Exhibit 10.15

OFFICE FLEX LEASE

[TRIPLE NET]

250 Technology Parkway

Lake Mary, Florida

 

Landlord:   

Sun Life Assurance Company of Canada,

a Canadian corporation

Tenant:   

FARO Technologies, Inc.,

a Florida corporation

Date:    September __, 2007

This Lease consists of four parts:

 

Part I    Cover Sheet Part II    Standard Lease Provisions Part III   
Additional Provisions (if any) and Part IV    Exhibits    EXHIBIT A - Floor Plan
of Premises    EXHIBIT B - Legal Description of Lot    EXHIBIT C - Landlord’s
Notice of Lease Term Dates    EXHIBIT D - Tenant Improvements    EXHIBIT E -
Rules and Regulations

--------------------------------------------------------------------------------

PART I

COVER SHEET

The terms listed below shall have the following meanings throughout this Lease:

 

DATE OF LEASE:    September     , 2007, the date on which Landlord has signed
this Lease LANDLORD:   

Sun Life Assurance Company of Canada,

a Canadian corporation

TENANT:   

FARO Technologies, Inc.,

a Florida corporation

TENANT’S ADDRESS:   

525 Technology Parkway

Lake Mary, Florida 32746

MANAGER:    Crescent Resources, LLC MANAGER’S ADDRESS:    Crescent Resources,
LLC, 300 Primera Boulevard, Suite 140, Lake Mary, Florida 32746, Attention:
Diane S. Crouse, Senior Property Manager PREMISES:    The area consisting of
approximately 46,481 rentable square feet of the Building, as shown on Exhibit A
attached hereto BUILDING:    The building in which the Premises are located at
250 Technology Parkway, Lake Mary, Florida 32746, and consisting of a total of
approximately 46,481 square feet of space PROPERTY:    The Building and land
located on a parcel in the legal description of which is shown on Exhibit B
attached hereto

TENANT’S

PERCENTAGE:

   100% (46,481 rentable square feet in the Premises divided by 46,481 rentable
square feet in the Building) PERMITTED USES:    Office purposes and uses
ancillary to office use, such as a kitchen, cafeteria and work out room; Tenant
shall not be permitted to use as a call center or other high-intensity uses or
for manufacturing or assembly.

TENANT

IMPROVEMENTS:

   See Exhibit D attached hereto

--------------------------------------------------------------------------------

SCHEDULED COMMENCEMENT DATE:    October 1, 2007 TERM:    Sixty-five (65) full
calendar months (“Expiration Date”).

BASE RENT

(TRIPLE NET):

   Tenant shall pay Base Rent for the Premises in accordance with the following
schedule:

Months

   Annual
Rent
p.r.s.f.    Rent Per Month Commencement Date – 9/30/08    $ 9.75 NNN    $
37,765.81 NNN 10/1/08 – 9/30/09    $ 10.05 NNN    $ 38,927.84 NNN 10/1/09 –
9/30/10    $ 10.35 NNN    $ 40,089.86 NNN 10/1/10 – 9/30/11    $ 10.65 NNN    $
41,251.89 NNN 10/1/11 – 9/30/12    $ 10.95 NNN    $ 42,413.91 NNN 10/1/12 –
Expiration Date    $ 11.25 NNN    $ 43,575.94 NNN

SALES TAX:    Tenant shall pay to Landlord, simultaneously with Tenant’s
payments of such Base Rent, all Florida sales or rental taxes due on such rents.
The current rate for such taxes in Seminole County is seven percent (7%).
PREPAID RENT:    First (1st) month Base Rent, Operating Expenses, Taxes and
Capital Costs SECURITY DEPOSIT:    $54,963.79 PUBLIC LIABILITY INSURANCE AMOUNT:
   $3,000,000 combined single limit BROKER(S):    Crescent Resources, LLC
GUARANTOR(S):    None CONTINGENCY:    Tenant acknowledges there are currently
existing tenants (the “Existing Tenants”) occupying portions of the Premises
under an existing leases (the “Existing Leases”). This Lease is contingent upon
Landlord entering into a termination agreement with the Existing Tenants of the
Existing Leases on terms and conditions acceptable to Landlord, in Landlord’s
sole discretion. Landlord agrees to use its reasonable efforts to obtain the
termination agreement with the Existing Tenant, but shall not be liable to
Tenant for any such failure. If this contingency is not satisfied on or before
September 30, 2007, Landlord may at any time thereafter terminate this Lease
upon prior written notice to Tenant and this Lease shall be deemed null and void
and neither party shall have any further obligation to the other under this
Lease.

--------------------------------------------------------------------------------

TABLE OF CONTENTS OF STANDARD LEASE PROVISIONS

 

         

Page

ARTICLE I: PREMISES

1.1

   Premises   

1.2

   Common Areas   

ARTICLE II: TERM

2.1

   Commencement Without Tenant Improvements   

2.2

   Commencement With Tenant Improvements   

ARTICLE III: RENT

3.1

   Base Rent   

3.2

   Additional Rent for Operating Expenses, Taxes, and Capital Costs   

ARTICLE IV: DELIVERY OF PREMISES AND TENANT IMPROVEMENTS

4.1

   Condition of Premises   

4.2

   Delay in Possession   

4.3

   Delivery and Acceptance of Possession   

4.4

   Early Occupancy   

ARTICLE V: ALTERATIONS AND TENANT’S PERSONAL PROPERTY

5.1

   Alterations   

5.2

   Tenant’s Personal Property   

ARTICLE VI: LANDLORD’S COVENANTS

6.1

   Services Provided by Landlord   

6.2

   Repairs and Maintenance   

6.3

   Quiet Enjoyment   

6.4

   Insurance   

ARTICLE VII: TENANT’S COVENANTS

7.1

   Repairs, Maintenance and Surrender   

7.2

   Use   

7.3

   Assignment; Sublease   

7.4

   Indemnities   

7.5

   Tenant’s Insurance   

7.6

   Payment of Taxes   

7.7

   Environmental Assurances   

7.8

   Americans With Disabilities Act   

--------------------------------------------------------------------------------

ARTICLE VIII: DEFAULT

8.1

   Default   

8.2

   Remedies of Landlord and Calculation of Damages   

ARTICLE IX: CASUALTY AND EMINENT DOMAIN

9.1

   Casualty   

9.2

   Eminent Domain   

ARTICLE X: RIGHTS OF PARTIES HOLDING SENIOR INTERESTS

10.1

   Subordination   

10.2

   Mortgagee’s Consent   

ARTICLE XI: GENERAL

11.1

   Representations by Tenant   

11.2

   Notices   

11.3

   No Waiver or Oral Modification   

11.4

   Severability   

11.5

   Requests by Tenant   

11.6

   Estoppel Certificate and Financial Statements   

11.7

   Waiver of Liability   

11.8

   Execution; Prior Agreements and No Representations   

11.9

   Brokers   

11.10

   Successors and Assigns   

11.11

   Applicable Law and Lease Interpretation   

11.12

   Costs of Collection, Enforcement and Disputes   

11.13

   Holdover   

11.14

   Force Majeure   

11.15

   Limitation On Liability   

11.16

   Notice of Landlord’s Default   

11.17

   Lease not to be Recorded   

11.18

   Security Deposit   

11.19

   Generator   

11.20

   Radon   

--------------------------------------------------------------------------------

PART II STANDARD LEASE PROVISIONS

ARTICLE I PREMISES

1.1 Premises.

(a) Demise of Premises. This Lease (the “Lease”) is made and entered into by and
between Landlord and Tenant and shall become effective as of the Date of Lease.
In consideration of the mutual covenants made herein, Landlord hereby leases to
Tenant, and Tenant hereby leases from Landlord, the Premises, on all of the
terms and conditions set forth in this Lease.

(b) Intentionally Omitted.

(c) Access to Premises. Landlord shall have reasonable access to the Premises,
at any time during the Term, to inspect Tenant’s performance hereunder and to
perform any acts required of or permitted to Landlord herein, including, without
limitation, (i) the right to make any repairs or replacements Landlord deems
necessary, (ii) the right to show the Premises to prospective purchasers and
mortgagees, and (iii) during the last nine (9) months of the Term, the right to
show the Premises to prospective tenants. Landlord shall at all times have a key
to the Premises, and Tenant shall not change any existing lock(s), nor install
any additional lock(s) without Landlord’s prior consent. Except in the case of
any emergency, any entry into the Premises by Landlord shall be on reasonable
advance notice, and if available, Tenant shall have the right to accompany
Landlord and/or its representatives during any such entry.

1.2 Common Areas. Tenant shall have the right to use, in common with other
tenants, the Building’s common walkways and driveways necessary for access to
the Building and the parking areas for the Building (“Common Areas”). Tenant’s
use of the Building parking areas shall be on an unreserved, non-exclusive basis
and solely for Tenant’s employees and visitors. Landlord shall not be liable to
Tenant, and this Lease shall not be affected, if any parking rights of Tenant
hereunder are impaired by any law, ordinance or other governmental regulation
imposed after the Date of Lease. If Landlord grants to any other tenant the
exclusive right to use any particular parking spaces, neither Tenant nor its
visitors shall use such spaces. Use of the Common Areas shall be only upon the
terms set forth at any time by Landlord. Landlord may at any time and in any
manner make any changes, additions, improvements, repairs or replacements to the
Common Areas that it considers desirable, provided that Landlord shall use
reasonable efforts to minimize interference with Tenant’s normal activities.
Such actions of Landlord shall not constitute constructive eviction or give rise
to any rent abatement or liability of Landlord to Tenant.

ARTICLE II TERM

2.1 Intentionally Deleted.

2.2 Commencement With Tenant Improvements. If Landlord is required to construct
Tenant Improvements to the Premises pursuant to Exhibit D, the Scheduled
Commencement Date shall be only an estimate of the beginning of the Term of this
Lease and the actual commencement date (the “Commencement Date”) shall be the
first to occur of (i) the date the Premises are offered by Landlord for
occupancy following substantial completion of the Tenant Improvements to be
constructed by Landlord pursuant to Exhibit D, as reasonably determined by
Landlord, and any certificate or approval required by local governmental
authority for occupancy of the Premises has been obtained, or (ii) the date
Tenant enters into occupancy of the Premises.

 

1

--------------------------------------------------------------------------------

If Landlord is obligated to construct Tenant Improvements pursuant to Exhibit D,
the dates upon which the Term shall commence and end shall be confirmed in
Landlord’s Notice of Lease Term Dates (“Notice”), substantially in the form
attached as Exhibit C. Landlord shall deliver the Notice to Tenant after
Landlord offers possession of the Premises to Tenant or Tenant enters into
occupancy of the Premises. Tenant shall promptly return to Landlord a
countersigned original of the Notice, provided that Landlord’s failure to
deliver the Notice shall not delay the Commencement Date.

