EX-10.40 LEASE

Exhibit 10.40

LEASE

ARTICLE 1 - REFERENCE DATA

1.1       Subjects Referred To

          Each reference in this Lease to any of the following subjects shall be construed to incorporate the date stated for that subject in this Section 1.1:

DATE:		December 27, 2006
LANDLORD:		Atlantic-Philadelphia Realty LLC
LANDLORD ADDRESS:		c/o Atlantic Management
		Corporation 205 Newbury Street
		Framingham, Massachusetts 01701
BUILDING:		The building situated on Newbury Street, Framingham,
		Middlesex County, Massachusetts, known as #205
		Newbury Street (the “Premises”), upon the Lot (the “Lot”)
		more particularly described on Exhibit A attached hereto
		and made a part hereof.
TENANT:		HeartWare, Inc.
TENANT SPACE:		Those premises to be used as OFFICE SPACE located
		on the first (1st) floor of the Premises, as shown on floor
		plan attached here to as Exhibit B and identified as Suite
		#101.
RENTABLE FLOOR AREA
OF TENANT SPACE:		3,530 rentable square feet
TOTAL RENTABLE
FLOOR AREA OF
THE BUILDING:		56,865 square feet
TENANT’S
PROPORTIONATE
SHARE:		6.2%
TERM:		Four (4) Years
RENT AND TERM
COMMENCEMENT DATE:		January 15,2007
OCCUPANCY DATE:		January 15, 2007

TERMINATION DATE:		January 31, 2011
ANNUAL FIXED RENT:		The sum of $21.50/Sq.Ft., which equates to an Annual Fixed Rent of $75,895.00 per annum.
MONTHLY FIXED RENT:		Tenant shall pay the Annual Fixed Rent of $75,895.00 in EQUAL MONTHLY installments of $6,324.58. All such monthly installments are due ON OR BEFORE THE 1ST of each month, beginning with the first payment due on the Commencement Date.
OPTION:		Tenant shall have one (1) option to extend the term of this Lease for an additional three years.
SECURITY DEPOSIT:		Tenant shall deposit the sum equal to one (1) month’s rent or $6,324.58, which shall be held by Landlord as a Security Deposit. Said deposit shall be held by Landlord in a non-interest bearing account and shall be due and payable by Tenant upon execution of this Lease.
BASE YEAR FOR
CALCULATING
LANDLORD’S		2007
OPERATING
EXPENSE:
PERMITTED USES:		First Class General Office Space
PUBLIC LIABILITY
INSURANCE BODILY
INJURY:		$1,000,000 Combined Single Limit Coverage
BROKER:		R.W. Holmes Realty Co., Inc.
PARKING:		Tenant will receive 3.8 parking spaces per 1,000 square feet of rented space, or 13 parking spaces, on a first come first serve basis.

1.2     Exhibits

          The Exhibits listed below in this Section 1.2 are incorporated in this Lease by reference and are to be construed as part of this Lease:

Exhibit A - Description of Lot
Exhibit B - Floor Plan Showing Tenant’s Space

Exhibit C - Landlord’s Services
Exhibit D - Rules and Regulations
Exhibit E - Estoppel Certificate
Exhibit F - Landlord’s Work

1.3     Table of Contents by Article and Section;

1.      Reference Data

1.1       Subjects Referred To
1.2       Exhibits
1.3       Table of Contents

2.      Premises and Term

2.1       Premises
2.2       Common Facilities
2.3       Landlord’s Reservations
2.4       Term
2.5       Option to Renew
2.6       Holdover Penalty

3.      Alteration

3.1       Preparation of Premises for Occupancy
3.2       Tenant Changes and Additions
3.3       General Provisions Applicable to Construction

4.      Rent

4.1       Fixed Rent
4.2       Operating Expenses Including Real Estate Taxes
4.3       Lot
4.4       Accounting
4.5       Payment of Additional Rent

