Document:

EMPLOYMENT
AGREEMENT

     

    This EMPLOYMENT AGREEMENT (this
“Agreement”) is made effective as of October 1, 2009, by and between ADVANCED CELL TECHNOLOGY,
INC., a Delaware corporation (the “Company”) and WILLIAM M. CALDWELL, IV, an
individual (the “Executive”).

     

    WHEREAS, the Board of
Directors of the Company (the “Board”) has approved and authorized the entry
into this Agreement with Executive; and

     

    WHEREAS, Executive is
currently employed by Company as Company's Chief Executive Officer and Chairman;
and

     

    WHEREAS, Company desires to
retain the services of Executive as Company's Chief Executive Officer and
Chairman, and Executive desires to continue to provide Executives' services as
Chief Executive Officer and Chairman of Company, and, therefore, the parties
desire to enter into this Agreement setting forth the terms and conditions for
the retention of the services of Executive and specifying the terms and
conditions of the continued employment relationship of Executive with the
Company.

     

    NOW, THEREFORE, in
consideration of the promises and mutual covenants and agreements herein
contained, and for other valuable consideration, the receipt and sufficiency of
which is hereby acknowledged by Company and Executive, and intending to be
legally bound hereby, the Company and Executive hereby agree as
follows;

     

    1.           Term.  Subject
to the termination provisions of Section 11 below, the term of this Agreement
shall be for a period of two and one third (2 1/3) years (“Term”), commencing
October 1, 2009 (the "Commencement Date") and ending January 31, 2012
(“Termination Date”); provided, however, that this Agreement shall automatically
be extended for additional one year terms beyond the Termination Date (the
“Extended Termination Date”) or the then current Extended Termination Date,
unless at least 90 calendar days prior to the Termination Date or the then
current Extended Termination Date, Executive or the Company shall have given
notice that he or it does not wish to extend the Agreement.

     

    2.           Employment.  Executive
shall continue to be employed as and to hold the title of Chief Executive
Officer from the Commencement Date until such employment is terminated in
accordance with this Agreement.  Executive, in his capacity as Chief
Executive Officer will have the full range of executive duties and
responsibilities that are customary for public company CEO
positions.  All Company officers shall report to and take direction
from Executive, provided however, that nothing
herein shall restrict the Board from conferring directly with Company officers
and the Company shall have the right to enter into agreements with Company
officers for the Board to determine specific employment-related issues such as
compensation and termination.  Executive shall have day-to-day
responsibility for the affairs of the Company and shall have such other powers
and duties as may be from time to time assigned to him by the Board of Directors
of the Company (the “Board”).  Executive shall report directly to the
Board.  All other employees of Company will report, either directly or
through other officers of Company, to Executive.  Executive shall
devote substantially all of Executive's time, attention and energies to the
business and affairs of the Company; provided, however, the Company acknowledges
that Executive is an executive and/or director in the entities listed on
Schedule “A” attached hereto, as described therein and may continue in such
capacities only so long as such activities do not unreasonably or materially
interfere with the performance of his duties under this Agreement and do not
present any conflicts of interest with the Company.  

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    3.           Salary.  The
Company shall pay Executive an annual salary at an initial annual rate of four
hundred eighty thousand ($480,000), less applicable deductions (the “Base
Salary”).  Such Base Salary will be reviewed by the Board
annually.  The Base Salary shall be payable by the Company to
Executive in substantially equal installments not less frequently than
semi-monthly (two times per month). At the end of each full year of this
Agreement, the Base Salary shall be increased (but not decreased) by an amount
determined by the Board; provided, however, that each such annual increase will
be not less than the percentage increase in the Consumer Price Index during the
preceding year, provided further, however, that the increase set forth in this
sentence shall never be zero or less.  For purposes of this Agreement,
the “Consumer Price Index” as of any particular date means the Consumer Price
Index for Urban Wage Earners and Clerical Workers, Los Angeles/Anaheim/
Riverside CMSA, all items, in respect of the month immediately preceding such
particular date, published by the U.S. Department of Labor, Bureau of Labor
Statistics, or if such index is no longer published, the U.S. Department of
Labor's most comprehensive official index then in use that most nearly
corresponds to the index named above.   The
Company’s awards of deferred compensation, discretionary bonus, retirement,
stock option and other Executive benefit plans and in fringe benefits shall not
reduce the Base Salary; provided, however, that voluntary deferrals or
contributions by the Executive to such plans agreed to by Executive, if any,
shall reduce the current cash compensation paid
to Executive

     

    4.           Bonuses.

     

    (a) Within ten (10) days following the
execution of this Agreement by Company and Executive, Company will pay to
Executive a retention bonus in the amount of one hundred thousand dollars
($100,000) (the "Retention Bonus").  The Retention Bonus will be
deemed fully earned by Executive upon Executive's execution of this Agreement
and delivery of this Agreement by Executive to Company.

     

    (b) Commencing for calendar year 2010,
Executive shall be eligible for an additional annual cash bonus (a “Bonus” if
the Company realizes a per share
stock price increase at the end of each fiscal year of Company during the Term
or the Extended Term of this Agreement.  Any Bonus will be computed on
an annual basis and earned at the close of Company's applicable fiscal year, and
shall be paid to Executive within thirty days of completion of the Company’s
Compensation Committee’s annual review for such fiscal year.  The
amount and award of each such Bonus, if any, shall be based upon the following
schedule:

     

    
      
        
          
            	
                    Stock Price Accretion Attainment

                  	 	
                    Cash Bonus

                  
	 
      	 	 
      
	
                    From
      minimum 20% increase for 4th
      quarter over higher of same period a year ago or $.10 per
      share

                  	 	
                    50%
      of salary cash bonus

                  
	 
      	 	 
      
	
                    50%
      increase for 4th
      quarter over higher of same period a year ago or $.10 per
      share

                  	 	
                    100%
      of salary cash bonus

                  
	 
      	 	 
      
	
                    100%
      or greater increase for 4th
      quarter over higher of same period a year ago of $.10 per
      share

                  	 	
                    200%
      of salary cash
bonus

                  

          

        

      

    

     

    
      
         

      

      
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    Stock
Price Accretion Attainment "SPAA” for any year shall mean the average per day
closing price for all fourth quarter trading days averaged over the quarter as
determined by the Bloomberg closing price each day.  If the Company
completes a stock split or reverse split, the “SPAA” levels herein shall be
appropriately adjusted in a manner the Board determines in good faith to be fair
and equitable to Executive.

    

    (c)           In
addition to the foregoing bonuses, Company may, in its discretion, award
additional annual or other bonuses to Executive during the Term of this
Agreement based upon the Executive's performance or such other criteria as may
be determined from time to time by the Board including financial condition of
the company and the attainment of company’s operational milestones etc.

    

    5.           Benefits.  Executive
shall receive the following benefits and/or be entitled to participate in the
following benefits programs of Company:

     

    5.1          (a)           Following
the execution and delivery of this Agreement by Company and Executive, Company
will recommend to the Board that Company grant to Executive restricted Common
Stock of Company in an amount equal to the greater of (a) Seventy Million
shares, or (b) seven percent (7%) of the fully diluted shares of issued and
outstanding stock of Company, including all warrants, conversions of Preferred
Stock, Debentures and all issued Subordinated stock, all of which grants will be
made by the Board by no later than the January 2010 meeting of the
Board.  All such restricted stock granted to Executive will be
restricted to provide that Executive cannot sell such stock for a period of one
(1) year plus one (1) day following the grant date of such restricted stock;
provided, however, that in the event of any "Change of Control", as that term is
hereinafter defined, prior to the expiration of such restriction period, and if
Executive is not retained as the Chief Executive Officer and Chairman of the
Board of the acquiring or surviving entity, then all such restrictions on all of
said restricted shares of stock shall be deemed to be removed and all such
restricted stock will thereupon be unrestricted and may be sold by Executive in
Executive's sole and absolute discretion.  Executive may also receive
additional future grants of restricted stock during the Term of this Agreement
as may be determined by the Board in its sole discretion.

    

    (b)           Concurrently
with the execution and delivery of this Agreement by Executive and Company,
vesting of any and all stock options that were previously granted to Executive
will immediately thereupon become fully vested, and the term during which
Executive will be entitled to exercise all such stock options will immediately
thereupon be extended to be a period of five (5) years following the
Commencement Date (as that term is defined in this Agreement).

    
      
         

      

      
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    5.2          (a)           In
addition, at the first meeting of the Board following the Commencement Date of
this agreement, Company will recommend to the Board that the Company grant to
Executive options (the "Initial Options") to purchase an additional 100% of the
existing aggregated employee options that were previously or are currently
awarded to Executive under the Company’s 2005 Stock Option Plan (the
“Plan”).  The exercise price of the Initial Options shall be equal to
the per share price of the Company’s Common Stock at the close of trading on the
trading day that the Compensation Committee approves the award.  Except as provided herein, the terms
of the Initial Options shall be set by the Compensation Committee in accordance
with the Plan and in the Company's standard form Incentive Option Agreement;
provided, further, that the Initial Options shall be incentive stock options to
the maximum extent permitted under the Company's Plan and applicable provisions
of the Internal Revenue Code.  Unless vesting is otherwise accelerated
as provided in this Agreement in connection with a
Change of Control, 100 % of the Initial Options shall vest immediately on
the first anniversary of the Commencement Date.

