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  operational. Notwithstanding the installation of the New HVAC Units, Lessee shall continue to be responsible for themaintenance and repair of the HVAC units after their replacement.  b. Install new walk pads around all HVAC units on the entire roof area (boththe front office building and the entire rear building).  c. Repair window mullions broken by the settling in the downstairs courtyardas well as the ponding problem at the upstairs (entry) courtyard.  d. Install a new COOL roof (“New Roof”) to include 81 new skylights on therear warehouse and 116 new skylights on the front warehouse. Each skylight shallhave security grills. Lessee’s use of the Premises including, but not limited to,its manufacturing processes shall not damage the New Roof including, but not limitedto, emitting particulates which damage the New Roof. Notwithstanding anything to thecontrary, Lessor shall, at Lessee’s sole cost and expense, maintain the New Roofincluding, but not limited to, Lessor entering into a roof maintenance contract witha contractor approved by Lessee, which approval shall not be unreasonably withheld,delayed or conditioned.  e. To the extent that Lessor’s costs are not increased for Lessor’s Work,Lessor shall cooperate with Lessee in incorporating environmentally sensitivecharacteristics into the design and execution of Lessor’s Work including, but notlimited installation of a “cool roof,” i.e., a roof that reflects and emits aportion of the sun’s heat back to the sky instead of transferring it to theBuilding.  f. Repair or replace broken ground aggregate panels in the vicinity of thegated entry to the main lobby entrance but excluding the path leading all the wayout to Harpers Way.  g. At such time as the Building is repainted by Lessee, Lessor shallre-caulk various panel joints on the exterior walls.     Notwithstanding the foregoing or anything to the contrary, Lessor shall not install solarpanels or wind turbines on the Building. Further, Lessor shall not repair or replace broken andaging sprinkler system back flow devices.     Lessee, at its sole cost and expense, shall cooperate with Lessor and Lessor’s contractors inthe completion of Lessor’s Work. Such cooperation shall include, but not be limited to, providingaccess to the Premises at all reasonable times to Lessor and Lessor’s contractors, moving allfurniture, fixtures, equipment and decorations (collectively “Lessee Property”) in the mannerdeemed necessary by Lessor or Lessor’s contractors to allow Lessor or Lessor’s contractors tocomplete Lessor’s Work, and returning installing, attaching or affixing the Lessee Property aftercompletion of Lessor’s Work.     5. Lessee Improvement Allowance. Subject to Lessee’s compliance with the provisions ofthis Amendment and the Lease, Lessor shall provide to Lessee an allowance in the amount of SixHundred Thousand and zero/00 Dollars ($600,000.00) (the “TI Allowance”) to construct and installonly improvements and upgrades to the two buildings which constitute the Building (“Alterations”)and which have been approved in writing by Lessor pursuant to this Amendment which approval shallnot be unreasonably withheld or delayed. The Alterations shall include, but not necessarily belimited to, new carpet and paint, wall coverings, ceiling tiles and ceiling finishes, bathroomrepairs and upgrades in both the front office building and the administrative area and shop officesand restrooms of the rear manufacturing building and repair of broken or aging sprinkler systembackflow devices. Additionally, Lessee may use a portion of the TI Allowance on the replacing ofold and inefficient roof top air handlers, HVAC equipment, and blowers with new, more energyefficient models and hiring an engineer to investigate the load capacity of the storage mezzaninein the manufacturing area of the Building and a portion of the TI allowance not to exceed $50,000for a backup electrical generator which shall be the property of Lessor at the end of the Term,Extended Term or earlier termination of the Lease. The TI Allowance shall be used to design,prepare, plan, obtain the approval of, construct and install the Alterations and for no otherpurpose. Except as otherwise expressly provided herein, Lessor shall have no obligation tocontribute the TI Allowance unless and until the Alterations have been completed in a good andworkmanlike manner in lien free condition and evidence of same reasonably satisfactory to Lessorhas been received by Lessor to include, but not be limited to (a) receipt by Lessor ofunconditional mechanics’ lien releases from the contractor and all subcontractors, labor suppliersand materialmen for the Alterations completed by the contractor, subcontractors, labor suppliersand materialmen and for which Lessee seeks funds from the TI Allowance to pay for such Alterations,(b) receipt by Lessor of
