s trucks, trailers and full-size
passenger automobiles.  Tenant shall not permit or allow any vehicles that
belong to or are controlled by Tenant or Tenant's employees, suppliers,
shippers, customers, contractors or invitees to be loaded, unloaded, or parked
in areas other than those designated by Landlord for such activities.  If Tenant
permits or allows any of the prohibited activities described in this Lease or in
any Project Rules then in effect, Landlord shall have the right, without notice,
in addition to such other rights and remedies that it may have, to remove or tow
away the vehicle involved and charge the cost to Tenant, which cost shall be
immediately payable by Tenant upon demand by Landlord.  Neither Landlord nor any
of Landlord’s employees, agents or

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representatives shall have any liability or responsibility to Tenant or any
other party parking in the Parking Facility for any loss or damage that may be
occasioned by or may arise out of such parking, including, without limitation,
loss of property or damage to person or property from any cause whatsoever,
other than to the extent arising from the gross negligence or willful misconduct
of Landlord.  Tenant, in consideration of the parking privileges hereby
conferred on Tenant, waives any and all liabilities against Landlord and any of
Landlord’s employees, agents and representative, by reason of occurrences in the
Parking Facility and the driveway access and entrances thereto, other than to
the extent arising from the gross negligence or willful misconduct of Landlord
or any of Landlord’s employees, agents or representatives.  From time to time,
Tenant may perform testing activities for unmanned aircraft vehicles and
components thereof in the parking lot, but shall not use parking spaces in
excess of the amount allocated to Tenant in this Section 2(c).  Tenant shall
provide Landlord and other tenants with 2 business days’ prior written notice
prior to any testing being performed in the parking lot and will minimize
impacts to other tenants due to testing activity, and any such activity shall be
subject to reasonable rules and restrictions as may be required by Landlord,
which rules and restrictions shall be mutually agreed upon by Landlord and
Tenant prior any such testing.

(d)          Landlord shall have the right, in Landlord’s sole discretion, from
time to time, to:

(i)           Make changes to the Common Areas, including, without limitation,
changes in the location, size, shape and appearance thereof, including but not
limited to the driveways entrances, parking spaces, parking areas loading and
unloading areas, ingress, egress, direction of traffic, landscaped areas and
walkways;

(ii)          Close temporarily any of the Common Areas for maintenance purposes
so long as reasonable access to the Premises remains available;

(iii)         Designate other land and improvements outside the boundaries of
the Project to be a part of the Common Areas, provided that such other land and
improvements have a reasonable and functional relationship to the Project;

(iv)         Add additional buildings and improvements to the Common Areas;

(v)          Use the Common Areas while engaged in making additional
improvements, repairs or alterations to the Project, or any portion thereof; and

(vi)         Perform such other acts and make such other changes in, to or with
respect to the Common Areas and Project as Landlord may, in the exercise of
sound business judgment deem to be appropriate.

3.            TERM.

(a)          The term of this Lease (“Term”) shall be for the period identified
in the Basic Lease Information.  The Term shall commence on the Commencement
Date, and shall end on the Expiration Date.

(b)          Landlord and Tenant each shall, promptly after the Commencement
Date has been determined, execute and deliver to the other a written statement
in the form attached hereto as Exhibit E (the “Commencement Letter”), setting
forth (i) the Commencement Date and the Expiration Date; and (ii) the other
matters referenced in such Commencement Letter.  The enforceability of this
Lease shall not be affected and the term of this Lease shall commence on the
Commencement Date and end on the Expiration Date, whether or not the
Commencement Letter is executed.

4.            DELIVERY OF POSSESSION.

(a)          Upon Substantial Completion of the Landlord’s Work as set forth in
Exhibit D hereto, Landlord shall deliver possession of the Premises to Tenant,
and Tenant shall accept the same, in its “AS IS” condition, subject to all
recorded matters and governmental regulations, and without any warranties of any
kind, including without limitation, any warranty of condition, or compliance
with law, or that the Premises or any Building Systems (as defined in Paragraph
11(a) below) are suitable for Tenant’s use; provided, however, that
notwithstanding the foregoing, Landlord shall warrant the Landlord’s Work for a
period of six (6) months after the Commencement Date, and Landlord warrants
that, upon delivery of possession of the Premises, that the Premises and
restrooms are in compliance with the Federal Americans with Disabilities Act and
applicable municipal code requirements.

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Tenant agrees that, except for the Landlord’s Work set forth in Exhibit D and as
otherwise set forth in this Section 4(a), Landlord has no obligation and has
made no promise to alter, remodel, improve, or repair the Premises or any part
thereof or to repair, bring into compliance with Applicable Laws, or improve any
condition existing in the Premises as of the Commencement Date.  Tenant agrees
that neither Landlord nor any of Landlord’s employees or agents has made any
representation or warranty as to the present or future suitability of the
Premises for the conduct of Tenant’s business therein.  Any improvements or
personal property located in the Premises are delivered without any
representation or warranty from Landlord, either express or implied, of any
kind, including merchantability or suitability for a particular purpose.  Tenant
acknowledges that the Premises has not undergone inspection by a Certified
Access Specialist (CASp), as defined in California Civil Code Section 55.52,
and, except as set forth above in this Section 4(a), Landlord is not providing
any representations or warranties regarding whether the Premises, the Common
Area or any other portion of the Project meets all applicable
construction-related accessibility standards.  Landlord hereby notifies Tenant
pursuant to California Civil Code Section 1938 that:  “A Certified Access
Specialist (CASp) can inspect the subject premises and determine whether the
subject premises comply with all of the applicable construction-related
accessibility standards under state law.  Although state law does not require a
CASp inspection of the subject premises, the commercial property owner or lessor
may not prohibit the lessee or tenant from obtaining a CASp inspection of the
subject premises for the occupancy or potential occupancy of the lessee or
tenant, if requested by the lessee or tenant.  The parties shall mutually agree
on the arrangements for the time and manner of the CASp inspection, the payment
of the fee for the CASp inspection, and the cost of making any repairs necessary
to correct violations of construction-related accessibility standards within the
premises.”  Landlord and Tenant hereby agree that notwithstanding anything in
this Lease or California Civil Code Section 1938 to the contrary, (i) Tenant
may, at its option and at its sole cost, cause a CASp to inspect the Premises
and determine whether the Premises complies with all of the applicable
construction-related accessibility standards under state law, (ii) the parties
shall mutually coordinate and reasonably approve of the timing of any such CASp
inspection so that Landlord may, at its option, have a representative present
during such inspection, and (iii) if Tenant elects to perform a CASp inspection:
(A) Tenant shall ensure that such inspection performed shall be limited solely
to the Premises and not the Common Areas, (B) such inspection shall be performed
at Tenant’s sole cost and expense, (C) if the CASp inspection finds the Premises
(or any other property covered by the inspection) to be non-compliant, then
Tenant shall remedy any violations found to exist at its sole cost and expense
and in accordance with the terms and conditions of this Lease by no later than
the date that is sixty (60) days after the results of the CASp inspection are
received regardless of whether or not Tenant terminates this Lease pursuant to
any termination right set forth herein, if any, and (D) Tenant shall be
responsible for obtaining and providing to Landlord a copy of the CASp
compliance certificate confirming the correction of any such violations noted in
the CASp inspection report.

(b)          In the event of the inability of Landlord to deliver possession of
the Premises at the time for the commencement of the Term for any reason
whatsoever, neither Landlord nor its agents shall be liable for any damage
caused thereby, nor shall this Lease thereby become void or voidable, nor shall
the Term be in any way extended, but in such event Tenant shall not be liable
for any rent until such time as Landlord can deliver possession.  Landlord shall
use commercially reasonable efforts to deliver to Tenant access to the warehouse
portion of the Premises on or before April 30, 2018.  Notwithstanding anything
to the contrary in this Lease, if Landlord does not deliver access to the
warehouse portion of the Premises by April 30, 2018, and such delay is not
attributable to force majeure or Tenant Delay (as defined in Exhibit D, Section
4),  then Tenant shall have the option to terminate this Lease by providing
thirty (30) days prior written notice thereof to Landlord; provided that if
Landlord delivers access to of the warehouse portion of the Premises prior to
expiration of such thirty (30) day notice period, then such termination election
shall be deemed rescinded and null, void and of no force or effect.

5.            RENT.

(a)          Tenant shall pay to Landlord the following amounts as rent for the
Premises:

(i)           During the Term, commencing on the Commencement Date, Tenant shall
pay to Landlord, as base monthly rent, the respective amounts of monthly rent
specified in the Basic Lease Information (the “Base Rent”).  If the Commencement
Date should occur on a day other than the first day of a calendar month, or if
the Expiration Date should occur on a day other than the last day of a calendar
month, then the Base Rent for such fractional month shall be prorated upon a
daily basis based upon a thirty (30) day month.  Base Rent is due and payable
monthly, in advance, on the first day of each calendar month, except that Tenant
shall pay to Landlord an amount equal to Seventy One Thousand Three Hundred
Fifteen and 25/100 Dollars ($71,315.25), as prepaid Base Rent to be applied
(until exhausted) against the first obligation of Tenant to pay Base Rent under
this Lease.  If the

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Commencement Date occurs on a day other than the first day of a calendar month,
Base Rent for the period from the Commencement Date through the end of said
calendar month shall be due and payable on the Commencement Date, and the Base
Rent payable upon execution of this Lease shall be credited against the Base
Rent due for the First Month as of the first day of the First Month.

(ii)          During each calendar year or part thereof, Tenant shall pay to
Landlord, as additional monthly rent, Tenant’s Percentage Share (as provided in
the Basic Lease Information) of all Operating Expenses (as defined in Exhibit B
hereto) paid or incurred by Landlord in such calendar year or part
thereof.  Payments on account of Tenant’s Percentage Share of Operating
Expenses, determined in accordance with Paragraph 7(a), are due and payable
monthly together with the payment of Base Rent.

(iii)         During each calendar year or part thereof, Tenant shall pay to
Landlord, as additional monthly rent, Tenant’s Percentage Share of all Property
Taxes (as defined in Exhibit B hereto) paid or incurred by Landlord in such
calendar year or part thereof; provided, however, that Tenant shall not be
required to pay any Property Taxes incurred or paid by Landlord during the Term
that relate to a period prior to the Commencement Date.  Payments on account of
Tenant’s Percentage Share of Property Taxes, determined in accordance with
Paragraph 7(a), are due and payable monthly together with the payment of Base
Rent.

(iv)         Throughout the Term, Tenant shall pay, as additional rent, all
other amounts of money and charges required to be paid by Tenant under this
Lease, whether or not such amounts of money or charges are designated
“additional rent.”  As used in this Lease, “rent” shall mean and include all
Base Rent, additional monthly rent as described in Paragraphs 5(a)(ii) and (iii)
above, and any other additional amount payable by Tenant in accordance with this
Lease.

(b)          Rent shall be paid to Landlord in lawful money of the United States
of America at the following address: Nearon Property Management, 101 Ygnacio
Valley Road, Suite 450, Walnut Creek, California 94596, Attn: Property Manager,
or at such other place as Landlord may designate in writing in advance, free
from all claims, demands, or set-offs against Landlord of any kind or character
whatsoever.

(c)          Adjustments in Base Rent specified in the Basic Lease Information
shall be determined on a Lease Year basis.  As used herein, the term “Lease
Year” shall mean a twelve (12) calendar month period; provided, however that the
first Lease Year of the Term shall, except as may otherwise be expressly
provided in this Lease, commence on the Commencement Date and run through the
day immediately preceding the first day of the month in which the one year
anniversary of the Commencement Date occurs, with each successive Lease Year
specified in the Basic Lease Information to run for a period of the next
succeeding twelve (12) months, other than and except for the final Lease Year
specified in the Base Lease Information which shall commence as hereinabove
provided and which shall run through the Expiration Date notwithstanding the
actual number of days included in said period.

(d)          Notwithstanding the provisions of Paragraph 5(a) above, subject to
the terms of this Paragraph 5(d), and conditioned on no Event of Default (as
defined in Paragraph 17 below) having been declared under this lease because of
a monetary default by Tenant, Base Rent shall be entirely abated for each of the
first (1st), second (2nd) and third (3rd) complete calendar months of the Term
(the foregoing months being the “Rent Abatement Period”).  For the avoidance of
doubt, the collective amount of Base Rent that shall be abated under the first
sentence of this Paragraph 5(d) shall be Two Hundred Thirteen Thousand Nine
Hundred Forty Five and 75/100 Dollars ($213,945.75)  (the “Abated Rent”).   
Notwithstanding the foregoing, if an Event of Default shall at any time be
declared under this Lease because of a monetary default by Tenant, then (i) the
foregoing rent abatement shall be deemed revoked, prospectively, as to any
period remaining in the Rent Abatement Period, (ii) if Landlord elects to
terminate this Lease as a result of such Event of Default then the unamortized
portion of the Abated Rent (i.e., for purposes of such calculation,  Abated Rent
shall be amortized on a straight-line basis over the initial Term of the Lease
and Tenant shall be credited with having paid the monthly amortized portion of
Abated Rent on a monthly basis so that all such Abated Rent shall be credited as
paid in full on the expiration of the initial Term of this Lease) shall become
immediately due and payable upon demand by Landlord, and without impairing any
other rights and remedies of Landlord resulting from said Event of Default and
(ii) notwithstanding anything to the contrary contained in the Basic Lease
Information, the Base Rent payable by Tenant during the Rent Abatement Period
shall be deemed to be Seventy One Thousand Three Hundred Fifteen and 25/100
Dollars ($71,315.25 ) per month.

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6.            USE.

(a)          The Premises shall be used for the purposes identified in the Basic
Lease Information (except as limited by Paragraph 6(b) below), and, subject to
the terms of this Lease, uses incidental thereto, and shall be used for no other
purpose without the prior written consent of Landlord, which consent, provided
the same is consistent with the character of the Project, shall not be
unreasonably withheld, but shall otherwise be in the sole discretion of
Landlord.  Notwithstanding anything in the foregoing to the contrary, in the
case of public unrest, a general state of emergency or other circumstances
rendering such action advisable in Landlord’s opinion, Landlord reserves the
right to prevent access to the Building during the continuance of the same by
such action as Landlord may deem appropriate, including closing doors and such
action shall not relieve Tenant of, or result in any abatement of, any
obligations of Tenant under this Lease.