     

    (b)           Executive
shall also be eligible for subsequent grants of stock options during the term of
this Agreement as determined by the Board in its sole discretion under the
Plan.  The parties intend that the award of such option, when considered with the other compensation provided
to Executive and the financial performance of the Company under Executive's
management, shall be commensurate with that offered to CEOs of similarly
situated public companies in the same or similar industries as
Company.

     

    (c)           Following
the execution and delivery of this Agreement by Executive and Company, if a
"Change of Control", as hereinafter defined, occurs and if Executive is not
retained at the Chief Executive Officer and Chairman of the Board by the
acquiring or surviving entity, then (a) vesting of all previously issued stock
options, including but not limited to, the Initial Options and any other stock
options to be granted to Executive by Company under and pursuant to this
Agreement, will accelerate and all such stock options will thereupon become
fully vested.  Further, Executive will also thereafter be allowed to
have a period of three (3) years to exercise all vested stock options then held
by or previously issued to Executive in the event that Executive is no longer
employed with Company.

     

    (d)           For purposes of this Agreement, “Change in
Control” means the occurrence of any of the following events:

     

    (i)           the
acquisition, directly or indirectly, by any ”person” or “group” (as those terms
are defined in Sections 3(a)(9), 13(d), and 14(d) of the Securities Exchange Act
of 1934 (the “Exchange Act”) and the rules thereunder) of “beneficial
ownership”(as determined pursuant to Rule 13d-3 under the Exchange Act) of
securities entitled to vote generally in the election of directors (“voting
securities”) of the Company that represent 50% or more of the combined voting
power of the Company’s then outstanding voting securities, other
than:

    
      
         

      

      
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    a.           an
acquisition by a trustee or other fiduciary holding securities under any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any person controlled by the Company or by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any person controlled
by the Company, or

     

    b.           an
acquisition of voting securities by the Company or a corporation owned, directly
or indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of the stock of the Company, or

     

    c.           an
acquisition of voting securities pursuant to a transaction described in clause
(iii) below that would not be a Change in Control under clause
(iii);

     

    (ii)          individuals
who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease
for any reason to constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to the date hereof
whose election, or nomination for election by the Company’s shareholders, was
approved by a vote of at least a majority of the directors then comprising the
Incumbent Board shall be considered as though such individual were a member of
the Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a
person other than the Board; or

     

    (iii)         the
consummation by the Company (whether directly involving the Company or
indirectly involving the Company through one or more intermediaries) of (x) a
merger, consolidation, reorganization, or business combination or (y) a sale or
other disposition of all or substantially all of the Company’s assets or (z) the
acquisition of assets or stock of another entity, in each case, other than a
transaction:

     

    a.           which
results in the Company’s voting securities outstanding immediately before the
transaction continuing to represent (either by remaining outstanding or by being
converted into voting securities of the Company or the person that, as a result
of the transaction, controls, directly or indirectly, the Company or owns,
directly or indirectly, all or substantially all of the Company’s assets or
otherwise succeeds to the business of the Company (the Company or such person,
the “Successor Entity”)) directly or indirectly, at more than 50% of the
combined voting power of the Successor Entity’s outstanding voting securities
immediately after the transaction, or

     

    b.           after
which no person or group beneficially owns voting securities representing 50% or
more of the combined voting power of the Successor Entity; provided, however,
that no person or group shall be treated for purposes of this clause b. as
beneficially owning 50% or more of combined voting power of the Successor Entity
solely as a result of the voting power held in the Company prior to the
consummation of the transaction.

     

    5.3           Executive
and his spouse shall be entitled to participate in the Company’s health
insurance program effective as of the Commencement Date and the Company shall
pay all premiums for said insurance for Executive and his spouse under the
applicable plans. .

    
      
         

      

      
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    5.4           In
addition to the foregoing, Executive shall be entitled to participate with other
key executive officers of the Company based on position, tenure and salary in
any plan of the Company relating to stock purchases, pension, thrift, profit
sharing, life insurance, disability insurance, education, or other retirement or
Executive benefits that the Company has adopted or may hereafter adopt for the
benefit of its executive officers.

     

    5.5          The
Company shall pay all unreimbursed out-of-pocket costs associated with an annual
physical examination of Executive, such amount not to exceed $3,000 per
year.

     

    5.6          Executive
shall be reimbursed for his legal fees incurred in connection with negotiating
and drafting this Agreement up to a maximum of $10,000.

     

    5.7          Company
will reimburse Executive for the requisite annual premiums for a policy of
25-year level-premium term life insurance coverage in the amount of Three
Million Dollars ($3,000,000) for Executive (with Executive designating the
beneficiary of such life insurance).  Executive will submit an invoice
to Company for reimbursement of the annual premiums.

     

    5.8           Executive agrees that the Company may apply for and take
out in its own name and at its own expense such “key person” life insurance upon
the life of Executive as the Company may deem necessary or advisable to protect
its interests; provided, however, that (i) such insurance coverage does not
otherwise diminish or restrict Executive's eligibility for and/or participation
level in any benefit plan or arrangement described in this Section 5, and (ii)
such coverage does not otherwise diminish any other economic benefit to which
Executive is entitled pursuant to the terms of this Agreement, and (iii) no
taxable income is attributed to Executive as a result of such
coverage.  Executive agrees to reasonably assist and reasonably
cooperate with the Company in procuring such insurance, including (without
limitation) submitting to medical examinations for purposes of obtaining and/or
maintaining such insurance.  Employee agrees that he shall have no
right, title or interest in and to such insurance.

     

    6.           Automobile.  The
Company shall provide Executive a car allowance of $600 per month, payable on
the Commencement Date and on the 1st day of each calendar month
thereafter.  In addition, the Company shall reimburse Executive for
reasonable actual expenses incurred (including, without limitation, gas,
scheduled and unscheduled maintenance and repairs, insurance, registration fees
and taxes) in operating the vehicle used for business purposes subject to the
provisions of paragraph 8.

    

    7.           Vacation.  Executive
shall be entitled to six (6) weeks annual paid vacation in accordance with the
Company’s policy, in addition to holidays and other paid time off (excluding
vacation) provided to similarly situated executive officers of the
Company.  The maximum amount of accrued vacation to which Executive
may be entitled at any time is twelve (12) weeks.  

    
      
         

      

      
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    8.           Business
Expenses.  During such time as Executive is rendering services
hereunder, Executive shall be entitled to incur and be reimbursed by the Company
for all reasonable business expenses, including but not limited to, at least
business class airfare while traveling at least 1,000 miles from Executive's
home city (at least coach class for travel under 1,000 miles), first class hotel
accommodations, ground transportation while traveling, reasonable meals or an
agreed upon per diem while traveling, mobile telephone and text messaging
charges.  The Company agrees that it will reimburse Executive for all
such expenses upon the presentation by Executive, on a monthly basis, of an
itemized statement of such expenditures setting forth the date, the purposes for
which incurred, and the amounts thereof, together with such receipts showing
payments in conformity with the Company’s established
policies.  Reimbursement for approved expenses shall be made within a
reasonable period not to exceed 30 days after the receipt of foregoing
statements and supporting documentation.  Further, Company recognizes
that the Executive’s spouse will be traveling with Executive and that her
airfare will be included as a business expense in accordance with IRS guidelines
as to comporting to business duties requested by Executive.

     

    9.           Indemnity.  Company
shall to the extent permitted and required by law, indemnify and hold Executive
harmless from costs, expense or liability arising out of or relating to any acts
or decisions made by Executive in the course of his employment to the same
extent Company indemnifies and holds harmless other officers and directors of
Company in accordance with Company’s established policies.  This
indemnity shall include, without limitation, advancing Executive attorneys
fees to the fullest extent permitted by applicable
law.  Company agrees to continuously maintain Directors and
Officers Liability Insurance with limits of coverage the same as currently in
effect, unless a change is mutually agreed upon by Executive and the Board of
Directors of Company, and to include Executive within said coverage while
Executive is employed by Company and for at least thirty-six (36) months after
the termination of Executive's employment by Company.

    

    10.          Termination.  Executive's
employment with Company may be terminated for the reasons set forth
below.  At the request of the Board, Executive agrees to resign from
his position as a director of Company within 24 hours after his
termination.

     

    10.1           Death.  This
Agreement shall terminate upon Executive’s death.  Company shall pay
Executive’s estate (i) on the date it would have been payable to Executive any
unpaid Base Salary and accrued vacation earned prior to the date of Executive’s
death, (ii) within 30 days of the conclusion of the quarter following
Executive’s death, any unpaid Bonus prorated to the date of Executive’s death,
and (iii) any unpaid reimbursements due Executive for expenses incurred by
Executive prior to Executive’s death upon receipt from Executive’s personal
representative of receipts therefore.  Any Initial Options and
subsequent stock options granted to Executive that have not vested as of the
date of Executive’s death shall terminate
on the date of Executive’s death, but all vested but unexercised Initial Options
and subsequently granted stock options will be exercisable by Executive's heirs
in accordance with the Plan; provided, however, that Executive's estate shall
have a period of up to three (3) years within which to exercise any vested
Initial Options or subsequently issued stock options following the date of death
of Executive.

