OFFICE AND INDUSTRIAL/COMMERCIAL LEASE

Exhibit 10.2

OFFICE AND INDUSTRIAL/COMMERCIAL LEASE

THIS OFFICE AND INDUSTRIAL/COMMERCIAL LEASE (“Lease”) is entered into as of June ___, 2005, by and between Stafford Office Park II, LP, a Delaware limited partnership (“Landlord”), and INPUT-OUTPUT, INC., a Delaware corporation (“Tenant”).

1. BASIC LEASE TERMS. For purposes of this Lease, the following terms have the following definitions and meanings:

(a) Landlord: Stafford Office Park II, LP, a Delaware limited partnership

(b) Landlord’s Address (For Notices): c/o Mosby Manager, LLC, 17124 Northbrook Trail, Chagrin Falls, Ohio 44023 or such other place as Landlord may from time to time designate by written notice to Tenant.

(c) Tenant: INPUT-OUTPUT, INC., a Delaware corporation.

(d) Tenant’s Address (For Notices): INPUT-OUTPUT , INC., 12300 Parc Crest Drive, Stafford, Texas 77477, or such other place as Tenant may from time to time designate by written notice to Landlord.

(e) Intentionally Deleted

(f) Intentionally Deleted

(g) Premises: The real property located at 11104 West Airport Blvd., Stafford, Fort Bend County, Texas, (“Building One ”), located on that certain property described in Exhibit A-1 (the “Property”) as shown on the site plan attached hereto as Exhibit “A” (the “Development”), together with all buildings, improvements and facilities, now or subsequently located on the Property from time to time, including, without limitation, Building One containing approximately 90,990 rentable square feet (collectively, the “Premises”).

(h) Intentionally omitted.

(i) Term: Ten (10) Lease Years.

(j) Commencement Date: June ___, 2005.

 Expiration Date: June 30, 2015.

(k) Monthly Base Rent: The Monthly Base Rent will be as set forth below, with each “Lease Year” being the period beginning on the Commencement Date (or the anniversary thereof) and ending on the day preceding the next anniversary of the Commencement Date and the Monthly Base Rent being the amount calculated by multiplying the applicable yearly Rental Rate by 90,990 square feet and dividing by twelve, as set forth in the table below:

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(l) Security Deposit: No Security Deposit at lease signing subject to conditions and adjustments as set forth in Paragraph 7 below.

(m) Tenant Improvements: None. Tenant agrees to accept the Buildings “AS IS, WHERE IS, AND WITH ALL FAULTS” as further provided in Paragraph 4 below.

(n) Tenant Improvement Allowance: None.

(o) Permitted Use: General office, light manufacturing and incidental uses, and assembly and any other legal use allowed under current City zoning or other applicable law, as same may be amended from time to time.

(p) Intentionally Deleted

(q) Broker(s): Studley, Inc., representing Tenant

(r) Intentionally Deleted

(s) Interest Rate: Shall mean the four percent (4%) in excess of the prime lending or reference rate of Bank of America, N.A., or any successor bank in effect on the twenty-fifth (25 ^th ) day of the calendar month immediately prior to the event giving rise to the Interest Rate imposition; provided, however, the Interest Rate will in no event exceed the maximum interest rate permitted to be charged by applicable law.

(t) Exhibits: A through D, inclusive, which Exhibits are attached to this Lease and incorporated herein by this reference.

This Paragraph 1 represents a summary of the basic terms and definitions of this Lease. In the event of any inconsistency between the terms contained in this Paragraph 1 and any specific provision of this Lease, the terms of the more specific provision shall prevail.

2. PREMISES.

(a) Premises. Landlord hereby leases to Tenant and Tenant hereby leases from Landlord the Premises.

(b) Mutual Covenants. Landlord and Tenant agree that the letting and hiring of the Premises is upon and subject to the terms, covenants and conditions contained in this Lease and each party covenants as a material part of the consideration for this Lease to keep and perform their respective obligations under this Lease.

3.0 TERM. Initial Term. The term of this Lease will be for the period designated in Subparagraph 1(i), commencing on the Commencement Date, and ending on the Expiration Date (“Initial

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Term”). Each consecutive twelve (12) month period of the Term of this Lease, commencing on the Commencement Date, will be referred to herein as a “Lease Year”; provided, however, that if the Commencement Date is not the first day of a calendar month, then the first Lease Year shall begin on the Commencement Date and shall end on the last day of the calendar month in which the first anniversary of the Commencement Date occurs.

3.1. OPTION TERM.

(a) Option Right. Landlord hereby grants the originally named Tenant herein (or any affiliate to which this Lease has been assigned pursuant to Paragraph 24(c) above (a “Permitted Assignee”)), up to four (4) consecutive dependant options to extend the Initial Term for a total period of twenty (20) years (the “Option Term”) with respect to the entire Premises, which option(s) shall be exercisable only by written notice delivered by Tenant to Landlord as provided below, and provided further that, as of the date of delivery of such notice, Tenant is not in default under this Lease beyond any applicable cure period. Each such option may be exercised at Tenant’s election for either a five (5) or ten (10) year period (“Option Term Period”), provided, however, that the total Option Term exercised may not exceed twenty (20) years. Upon the proper exercise of such option to extend, and provided that, as of the end of the Initial Term or exercised portion of the Option Term, Tenant is not in default under this Lease beyond any applicable cure period, the Term, as it applies to the Premises, shall be extended for a period of five (5) or ten (10) years, at the election of Tenant, at the monthly base rent and on the other terms set forth in Paragraph 3.1(b) below. The rights contained in this Paragraph 3.1 shall be personal to Tenant or a Permitted Assignee. Any renewal event outside exercise of one of the four (4) options (i.e. a renewal negotiated outside an option) shall be considered use of an option and will reduce the number of options remaining but will not eliminate Tenant’s rights to future renewal options.