5.      Landlord’s Covenants

5.1      Landlord’s Covenants
5.2      Interruptions

6.      Tenant’s Covenants

6.1       Tenant’s Covenants

7.      Casually and Taking

7.1      Casualty and Taking
7.2      Reservations of Award

8.      Right of Mortgage

8.1       Subordination
8.2       Entry Other Than For Foreclosure
8.3       Entry For Foreclosure
8.4       No Prepayment
8.5       No Release or Termination
8.6       No Modification, Etc.
8.7       Continuing Offer
8.8       Implementation
8.9       Financing

9.      Defaults

9.1       Events of Default
9.2       Tenant’s Obligations After Termination
9.3       Landlord’s Default

10.      Miscellaneous

10.1       Measurement
10.2       Titles
10.3       Notice of Lease
10.4       Consent
10.5       Notice
10.6       Bind and Inure
10.7       No Surrender
10.8       No Waiver, Etc.
10.9       No Accord and Satisfaction
10.10     Cumulative Remedies
10.11     Partial Invalidity
10.12     Landlord’s Rights to Cure Tenant’s Default
10.13     Estoppel Certificate
10.14     Waiver of Subrogation
10.15     Brokerage
10.16     Security Deposit

11.      Arbitration

ARTICLE 2 - PREMISES AND TERM

2.1     Premises

          Landlord hereby leases to Tenant, subject to and with the benefit of the provisions of this Lease, Tenant’s Space in the Building on the Lot referred to in Section 4.3 below and described in Exhibit A, excluding exterior faces of exterior walls, the common stairways, stairwells, elevators and elevator wells, and pipes, ducts, conduits, wires and appurtenant fixtures serving exclusively or in common other parts of the Building, and if Tenant’s space includes less than the entire rentable area of any floor, excluding the central core area of

such floor. Tenant’s Space, with said exclusions, is hereinafter sometimes referred to as the “Premises”. Tenant shall have access to the Premises twenty four hours a day, seven days a week.

2.2     Common Facilities

          Tenant shall have, as appurtenant to the Premises, rights to use in common with others now or hereafter entitled thereto, subject to reasonable rules of general applicability to Tenants of the Building from time to time made by Landlord of which Tenant is given notice: (1) the common facilities of the Building and Lot including common walkways, driveways, lobbies, hallways, ramps, stairways, elevators, loading platform and the parking area; (2) the common pipes, ducts, conduits, wires and appurtenant equipment serving the Premises; and (3) if the Premises include less than the entire rentable area of any floor, the common toilets and other common facilities in the central core area of such floor

2.3     Landlord’s Reservations

          Landlord reserves the right, from time to time, without unreasonable interference with Tenant’s use: (1) to install, repair, replace, use, maintain and relocate for service to the Premises and to other parts of the Building, pipes, ducts, conduits, wires and appurtenant fixtures wherever located in the Building, and (2) to alter or relocate any other common facility, provided that the substitution are substantially equivalent or better. Installations, replacements and relocations referred to in this Section 2.3 shall be located as far as practicable in the central core area, above ceiling surfaces, below floor surfaces or within the perimeter walls of the Premises.

2.4     Term

          To have and to hold for a period commencing on with the scheduled Term Commencement Date and continuing for the Term unless sooner terminated as provided in Section 7.1 or in Article 9 below. Notwithstanding anything contained in this Lease to the contrary, if Landlord’s Work (as subsequently defined) is not completed by the scheduled Term Commencement Date, then the Term Commencement Date and the Rent Commencement Date shall be adjusted so as to commence five days after Landlord receives all governmental approvals reflecting that the Landlord’s Work (as subsequently defined) has been completed according to the appropriate regulations and the Premises is ready for Tenant to occupy and use the Premises to conduct business.