ARTICLE III RENT

3.1 Base Rent.

(a) Payment of Base Rent. Tenant shall pay the Base Rent each month in advance
on the first day of each calendar month during the Term. If the Commencement
Date is other than the first day of the month, Tenant shall pay a proportionate
part of such monthly installment on the Commencement Date. An adjustment in the
Base Rent for the last month of the Term shall be made if the Term does not end
on the last day of the month. All payments shall be made to Manager at Manager’s
Address or to such other party or to such other place as Landlord may designate
in writing, without prior demand and without abatement, deduction or offset. All
charges to be paid by Tenant hereunder, other than Base Rent, shall be
considered additional rent for the purposes of this Lease, and the words “rent”
or “Rent” as used in this Lease shall mean both Base Rent and additional rent
unless the context specifically or clearly indicates that only Base Rent is
referenced. The first (1st) monthly installment of Base Rent shall be paid upon
Lease execution by Tenant.

(b) Late Payments. Tenant acknowledges that the late payment by Tenant to
Landlord of any rent or other sums due under this Lease will cause Landlord to
incur costs not contemplated by this Lease, the exact amount of such costs being
extremely difficult and impracticable to ascertain. Therefore, if any rent or
other sum due from Tenant is not received within five (5) days of the date due,
Tenant shall pay to Landlord no later than ten (10) calendar days after the
rental due date an additional sum equal to five percent (5%) of such overdue
payment. In addition to such late charge, all such delinquent rent or other sums
due to Landlord, including the late charge, shall bear interest beginning on the
date such payment was due at the lesser of: (i) then maximum lawful rate
permitted to be charged by Landlord or (ii) ten percent (10%) compounded
monthly. The notice and cure period provided in Paragraph 8.1(a) does not apply
to the foregoing late charges and interest. If payments of any kind are returned
for insufficient funds Tenant shall pay to Landlord an additional handling
charge of $50.00.

3.2 Additional Rent for Operating Expenses, Taxes, and Capital Costs.

(a) Additional Rent. For each Lease Year, Tenant shall pay to Landlord as
additional rent the sum of (1) Operating Expenses, (2) Taxes and (3) the Capital
Costs, times Tenant’s Percentage (“Tenant’s Share of Expenses”).

(b) Definitions. As used herein, the following terms shall have the following
meanings:

 

  (i) Lease Year. Each calendar year wholly included in the Term and, if the
Term does not begin on January 1st of the first year of the Term, the portion of
a calendar year at the beginning and end of the Term.

 

2

--------------------------------------------------------------------------------

  (ii) Operating Expenses. The total cost of operation of the Property,
including, without limitation, (1) premiums and deductibles for insurance
carried with respect to the Property; (2) all costs of supplies, materials,
equipment, and utilities used in or related to the operation, maintenance, and
repair of the Property or any part thereof (including utilities, unless the cost
of any utilities is to be paid for separately by Tenant pursuant to Paragraph
6.1(b)); (3) all labor costs, including without limitation, salaries, wages,
payroll and other taxes, unemployment insurance costs, and employee benefits;
(4) all maintenance, management (not to exceed five percent (5%) of gross
revenues of the Building), janitorial, inspection, legal, accounting, and
service agreement costs related to the operation, maintenance, and repair of the
Property or any part thereof, including, without limitation, service contracts
with independent contractors. Any of the above services may be performed by
Landlord or its affiliates, provided that fees for the performance of such
services shall be reasonable and competitive with fees charged by unaffiliated
entities for the performance of such services in comparable buildings in the
area. Operating Expenses shall not include Taxes, leasing commissions; repair
costs paid by insurance proceeds or by any tenant or third party; the initial
construction cost of the Building or any depreciation thereof; costs and
expenses attributable to the correction of any construction defects in the
initial construction of the Building or the construction of any additions to
their Building (as opposed to the cost of normal repair, maintenance and
replacement expected with the construction materials and equipment installed in
the Building in light of their specifications); machinery or equipment which is
covered under warranty; promotional and advertising expenditures, accounting fee
(other than those incurred with regard to Operating Expenses and items which
benefit the property generally); fines and penalties resulting from Landlord’s
gross negligence or willful misconduct; fees, costs and disbursements,
including, without limitation, legal fees, relating to the negotiation or
enforcement of leases, the surrender, termination or modification of any lease,
disputes with tenants, curing Landlord’s default or performing work resulting
from any violation by Landlord of the terms of any lease of space; any debt
service or costs related to sale or financing of the Property; any capital
expenses, except those which normally would be regarded as operating,
maintenance, or repair costs; tenant improvements provided for any tenant; or
any special services rendered to tenants (including Tenant) for which a separate
charge is made.

 

  (iii)

Taxes. Any form of assessment, rental tax, license tax, business license tax,
levy, margin, charge, tax or similar imposition imposed by any authority having
the power to tax, including any city, county, state or federal government, or
any school, agricultural, lighting, library, drainage, or other improvement or
special assessment district, as against the Property or any part thereof or any
legal or equitable interest of Landlord therein, or against Landlord by virtue

 

3

--------------------------------------------------------------------------------

 

of its interest therein, and any reasonable costs incurred by Landlord in any
proceedings for abatement thereof, including, without limitation, attorneys’ and
consultants’ fees, and regardless of whether any abatement is obtained.
Landlord’s income and franchise taxes are excluded from Taxes.

 

  (iv) Capital Costs. The annual cost of any capital improvements to the
Property made by Landlord that are designed to increase safety, to reduce
Operating Expenses, or to comply with any governmental law or regulation imposed
after initial completion of the Building, amortized over such period as Landlord
shall reasonably determine, together with a fixed annual interest rate equal to
the Prime Rate plus 2% on the unamortized balance. The Prime Rate shall be the
prime rate published in the Wall Street Journal on the date the construction is
completed.

(c) Estimate of Tenant’s Share of Expenses. Before each Lease Year, and from
time to time as Landlord deems appropriate, Landlord shall give Tenant estimates
for the coming Lease Year of Operating Expenses, Taxes, Capital Costs and
Tenant’s Share of Expenses. Landlord shall make reasonable efforts to provide
estimates fifteen (15) days before the beginning of each Lease Year. Tenant
shall pay one twelfth (1/12) of the estimated amount of Tenant’s Share of
Expenses with each monthly payment of Base Rent during the Lease Year. Each
Lease Year, Landlord shall give Tenant a statement (the “Share of Expenses
Statement”) showing the Operating Expenses, Taxes, and Capital Costs for the
prior Lease Year, a calculation of Tenant’s Share of Expenses due for the prior
Lease Year and a summary of amounts already paid by Tenant for the prior Lease
Year. Landlord shall make reasonable efforts to provide the Share of Expenses
Statement within one hundred twenty (120) days after the end of the prior Lease
Year. Any underpayment by Tenant shall be paid to Landlord within thirty
(30) days after delivery of the Share of Expenses Statement; any overpayment
shall be credited against the next installment of Base Rent due, provided that
any overpayment shall be paid to Tenant within thirty (30) days if the Term has
ended. No delay by Landlord in providing any Share of Expenses Statement shall
be deemed a waiver of Tenant’s obligation to pay Tenant’s Share of Expenses.

f. Audit. Tenant, at its sole expense, shall have the right, within sixty
(60) days after receiving the Annual Cost Statement for a particular year to
review Landlord’s books and records relating to the Operating Expenses for such
year. Such review shall be conducted only during regular business hours at
Landlord’s office and only after Tenant gives Landlord fourteen (14) days prior
written notice. Tenant shall deliver to Landlord a copy of the results of such
review within fifteen (15) days thereafter. If Landlord and Tenant are not able
to agree on the amount of any adjustments to Operating Expense within thirty
(30) days following the delivery of Tenant’s results, Tenant, at its sole cost,
shall hire an independent nationally recognized accounting firm mutually
acceptable to both Landlord and Tenant that is not being compensated by Tenant
on a contingency fee basis. The results of such audit shall be binding on the
parties. All information obtained through the Tenant’s audit with respect to
financial matters (including, without limitation, costs, expenses, income) and
any other matters pertaining to the Landlord and/or the Building as well as any
compromise settlement, or adjustment reached between Landlord and Tenant
relative to the results of the audit shall be held in strict confidence by the
Tenant and its officers, agents, lenders and employees; and Tenant shall cause
its auditor and any of its officers, agents, lenders and employees to be
similarly bound. As a condition precedent to Tenant’s exercise of its right to
audit, Tenant must deliver to Landlord a signed covenant from the auditor
selected by Landlord and Tenant in a form

 

4

--------------------------------------------------------------------------------

reasonably satisfactory to Landlord acknowledging that all of the results of
such audit as well as any compromise, settlement, or adjustment reached between
Landlord and Tenant shall be held in strict confidence and shall not be revealed
in any manner to any person except upon prior written consent of Landlord, which
consent may be withheld in Landlord’s sole discretion, if required pursuant to
any litigation between Landlord and Tenant, or if required by law. If within
such sixty (60) day period Tenant does not give Landlord written notice stating
in reasonable detail any objection to the Annual Cost Statement, Tenant shall be
deemed to have approved such statement in all respects. No subtenant shall have
any right to conduct an audit and no assignee shall conduct an audit for any
period during which such assignee was not in possession of the Premises. If it
is ultimately determined that Landlord has overstated the Operating Expense by
more than five percent (5%), Landlord agrees to pay the auditor its reasonable
fees associated with such audit (not to exceed $1,000.00). Notwithstanding
anything contained in this paragraph, the total rent payable by Tenant shall in
no event be less than the Base Rent.

ARTICLE IV DELIVERY OF PREMISES AND TENANT IMPROVEMENTS

4.1 Condition of Premises. Landlord shall deliver the Premises to Tenant in its
“as is” condition unless Landlord is required to construct tenant improvements
pursuant to and in accordance with the terms set forth in Exhibit D of this
Lease (“Tenant Improvements”). If Landlord is required to construct Tenant
Improvements, such Tenant Improvements shall become and remain the property of
Landlord.

4.2 Delay in Possession. If Landlord is required to construct Tenant
Improvements pursuant to Exhibit D, and Landlord is unable to deliver possession
of the Premises to Tenant on or before the Scheduled Commencement Date for any
reason whatsoever, Landlord shall not be liable to Tenant for any loss or damage
resulting therefrom and this Lease shall continue in full force and effect.