(b) Option Rent. The monthly base rent payable by Tenant during the Option Term (the “Option Rent”) shall be equal to 95% of the rent that a willing tenant and a willing landlord would agree to in arm’s length, bona fide negotiation for a new lease of direct space that is comparable in size, location and quality to the Premises, for a comparable term, which comparable space is located in other comparable buildings in the southwest sub market area of Houston, TX and taking into consideration all other relevant terms and conditions of any comparable leasing transactions, including, without limitation: (i) location, quality and age of the building; (ii) use and size of the space in question; (iii) extent of leasehold improvement allowances; (iv) the amount of any abatement of rental or other charges; (v) parking charges or inclusion of same in rental; (vi) lease takeovers/assumptions; (vii) relocation, refurbishment and repainting allowances; (viii) any and all other concessions or inducements; (ix) extent of services provided or to be provided, including maintenance and repair obligations; (x) distinction between “gross” and “net” lease; (xi) base year or dollar amount for escalation purposes (both operating costs and ad valorem/real estate); (xii) any other adjustments (including by way of indexes) to base rental; (xiii) credit standing and financial stature of the tenant; and (xiv) length of term (the “Fair Market Value Rental” or “FMVR”). All other terms and conditions of this Lease shall apply throughout the Option Term.

(c) Exercise of Option. The option contained in this Paragraph 3.1 shall be exercised by Tenant, if at all, and only in the following manner: (i) Tenant shall deliver written notice to Landlord no less than nine (9) months prior to the expiration of the Initial Term or Option Term Period as exercised, stating that Tenant is exercising its option and as to what portion of the Premises such renewal shall apply ; (ii) Landlord, after receipt of Tenant’s notice, shall deliver notice (the “Option Rent Notice”) to Tenant not more than one (1) month after receipt of the notice to extend, setting forth Landlord’s proposed Option Rent; and (iii) if Tenant wishes to object to the Option Rent, Tenant shall, on or before the date occurring one (1) month after receipt of the Option Rent Notice deliver written notice thereof to Landlord, in which case the parties shall follow the procedure, and the Option Rent shall be determined, as set forth in Paragraph 3.1(d) below.

(d) Determination of Option Rent. In the event Tenant timely and appropriately objects to the Option Rent proposed by Landlord, Landlord and Tenant shall attempt to agree upon the Option Rent using their best good-faith efforts. If Landlord and Tenant fail to reach agreement within ten (10) business days following Tenant’s objection to the Option Rent, (the “Outside Agreement Date”), then each party

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shall make a separate determination of the Option Rent, as the case may be, within five (5) business days, and such determinations shall be submitted to arbitration in accordance with Subparagraphs (i) through (vii) below.

(i) Landlord and Tenant shall each appoint one arbitrator who shall by profession be a licensed real estate brokers who shall have been active over the five (5) year period ending on the date of such appointment in the leasing of commercial office and industrial properties in Houston, TEXAS. The determination of the arbitrators shall be limited solely to the issue area of whether Landlord’s or Tenant’s submitted Option Rent, is the closest to the actual Option Rent as determined by the arbitrators, taking into account the requirements of Paragraph 3.1(b) above. Each such arbitrator shall be appointed within fifteen (15) business days after the applicable Outside Agreement Date.

(ii) The two arbitrators so appointed shall within ten (10) business days of the date of the appointment of the last appointed arbitrator agree upon and appoint a third arbitrator who shall be qualified under the same criteria set forth hereinabove for qualification of the initial two arbitrators.

(iii) The three arbitrators shall within thirty (30) days of the appointment of the third arbitrator reach a decision as to whether the parties shall use Landlord’s or Tenant’s submitted Option Rent, and shall notify Landlord and Tenant thereof.

(iv) The decision of the majority of the three arbitrators shall be binding upon Landlord and Tenant.

(v) If either Landlord or Tenant fails to appoint an arbitrator within fifteen (15) business days after the applicable Outside Agreement Date, the arbitrator appointed by one of them shall reach a decision, notify Landlord and Tenant thereof, and such arbitrator’s decision shall be binding upon Landlord and Tenant.

(vi) If the two arbitrators fail to agree upon and appoint a third arbitrator, or both parties fail to appoint an arbitrator, then the appointment of the third arbitrator or any arbitrator shall be dismissed and the matter to be decided shall be forthwith submitted to arbitration under the provisions of the American Arbitration Association, but subject to the instruction set forth in this Paragraph 3.1(d).

(vii) The cost of arbitration (including, without limitation, reasonable attorneys’ fees) shall be paid by the non-prevailing party.

(e) Partial Renewal. Tenant will have the right under this Paragraph 3 to exercise the Option Term for all of the Premises or a portion of the Premises as Tenant in its sole discretion may elect. In the event Tenant elects to exercise the Option Term for either Building Two or Building Three, the rent shall be determined as provided for in this paragraph 3 but shall be 100% or FMVR, and all remaining dependent options shall apply only to that portion of the Premises subject to the exercised Option Term.