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any and all documentation reasonably required by Lessor detailing theAlterations have been completed and the materials and supplies used as of the date of Lessee’srequest for the progress payment, including, without limitation, invoices, bills, or statements forthe Alterations completed and the materials and supplies used, and (c) completion by Lessor orLessor’s agents of any inspections of the Alterations completed and materials and supplies used as deemedreasonably necessary by Lessor. The TI Allowance progress payments shall be paid to Lessee withinfourteen (14) days from the satisfaction of the conditions set forth in the immediately precedingsentence. Should the total cost of constructing the Alterations be less than the TI Allowance, theTI Allowance shall be automatically reduced to the amount equal to said actual cost.Notwithstanding the foregoing or anything to the contrary, the TI Allowance shall only be paid byLessor to Lessee for Alterations completed by Lessee, and for which Lessee has complied with items(a) and (b) above, between full execution of this Amendment and December 31, 2009 (“TI CompletionPeriod”). To the extent that Alterations are not completed during the TI Completion Period, Lessorshall not have any obligation to pay, nor shall Lessee have any right to receive, the TI Allowance.If the Lease is terminated prior to the date on which the Alterations are completed, for anyreason due to the default of Lessee hereunder or under the Lease, in addition to any other remediesavailable to Lessor under the Lease, Lessee shall pay to Lessor as additional rent under the Lease,within five (5) days of receipt of a statement therefor, any and all costs incurred by Lessor andnot reimbursed or otherwise paid by Lessee through the date of termination in connection with theAlterations to the extent planned, installed and/or constructed as of such date of termination,including, but not limited to, any costs related to the removal of all or any portion of theAlterations and restoration costs related thereto.     6. “As-Is”. Except for the completion of Lessor’s Work and payment of TI Allowancepursuant to this Amendment, Lessee acknowledges and agrees that its tenancy of the Premises throughthe Lease Termination Date is a continuation of its tenancy of the Premises under the Lease.Therefore, Lessee accepts the Premises in its existing condition, “as-is, where is, and with allfaults”. Except as specifically set forth herein, it is expressly understood and agreed that Lessorhas no responsibility or obligation to or for (1) repair or perform any work with respect to thePremises including, but not limited to, the building, floor, roof, storefront (if any), walls,ceiling, lighting fixtures, heating, ventilating and air-conditioning systems, plumbing, bathrooms,utilities systems or otherwise, (2) the condition of the Premises, (3) the suitability of thePremises for any use by Lessee, (4) the presence of any hazardous, toxic or environmentallysensitive materials in, on or below the Premises, or (5) the existence of any other physicalimpairment or impairment to the Premises not specifically disclosed in this Lease. Lesseeacknowledges and agrees that, during its tenancy of the Premises, it has had sufficient opportunityto investigate and inspect the physical condition of the Premises and accepts the Premises subjectto the foregoing in its existing condition, “as-is, where is and with all faults”. Notwithstandingthe foregoing or anything to the contrary in the Lease, Lessee shall have no obligation orliability for the presence of any hazardous, toxic or environmentally sensitive materials in, on orbelow the Premises, except to the extent that same were brought on to the Premises by Lessee or itsemployees, agents, agents, contractors, visitors or invitees.     