(b)          Tenant shall not use the Premises or permit anything to be done in
or about the Premises or the Building or any other portion of the Project which
will in any way conflict with any present or future law, statute, ordinance,
code, rule, regulation, requirement, license, permit, certificate, judgment,
decree, order or direction of any present or future governmental or
quasi-governmental authority, agency, department, board, panel or court
(singularly and collectively “Applicable Laws”).  Landlord makes no
representation or warranty that the Permitted Use as set forth in the Basic
Lease Information is in compliance with Applicable Laws which govern the
Premises or Project, including without limitation any zoning regulations.
 Tenant shall, at its expense, promptly comply with all Applicable Laws
(including, without limitation, the Federal Americans with Disabilities Act (as
it affects Tenant’s operations within the Premises), and with the requirements
of any board of fire insurance underwriters or other similar bodies now or
hereafter constituted, relating to or affecting the condition, use or occupancy
of the Premises.  It is the intent of the parties to allocate to Tenant the cost
of compliance of any and all Applicable Laws, regardless of the existing
condition of the Premises, the cost of compliance or the foreseeability of the
enactment or application of the Applicable Laws to the
Premises.  Notwithstanding the foregoing, Tenant shall not be required to make
structural changes to the Premises unless they arise or are required because of
or in connection with Tenant’s specific use of the Premises, or the type of
business conducted by Tenant in the Premises, or Tenant’s Alterations, or
Tenant’s acts or omissions.

(c)          Supplementing the provisions of Paragraph 6(b) above, Tenant shall
not use or permit the generation, possession, storage, use, transportation, or
disposal of any Hazardous Substances in, on or from the Premises, other than the
use of any ordinary and customary materials in minimal quantities reasonably
required to be used by Tenant in the normal course of Tenant’s business as
permitted under the terms of Paragraph 6(a) above, and so long as such use does
not expose the Premises, the Building or any other part of the Project or
neighboring properties to any meaningful risk of contamination or damage or
expose Landlord to any liability therefor.  The term “Hazardous Substances” as
used in this Lease shall mean any product, substance, chemical, material or
waste whose presence, nature, quantity and/or intensity of existence, use,
manufacture, disposal, transportation, spill, release or effect, either by
itself or in combination with other materials expected to be on the Premises, is
either: (i) potentially injurious to the public health, safety or welfare, the
environment or the Premises, or (ii) regulated or monitored by any federal,
state or local governmental or quasi-governmental authority, agency, department,
board, panel or court under any Applicable Laws.  In addition to, and without
limiting, the obligation of Tenant to indemnify Landlord pursuant to this Lease,
Tenant shall, at its sole cost and expense, promptly take all actions required
by any federal, state or local governmental agency or political subdivision, or
that Landlord deems necessary for Landlord to make full economic use of the
Premises or any portion of the Building, which requirements or necessity arises
from the handling by Tenant or any employee, contractor, agent, or invitee of
Hazardous Substances upon, about, above or beneath the Premises or any portion
of the Building, including, without limitation, taking all actions necessary to
restore the Premises or any portion of the Building to the condition existing
prior to the introduction of Hazardous Substances, notwithstanding any less
stringent standards or remediation allowable under Applicable Laws.  Tenant
shall nevertheless obtain Landlord’s written approval prior to undertaking any
actions required by this Section, which approval shall not be unreasonably
withheld so long as such actions would not potentially have a material adverse
long-term or short-term effect on the Premises or any portion of the
Building.  Landlord shall have the right at all reasonable times to inspect the
Premises and to conduct tests and investigations to determine whether Tenant is
in compliance with the foregoing provisions, the costs of all such inspections,
tests and investigations to be borne by Landlord unless a noncompliance is
discovered, in which event in addition to all other remedies hereunder and at
law, Tenant shall reimburse Landlord for the costs of all such inspections,
tests and investigations.

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7.            OPERATING EXPENSES.

The additional monthly rent payable pursuant to Paragraphs 5(a)(ii) and (iii)
hereof shall be calculated and paid in accordance with the following procedures:

(a)          On or before the first day of each calendar year during the Term,
or as soon thereafter as practicable, Landlord shall give Tenant written notice
of Landlord’s reasonable estimate of the amounts payable by Tenant under
Paragraphs 5(a)(ii) and (iii) hereof for the ensuing calendar year.  On or
before the first day of each month during such ensuing calendar year, Tenant
shall pay to Landlord one-twelfth (1/12th) of such estimated amounts.  If such
notice is not given for any calendar year, Tenant shall continue to pay on the
basis of the prior year’s estimate until the month after such notice is given,
and subsequent payments by Tenant shall be based on Landlord’s current estimate,
adjusted, as determined by Landlord, so that the subsequent monthly installments
payable by Tenant hereunder through the end of the calendar year reimburse
Landlord for all amounts payable by Tenant under Paragraphs 5(a)(ii) and (iii)
hereof.  If at any time it appears to Landlord that the amounts payable under
Paragraphs 5(a)(ii) and (iii) hereof for the current calendar year will vary
from Landlord’s estimate, Landlord may, by giving written notice to Tenant,
revise Landlord’s estimate for such year, and subsequent payments by Tenant for
such year shall be based on such revised estimate.

(b)          As soon after such date as practicable, Landlord shall give Tenant
a written statement of the amounts payable under Paragraphs 5(a)(ii) and (iii)
hereof for such calendar year certified by Landlord.  If such statement shows an
amount owing by Tenant that is less than the estimated payments for such
calendar year previously made by Tenant, provided no Event of Default shall then
exist under this Lease or if this Lease has previously been terminated or the
Term expired, no Event of Default shall have existed under this Lease as of said
termination or expiration date, Landlord shall, at its option, either refund or
credit the excess to Tenant within thirty (30) days of the date of such
statement.  If such statement shows an amount owing by Tenant that is more than
the estimated payments for such calendar year previously made by Tenant, Tenant
shall pay the deficiency to Landlord within thirty (30) days after delivery of
such statement and payment of such deficiency shall be a condition precedent to
Tenant’s rights to inspect Landlord’s books pursuant to Paragraph 7(d)
below.  Failure by Landlord to give any notice or statement to Tenant under this
Paragraph 7 shall not waive Landlord’s right to receive, or Tenant’s obligation
to pay, the amounts payable by Tenant under Paragraphs 5(a)(ii) and (iii)
hereof.

(c)          If the Term ends on a day other than the last day of a calendar
year, the amounts payable by Tenant under Paragraphs 5(a)(ii) and (iii) hereof
applicable to the calendar year in which such Term ends shall be prorated
according to the ratio which the number of days in such calendar year to and
including the end of the Term bears to three hundred sixty (360).  Termination
of this Lease shall not affect the obligation of Tenant pursuant to Paragraph
7(b) hereof to be performed after such termination.

(d)          So long as no uncured Event of Default has occurred hereunder, and
not more often than once per calendar year, Tenant shall have the right, at its
sole cost and expense, to inspect the books of Landlord directly relating to
Operating Expenses and Property Taxes, after giving a minimum of fifteen (15)
day’s prior written notice to Landlord.  Tenant shall conduct its inspection of
Landlord’s books during the business hours of Landlord at Landlord’s office
specified on the Basic Lease Information, for the purpose of verifying the
information in such statement.  Tenant shall have no right to copy any of
Landlord’s books or remove such books from the location maintained by
Landlord.  Tenant shall use a certified public accountant with reasonable
experience in reviewing such commercial real property operating expenses and
property taxes to conduct its inspection of Landlord’s books and in no event
shall Tenant have the right to pay such accountant on a contingency fee
basis.  If Tenant shall have availed itself of its right to inspect the books
and records, and whether or not Tenant disputes the accuracy of the information
set forth in such books and records, Tenant shall nevertheless pay the amount
set forth in Landlord’s statement and continue to pay the amounts required by
the provisions of Paragraph 7(b), pending resolution of said dispute.  Any
default in the payment of such charges by Tenant shall be deemed an Event of
Default (as hereinafter defined) under this Lease.  If Tenant’s inspection of
Landlord’s books reveals that the aggregate amount of Operating Expenses paid or
incurred by Landlord in the calendar year being reviewed, plus the aggregate
amount of Property Taxes paid or incurred by Landlord in the calendar year being
reviewed (collectively, the "Reviewed Expenses") are overstated, then Landlord
shall within thirty (30) days after the completion of the inspection elect to
either reimburse or credit Tenant for any and all overcharges; or if the
Reviewed Expenses for any calendar year are not overstated, then Tenant shall
within thirty (30) days after the completion of the inspection pay to Landlord
the amount (if any) by which Tenant has underpaid Tenant’s Share of Operating
Expenses and/or Property Taxes for the

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calendar year being reviewed.  If Tenant’s inspection of Landlord’s books
discloses a liability for a refund in excess of the greater of (i) five percent
(5%) of Tenant’s Percentage Share of the Operating Expenses and Property Taxes
previously reported, and (ii) Five Thousand and 00/100 Dollars ($5,000.00), the
reasonable cost of such inspection (not to exceed $5,000) shall be borne by
Landlord; otherwise the cost of such inspection shall be paid by Tenant.  If
Tenant fails to notify Landlord of Tenant’s election to inspect Landlord’s books
within ninety (90) days of Tenant’s receipt of Landlord’s statement, Landlord’s
statement shall be deemed final and binding on Tenant and Tenant shall have no
further right to inspect Landlord's books with respect to the Operating Expenses
and Property Taxes for the calendar year for which the Landlord's statement
pertains.

8.            RULES AND REGULATIONS.

Tenant shall faithfully observe and comply with the Rules and Regulations
attached to this Lease as Exhibit C and made a part hereof, and such other
reasonable rules and regulations as Landlord may from time to time adopt for the
safety, care and cleanliness of the Project, the facilities thereof, or the
preservation of good order therein (collectively, the “Project
Rules”).  Landlord reserves the right from time to time in its sole discretion
to make all reasonable additions and modifications to the Project Rules.  Any
additions and modifications to the Project Rules shall be binding on Tenant when
delivered to Tenant.  Landlord shall not be liable to Tenant for violation of
any such Project Rules, or for the breach of any covenant or condition in any
lease, by any other tenant in the Building.  In the event of any conflict
between this Lease and the Project Rules, the terms of this Lease shall
govern.  A waiver by Landlord of any rule or regulation for any other tenant
shall not constitute nor be deemed a waiver of the rule or regulation for this
Tenant.  Landlord shall enforce the Project Rules against all tenants in a
uniform and non-discriminatory manner.

9.            ASSIGNMENT AND SUBLETTING.

(a)          Tenant shall not assign, mortgage or hypothecate this Lease, or any
interest therein, or permit the use of the Premises by any person or persons
other than the Tenant, or sublet the Premises, or any part thereof, without the
prior written consent of Landlord, which consent, subject to Landlord’s right of
termination in accordance with Paragraph 9(b) below, shall not be unreasonably
withheld.  For purposes of this Paragraph 9, an assignment shall not include an
assignment for security purposes, which shall only be permitted with the prior
consent of Landlord in its sole and absolute discretion.  Consent to any such
assignment or sublease shall not operate, as a waiver of the necessity for
consent to any subsequent assignment or sublease, and the terms of such consent
shall be binding upon any person holding by, under or through Tenant.

(b)          If Tenant desires to assign its interest in this Lease or to
sublease all or any part of the Premises, Tenant shall notify Landlord in
writing at least thirty (30) days in advance of the proposed transaction.  This
notice shall be accompanied by: (i) a statement setting forth the name and
business of the proposed assignee or subtenant; (ii) a copy of the proposed form
of assignment or sublease (and any collateral agreements) setting forth all of
the material terms and the financial details of the sublease or assignment; and
(iii) financial statements and any other information concerning the proposed
assignment or sublease which Landlord may reasonably request.  If Tenant
proposes to assign this Lease or sublet any portion of the Premises, Landlord
shall have the right, in its sole and absolute discretion, to terminate this
Lease in the event of a proposed assignment, or to terminate the effectiveness
of this Lease with respect to any portion of the Premises proposed by Tenant for
sublease, on written notice to Tenant within thirty (30) days after receipt of
Tenant’s notice and the information described above or the receipt of any
additional information requested by Landlord.  If Landlord elects to terminate
this Lease, in the event of a proposed assignment, or to terminate the
effectiveness of this Lease with respect to any portion of the Premises proposed
by Tenant for sublease, this Lease, or the effectiveness of this Lease with
respect to any portion of the Premises proposed by Tenant for sublease, shall
terminate as of the effective date of the proposed assignment or commencement of
the term of the proposed sublease as set forth in Tenant’s notice, and Landlord
shall have the right (but no obligation) to enter into a direct lease with the
proposed assignee or subtenant.  Tenant may withdraw its request for Landlord’s
consent at any time prior to, or within seven (7) days after, Landlord delivers
a written notice of termination, whereupon Landlord’s election to terminate
shall be null and void.

(c)          If Landlord elects not to terminate this Lease, in the event of a
proposed assignment, or elects not to terminate the effectiveness of this Lease
with respect to any portion of the Premises proposed by Tenant for sublease,
pursuant to Paragraph 9(b) above, Landlord shall not unreasonably withhold its
consent to an assignment or subletting.

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(d)          Each permitted assignee, transferee or subtenant, other than
Landlord, shall assume and be deemed to have assumed this Lease and shall be and
remain liable jointly and severally with Tenant for the payment of the rent and
for the due performance or satisfaction of all of the provision, covenants,
conditions and agreements herein contained on Tenant’s part to be performed or
satisfied.  Regardless of Landlord’s consent, no subletting or assignment shall
release or alter Tenant’s obligation or primary liability to pay the rent and
perform all other obligations under this Lease.  No permitted assignment or
sublease shall be binding on Landlord unless such assignee, subtenant or Tenant
shall deliver to Landlord a counterpart of such assignment or sublease which
contains a covenant of assumption by the assignee or subtenant, but the failure
or refusal of the assignee or subtenant to execute such instrument of assumption
shall not release or discharge the assignee or subtenant from its liability as
set forth above.

(e)          Notwithstanding the foregoing provisions of this Section 9, the
assignment or subletting by Tenant of all or any portion of this Lease or the
Premises to (i) a parent or subsidiary of Tenant, or (ii) any person or entity
which controls, is controlled by or under common control with Tenant, or (iii)
any entity which purchases all or substantially all of the assets of Tenant, or
(iv) any entity into which Tenant is merged or consolidated (all such persons or
entities described in (i), (ii), (iii) and (iv) being sometimes hereinafter
referred to as "Affiliates" or a “Permitted Transferee” and any such assignment
or subletting being a “Permitted Transfer”) shall not be subject to Landlord's
prior consent or right to terminate in Subsection 9(b) above or to receive any
share of consideration pursuant to Subsection 9(f) below, provided that:

(1)          any such Affiliate was not formed as a subterfuge to avoid the
obligations of this Section 21;

(2)          Tenant gives Landlord notice of any such assignment or sublease to
an Affiliate at least ten (10) days prior to the effective date of such
assignment or sublease;

(3)          the successor of Tenant and Tenant have as of the effective date of
any such assignment or sublease a tangible net worth and net income, in the
aggregate, computed in accordance with generally accepted accounting principles
(but excluding goodwill as an asset), which is sufficient to meet the Tenant's
obligations under this Lease;

(4)          any such assignment or sublease shall be subject and subordinate to
all of the terms and provisions of this Lease, and such assignee or sublessee
shall assume, in a written document reasonably satisfactory to Landlord and
delivered to Landlord upon or prior to the effective date of such assignment or
sublease, all the obligations of Tenant under this Lease with respect to the
Premises which is the subject of such Permitted Transfer (other than the amount
of Base Rent or Operating Expenses payable by Tenant with respect to a
sublease); and

(5)          Tenant shall remain fully liable for all obligations to be
performed by Tenant under this Lease.