    
      
         

      

      
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    10.2        Disability.  If,
as a result of Executive’s incapacity due to physical or mental illness,
Executive shall have been absent from the full time performance of substantially
all of his material duties with Company for 90 consecutive days or 180 days
total within any 12-month period, Executive's employment may be terminated by
Company or by Executive for “Disability.” Termination shall occur 30 days after
a notice of a written termination is delivered to Executive by Company or by
Executive to Company (the “Effective Date of Termination”).  In the
event of such a termination, Company shall pay Executive (i) any unpaid Base
Salary and accrued vacation earned prior to the date of Executive’s Effective
Date of Termination, (ii) within 30 days of the end of the quarter following
Executive’s Effective Date of Termination, any unpaid Bonus prorated to
Executive's last day of actual employment, (iii) any unpaid reimbursements due
Executive for expenses incurred by Executive prior to Executive’s Effective Date
of Termination, pursuant to paragraph 8, and (iv) if Executive is not covered by
any other comprehensive insurance that provides a comparable level of benefits,
Company will pay Executive an amount equivalent to Executive’s COBRA payments up
to 18 months following the Effective Date of Termination or the maximum term
allowable by then applicable law for coverage of Executive and his eligible
dependents.  Any Initial Options and subsequent options that have not
vested as of Executive’s Effective Date of Termination shall terminate on the date of Executive’s Effective
Date of Termination for Disability, but all vested but unexercised Initial Options
and subsequent options will be exercisable by Executive's in accordance with the
Plan; provided, however, that in the event of such a termination, Executive or
Executive's legal representative will have a period of up to three (3) years
within which to exercise any vested Initial Options or subsequently issued stock
options following the Effective Date of Termination.

     

    10.3        Cause.  The
Company may terminate Executive's employment hereunder for Cause.  For
purposes of this Agreement, “Cause” means

    

    (i)           an
act or acts of fraud or dishonesty undertaken by Executive during the course of
his employment;

    

    (ii)          misconduct
by Executive that is willful or deliberate on Executive’s part and that, in
either event, is materially injurious to Company, monetarily or
otherwise;

    

    (iii)         the
indictment, formal charge, conviction of Executive of, or the Executive entering
of a plea of nolo contendere to, a misdemeanor involving fraud, theft,
dishonesty or moral turpitude or a felony, or Executive’s debarment by the U.S.
Food and Drug Administration from working in or providing services to any
pharmaceutical or biotechnology company;

     

    (iv)        the
material breach of any terms and conditions of this Agreement by Executive,
which failure or breach has not been cured by Executive within 30 days after
written notice thereof to Executive from Company; or

    

    (v)          Executive’s
failure to perform his duties or follow the lawful directions of the Board,
which failure has not been cured by Executive within 30 days after written
notice thereof to Executive from Company

    

    The
termination of Executive’s employment shall not be deemed to be for Cause unless
and until there shall have been delivered to Executive a copy of a resolution,
duly adopted by the affirmative vote of not less than a majority of the entire membership of the Board
(not including Executive) at a meeting of the Board (after reasonable notice to
Executive and an opportunity for him, together with his counsel, to be heard
before the Board), finding that, in the good faith opinion of the Board, one or
more causes for termination exist under this Section 10.3, and specifying the particulars thereof in
detail.    In the event of termination for Cause, Executive
will be entitled to such Base Salary, accrued vacation pay, and benefits as have
accrued under this Agreement through the date of termination which accrued
amounts shall be payable on the Effective Date of Termination, to exercise
vested stock options in accordance with the terms
of the Plan and to extend his insurance coverage at his own expense for
up to 18 months following the Effective Date of Termination or the maximum term
allowable by then applicable law for coverage of Executive and his eligible
dependents, but will not be entitled to any other salary, benefits, bonuses or
other compensation after such date.

    
      
         

      

      
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    10.4        Without
Cause.  This
Agreement may also be terminated by Company without Cause, and for any reason or
no reason, at any time by the delivery to Executive of a written notice of
termination; provided, however, that upon any termination of this Agreement by
Company other than for Cause, Executive shall be entitled to receive the
following (collectively, the "Severance Benefits"): (a) on the Effective Date of
Termination, Executive will be paid such Base Salary, vacation, pro rated bonus
(pro rated on a daily basis based on the number of days during the year in which
such termination occurs prior to the effective date of such termination, over a
presumed 365 day year) and all other benefits as have been earned or accrued
under this Agreement through the date of termination and (b) provided Executive
executes the Company’s standard general release for employees (and does not
revoke such general release) (i) if Executive is not covered by any other
comprehensive insurance, the Company will pay Executive an amount equivalent to
Executive’s and Executive's Spouse’s COBRA payments up to 24 months following
the Effective Date of Termination or the maximum term allowable by then
applicable law for coverage of Executive and his Spouse, and (ii) Executive will
also be paid a lump sum severance equal to two (2) year’s then current Base
Salary within thirty days of the Executive’s execution of the general release,
and (iii) Company will continue to reimburse Executive for the
premiums on the 25 year level premium term life policy for Executive for a
period of two (2) years following any such termination, and (iv) in the event of
a termination without Cause during the twenty-four month (24) month period
following a Change of Control, any Initial Options and subsequent options
and any replacement options in any successor entity that were obtained by
Executive in exchange for the Initial Options or subsequent options that have
not vested as of Executive’s Effective Date of Termination ("Unvested Options")
shall vest on the date of Executive’s Effective Date of
Termination.  For avoidance of any doubt, the Company shall not be
obligated to pay Executive any Severance Benefits if his employment is
terminated on a Termination Date or Extended Termination Date in accordance with
the notice provision of Article 1 of this Agreement.

     

    10.5        By
Executive.  Executive
may terminate this Agreement for any reason or no reason at any time upon 30
days written notice to Company.

     

    (a)          In
the event Executive terminates this Agreement for “Good Reason,” Executive shall
be entitled to receive the Severance Benefits.  As used herein, “Good
Reason” shall mean:

     

    (i)           any
removal of Executive from, or any failure to nominate or re-elect Executive to,
his current office and/or as the Chairman of the Board, except in connection
with termination of Executive’s employment for death, disability or Cause as
provided above in this Agreement;;

    
      
         

      

      
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    (ii)          the
failure of Company to obtain the assumption of this Agreement by any successor
to Company, as provided in this Agreement;

     

    (iii)         in
the event of a Change in Control:

     

    a.           (1) any reduction  in Executive's then-current
Base Salary or any material reduction in Executive's comprehensive benefit
package (other than changes, if any, required by group insurance carriers
applicable to all persons covered under such plans or changes required under
applicable law), or (2) the assignment to Executive of duties that
represent or constitute a material adverse change in Executive's position,
duties, responsibilities and status with Company immediately prior to a Change
in Control, or (3) a material adverse change in Executive's reporting
responsibilities, titles, offices, or any removal of Executive from, or any
failure to re-elect Executive to, any of such positions; except in connection
with the termination of Executive's employment for Cause, upon the disability or
death of Executive, or upon the voluntary termination by Executive;

    

    b.           the
relocation of Executive’s place of employment from the location at which
Executive was principally employed immediately prior to the date of the Change
in Control to a location more than 50 miles from such location; or

     

    c.           the
failure of any successor to Company to assume and agree to perform Company's
obligations under this Agreement; or

     

    (iv)         the
material breach of any terms and conditions of this Agreement by
Company.

     

    Within
thirty (30) days of the initial existence of any event described above,
Executive must give the Company a written notice which shall identify the above
basis for termination for Good Reason and set forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination (“Good Reason Notice”). A
separation for Good Reason shall not occur if the basis for Good Reason is
remedied by the Company during such 30-day period.  If the Company does not
remedy the basis for Good Reason, the separation from service for Good Reason
shall occur on the 31st day
after receiving the Good Reason Notice from the Executive.

     

    If it
shall be determined that any payment or distribution by Company to or for the
benefit of Executive hereunder (a “Payment”) would be subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the
“Code”) or any interest or penalties are incurred by Executive with respect to
such excise tax (such excise tax, together with any such interest and penalties,
are hereafter collectively referred to as the “Excise Tax”), then Company shall
calculate the amount Executive will retain net after-all-taxes, including Excise
Taxes, if all payments are made and also calculate the amount Executive shall
retain net after-all-taxes, including Excise Taxes, if payments are reduced to
an amount so that no Excise Taxes are imposed, and Company shall pay Executive
the amount that maximizes the amount Executive will receive
after-all-taxes.  Company will consult with Executive as to the
appropriate Federal and any state income tax to be used in making such
calculations.  In the event that it is determined that Executive
should receive an amount that results in the Payment not being subject to Excise
Taxes (the "Reduced Payment"), Executive advise Company as to how to reduce or
eliminate the Payment or Payments from among the following
categories:

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    
      
        	
              	
                (1) 

              	
                the
      portion denominated and payable in
cash;

              

      

    

    

    
      
        	
              	
                (2) 

              	
                the
      portion payable in-kind, such as insurance coverage, or in cash as a
      reimbursement; and

              

      

    

    

    
      
        	
              	
                (3) 

              	
                equity-based
      compensation and enhancements, such as accelerated vesting and extended
      periods to exercise options.

              

      

    

    

    Executive
shall have full discretionary authority to determine which payments to reduce
within any of the three categories described in the preceding sentence, and can
determine to have Company reduce payments in any or all of the three categories
in such order as Executive shall advise Company.  As promptly as
practicable following such determination and election by Executive and subject
to any payment provisions otherwise applicable under this Agreement, Company
shall pay to or distribute for the benefit of Executive such Payments as are
then due to Executive under this Agreement.  In the event that
Executive is nevertheless subject to Excise Tax, the Company shall have no
liability to Executive for payment thereof.