3.2 TERMINATION RIGHT.

(a) Tenant’s Election. After the twelfth (12th) month from the Commencement Date, Tenant shall have the right to require Landlord to market the Premises for sale. Landlord shall control all aspects of the sale but will be obligated to sell the Premises in the event the sales price net of all commissions, costs, fees and expenses yields Landlord a minimum price (“Strike Price”) as set forth in Exhibit “E” attached hereto provided further however, that if Tenant elects to require Landlord to sell the Premises prior to the thirty-sixth (36 ^th ) month from the Commencement Date, then the sales price must include assumption of Landlord’s financing on the Premises. Landlord represents and warrants that its loan document will include a provision that the loan is assumable subject to lender’s review and approval rights as set forth within the loan documents. However, if the lender does not approve the proposed purchaser or the terms of the proposed sale, then Landlord shall have no obligation under this Section to consummate the sale to such proposed purchaser. In the event any such sale would exceed the Strike Price, Landlord and Tenant shall evenly share the excess proceeds. Tenant may require Landlord to accept a sales price less than the Strike Price by paying the difference between the two (“Strike Price

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Differential”) to Landlord at closing. If Landlord, in the exercise of its good faith business judgment believes it can only consummate a sale for less then the Strike Price, it shall provide written notice to Tenant. Tenant shall have five (5) business days to provide written notice to Landlord whether it elects to require Landlord to accept such offer and to deposit the Sales Price Differential into an escrow of Landlord’s choosing 24 hours prior to Landlord executing the purchase contract. At all times, Landlord shall have the right of last refusal to match any offer that meets or exceeds the Strike Price or that Tenant is willing to accept pursuant hereto. Upon consummation of a sale pursuant to this paragraph 3.2(a), this Lease shall terminate. Tenant shall be entitled to exercise this right once in any twelve (12) month period.

(b) Landlord’s Election. Landlord shall at all times have the right to sell the Premises. In the event Landlord elects to sell the Premises, it shall provide written notice to Tenant. Tenant shall have thirty (30) days to either “opt in” or “opt out”. In the event Tenant “opts in”, then the sale shall proceed as if Tenant required Landlord to market the Premises under paragraph 3.2(a) above. In the event Tenant “opts out”, Landlord shall sell the Premises in its sole and absolute discretion, retain all amounts in excess of the Strike Price, have no right to require Tenant to pay the Strike Price Differential, and pay all costs, fees and expenses. Upon consummation of any “opt out” sale, this Lease shall remain in full force and effect with the exception that this paragraph 3.2(a) and 3.2 (b) shall be null and void and deemed deleted herefrom.

4. POSSESSION.

(a) Delivery of Possession. Landlord and Tenant acknowledge that Tenant is in possession of the Premises as of the date hereof pursuant to the terms of lease between Tenant and NL VENTURES III STAFFORD, L.P., a Texas limited partnership, Landlord’s predecessor in interest with respect to the Premises. Landlord and Tenant acknowledge and agree that Tenant shall remain in possession of the Premises and that the existing lease between Tenant and NL VENTURES III STAFFORD, L.P. shall terminate concurrently with the Commencement Date of this Lease which shall occur at such time as Landlord completes its acquisition of the Premises.

(b) Condition of Premises. By taking possession of the Premises, Tenant will be deemed to have accepted the Premises in its “as is” “where is” and “with all faults” condition on the date of delivery of possession and to have acknowledged that neither Landlord nor any agent of Landlord has made any representation or warranty with respect to the Premises or any portions thereof or with respect to the suitability of same for the conduct of Tenant’s business. THIS LEASE IS EXPRESSLY ENTERED INTO WITHOUT ANY REPRESENTATION OR WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY AND LANDLORD IS TRANSFERRING POSSESSION OF THE PREMISES AS IS, WHERE IS, AND WITH ALL FAULTS, AND WITHOUT REPRESENTATIONS OR WARRANTY (ALL OF WHICH LANDLORD HEREBY DISCLAIMS) AS TO FITNESS FOR ANY PARTICULAR PURPOSE, MERCHANTABILITY, DESIGN, QUALITY, LAYOUT, FOOTAGE, PHYSICAL CONDITION, OPERATION, COMPLIANCE WITH SPECIFICATIONS, ABSENCE OF LATENT DEFECTS, OR COMPLIANCE WITH LAWS AND REGULATIONS (INCLUDING, WITHOUT LIMITATION, THOSE RELATING TO HEALTH, SAFETY AND THE ENVIRONMENT) OR ANY OTHER MATTER AFFECTING OR RELATED TO THE PROPERTY. TENANT HEREBY FURTHER ACKNOWLEDGES THAT LANDLORD HAS NOT MADE, DOES NOT MAKE AND SPECIFICALLY DISCLAIMS ANY REPRESENTATIONS OR WARRANTIES AS TO WATER, SOIL OR GEOLOGY OF THE PREMISES. WITHOUT LIMITING THE FOREGOING, LANDLORD DOES NOT AND HAS NOT MADE ANY REPRESENTATION OR WARRANTY REGARDING THE PRESENCE OR ABSENCE OF ANY HAZARDOUS MATERIALS (as defined in Paragraph 7(c) below) ON, UNDER OR ABOUT THE PREMISES OR THE COMPLIANCE OR NON-COMPLIANCE OF THE PREMISES WITH THE COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION AND LIABILITY ACT, THE SUPERFUND AMENDMENT AND REAUTHORIZATION ACT, THE RESOURCE CONSERVATION RECOVERY ACT, THE FEDERAL WATER POLLUTION CONTROL ACT, THE FEDERAL INSECTICIDE, RODENTICIDE AND FUNGICIDE ACT, THE CLEAN WATER ACT, THE CLEAN AIR ACT, ANY SO-CALLED FEDERAL, STATE OR LOCAL “SUPERFUND” OR “SUPERLIEN” STATUTE, OR ANY OTHER STATUTE, LAW, ORDINANCE, CODE, RULE, REGULATION, ORDER OR DECREE REGULATING, RELATING TO OR IMPOSING