4.3 Delivery and Acceptance of Possession. Tenant shall accept possession and
enter in good faith occupancy of the entire Premises and commence the operation
of its business therein within thirty (30) days after the Commencement Date.
Tenant’s taking possession of any part of the Premises shall be deemed to be an
acceptance and an acknowledgment by Tenant that (i) Tenant has had an
opportunity to conduct, and has conducted, such inspections of the Premises as
it deems necessary to evaluate its condition, (ii) except as otherwise
specifically provided herein, Tenant accepts possession of the Premises in its
then existing condition, “as-is”, including all patent and latent defects,
(iii) Tenant Improvements have been completed in accordance with the terms of
this Lease, except for defects of which Tenant has given Landlord written notice
prior to the time Tenant takes possession, and (iv) neither Landlord, nor any of
Landlord’s agents, has made any oral or written representations or warranties
with respect to such matters other than as set forth in this Lease.

4.4 Early Occupancy. If Landlord agrees in writing to allow Tenant or its
contractors to enter the Premises prior to the Commencement Date, Tenant (and
its contractors) shall do so upon all of the provisions of this Lease (including
Tenant’s obligations regarding indemnity and insurance), except those provisions
regarding Tenant’s obligation to pay Base Rent, which obligation shall commence
on the Commencement Date.

 

5

--------------------------------------------------------------------------------

ARTICLE V ALTERATIONS AND TENANT’S PERSONAL PROPERTY

5.1 Alterations.

(a) Landlord’s Consent. Tenant shall not make any alterations, additions,
installations, substitutes or improvements (“Alterations”) in and to the
Premises without first obtaining Landlord’s written consent. Landlord shall not
unreasonably withhold or delay its consent; provided, however, that Landlord
shall have no obligation to consent to Alterations of a structural nature or
Alterations that would violate the certificate of occupancy for the Premises or
any applicable law, code or ordinance or the terms of any superior lease or
mortgage affecting the Property. No consent given by Landlord shall be deemed as
a representation or warranty that such Alterations comply with laws, regulations
and rules applicable to the Property (“Laws”). Tenant shall pay Landlord’s
reasonable costs of reviewing or inspecting any proposed Alterations and any
other costs that may be incurred by Landlord as a result of such Alterations.

(b) Workmanship. All Alterations shall be done at reasonable times in a
first-class workmanlike manner, by contractors approved by Landlord, and
according to plans and specifications previously approved by Landlord. All work
shall be done in compliance with all Laws, and with all regulations of the Board
of Fire Underwriters or any similar insurance body or bodies. Tenant shall be
solely responsible for the effect of any Alterations on the Building’s structure
and systems, notwithstanding that Landlord has consented to the Alterations, and
shall reimburse Landlord on demand for any costs incurred by Landlord by reason
of any faulty work done by Tenant or its contractors. Upon completion of
Alterations, Tenant shall provide Landlord with a complete set of “as-built”
plans.

(c) Mechanics and Other Liens. Tenant shall keep the Property and Tenant’s
leasehold interest therein free of any liens or claims of liens, and shall
discharge (or bond around in a manner acceptable to Landlord) any such liens
within fifteen (15) days of their filing. Before commencement of any work,
Tenant’s contractor shall provide payment, performance and lien indemnity bonds
required by Landlord (for work for which the cost exceeds $100,000), and Tenant
shall provide evidence of such insurance as Landlord may require, naming
Landlord as an additional insured. Tenant shall indemnify Landlord and hold it
harmless from and against any cost, claim, or liability arising from any work
done by or at the direction of Tenant.

(d) Removal of Alterations. All Alterations affixed to the Premises shall become
part thereof and remain therein at the end of the Term. However, if Landlord
gives Tenant notice, at least thirty (30) days before the end of the Term, to
remove any Alterations, Tenant shall remove the Alterations, make any repair
required by such removal, and restore the Premises to its original condition.
Notwithstanding the foregoing, Landlord acknowledges and agrees that the
building generator and Tenant’s Property is property of Tenant and Tenant shall
be required to remove or dispose of same and repair and restore all damage
caused thereby upon expiration of the Term or earlier termination of this Lease.
In addition, if requested by Landlord, upon expiration of the Lease, Tenant
shall return any computer/server room to Landlord in warehouse condition,
including, without limitation, removal of raised flooring, wiring and cabling,
and Tenant shall also be responsible for removing all other non-Building
standard improvements not removed by the prior tenant consisting of the
following: S. I. Baker Conveyor System, Miscellaneous Furniture and Equipment,
Generator Pad, Dock High Fenced Area built for Commercial Refrigeration System,
Access System and/or Alarm System, Server Room and all Equipment and cabling,
Raised Floor in Server Area, Fire Suppression System in Server Room and
Miscellaneous Shelving and/or Racks in Warehouse Area.

5.2 Tenant’s Personal Property.

(a) In General. Tenant may provide and install, and shall maintain in good
condition, all trade fixtures, personal property, equipment, furniture and
moveable partitions

 

6

--------------------------------------------------------------------------------

required in the conduct of its business in the Premises. All of Tenant’s
personal property, trade fixtures, equipment, furniture, movable partitions, and
any Alterations not affixed to the Premises shall remain Tenant’s property
(“Tenant’s Property”). Tenant’s Property shall include all property purchased by
Tenant from the prior tenant.

(b) Landlord’s Lien. Tenant hereby pledges and conveys to Landlord a security
interest (“Landlord’s Lien”) in all of Tenant’s Property as collateral security
for the full and prompt payment of Base Rent and any additional rent as and when
due and the full and faithful performance of Tenant’s covenants herein
contained. Upon Landlord’s request, Tenant will execute and deliver financing
statements and other documents reasonably required by Landlord to perfect
Landlord’s Lien. Tenant also agrees that Landlord’s Lien may be enforced by
distress sale, foreclosure, or by any other method, and that any and all costs
incurred by Landlord by enforcement of this Landlord’s Lien shall be payable to
Landlord by Tenant. Tenant may not remove all or substantially all of Tenant’s
Property from the Premises prior to the end of the Term without Landlord’s prior
written consent.

(c) Payment of Taxes. Tenant shall pay before delinquency all taxes levied
against Tenant’s Property and any Alterations installed by or on behalf of
Tenant. If any such taxes are levied against Landlord or its property, or if the
assessed value of the Premises is increased by the inclusion of a value placed
on Tenant’s Property, Landlord may pay such taxes, and Tenant shall upon demand
repay to Landlord the portion of such taxes resulting from such increase.

ARTICLE VI LANDLORD’S COVENANTS

6.1 Services Provided by Landlord.

(a) Services. Landlord shall provide services, utilities, facilities and
supplies equal in quality to those customarily provided by landlords in
buildings of a similar design in the area in which the Property is located.

(b) Utilities. Tenant shall pay all charges for gas, electricity, telephone and
other utility services used, rendered or supplied upon or in connection with the
Premises and shall indemnify Landlord against liability or damage on such
account.

(c) Graphics and Signs. All signs, notices, graphics and decorations of every
kind or character which are visible in or from the Common Areas or the exterior
of the Premises shall be subject to Landlord’s prior written approval, which
Landlord shall have the right to withhold in its absolute and sole discretion.

(d) Right to Cease Providing Services. In case of Force Majeure or in connection
with any repairs, alterations or additions to the Property or the Premises, or
any other acts required of or permitted to Landlord herein, Landlord may reduce
or suspend service of the Building’s utilities, facilities or supplies, provided
that Landlord shall use reasonable diligence to restore such services,
facilities or supplies as soon as possible. No such reduction or suspension
shall constitute an actual or constructive eviction or disturbance of Tenant’s
use or possession of the Premises.

6.2 Repairs and Maintenance. Landlord shall repair and maintain (i) the Common
Areas, (ii) the structural portions of the Building, (iii) the exterior walls of
the Building (including exterior windows and glazing), (iv) the roof, and
(v) the basic plumbing, electrical, mechanical and heating, ventilating and
air-conditioning systems serving the Premises, in the manner and to the

 

7

--------------------------------------------------------------------------------

extent customarily provided by landlords in similar buildings in the area.
Tenant shall pay for such repairs as set forth in Paragraph 3.2. If any
maintenance, repair or replacement is required because of any act, omission or
neglect of duty by Tenant or its agents, employees, invitees or contractors, the
cost thereof shall be paid by Tenant to Landlord as additional rent within
thirty (30) days after billing.

6.3 Quiet Enjoyment. Upon Tenant’s paying the rent and performing its other
obligations, Landlord shall permit Tenant to peacefully and quietly hold and
enjoy the Premises, subject to the provisions of this Lease.

6.4 Insurance. Landlord shall insure the Property, including the Building and
Tenant Improvements and approved Alterations, if any, against damage by fire and
standard extended coverage perils, and shall carry public liability insurance,
all in such reasonable amounts as would be carried by a prudent owner of a
similar building in the area. Landlord may carry any other forms of insurance as
it or its mortgagee may deem advisable. Insurance obtained by Landlord shall not
be in lieu of any insurance required to be maintained by Tenant. Landlord shall
not carry any insurance on Tenant’s Property, and shall not be obligated to
repair or replace any of Tenant’s Property.

ARTICLE VII TENANT’S COVENANTS

7.1 Repairs, Maintenance and Surrender.

(a) Repairs and Maintenance. Tenant shall keep the Premises in good order and
condition, and shall promptly repair any damage to the Premises excluding glass
in exterior walls. Tenant shall also repair any damage to the rest of the
Property, including glass in exterior walls, if such damage is attributable to
Tenant’s negligence or misuse caused by Tenant or its agents, employees, or
invitees, licensees or independent contractors. All repairs shall be made in a
workmanlike manner and any replacements or substitutions shall be of a quality,
utility, value and condition similar to or better than the replaced or
substituted item.

(b) Surrender. At the end of the Term, Tenant shall peaceably surrender the
Premises in good order, repair and condition, except for reasonable wear and
tear, and Tenant shall remove Tenant’s Property and (if required by Landlord)
any Alterations, repairing any damage caused by such removal and restoring the
Premises and leaving them clean and neat. Any property not so removed shall be
deemed abandoned and may be retained by Landlord or may be removed and disposed
of by Landlord in such manner as Landlord shall determine. Tenant shall be
responsible for costs and expenses incurred by Landlord in removing any
Alterations and disposing of any such abandoned property, making any incidental
repairs and replacements to the Premises, and restoring the Premises to its
original condition.

7.2 Use.

(a) General Use. Tenant shall use the Premises only for the Permitted Uses, and
shall not use or permit the Premises to be used in violation of any law or
ordinance or of any certificate of occupancy issued for the Building or the
Premises, or of the Rules and Regulations. Tenant shall not cause, maintain or
permit any nuisance in, on or about the Property, or commit or allow any waste
in or upon the Property.