     

    (b)  In
the event Executive terminates this Agreement other than because of Disability
or other than for Good Reason, Company shall pay Executive: (i) on the date it
would have been payable to Executive, any unpaid Base Salary and accrued
vacation pay earned prior to the date of Executive’s termination, and (ii) any
unpaid reimbursements due Executive for expenses incurred by Executive prior to
the date of Executive’s termination, pursuant to this Agreement, and Executive
shall have the right to exercise any vested stock options in accordance with the
terms of the Plan but be allowed to due such exercise in over a thirty-six (36)
month period after termination of this Agreement and to extend Executive's and
Executive's eligible dependents' medial insurance coverage at Executive's own
expense for up to twenty-four (24) months following the Effective Date of
Termination, or the maximum term allowable by then applicable law for coverage
of Executive and his eligible dependents.

     

    10.6           Notwithstanding
anything contained in this Agreement, under applicable law, or otherwise, in the
event of any termination of this Agreement whereby Executive is entitled to
receive all or any portion of the Severance Benefits (as defined and provided in
this Agreement), then (a) Executive shall have no obligation to seek or accept
any other employment or engagement with any other individual or entity following
any such termination, and (b) in the event that Executive accepts any other
employment or any engagement with any other individual or entity, Company will
not be entitled to offset or reduce any portion of the Severance Benefits by any
compensation, remuneration, consideration or other things of value received or
to be received by Executive from or in connection therewith, it being expressly
understood and agreed by Company and Executive that Executive will be entitled
to receive all such Severance Benefits without deduction or offset as provided
in this Agreement, except that any benefits otherwise receivable by Executive
pursuant to Sections 10.4(b)(i) and 10.4(b)(iii) shall be reduced to the extent
comparable benefits are received by Executive from a subsequent employer during
the two years after termination of his employment.

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    11.          Assignment.

     

    11.1           This
Agreement may not be assigned by Executive.

     

    11.2           This
Agreement may be assigned by Company provided that Company shall require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of Company
to expressly assume and agree to perform under this Agreement in the same manner
and to the same extent that Company would be required to perform as if no such
succession had taken place.

     

    12.          Covenants.

     

    12.1          Confidential
Information.  During the term of this Agreement and thereafter,
Executive shall not, except as may be required to perform his duties hereunder
or as required by applicable law or court order, disclose to others for use,
whether directly or indirectly, any Confidential Information regarding
Company.  “Confidential Information” shall mean information about
Company, its subsidiaries and affiliates, and their respective clients and
customers that is not available to the general public or that does not otherwise
become available to the general public, and that was learned by Executive in the
course of his employment by Company, including, without limitation, any data,
formulae, recipes, methods, information, proprietary knowledge, trade secrets
and client and customer lists and all papers, resumes, records and other
documents containing such Confidential Information.  Executive
acknowledges that such Confidential Information is specialized, unique in nature
and of great value to Company, and that such information gives Company a
competitive advantage.  Upon the termination of his employment,
Executive will promptly deliver to Company all documents, maintained in any
format, including electronic or print, (and all copies thereof) in his
possession containing any Confidential Information.

     

    12.2           Noncompetition.  Except
as otherwise provided herein, Executive agrees that during the term of this
Agreement he will not, directly or indirectly, without the prior written consent
of Company, provide consulting services with or without pay, or own, manage,
operate, join, control, participate in, or be connected as a stockholder,
employee, partner, or otherwise with any business, individual, partner, firm,
corporation, or other entity which is then in competition with Company or any
present affiliate of Company in the biotech industry; provided, however, that
the “beneficial ownership” by Executive, either individually or as a member of a
“group,” as such terms are used in Rule 13d of the General Rules and Regulations
under the Securities Exchange Act of 1934 (“Exchange Act”), of not more than 5 %
of the voting stock of any corporation shall not be a violation of this
Agreement.  Notwithstanding the foregoing, Executive shall be
permitted to maintain the ownership interests and directorship described on
Exhibit “A” attached hereto so long as they do not interfere with the
performance of his duties and do not constitute competitive
activities.

     

    12.3           Right to Company
Materials.  Executive
agrees that all materials, books, files, reports, correspondence, records, and
other documents (“Company Material”) used, prepared, or made available to
Executive, shall be and shall remain the property of Company.  Upon
the termination of his employment and/or the expiration of this Agreement, all
Company Materials shall be returned immediately to Company, and Executive shall
not make or retain any copies thereof, unless and except to the extent required
by applicable law, rule or regulation and provided that Executive gives the
Company with specific written notice of the copies retained and the purpose of
retaining them.

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    12.4           Non-solicitation.  Executive
understands and agrees that in the course of employment with Company, Executive
will obtain access to and/or acquire Company trade secrets, including
Confidential Information, which are solely the property of
Company.  Therefore, to protect such trade secrets, Executive promises
and agrees that during the term of this Agreement, and for a period of six (6)
months thereafter, he will not solicit or assist
or instruct others in soliciting any employees of Company or any of its
present or future subsidiaries or affiliates, to divert their employment or
business to or with any individual, partnership, firm, corporation or other
entity then in competition with the business of Company, or any subsidiary or
affiliate of Company.

     

    12.5           Non-disparagement.  Except for
statements of fact, internal Company communications relating to the performance
of Company, disclosures required under applicable law or in connection with any
legal proceedings with respect to which Executive is a party or witness,
Executive will not make any disparaging remarks regarding Company at any time
during or after the termination of Executive's employment with
Company.  Except for statements of fact, internal communications
relating to the performance of Executive, and disclosures required under
applicable law or in connection with any legal proceedings with respect to which
Company is a party or witness, Company will not make any disparaging remarks
regarding Executive at any time during or after the termination of his
employment with Company.

     

    12.6           Survival.  This Article 12 shall survive the
termination or expiration of this Agreement for the periods of time indicated
herein or indefinitely if no period of time is indicated.

    

    13.           Notice.  For
the purpose of this Agreement, notices and all other communications provided for
in this Agreement shall be in writing and shall be deemed to have been duly
given when delivered or when mailed by United States certified or registered
mail, return receipt requested, postage prepaid, addressed to the respective
addresses set forth below, or to such other addresses as either party may have
furnished to the other in writing in accordance herewith, exception that notice
of a change of address shall be effective only upon actual receipt:

     

    
      	 
      	
              Company:

            	
              Advanced
      Cell Technology, Inc.

            
	 
      	 
      	
              381
      Plantation Street,

            
	 
      	 
      	
              Biotech
      V.

            
	 
      	 
      	
              Worcester,
      Massachusetts 09605

            
	 
      	 
      	
              Attention:  Rita
      Parker

            
	 
      	 
      	 
      
	 
      	
              Executive:

            	
              William
      M. Caldwell, IV

            
	 
      	 
      	
              15516
      W. Sunset, #205

            
	 
      	 
      	
              Pacific
      Palisades, CA 90272

            

    

     

    14.           Amendments or
Additions.  No
amendment or additions to this Agreement shall be binding unless in writing and
signed by both parties hereto.

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    15.           Section
Headings.  The
section headings used in this Agreement are included solely for convenience and
shall not affect, or be used in connection with, the interpretation of this
Agreement.

     

    16.           Severability.  The
provisions of this Agreement shall be deemed severable and the invalidity or
unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof.

     

    17.           Counterparts.  This
Agreement may be executed in counterparts, each of which shall be deemed to be
an original, but both of which together will constitute one and the same
instrument.

    

    18.           Arbitration.  Except
as provided herein, any controversy or claim arising out of or relating in any
way to this Agreement or the breach thereof, or Executive's employment and any
statutory claims including all claims of employment discrimination shall be
subject to private and confidential arbitration in Los Angeles County,
California in accordance with the laws of the State of
California.  The arbitration shall be conducted in a procedurally fair
manner by a mutually agreed upon neutral arbitrator selected in accordance with
the National Rules for the Resolution of Employment Disputes (“Rules”) of the
American Arbitration Association or if none can be mutually agreed upon, then by
one arbitrator appointed pursuant to the Rules. The arbitration shall be
conducted confidentially in accordance with the Rules.  The
arbitration fees shall be paid by the Company.  Each party shall have
the right to conduct discovery including depositions, requests for production of
documents and such other discovery as permitted under the Rules or ordered by
the arbitrator.  The statute of limitations or any cause of action
shall be that prescribed by law.  The arbitrator shall have the
authority to award any damages authorized by law for the claims presented
including punitive damages and shall have the authority to award reasonable
attorneys fees to the prevailing party in accordance with applicable
law.  The decision of the arbitrator shall be final and binding on all
parties and shall be the exclusive remedy of the parties.  The award
shall be in writing in accordance with the Rules, and shall be subject to
judicial enforcement in accordance with California law.  Notwithstanding anything to the contrary
contained in this Section, nothing herein shall prevent or restrict the Company
or Executive from seeking provisional injunctive relief from any forum having
competent jurisdiction over the parties.