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LIABILITY (INCLUDING STRICT LIABILITY) OR STANDARDS OF CONDUCT CONCERNING ANY HAZARDOUS MATERIALS (collectively, the “Environmental Laws”). TENANT HEREBY FURTHER ACKNOWLEDGES AND AGREES THAT IT IS RELYING SOLELY UPON ITS CURRENT POSSESSION, INSPECTION, EXAMINATION, AND EVALUATION OF THE PREMISES.

5. RENT.

(a) Monthly Base Rent. Tenant agrees to pay Landlord the Monthly Base Rent (as set forth in paragraph 1(k) above) for the Premises (subject to adjustment as hereinafter provided) in advance on the first day of each calendar month during the Term without prior notice or demand, except that Tenant agrees to pay the Monthly Base Rent for the first month of the Term directly to Landlord concurrently with Tenant’s delivery of the executed Lease to Landlord. If the Term of this Lease commences or ends on a day other than the first day of a calendar month, then the rent for such period will be prorated in the proportion that the number of days this Lease is in effect during such period bears to the number of days in such month. All rent must be paid to Landlord, without any deduction or offset, in lawful money of the United States of America, at the address designated by Landlord or to such other person or at such other place as Landlord may from time to time designate in writing.

(b) Additional Rent. All amounts and charges to be paid by Tenant hereunder, including, without limitation, payments for Operating Expenses, insurance, and repairs for which Tenant is responsible pursuant to Subparagraph 14(b) below, will be considered additional rent for purposes of this Lease, and the word “rent” as used in this Lease will include all such additional rent unless the context specifically or clearly implies that only Monthly Base Rent is intended.

(c) Late Payments. Late payments of Monthly Base Rent and/or any item of additional rent (with the exception of direct payments for landscaping and janitorial services) will be subject to interest and a late charge as provided in Subparagraph 22(f) below.

6. REAL PROPERTY TAXES.

(a) Real Property Taxes . Tenant shall pay all real property taxes on the Premises during the term of this Lease. Tenant agrees to pay to Landlord one twelfth (1/12 ^th ) of the total annual real property taxes due on a monthly basis concurrently with the payment of Monthly Base Rent. Failure of Tenant to pay said real property taxes as and when herein specified shall, in addition to all other rights and remedies of Landlord hereunder, subject Tenant to any fine, penalty, interest, or cost which Landlord may incur as a result thereof. Tenant shall, within thirty (30) days after demand, reimburse Landlord for any such fine, penalty, interest, or cost, together with interest thereon at the Interest Rate.

(b) Definition of “Real Property Tax.” “Real property tax” means; (i) any fee, license fee, license tax, business license fee, commercial rental tax, levy, charge, assessment, penalty or tax imposed by any taxing authority against the Premises; (ii) any tax or charge for fire protection, streets, sidewalks, road maintenance, refuse or other services provided to the Premises by any governmental agency; (iii) any tax imposed upon this transaction or based upon a re-assessment of the Premises due to a change of ownership, as defined by applicable law, or other transfer of all or part of Landlord’s interest in the Premises ; and (iv) any charge or fee replacing any tax previously included within the definition of real property tax, or in substitution of or in lieu of an increase in real property taxes. “Real property tax” does not, however, include Landlord’s federal or state income, franchise, inheritance or estate taxes or any other taxes applicable to Landlord’s general or net income.

(c) Impounds for Real Property Taxes . If Tenant is more than ten (10) days late in the payment of real property taxes more than two (2) times during the initial Term of this Lease, Tenant shall pay Landlord a sum equal to one-twelfth (1/12) of the estimated annual real property taxes payable by Tenant under this Lease, together with each payment of Monthly Base Rent. Landlord shall hold such payments in a non-interest bearing impound account, and Landlord shall use such funds to pay the real property taxes on the Premises to the taxing authority entitled thereto at least fifteen (15) days prior to the delinquency date established by the taxing authority. If unknown, Landlord shall reasonably estimate the

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amount of real property taxes when due. Tenant shall pay any deficiency of funds in the impound account to Landlord upon written request. Landlord shall refund any excess to Tenant once the actual amount of the real property taxes is known. If Tenant defaults under this Lease, Landlord may apply any funds in the impound account to any obligation then due under this Lease.

(d) Right to Contest. Tenant will have the exclusive right throughout the Term (including any extensions) to contest the assessed valuation of the Premises by all appropriate proceedings, and to settle or compromise any such proceedings initiated by Tenant, all at Tenant’s sole cost and expense. Any tax savings shall inure solely to the benefit of Tenant.