(b) Obstructions and Exterior Displays. Tenant shall not obstruct any of the
Common Areas or any portion of the Property outside the Premises, and shall not,
except as otherwise previously approved by Landlord, place or permit any signs,
decorations, curtains,

 

8

--------------------------------------------------------------------------------

blinds, shades, awnings, aerials or flagpoles, or the like, that may be visible
from outside the Premises. If Landlord designates a standard window covering for
use throughout the Building, Tenant shall use this standard window covering to
cover all windows in the Premises.

(c) Floor Load. Tenant shall not place a load upon the floor of the Premises
exceeding the load per square foot such floor was designed to carry, as
determined by applicable building code.

(d) Compliance with Insurance Policies. Tenant shall not keep or use any article
in the Premises, or permit any activity therein, which is prohibited by any
insurance policy covering the Building, or would result in an increase in the
premiums thereunder.

(e) Rules and Regulations. Tenant shall observe and comply with the rules and
regulations attached as Exhibit E (the “Rules and Regulations”), and all
modifications thereto as made by Landlord and put into effect from time to time.
Landlord shall not be responsible to Tenant for the violation or non-performance
by any other tenant or occupant of the Building of the Rules and Regulations.

7.3 Assignment; Sublease. Tenant shall not assign its rights under this Lease
nor sublet the whole or any part of the Premises without Landlord’s prior
written consent. In the event that Landlord grants such consent, Tenant shall
remain primarily liable to Landlord for the payment of all rent and for the full
performance of the obligations under this Lease and any excess rents collected
by Tenant shall be paid to Landlord. Tenant shall be responsible for payment of
all costs incurred by Landlord in connection with any such request for
Landlord’s consent to a proposed assignment or subletting, as provided in
Paragraph 11.5. Any assignment or subletting which does not conform with this
Paragraph 7.3 shall be void and a default hereunder. Landlord consents to
Tenant’s sublease of approximately 2,000 rentable square feet of the Premises to
Priority Healthcare, subject to Landlord’s approval of the sublease.

In addition to, but not in limitation of, the foregoing: in the event of a
request by Tenant for Landlord’s consent to a proposed assignment of the Lease
or a proposed subletting of twenty percent (20%) or more of the floor area of
the Premises, Landlord, at Landlord’s sole option, may terminate the Lease; and
in the event of a request by Tenant for Landlord’s consent to a proposed
subletting of less than twenty percent (20%) of the floor area of the Premises,
Landlord, at Landlord’s sole option, may cancel the Lease with respect to the
area in question for the proposed term of such sublease. Landlord shall exercise
any such option by written notice given to Tenant within thirty (30) days after
Landlord’s receipt of such request from Tenant, and in each case such
termination or cancellation shall take effect as of the date set forth in
Landlord’s said notice, which shall be not less than sixty (60) days and not
more than one hundred twenty (120) days after the date of Landlord’s said
notice. If Landlord exercises any such option to terminate or cancel the Lease,
Tenant shall surrender possession of the portion of the Premises to which the
termination or cancellation applies on or before the date set forth in
Landlord’s notice, in accordance with the provisions of this Lease relating to
the surrender of the Premises at expiration of the Term. If the Lease is
cancelled as to a portion of the Premises only, Base Rent after the date of such
cancellation shall be abated on a pro-rata basis, as determined by Landlord, and
Tenant’s Percentage shall be proportionally reduced. Landlord’s failure to
exercise such option to terminate or cancel the Lease shall not be construed as
Landlord’s consent to the proposed assignment or subletting.

Except as provided in this last paragraph, for purposes of this Paragraph 7.3,
“assignment” shall include, without limitation: (i) any transfer of Tenant’s
interest in this Lease by operation of law; (ii) any merger or consolidation of
Tenant with or into any other firm or corporate

 

9

--------------------------------------------------------------------------------

entity, whether in a single transaction or a series of transactions; (iii) the
transfer or sale of a controlling interest in Tenant, whether by sale of its
capital stock or otherwise (however, this shall not apply if Tenant is a
publicly traded company); or (iv) any agreement by which Tenant agrees to enter
into or execute any assignment or other transfer of the Lease at the direction
of any other party, or assigns Tenant’s rights in and to the income arising from
any such assignment or transfer to another party.

Notwithstanding anything to the contrary set forth herein, Tenant shall be
permitted to assign this Lease, or sublet all or a portion of the Premises, to
an Affiliate without the prior consent of Landlord, if all of the following
conditions are first satisfied: (a) Tenant shall give Landlord at least thirty
(30) days prior written notice of such assignment or subletting; (b) no Event of
Default (or event which, with notice or lapse of time or both, would constitute
an Event of Default) has occurred and is continuing under this Lease; (c) a
fully executed copy of such assignment or sublease, the assumption of this Lease
by the assignee or acceptance of the sublease by the sublessee, and such other
information regarding the assignment or sublease as Landlord may reasonably
request, shall have been delivered to Landlord; (d) the Premises shall continue
to be operated solely for the use specified in this Lease; (e) Tenant shall pay
all costs reasonably incurred by Landlord in connection with such assignment or
subletting, including, without limitation, attorneys’ fees; (f) the Affiliate
remains an Affiliate of Tenant during the Term of this Lease; and (g) the Net
Worth of the Affiliate at the time of such assignment or subletting is equal to
or greater than (i) the Net Worth of Tenant at the time of execution of the
Lease or (ii) the Net Worth of Tenant at the time of said transfer. As used
herein, the term “Affiliate” shall mean an entity which (i) directly or
indirectly controls the subject party, (ii) is under the direct or indirect
control of the subject party, (iii) is under common direct or indirect control
with the subject party, (iv) with which the subject party is merged or
consolidated, or (v) which acquires all or substantially all of the subject
party’s assets or stock. Control shall mean ownership of fifty-one percent
(51%) or more of the voting securities or rights of the controlled entity.
Tenant acknowledges and agrees (and agrees at the time of such assignment or
subletting to confirm) that in each instance described above, Tenant shall
remain liable for the performance of the terms and conditions of this Lease
despite such assignment or subletting. “Net Worth” of Tenant as described in
this Lease shall mean the unencumbered (e.g., not encumbered by any pledge,
claim, lien, judgment, mortgage or other encumbrance), tangible net worth of
said entity (excluding good will or the net worth of any guarantors), all as
evidenced and determined in a manner reasonable satisfactory to Landlord.

7.4 Indemnity. Tenant, at Tenant’s expense, shall defend (with counsel
satisfactory to Landlord), indemnify and hold harmless Landlord and Landlord’s
agents, employees, invitees, licensees and contractors from and against any
cost, claim, action, liability or damage of any kind arising from (i) Tenant’s
use and occupancy of the Premises or the Property, or any activity done or
permitted by Tenant, in, on or about the Premises or the Property, (ii) any
breach or default by Tenant of its obligations under this Lease, or (iii) any
negligent, tortious or illegal act or omission of Tenant, its agents, employees,
invitees, licensees or contractors. The obligations of Tenant under this
paragraph shall survive the expiration or termination of this Lease. Nothing in
this paragraph shall relieve Landlord from, or require Tenant to indemnify
Landlord against, liability for damages to property or injury to person caused
by the negligence or willful misconduct of Landlord or its agents, employees or
contractors. All property kept, stored or maintained in the Premises shall be at
the sole risk of Tenant. Subject to the terms and conditions of this Lease,
Landlord shall indemnify, defend and hold harmless Tenant and its officers,
directors, employees and agents against any claim by any third party for damage
to person or property in the common areas of the Building caused solely by the
gross negligence or intentional misconduct of Landlord or any of Landlord’s
employees or agents in the Common Areas, but specifically excluding any acts
resulting from the negligence of Tenant.

 

10

--------------------------------------------------------------------------------

7.5 Tenant’s Insurance. Tenant shall maintain in responsible companies qualified
to do business, in good standing in the state in which the Premises are located
and otherwise acceptable to Landlord and at its sole expense the following
insurance: (i) comprehensive general liability insurance covering the Premises
insuring Landlord as well as Tenant with limits which shall, at the commencement
of the Term, be at least equal to the Public Liability Insurance Amount and from
time to time during the Term shall be for such higher limits, if any, as are
customarily carried in the area in which the Premises are located with respect
to similar properties, (ii) workers’ compensation insurance with statutory
limits covering all of Tenant’s employees working in the Premises,
(iii) property insurance insuring Tenant’s Property for the full replacement
value of such items and (iv) business interruption insurance. There shall be no
deductible for liability policies and a deductible not greater than $10,000 for
property insurance policies. Tenant shall deposit promptly with Landlord
certificates for such insurance, and all renewals thereof, bearing the
endorsement that the policies will not be canceled until after thirty (30) days’
written notice to Landlord. All policies shall be taken out with insurers with a
rating of A-IX by Best’s and otherwise acceptable to Landlord.

7.6 Payment of Taxes. If at any time during the Term, any political subdivision
of the state in which the Property is located, or any other governmental
authority, levies or assesses against Landlord a tax or excise on rents or other
tax (excluding income tax), however described, including but not limited to
assessments, charges or fees required to be paid, by way of substitution for or
as a supplement to real estate taxes, or any other tax on rent or profits in
substitution for or as a supplement to a tax levied against the Property,
Building or Landlord’s personal property, then Tenant will pay to Landlord as
additional rent its proportionate share based on Tenant’s Percentage of said tax
or excise.

7.7 Environmental Assurances.

(a) Covenants.

 

  (i) Tenant shall not cause any Hazardous Materials to be used, generated,
stored or disposed of on, under or about, or transported to or from, the
Premises unless the same is specifically approved in advance by Landlord in
writing other than small quantities of retail, household, generator fuel and
office chemicals customarily sold over-the-counter to the public and which are
related to Tenant’s Permitted Uses so long as the same is compliance with all
laws and codes.

 

  (ii) Tenant shall comply with all obligations imposed by Environmental Laws,
and all other restrictions and regulations upon the use, generation, storage or
disposal of Hazardous Materials at, to or from the Premises.

 

  (iii) Tenant shall deliver promptly to Landlord true and complete copies of
all notices received by Tenant from any governmental authority with respect to
the use, generation, storage or disposal by Tenant of Hazardous Materials at, to
or from the Premises and shall immediately notify Landlord both by telephone and
in writing of any unauthorized discharge of Hazardous Materials or of any
condition that poses an imminent hazard to the Property, the public or the
environment.

 

11

--------------------------------------------------------------------------------

  (iv) Tenant shall complete fully, truthfully and promptly any questionnaires
sent by Landlord with respect to Tenant’s use of the Premises and its use,
generation, storage and disposal of Hazardous Materials at, to or from the
Premises.