2.5     Option to Renew

          (a)      Subject to the conditions set forth below, Tenant is granted an Option to Renew this Lease for one (1) consecutive (additional) term of three (3) years (the “Renewal Term”), such Renewal Term commencing on the day following the expiration of this Lease. Said Option to Renew this Lease shall be on the same terms and conditions and provisions and covenants as set forth herein (except as specifically set forth hereunder). The Renewal Term shall be subject to and provided that Tenant (a) is not is default beyond the expiration

of any applicable cure period or the monetary covenant, or a material non-monetary covenant under this Lease; (b) this Lease is still in full force and effect; (c) Tenant shall not have sublet, assigned, or otherwise transferred all or any portion of its interest under this Lease in violation of the terms of this Lease; and (d) Tenant shall have exercised this Option at least seven (7) months prior to the expiration of the Lease Term, then the Tenant may renew this Lease as set forth below.

          (b)      The Base Rent during the Renewal Term shall be equal to the greater of the Tenant’s then current rental rate, or the fair market value rent. For the purpose of this Section, fair market value rent shall mean the Base Rent plus such additional financial terms in the nature of rent and rent adjustments customarily then being included in leases for comparable premises within a one mile radius of the Property. Tenant shall, during the Renewal Term, pay its proportionate share of Landlord’s Operating Expenses and its proportionate share of Real Estate Taxes. Said fair market value rent for the Premises shall be agreed upon by Landlord and Tenant; provided, however, if Landlord and Tenant are unable to agree on said fair market value rent within thirty (30) days of the date of the date of Tenant’s notice to extend, said fair value effective rent shall be conclusively determined by three (3) appraisers. Within fifteen (15) days of the expiration of such thirty (30) day period, Landlord and Tenant shall each select an appraiser, who shall select a third. Should the two appraisers fail to agree on a third within fifteen (15) days of the date on which such appraisers have been appointed, or if either Landlord or Tenant shall fail to appoint an appraiser within the time provided, such appraiser shall be appointed by the American Institute of Appraisers. Each party shall bear the cost of the appraiser selected by such party, and the cost of the third appraiser shall be shared equally by Landlord and Tenant. If the three appraisers are unable to agree upon such fair market effective rent within fifteen (15) days of the appointment of the third appraiser, the fair market effective rent shall be that determined by the appraiser not selected by either Landlord or Tenant.

          (c)      Except as provided above, all of the terms, covenants and agreements contained in this Lease shall continue during the Renewal Term.

2.6     Hold-Over Penalty

          Tenant shall be liable to pay one and one-half times (1.50 times) the Base Rental Amount for any hold-over period in the event Tenant fails to vacate on or before the applicable Expiration Date.

ARTICLE 3 - ALTERATIONS

3.1     Preparation of Premises for Occupancy

          Tenant shall accept the Premises in their “as is” and present condition, except that prior to the Term Commencement Date, Landlord, at its expenses, shall perform the work

described on Exhibit F to Tenant’s satisfaction (“Landlord’s Work”). In connection with the foregoing, Landlord represent, warrants and covenants that as of the date hereof, (a) the Premises (including without limitation all structural and nonstructural systems, equipment and apparatus therein and/or appurtenant thereto) is in good working order and condition and (b) the Premises is in compliance with all local, state and federal laws, statutes, ordinances and regulations and the Premises shall remain in such good working order and condition, and the Premises shall remain in such condition and in such compliance up to and including the Term Commencement Date.