7. SECURITY DEPOSIT. Tenant will not be required to deposit with Landlord any Security Deposit provided that Tenant demonstrates by way of audited financial statements that it maintains a Tangible Net Worth (”TNW”) (defined in accordance with Generally Accepted Accounting Principles consistently applied) of Fifty Million Dollars ($50,000,000) and a Current Ratio (“CR”) (defined as the ratio of current assets to current liabilities) of 1.5. If during the term of this Lease either of these conditions is not satisfied, Tenant shall deposit a Security Deposit with Landlord in an amount equal to six (6) times the then applicable monthly rent. The Security Deposit will be returned after Tenant satisfies the TNW and CR conditions for four (4) consecutive quarters. Any Security Deposit will be held by Landlord in an interest-bearing account as security for the full and faithful performance by Tenant of all of the terms, covenants, and conditions of this Lease to be kept and performed by Tenant during the Term hereof. If the Security Deposit, if any, has not been returned prior to the expiration of the Lease Term, and Tenant fully and faithfully performs its obligations under this Lease including, without limitation, surrendering the Premises upon the expiration or sooner termination of this Lease in compliance with Subparagraph 11(a) below, the Security Deposit (and interest earned thereon) or any balance thereof will be returned to Tenant (or, at Landlord’s option, to the last assignee of Tenant’s interest hereunder) within thirty (30) days following the expiration of the Lease Term or as required under applicable law, provided that Landlord may retain the Security Deposit (and interest earned thereon) until such time as any outstanding rent or additional rent amount has been determined and paid in full. The Security Deposit (and interest earned thereon) is not, and may not be construed by Tenant to constitute, rent for the last month or any portion thereof. If Tenant defaults with respect to any provisions of this Lease including, but not limited to, the provisions relating to the payment of rent or additional rent, Landlord may (but will not be required to) use, apply or retain all or any part of the Security Deposit (and interest earned thereon) for the payment of any rent or any other sum in default, or for the payment of any other amount which Landlord may spend or become obligated to spend by reason of Tenant’s default or to compensate Landlord for any loss or damage which Landlord may suffer by reason of Tenant’s default. If any portion of the Security Deposit is so used or applied, Tenant agrees, within ten (10) business days after Landlord’s written demand therefor, to deposit cash with Landlord in an amount sufficient to restore the Security Deposit to its original amount and Tenant’s failure to do so shall constitute a default under this Lease. Should Landlord sell its interest in the Premises during the Term hereof and deposit with the purchaser thereof the then unappropriated Security Deposit (and interest earned thereon), Landlord will be discharged from any further liability with respect to such Security Deposit.

8. USE.

(a) Tenant’s Use of the Premises. The Premises may be used for the use or uses set forth in Subparagraph 1(o) only, and Tenant will not use or permit the Premises to be used for any other purpose without the prior written consent of Landlord, which consent Landlord may withhold in its sole and absolute discretion.

(b) Compliance. At Tenant’s sole cost and expense, Tenant agrees to procure, maintain and hold available for Landlord’s inspection, all governmental licenses and permits required, if any, for the proper and lawful conduct of Tenant’s business from the Premises Tenant will be responsible for compliance of its use and occupancy of the Premises, and any alterations to the Premises, at Tenant’s sole cost and expense, with (i) any and all laws, statutes, zoning restrictions, ordinances, rules, regulations, orders and rulings now or hereafter in force and any requirements of any insurer, insurance authority or duly constituted public authority having jurisdiction over the Premises now or hereafter in force, (ii) the

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requirements of the Board of Fire Underwriters and any other similar body, (iii) the Certificate of Occupancy issued for the Building One, and (iv) any recorded covenants, conditions and restrictions and similar regulatory agreements, if any, which affect the use, occupation or alteration of the Building One or the Premises. Tenant agrees to comply with the Rules and Regulations referenced in Paragraph 28 below. Tenant agrees not to allow the Premises to be used for any unlawful or unreasonably objectionable purpose. Tenant agrees not to cause, maintain or permit any nuisance or waste in, on, under or about the Premises. Notwithstanding anything contained in this Lease to the contrary, all transferable development rights related in any way to that portion of the Property owned by Landlord are and will remain vested in Landlord, and Tenant hereby waives any rights thereto.