(f)           Any notice by Tenant to Landlord pursuant to this Paragraph 9 of a
proposed assignment or sublease shall be accompanied by a payment of One
Thousand Dollars ($1,000) as a non-refundable fee for the processing of Tenant’s
request for Landlord’s consent.  In addition to said fee, Tenant shall reimburse
Landlord for reasonable attorneys’ fees incurred by Landlord in connection with
such review and the preparation of documents in connection therewith.  Tenant
shall pay to Landlord monthly on or before the first (1st) of each month fifty
percent (50%) of the rent or other consideration received from such assignee(s)
or subtenant(s) over and above the concurrent underlying rent payable by Tenant
to Landlord for that portion of the Premises being assigned or sublet, and after
deduction for the amortized portion of the reasonable expenses actually paid by
Tenant to unrelated third parties for brokerage commissions, legal fees, tenant
improvements to the Premises, or design fees incurred as a direct consequence of
the assignment or sublease.  Tenant shall furnish Landlord with a true signed
copy of such assignment(s) or sublease(s) and any supplementary agreements or
amendments thereto, within five (5) days after their respective execution.

10.          LIABILITY OF LANDLORD.

It is expressly understood and agreed that the obligations of Landlord under
this Lease shall be binding upon Landlord and its successors and assigns and any
future owner of the Building only with respect to events occurring during its
and their respective ownership of the Building.  In the event of any conveyance
of title to the Project (or any portion thereof in which the Building is
located), then the grantor or transferor shall be relieved of all liability with
respect to Landlord’s obligations to be performed under this Lease after the
date of such conveyance.

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In addition, Tenant agrees to look solely to Landlord’s interest in the Building
and the rent and other income therefrom and any casualty or condemnation
proceeds actually received with respect to the Building for recovery of any
judgment against Landlord arising in connection with this Lease, it being agreed
that neither Landlord nor any successor or assign of Landlord nor any future
owner of the Building, nor any partner, shareholder, or officer of any of the
foregoing shall ever be personally liable for any such judgment.

11.          MAINTENANCE AND REPAIRS.

(a)          Subject to reimbursement pursuant to Paragraph 7 hereof, (i)
Landlord shall maintain and repair the Common Areas, the roof, structural and
exterior elements of the Building and the mechanical, electrical,
telecommunication, vertical transportation, plumbing, and other equipment,
facilities and systems located within or serving the Premises or the Project
(collectively, the “Building Systems”), and keep such areas, elements and
systems in good order and condition, consistent with the standards of other
comparable buildings in the vicinity of the Building; and (ii) Landlord shall
repair and maintain the heating, ventilating and air conditioning system (the
“HVAC”) exclusively servicing the Premises, including contracting with a service
company for the service and maintenance thereof.  In the event that the HVAC
requires replacement during the Term of this Lease, as determined by Landlord in
its reasonable discretion, the cost of such replacement HVAC shall be borne
solely by Tenant; provided, however, the cost of replacement HVAC will be
amortized over its useful life in accordance with generally accepted accounting
principles and Tenant shall only be liable for that portion of the cost that is
payable during the Term of this Lease, as may be extended.  Subject to
Subsection 14(e) below, any damage in or to any such areas, elements or systems
caused by Tenant or any agent, officer, employee, contractor, licensee or
invitee of Tenant shall be repaired by Landlord at Tenant’s expense and Tenant
shall pay to Landlord, upon billing by Landlord, as additional rent, the cost of
such repairs incurred by Landlord.

(b)          Tenant shall, at all times during the Term of this Lease and at
Tenant’s sole cost and expense, maintain and repair the Premises and every part
thereof and all equipment (including, without limitation, any kitchen
equipment), and any fixtures and improvements therein, and keep all of the
foregoing clean and in good working order and operating condition, ordinary wear
and tear and damage thereto by fire or other casualty excepted.  All repairs and
replacements made by or on behalf of Tenant shall be made and performed at
Tenant’s cost and expense and at such time and in such manner as Landlord may
reasonably designate, by contractors or mechanics reasonably approved by
Landlord and so that the same shall be at least equal in quality, value,
character and utility to the original work or installation being repaired or
replaced, normal wear and tear excepted.  Tenant hereby waives all rights under
California Civil Code Section 1941 and all rights to make repairs at the expense
of Landlord or in lieu thereof to vacate the Premises as provided by California
Civil Code Section 1942 or any other law, statute or ordinance now or hereafter
in effect.

(c)          Tenant’s installation of telephone lines, cables, and other
electronic telecommunications services and equipment shall be subject to the
terms and conditions of Paragraph 13 of this Lease.  Upon the expiration or
earlier termination of this Lease, Tenant shall remove, at its sole cost and
expense, all of Tenant’s telecommunications lines and cabling designated by
Landlord for removal.

(d)          Tenant shall not alter, modify, add to or disturb any
telecommunications wiring or cabling in the Building other than located
exclusively in the Premises, without Landlord’s prior written consent.  By its
acceptance of possession of the Premises, Tenant shall be deemed to have agreed
that the existing number and type of lines designated for service to or
presently serving the Premises, as the case may be, is adequate for Tenant’s
occupancy.  Any and all telecommunications equipment and cabling serving Tenant
and the Premises and connecting to or from the intermediate distribution frame
(“IDF”) shall be located solely in the Premises, and Tenant shall only be
permitted to access the IDF with the prior written consent of Landlord and for
purposes of confirming interconnection with the Building’s riser
facilities.  Landlord reserves the right to limit the number of local exchange
carriers and competitive alternative telecommunications providers (collectively
“TSPs”) having access to the Building’s riser system and infrastructure, to
install a cable distribution/riser management system to which Tenant and all
TSPs shall connect, and to charge TSPs for the use of Landlord’s
telecommunications riser system and infrastructure; provided, however, in all
cases, Landlord will provide Building and riser access to at least one TSP for
dial tone telecommunications service to tenants of the Building.

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12.          SERVICES.

(a)          Tenant shall make arrangements directly with the applicable utility
companies for, and shall pay directly for, all water, gas, heat, light, power,
telephone, broadband or cable, security, alarm and other utilities and services
supplied to the Premises or to Tenant, together with any taxes thereon.  If any
such services are not separately metered to the Premises, Tenant shall pay a
reasonable proportion to be determined by Landlord of all charges jointly
metered with other premises in the Building.

(b)          Tenant shall not make connection to utilities except by or through
existing outlets and shall not install or use machinery or equipment in or about
the Premises that uses water, lighting or power, or otherwise suffer or permit
any act, that causes extra burden upon the utilities or any Building services
over that consumed or used by a general industrial tenant in the Building.
Landlord may require Tenant to reimburse Landlord for any excess expenses or
costs that may arise out of a breach of this subparagraph by Tenant.  Landlord
may, in its sole discretion, install at Tenant’s expense supplemental equipment
and/or separate metering applicable to Tenant’s excess usage or loading.

(c)          Tenant acknowledges that Landlord does not provide an attendant, or
access control or screening services at the Project, and that access to the
Building during other than business hours may be restricted by “card-key” access
through identification cards initially given by Landlord to Tenant.  Tenant
shall be solely responsible for the distribution and collection of Building
access cards to current and former employees, and shall not distribute such
cards to contractors, vendors and other invitees.  Responsibility for developing
access control and employee and visitor screening procedures and policies with
respect to the Premises is delegated solely to Tenant.

(d)          Tenant shall, at Tenant’s sole cost and expense, provide janitorial
services to the Premises.  All janitorial services shall be of a standard that
is substantially equivalent to the services provided in similar industrial
buildings in the City of Moorpark.

(e)          Subject to Landlord’s provision of janitorial services and waste
removal for the Common Areas, Tenant shall provide for any necessary additional
garbage, waste and refuse removal from the Premises at its sole cost and
expense.

(f)           There shall be no abatement of rent and Landlord shall not be
liable in any respect whatsoever for the inadequacy, stoppage, interruption or
discontinuance of any utility or service due to riot, strike, labor dispute,
breakdown, accident, repair, in cooperation with governmental request or
directions, or any other cause whatsoever, unless caused solely by the gross
negligence or willful misconduct of Landlord or its employees or agents.  Any
interruption or discontinuance of service shall not be deemed an eviction or
disturbance of Tenant’s use and possession of the Premises, or any part thereof,
nor shall it render Landlord liable to Tenant for any injury, loss or damage by
abatement of rent or otherwise, nor shall it relieve Tenant from performance of
Tenant’s obligations under this Lease.  Landlord reserves the right, without
liability to Tenant, to limit, restrict or exclude access to the Building or
portions of the Project under circumstances that would not otherwise constitute
a casualty subject to Paragraph 15, and to otherwise reduce or disrupt services
to the Building due to causes beyond the control of Landlord, including, without
limitation, evacuation or damage to any surrounding areas or nearby structures
(even when there is no physical damage to the Building), the presence of
biological or other airborne agents in the Building, or instances of public
excitement or unrest. Landlord shall not be liable to Tenant for interference
with Tenant’s use and enjoyment of the Premises as a consequence of such lack of
access or services, and any such event shall be treated in the same manner as a
utility interruption under this Paragraph 12(d).  Notwithstanding anything in
the foregoing to the contrary, if there is an interruption of utility services
that results in Tenant’s inability to reasonably use the Premises (and Tenant
does not use the Premises) for more than three (3) consecutive business days,
and such interruption results from the gross negligence or misconduct of
Landlord or its contractors, then, commencing at the expiration of such three
(3) business day period, then the Base Rent and additional rent shall be abated
with respect to the affected portion of Tenant’s Premises from the date of such
interruption until the earlier of (i) such services have been restored, and (ii)
Tenant commences use of the Premises; provided that, if such interruption is
within Landlord’s reasonable control to restore, Landlord shall promptly
commence and diligently pursue such restoration.

13.          ALTERATIONS.

(a)          Except for non-structural and/or cosmetic changes which do not
affect building systems and are not visible from the exterior of the Building
(such as paint and carpet) and which do not exceed  Fifty Thousand Dollars

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($50,000.00) per project (“Minor Alterations”) (and which may be made without
Landlord’s consent), Tenant shall make no alterations, improvements or additions
in or to the Premises or any part thereof (individually and collectively,
“Alterations”) without giving Landlord prior notice of the proposed Alterations
and obtaining Landlord’s prior written consent thereto, which consent, except as
hereinafter provided, shall not be unreasonably withheld or delayed; provided,
however, Landlord may withhold its consent in its sole discretion if any
proposed Alterations would adversely affect any of the structural elements of
the Building, the Building’s electrical, plumbing, heating, telecommunications,
mechanical or life safety systems, or involve any permanently affixed signage
visible from or to be attached to the exterior of the Premises.  Any and all
work by Tenant shall be performed only by contractors approved by Landlord and,
where the prior consent of Landlord is required, upon the approval by Landlord
of fully detailed and dimensioned plans and specifications pertaining to the
work in question, to be prepared and submitted by Tenant at its sole cost and
expense.  Landlord’s approval or consent to any such work shall not impose any
liability upon Landlord, and no action taken by Landlord in connection with such
approval, including, without limitation, attending construction meetings of
Tenant’s contractors, shall render Tenant the agent of Landlord for purposes of
constructing any Alterations.  In addition, Tenant acknowledges and agrees that
no Alterations have been expressly or impliedly required as a condition to the
execution of this Lease for the use of the Premises permitted under this Lease
or in lieu of payment of rent.

(b)          Tenant shall at its sole cost and expense obtain all necessary
approvals and permits pertaining to any Alterations.  Tenant shall be
responsible for any additional alterations and improvements required by law to
be made by Landlord to or in the Building as a result of any alterations,
additions or improvements to the Premises made by or for Tenant.  All
alterations, additions, fixtures (other than trade fixtures) and improvements,
including, but not limited to carpeting, other floor coverings, built-in
shelving, bookcases, paneling and built-in security systems (excluding any
leased system) made in or upon the Premises either by or for Tenant and affixed
to or forming a part of the Premises, shall immediately upon installation become
Landlord’s property free and clear of all liens and encumbrances.  On or before
the expiration or sooner termination of this Lease, Tenant shall remove all
Alterations in accordance with the provisions of Paragraph 28 below.  At the
time Tenant requests Landlord’s approval of the installation or construction of
any Alterations, Landlord shall inform Tenant which Alterations, if any,
Landlord shall require to be removed upon the expiration or any sooner
termination of this Lease.  In the event Landlord fails to so inform Tenant
which Alterations, if any, that Landlord shall require to be removed, then
Landlord shall be deemed to have required that all such Alterations be removed
upon the expiration or any sooner termination of this Lease.

(c)          Tenant shall keep the Premises and the Building and the rest of the
Project free from any mechanics’ liens, vendors liens or any other liens arising
out of any work performed, materials furnished or obligations incurred by
Tenant, and agrees to defend, indemnify and hold harmless Landlord from and
against any such lien or claim or action thereon, together with costs of suit
and reasonable attorneys’ fees incurred by Landlord in connection with any such
claim or action.  Before commencing any work or alteration, addition or
improvement to the Premises which requires Landlord’s consent, Tenant shall give
Landlord at least ten (10) business days’ written notice of the proposed
commencement of work (to afford Landlord an opportunity to post appropriate
notices of non-responsibility).  In the event that there shall be recorded
against the Premises or the Building or any other portion of the Project, or the
property of which the Premises is a part any claim or lien arising out of any
such work performed, materials furnished or obligations incurred by Tenant and
such claim or lien shall not be removed, bonded over or discharged by Tenant
within ten (10) days of written notice from Landlord, Landlord shall have the
right but not the obligation to pay and discharge said lien by bond or otherwise
without regard to whether such lien shall be lawful or correct.  Any reasonable
costs, including attorney’s fees incurred by Landlord, shall be paid by Tenant
within ten (10) days after demand by Landlord.