3.2     Tenant Changes and Additions

          Tenant may, from time to time, after commencement of the Term, make changes and additions to the Premises in accordance with plans and specifications therefore first being approved by Landlord, which Landlord will not approve if they will require unusual expense to readapt the Premises to normal office use on lease termination or will increase the cost of insurance or taxes on the Building or of Landlord’s services called for by Section 5.1, unless Tenant first gives assurances acceptable to Landlord for payment of such increased cost and that such readaptation will be made prior to such termination without expense to Landlord. In the event such changes and/or additions are cosmetic in nature and cost less than $25,000, then Landlord’s consent shall not be required. All such changes and additions shall be part of the Building except Tenant’s business equipment, business furnishings and other special items relating to Tenant’s business. Such other special items shall include only those items which the parties agree in writing at the time of approval shall be removed by Tenant on termination of the Lease, or which Landlord agrees in writing that Tenant may elect to remove or leave, provided that the Building is not damaged by removal nor reduced below the then building standard. All of Tenant’s changes and additions and installations of furnishings shall be coordinated with any work being performed by Landlord and in such manner as to maintain harmonious labor relations and not to damage the Building or Lot or interfere with Building operation and, except for installation of furnishings, shall be performed by Landlord’s general contractor or by contractors or workmen first approved by Landlord. Except for work by Landlord’s general contractor, Tenant, before its work is started shall: (a) secure all licenses and permits necessary therefore, (b) deliver to Landlord a statement of the names of all its contractors and subcontractors and the estimated cost of all labor and material to be furnished by them, (c) cause each contractor to carry workmen’s compensation insurance in statutory amounts covering all of the contractor’s and subcontractor’s employees, comprehensive public liability insurance with limits in no event less than $1,000,000 combined single limited coverage and property damage insurance with limits of not less than $1,000,000 (all such insurance to be written insuring Landlord and Tenant as well as the contractor, and (d) deliver to Landlord certificates of all such insurance. Tenant agrees to pay promptly, when due, the entire cost of any work done on the Premises by Tenant, its agent, employees or independent contractors, and not to cause or permit any liens for labor or materials performed or furnished in connection therewith to attach to the Premises. Tenant agrees to immediately discharge any such liens which may be so attached.

3.4     General Provisions Applicable to Construction

          All construction work required or permitted by this Lease, whether by Landlord or Tenant, shall be done in a good and workmanlike manner and in compliance with all applicable laws and all lawful ordinances, regulations and orders of governmental authority and insurers of the Building. Either party may inspect the work of the other at reasonable times, and shall promptly give notice of observed defects.

ARTICLE 4 - RENT

4.1      Fixed Rent

          Tenant agrees to pay, without any offset or deduction whatever except as made in accordance with the provisions of this Leased, Annual Fixed Rent at the rate set forth in Section 1.1 above in equal monthly installments (“Monthly Fixed Rent”) at the rate set forth in Section 1.1 above, on the first day of each calendar month including in the Term hereof and for any portion of a calendar month at the beginning or the end of the Term, unless otherwise excluded hereunder, at the rate payable in advance for such portion.

4.2      Operating Expenses - Including Real Estate Taxes

	(a)		If, with respect to any calendar year of the Term after the Base Year for calculating Landlord’s Operating Expenses set forth in Section 1.1, or fraction thereof, Landlord’s Operating Expenses for the Building and Lot either:
	(i)		for a full calendar year exceed Landlord’s Initial Operating Expenses, as defined below (as the same may be reduced from time to time pursuant to the following sentence), or for any fraction of a calendar year exceed the corresponding fraction of such Landlord’s Initial Operating Expenses; or

(ii)

for a full calendar year are less than Landlord’s Initial Operating Expenses (as the same may be reduced from time to time pursuant to the following sentence), or for any fraction of a calendar year are less than the corresponding fraction of such Landlord’s Initial Operating Expenses;

then, on or before the thirtieth (30th) day following receipt by Tenant of the statement referred to below in this Section 4.2, Tenant shall, in the case of (i) pay to Landlord, as additional rent, Landlord’s Operating Expenses allocable to the Premises, as defined below in this Section 4.2, or in the case of (ii) Landlord shall, if the Tenant is paying previously a monthly estimated operating expense charge, credit over the next year such amount against monthly installments of operating expense next coming due.