c) Hazardous Materials. Except for (i) ordinary and general office supplies typically used in the ordinary course of business, such as copier toner, liquid paper, glue, ink and common household cleaning materials (some or all of which may constitute “Hazardous Materials” as defined in this Lease), in ordinary quantities, (ii) those Hazardous Materials that are necessary for Tenant’s business, provided that such usage and storage is only to the extent of the quantities as reasonably necessary in the ordinary course of Tenant’s business, Tenant agrees not to cause or permit any Hazardous Materials to be brought upon, stored, used, handled, generated, released or disposed of on, in, under or about any portion of the Premises by Tenant, its agents, employees, subtenants, assignees, licensees, contractors or invitees (collectively, “Tenant’s Parties”), without the prior written consent of Landlord, which consent Landlord may withhold in its sole and absolute discretion. Upon the expiration or earlier termination of this Lease, Tenant agrees to promptly remove from the Premises, at its sole cost and expense, any and all Hazardous Materials, including any equipment or systems containing Hazardous Materials which are installed, brought upon, stored, used, generated or released upon, in, under or about the Premises or any portion thereof by Tenant or any of Tenant’s Parties. Landlord reserves the right, during the last one hundred eighty (180) days of the Term, to have an experienced and qualified environmental consultant perform an environmental inspection of the Premises to determine the existence of any Hazardous Materials for which Tenant is responsible for their removal. If Landlord’s inspection reveals or confirms the existence of any such Hazardous Materials (except for Hazardous Materials that have been previously approved by Landlord in writing and such Hazardous Materials have been used, handled, stored and disposed of in accordance with all applicable Environmental Laws), or if Landlord has reasonable cause to believe that any such Hazardous Materials are likely to exist at the Premises, then Tenant shall be responsible for the cost of such inspection; in all other instances, Landlord shall be responsible for the cost of such inspection. To the fullest extent permitted by law, Tenant agrees to promptly indemnify, protect, defend and hold harmless Landlord and Landlord’s members, managers, partners, officers, directors, employees, agents, successors and assigns (collectively, “Landlord Indemnified Parties”) and lenders from and against any and all claims, damages, judgments, suits, causes of action, losses, liabilities, penalties, fines, expenses and costs (including, without limitation, clean-up, removal, remediation and restoration costs, sums paid in settlement of claims, attorneys’ fees, consultant fees and expert fees and court costs) which arise or result from the presence of Hazardous Materials on, in, under or about the Premises and which are caused or permitted by Tenant or any of Tenant’s Parties. Tenant agrees to promptly notify Landlord of any release of Hazardous Materials at the Premises which Tenant becomes aware of during the Term of this Lease, whether caused by Tenant or any other persons or entities. In the event of any release of Hazardous Materials caused or permitted by Tenant or any of Tenant’s Parties, Landlord shall have the right, but not the obligation, to cause Tenant to immediately take all steps Landlord deems reasonably necessary or appropriate to remediate such release and prevent any similar future release to the reasonable satisfaction of Landlord and Landlord’s mortgagee(s). As used in this Lease, the term “Hazardous Materials” shall mean and include any chemical, substance, material, controlled substance, object, condition, waste, living organism or combination thereof, whether solid, semi-solid, liquid or gaseous, which is or may be hazardous to human health or safety or to the environment due to its radioactivity, ignitability, corrosivity, reactivity, explosivity, toxicity, carcinogenicity, mutagenicity, phytotoxicity, infectiousness or other harmful or potentially harmful properties or effects, including, without limitation, tobacco smoke, petroleum and petroleum products, asbestos, radon, polychlorinated biphenyls (PCBs), refrigerants (including those substances defined in the Environmental Protection Agency’s “Refrigerant Recycling Rule,” as amended from time to time) and all of those chemicals, substances, materials, controlled substances, objects, conditions, wastes, living organisms or combinations thereof which are now or become in the future listed, defined or regulated in

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any manner by any Environmental Law based upon, directly or indirectly, such properties or effects. As used herein, “Environmental Laws” means any and all federal, state or local environmental, health and/or safety-related laws, regulations, standards, decisions of courts, ordinances, rules, codes, orders, decrees, directives, guidelines, permits or permit conditions, currently existing and as amended, enacted, issued or adopted in the future which are or become applicable to Tenant, the Premises. The provisions of this Subparagraph 8(c) shall survive the expiration or earlier termination of this Lease.

(d) Tenant shall have the right to self-manage the Premises on behalf of Tenant at Tenant’s sole cost and expense. Tenant’s right to manage the Premises as set forth above shall be exclusive and Landlord will have no right to manage the Premises, either directly or through a third-party property manager or asset manager. However, notwithstanding the foregoing, Landlord shall at all times have the right to inspect the Premises as set forth in paragraph 16, below.

9. NOTICES. Any notice required or permitted to be given hereunder must be in writing and may be given by personal delivery (including delivery by overnight courier or an express mailing service) or by mail, if sent by registered or certified mail. Notices to Tenant shall be sufficient if delivered to Tenant at the addresses designated in Subparagraph 1(d) and notices to Landlord shall be sufficient if delivered to Landlord at the address designated in Subparagraph 1(b). Either party may specify a different address for notice purposes by written notice to the other.

10. BROKERS. The parties acknowledge that the broker(s) who were retained by the parties in connection with this Lease are stated in Subparagraph 1(q). Each party represents and warrants to the other, that, to its knowledge, no other broker, agent or finder (a) negotiated or was instrumental in negotiating or consummating this Lease on its behalf, and (b) is or might be entitled to a commission or compensation in connection with this Lease. LANDLORD AND TENANT EACH AGREE TO PROMPTLY INDEMNIFY PROTECT, DEFEND AND HOLD HARMLESS THE OTHER FROM AND AGAINST ANY AND ALL CLAIMS, DAMAGES, JUDGMENTS, SUITS, CAUSES OF ACTION, LOSSES, LIABILITIES, PENALTIES, FINES, EXPENSES, AND COSTS (INCLUDING ATTORNEYS’ FEES AND COURT COSTS) RESULTING FROM ANY BREACH BY THE INDEMNIFYING PARTY. THE FOREGOING MUTUAL INDEMNITY SHALL SURVIVE THE EXPIRATION OR EARLIER TERMINATION OF THIS LEASE. LANDLORD SHALL BE RESPONSIBLE FOR PAYMENT OF A COMMISSION TO BROKER PER THE TERMS OF A SEPARATE AGREEMENT BETWEEN LANDLORD AND BROKER.