(d)          Except in the case of Minor Alterations or other alterations which
do not require Landlord’s supervision (which include, but are not limited to,
non-structural and/or cosmetic changes which do not affect building systems),
Tenant shall pay to Landlord a project administration fee equal to three percent
(3%) of the cost of such Alterations to compensate Landlord for the
administrative costs incurred and the Building services provided by Landlord in
the supervision and coordination of the work.

(e)          Notwithstanding anything to the contrary set forth in this Lease,
and subject to the following terms and conditions of this Paragraph 13(e),
Tenant shall have the right to complete any or all of Tenant Improvements (as
defined below), and obtain reimbursement for the costs and expenses incurred by
Tenant in the design, permitting and construction of the Tenant Improvements
(the “TI Reimbursement”). Tenant may also elect to apply all or a

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portion of the TI Reimbursement amount (as set forth in subsection (ii) below)
to Tenant’s reimbursement obligations for the Supplemental Landlord Work under
Exhibit D, Section 1(b).

(i)    “Tenant Improvements” shall include any or all of the following
improvements made on or about the Premises at the direction of Tenant.

(ii)   The TI Reimbursement shall in no event exceed an amount equal to One
Hundred Fifty Thousand and 00/100 Dollars ($150,000.00).

(iii)  For the avoidance of doubt, if any of the Tenant Improvements would be
considered Alterations under this Lease, then Tenant shall comply with the terms
of this Lease related to Alterations, including, without limitation, obtaining
Landlord’s prior written consent thereto (as set forth in Paragraph 13(a)
above).

(iv)  Landlord will disburse the TI Reimbursement for actual Tenant Improvements
within thirty (30) days of Tenant’s completion of such Tenant Improvements, and
delivery of the following material/documents, and provided Tenant is not then in
default under any provision of this Lease and has opened for business in the
Premises:  (i)  a contractors lien waiver and release form from its general
contractor certifying that all Tenant Improvements have been paid for in the
form of a AIA G706A; (ii) two (2) full sets of as built drawings showing all of
the Tenant Improvements in the Premises; (iii) subcontractor’s and materialmen’s
full and complete lien releases for all work performed or materials delivered to
the Premises including conditional and unconditional lien releases from all
persons arguably with mechanic’s lien rights; (iv) unconditional lien releases
upon final payment; (v) Landlord’s certification that Tenant Improvements
complies with the requirements of the Lease and all laws; and (vi) such other
further documentation as reasonably required by Landlord.

(v)   All TI Reimbursement Requests must be received by Landlord on or before
the end of the sixth (6th) month after the Commencement Date (the “TI
Reimbursement Deadline”), and Tenant hereby waives its right to any TI
Reimbursement for which Landlord has not received a TI Reimbursement Request by
the TI Reimbursement Deadline.

(vi)  Notwithstanding anything in this Lease to the contrary, if any Event of
Default (as defined below) has occurred, then, in addition to all other rights
and remedies granted to Landlord pursuant to this Lease, Landlord shall not be
obligated to disburse any amount of the TI Reimbursement to Tenant.

14.          INSURANCE, INDEMNIFICATION AND EXCULPATION.

(a)          Tenant shall, at Tenant’s expense, obtain and keep in force during
the Term of this Lease a policy of Commercial General Liability insurance
utilizing an Insurance Services Office standard form with Broad Form General
Liability Endorsement (CL00011188), or equivalent, in an amount not less than
Two Million Dollars ($2,000,000.00) combined single limit per
occurrence/aggregate of bodily injury and property damage, and shall insure
Tenant against liability arising out of the use, occupancy or maintenance of the
Premises.  Landlord, Landlord’s property manager, and any lender(s) whose names
have been provided to Tenant in writing shall be named as additional insureds,
as respects the negligence of the Tenant. The policy shall not contain any
intra-insured exclusions as between insured persons or organizations, but shall
include coverage for liability assumed under this Lease as an “insured contract”
for the performance of Tenant’s indemnity obligations under this
Lease.  Compliance with the above requirements shall not, however, limit the
liability of Tenant nor relieve Tenant of any obligation hereunder.  All
insurance to be carried by Tenant shall be primary to and not contributory with
any similar insurance carried by Landlord, whose insurance shall be considered
excess insurance only.

(b)                        (i)           Tenant at its cost shall either by
separate policy or by endorsement to a policy already carried by Tenant,
maintain property insurance coverage on all of Tenant’s personal property and
Alterations in, on, or about the Premises.  Such insurance shall be full
replacement cost coverage.  Landlord shall be named as a loss payee under said
policy with respect to any permanently affixed Alterations.  The proceeds from
any such insurance shall be used by Tenant for the replacement and/or
restoration of Tenant’s personal property and Alterations.

(ii)          Tenant shall obtain and maintain loss of income and extra expense
insurance in amounts as will reimburse Tenant for direct or indirect loss of
earnings attributable to all perils commonly insured against by

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prudent lessees in the business of Tenant or attributable to prevention of
access to the Premises as a result of such perils.

(iii)         Workers’ Compensation and Employers’ Liability insurance covering
injury, disease or death of employees in the course of employment.  The Workers’
Compensation will meet the state requirement for coverage and the employers’
liability will have limits not less than $1,000,000.  Such policy shall contain
an endorsement where the insurer waives its right to subrogation.

(iv)         Business Auto Liability covering owned, non-owned and hired
vehicles with a limit of not less than $1,000,000 per accident

(c)          Insurance required hereunder shall be in companies duly licensed to
transact business in the state where the Premises are located, and maintaining
during the policy term a “General Policyholders Rating” of at least A, VIII, as
set forth in the most current issue of “Best’s Insurance Guide.”  Tenant shall
cause to be delivered to Landlord, no later than the Commencement Date, and from
time to time upon Landlord’s request certificates evidencing the existence and
amounts of, the insurance required to be maintained by Tenant hereunder.  No
deductible (including any self-insured retention) under any policy of insurance
carried by Tenant shall exceed Twenty Five Thousand Dollars ($25,000.00).  No
such policy shall be cancelable except after fifteen (15) days prior written
notice to Landlord.  Tenant shall within thirty (30) days after the renewal of
such policies, furnish Landlord with evidence of renewals evidencing renewal
thereof, or Landlord may order such insurance and charge the cost thereof to
Tenant, which amount shall be payable by Tenant to Landlord upon demand.

(d)          Landlord shall at all times during the Term maintain:

(i)      all-risk property insurance coverage, including equipment breakdown, on
the Landlord’s property (including, but not limited to, the Building,
improvements, machinery and equipment and any personal property in the Common
Areas) for the full replacement cost thereof and with commercially reasonable
deductibles.  Landlord shall not be obligated to insure any furniture,
equipment, trade fixtures, machinery, goods, or supplies which Tenant may keep
or maintain in the Premises or any Alteration, addition or improvement which
Tenant may make upon the Premises.  In addition, Landlord may secure and
maintain rental income insurance.

(ii)    Commercial general liability insurance with limits not less than
$5,000,000 per occurrence and aggregate.  Such insurance shall be in addition
to, and not in lieu of, insurance required to be maintained by Tenant.    The
policy shall (i) name Tenant as additional insured thereunder; and (ii)
specifically provide that the insurance afforded by such policy for the benefit
of the additional insured shall be primary, and any insurance carried by the
additional insured shall be excess and non-contributing.  Such insurance can be
included within an umbrella coverage maintained by Landlord covering additional
properties.

(iii)   Workers’ Compensation and Employers’ Liability insurance covering
injury, disease or death of employees in the course of employment.  The Workers’
Compensation will meet the state requirement for coverage and the employers’
liability will have limits not less than $1,000,000.  Such policy shall contain
an endorsement where the insurer waives its right to subrogation. Landlord may
elect to self-insure for this coverage, if allowed in the state of operation.

(e)          Without affecting any other rights or remedies of the parties,
Tenant and Landlord each hereby agree to cause the insurance companies issuing
their respective first party insurance to waive any subrogation rights that such
insurers may have against Landlord and Tenant, respectively, as long as the
insurance is not invalidated by such waiver.  If such waivers of subrogation are
contained in their respective insurance policies, Landlord and Tenant each
waive, release and relieve the other, and waive their entire right to recover
damages (whether in contract or in tort) against the other, for loss of or
damage to the waiving party’s property arising out of or incident to the perils
required to be insured against under this Paragraph 14.

(f)           Except for instances of Landlord’s negligence or willful
misconduct, Tenant shall indemnify, protect, defend and hold harmless the
Premises, Landlord, Landlord’s master or ground lessor, any lenders, Landlord’s
partners and members, and each of their officers, directors, shareholders,
managers, employees, agents and representatives from and against any and all
claims, loss of rents and/or damages, costs, liens, judgments, penalties,

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permits, attorney’s and consultant’s fees, expenses and/or liabilities arising
out of, involving, or in dealing with, (i) the occupancy of the Premises by
Tenant, (ii) the conduct of Tenant’s business, (iii) any act, omission or
neglect of Tenant, its agents, contractors, employees or invitees, and/or
(iv) any default or breach by Tenant in the performance in a timely manner of
any obligation on Tenant’s part to be performed under this Lease. The foregoing
shall include, but not be limited to, the defense or pursuit of any claim or any
action or proceeding involved therein, and whether or not (in the case of claims
made against Landlord) litigated and/or reduced to judgment, and whether well
founded or not.  In case any action or proceeding is brought against Landlord by
reason of any of the foregoing matters, Tenant upon notice from Landlord shall
defend the same at Tenant’s expense by counsel reasonably satisfactory to
Landlord and Landlord shall cooperate with Tenant in such defense.  Landlord
need not have first paid any such claim in order to be so indemnified.  The
foregoing indemnification obligations shall survive the expiration or earlier
termination of this Lease to and until the last date permitted by law for the
bringing of any claim with respect to which indemnification may be claimed under
this Paragraph 14.

(g)          Except for instances of Tenant’s negligence or willful misconduct,
Landlord shall indemnify, protect, defend and hold harmless Tenant, Tenant’s
lenders, Tenant’s partners and members, and each of their officers, directors,
shareholders, managers, employees, agents and representatives from and against
any and all claims, loss of rents and/or damages, costs, liens, judgments,
penalties, permits, attorney’s and consultant’s fees, expenses and/or
liabilities arising out of (i) the gross negligence or willful misconduct of
Landlord, its employees, agents or contractors and/or (ii) any default or breach
by the Landlord in the performance in a timely manner of any obligation on
Landlord’s part to be performed under this Lease.  In case any action or
proceeding is brought against Tenant by reason of any of the foregoing matters,
Landlord upon notice from Tenant shall defend the same at Landlord’s expense by
counsel reasonably satisfactory to Tenant and Tenant shall cooperate with
Landlord in such defense.  Tenant need not have first paid any such claim in
order to be so indemnified.  The foregoing indemnification obligations shall
survive the expiration or earlier termination of this Lease to and until the
last date permitted by law for the bringing of any claim with respect to which
indemnification may be claimed under this Paragraph 14.

(h)          Tenant hereby releases Landlord from, and Landlord shall not be
liable for, and any all claims for  injury or damage to the person or goods,
wares, merchandise or other property of Tenant, Tenant’s employees, contractors,
invitees, customers, or any other person in or about the Premises, Building or
Project, from any cause, and whether said injury or damage results from
conditions arising on the Premises or on other portions of the Building or
Project (including, without limitation the parking facilities), or from other
sources or places, and regardless of whether the cause of such damage or injury
or the means of repairing the same is accessible or not, unless caused by the
gross negligence or willful misconduct of Landlord or any of its employees,
contractors or agents.  Landlord shall not be liable for any damages arising
from any act, omission or neglect of any other lessee of
Landlord.  Notwithstanding Landlord’s active or passive negligence or breach of
this Lease, Landlord shall under no circumstances be liable for injury to
Tenant’s business or for any loss of income or profit therefrom.

15.          DESTRUCTION.

(a)          In the event of a partial destruction of the Premises during the
Term from any cause, Landlord shall forthwith repair the same (except as
otherwise provided in this Paragraph 15 as to a casualty occurring during the
last twelve (12) months of the Term), provided such repairs can be made within
one hundred twenty (120) days under the laws and regulations of State, county,
federal or municipal authorities, but such partial destruction shall not annul
or void this Lease, except that Tenant shall be entitled to a proportional
abatement in rent while such repairs are being made, such proportionate
abatement to be based upon the amount of square footage in the Premises damaged
and the length of time said area is not either actually being used by Tenant for
business purposes or is not in a condition habitable for general industrial
use.  If such repairs cannot be made within one hundred twenty (120) days of
such casualty, or if the casualty occurs during the last twelve (12) months of
the Term and would result in any rent abatement for a period greater than thirty
(30) days, Landlord may, at its option, elect to make such repairs within a
reasonable time, this Lease continuing in full force and effect and the rent to
be proportionately abated as provided hereinabove.  In the event that Landlord
does not so elect to make such repairs which cannot be made in one hundred
twenty (120) days or which results from a casualty occurring during the last
twelve (12) months of the term, within a reasonable time following the casualty
(but in no event not less than sixty (60) days), this Lease may be terminated at
the option of either party.  In respect to any partial destruction which
Landlord is obligated to repair or may elect to repair under the terms of this
Paragraph 15, Tenant waives the provisions of California Civil Code
Sections 1932(2) and 1933(4).  In the event that any portion of the Building
other than the Premises is destroyed to the extent of ten percent (10%) or more
of the replacement cost of the

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Building, Landlord may elect to terminate this Lease, whether the Premises be
injured or not; provided, however, that if Landlord’s lender makes insurance
proceeds available to Landlord in an amount sufficient to complete restoration
of the Building, then Landlord may not terminate this Lease unless the Building
is destroyed to the extent of thirty percent (30%) or more of the replacement
cost of the Building.  A total destruction of the Building shall terminate this
Lease.

(b)          If the Premises are to be repaired or restored by Landlord under
this Paragraph 15, Landlord shall repair or restore, at Landlord’s cost, the
Premises itself and any and all permanently affixed improvements in the Premises
constructed or provided by Landlord as of the commencement of the Term, together
with any permanently affixed Alterations approved by Landlord (unless at the
time of construction Landlord informs Tenant that Tenant will be required to
remove the same at the end of the Term).  In no event shall Landlord repair,
replace or restore any of Tenant’s property.