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    19.           Section
409A.   This Agreement is intended to comply with Section
409A of the Internal Revenue Code of 1986, as amended (the “Code”) and will be
interpreted in a manner intended to comply with Section 409A of the
Code.  To the extent any reimbursements or in-kind benefits due to
Executive under this Agreement constitute “deferred compensation” under
Section 409A of the Code, any such reimbursements or in-kind benefits shall
be paid to Executive in a manner consistent with Treas. Reg. Section
1.409A-3(i)(1)(iv).  Each payment made under this Agreement shall be
designated as a “separate payment” within the meaning of Section 409A of
the Code.  Notwithstanding anything herein to the contrary, if any
payment of money or other benefits due to Executive hereunder could cause the
application of an accelerated or additional tax under Section 409A of the
Code, Company, in its reasonable discretion, may decide such payments or other
benefits shall be deferred if deferral will make such payment or other benefits
compliant under Section 409A of the Code (“a 409A Tax”), or otherwise such
payment or other benefits shall be restructured, to the extent possible, in a
manner, determined by Company that does not cause such accelerated or additional
tax.  In addition, to the extent Executive is a “specified employee”
as defined in Section 409A of the Code as of the earlier of a Services Cessation
Date or the date of termination of Executive's employment, and the deferral of
the commencement of any compensation or benefits otherwise payable under this
Agreement, or any other applicable separation program or plan, as a result of
such Services Cessation Date or termination of employment is necessary in order
to prevent a 409A Tax, then Company will postpone the commencement of
such payment of any such compensations or benefits until the first business day
of the seventh month following Executive's termination date (the “Delayed
Payment Date”).  Payment of the withheld and accumulated payments
(with interest as calculated below) shall be treated as made on the Delayed
Payment Date if the payment is made on such date or on a later date within the
same calendar year as the Delayed Payment Date, or, if later, by the 15th day of
the third month following the Delayed Payment Date, provided that Executive may
not, directly or indirectly, designate the year of payment.  In the
event that this Paragraph 14(d) requires a delay of any payment or benefit,
such payment shall be accumulated and paid in a single lump sum on the Delayed
Payment Date, with interest for the period of delay, compounded monthly, equal
to the prime or base lending rate then in effect as of the date the payment
would have otherwise been made.  Company shall consult with Executive
in good faith regarding the implementation of the provisions of this Paragraph,
but Company shall determine the terms of any such
implementation.  Executive acknowledges that Executive has been
advised to obtain independent legal, tax or other counsel in connection with
409A, and that Executive has done so to the extent that you deemed necessary or
appropriate.

     

    20.           Miscellaneous.  No
provision of this Agreement may be modified, waived or discharged unless such
waiver, modification or discharge is agreed to in writing and signed by
Executive and such officer as may be specifically designated by the
Board.  No waiver by either party hereto at any time of any breach by
the other party hereto of, or compliance with, any condition or provision of
this Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.  No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party which are not expressly set forth in this Agreement.  The
validity, interpretation, construction and performance of this Agreement shall
be governed by the laws of the State of California without regard to its
conflicts of law principles.  All references to sections of the
Exchange Act shall be deemed also to refer to any successor provisions to such
sections.  This Agreement may be executed in counterparts, each of
which shall constitute an original but all of which, taken together, shall
constitute one document.

     

    IN WITNESS WHEREOF, each of
the parties hereto has executed this Agreement and has made it effective as of
the date first indicated above.

     

    
      	
              ADVANCED CELL TECHNOLOGY,
      INC.

            	
              EXECUTIVE:

            
	 
      	 
      
	
              By:
      /s/ William M. Caldwell, IV

            	
              /s/
      William M. Caldwell, IV

            
	 
      	
              William
      M. Caldwell, IV

            
	
              Name:
      William M. Caldwell, IV

            	 
      
	 
      	 
      
	
              Title:
      Chief Executive Officer

            	 
      

    

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    

    SCHEDULE
A

    

    EXISTING
EXECUTIVE AND/OR DIRECTOR POSITIONS

    

    Director:  Lee
Pharmaceuticals, Inc, El Monte, California

    

    Director:  King
Koil Licensing Company, Chicago, Illinois

    
      
         

      

      
        16_

Exhibit 10.6

Dated the 30th day of October 2009

MUTUAL PROPERTY MANAGEMENT COMPANY LIMITED as agent for The Chung Shun Land Investment Company Limited

And

ARTIFICIAL LIFE ASIA LIMITED

**********************************************

TENANCY AGREEMENT

**********************************************

ROBERTSONS

Solicitors & Notaries

57th Floor, The Center

No.99 Queen’s Road Central

Hong Kong

		
	Parties

	BETWEEN the party named and described as the Landlord in Part 1 of the First Schedule (hereinafter called “the Landlord”) of the one part and the party or parties named and described as the Tenant in Part 2 of the First Schedule (hereinafter called “the Tenant”) of the other part.

	 
	 

	 
	WHEREBY IT IS MUTUALLY AGREED  as follows :- 

	Agreement to rent the Premises

	1.   

The Landlord shall let and the Tenant shall take ALL THOSE premises set
out in Part 3 of the First Schedule (hereinafter called “the said Premises”)  TOGETHER WITH the use in common with the Landlord and all others having
the like right and subject to the right of the Landlord, its managing agents or the manager of the said building (hereinafter defined) to restrict such use to use go
pass and repass up down over and upon the common parts including inter alia entrances, staircases, passages and lavatories (if any) in the building (of which the said
 premises form part) more particularly described in Part 3 of the First Schedule (hereinafter called “the said building”) in so far as the same is
 necessary for the proper use and enjoyment of the said premises AND TOGETHER with the use in common as aforesaid of the lifts (if any are installed in the said
building and during such hours as the same shall be operating) EXCEPTING AND RESERVING to the Landlord and all persons authorized by the Landlord the free and
uninterrupted passage of water and soil through the water pipes and drains and of electricity through the electric wires and meters which now are or may at
any time hereafter be in or passing through the said premises with power for the Landlord and the Landlord’s agents at all reasonable times to enter the
said premises for the purpose of inspecting repairing cleansing replacing or altering the said pipes drains wires and meters the Landlord making good all damages
done to the said premises in exercising such power for the term particularized in Part 4 of the First Schedule (hereinafter called “the said term”)
YIELDING AND PAYING therefore during the said term the clear calendar monthly rent (hereinafter called “the said rent”) as set out in Part 5(i) of the
First Schedule which sum shall be payable exclusive of rates management fees air-conditioning charges and other outgoings in advance in each and every calendar
 month without any deduction or right to set off (whether legal or equitable) and the first of such payments to be made on the signing of this Agreement and all
subsequent payments to be made on the 1st day of each and every succeeding calendar month and when the term of tenancy does not commence on the
1st day of the month, the Landlord may at any time during the said term require the Tenant to pay rent for a particular month on a pro-rata basis,
namely, from the commencement day to the end of the month, and thereafter the Tenant shall pay rent for each calendar month (including the last month of the
said term also on a pro-rata basis) on the 1st day of each such calendar month subject to and with the benefit of the Deed of Mutual Covenant and
Management Agreement (hereinafter called “the Deed of Mutual Covenant") (if any) of the said building and the rules regulations and directions made by the manager
 for the time being of the said building.

	 
	 

	Agreement by Tenant To pay rent

	2.

The Tenant to the intent that the obligations may continue throughout the said term hereby agrees with Landlord as follows :-

(a)

To pay unto the Landlord the said rent and other charges at the time and in the manner aforesaid.

	To pay Maintenance and Management Charges

	(b)

To pay or discharge all Maintenance and Management Charges currently at HK$9,660.00 per month and Air-Conditioning Charges currently at HK$12,180.00 per month in respect of the said Premises or as provided in accordance with the provisions of the Deed of Mutual Covenants and Management Agreement (if any) of  the said Building. The Maintenance and Management Charges and Air-Conditioning Charges shall be subject to increase by the Landlord during the continuance of the term hereby created on giving one month’s notice in writing of any increase to the Tenant. Upon the expiration of the said period of one month the Maintenance and Management Charges shall be increased by the amount specified in the Landlord’s notice. There shall be no restriction on the number of occasion upon which the Landlord may call for an increase of such Maintenance and Management Charges and Air-Conditioning Charges.

	To pay rates
	(c)        To pay rates charged
on the said Premises as assessed by the Government quarterly in advance within the months of January, April, July and October provided that the first payment thereof shall be
paid on the  commencement of the tenancy and in the event of the said premises not having been assessed to rates by the Government to pay such sum 

		
	 
	as shall be required by
 the Landlord as a deposit by way of security for the due  payment  of rates subject to adjustment on actual rating assessment being received from the Government and
also to pay and discharge all taxes assessments duties charges impositions and outgoings whatsoever now or hereafter to be imposed or charged on the said premises or upon the
owner or occupier in respect thereof by the Government of Hong Kong other lawful authority (Government Rent, Property Tax and expenses of a capital and non-recurring nature alone excepted).

	To pay electricity charges

	(d)

To pay and discharge all charges for electricity and telephone rental and other outgoings now or at any time hereafter consumed by the Tenant and chargeable in respect of the said Premises and to make all necessary deposits therefore (if any).