(b)      Within one hundred twenty days from the end of the calendar year, Landlord shall render to Tenant an audited statement (“Statement”) in reasonable detail and according to usual accounting practices showing for the preceding calendar year or fraction thereof, as the case may be, Landlord’s Operating Expenses for the Building and Lot, excluding costs of special services rendered to tenants (including Tenant) for which a special charge is made, but including without limitation: real estate taxes on the Building and Lot; installments and interest on assessments for public betterments or public improvements, whether or not deductible from any condemnation award, such assessments to be paid over the longest period permitted by law; expenses of any proceedings for abatement of taxes and assessments with respect to any calendar year or fraction of a calendar year; premiums for insurance of any kind normally carried by owners of similar properties (including insurance in case of fire or casualty against loss of up to eighteen monthly installments of fixed and additional rent) or, if there be any mortgage of the Lot or Building, or both, the insurance as may be required by the holder of the mortgage; compensation and all fringe benefits, workmen’s compensation insurance premiums and payroll taxes paid by Landlord to, for or with respect to all persons substantially engaged in the operating, maintaining or cleaning of the Building or Lot; steam, water, sewer, electric, gas and telephone charges not chargeable to tenants; cost of building and cleaning supplies and equipment; and cost of maintenance, cleaning and repairs (other than repairs not properly chargeable against income or for which Landlord has received reimbursement from contractors under guaranties); cost of snow removal and care of landscaping; payments under service contracts with independent contractors; management fees at a rate of five percent (5%) of total rent from all tenants; and all other reasonable and necessary expenses paid in connection with the operation, cleaning and maintenance of the Building and Lot and properly chargeable against income. Notwithstanding any provision to the contrary contained herein, Landlord’s Operating Expenses shall not include (a) costs and expenses of a capital nature, including but not limited to, original or new construction or installation of any capital investments, or improvements, unless such capital investments or improvements are intended to reduce operating expenses, in which event Landlord shall be entitled to charge the amortized value of such capital investments or improvements; (b) any amounts incurred for labor, materials or services that are not directly employed or used in the performance of Landlord’s obligations under this Section; (c) any cost or expense for which Landlord or the Building is reimbursed by other parties; (d) any repairs to the Common Area necessitated by any construction in the Building; (e) costs and expenses incurred to the extent that the same are attributable to Landlord’s negligence or breach of its obligations under this Lease or any other lease or premises in the Building; (f) costs and expenses relating to or arising from correcting defects in, or the inadequacy of the construction of, the Building or other improvements located in the Building; (g) costs of alterations or improvements to the premises of other tenants in the Building; (h) interests, principal payments, and other costs of any indebtedness encumbering the Building or any portion thereof; (i) legal fees, space-planner’s fees, architectural fees, engineering fees, real estate commissions, and marketing and advertising expenses incurred in connection with the development, leasing, and construction of

the Building or any portion thereof; (j) any bad debt losses, rent losses or reserves for bad debt or rent losses; (k) costs of selling, syndicating, financing, mortgaging, hypothecating, or ground leasing any of Landlord’s interest in the Building; (1) the wages of employees who do not devote the majority of their time to the Building; provided, however, the costs associated with such employees who do not devote the majority of their time to the Building may be prorated and such an amount may be included as a Landlord’s Operating Expense to the extent that such employees devote their time to the Building; (m) the cost of utility installation and tap-in charges; (n) any investigation, monitoring, remediation or other cost or expense arising from or relating to the existence of Hazardous Substances in, on or under the Building; (o) the costs of compliance with applicable legal requirements (including, without limitation, the cost of curing violations of or contesting such legal requirements); (p) any costs which would have been reimbursed or paid for by insurance proceeds had Landlord maintained the insurance required under this Lease and the amount of any judgment or other charge entered or costs assessed against Landlord in excess of the policy limits of the insurance maintained by Landlord pursuant to this Lease; (q) Landlord’s advertising, entertainment and promotional costs for the Building (including, without limitation, holiday decorations); (r) costs of acquiring, leasing, restoring, insuring or displaying sculptures, paintings and other objects of art located within or outside the Building; (s) reserves for anticipated future expenses; or (t) any costs or expense to the extent that such cost or expense either exceeds the prevailing market rate for such product or service or relates to a type, quality or quantity of service or product not customarily included within common area charges in other Building of comparable size, quality and location to the Building. The term “capital expenditure” as used herein shall mean an expenditure that (i) adds to the value of the component of the Common Area in question, or (ii) appreciably prolongs the useful life of the component of the Common Area in question, but shall specifically exclude expenditures that only serve to keep such component of the Common Area in an ordinarily efficient operating condition. In addition, if any tenant or other occupant of the Building pays directly for costs which would otherwise be included in the Landlord’s Operating Expenses, then the costs associated with or attributable to any of the foregoing shall be excluded from Landlord’s Operating Expenses.