11. SURRENDER; HOLDING OVER.

(a) Surrender. The voluntary or other surrender of this Lease by Tenant, or a mutual cancellation thereof, shall not constitute a merger, and shall, at the option of Landlord, operate as an assignment to Landlord of any or all subleases or subtenancies. Upon the expiration or earlier termination of this Lease, Tenant agrees to peaceably surrender the Premises to Landlord broom clean and, in the case of all warehouse floors, scrubbed clean (to remove all oil, grease and other debris to the extent practicable) and in a state of good order, repair and condition, ordinary wear and tear and casualty damage (if this Lease is terminated as a result thereof pursuant to Paragraph 20) excepted, with all of Tenant’s personal property and Structural Alterations (as defined in Paragraph 13) removed from the Premises to the extent required under Paragraph 13 and all damage caused by such removal repaired as required by Paragraph 13. If any wiring and/or cabling is not removed from the Premises upon expiration of this lease then such wiring and/or cabling shall become the property of Landlord (without payment by Landlord). The delivery of keys to any employee of Landlord or to Landlord’s agent or any employee thereof alone will not be sufficient to constitute a termination of this Lease or a surrender of the Premises.

(b) Holding Over. Tenant will not be permitted to hold over possession of the Premises after the expiration or earlier termination of the Term without the express written consent of Landlord, which consent Landlord may withhold in its sole and absolute discretion. If Tenant holds over after the expiration or earlier termination of the Term, Landlord may, at its option, treat Tenant as a tenant at sufferance only, and such continued occupancy by Tenant shall be subject to all of the terms, covenants and conditions of this Lease, so far as applicable, except that the Monthly Base Rent for any such holdover period shall be equal to one hundred fifty percent (150%) of the Monthly Base Rent in effect

TENANT’S INITIALS                      LANDLORD’S INITIALS                     

under this Lease immediately prior to such holdover.. Acceptance by Landlord of rent after such expiration or earlier termination will not result in a renewal of this Lease. The foregoing provisions of this Paragraph 11 are in addition to and do not affect Landlord’s right of re-entry or any rights of Landlord under this Lease or as otherwise provided by law. If Tenant fails to surrender the Premises upon the expiration of this Lease in accordance with the terms of this Paragraph 11 despite demand to do so by Landlord, Tenant agrees to promptly indemnify, protect, defend and hold Landlord harmless from all claims, damages, judgments, suits, causes of action, losses, liabilities, penalties, fines, expenses and costs (including attorneys’ fees and costs), including, without limitation, costs and expenses incurred by Landlord in returning the Premises to the condition in which Tenant was to surrender it and claims made by any succeeding tenant founded solely on or resulting solely from Tenant’s failure to surrender the Premises. The provisions of this Subparagraph 11(b) will survive the expiration or earlier termination of this Lease.

12. TAXES ON TENANT’S PROPERTY. Tenant agrees to pay before delinquency, all taxes and assessments (real and personal) levied against (a) any personal property or trade fixtures placed by Tenant in or about the Premises (including any increase in the assessed value of the Premises based upon the value of any such personal property or trade fixtures); (b) any Tenant Improvements or Alterations in the Premises (whether installed and/or paid for by Landlord or Tenant) to the extent such items are assessed at a valuation higher than the valuation at which tenant improvements conforming to Landlord’s building standard tenant improvements are assessed, (c) any franchise, sales or rent tax, and (d) any taxes imposed or levied against Tenant due to any sub-tenancies or assignment of the Lease (or any part thereof). If any such taxes or assessments based upon items in (a), (b), (c) or (d) above, are levied against Landlord or Landlord’s property, Landlord may, after written notice to Tenant (and under proper protest if requested by Tenant) pay such taxes and assessments, in which event Tenant agrees to reimburse Landlord all amounts paid by Landlord within ten (10) business days after demand by Landlord; provided, however, Tenant, at its sole cost and expense, will have the right, with Landlord’s cooperation, to bring suit in any court of competent jurisdiction to recover the amount of any such taxes and assessments so paid under protest.

13. ALTERATIONS. Subject to and upon the terms and conditions set forth below, Tenant may, at its sole cost and expense, make non-structural alterations, additions, improvements and decorations to the Premises as well as any repairs under Paragraph 14 below (collectively, “Alterations”) without Landlord’s approval, provided such Alterations (i) do not affect the outside appearance, character or use of the Building One, (ii) do not materially adversely affect the structure, equipment, services or systems of the Building One or Development, (iii) in the reasonable opinion of Landlord, do not materially adversely affect the value of the Buildings, (iv) violate any occupancy certificate applicable to the Building One or the Development, or (v) cost less than Two Hundred Fifty Thousand Dollars ($250,000).

(a) Intentionally Deleted.

(b) Landlord’s Notice. Before proceeding with any Alterations, Tenant must first deliver to Landlord written notice and a copy of any final plans, specifications and working drawings for any such Alterations if required for such work (i.e. carpeting work does not require drawings) at least ten (10) business days prior to commencement of the work thereof, and (B) comply with the other conditions of this Paragraph 13, including, without limitation, conforming to Landlord’s rules, regulations and insurance requirements which govern contractors. Landlord’s review of plans, specifications and/or working drawings for Alterations will not create any responsibility or liability on the part of Landlord for their completeness, design sufficiency, or compliance with applicable permits, laws, rules and regulations of governmental agencies or authorities. If the Alteration is structural or does not comply with 13 (i)-(v) above (a “Structural Alteration”), Landlord will have the right to approve such Structural Alteration, such approval not to be unreasonably withheld, delayed or conditioned. Landlord will notify Tenant in writing of (i) any objections to a proposed Structural Alteration within twenty (20) business days following receipt of Tenant’s notice, which objections will provide sufficient detail and specifics of Landlord’s objections to allow Tenant to review the plans, specifications and working drawings to eliminate Landlord’s objections, If Landlord fails to provide notice of any objections within such twenty (20) business day period, then Tenant shall provide Landlord a second written notice. If Landlord fails to provide notice of any objections

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within ten (10) business day from receipt of the second notice, then Landlord will be deemed to have approved the proposed Structural Alteration and Tenant will be entitled to proceed with same without further consent from Landlord.

