Preview | Lease Agreement |

THIS LEASE AGREEMENT (the Lease) is made as of August 8, 2006 between Xenon Research, Inc. (Landlord), a Florida corporation having its principal place of business at 1640 East Adams Drive, Maitland, Florida 32751 and FARO Technologies, Inc. (Tenant) a Florida corporation having its principal place of business at 125 Technology Park, Lake Mary, Florida 32746.

Section 1.1. Landlord does hereby lease and demise unto Tenant and Tenant does hereby hire and take from Landlord, all those certain plots, pieces or parcels of land, together with the buildings, structures and improvements thereon, located at 125 Technology Park, Lake Mary, Florida 32746 (said land, together with any and all buildings, structures and improvements now or hereafter erected thereon by Landlord or Tenant, being hereinafter referred to as the Demised Premises).

Section 2.1. The term of this Lease shall commence as of July 1, 2006 (the Commencement Date) and expire at midnight on July 1, 2011, both dates inclusive, unless sooner terminated as hereinafter provided (the Initial Term). Thereafter, this Lease shall automatically renew for one (1) successive term of five (5) years, unless Tenant provides Landlord written notice of non-renewal, which notice is delivered at least 90 days prior to the end of the then current term of this Lease (hereinafter the Renewal Term, and hereinafter the Initial Term and the Renewal Term are collectively referred to as the Term). The date the Lease expires pursuant to this paragraph or such earlier termination date as may be provided for elsewhere in this Lease shall be referred to as the Expiration Date.

Section 2.2. Notwithstanding anything to the contrary in Section 2.1 hereof, Tenant may in its sole discretion terminate this Lease after three (3) years from the Commencement Date upon written notice delivered to Landlord, which notice shall be delivered one (1) year prior to the date upon which Tenant wishes to early terminate this Lease. The parties agree and acknowledge that the early termination right set forth in this Section 2.2 is a one time right which shall become effective and may be exercised after three (3) years from the Commencement Date. Upon this earlier termination, the parties shall be released from any and all further liability and obligations under this Lease (including Tenants obligation to pay Fixed Rent and Additional Rent) other than those obligations which specifically survive termination of this Lease.

Section 3.1. During the first year of the Initial Term, Tenant shall pay to Landlord, as fixed rent (the Fixed Rent ) for the Demised Premises $302,750.00 per annum payable in equal monthly installments, each in advance on the first day of each month during the first year of the Initial Term hereof, and without offset or deduction of any kind whatsoever, except as herein specifically set forth. Commencing on the first anniversary of the Commencement Date and on each anniversary of the Commencement Date thereafter during the Initial Term and Renewal Term, the Fixed Rent shall be increased by an amount equal to the product of three percent (3%) multiplied by the Fixed Rent for the immediate preceding twelve month period. During the Term, Tenant shall pay to Landlord the Fixed Rent payable in equal monthly installments, each in advance on the first day of each month during the term hereof, without offset or deduction of any kind whatsoever, except as herein specifically set forth.