 

  (v) Tenant shall permit entry onto the Premises by Landlord or Landlord’s
representatives at any reasonable time to verify and monitor Tenant’s compliance
with its covenants set forth in this Paragraph 7.7 and to perform other
environmental inspections of the Premises.

 

  (vi) If Landlord conducts any environmental inspections because it has reason
to believe that Tenant’s activities have or are likely to result in a violation
of Environmental Laws or a release of Hazardous Materials on the Property, then
Tenant shall pay to Landlord, as additional rent, the costs incurred by Landlord
for such inspections.

 

  (vii) Tenant shall cease immediately upon notice from Landlord any activity
which violates or creates a risk of violation of any Environmental Laws.

 

  (viii) After notice to and approval by Landlord, Tenant shall promptly remove,
clean-up, dispose of or otherwise remediate, in accordance with Environmental
Laws and good commercial practice, any Hazardous Materials on, under or about
the Property resulting from Tenant’s activities on the Property.

(b) Indemnification. Tenant shall indemnify, defend with counsel acceptable to
Landlord and hold Landlord harmless from and against any claims, damages, costs,
liabilities or losses (including, without limitation, any decrease in the value
of the Property, loss or restriction of any area of the Property, and adverse
impact of the marketability of the Property or Premises) arising out of Tenant’s
use, generation, storage or disposal of Hazardous Materials at, to or from the
Premises. Notwithstanding anything contained in this Lease to the contrary,
Tenant has no responsibility for any: (a) Hazardous Materials existing at the
Building prior to Tenant’s occupancy or (b) Hazardous Materials, except those
brought upon, produced, stored, transported, migrated, spilled, released, used,
discharged or disposed of in the Building by (or at the direction of) Tenant or
its employees, contractors, assignees, sublessees, invitees, agents and
affiliates (collectively, “Tenant Party”); provided, however, Tenant shall be
liable to Landlord and the indemnifications set forth in this Section and the
Lease shall be applicable for all loss, cost, damage, liability or expense (as
provided in this Lease) to any environmental condition or circumstance arising
from Tenant’s operations at the Building, Tenant’s products and/or Tenant’s use
of the Building from any cause whatsoever, including, without limitation, those
losses, liabilities and expenses caused by fire (including hostile fire) or
other casualty, earthquake, acts of God, strikes, terrorism, boycotts, war,
riot, insurrection, embargoes and shortages of equipment, labor or materials (by
way of example, and not limitation, in the event of an earthquake that causes
Tenant’s products to spill or migrate into ground water, Tenant would be liable
for the clean-up as well as all indemnity obligations and/or other obligations
under this Lease.

(c) Definitions. Hazardous Materials shall include but not be limited to
substances defined as “hazardous substances”, “toxic substances”, or “hazardous
wastes” in the federal Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as

 

12

--------------------------------------------------------------------------------

amended; the federal Hazardous Materials Transportation Act, as amended; and the
federal Resource Conservation and Recovery Act, as amended; those substances
defined as “hazardous substances”, “materials”, or “wastes” under the law of the
state in which the Premises are located; and as such substances are defined in
any regulations adopted and publications promulgated pursuant to said laws
(“Environmental Laws”); materials containing asbestos or urea formaldehyde;
gasoline and other petroleum products; flammable explosives; radon and other
natural gases; and radioactive materials.

(d) Survival. The obligations of Tenant in this Paragraph 7.7 shall survive the
expiration or termination of this Lease.

7.8 Americans With Disabilities Act. Tenant shall comply with the Americans with
Disabilities Act of 1990 (“ADA”) and the regulations promulgated thereunder.
Tenant hereby expressly assumes all responsibility for compliance with the ADA
relating to the Premises and the activities conducted by Tenant within the
Premises. Any Alterations to the Premises made by Tenant for the purpose of
complying with the ADA or which otherwise require compliance with the ADA shall
be done in accordance with this Lease; provided, that Landlord’s consent to such
Alterations shall not constitute either Landlord’s assumption, in whole or in
part, of Tenant’s responsibility for compliance with the ADA, or representation
or confirmation by Landlord that such Alterations comply with the provisions of
the ADA.

ARTICLE VIII DEFAULT

8.1 Default. The occurrence of any one or more of the following events shall
constitute a default hereunder by Tenant:

(a) The failure by Tenant to make any payment of Base Rent or additional rent or
any other payment required hereunder, as and when due, where such failure shall
continue for a period of five (5) days after written notice thereof from
Landlord to Tenant; provided, that Landlord shall not be required to provide
such notice more than once during each consecutive 12-month period with respect
to non-payment of Rent, the third such non-payment constituting a default
without requirement of notice;

(b) The failure by Tenant to observe or perform any of the express or implied
covenants or provisions of this Lease to be observed or performed by Tenant,
other than as specified in clause (a) above, where such failure shall continue
for a period of more than thirty (30) days after written notice thereof from
Landlord to Tenant; provided, however, that if the nature of Tenant’s default is
such that more than thirty (30) days are reasonably required for its cure, then
Tenant shall not be deemed to be in default if Tenant commences such cure within
said thirty (30) day period, diligently prosecutes such cure to completion, and
completes such cure no later than sixty (60) days from the date of such notice
from Landlord;

(c) The failure by Tenant, Guarantor (if any), or any present or future
guarantor of all or any portion of Tenant’s obligations under this Lease to pay
its debts as they become due, or Tenant or any such Guarantor (if any) becoming
insolvent, filing or having filed against it a petition under any chapter of the
United States Bankruptcy Code, 11 U.S.C. Paragraph 101 et seq. (or any similar
petition under any insolvency law of any jurisdiction) and such petition is not
dismissed within sixty (60) days thereafter, proposing any dissolution,
liquidation, composition, financial reorganization or recapitalization with
creditors, making an assignment or trust mortgage for the benefit of creditors,
or if a receiver, trustee, custodian or similar agent is appointed or takes
possession with respect to any property or business of Tenant or Guarantor (if
any); or

 

13

--------------------------------------------------------------------------------

(d) If the leasehold estate under this Lease or any substantial part of the
property or assets of Tenant or of Guarantor of this leasehold is taken by
execution, or by other process of law, or is attached or subjected to any
involuntary encumbrance if such attachment or other seizure remains undismissed
or undischarged for a period of ten business (10) days after the levy thereof.

8.2 Remedies of Landlord and Calculation of Damages.

(a) Remedies. In the event of any default by Tenant, whether or not the Term
shall have begun, in addition to any other remedies available to Landlord at law
or in equity, Landlord may, at its option and without further notice exercise
any or all of the following remedies:

 

  (i) Terminate the Lease and upon notice to Tenant of termination of the Lease
all rights of Tenant hereunder shall thereupon come to an end as fully and
completely as if the date such notice is given were the date originally fixed
for the expiration of the Term, and Tenant shall then quit and surrender the
Premises to Landlord and Landlord shall have the right, without judicial
process, to re-enter the Premises. No such expiration or termination of the
Lease shall relieve Tenant of its liability and obligations under the Lease.

 

  (ii) Accelerate the payment of Base Rent and all additional rent under this
Lease for the remainder of the Term and terminate the Lease in the same manner,
and with the same force and effect, as provided in clause (i) above.

 

  (iii) Enter the Premises and cure any default by Tenant and in so doing,
Landlord may make any payment of money or perform any other act. All sums so
paid by Landlord, and all incidental costs and expenses, including reasonable
attorneys’ fees, shall be considered additional rent under this Lease and shall
be payable to Landlord immediately upon demand, together with interest from the
date of demand to the date of payment at the maximum lawful rate permitted to be
charged by Landlord.

(b) Calculation of Damages. If this Lease is terminated as provided in Paragraph
8.2(a)(i) above, Tenant, until the end of the Term, or what would have been such
Term in the absence of any such event, shall be liable to Landlord, as damages
for Tenant’s default, for the amount of the Base Rent and all additional rent
and other charges which would be payable under this lease by Tenant if this
Lease were still in effect, less the net proceeds of any reletting of the
Premises actually collected by Landlord after deducting all Landlord’s expenses
in connection with such reletting, including, without limitation, all
repossession costs, brokerage and management commissions, operating expenses,
legal expenses, reasonable attorneys’ fees, alteration costs and expenses of
preparation of the Premises for such reletting. Tenant shall pay such damages to
Landlord monthly on the days on which the Base Rent would have been payable as
if this Lease were still in effect, and Landlord shall be entitled to recover
from Tenant such damages monthly as the same shall arise.

If Base Rent and additional rent are accelerated and this Lease is terminated as
provided in Paragraph 8.2(a)(ii) above, Tenant shall be liable to pay to
Landlord, in one payment, as damages for Tenant’s default, an amount equal to
the total amount of Base Rent and additional rent reserved in this Lease from
the date of default to the date of expiration of the Term discounted at a fixed
annual interest rate equal to the Federal Funds Rate as published in the Wall
Street Journal on the date of Landlord’s election to accelerate the rents
hereunder.

 

14

--------------------------------------------------------------------------------

Whether or not the Lease is terminated, Landlord shall in no way be responsible
or liable for any failure to relet the Premises or for any failure to collect
any rent upon such reletting.

(c) No Limitations. Nothing contained in this Lease shall limit or prejudice the
right of Landlord to prove for and obtain in proceedings for bankruptcy or
insolvency by reason of the termination of this Lease, an amount equal to the
maximum allowed by any statute or rule of law in effect at the time when, and
governing the proceedings in which, the damages are to be provided, whether or
not the amount be greater, equal to, or less than the amount of the loss or
damages referred to above.

(d) Cumulative Remedies. Landlord’s remedies under this Lease are cumulative and
not exclusive of any other remedies to which Landlord may be entitled in case of
Tenant’s default or threatened default under this Lease, including, without
limitation, the remedies of injunction and specific performance.

ARTICLE IX CASUALTY AND EMINENT DOMAIN

9.1 Casualty.

(a) Casualty in General. If, during the Term, the Premises, the Building or the
Lot, are wholly or partially damaged or destroyed by fire or other casualty, and
the casualty renders the Premises totally or partially inaccessible or unusable
by Tenant in the ordinary conduct of Tenant’s business, then Landlord shall,
within sixty (60) days of the date of the damage, give Tenant a notice (“Damage
Notice”) stating whether, according to Landlord’s good faith estimate, the
damage can be repaired within three hundred sixty (360) days from the date of
damage (“Repair Period”), without the payment of overtime or other premiums. The
parties’ rights and obligations shall then be governed according to whether the
casualty is an Insured Casualty or an Uninsured Casualty as set forth in the
following paragraphs.