	(c)		If some other method or type of assessment or taxation shall replace the current method of assessment or the type of real estate taxes, Tenant agrees to pay an equitable share of the same computed in a fashion consistent with the method of computation herein provided, to the end that Tenant’s share thereof shall be, to the maximum extent practicable, comparable to that which Tenant would bear under the foregoing provisions. If a tax (other than a Federal or State net income tax) is assessed on account of the rents or other charges payable by Tenant to Landlord under this Lease, the Tenant agrees to pay the same within ten (10) days after billing therefore, unless applicable law prohibits the payment of such tax by Tenant.
	(d)		Landlord’s Initial Operating Expenses shall be Landlord’s expenses for the Base Year for Calculating Landlord’s Base Operating Expenses set forth in Section

1.1. Landlord’s Operating Expenses Allocable to the Premises for any particular year shall be determined by multiplying the difference between Landlord’s Operating Expenses for the Building and Lot for the items covered by the foregoing statement for such year and Landlord’s Initial Operating Expenses times a fraction, the numerator of which is the Rentable Floor Area of Tenant’s Space and the denominator of which is the Total Rentable Floor Area of the Building (“Tenant’s Proportionate Share”). In case of special services which are not rendered to all areas on a comparable basis, the proportion allocable to the Premises shall be the same proportion which Rentable Floor Area of Tenant’s Space bears to the total rentable floor area of the Building to which such service is so rendered (such latter area to be determined in the same manner as the Total Rentable Floor Area of the Building).

	(e)		If Tenant questions a component of the Landlord’s Operating Expenses as provided by Landlord, Landlord shall, within one (1) month of Tenant’s request therefore, provide Tenant with a copy of the actual invoices or other documentation reasonably acceptable to Tenant substantiating such component,
	(f)		Landlord shall maintain accurate, detailed records of Landlord’s Operating Expenses at Landlord’s office identified on page 1 of this Lease for at least two (2) years after delivery of the Statement to Tenant. During the six (6) months after a Statement is submitted to Tenant, Tenant may, upon ten (10) days’ prior written notice to Landlord, inspect and/or audit Landlord’s records of Landlord’s Operating Expenses for the period covered by such Statement. If the audit shows that Tenant paid less of Tenant’s pro rata share of Landlord’s Operating Expenses than was actually due, Tenant shall pay the amount of the deficiency to Landlord within one (1) month after Tenant’s receipt of such audit. If the audit shows that Tenant paid more of Tenant’s pro rate share of Landlord’s Operating Expenses than was actually due, Landlord shall, at Tenant’s election, pay said excess to Tenant within one (1) month after completion of such audit or credit such excess to Tenant’s next installment of Base Rent due. If such audit shows that such Statement contains an overstatement of Landlord’s Operating Expenses exceeding five percent (5%) of the actual Landlord’s Operating expenses for the period covered by such Statement, then the reasonable third party fees and expenses actually incurred by Tenant in conducting such audit shall be paid by Landlord; otherwise, such fees and expenses shall be paid by Tenant. If Landlord protests the conclusions of such audit, Landlord may contest Tenant’s determination by giving Tenant written notice within one (1) month following Landlord’s receipt of the audit report. If Landlord and Tenant cannot mutually agree as to Tenant’s pro rat share of Landlord’s Operating Expenses due within one (1) month after Tenant’s receipt of Landlord’s notice of protest, Landlord and Tenant shall jointly                   choose                  an                   independent                  Certified                  Public                Accountant, whose determination shall be binding upon the parties hereto. If Landlord and Tenant fail to agree upon an independent Certified Public Accountant, the parties agree to proceed forthwith to arbitrate the issue in accordance with the Commercial