(c) Contractors. Tenant may select architects, engineers contractors, subcontractors and other consultants of Tenant’s choice to perform any Alterations or Structural Alterations provided same are properly licensed. Before proceeding with any Alterations or Structural Alterations, Tenant’s contractors must obtain and maintain, on behalf of Tenant and at Tenant’s sole cost and expense: (i) all necessary governmental permits and approvals for the commencement and completion of such Alterations or Structural Alterations; and (ii) if reasonably requested by Landlord, a completion and lien indemnity or payment performance bond, or other surety, reasonably satisfactory to Landlord for such Structural Alterations. Throughout the performance of any Alterations or Structural Alterations, Tenant agrees to obtain, or cause its contractors to obtain, workers compensation insurance and general liability insurance in compliance with the provisions of Paragraph 19 of this Lease.

(d) Manner of Performance. All Alterations and Structural Alterations must be performed: (i) in accordance with the approved plans, specifications and working drawings; (ii) in a lien-free and first-class and workmanlike manner; and (iii) in compliance with all applicable permits, laws, statutes, ordinances, rules, regulations, orders and rulings now or hereafter in effect and imposed by any governmental agencies and authorities which assert jurisdiction.

(e) Ownership. Any tenant improvements, including, without limitation, all affixed sinks, dishwashers, microwave ovens and other fixtures, and all Alterations and Structural Alterations will become the property of Landlord and will remain upon and be surrendered with the Premises at the end of the Term of this Lease; provided, however, Landlord may, by written notice delivered to Tenant at least ninety (90) days before the end of the Term, identify those Structural Alterations which Landlord will require Tenant to remove at the end of the Term of this Lease, provided that at the time Landlord approves the Structural Alterations, Landlord has reserved the right to require Tenant to remove such Structural Alterations.. If Landlord requires Tenant to remove any Structural Alterations, Tenant, at its sole cost and expense, agrees to remove the identified Structural Alterations on or before the expiration or earlier termination of this Lease and repair any damage to the Premises caused by such removal (or, at Landlord’s option, Tenant agrees to pay to Landlord all of Landlord’s costs of such removal and repair).

(f) Plan Review. Tenant agrees to pay Landlord, as additional rent, the reasonable costs of professional services and costs for general conditions of Landlord’s third party consultants if utilized by Landlord (but not Landlord’s “in-house” personnel) for review of all plans, specifications and working drawings for any Alterations, within ten (10) business days after Tenant’s receipt of invoices either from Landlord or such consultants.

(g) Personal Property. All articles of personal property owned by Tenant or installed by Tenant at its expense in the Premises (including Tenant’s business and trade fixtures, furniture, movable partitions and equipment) will be and remain the property of Tenant, and must be removed by Tenant from the Premises, at Tenant’s sole cost and expense, on or before the expiration or earlier termination of this Lease. Tenant agrees to repair any damage caused by such removal at its cost on or before the expiration or earlier termination of this Lease.

(h) Removal of Alterations. If Tenant fails to remove by the expiration or earlier termination of this Lease all of its personal property, or any Structural Alterations properly identified by Landlord for removal, Landlord may, (without liability to Tenant for loss thereof) treat such personal property and/or Structural Alterations as abandoned and, at Tenant’s sole cost and expense, and in addition to Landlord’s other rights and remedies under this Lease, at law or in equity: (a) remove and store such items; and/or (b) upon ten (10) business days prior notice to Tenant, sell, discard or otherwise dispose of all or any such items at private or public sale for such price as Landlord may obtain or by other commercially reasonable means. Tenant shall be liable for all costs of disposition of Tenant’s abandoned property plus a surcharge of five percent (5%) and Landlord shall have no liability to Tenant with respect to any such abandoned property. Landlord agrees to apply the proceeds of any sale of any such property (except the

TENANT’S INITIALS                      LANDLORD’S INITIALS                     

five percent surcharge) to any amounts due to Landlord under this Lease from Tenant (including Landlord’s reasonable attorneys’ fees and other costs incurred in the removal, storage and/or sale of such items), with any remainder to be paid to Tenant.

14. REPAIRS AND MAINTENANCE.

(a) Tenant’s Obligations. Tenant agrees to keep, maintain and preserve the Premises (excluding the structural portions of the Building One as set forth in Paragraph 14(c) below) in good condition and repair and, when and if needed, at Tenant’s sole cost and expense, to make all repairs to the Premises and every part thereof. Tenant shall enter into and maintain in effect preventive maintenance or service contracts with respect to (i) HVAC equipment, (ii) boiler, and pressure vessels, (iii) fire extinguishing systems, including fire alarm and/or smoke detection, (iv) landscaping and irrigation systems, (v) parking areas, driveways and sidewalks, (vi) roof surface and membrane, (vii) window cleaning, (viii) clarifiers, and (ix) any other equipment, if reasonably required by Landlord. All such service contracts shall be subject to Landlord’s prior written approval not to be unreasonably withheld. Tenant shall perform its obligations under this Paragraph 14(a) with diligence and consistent with good building management. Tenant agrees to cause any mechanics’ liens or other liens aris