(b) Insured Casualty. If the casualty results from a risk, the loss to Landlord
from which is fully covered by insurance maintained by Landlord or for
Landlord’s benefit (except for any deductible amount), it shall be an “Insured
Casualty” and governed by this Paragraph 9.1(b). In such event, if the Damage
Notice states that the repairs can be completed within the Repair Period without
the payment of overtime or other premiums, then Landlord shall promptly proceed
to make the repairs, this Lease shall remain in full force and effect, and Base
Rent shall be reduced, during the period between the casualty and completion of
the repairs, in proportion to the portion of the Premises that is inaccessible
or unusable during that period and which is, in fact, not utilized by Tenant.
Base Rent shall not be reduced by reason of any portion of the Premises being
unusable or inaccessible for a period of five (5) business days or less. If the
Damage Notice states that the repairs cannot, in Landlord’s estimate, be
completed within the Repair Period without the payment of overtime or other
premiums, then either party may, terminate this Lease by written notice given to
the other within thirty (30) days after the giving of the Damage Notice. If
either party elects to terminate this Lease, the lease shall terminate as of the
date of the occurrence of such damage or destruction and Tenant shall vacate the
Premises five (5) business days from the date of the written notice terminating
the Lease. If neither party so terminates, then this Lease shall remain in
effect, Landlord shall make repairs, and Base Rent shall be proportionately
reduced as set forth above during the period when the Premises is inaccessible
or unusable and is not used by Tenant.

 

15

--------------------------------------------------------------------------------

(c) Uninsured Casualty. If the casualty is not an Insured Casualty as set forth
in the previous paragraph, it shall be an “Uninsured Casualty” governed by this
Paragraph 9.1(c). In such event, if the Damage Notice states that the repairs
can be completed within the Repair Period without the payment of overtime or
other premiums, Landlord may elect, by written notice given to Tenant within
thirty (30) days after the Damage Notice, to make the repairs, in which event
this Lease shall remain in effect and Base Rent shall be proportionately reduced
as set forth above. If Landlord does not so elect to make the repairs, or if the
Damage Notice states that the repairs cannot be made within the Repair Period,
this Lease shall terminate as of the date of the casualty and Tenant shall
vacate the Premises five (5) business days from the date of Landlord’s written
notice to Tenant terminating the Lease.

(d) Casualty within final six months of Term. Notwithstanding anything to the
contrary contained in this Paragraph 9.1, if the Premises or the Building is
wholly or partially damaged or destroyed within the final six (6) months of the
Term of this Lease, Landlord shall not be required to repair such casualty and
either Landlord or Tenant may elect to terminate this Lease.

(e) Tenant Improvements and Alterations. If Landlord elects to repair after a
casualty in accordance with this Paragraph 9.1, Landlord shall cause Tenant
Improvements and Alterations which Landlord has approved, to be repaired and
restored at Landlord’s sole expense. Landlord shall have no responsibility for
any personal property placed or kept in or on the Premises or the Building by
Tenant or Tenant’s agents, employees, invitees or contractors and Landlord shall
not be required to repair any damage to, or make any repairs to or replacements
of, such personal property.

(f) Exclusive Remedy. This Paragraph 9.1 shall be Tenant’s sole and exclusive
remedy in the event of damage or destruction to the Premises or the Building.
No damages, compensation or claim shall be payable by Landlord for any
inconvenience, any interruption or cessation of Tenant’s business, or any
annoyance, arising from any damage to or destruction of all or any portion of
the Premises or the Building.

(g) Waiver of Subrogation. Landlord and Tenant shall cause each insurance policy
obtained by each of them to provide that the insurer waives all right of
recovery by way of subrogation against either Landlord or Tenant in connection
with any loss or damage covered by such policy.

9.2 Eminent Domain.

(a) Eminent Domain in General. If the whole of the Premises, or so much of the
Premises as to render the balance unusable by Tenant, shall be taken or
appropriated under the power of eminent domain or condemnation (a “Taking”),
either Landlord or Tenant may terminate this Lease and the termination date
shall be the date of the Order of Taking, or the date possession is taken by the
Taking authority, whichever is earlier. If any part of the Property is the
subject of a Taking and such Taking materially affects the normal operation of
the Building or Common Areas, Landlord may elect to terminate this Lease. A sale
by Landlord under threat of a Taking shall constitute a Taking for the purpose
of this Paragraph 9.2. No award for any partial or entire Taking shall be
apportioned. Notwithstanding the foregoing, if any part of the Premises is
permanently Taken and such Taking materially and adversely prevents Tenant from
conducting its business in the Premises, then, in such event, Tenant may, as its
sole remedy, terminate this Lease upon written notice to Landlord given within
thirty (30) days following the Taking, unless Tenant is relocated by Landlord to
other comparable space. Landlord shall receive (subject to the

 

16

--------------------------------------------------------------------------------

rights of Landlord’s mortgagees) and Tenant hereby assigns to Landlord any award
which may be made and any other proceeds in connection with such Taking,
together with all rights of Tenant to such award or proceeds, including, without
limitation, any award or compensation for the value of all or any part of the
leasehold estate; provided that nothing contained in this Paragraph 9.2(a) shall
be deemed to give Landlord any interest in or to require Tenant to assign to
Landlord any separate award pursued by Tenant or made to Tenant for (i) the
taking of Tenant’s Property, or (ii) interruption of or damage to Tenant’s
business, or (iii) Tenant’s moving and relocation costs.

(b) Reduction in Base Rent. In the event of a Taking which does not result in
a termination of the Lease, Base Rent shall be proportionately reduced based on
the portion of the Premises rendered unusable, and Landlord shall restore the
Premises or the Building to the extent of available proceeds or awards from such
Taking. Landlord shall not be required to repair or restore any damage to
Tenant’s Property or any Alterations.

(c) Sole Remedies. This Paragraph 9.2 sets forth Tenant’s and Landlord’s sole
remedies for Taking. Upon termination of this Lease pursuant to this
Paragraph 9.2, Tenant and Landlord hereby agree to release each other from any
and all obligations and liabilities with respect to this Lease except such
obligations and liabilities which arise or accrue prior to such termination.

ARTICLE X RIGHTS OF PARTIES HOLDING SENIOR INTERESTS

10.1 Subordination. This Lease shall be subject and subordinate to any and all
mortgages, deeds of trust and other instruments in the nature of a mortgage,
ground lease or other matters or record (“Senior Interests”) which now or at any
time hereafter encumber the Property and Tenant shall, within twenty (20) days
of Landlord’s request, execute and deliver to Landlord such recordable written
instruments as shall be necessary to show the subordination of this Lease to
such Senior Interests. Notwithstanding the foregoing, if any holder of a Senior
Interest succeeds to the interest of Landlord under this Lease, then, at the
option of such holder, this Lease shall continue in full force and effect and
Tenant shall attorn to such holder and to recognize such holder as its landlord.

10.2 Mortgagee’s Consent. No assignment of the Lease and no agreement to make or
accept any surrender, termination or cancellation of this Lease and no agreement
to modify so as to reduce the Rent, change the Term, or otherwise materially
change the rights of Landlord under this Lease, or to relieve Tenant of any
obligations or liability under this Lease, shall be valid unless consented to by
Landlord’s mortgagees of record, if any.

10.3 Subordination, Attornment and Non-Disturbance Agreement. In the event
Landlord encumbers the Building with a mortgage, Tenant’s subordination shall
not be effective until Landlord obtains from the holder of a senior interest a
subordination and non-disturbance agreement on said mortgagee’s standard form
(“SNDA”).

ARTICLE XI GENERAL

11.1 Representations by Tenant. Tenant represents and warrants that any
financial statements provided by it to Landlord were true, correct and complete
when provided, and that no material adverse change has occurred since that date
that would render them inaccurate or misleading. Tenant represents and warrants
that those persons executing this Lease on Tenant’s behalf are duly authorized
to execute and deliver this Lease on its behalf, and that this Lease is binding
upon Tenant in accordance with its terms, and simultaneously with the execution
of this Lease, Tenant shall deliver evidence of such authority to Landlord in
form satisfactory to Landlord.

 

17

--------------------------------------------------------------------------------

11.2 Notices. Any notice required or permitted hereunder shall be in writing.
Notices shall be addressed to Landlord c/o Manager at Manager’s Address and to
Tenant at Tenant’s Address. Any communication so addressed shall be deemed duly
given when delivered by hand, one (1) day after being sent by Federal Express
(or other guaranteed one day delivery service) or three (3) days after being
sent by registered or certified mail, return receipt requested. Either party may
change its address by giving notice to the other.

11.3 No Waiver or Oral Modification. No provision of this Lease shall be deemed
waived by Landlord or Tenant except by a signed written waiver. No consent to
any act or waiver of any breach or default, express or implied, by Landlord or
Tenant, shall be construed as a consent to any other act or waiver of any other
breach or default.

11.4 Severability. If any provision of this Lease, or the application thereof in
any circumstances, shall to any extent be invalid or unenforceable, the
remainder of this Lease shall not be affected thereby, and each provision hereof
shall be valid and enforceable to the fullest extent permitted by law.

11.5 Requests by Tenant. Tenant shall pay, on demand, all costs incurred by
Landlord, including without limitation reasonable attorneys’ fees, in connection
with any matter requiring Landlord’s review or consent or any other requests
made by Tenant under this Lease, regardless of whether such request is granted
by Landlord.

11.6 Estoppel Certificate and Financial Statements.

(a) Estoppel Certificate. Within ten (10) days after written request by
Landlord, Tenant shall execute, acknowledge and deliver to Landlord a written
statement certifying (i) that this Lease is unmodified and in full force and
effect, or is in full force and effect as modified and stating the
modifications; (ii) the amount of Base Rent currently payable by Tenant to
Landlord; (iii) Tenant’s Percentage and Tenant’s Share of Expenses currently
payable by Tenant to Landlord; (iv) the date to which Base Rent and Tenant’s
Share of Expenses have been paid in advance; (v) the amount of any security
deposited with Landlord; (vi) that Landlord is not in default hereunder or, if
Landlord is claimed to be in default, stating the nature of any claimed default,
and (vii) such other matters as may be reasonably requested by Landlord. Any
such statement may be relied upon by a purchaser, assignee or lender. Tenant’s
failure to execute and deliver such statement within the time required shall be
a default under this Lease and shall also be conclusive upon Tenant that this
Lease is in full force and effect and has not been modified except as
represented by Landlord; and there are no uncured defaults in Landlord’s
performance and Tenant has no right of offset, counterclaim or deduction against
rent.

(b) Financial Statements. Tenant shall, without charge therefor, at any time,
within ten (10) days following a request by Landlord, deliver to Landlord, or to
any other party designated by Landlord, a true and accurate copy of Tenant’s
most recent financial statements. All requests made by Tenant regarding renewals
or expansions must be accompanied by Tenant’s most recent financial statements.
All requests made by Tenant regarding subleases, or assignments must be
accompanied by Tenant’s prospective subtenant’s and prospective assignee’s most
recent financial statements.