Arbitration Rules of the American Arbitration Association. The cost of the independent Certified Public Accountant or the cost of arbitration shall be borne equally by the parties, but the cost of the audit shall be borne by either Landlord or Tenant as aforesaid.

4.3    Lot

          “Lot” means all the land described in Exhibit A, or any part(s) thereof, plus any addition(s) thereto resulting from the change of any abutting street line.

4.4     Accounting

          Landlord shall have the right, from time to time, to change the periods of accounting under Section 4.2 to any annual period other than a calendar year, and upon any such change, all items referred to in said Section 4.2 shall be appropriately apportioned. In all statements rendered under Section 4.2 amounts for periods partially within and partially without the accounting periods shall be appropriately apportioned. Any costs which are not determinable at the time of a statement shall be included therein on the basis of Landlord’s estimate, and Landlord shall render promptly after determination of such costs a supplemental statement and appropriate adjustment shall be according thereto.

4.5     Payment of Additional Rent

          Except as otherwise specifically provided in this Lease, any sum, amount, item or charge designated or considered as additional rent in this Lease shall be paid by Tenant to Landlord on the first day of the month following the date on which Landlord notifies Tenant of the amount payable, or on the thirtieth day after the giving of such notice, whichever shall be later. Any such notice shall specify, in reasonable detail, the basis of such additional rent. On the first day of each month following the thirtieth day in which notice of additional rent is given, Tenant shall pay to Landlord one-twelfth (1/12) of the amount reasonably estimated by Landlord to be the amount of additional rent which shall be payable by the Lessee for the then current year. Reasonably estimated amounts shall, where possible, be based on actual cost experience. When the actual, rather than reasonably estimated, amount(s) of such additional rent has been ascertained, Landlord shall notify Tenant of the amount due, if any, giving credit for the monthly payments theretofore made by Tenant and crediting the overage, if any, against additional rent to become due. Tenant shall pay any balance due within thirty (30) days after Landlord’s notice.

ARTICLE 5 - LANDLORD’S COVENANTS

5.1   Landlord’s Covenants

(a)

to furnish, through Landlord’s employees or independent contractors, the services listed in Exhibit C attached hereto and made a part hereof; and

	(b)		to furnish, through Landlord’s employees or independent contractors, reasonable additional building operation services upon reasonable advance request of Tenant at equitable rates from time to time established by Landlord to be paid for by Tenant; and
	(c)		except as otherwise provided in Article 7, to make such repairs to the roof, exterior walls and glass, floor slabs and common areas and facilities of the Building as may be necessary to keep them in serviceable and good and working condition; and
	(d)		that Landlord is the fee owner of the Building and the Lot and has the right to enter into this Lease and that Tenant, on paying the rent and performing its obligations in this Lease, shall peacefully and quietly have, hold and enjoy the Premises throughout the Term, subject to all the terms and provisions hereof; and
	(e)		to defend, save harmless and indemnify Tenant from any liability or injury, loss, accident or damage to any person or property and from any claims, actions, proceedings and expenses and costs in connection therewith (including, without limitation, reasonable counsel fees), (i) arising from the omission, fault, willful act, negligence or other misconduct of Landlord or from any use made or thing done or occurring on the Premises not due to the omission, fault, willful act, negligence or other misconduct of Tenant, or (ii) resulting from the failure of Landlord to perform and discharge its covenants and obligations under this Lease.