16.          ENTRY.

Landlord, Landlord’s agents, employees, contractors and designated
representatives, and the holders of any mortgages, deeds of trust or ground
leases on the Premises shall have the right to enter the Premises at any time in
the case of an emergency, and otherwise at reasonable times upon at least one
business day’s prior notice, for the purpose of inspecting the condition of the
Premises, performing any services required of Landlord by this Lease, showing
the same to prospective purchasers, lenders or, during the last twelve months of
the Term, lessees, making such alterations, repairs and improvements to the
Premises or to the Project as Landlord may deem reasonable or desirable, and for
verifying compliance by Tenant with this Lease.  Any such entry shall be without
any rebate of rent to Tenant for any loss of occupancy or quiet enjoyment of the
Premises, or damage, injury or inconvenience thereby
occasioned.  Notwithstanding the foregoing, in any such entry into the Premises
Landlord shall use commercially reasonable good faith efforts not to
unreasonably disturb Tenant’s business activities conducted within the Premises.

17.          EVENTS OF DEFAULT.

(a)          The occurrence of any one or more of the following events (each, an
“Event of Default”) shall constitute a breach of this Lease by Tenant:  (i) if
Tenant shall default in its obligation to pay any rent or other payment(s) due
hereunder and such failure continues for more than five (5) days after written
notice from Landlord; or (ii) if Tenant shall fail to perform or observe any
other term hereof (except as otherwise provided in this Paragraph 17) or of the
Project Rules described in Paragraph 8 hereof to be performed or observed by
Tenant, such failure shall continue for more than twenty (20) days after notice
thereof from Landlord, and Tenant shall not within such period commence with due
diligence and dispatch the curing of such default, or, having so commenced,
thereafter shall fail or neglect to prosecute or complete with due diligence the
curing of such default; or (iii) any assignment or subletting in violation of
the terms of this Lease; or (iv) the failure of Tenant to maintain insurance
coverages required by this Lease and/or to provide evidence of such coverages
within five (5) business days after request therefor from Landlord; or
(v) Tenant’s failure to timely execute and deliver, when requested, an estoppel
certificate in accordance with the terms of this Lease; or (vi) the taking of
any action leading to, or the actual dissolution or liquidation of Tenant, if
Tenant is other than an individual; or (vii)  if within sixty (60) days after
the commencement of any proceeding against Tenant seeking any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under any present or future statute, law or regulation, such proceeding
shall not have been dismissed or if this Lease or any estate of Tenant hereunder
shall be levied upon under any attachment or execution and such attachment or
execution is not vacated within thirty (30) days after notice to Tenant.

(b)          Any notice required to be given by Landlord under this Lease shall,
in each case, be in lieu of, and not in addition to, any notice required to be
given under California Code of Civil Procedure Sections 1161 through 1162, or
any other applicable unlawful detainer statutes, to the extent the substance
thereof is given in compliance therewith and the notice is served as provided in
this Lease, and any time periods provided under such statutes shall run
concurrently with the time periods contained in any notice provided under this
Lease.

18.          TERMINATION UPON DEFAULT.

In any notice given pursuant to any one or more Events of Default, Landlord in
its sole discretion may elect to declare a forfeiture of this Lease as provided
in Section 1161 of the California Code of Civil Procedure, and provided that
Landlord’s notice states such an election, Tenant’s right to possession shall
terminate and this Lease shall terminate, unless on or before the date specified
in such notice all arrears of rent and all other sums payable by

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Tenant under this Lease, and all costs and expenses incurred by or on behalf of
Landlord hereunder, including reasonable attorneys’ fees, incurred in connection
with such default, shall have been paid by Tenant and all other breaches of this
Lease by Tenant at the time existing shall have been fully remedied to the
satisfaction of Landlord. Upon such termination, Landlord may recover from
Tenant (a) the worth at the time of award of the unpaid rent which had been
earned at the time of termination; (b) the worth at the time of award of the
amount by which the unpaid rent which would have been earned after termination
until the time of award exceeds the amount of such rent loss that Tenant proves
could reasonably have been avoided; (c) the worth at the time of award of the
amount by which the unpaid rent for the balance of the Term after the time of
award exceeds the amount of such rent loss that Tenant proves could be
reasonably avoided; and (d) any other amount necessary to compensate Landlord
for all the detriment proximately caused by Tenant’s failure to perform its
obligations under this Lease or which in the ordinary course of things would be
likely to result therefrom.  The “worth at the time of award” of the amount
referred to in clauses (a) and (b) above is computed by allowing interest at the
discount rate of the Federal Reserve Bank of San Francisco plus four percent
(4%) per annum at date of termination, but in no event in excess of the maximum
rate of interest permitted by law.  The worth at the time of award of the amount
referred to in clause (c) above is computed by discounting such amount at the
discount rate of the Federal Reserve Bank of San Francisco at the time of award
plus one percent (1%).  For the purpose of determining unpaid rent under
clause (c) above, the monthly rent reserved in this Lease shall be deemed to be
the sum of the Base Rent and the amounts last payable by Tenant as reimbursement
of expenses pursuant to Paragraphs 5(a)(ii) and (iii) hereof for the calendar
year in which Landlord terminated this Lease as provided herein.  Tenant waives
any rights of redemption or relief from forfeiture under California Code of
Civil Procedure Sections 1174 and 1179, or under any other applicable present or
future law, if Tenant is evicted or Landlord takes possession of the Premises by
reason of any Event of Default.

19.          CONTINUATION AFTER DEFAULT.

Even though Tenant has breached this Lease and/or abandoned the Premises, this
Lease shall continue in effect for so long as Landlord does not terminate
Tenant’s right to possession as provided in Paragraph 18 hereof, and Landlord
may enforce all its rights and remedies under this Lease, including the right to
recover rent as it becomes due under this Lease.  In such event, Landlord may
exercise all of the rights and remedies of a landlord under Section 1951.4 of
the California Civil Code (which provides that a landlord may continue a lease
in effect after a tenant’s breach and abandonment and recover rent as it becomes
due, if the tenant has the right to sublet or assign, subject only to reasonable
limitations), or any successor statute.  Acts of maintenance or preservation or
efforts to relet the Premises or the appointment of a receiver upon initiative
of Landlord to protect Landlord’s interest under this Lease shall not constitute
a termination of Tenant’s right to possession.

20.          OTHER RELIEF.

The remedies provided for in this Lease are in addition to any other remedies
available to Landlord at law or in equity, by statute or otherwise.  Landlord’s
failure to take advantage of any default or breach of covenant on the part of
Tenant shall not be, or be construed as a waiver thereof, nor shall any custom
or practice which may grow up between the parties in the course of administering
this instrument be construed to waive or to lessen the right of Landlord to
insist upon the performance by Tenant of any term, covenant or condition hereof,
or to exercise any rights given Landlord on account of any such default.  A
waiver of a particular breach or default shall not be deemed to be a waiver of
the same or any other subsequent breach or default.  The acceptance of rent
hereunder shall not be, nor be construed to be, a waiver of any breach of any
term, covenant or condition of this Lease.

In no event shall either party be liable to the other for any punitive or
consequential damages, except in the case of a holdover pursuant to Section 29
below and nothing herein shall be construed to limit a party’s indemnification
obligations under this Lease.

21.          ATTORNEYS’ FEES.

If as a result of any breach or default on the part of Tenant under this Lease
Landlord uses the services of an attorney in order to secure compliance with
this Lease, Tenant shall reimburse Landlord upon demand as additional rent for
reasonable  attorneys’ fees and expenses incurred by Landlord, whether or not
formal legal proceedings are instituted.  Should either party bring an action
against the other party, by reason of or alleging the failure of the other party
to comply with any or all of its obligations hereunder, or to seek enforcement
of any of the terms of this Lease, whether for declaratory or other relief, then
the party which prevails in such action (including those incurred in connection
with any matters on appeal) shall be entitled to its reasonable attorneys’ fees,
expert witness fees and disbursements, and all other reasonable costs and
expenses related to such action, in addition to all

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other recovery or relief.  The “party which prevails in such action” (a) as used
in the context of proceedings in the Bankruptcy Court, means the prevailing
party in an adversary proceeding or contested matter, or any other action taken
by the non‑bankruptcy party which is reasonably necessary to protect its rights
under this Agreement, and (b) as used in the context of proceedings in any court
other than the Bankruptcy Court, shall mean the party that prevails in obtaining
a remedy or relief which most nearly reflects the remedy or relief which the
party sought, so that, for example, the party which prevails may be a party
which is ordered to pay $100 where the obligation to pay $80 was undisputed and
the other party claimed that it was entitled to $1,000.

22.          NOTICES.

All approvals, consents and other notices given by Landlord or Tenant under this
Lease shall be properly given only if made in writing and either deposited in
the United States mail, postage prepaid, certified with return receipt
requested, or delivered by hand (which may be through a messenger or recognized
delivery, courier or air express service) and addressed to Landlord at the
address of Landlord specified in the Basic Lease Information or at such other
place as Landlord may from time to time designate in a written notice to Tenant,
and addressed to Tenant at the address of Tenant specified in the Basic Lease
Information and, after the Commencement Date, at the Premises, together with a
copy to such other address as Tenant may from time to time designate in a
written notice to Landlord.  Such approvals, consents and other notices shall be
effective on the date of receipt (evidenced by the certified mail receipt), if
mailed, or on the date of hand delivery, if hand delivered.  If any such
approval, consent or other notice is not received or cannot be delivered due to
a change in the address of the receiving party of which notice was not
previously given to the sending party or due to a refusal to accept by the
receiving party, such request, approval, consent, notice or other communication
shall be effective on the date delivery is attempted.  Tenant hereby appoints as
its agent to receive the service of all default notices and notice of
commencement of unlawful detainer proceedings the person in charge of or
apparently in charge of or occupying the Premises at the time, and, if there is
no such person, then such service may be made by attaching the same on the door
of the Premises and such service shall be effective for all purposes under this
Lease.  Landlord shall provide a copy of any such notices at the address
indicated on the

23.          EMINENT DOMAIN.

If all or any part of the Premises shall be taken as a result of the exercise of
the power of eminent domain or agreement in lieu thereof, this Lease shall
terminate as to the part so taken as of the date of taking, and, in the case of
a partial taking of a substantial portion of the Premises, Landlord shall have
the right to terminate this Lease as to the balance of the Premises by giving
written notice to Tenant within sixty (60) days after such date.  Common Areas
taken shall be excluded from the Common Areas usable by Tenant and no reduction
of base rent shall occur with respect thereto or by reason thereof.  In the
event of any taking, Landlord shall be entitled to any and all compensation,
damages, income, rent, awards, or interest therein which may be paid or made in
connection therewith, and, except as hereinafter expressly provided,  Tenant
waives and relinquishes to Landlord any and all claims for the value of any
unexpired Term of this Lease or otherwise.   Notwithstanding the foregoing,
Tenant shall have the right to make a separate claim against any such condemning
authority for compensation specifically and separately awarded Tenant for
Tenant’s personal property and moving costs.  In the event of a partial taking
of the Premises which does not result in a termination of this Lease, the Base
Rent thereafter to be paid shall be equitably reduced.  If all or any part of
the Building shall be taken as a result of the exercise of the power of eminent
domain, and, in the case of a partial taking, Landlord determines that the
remainder of the Building is not suitable for the continued operation as a
multi-tenant industrial building, Landlord shall have the right to terminate
this Lease by giving written notice to Tenant within sixty (60) days of the date
when the possession is required.   If all or any material part of the Premises
shall be taken as a result of the exercise of the power of eminent domain, and,
in the case of a partial taking, Tenant determines in tis good faith, reasonable
business judgment that the remainder of the Premises is not suitable for the
Permitted Use, Tenant shall have the right to terminate this Lease by giving
written notice to Landlord within sixty (60) days of the date when the
possession is required. Without obligation to Tenant, Landlord may agree to
transfer to any condemnor all or any portion of the Project sought by such
condemnor, free from this Lease and the rights of Tenant hereunder, without
first requiring that any action or proceeding be instituted or, if instituted,
pursued to a judgment.  Landlord and Tenant hereby waive the provisions of
California Code of Civil Procedure Sections 1265.110 through 1265.160 to the
extent that such provisions are inconsistent with the terms of this Lease.

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24.          LATE CHARGE/RETURNED CHECKS.

Rent or other payments due under this Lease which remain unpaid when due shall
bear interest from and after the date said amount was due at the discount rate
of the Federal Reserve Bank of San Francisco on the date said amount was due,
plus four percent (4%) per annum, but in no event in excess of the maximum rate
of interest permitted by law.  Tenant acknowledges that late payment by Tenant
to Landlord of such rent or other payments will cause Landlord to incur costs
not contemplated by this Lease, the exact amount of such costs being extremely
difficult and impracticable to fix.  Therefore, if on more than one (1) occasion
during any twelve (12) month period during the Term, any installment of rent or
other payment due from Tenant is not received by Landlord by the fifth (5th) day
of the month when due, Tenant shall pay to Landlord an additional sum of four
percent (4%) of the overdue amount as a late charge.  Said late charge shall be
due as of the sixth (6th) day of the month in question.  If any check for
payment by Tenant to Landlord of Base Rent or other sums due hereunder is
returned to Landlord by Tenant’s bank for any reason, a returned check charge
(“NSF charge”) will be added in the amount of Fifty Dollars ($50.00), in
addition to any sums due hereunder including late charges, to compensate
Landlord for the costs associated with processing such dishonored check.  The
parties agree that the foregoing late charges and NSF charge represent a fair
and reasonable estimate of the costs Landlord will incur because of said late or
dishonored payment.  Acceptance of said charges by Landlord shall not constitute
a waiver of Tenant’s default for the overdue amount, nor prevent Landlord from
exercising the other rights and remedies granted Landlord under this Lease.

25.          SECURITY DEPOSIT.

Intentionally omitted.

26.          SIGNAGE.

Tenant shall not place or permit to be placed any lights, decorations, banners,
signs, window or door lettering, advertising media, or any other item that can
be viewed from the exterior of the Premises without obtaining Landlord’s prior
written consent, which may be withheld in Landlord’s sole discretion, and shall
be subject to any applicable laws and regulations of the City of Moorpark,
Landlord’s signage program at the Project (if any), and any other covenants,
conditions and/or restrictions affecting the Project and/or the Building.  If
any such items are installed without Landlord’s consent, or are not timely
removed, Landlord shall have the right (but not the obligation) to remove any or
all of such items and/or repair any such damage or injury, all at Tenant’s sole
cost and expense.

27.          ESTOPPEL CERTIFICATE.

Within ten (10) days after notice from Landlord, Tenant shall execute and
deliver to Landlord a certificate stating (a) that this Lease is unmodified and
in full force and effect (or, if there have been modifications, that this Lease
is in full force and effect, as modified, and stating the date and nature of
each modification), (b) the date, if any, to which rental and other sums payable
hereunder have been paid, (c) that no notice has been received by Tenant of any
default which has not been cured, except as to defaults specified in said
certificate and (d) such other matters as may be reasonably requested by
Landlord.    In the event Tenant does not respond to Landlord’s request in a
timely manner, Landlord may send Tenant a second notice that states that
Tenant’s failure to provide the estoppel certificate to Landlord within three
(3) business days after Tenant receives Landlord’s second notice shall be an
Event of Default under this Lease and that such failure will be deemed an
acknowledgment by Tenant that statements included in the estoppel certificate
are true and correct without exception.  Tenant’s failure to timely deliver an
estoppel certificate in accordance with this Paragraph 27 shall be deemed an
Event of Default in accordance with Paragraph 17 of this Lease.