11.7 Waiver of Liability. Landlord and Tenant each hereby waive all rights of
recovery against the other and against the officers, employees, agents, and
representatives of the other, on account of loss by or damage to the waiving
party or its property or the property of others under its control, to the extent
that such loss or damage is insured against under any insurance policy that
either may have in force at the time of the loss or damage. Each party shall
notify its insurers that the foregoing waiver is contained in this Lease.

 

18

--------------------------------------------------------------------------------

11.8 Execution, Prior Agreements and No Representations. This Lease shall not be
binding and enforceable until executed by authorized representatives of Landlord
and Tenant. This Lease contains all of the agreements of the parties with
respect to the subject matter hereof and supersedes all prior dealings, whether
written or oral, between them with respect to such subject matter. Each party
acknowledges that the other has made no representations or warranties of any
kind except as may be specifically set forth in this Lease.

11.9 Brokers. Each party represents and warrants that it has not dealt with any
real estate broker or agent in connection with this Lease or its negotiation
except Broker. Landlord shall be responsible for any commission payable to
Broker by separate written agreement. Each party shall indemnify the other and
hold it harmless from any cost, expense, or liability (including costs of suit
and reasonable attorneys’ fees) for any compensation, commission or fees claimed
by any other real estate broker or agent in connection with this Lease or its
negotiation by reason of any act or statement of the indemnifying party.

11.10 Successors and Assigns. This Lease shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns;
provided, however, that only the original Landlord named herein shall be liable
for obligations accruing before the beginning of the Term, and thereafter the
original Landlord named herein and each successive owner of the Premises shall
be liable only for obligations accruing during the period of their respective
ownership.

11.11 Applicable Law and Lease Interpretation. This Lease shall be construed,
governed and enforced according to the laws of the state in which the Property
is located. In construing this Lease, paragraph headings are for convenience
only and shall be disregarded. Any recitals herein or exhibits attached hereto
are hereby incorporated into this Lease by this reference. Time is of the
essence of this Lease and every provision contained herein. The parties
acknowledge that this Lease was freely negotiated by both parties, each of whom
was represented by counsel; accordingly, this Lease shall be construed according
to the fair meaning of its terms, and not against either party.

11.12 Costs of Collection, Enforcement and Disputes. Tenant shall pay all costs
of collection, including reasonable attorneys’ fees, incurred by Landlord in
connection with any default by Tenant. If either Landlord or Tenant institutes
any action to enforce the provisions of this Lease or to seek a declaration of
rights hereunder, the prevailing party shall be entitled to recover its
reasonable attorneys’ fees and court costs as part of any award. Landlord and
Tenant hereby waive trial by jury in any action, proceeding or counterclaim
brought by either of the parties hereto against the other, on or in respect to
any matter whatsoever arising out of or in any way connected with this Lease,
the relationship of Landlord and Tenant hereunder, Tenant’s use or occupancy of
the Premises, and/or claim of injury or damage.

11.13 Holdover. If Tenant holds over in occupancy of the Premises after the
expiration of the Term, Tenant shall, at the election of Landlord (i) become a
tenant at sufferance only on a month-to-month basis subject to the terms and
conditions herein specified, so far as applicable; or (ii) be deemed to have
renewed this Lease for a one year period under the terms and conditions herein
specified, so far as applicable. In either case, Tenant shall pay rent during
the holdover period, at a base rental rate equal to one hundred fifty percent
(150%) of the Base Rent in effect at the end of the Term, plus the amount of
Tenant’s Share of Expenses then in effect. Tenant shall also be liable for all
damages sustained by Landlord on account of such holding over.

 

19

--------------------------------------------------------------------------------

11.14 Force Majeure. If Landlord or Tenant is prevented from or delayed in
performing any act required of it hereunder, and such prevention or delay is
caused by strikes, labor disputes, inability to obtain labor, materials, or
equipment, inclement weather, acts of God, governmental restrictions,
regulations, or controls, judicial orders, enemy or hostile government actions,
civil commotion, fire or other casualty, or other causes beyond such party’s
reasonable control (“Force Majeure”), the performance of such act shall be
excused for a period equal to the period of prevention or delay. A party’s
financial inability to perform its obligations shall in no event constitute
Force Majeure. Nothing in this Paragraph 11.14 shall excuse or delay Tenant’s
obligation to pay any rent or other charges due under this Lease.

11.15 Limitation On Liability. Landlord, and its partners, directors, officers,
shareholders, trustees or beneficiaries, shall not be liable to Tenant for any
damage to or loss of personal property in, or to any personal injury occurring
in, the Premises, unless such damage, loss or injury is the result of the gross
negligence of Landlord or its agents as determined by a final non-appeal
judicial proceeding. The obligations of Landlord under this Lease do not
constitute personal obligations of the individual partners, directors, officers,
shareholders, trustees or beneficiaries of Landlord, and Tenant shall not seek
recourse against the partners, directors, officers, shareholders, trustees or
beneficiaries of Landlord, or any of their personal assets for satisfaction of
any liability with respect to this Lease. In the event of any default by
Landlord under this Lease, Tenant’s sole and exclusive remedy shall be against
Landlord’s interest in the Property.

11.16 Notice of Landlord’s Default. The failure by Landlord to observe or
perform any of the express or implied covenants or provisions of this Lease to
be observed or performed by Landlord shall not constitute a default by Landlord
unless such failure shall continue for a period of more than thirty (30) days
after written notice thereof from Tenant to Landlord specifying Landlord’s
default; provided, however, that if the nature of Landlord’s default is such
that more than thirty (30) days are reasonably required for its cure, then
Landlord shall not be deemed to be in default if Landlord commences such cure
within said thirty (30) day period and diligently prosecutes such cure to
completion. Tenant shall, simultaneously with delivery to Landlord, provide
written notice specifying the Landlord default to the holder of any first
mortgage or deed of trust covering the Premises whose name and address have been
furnished to Tenant in writing.

11.17 Lease not to be Recorded. Tenant agrees that it will not record this
Lease. Both parties shall, upon the request of either, execute and deliver a
notice or short form of this Lease in such form, if any, as may be permitted by
applicable statute. If this Lease is terminated before the Term expires the
parties shall execute, deliver and record an instrument acknowledging such fact
and the actual date of termination of this Lease, and Tenant hereby appoints
Landlord its attorney-in-fact, coupled with an interest, with full power of
substitution to execute such instrument.

11.18 Security Deposit. Upon the execution and delivery of this Lease, Tenant
shall pay to Landlord the Security Deposit, which shall be held as security for
Tenant’s performance as herein provided and refunded to Tenant at the end of the
Term subject to Tenant’s satisfactory compliance with the conditions hereof. The
Security Deposit may be commingled with other funds of Landlord and no interest
shall accrue thereon or be payable by Landlord with respect to the Security
Deposit. If all or any part of the Security Deposit is applied to an obligation
of Tenant hereunder, Tenant shall immediately upon request by Landlord restore
the Security Deposit to its original amount.

11.19 Generator. Subject to the terms and conditions set forth herein, Tenant
may, at its sole expense, install, operate, maintain and remove the emergency
generator equipment (the “Emergency Generator Equipment”) serving the Premises,
in accordance with the following:

(a) The Emergency Generator Equipment may only be used as a backup power supply
in the event of a power outage to the Premises.

 

20

--------------------------------------------------------------------------------

(b) The Emergency Generator Equipment may be operated during the period from 9
p.m. through 6 a.m. for testing purposes not more than one (1) time per week,
and for not more than thirty (30) minutes, provided that the same is in
accordance with all applicable laws, permits, rules and regulations.

(c) The location and amount of space of the Emergency Generator Equipment shall
remain where presently located.

(d) Intentionally Deleted.

(e) Tenant shall, at its sole expense, obtain any municipal, state or federal
permits and/or licenses required for the installation and operation of the
Emergency Generator System, and copy of each permit or license shall be
submitted to Landlord.

(f) Tenant shall obtain appropriate insurance for, and such insurance required
by Landlord from time to time, and assumes full responsibility for the
installation, operation, engineering and maintenance of all the Emergency
Generator Equipment installed by Tenant. Such insurance shall be maintained with
a nationally-recognized responsible insurance carrier licensed in the State of
Florida that is reasonably acceptable to Landlord, and otherwise shall be in
amount and form reasonably acceptable to Landlord and shall name Landlord as an
additional insured. Tenant shall indemnify, defend, and save harmless Landlord
from and against any and all costs (including reasonably attorneys fees),
damages, expense and liability (including statutory liability, liability under
Workers Compensation laws and mechanic’s liens), in connection with claims or
damages as a result of injury or death of any person or property damage due to
any acts or omissions or negligence of Tenant, Tenant’s agents, employees,
customers, invitees, contractors, and subcontractors in connection with the
Emergency Generator Equipment.

(g) All costs for such Emergency Generator Equipment installation, including
without limitation, the cost of a fuel tank, fuel, batteries, piping and other
ancillary equipment reasonably necessary to the operation of the Emergency
Generator Equipment, will be at Tenant’s sole expense and in compliance with all
laws.

(h) The Emergency Generator Equipment shall be operated in a manner to not
interfere with the use or operation of other equipment installed at the Building
or in the common areas.

(i) Tenant and its contractors, agents and subcontractors, may access the
Emergency Generator Equipment at any time and from time to time, at their own
risk.

(j) Intentionally Deleted.

(k) During the Term of the Lease, Tenant shall keep the Emergency Generator
Equipment in good condition and repair and allow no waste thereon. Upon
termination or expiration of the Lease. Tenant will remove the Emergency
Generator Equipment and all of its related equipment and reimburse Landlord for
the cost of repairing any damage caused by removal of the Emergency Generator
Equipment or any ancillary equipment.

 

21

--------------------------------------------------------------------------------

(l) The rights set forth in this Section 11.19 are granted by Landlord to
Tenant, are personal to Tenant and shall not be exercised or assigned,
voluntarily or involuntarily, by or to anyone, except to an entity which merges
into Tenant or purchases all or substantially all of Tenant’s assets. Except as
provided in the prior sentence, any assignment of these rights without
Landlord’s prior written consent, which may be withheld in Landlord’s reasonable
discretion, shall be void and, at Landlord’s election, shall constitute a
material default hereunder.

11.20 Radon. Radon is a naturally occurring radioactive gas, that when it has
accumulated in a building in sufficient quantities, may present a health risk to
persons who are exposed to it over time. Levels of radon that exceed federal and
state guidelines have been found in buildings in Florida. Additional information
regarding radon and radon testing may be obtained from your county public health
unit.

IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease, which includes
the cover sheet, the foregoing Standard Provisions, Additional Provisions, if
any, and Exhibits attached to this Lease, with the intent that each of the
parties shall be legally bound thereby and that this Lease shall become
effective as of the Date of Lease.

 

WITNESSES:   TENANT:  

FARO TECHNOLOGIES, INC.,

a Florida corporation

/s/ John Townsley

  By:  

/s/ Jay W. Freeland

  Name:  

Jay W. Freeland

/s/ Susan Jenik

  Title:  

President & CEO

  Date:  

September 14, 2007

  LANDLORD: WITNESSES:       SUN LIFE ASSURANCE COMPANY OF CANADA,
a Canadian corporation

/s/ Elizabeth Robichaud

  By:  

/s/ Thomas V. Pedulla

  Name:  

Thomas V. Pedulla

 

  Title:  

Senior Managing Director

  Date:  

September 26, 2007

WITNESSES:    

/s/ Anna-Jean Creegan

  By:  

/s/ Charles S. Andes

  Name:  

Charles S. Andes

 

  Title:  

Managing Director

  Date:  

September 26, 2007

 

22

--------------------------------------------------------------------------------

PART III ADDITIONAL PROVISIONS

The following provisions (“Additional Provisions”) identified below and attached
and/or set forth below are included as part of the Lease between Landlord and
Tenant. Capitalized terms used in any of the Additional Provisions and not
otherwise defined shall have the meanings given such terms in Part I and Part II
of this Lease. Unless express reference is made to a provision in Part I and
Part II of this Lease for the purpose of modifying such provision, in the event
of any conflict between the Additional Provisions and the provisions of Part I
and Part II of this Lease, the provisions contained in Parts I and II shall
control.

EXTERIOR SIGNAGE

Tenant shall have the non-exclusive right, at Tenant’s sole cost and expense and
subject to all applicable laws and codes related thereto, to install one
(1) exterior sign on the façade of the Building above the main entrance to the
Building (the “Exterior Signage”). The graphics, lighting, size, location, POA
standards, aesthetics, material, color and installation of such signage shall be
subject to the prior written consent of (a) the City of Lake Mary, (b) Landlord
and/or (c) any other entity having approval rights. Tenant shall maintain the
Exterior Signage at Tenant’s sole cost and expense and in conformity with all
applicable laws and codes. Notwithstanding the foregoing, if during the Term of
the Lease, Tenant commits any uncured monetary default, abandons or vacates the
Premises, assigns or subleases all or any portion of the Premises (other that to
Priority Healthcare for approximately 1,000 rentable square feet), then Tenant’s
right to the Exterior Signage shall automatically terminate and Tenant shall
remove such signage and repair any and all damage caused thereby, including,
without limitation, restoring the façade to match the remaining façade. The
rights of Tenant contained in this Lease shall apply only for the benefit of the
undersigned Tenant and shall not apply in favor of any assignee or sublessee of
Tenant. Tenant shall be required to remove the sign and repair all damages
(including, without limitation, matching the façade) caused thereby after
expiration or earlier termination of the Lease.

 

 

  TENANT: WITNESSES:     FARO TECHNOLOGIES, INC.,
a Florida corporation

 

  By:  

/s/ Jay W. Freeland

  Name:   Jay W. Freeland

 

  Title:   President & CEO   Date:   September 14, 2007

 

23

--------------------------------------------------------------------------------

  LANDLORD: WITNESSES:    

 

  SUN LIFE ASSURANCE COMPANY OF CANADA,
a Canadian corporation

 

  By:  

/s/ Thomas V. Pedulla

  Name:   Thomas V. Pedulla   Title:   Senior Managing Director WITNESSES:      
Date:   September 26, 2007

 

  By:  

/s/ Charles S. Andes

  Name:   Charles S. Andes

 

  Title:   Managing Director   Date:   September 26, 2007

 

24

--------------------------------------------------------------------------------

EXHIBIT C

NOTICE OF LEASE TERM DATES

Date:                     

 

[Tenant]         

 

        

 

        

 

        

Re: Lease dated                      between Sun Life Assurance Company of
Canada, Landlord, and FARO Technologies, Inc., Tenant, (the “Lease”) concerning
the Premises (as defined in the Lease) located at 250 Technology Parkway, Lake
Mary, Florida 32746

Ladies and Gentlemen:

In accordance with the Lease, please confirm the following by signing below:

1. The Premises have been accepted by Tenant as being substantially complete in
accordance with the Lease, and there is no deficiency in construction.

2. Tenant has possession of the Premises. The Commencement Date of the Lease is
                     and the Term shall end on                     .

Your rent checks should be made payable to
                                                              [Manager].

AGREED AND ACCEPTED

 

TENANT:   MANAGER: FARO TECHNOLOGIES, INC.   CRESCENT RESOURCES, LLC By:  

 

  By:  

 

Name:  

 

  Name:  

 

Title:  

 

  Title:  

 

 

25

--------------------------------------------------------------------------------

EXHIBIT D

TENANT FINISH WORK: ALLOWANCE

1. Except as set forth on this Exhibit, Tenant accepts the Premises “AS-IS” and
acknowledges that Landlord has no obligation to make or otherwise pay for any
improvements, alterations or repairs thereto.

2. Landlord will have prepared the Working Drawings for the Premises. Tenant
will review and approve the Working Drawings within five (5) business days
following receipt thereof. As used herein, “Working Drawings” shall mean the
final working drawings approved by Landlord, as amended from time to time by any
approved changes thereto, and “Work” shall mean all improvements to be
constructed in accordance with and as indicated on the Working Drawings, which
shall be carpet and paint. Approval by Landlord of the Working Drawings shall
not be a representation or warranty of Landlord that such drawings are adequate
for any use, purpose, or condition, or that such drawings comply with any
applicable law or code, but shall merely be the consent of Landlord to the
performance of the Work. Tenant shall, at Landlord’s request, sign the Working
Drawings to evidence its review and approval thereof. All changes in the Work
must receive the prior written approval of Landlord, and in the event of any
such approved change Tenant shall, upon completion of the Work, furnish Landlord
with an accurate, reproducible “as-built” plan (e.g., sepia) of the improvements
as constructed, which plan shall be incorporated into this Lease by this
reference for all purposes.

3. Landlord will cause the Work to be performed by contractors and
subcontractors approved in writing by Landlord.

4. If a delay in the performance of the Work occurs (each delay being a “Tenant
Delay”) (a) because Tenant does not timely approve the Working Drawings;
(b) because of any change by Tenant to the Working Drawings, (c) because of any
specification by Tenant of materials or installations that are not available, or
(d) if Tenant, any contractor or subcontractor, or Tenant’s agents otherwise
delays completion of the Work, then, notwithstanding any provision to the
contrary in this Lease, Tenant’s obligation to pay Base Rent and Tenant’s share
of Excess shall commence on the scheduled Commencement Date.

5. Tenant shall bear the entire cost of performing the Work (including, without
limitation, space planning and construction document fees, design of the Work
and preparation of the Working Drawings, costs of construction labor and
materials, electrical usage during construction, additional janitorial services,
approved signage, related taxes and insurance costs, all of which costs are
herein collectively called the “Total Construction Costs”) in excess of the
Construction Allowance (hereinafter defined). Upon approval of the Working
Drawings and selection of a contractor, Tenant shall promptly (a) execute a work
order agreement prepared by Landlord which identifies such drawings, itemizes
the Total Construction Costs and sets forth the Construction Allowance, and
(b) pay to Landlord 50% of the amount by which the estimated Total Construction
Costs exceed the Construction Allowance. Tenant shall pay to Landlord, within
ten (10) days after Landlord’s delivery to Tenant of an appropriate invoice, an
amount equal to the Total Construction Costs (as adjusted for any approved
changes to the Work), less (i) the amount of the payments already made by
Tenant, (ii) the amount of the Construction Allowance, and (iii) the cost
reasonably estimated by Landlord for completing all “punch list” items; finally,
upon completion of the punch list items, Tenant shall pay to Landlord the costs
incurred in completing the same.

 

26

--------------------------------------------------------------------------------

6. Landlord shall provide to Tenant a construction allowance
(the “Construction Allowance”) equal to the lesser of (a) $3.00 per rentable
square foot in the Premises or (b) the Total Construction Costs, as adjusted for
any approved changes to the Work. Any unspent portion of the Construction
Allowance remaining as of the Commencement Date shall be retained by Landlord
without credit or reimbursement to Tenant. The Construction Allowance shall only
be used for one (1) initial space plan and one revision and normal hard
improvement costs. All cabling and wiring shall be at Tenant’s sole expense.

7. Landlord or its affiliate shall supervise the Work, make disbursements
required to be made to the contractor, and act as a liaison between the
contractor and Tenant and coordinate the relationship between the Work, the
Building, and the Building’s systems. In consideration for Landlord’s
construction supervision services, Tenant shall pay to Landlord a construction
supervision fee equal to four percent (4%) of the Construction Allowance, which
may be deducted from the Construction Allowance. In addition, Landlord’s project
manager shall receive a supervisory fee for review of plans, permit process
supervision and overseeing the Work.

8. Tenant will be performing other improvements pursuant to which terms and
conditions of the Lease shall apply.

9. To the extent not inconsistent with this Exhibit, the Lease shall govern the
performance of the Work and the Landlord’s and Tenant’s respective rights and
obligations regarding the improvements installed pursuant thereto.

 

27

--------------------------------------------------------------------------------

EXHIBIT C

NOTICE OF LEASE TERM DATES

Date: October 1, 2007

[Tenant]

FARO Technologies, Inc.

250 Technology Parkway

Lake Mary, FL 32746

Re: Lease dated September 26, 2007 between Sun Life Assurance Company of Canada,
Landlord, and FARO Technologies, Inc., Tenant, (the “Lease”) concerning the
Premises (as defined in the Lease) located at 250 Technology Parkway, Lake Mary,
Florida 32746

Ladies and Gentlemen:

In accordance with the Lease, please confirm the following by signing below:

1. The Premises have been accepted by Tenant as being substantially complete in
accordance with the Lease, and there is no deficiency in construction.

2. Tenant has possession of the Premises. The Commencement Date of the Lease is
October 1, 2007 and the Term shall end on February 28, 2013.

Your rent checks should be made payable to Sun Life Assurance Company of Canada
[Manager].

AGREED AND ACCEPTED

 

TENANT:   MANAGER: FARO TECHNOLOGIES, INC.   CRESCENT RESOURCES, LLC By:  

/s/ Jay W. Freeland

  By:  

/s/ Whit Duncan

Name:   Jay W. Freeland   Name:   Whit Duncan Title:   President & CEO   Title:
  Sr. Vice President - Florida