	To keep interior etc. in repair

	(e)

To keep the interior of the said Premises including the flooring and interior plaster or other
 finishing material or rendering to walls, floors and ceilings and the Landlord's fixtures therein including all doors, windows, electrical installations and wiring and fire fighting
installation in good, clean tenantable, substantial and proper repair and condition and properly preserved and painted as may be appropriate when from time to time required and to so
maintain the same at the expense of the Tenant. The Tenant shall in the last year of the said term paint and decorate in a proper and workmanlike manner all parts of the said premises
usually painted and decorated and all such internal parts of the said premises that have been or ought properly to be so treated and deliver up the same to the Landlord at the expiration
or sooner determination of the term in like condition replacing and reinstating any part of the said premises damaged or destroyed by or through or in consequence directly or indirectly
of any negligent act or omission of the Tenant may be released by the Landlord if the Landlord shall be satisfied with the condition of the said premises in the last year of the said term.
 The Tenant particularly agrees:-

	To repair and replace electrical wirings within the said Premises

	(i)

To repair or replace, if so required by the appropriate supply company, statutory undertaking or authority as the case may be under the terms of any Electricity Supply or similar Ordinance for the time being in force or any Orders in Council or Regulations made thereunder, all electrical wiring installations and fittings within the said Premises from the Tenant's meter or meters to and within the same.

	To keep sanitary and water apparatus used exclusively in good repair

	(ii)

To keep the sanitary and water apparatus used exclusively by the Tenant and his servants, agents and licensees in good, clean and tenantable repair and condition to the satisfaction of the Landlord and in accordance with the Regulations or by-laws of all Public Health and other Government Authorities concerned and repair or replace any drains pipes or sanitary or plumbing apparatus if required by the Landlord or any government authority.

	To be responsible for loss or damage caused by interior defects

To be responsible for maintenance of windows

To be responsible for maintenance of shop front plate glass

Installation of 

additional air-conditioners

	(iii)

To be wholly responsible for any loss, damage or injury caused to any other person whomsoever directly or indirectly through the defective or damaged condition of any part of the interior of the said Premises and to make good the same by payment or otherwise and to indemnify the Landlord against all actions, proceedings, claims and demands made upon the Landlord in respect of any such loss, damage or injury and all costs and expenses incidental thereto.

(iv)

to reimburse to the Landlord the cost of replacing all broken and damaged windows whether the same be broken or damaged by the negligence of the Tenant or any of its servants, agents or licensees or by circumstances beyond the control of the Tenant.

(v)

to reimburse to the Landlord the cost of repairing or replacing the shop front plate glass or any part thereof in the event of the same being broken or damaged by the Tenant or by any servant, agent or licensee of the Tenant.

(vi)

upon prior consent of the Landlord is given, to install additional air-conditioning units at such places and in such positions of the said Premises as shall be approved by the Landlord and not to cut the window or bar or projecting out of the said Premises and to make good all damage done to all windows, doors and window panes and to replace or reinstate the same in strict accordance with any direction which shall or may be given by the Landlord and to be responsible for their maintenance and repair at the expenses of the Tenant.

	To permit Landlord to enter and view the state of repair and to carry out necessary repairs

	(f)

To permit the Landlord and all persons authorised by him at all reasonable times to enter and view the state of repair of the said Premises, to take inventories of the fixtures therein, to carry out any works or repairs which may be required to be done and, during the last three months of the said term, to show the said Premises to prospective tenants or purchasers.

	To permit Landlord to repair other premises

	(g)

To permit the Landlord and all persons authorised by him at all reasonable times to enter and carry out any works or repairs in respect of other premises in the said building  PROVIDED  that in this connection the Landlord shall be responsible to make good all damage done to the said Premises.

	To execute repairs on receipt of notice

	(h)

On receipt of any notice from the Landlord or his authorised representatives specifying any works or repairs which they require to be done and which are the responsibility of the Tenant hereunder, forthwith to put in hand and execute the same with all possible dispatch and without any delay.

		
	Not to erect install or alter fixtures etc without Landlord's consent

	(i)

Not without the previous written consent of the Landlord to erect, install or alter any fixtures partitioning or other partitioning erection or installation in the said Premises or shop front or any part thereof.

	Not to cut or  maim or deface any doors, walls, beams or any structural part of the Premises

	(j)

Not to cut, maim, injure, drill into, mark or deface or permit or suffer to be cut, maimed, injured, drilled into, marked or defaced any doors, windows, walls, beams, structural members or any part of the fabric of the said Premises nor any of the plumbing or sanitary apparatus or installations included therein.

	Not to remove any fixtures, erections on any part of the Premises

	(k)

Not without the previous written consent of the Landlord to put up or remove any fixtures partitions or other erections on any part of the said Premises without the like consent and to reinstate or restore the said Premises to their original condition at the expiration or sooner determination of the said term of tenancy.

	Not to install any plant apparatus or machinery without consent

	(l)

Not to install or use in the said Premises any plant, apparatus or machinery which consumes electricity without the prior consent of the Landlord.  In the event of such installation or use being approved the Tenant shall pay the charges for all electricity thereby consumed.

	Not to erect aerial

	(m)

Not to erect any aerial on the roof or walls of the said building nor the ceiling or walls of the said Premises.

	Not to deliver bulky items

	(n)

Not to take delivery of furniture or fixtures or bulky items of goods in and out of the building without the permission of the Landlord.

	Not to prepare food 

	(o)

Not to prepare or permit to be prepared any food or to allow delivery of food from the said Premises.

	Not to keep pressurized items

	(p)

Not to permit to be brought into the said Premises any gas whether bottled or in pressurized containers or otherwise for any purpose whatsoever.

	Not to display sign etc.

	(q)

Not without the prior written consent of the Landlord to affix erect attach or display or permit or suffer so to be upon any part of the exterior of the said Premises or to or through any windows thereof any placard, poster, decoration, flag, notice, advertisement, signboard, sign, name or other device whatsoever whether illuminated or not PROVIDED that the Landlord shall have the right to remove at the cost and expense of the Tenant any signboard or other things which shall have been affixed displayed or exhibited as aforesaid without the prior consent of the Landlord AND PROVIDED FURTHER that which said cost and expenses shall be recoverable by the Landlord from the Tenant as a debt.

	Not to drive nails etc. into ceilings, walls or floors

	(r)

Not to drive or insert or permit or suffer to be driven or inserted any nails, screws, hooks brackets or similar articles into the ceilings, walls or floors of the said Premises without the previous written consent of the Landlord, nor without the like consent to lay or use any floor covering which may damage the existing flooring.

	Usage of the said Premises

	(s)

Not to use the said Premises for any purpose other than for the purpose and under the name
as described and set out in the Third Schedule hereto.  For the avoidance of doubt, not to use the said Premises for any of the following purposes, namely : domestic premises,
factory or industrial premises, undertakers or business or activities in connection therewith, dance hall, club, billiard saloon, massage establishment as defined in Miscellaneous
Licences Ordinance, automatic machines establishment as defined in the Miscellaneous Licences Ordinance, premises licenced under the Gambling Ordinance for playing therein or games in
which mahjong or Tin Kau tiles are used, offensive trades as in the Public Health and Urban Services Ordinance, top-less bar or any business the operation of which may directly or
indirectly involve the provision of female companionship to the customers thereof.  Not to operate around-the-clock business and use the said Premises for any kinds of school
 including training center, teaching institute and tutorial workshop without Landlord’s prior consent. No over night work is allowed unless prior consent is obtained from the Landlord.

	Not to use the said Premises as sleeping quarters or domestic premises

	(t)

Not to use or permit to suffer the said Premises or any part thereof to be used as sleeping quarters or as domestic premises within the meaning of the Landlord and Tenant (Consolidation) Ordinance or similar legislation for the time being in force.

	Not to produce  noise audible outside

	(u)

Not to produce or permit or suffer to be produced any noise (including sound produced by broadcasting or any apparatus or equipment capable of producing, reproducing, receiving or recording sound) so as to cause a nuisance to other users of the Building, and where music is to be regularly played, to install at the Tenant's cost or expense and to the satisfaction of the Landlord adequate sound proofing or insulation devices in the said Premises.

	Not to permit any nuisance or annoyance

	(v)

Not to do or permit or suffer to be done any act or thing which may be or become a nuisance or annoyance to the Landlord or to the tenant or occupiers of other premises in the said building or in any adjoining or neighboring building.

	Not to breach Government Lease or cause insurance policies to be voided or premium to be increased

	(w)

Not to do or permit or suffer to be done any act, deed, matter or thing whatsoever which amounts to a breach of any of the terms and conditions under which the land on which the said building stands is held from the Government or whereby any insurance on the Building against loss or damage by fire and/or claims by third parties for the time being in force may be rendered void or voidable or whereby the premium thereon may be increased Provided that if as the result of any act, deed, matter or thing done permitted or suffered by the Tenant, the premium on any such policy of insurance shall be increased, the Landlord shall be entitled at his option either to terminate this Agreement or to continue the same upon payment by the Tenant of the additional premium and upon such other terms and conditions as the Landlord may, at his discretion, think fit to impose.

		
	Not to keep items of combustible or hazardous goods on the said Premises

	(x)

Not to keep or store or permit or suffer to be kept or stored in the said Premises any arms, ammunition, gun-powder, saltpetre, kerosene or other explosive or combustible substance or hazardous goods which may contravene any ordinance regulation by-law or Management Rules of the Building or constitute a nuisance or annoyance to the tenants or occupants of any part of the Building or injurious or detrimental to the reputation of the Building of which the said Premises form part.