28.          SURRENDER.

On or before the expiration or sooner termination of this Lease, Tenant shall
remove all of Tenant’s property and all alterations, additions, fixtures and
improvements therein or thereto except those which Landlord has confirmed in
writing should be left in place; and fully repair any damage to the Premises,
the Building or other portions of the Project caused by the removal of any of
the items provided herein.  Upon the expiration or earlier termination of this
Lease, Tenant shall not be required to remove any clean room laboratories which
existed on the Premises upon Landlord’s initial delivery of possession thereof
to Tenant, and shall not be financially responsible for Landlord’s removal of
any such laboratories after the expiration or earlier termination of this Lease.
Subject to the foregoing, Tenant shall surrender the Premises at the expiration
or earlier termination of the tenancy herein

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created broom clean, and in the same condition as received, reasonable use and
wear thereof and damage by the act of God, casualty or by the elements
excepted.  The voluntary or other surrender of this Lease by Tenant, or a mutual
cancellation thereof, shall not work a merger and shall at the option of
Landlord, terminate all of any existing subleases or subtenancies, or may, at
the option of Landlord, operate as an assignment to it of any or all such
subleases or subtenancies.  Tenant’s obligations under this Paragraph 28 shall
survive the termination of this Lease.

29.          HOLDING OVER.

If, without objection by Landlord, Tenant holds possession of the Premises after
expiration of the Term of this Lease, Tenant shall become a tenant from month to
month upon the terms herein specified but at a Base Rent equal to one hundred
fifty percent (150%) of the Base Rent in effect at the expiration of the Term of
this Lease, payable in advance on or before the first day of each month.  Such
month-to-month tenancy may be terminated by either Landlord or Tenant by giving
thirty (30) days’ written notice of termination to the other at any time.  If
Tenant fails to surrender the Premises upon the expiration or termination of
this Lease except as hereinabove provided, Tenant hereby indemnifies and agrees
to hold Landlord harmless from all costs, loss, expense or liability, including
without limitation, costs, real estate brokers claims and attorneys’ fees,
arising out of or in connection with any delay by Tenant in surrendering and
vacating the Premises, including, without limitation, any claims made by any
succeeding tenant based on any delay and any liabilities arising out of or in
connection with these claims.  Nothing in this Paragraph 29 shall be deemed to
permit Tenant to retain possession of the Premises after the expiration or
sooner termination of the Term.

30.          SUBORDINATION.

Provided Landlord obtains from any applicable lender a commercially reasonable
subordination, non-disturbance and attornment agreement which provides that
Tenant’s occupancy of the Premises will not be disturbed so long as no Event of
Default is continuing, this Lease shall be subordinate to any ground lease,
master lease, mortgage, deed of trust, or any other hypothecation for security
now or later placed upon the Building or the Project and to any advances made on
the security of it or Landlord’s interest in it, and to all renewals,
modifications, consolidations, replacements, and extensions of it.  However, if
any mortgagee, trustee, master lease or ground lessor elects to have this Lease
prior to the lien of its mortgage or deed of trust or prior to its master lease
or ground lease, and gives notice of that to Tenant, this Lease shall be deemed
prior to the mortgage, deed of trust, master lease or ground lease, whether this
Lease is dated prior or subsequent to the date of the mortgage, deed of trust,
master lease or ground lease, or the date of recording of it.  In the event any
mortgage or deed of trust to which this Lease is subordinate is foreclosed or a
deed in lieu of foreclosure is given to the mortgagee or beneficiary, Tenant
shall attorn to the purchaser at the foreclosure sale or to the grantee under
the deed in lieu of foreclosure.  In the event of termination of any master
lease or ground lease to which this Lease is subordinate, Tenant shall attorn to
the master lessor or ground lessor.  Tenant agrees to execute any documents, in
form and substance reasonably acceptable to Tenant, required to effectuate the
subordination, to make this Lease prior to the lien of any mortgage or deed of
trust, master lease or ground lease, or to evidence the attornment provided such
documents affirm Tenant’s tenancy of the Premises will not be disturbed so long
as Tenant is not in default.

31.          INABILITY TO PERFORM.

Neither Landlord nor Tenant shall be in default hereunder nor shall Landlord be
liable to Tenant or Tenant be liable to Landlord for any loss or damages if such
party is unable to fulfill any of its obligations, or is delayed in doing so, if
the inability or delay is caused by reason of accidents, strike, labor troubles,
acts of God, or any other cause, whether similar or dissimilar, which is beyond
the reasonable control of Landlord or Tenant.  The foregoing sentence shall not
be deemed to apply to Tenant’s obligation to pay rent hereunder.

32.          MISCELLANEOUS.

(a)          The words “Landlord” and “Tenant” as used herein shall include the
plural as well as the singular.  Words used in masculine gender include the
feminine and neuter.  If there be more than one Tenant, the obligations
hereunder imposed on Tenant shall be joint and several.  Subject to the
provisions hereof relating to assignment and subletting, this Lease is intended
to and does bind the heirs, executors, administrators, successors and assigns of
any and all of the parties hereto.  Each provision of this Lease to be observed
or performed by Tenant shall be deemed both a covenant and a condition.  Time is
of the essence of this Lease.

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(b)          If Tenant is a corporation or limited liability company, Tenant and
each person executing this Lease on behalf of Tenant represents and warrants to
Landlord that (a) Tenant is duly incorporated or formed, as the case may be and
validly existing under the laws of its state of incorporation or formation,
(b) Tenant is qualified to do business in California, (c) Tenant has the full
right, power and authority to enter into this Lease and to perform all of
Tenant’s obligations hereunder, and (d) each person signing this Lease on behalf
of the corporation or company is duly and validly authorized to do so.    If
Landlord is a corporation or limited liability company, Landlord and each person
executing this Lease on behalf of Landlord represents and warrants to Tenant
that (a) Landlord is duly incorporated or formed, as the case may be and validly
existing under the laws of its state of incorporation or formation, (b) Landlord
is qualified to do business in California, (c) Landlord has the full right,
power and authority to enter into this Lease and to perform all of Landlord’s
obligations hereunder, and (d) each person signing this Lease on behalf of the
corporation or company is duly and validly authorized to do so.

(c)          There are no oral agreements between Landlord and Tenant affecting
this Lease, and this Lease supersedes and cancels any and all previous
negotiations, arrangements, brochures, agreements and understandings, if any,
between Landlord and Tenant or displayed by Landlord to Tenant with respect to
the subject matter of this Lease or the Building or any other portion of the
Project.  No party has been induced to enter into this Lease by, nor is any
party relying on, any representation or warranty outside those expressly set
forth in this Lease.  Notwithstanding the preparation of this Lease by Landlord
or its agent, all of the provisions of this Lease have been freely negotiated by
the parties hereto, and each of the parties has had the opportunity to be
represented by counsel in connection with the negotiation and execution of this
Lease.  Accordingly, the parties agree that there shall be no presumption or
implication against either party with respect to the meaning or interpretation
of this Lease, and any presumption against the drafter implied by law is hereby
waived.  Any amendment or modification of this Lease is ineffective to modify,
waive, or terminate this Lease, in whole or in part, unless such agreement is in
writing, signed by the parties to this Lease.

(d)          Any provision of this Lease which shall be held invalid, void or
illegal shall in no way affect, impair or invalidate any of the other provisions
hereof and such other provisions shall remain in full force and effect.

(e)          The obstruction of Tenant’s view, air, or light by any structure
erected in the vicinity of the Building, whether by Landlord or third parties,
shall in no way affect this Lease or impose any liability upon Landlord.

(f)           To the extent permitted by law, Tenant hereby waives trial by jury
in any action, proceeding or counterclaim brought by either of the parties
hereto on any matters whatsoever arising out of or in any way connected with
this Lease.

(g)          This Lease shall be governed by the laws of the State of California
applicable to transactions to be performed wholly therein.

(h)          Tenant acknowledges that the financial capability of Tenant to
perform its obligations under this Lease is material to Landlord and that
Landlord would not enter into this Lease but for its belief, based on its review
of the financial statements of Tenant and any person guarantying the obligations
of Tenant under this Lease delivered to Landlord prior to the Lease Effective
Date, that Tenant is capable of performing such financial obligations.  If
Tenant ceases filing Quarterly Reports on Form 10-Q and Annual Reports on Form
10-K with the U.S. Securities and Exchange Commission during the Term, Landlord
may request, and Tenant shall provide Landlord within ten (10) business days of
Landlord’s request, Tenant’s and any such guarantor’s current financial
statements, and such other information discussing the financial worth of Tenant
and any such guarantor reasonably requested by Landlord, which statements and
information Landlord shall use solely for purposes of this Lease and in
connection with the ownership, management, financing and disposition of the
Building.  Tenant hereby represents, warrants and certifies to Landlord that all
financial statements delivered to Landlord by Tenant or such guarantor: (a) are
true and correct in all material respects at the time delivered to Landlord, (b)
are prepared in accordance with a recognized standard of accounting consistently
applied that fairly presents the financial condition and results of the
operations of Tenant or such guarantor, as applicable, and (c) with respect to
any financial statements delivered to Landlord prior to the effective date of
this Lease, are true and correct as of the effective date of this Lease.

(i)           Tenant represents, warrants and covenants that Tenant is in
compliance with the requirements of Executive Order No. 13224, 66 Fed. Reg.
49079 (September 25, 2001) (the “Order”), and other similar requirements
contained in the rules and regulations of the Office of Foreign Asset Control,
Department of the Treasury (“OFAC”), and in enabling legislation or other
Executive Orders in respect thereof (the Order and such other rules,
regulations, legislation or orders are collectively called the
“Orders”).  Without limiting the generality of the foregoing, Tenant

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represents, warrants and covenants that Tenant: (i) is listed on the Specially
Designated Nationals and Blocked Persons List maintained by OFAC pursuant to the
Order and/or on any other list of terrorists or terrorist organizations
maintained pursuant to any of the rules and regulations of OFAC pursuant to any
other applicable Orders (such lists being collectively referred to as the
“Lists”); (ii) is a person who has been determined by competent authority to be
subject to the prohibitions contained in the Orders; or (iii) is owned or
controlled by, nor acts for or on behalf of, any person on the Lists or any
other persons who have been determined by competent authority to be subject to
the prohibitions contained in the Orders.  Tenant agrees to execute such
certificates as may be reasonably requested by Landlord from time to time to
enable Landlord to comply with the Orders and/or any anti-money laundering laws
as relates to this Lease.

33.          BROKER.

Tenant represents and warrants to Landlord that Tenant has had no dealings with
any broker, finder, or similar person who is or might be entitled to a
commission or other fee in connection with the execution of this Lease, except
for Landlord’s Broker and Tenant’s Broker.  Landlord shall pay the commission
due Landlord’s Broker and Tenant’s Broker pursuant to a separate agreement
between Landlord and Landlord’s Broker.  Landlord and Tenant shall each
indemnify, defend, protect and hold the other harmless from and against any and
all claims and damages and for any and all costs and expenses (including
reasonable attorneys’ fees and costs) resulting from claims that may be asserted
against the other party by any broker, agent or finder not disclosed herein.

34.          ROOF EQUIPMENT.

Subject to Landlord’s approval of the plans and specifications related thereto,
Landlord shall permit Tenant to install, operate, maintain and remove at
Tenant’s sole expense one or more satellite dishes, cellular antennae related
equipment (each, “Rooftop Equipment”) on the roof of the Building, all in
locations mutually acceptable to Landlord and Tenant.  Any such Rooftop
Equipment installed pursuant to this Section shall be so installed in an
aesthetically pleasing manner and Tenant shall exercise all reasonable steps to
shield or screen such items from public view so as to minimize any risks that
the items create or constitute a nuisance.    Landlord and Tenant agree that the
Rooftop Equipment shall constitute an Alteration; provided, however, that
notwithstanding anything to the contrary in this Lease, (i) removal of the
Rooftop Equipment at the end of the Lease Term shall be governed by the terms of
this Section 34;  (ii) Landlord shall not be required to maintain property
insurance covering loss of the Rooftop Equipment; and (iii) Tenant shall not be
required to pay any supervisory or other construction fee to Landlord or
Landlord’s property manager in connection with installation or removal of the
Rooftop Equipment.  Landlord makes no warranties or representations to Tenant as
to the permissibility of Rooftop Equipment on the Building under Applicable
Laws.  In no event shall installation of Rooftop Equipment require any roof
penetrations or void any roof warranty.  Upon the expiration or earlier
termination of this Lease, at Tenant’s sole cost and expense, Tenant shall
remove or cause to be removed the Rooftop Equipment and repair or cause to be
repaired any damage caused by such removal.

Without limiting the terms of any other indemnity set forth in this Lease,
Tenant hereby agrees to indemnify and hold Landlord, its agents, employees,
contractors and representatives, harmless from and against any and all cost,
claims, damages (including, but not limited to, any damage to the Building, the
roof or Landlord's property), causes of action and liability which may arise by
reason of any occurrence attributable to or arising out of Tenant's
installation, maintenance, repair, operation or removal of any Rooftop
Equipment, including without limitation, any claim or cause of action for injury
to or death of any person or damage to any property arising therefrom and Tenant
agrees to defend any claim or demand against Landlord, its agents or employees
arising out of any such occurrence. Tenant shall, upon thirty (30) days prior
written notice from Landlord, reimburse Landlord for all costs and expenses
incurred by Landlord as a result of Tenant's operation of any Rooftop Equipment,
including damages to the Building and the furnishing of electric power for the
operation of the same.