5.2       Interruptions

(a)

Landlord shall not be liable to Tenant for any compensation or reduction of rent by reason of inconvenience or annoyance or for loss of business arising from power losses and shortages, the necessity of Landlord’s entering the Premises for any of the purposes in this Lease authorized, or for repairing the Premises or any portion of the Building or Lot however the necessity may occur except as a result of Landlord’s negligence, omission, fault, willful act or other misconduct. In case Landlord is prevented or delayed from making any repairs, alterations or improvements, or furnishing any services or performing any other covenant or duty to be performed on Landlord’s part, by reason of any cause reasonably beyond Landlord’s control. Landlord shall not be liable to Tenant therefore, nor, except as expressly provided in Section 7.1, shall Tenant be entitled to any abatement or reduction of rent by reason thereof, nor shall the same give rise to a claim in Tenant’s favor that such failure constitutes actual or constructive, total or partial, eviction from the Premises.

(b)

Landlord reserves the right to stop any service or utility system, when necessary, by reason of accident or emergency, or until necessary repairs have been completed; provided, however, that in each instance of stoppage, Landlord shall exercise reasonable diligence to eliminate the cause(s) thereof. Except in case of emergency repairs, Landlord will give Tenant reasonable advance efforts to avoid unnecessary inconvenience to Tenant by reason thereof.

ARTICLE 6 - TENANT’S COVENANTS

6.1

Tenant’s Covenants

          Tenant Covenants during the Term hereof and such further time as Tenant occupies any part of the Premises:

	(a)		to pay when due all fixed rent and additional rent, all taxes which may be imposed on Tenant’s personal property on the Premises (including, without limitation, Tenant’s fixtures and equipment) regardless to whomever assessed, and all charges by Landlord or by public utility companies for telephone, electricity, gas and any other utility services and service inspections therefore, and all charges by public utility companies for installation of metering devices (which charges, if not separately metered or otherwise apportionable, shall be apportioned on a floor area basis for multi-tenanted floors) (electricity charges for the Premises, however, are separately metered and Tenant shall be responsible for paying such charges directly to the supplier thereof), and all charges of Landlord for services rendered pursuant to Section 5.1; and
	(b)		except as otherwise provided in Article 7 and Section 5.1 (c), to keep the Premises in good order, repair and condition, reasonable wear and damage by fire and casualty only excepted, and at the expiration or termination of this Lease peaceable to yield up the Premises and all changes and additions therein in such order, repair and condition, first removing all goods, effects and fixtures of Tenant and any items the removal of which is required by any agreement made pursuant to Section 3.2 hereof, or specified therein to be removed at Tenant’s election and which Tenant elects to remove, and repairing all damage caused by such removal and restoring the Premises and leaving them clean and neat; and
	(c)		not inure or deface the Premises, Building or Lot, nor to permit in the Premises any auction sale, or nuisance, or the emission from the Premises of any objectionable noise or odor, nor to use or devote the Premises or any part thereof for any purpose other than the Permitted Uses, nor any use thereof which is improper, offensive, contrary to law or ordinance, or liable to invalidate or increase the premiums for any insurance on the Building or its

			contents or liable to render necessary any alteration or addition to the Building; and
	(d)		not to obstruct in any manner any portion of the Building not hereby leased or any portion thereof or of the Lot used by Tenant in common with others; not without prior consent of Landlord to permit the painting or placing of any signs or the placing of any curtains, blinds, shades, awnings, aerials or flagpoles, or the like, visible from outside the Premises; and to comply with the Rules and Regulations set forth in Exhibit D attached hereto, and all other reasonable rules and/or regulations hereafter made by Landlord, of which Tenant has been given notice, for the case and use of the Building a