	Not to permit illegal or immoral use

	(y)

Not to use or permit or suffer the said Premises to be used for any illegal or immoral purpose or for any purpose which is in contravention of the terms and conditions contained in the Government Lease or Conditions under which the said Premises are held from the Government and not to carry on any trade or business thereon which is now or may hereafter be declared to be an offensive trade under the Public Health & Urban Services Ordinance or any other Ordinance or Regulations and any enactment amending or substituting the same.

	Not to encumber, leave rubbish or obstruct passage and common areas

	(z)

Not to encumber or obstruct or permit to be encumbered or obstructed with any box, packaging or other obstruction of any kind or nature any of the entrances, passages, lifts (if any) lobbies or other parts of the Building in common use and not to leave rubbish or any other article or thing in any part of the Building not in the exclusive occupation of the Tenant.

	Not to lay wiring or cables etc. in the public areas

	(aa)

Not to lay install affix or attach any wiring, cables or other article or thing in or upon any of the entrances, staircases, landings, passage-ways, lobbies or, public areas.

	No to employ any Security Contractors except from the Landlord

	(bb)

Not to employ any security contractors for the rendering of any services for or in connection with said Premises without the consent of the Landlord, but to permit the Landlord’s servants or security guards to enter the said Premises at all reasonable times for security purposes, and to connect and keep the said Premises connected to any communal alarm or security system, the fees for any connection of burglary alarm from the said Premises to the communal alarm or security system and any subsequent repair and maintenance fees thereof shall be solely borne by the Tenant.

	Not to install any gate or rolling shutter without consent.

	(cc)

Not to install any gate, additional lock, fixture, rolling shutter or additional door to the entrances of the said Premises without prior consent from the Landlord.  If the door lock is changed, a key should be deposited with the Landlord for custody.

	Deposit a spare key of the said Premises with the Landlord in case of emergency 

	(dd)

To deposit with the Landlord a key to the said Premises and to grant the Landlord access to the said Premises in the event of any apparent emergency by the use of the key deposited or otherwise.

	No pets

	(ee)

Not to keep in the building or any part thereof any dog or other pet or animal.

	Not to alter or install additional locks etc.

	(ff)

Not without the previous written consent of the Landlord to alter the existing locks, bolts or fittings on the entrance doors to the said Premises nor to install any additional locks, bolts or fittings thereon.

	Not to change the colour of doors and glasses of the said Premises or any part thereof

	(gg)

Not to change the colour of the doors or the wooden door(s) to the glass door(s) (if applicable) of the said Premises without prior approval from the Landlord.

	No overloading of electricity 

	(hh)

Not to use electricity in excess of the supply from the electricity meter at any one time in the said Premises and the Landlord shall not be responsible for supply of any additional electricity.

	Tenant shall at its own cost to apply for transferal of the electric meter 

	(ii)

Upon signing of this Agreement, the Tenant shall at its own cost apply for transferal of the electric meter to its own and pay the related electric meter deposit directly to the Electric Company.  Tenant shall undertake to immediately and unconditionally transfer back the electric meter to the Landlord with settlement of the outstanding electric charges (if any) at the termination or early termination of this Agreement.  If the Tenant fails to transfer the electric meter to its own name within 7 days from the date of taking over the said Premises, the Landlord is entitled to disconnect the electric meter and shut down the air conditioners without prior notice and the Tenant shall not make any claims against the Landlord.

	Not to carry out   business during Rent-free Period 

	(jj)

Not to carry out any business or start working during the Rent-free Period for decoration in the said Premises, failing which the Landlord shall be entitled to charge the Tenant for the rental payment and other fees without prior notice. Tenant shall pay the Management Fee, Air-Conditional Charges and all outgoing payments during the Rent Free Period. The Tenant shall submit full details of decoration plan(s) to the Landlord for approval before commencement of works, failing which the whole amount of decoration deposit shall be forfeited without prior notice.

	Garbage 

	(kk)

To be fully responsible for the disposal of any bulky refuse which is not included in the Maintenance and Management Charges.  Any bulky garbage must not be placed at the common area or any part of the Building and be removed away daily by Tenants themselves or by the nominated cleaning contractor at Tenant’s own cost.

	Burglary Alarm

	(ll)

To appoint the Landlord’s nominated contractor for repairing and maintenance of the Burglary Alarm installed at the main door and to pay the related fees annually in advance (if any) as shall be charged by the contractor.

	Electrical installations or wiring 

	(mm)

Any alternation in electrical installations or wirings of the said Premises shall be done by the nominated electrical contractor of the Landlord but at the Tenant’s own expenses.  Tenant shall obtain consent from the Landlord before commencement of work and not to cause the electrical loading exceeding the loading of the existing meter.

		
	To appoint contractors designated by the Landlord

	(nn)

To appoint either registered electrical contractors under HKSAR or electrical contractor nominated by Landlord to rectify and testify the electrical installation in the said Premises and make sure that the electrical installation complies with relevant regulations and Ordinance in Hong Kong but at the Tenant’s sole expenses if it is required by the Government.

	 
	*

(oo)

To appoint contractor nominated by Landlord if any work of fire services and air conditioning (Air Ducts) or alteration is required.

	 
	(pp)

The Tenant shall submit details of decoration plans including room partitions, electrical installation, air conditionings or other decoration (if any) to Landlord for approval before commencing of work.  The Tenant shall not commence any work for decoration before approval to the work is obtained from the Landlord. 

	 
	(qq)

Landlord shall have right to cut off or shut down the electrical supply at any part of the Building without prior notice to Tenant in the event that maintenance, repairing or emergency work is to be carried out.  Tenant shall not object the cut-off or shut-down of the electrical power supply and shall not make any claim against the Landlord for any consequences arising therefrom.

	Insurance

	(rr)

The Tenant shall effect an valid insurance policy covering public liability of the said Premises for the insured amount not less than HK$5 million to indemnify the Landlord by any person in respect of any loss or damage or injury caused by the overflow of water or the escape of fumes, smoke, fire or any other substance or thing from the said Premises owing to the neglect or default of the Tenant, his licensees, servants or agents during the term of the tenancy agreement including the period of decoration.

	Not to assign underlet etc

	(ss)

Without the prior written approval of the Landlord not to assign, underlet or otherwise part with the possession of the said Premises or any part thereof in any way whether by way of sub-letting, lending, sharing or other means whereby any person or persons not a party to this Agreement obtains the use, possession, occupation or enjoyment of the said Premises or any part thereof regardless of whether any rental or other consideration is given therefor.  The tenancy shall be personal to the Tenant named in this Agreement and without in any way limiting the generality of the foregoing, the following acts and events shall, unless previously approved in writing by the Landlord (which approval the Landlord may give or withhold at its discretion without assigning any reason therefor) be deemed to be breaches of this Clause :-

	 
	(i)

any take-over, reconstruction, amalgamation, merger, voluntary liquidation or change in the person or persons who own a majority of the Tenant's voting shares or who otherwise has or have effective control thereof.

(ii)

the giving by the Tenant of a Power of Attorney or similar authority whereby the donee of the Power obtains the right to use, possess, occupy or enjoy the said Premises or any part thereof or does in fact use, possess, occupy or enjoy the same.

(iii)

the change of the Tenant's business name without the previous written consent of the Landlord, such consent shall not be unreasonably withheld.

“Subject always to the following:

(1)

In the event that the Tenant desires to undertake any of the activities described at paragraphs (i), (ii) or (iii) directly above, it shall provide written notice to the Landlord of its desire to do so.

(2)

The Landlord shall have 10 days from the date of receipt of the Tenant’s written notice within which approve or reject the Tenant’s proposed activity.

(3)

If the Landlord does not reject the Tenant’s proposed activity by way of a written notice to the Tenant within 10 days of receipt the Tenant’s written notice, the Tenancy Agreement shall continue in force without interruption or variation for the remainder of the Term.

(4)

If the Landlord rejects the Tenant’s proposed activity, the Landlord shall provide the Tenant with written notice of the termination of the Tenant’s tenancy of the Premises under the Tenancy Agreement, such notice expiring 3 months after the date of the receipt of the Landlord’s notice rejecting the Tenant’s proposed activity”

(iv)

Notwithstanding any provisions to the contrary herein the Tenant shall be entitled to enter into consignment arrangements or such other business arrangements which the Landlord shall consider and approve in writing provided that the Tenant shall ensure that the right of such consignees and occupiers shall be that of licensees only and there shall be no tenancy or sub-tenancy created by such consignment or other arrangements and shall ensure that such consignees and occupiers shall deliver up vacant possession of such parts of the said Premises as shall be occupied by them to the Landlord at the expiration or sooner determination of this Agreement in accordance with the terms hereof.

	To comply with the Deed of Mutual Covenants and all ordinances etc

	(tt)

To obey and comply with and to indemnify the Landlord against the breach of the Deed of Mutual Covenants and Management Agreement (if any) of the said building and all ordinances, regulations, by-laws, rules and requirements of any Governmental or other competent authority relating to the conduct and carrying on of the Tenant's business on the said Premises or to any other act, deed, matter or thing done, permitted suffered or omitted therein or thereon by the Tenant or any employee, agent or licensee of the Tenant.

		
	To pay cost of clearing or drains etc.

	(uu)

To pay to the Landlord on demand all costs incurred by the Landlord in cleansing or clearing any of the drains pipes sanitary or plumbing apparatus choked or stopped up owing to the careless or improper use or neglect by the Tenant or any employee agent or licensee of the Tenant.