 

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

TENANT:

    

LANDLORD:

 

 

 

AEROVIRONMENT, INC.,

 

PRINCETON AVENUE HOLDINGS, LLC,

a Delaware corporation

 

a California limited liability company

 

 

 

 

 

 

By:

/s/ Kirk J. Flittie

 

By:

Nearon Enterprises,

Name:

Kirk J. Flittie

 

 

a California corporation

Its:

VP & GM, UAS

 

Its:

Designated Manager

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ Anthony Perino

 

 

 

 

Anthony Perino, President

 

 

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EXHIBIT A-1

SITE PLAN

 

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EXHIBIT A-2

 

PREMISES PLAN

 

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A-2-1

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A-2-2

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EXHIBIT B

OPERATING EXPENSES AND TAXES

A.           As used in this Lease, “Operating Expenses” shall mean, without
duplication, all costs and expenses paid or incurred by Landlord in connection
with the ownership, management, operation, maintenance and repair of the
Building and/or the Project (individually and collectively, as used in this
Exhibit, the “Building”), and in providing services in accordance with this
Lease, including the following:  salaries, wages, other compensation, taxes and
benefits (including payroll, social security, workers’ compensation,
unemployment, disability and similar taxes and payments) for all personnel
engaged in the management, operation, maintenance or repair of the Building;
uniforms provided to such personnel; premiums and other charges for all
property, earthquake, rental value, liability and other insurance carried by
Landlord, together with the amount of any deductible under such policy; water
and sewer charges or fees; license, permit and inspection fees; electricity,
water, heating, ventilation, air conditioning, gas, fuel, steam and other
utilities; sales, use and excise taxes on goods and services purchased by
Landlord; telephone, delivery, postage, stationery supplies and other expenses;
management fees (not to exceed 2.5% of then applicable Base Rent) and expenses;
repairs to and maintenance of the Building (including the contribution to and
replenishment of reserves maintained by Landlord for the payment of such
expenses), including Building Systems and accessories thereto and repair and
replacement of worn out or broken equipment, facilities, parts and
installations; window cleaning, security, guard, extermination, water treatment,
garbage and waste disposal, rubbish removal, plumbing and other services;
inspection or service contracts for electrical, mechanical and other Building
equipment and systems; supplies, tools, materials and equipment; accounting,
legal and other professional fees and expenses (excluding legal fees,
accounting, and other professional fees and expenses incurred by Landlord
relating to disputes with specific tenants or the negotiation, interpretation or
enforcement of specific leases); painting of any of the public or Common Areas
of the Project, including, without limitation, the Building exterior and any
interior portions thereof, and the cost of maintaining the sidewalks,
landscaping and other common areas of the Project; the cost of parking area
repair, restoration and maintenance, including, without limitation, resurfacing,
restriping and cleaning; the cost, amortized over the useful life as reasonably
determined by Landlord, according to generally accepted accounting principles,
of all furniture, fixtures, draperies, carpeting and personal property furnished
by Landlord in the Common Areas or in the Building office (if any); all costs
and expenses resulting from compliance with any laws, ordinances, rules,
regulations or orders applicable to the Building; all costs and expenses of
contesting by appropriate legal proceedings brought in good faith on any matter
concerning the amount or validity of any Property Taxes; the cost, reasonably
amortized as determined by Landlord, according to generally accepted accounting
principles, of all capital improvements made to the Building to reduce any item
of Operating Expenses, or that constitute a replacement of a Building System, or
that are required by any law, ordinance, rule, regulation or order; charges and
assessments on the Project pursuant to any applicable covenants, conditions and
restrictions encumbering the Project; and such other usual costs and expenses
which are paid by other landlords for the on-site operation, servicing,
maintenance and repair of comparable industrial buildings in the Ventura County,
California area.  Any capital expenses incurred by Landlord in connection with
the foregoing shall be amortized on a straight-line basis over the useful life
of the relevant item in accordance with generally accepted accounting
principles, consistently applied, and as generally practiced in the real estate
industry (“GAAP”).

Notwithstanding anything contained in the Lease or the foregoing list of
Operating Expenses, no expenses incurred for the following shall be included in
Operating Expenses for any expense year:  Property Taxes; depreciation on the
Building (except as described above) costs of tenants’ improvements (including
permit, license and inspection fees); real estate brokers’ commissions,
interest, payments of loan principal and expenses related to a financing or
refinancing of the Building; the cost of services provided to tenants materially
in excess of services customarily provided to Tenant, whether or not Landlord is
entitled to reimbursement therefor; Landlord’s legal costs and expenses in
connection with any lease dispute, or litigation with any tenant, or Landlord’s
costs in maintaining Landlord’s corporate or limited liability company status;
expenses for which Landlord is reimbursed or indemnified (either by an insurer,
condemnor, tenant or otherwise); expenses incurred in leasing or procuring
tenants (including, without limitation, lease commissions, legal expenses, and
expenses of renovating space for tenants); interest on, and amortization of,
mortgages or deeds of trust; any rents under any ground, overriding and/or
underlying leases; costs of selling, financing and/or mortgaging any of
Landlord’s interest in the Building or Project including, without limitation,
mortgage or recording taxes, points, commissions, legal fees and commitment
fees; any sums paid to a person, firm, corporation or other entity related to
Landlord which are in excess of the market amount; compensation, bonuses,
salaries, administrative wages and benefits of officers, directors, and
executive personnel,

B-1

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property manager and leasing agents of Landlord or personnel of Landlord above
the level of Building manager; legal and other professional fees, court costs,
and other expenses incurred in preparing, negotiating and executing leases,
amendments, terminations and extensions or in resolving any disputes with
tenants or other occupants or enforcing lease obligations; auditing fees other
than auditing fees in connection with the preparation of statements required to
reconcile Operating Expenses; cost of any work or service performed for any
specific tenant (including Tenant) at such tenant's cost; and/or charges for
electricity, HVAC, any other utilities or for janitorial or cleaning for which
Landlord is entitled to reimbursement from any specific tenant other than
through Operating Expenses; services or benefits provided to some tenants but
not to Tenant; the costs of developing the site or correcting defects and/or
latent defects in the original construction of the Building or in the Building
equipment and/or costs to correct any damage caused by subsurface or soil
conditions; cost of any repair made by Landlord to remedy damage caused by, or
resulting from the gross negligence or willful or intentional acts of Landlord,
its agents, servants, contractors, or employees; costs to remove asbestos or
Hazardous Materials (as defined by all applicable environmental laws) from the
Building except for routine removal of Hazardous Materials commonly present in a
Building comparable to that of the Building, such as but not limited to office
and cleaning supplies and motor oil deposits; the cost of any additions to the
Building; costs to retrofit or reinforce the Building or the Premises to comply
with existing (as of the Effective Date) laws, rules, codes or regulation
related to earthquake safety, floor control and/or handicapped access; fines or
penalties incurred by Landlord due to Landlord's violation of any applicable
governmental Law, requirement or order; any late fees, penalties, interest
charges or similar fees incurred by Landlord; except to the extent permitted in
the preceding paragraph, lease payments for rented equipment, the cost of which
equipment would constitute a capital expenditure if the equipment were
purchased; the cost of complying with the Americans With Disabilities Act in
effect (and as interpreted) as of the Effective Date, whether such costs are
classified as capital items or expenses under generally accepted accounting
principles; charitable or political contributions; gift and corporate taxes of
Landlord; and capital expenditures as determined in accordance with GAAP,
including, but not limited to, costs incurred by Landlord for improvements or
replacements (including structural additions), repairs, equipment and tools
which are of a “capital” nature and/or which are considered “capital”
improvements or replacements under GAAP, except as otherwise provided in
paragraph A above.

B.           Actual Operating Expenses for each calendar year shall be adjusted,
if necessary, to equal Landlord’s reasonable estimate of Operating Expenses for
a full calendar year with the total area of the Building occupied during such
full calendar year; provided, however, Landlord shall not in any year collect in
excess of one hundred percent (100%) of the actual Operating Expenses paid or
incurred by Landlord in any calendar year.

C.           Landlord reserves the right to, in good faith, establish
classifications for the equitable allocation of Operating Expenses that are
incurred for the direct benefit of specific types of tenants or users in the
Building (“Cost Pools”).  Landlord’s reasonable determination of such
allocations in a manner consistent with the terms and conditions of this section
shall be final and binding on Tenant.  Tenant acknowledges that the allocation
of Operating Expenses among Cost Pools does not affect all Operating Expenses,
and is limited to specific items that are incurred or provided to tenants of
Cost Pools which Landlord determines, in good faith, it would be inequitable to
share, in whole or in part, among tenants of other Cost Pools in the Building.

D.           As used in this Lease, “Property Taxes” shall mean all taxes,
assessments, excises, levies, fees and charges (and any tax, assessment, excise,
levy, fee or charge levied wholly or partly in lieu thereof or as a substitute
therefor or as an addition thereto) of every kind and description, general or
special, ordinary or extraordinary, foreseen or unforeseen, secured or
unsecured, that are levied, assessed, charged, confirmed or imposed by any
public or government authority on or against, or otherwise with respect to, the
Building or any part thereof or any personal property used in connection with
the Building, or any charge or fee imposed by any federal, state or local
government, district or agency for fire protection, public transportation,
housing, trash removal, sidewalk, street maintenance or other public
service(s).  Property Taxes shall not include net income (measured by the income
of Landlord from all sources or from sources other than solely rent), franchise,
documentary transfer, inheritance or capital stock taxes of Landlord, unless
levied or assessed against Landlord in whole or in part in lieu of, as a
substitute for, or as an addition to any Property Taxes.

E.           In addition to all rent and other charges to be paid by Tenant
under the Lease, Tenant shall reimburse Landlord upon demand for all taxes,
assessments, excises, levies, fees and charges including all payments related to
the cost of providing facilities or services, whether or not now customary or
within the contemplation of Landlord and Tenant, that are payable by Landlord
and levied, assessed, charged, confirmed or imposed by any public or government
authority upon, or measured by, or reasonably attributable to (i) the cost or

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value of Tenant’s equipment, furniture, fixtures and other personal property
located in the Premises or the cost or value of any leasehold improvements made
in or to the Premises by or for Tenant, regardless of whether title to such
improvements is vested in Tenant or Landlord, (ii) any rent payable under this
Lease, including any gross income tax or excise tax levied by any public or
government authority with respect to the receipt of any such rent, (iii) the
possession, leasing, operation, management, maintenance, alteration, repair, use
or occupancy by Tenant of the Premises, or (iv) this transaction or any document
to which Tenant is a party creating or transferring an interest or an estate in
the Premises.  All taxes, assessments, excises, levies, fees and charges payable
by Tenant under this Exhibit shall be deemed to be, and shall be paid as,
additional rent.

 

 

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EXHIBIT C

 

RULES AND REGULATIONS OF

14501 PRINCETON AVENUE, MOORPARK, CA

 

ROOF

Neither Tenant nor any agent, employee, contractor, invitee or licensee of
Tenant shall go upon the roof of the Building, except as permitted by Landlord
in accordance with the Lease.

SIGNS

No sign, placard, picture, name, advertisement or notice visible from the
exterior of the Premises shall be inscribed, painted, affixed or otherwise
displayed by Tenant on any part of the Building or the Premises without the
prior written consent of Landlord.  Landlord will adopt and furnish to tenants
general guidelines relating to signs inside the Building.  Tenant agrees to
conform to such guidelines.  All approved signs or lettering shall be printed,
painted, affixed or inscribed at the expense of Tenant by a person approved by
Landlord.

KEYS

Landlord will furnish Tenant without charge with two (2) keys to each door lock
provided in the Premises by Landlord.  Landlord may make a reasonable charge for
any additional keys.  Tenant, upon the termination of this Lease, shall deliver
to Landlord all keys to doors in the Building.

NO NUISANCES

Tenant shall not use or keep in the premises or the building any kerosene,
gasoline or inflammable or combustible fluid or material other than limited
quantities thereof reasonably necessary for the operation or maintenance of
tenant’s equipment.  Tenant shall not use any method of heating or air
conditioning other than that supplied by landlord.  Tenant shall not use or keep
or permit to be used or kept any foul or noxious gas or substance in the
premises, or permit or suffer the premises to be occupied or used in a manner
offensive or objectionable to Landlord or other occupants of the Building by
reason of noise, odors or vibrations, or interfere in any way with other tenants
or those having business in the Building, nor shall any animals be brought or
kept in the premises or the Building (other than service animals).

ACCESS TO BUILDING

In the case of invasion, mob, riot, public excitement or other circumstances
rendering such action advisable in Landlord’s opinion, Landlord reserves the
right to prevent access to the Building during the continuance of the same by
such action as Landlord may deem appropriate, including closing doors.  Tenant
assumes all risks from theft or vandalism and agrees to keep the Premises locked
as may be required.

USE OF NAME OF BUILDING

Tenant shall not use the name of the Building for any purpose other than as an
address of the business to be conducted by Tenant in the Premises.  Landlord
shall have the right to change the name, address or title of the Project or the
Building.

BATHROOMS

The toilet rooms, toilets, urinals, wash bowls and other apparatus shall not be
used for any purpose other than that for which they were constructed, no foreign
substance of any kind whatsoever shall be thrown therein, and the expense of any
breakage, stoppage or damage resulting from the violation of this rule shall be
paid by Tenant if caused by Tenant or its agents, employees, contractors,
invitees or licensees.

TRASH REMOVAL

Tenant shall not make, suffer or permit litter, except in appropriate
receptacles for that purpose.  Tenant shall store all its trash and garbage
within the Premises.  No material shall be placed in the trash boxes or
receptacles

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if such material is of such nature that it may not be disposed of in the
ordinary and customary manner of removing and disposing of industrial building
trash and garbage in the city or county in which the Building is located without
being in violation of any law or ordinance governing such disposal.  Tenant
shall crush and flatten all boxes, cartons and containers.  Tenant shall pay
extra charges for any unusual trash disposal.

NO SOLICITING

Canvassing, soliciting, distribution of handbills or any other written material
and peddling in the Building are prohibited, and Tenant shall cooperate to
prevent the same.

NO SMOKING

There shall be NO SMOKING in the Building or in the immediate area of the
entrances to the Building as designated by Landlord.

PARKING RULES

1.            Tenant shall use the parking facilities of the Project only for
the parking of automobiles used by Tenant’s employees while the employees are
working in the Premises and for use by Tenant’s licensees and invitees while
visiting the Premises.  Except as expressly designated in writing by Landlord,
parking is on an unreserved, first-come basis.

2.            Automobile parking areas (except as provided below) shall be used
only for parking by vehicles no longer than full size, passenger automobiles
herein called “Permitted Size Vehicles”.  Vehicles other than Permitted Size
Vehicles are herein referred to as “Oversized Vehicles”.  Tenant shall be
permitted to park Oversized Vehicles used in Tenant’s business in the automobile
parking areas, subject to reasonable limitations of such parking as designated
by Landlord.

3.            Tenant shall not permit or allow any vehicles that belong to or
are controlled by Tenant or Tenant’s employees, suppliers, shippers, customers,
or invitees to be loaded, unloaded, or parked in areas other than those
designated by Landlord for such activities.