7. New Roof Repairs and Maintenance. Notwithstanding anything to the contrary in theLease and Addendum, upon completion of the New Roof, Lessor, at Lessee’s sole cost and expense,shall maintain and repair the New Roof (“New Roof Repair Costs”), as deemed reasonably necessary byLessor including, but not limited to a roof inspection and maintenance contract. The New RoofRepair Costs may, at Lessor’s sole option, be estimated by Lessor and paid by Lessee on a monthlybasis as additional rent under the Lease in the same time and manner as rent is otherwise paidunder the Lease, or paid by Lessee, as additional rent, within fifteen (15) days of receipt byLessee from Lessor of a bill for such New Roof Repair Costs.     8. New HVAC Repairs and Maintenance. Notwithstanding anything to the contrary in theLease and Addendum, upon completion of the New HVAC Units, Lessee shall, at its sole cost andexpense, maintain, repair and replace the New HVAC Units and any ducting or additional equipmentrelated thereto (“Related HVAC Equipment”) including, but not limited to a obtaining andmaintaining, at Lessee’s sole cost and expense, a service contract (“HVAC Contract”), with alicensed HVAC contractor (“HVAC Contractor”) approved by Lessor in advance, providing for themaintenance and repair of the New HVAC Units and Related HVAC Equipment and providing for at leastquarterly maintenance of the New HVAC Units and Related HVAC Equipment by the HVAC Contractor. IfLessee fails to obtain or maintain the HVAC Contract, fails to perform any maintenance or repairssuggested or required by the HVAC Contractor, or fails to perform any of Lessee’s obligations underthis Paragraph 7, after five (5) days written notice from Lessor to Lessee, Lessor may, at Lessee’ssole cost and expense plus an administrative fee payable by Lessee to Lessor, as additional rent,equal to fifteen percent (15%) of such cost and expense, obtain and maintain the HVAC Contract,authorize or perform any repairs or maintenance suggested or required by the HVAC Contractor,perform such Lessee’s obligations or authorize or perform any repairs, replacements or maintenancewhich would be Lessee’s obligations as deemed reasonably necessary by Lessor. Notwithstanding theforegoing and except to the extent caused by the negligent or intentional acts or omissions ofLessee, its employees, agents, or contractors or the breach by Lessee of any
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of its obligations under the Lease, Lessee shall have no obligation to replace the New HVAC Units or Related HVACEquipment until after February 28, 2015.     9. Capital Expenditures. Paragraph 53(j) of the Addendum is hereby deleted and of nofurther force or effect.     10. Lessor’s Obligations Under Lease. Notwithstanding anything to the contrary in theLease, Lessee acknowledges and agrees that Lessor has completed its obligations under Paragraphs54(d) and (f) of the Addendum and Paragraph 2 of Exhibit A (Work Letter Agreement) to the Lease andhas no further obligations thereunder.     11. Exercise of Option to Extend. Notwithstanding anything to the contrary, theExtended Term as set forth in this Amendment shall be deemed the exercise of the Option to Extendgranted in the Lease and Lessee shall have no further option to extend the term of the Lease beyondthe Lease Expiration Date.     12. Warehouse Condition. Schedule 1, “Warehouse Condition,” of the Lease is amended asfollows: a. Item 9: Notwithstanding anything to the contrary contained inSchedule 1, Lessor, at its sole cost and expense, shall remove ventilationducting and ventilation equipment and make any repairs to the roof and roofstructure necessitated by their removal.  b. Item 11: Notwithstanding anything to the contrary contained inSchedule 1, Lessor, at its sole cost and expense, shall remove all roof mountedequipment as set forth in Item 11 of Schedule 1 and make any repairs to the roofnecessitated by their removal.  c. Items 15, 16 and 17: Notwithstanding anything to the contrarycontained in Schedule 1, Lessee shall not be required to “add high bay lighting”as set forth in items 15, 16 and 17.  d. Item 22: Notwithstanding anything to the contrary contained inSchedule 1, Lessee shall not be responsible to “restore door #30 at woodgrinder”.  e. Item 23: Notwithstanding anything to the contrary contained inSchedule 1, Lessee shall be responsible to remove the small spray booth at thelower level under the upholstery area, but it shall not be required to remove thestack assembly.  f. Item 24: Notwithstanding anything to the contrary contained inSchedule 1, Lessee shall not be obligated to “install walls made of drywall andgalvanized studs under upholstery mezzanine.”     13. Lessor’s Address for Payments and Notices. The address for notices to Lessor asset forth in the Lease shall be to:AMB Property, L.P.