4.            Unless otherwise instructed, every person using the parking area
is required to park and lock his own vehicle.  Landlord is not responsible for
any damage to vehicles, injury to persons or loss of property, all of which
risks are assumed by the party using the parking facilities.  The release
provision contained in Paragraph 14(f) of this Lease is expressly made
applicable to Tenant’s use of the parking facilities and any occurrences therein
and in the driveway access and entrances thereto.

5.            The maintenance, washing, waxing or cleaning of vehicles in the
parking areas or anywhere on the property is prohibited.

6.            Tenant shall be responsible for ensuring that all of its
employees, agents and invitees comply with the applicable parking rules,
regulations, laws and agreements.

7.            Parking herein provided is intended as a license only and no
bailment is intended or shall be created hereby.

8.            Users of the parking area will obey all posted signs and park only
in the areas designated for vehicle parking.

9.            Landlord reserves the right to modify these rules and/or adopt
such other reasonable and nondiscriminatory rules and regulations as it may deem
necessary for the proper operation of the parking facilities.

WAIVER

Landlord may waive any one or more of these Rules and Regulations for the
benefit of any particular tenant or tenants, but no such waiver by Landlord
shall be construed as a waiver of such Rules and Regulations in favor of any
other tenant or tenants, nor prevent Landlord from thereafter enforcing any such
Rules and Regulations against any or all of the tenants of the Building in a
uniform and non-discriminatory manner.

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LIFE SAFETY

Tenant shall comply with all safety, fire protection and evacuation regulations
established by Landlord or any applicable governmental agency.

SUPPLEMENTAL TO LEASE

These Rules and Regulations are in addition to, and shall not be construed to in
any way modify or amend, in whole or in part, the covenants of this Lease.

 

 

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EXHIBIT D

WORK LETTER

This Work Letter sets forth the agreement of Landlord and Tenant with respect to
the improvements to be constructed in the Premises.  All defined terms used
herein shall have the meaning set forth in the Lease, unless otherwise defined
in this Work Letter.

1.            Landlord’s Work.

(a)          Landlord shall deliver the Premises to Tenant upon Substantial
Completion of the Landlord’s Work (as defined below).  The term “Substantially
Completed” or “Substantial Completion” as used in the Lease or this Work Letter
shall mean Landlord has sufficiently completed all the work required to be
performed by Landlord in accordance with this Work Letter (except standard
punchlist items, which Landlord shall thereafter promptly complete after receipt
of written notice thereof from Tenant received within thirty (30) days after the
Commencement Date) such that Tenant can conduct normal business operations from
the Premises.  The Landlord’s Work shall be comprised of (i) the improvements
(the “Base Landlord Work”) identified in that certain space plan (the “Base
Landlord Work Space Plan”), a copy of which is attached as Exhibit D-1 (and
which, for avoidance of doubt, include, without limitation, HVAC for the
warehouse, five (5) private offices on the first floor of the Premises, and the
epoxy finish on the warehouse floor), and (ii) the improvements identified in
that certain space plan (the “Full Scope Space Plan” and referred to
collectively with the Base Landlord Work Space Plan as the “Space Plan”), a copy
of which is attached as Exhibit D-2, which are in addition to the Base Landlord
Work and which Tenant elects pursuant to Section 1(b) below to cause Landlord to
complete (such additional improvements, the “Supplemental Landlord
Work”).  Except as otherwise noted in the Space Plan, Landlord shall utilize
Building Standard materials for improvement to the Premises.  Landlord shall
perform and commence work on the Landlord’s Work through an architect and
contractors acceptable to Landlord in its sole discretion.  As used herein, the
term “Building Standard” refers to the materials maintained in stock by Landlord
for use in the improvements of tenant space in the Building.  The parties
acknowledge and agree that the Landlord’s Work constitutes all of the work
required to enable Tenant to occupy, and operate its business in, the Premises.

(b)          Landlord will perform, at its sole cost and expense, the Base
Landlord Work.  Within five (5) business days of the Effective Date of the
Lease, Tenant shall provide written notice to Landlord of the Supplemental
Landlord Work which Tenant elects for Landlord to construct; provided that
Tenant may modify its election of Supplemental Landlord Work to be performed by
adding or deleting therefrom until Construction Drawings have been approved
pursuant to Section 2 below, and any modifications thereafter to the
Supplemental Landlord Work shall constitute a Tenant Delay pursuant to Section 4
below.  As part of the Landlord’s Work, Landlord will also perform, at its sole
cost and expense, the Supplemental Landlord Work, provided however, that all
costs attributable to such Supplemental Landlord Work shall be reimbursed by
Tenant within thirty (30) days of receipt from Landlord of invoice therefore
(and reasonable evidence of such costs), except that Tenant shall not be
responsible to reimburse Landlord for the cost of architectural plans,
engineering plans and permits attributable to the Supplemental Landlord Work,
and Tenant may, by delivery of written notice to Landlord, elect to apply all or
a portion of the TI Reimbursement (as set forth under Section 13(e) of the
Lease) towards Tenant’s reimbursement obligations for the Supplemental Landlord
Work.

2.            Plans.

(a)          Landlord shall deliver to Tenant construction drawings which
incorporate and are consistent with the Space Plan, and which show in detail the
intended design, construction and finishing of all portions of the Landlord’s
Work (collectively, the “Construction Drawings”).  Within five (5) business days
after Tenant’s receipt of the Construction Drawings, Tenant shall either approve
or disapprove the Construction Drawings, which approval shall not be
unreasonably withheld.  Tenant’s failure to approve or disapprove the
Construction Drawings within such 5 business-day period shall be deemed to
constitute Tenant’s approval of the Construction Drawings.  If Tenant
disapproves the Construction Drawings, then Tenant shall state in reasonable
detail the changes which Tenant requires to be made thereto.  Landlord shall
submit to Tenant revised Construction Drawings within five (5) business days
after Landlord’s receipt of Tenant’s disapproval notice.  Tenant shall give
Landlord written notice of its approval or disapproval of the revised
Construction Drawings within two business (2)

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days after the date of Tenant’s receipt thereof.  Tenant’s failure to approve or
disapprove the revised Construction Drawings within such 2 business-day period
shall be deemed to constitute Tenant’s approval of the revised Construction
Drawings.  If Tenant disapproves the revised Construction Drawings, then
Landlord and Tenant shall continue to follow the procedures set forth in this
Paragraph 2(a) until Landlord and Tenant reasonably approve such Construction
Drawings in accordance with this Paragraph 4(a);  provided, however, that
notwithstanding anything to the contrary set forth above in this Paragraph 2(a),
if Landlord and Tenant have not mutually approved the Construction Drawings
within two business (2) days after Landlord’s delivery of the third (3rd)
iteration of the same to Tenant, or within thirty (30) calendar days after
Landlord delivers the initial set of Construction Drawings to Tenant (whichever
is sooner), then Landlord may, in its sole discretion, elect to terminate this
Lease by giving written notice of such election to Tenant at any time
thereafter.

(b)          After Landlord and Tenant have mutually approved the Construction
Drawings pursuant to Paragraph 2(a) above, Landlord shall apply, or cause its
architect to apply, for applicable permits.  Notwithstanding anything to the
contrary set forth above in this Paragraph 2(b), if Architect is unable to
obtain the Permits within sixty (60) days after Landlord and Tenant have
mutually approved the Construction Drawings despite Architect’s good faith and
diligent efforts, then Landlord may elect to terminate this Lease by giving
written notice of such election to Tenant at any time thereafter.

3.            Early Access. Provided that Tenant, its employees, contractors and
agents do not interfere with, or delay, the Landlord’s construction of the
Landlord’s Work, Landlord shall allow Tenant access to the Premises commencing
as of the execution and delivery of this Lease by both parties for the purpose
of Tenant performing any building design, permitting and preparation prior to
occupancy.  Prior to Tenant’s entry into the Premises as permitted by the terms
of this paragraph, Tenant shall submit a schedule to Landlord for its approval,
which schedule shall detail the timing and purpose of Tenant’s entry, and shall
deliver evidence of insurance coverage as required of Tenant under this
Lease.  Tenant’s early access onto the Premises under this Paragraph 3 shall be
subject to all terms and conditions of this Lease (including without limitation
all insurance and indemnity obligations), except for the payment of Rent.

4.            Tenant Delay.  In the event of any Tenant Delays (as that term is
hereinafter defined), the Commencement Date of the Lease shall be determined
based on the date Landlord in good faith determines it would have substantially
completed the Landlord’s Work without the delays attributable to Tenant
Delays.  As used herein, the term “Tenant Delays” shall mean any delay that
Landlord may encounter in the performance of Landlord’s obligations under this
Work Letter or the Lease to construct the Landlord’s Work because of any act or
omission of any nature by Tenant or its employees, contractors or agents,
including, without limitation, delays resulting from changes in or additions to
the plans for the Landlord’s Work; delays resulting from Tenant’s election to
include in the Landlord’s Work the construction of offices within the warehouse
portion of the Premises; delays due to the failure to promptly give
authorizations or approvals of the Construction Drawings or any other matter
required to enable Landlord to proceed with any work; delays resulting from
interference by Tenant, its employees, contractors or agents with Landlord’s
performance of the Landlord’s Work.

 

 

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EXHIBIT D-1

BASE LANDLORD WORK SPACE PLAN

 

Picture 4 [avav20180430ex1024f05cd004.jpg]

 

D-1-1

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Picture 5 [avav20180430ex1024f05cd005.jpg]

 

D-1-2

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Picture 6 [avav20180430ex1024f05cd006.jpg]

 

D-1-3

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Picture 7 [avav20180430ex1024f05cd007.jpg]

 

 

D-1-4

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EXHIBIT D-2

FULL SCOPE SPACE PLAN

 

Picture 8 [avav20180430ex1024f05cd008.jpg]

 

D-2-1

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Picture 9 [avav20180430ex1024f05cd009.jpg]

 

D-2-2

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Picture 10 [avav20180430ex1024f05cd010.jpg]

 

D-2-3

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Picture 11 [avav20180430ex1024f05cd011.jpg]Picture 12
[avav20180430ex1024f05cd012.jpg]

 

 

D-2-4

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EXHIBIT E

COMMENCEMENT LETTER

________, 20__

_____________________
_____________________

_____________________

Re:         Lease dated __________ ___, 201_ (“Lease”), by and between Princeton
Avenue Holdings, a California limited liability company (“Landlord”), and
Aerovironment, Inc., a Delaware corporation (“Tenant”), with respect to 14501
Princeton Avenue, Moorpark, California (“Premises”)

Dear Tenant:

In accordance with the terms and conditions of the above referenced Lease,
Tenant hereby accepts possession of the Premises and agrees as follows:

Commencement Date of the Lease: _______, 20__;

Expiration Date of the Lease: _______, 20__.

 

Please acknowledge your acceptance of possession of the Premises and agreement
to the terms set forth above by signing all three (3) copies of this
Commencement Letter in the space provided and returning two (2) fully executed
copies of the same to my attention.

Sincerely,

 

 

 

 

 

PRINCETON AVENUE HOLDINGS, LLC,

a California limited liability company

By:

Nearon Enterprises,

 

a California corporation

Its:

Designated Manager

By:

 

 

 

Anthony Perino, President

 

AGREED AND ACCEPTED:

 

 

AEROVIRONMENT, INC.,

a Delaware corporation

 

By:

 

 

Name:

 

 

Its:

 

 

 

 

E-1

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RIDER NO. 1 TO LEASE

14501 PRINCETON AVENUE, MOORPARK, CA

 

This Rider No. 1 to Lease is attached to and incorporated by reference into that
certain Lease, dated March 28,  2018, entered into by and between Princeton
Avenue Holdings, LLC, a California limited liability company, as Landlord, and
Aerovironment, Inc., a Delaware corporation, as Tenant (the “Lease”).  Landlord
and Tenant hereby amend and supplement the Lease as hereinafter set forth.  In
the event of any conflict or inconsistency between the Lease and this Rider, the
terms of this Rider shall control and prevail.  Capitalized terms used herein
and not otherwise defined shall have the meaning given said terms in the Lease.

 

35.          EARLY TERMINATION.

 

Tenant shall have the option (“Termination Option”) to terminate this Lease
effective upon the last day of the thirty ninth (39th) full calendar month of
the Term only (the “Termination Date”).  In order to exercise the Termination
Option, Tenant must fully and completely satisfy each and every one of the
following conditions:  (a) Tenant must give Landlord written notice
(“Termination Notice”) at least six (6) months prior to the Termination Date,
(b) at the time of the Termination Notice, no Event of Default shall exist under
this Lease, nor shall any circumstance exist that, with the giving of notice,
the passage of time, or both, would constitute an Event of Default under this
Lease, and (c) concurrently with Tenant’s delivery of the Termination Notice to
Landlord, Tenant shall pay to Landlord a termination fee (“Termination Fee”)
equal to Six Hundred Thousand and 00/100 Dollars ($600,000.00).  Tenant’s
failure to deliver the Termination Fee concurrently with the Termination Notice
shall render the Termination Notice and the Termination Option null and void and
this Lease shall continue in full force and effect.  Tenant’s rights granted
under this Paragraph 35 are personal to the original Tenant signatory to this
Lease and any Permitted Transferee, and shall not be assigned to nor inure to
the benefit of any other party.

 

36.      EXTENSION OPTION.

 

Tenant shall have the right to extend the Term of this Lease (the “Extension
Option”), for one (1) thirty six (36) month period (the “Extension Term”) if
Tenant (i) gives Landlord written notice of such election (the “Option Notice”)
not earlier than eighteen (18) months, and not later than twelve (12) months,
before the expiration of the original or then current Term of this Lease; (ii)
is not in default beyond any applicable cure periods under any provision of this
Lease on the date of giving the Option Notice; and (iii) is not in default
beyond any applicable cure periods of any provision of this Lease on the date of
the expiration of the original or then current Term of this Lease.  The
foregoing conditions are for the sole benefit of Landlord, and Landlord, alone,
shall have the right in its sole and absolute discretion to insist on strict
observance with the foregoing conditions or to waive any of the foregoing
conditions.  All of the terms and conditions of this Lease shall apply during
the Extension Term (other than the further right to extend the Term, and any
obligation to construct Landlord’s Work provided in this Lease, which shall be
inapplicable).  The Base Rent for the first year of the Extension Term shall
equal one hundred two point five percent (102.5%) of the then current Base Rent
being paid under this Lease, and shall increase annually thereafter by two point
five percent (2.5%).  The foregoing Extension Option is personal to the named
Tenant under this Lease, and shall not inure to the benefit of any assignee or
subtenant other than a Permitted Transferee.  The Extension Option shall be void
and of no further effect if at any time the named Tenant under this Lease
assigns this Lease or subleases any portion of the Premises to any entity other
than a Permitted Transferee.

AEROVIRONMENT

14501 Princeton avenue

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