	To protect interior from approaching typhoon

	(vv)

To take all precautions to protect the interior of the said Premises against damage by storm or typhoon or the like and to replace all broken and damaged windows and window-frames whether the same be broken or damaged by the negligence of the Tenant or owing to circumstances (including typhoon) beyond the control of the Tenant.

	To be responsible for contractors, servants, agents and licensees

	(ww)

To be responsible to the Landlord for the acts, neglects and defaults of all contractors, servants, agents and licensees of the Tenant as if they were the acts, neglects and defaults of Tenant himself and for the purpose of this Agreement "licensee" shall include any person present in, using or visiting the said Premises with the consent of the Tenant express or implied.

	Re-instate premises

	(xx)

Unless the Landlord otherwise agrees in writing, to re-instate and restore the said Premises to their original condition and to make good all damage caused or occasioned by the erection and removal of alterations partitions or other erections.  The Tenant shall also restore to the Landlord all keys of the said Premises and toilets used by the Tenant upon yielding up of the said Premises. 

	To yield up to end of term

	(yy)

Quietly to yield up the said Premises together with all fixtures, fittings and additions therein and thereto at the expiration or sooner determination of this tenancy in its original state and condition.

	To apply for consent for the type of business

	(zz)

To apply to the Government and other relevant authorities for consent and/or permission to operate and carry on the type of business intended to be carried on by the Tenant at the said Premises and to pay all fees and/or premium and to observe and perform all conditions and stipulations that may be imposed for the grant of such consent and/or permission.

	Sprinkler System

	(aaa)

Not to do or permit or suffer to be done any act or thing which will damage or interfere with or attest the operating of the sprinkler system or any other fire protection or fire fighting systems equipment or apparatus or any security system, equipment or apparatus or any part or parts thereof and to keep the Landlord fully indemnified against all loss, damages, claims and demands as a result of any act or thing done or permitted or suffered to be done by the Tenant aforesaid. Provided that the existing all sprinklers and fire fighting system are in align with current Fire Regulations within the premises. Should there be any alteration regarding the sprinkler systems, the tenant shall be fully responsible for all reinstatement works and subject to the Landlord’s satisfaction and be complied with regulations of Fire Services Department.

	 
	 

	Tenant is responsible for discharging all utility charges

	(bbb)     To pay and discharge all charges in respect of electricity, gas, water and telephones as may be shown by the separate meter or meters installed upon the said Premises or by accounts rendered to the Tenant.

	 
	 

	Landlord's covenant

	3.

The Landlord hereby agrees with the Tenant as follows :-

(a)

To pay the Government Rent payable in respect of the said Premises and the Property Tax and expenses of a capital nature (if any) attributable to or payable in respect of the said Premises.

	Structural maintenance

	(b)

To keep the outside main walls of the said Premises in good and proper repair.

	 
	(c)

At the expense of the Tenant to repaint, repair and maintain the outer shop front(s) and outer door(s) of the said Premises whenever reasonably required by the Tenant so to do or whenever, in the opinion of the Landlord, such work shall be deemed by the Landlord to be necessary provided that the Tenant shall not be liable to reimburse the Landlord the cost of repairing or replacing the shop front plate glass except as provided in Clause 2(e)(v).

	 
	 

	 
	4.

It is hereby further expressly agreed and declared as follows :-

	Other provisions, Landlord's right of re-entry

	(a)

If the rent and/or Management and Maintenance Charge and/or rates and/or Air-Conditioning
 Charges hereby agreed to be paid or any part thereof shall be unpaid for fifteen (15) days after the same shall become payable (whether legally or formally demanded or not) or if the
 Tenant shall fail or neglect to observe or perform any of the agreement, stipulations or conditions herein contained and on the Tenant's part to be observed and performed or if the
Tenant shall become bankrupt, or being a corporation shall go into liquidation or if any petition shall be filed for the winding up of the Tenant, or if the Tenant otherwise becomes
insolvent or makes any composition or arrangement with creditors or shall suffer any execution to be levied on the said Premises or otherwise on the Tenant's goods, then and in any such
case it shall be lawful for the Landlord at any 

		
	 

	 

time thereafter to re-enter on the said Premises or any part thereof in the name of the whole whereupon this Agreement shall absolutely cease
 and determine but without prejudice to any right of action by the Landlord in respect of any outstanding breach or non-observance or non-performance of any of the agreements, stipulations
and conditions herein contained and on the Tenant's part to be observed and performed and to the Landlord's right to deduct all loss and damage thereby incurred from the deposit paid by the
Tenant in accordance with the Clause 5 hereof.

	 
	(b)

If the rent or any part thereof of shall be unpaid for ten days after the same shall become payable (whether legally or formally demanded or not) the Tenant shall further pay to the Landlord interest calculated at the rate of two percent (2%) above the Hong Kong and Shanghai Bank’s best lending rate for the time being per annum on the amount unpaid as aforesaid from the date upon which the same shall have become payable until the date of payment.

	Written notice sufficient exercise of right

	(c)

A written notice served by the Landlord on the Tenant in manner hereinafter mentioned to the effect that the Landlord thereby  exercises the power of re-entry herein contained shall be a full sufficient exercise of such power without actual entry on the part of the Landlord.

	Acceptance of rent not waiver or breach of covenant

	(d)

Acceptance of rent by the Landlord shall not be deemed to operate as a waiver by the Landlord of any right to proceed against the Tenant in respect of any breach non-observance or non-performance by the Tenant of any of the agreements, stipulations and conditions herein contained and on the Tenant's part to be observed and performed.

	Landlord not liable for overflow of water

Tenant to indemnify Landlord against all claims in respect of any loss or damage due to overflow of water

	(e)

The Landlord shall not be under any liability to the Tenant or to any other person whomsoever
in respect of any loss or damage to person or property sustained by the Tenant or any such other person caused by or through or in any way owing to the overflow of water from anywhere
within the said building.  The Tenant shall fully and effectually indemnify the Landlord from and against all claims and demands made against the Landlord by any  person in
respect of any loss, damage or injury caused by or through or in any way owing to the overflow of water from the said Premises or to the neglect or default of the Tenant, his servants,
agents or licensees or to the defective or damaged condition of the interior of the said Premises or any fixtures or fittings for the repair of which the Tenant is responsible hereunder
and against all costs and expenses incurred by the Landlord in respect of any such claim or demand.

	Abatement of rent if the said Premises damaged by fire etc

	(f)

If the said Premises or any part thereof shall be destroyed or so damaged (not attributable
to the act or default of the Tenant) by fire, typhoon, Act of God, Force Majeure of other cause beyond the control of the Landlord as to be rendered unfit for use and occupation, the
rent hereby agreed to be paid or a part thereof proportionate to the damage sustained shall cease to be payable until the said Premises shall have been restored or reinstated and the
Landlord shall not be liable to pay any damage or compensation to the Tenant in these circumstances  AND Provided Always that the Landlord shall be under no obligation to repair
or reinstate the said Premises if, in their opinion, it is not reasonably economical or practicable so to do And Provided Further that if the whole or substantially the whole of the
said Premises shall have been destroyed or rendered unfit for use and occupation and shall not have been repaired and reinstated within three months of the occurrence of the destruction or
damage either party shall be entitled at any time before the same are so repaired and reinstated to terminate this Agreement by notice in writing to the other but such determination shall
not prejudice the Landlord's rights and remedies in respect of rent and outstanding breaches of covenant.

	Tenant responsible for acts of servants visitors etc.

	(g)

For the purposes of these presents any act, default, neglect or omission of any servant, agent or licensee (as hereinbefore defined) of the Tenant shall be deemed to be the act, default, neglect or omission of the Tenant and the Tenant shall compensate the Landlord for any damages suffered by the Landlord whether or not due to the negligence of the Tenant or all of its contractors, servants, agents, licensees and any person present in, using or visiting the said Premises with the consent of the Tenant express or implied.

	For the purposes of distraint rent in arrear if not paid in advance on due date

	(h)

For the purposes of Part III of the Landlord and Tenant (Consolidation) Ordinance (Chapter 7) and of these presents, the rent payable in respect of the said Premises shall be and be deemed to be in arrear if not paid in advance at the times and in manner hereinbefore provided for payment thereof.  All costs and expenses for and incidental to any distraint and legal charges shall be paid by the Tenant and is covertable from him as a debt on a full indemnity basis.

	Tenant waives rights to protection under Landlord and Tenant Ordinances

	(i)

To the extent that the Tenant can lawfully do so, the Tenant hereby expressly agrees to deprive himself of all rights (if any) to protection against eviction or ejectment afforded by any existing or future legislation from time to time in force and applicable to the said Premises or to this tenancy and the Tenant agrees to deliver up vacant possession of the said Premises to the Landlord on the expiration or sooner determination of the tenancy hereby created.

	No waiver by Landlord

	(j)

No condoning, excusing or waiving by the Landlord of any default, breach or non-observance or
non-performance, by the Tenant at any time or times of any of the Tenant's obligations herein contained shall operate as a waiver of the Landlord's rights hereunder in respect of any
continuing or subsequent default, breach or non-observance or non-performance or so as to defeat or affect in any way the rights and remedies of the Landlord hereunder in  respect
of any such continuing or subsequent default, or affect in any way the rights and remedies of the 

		
	 

	 

Landlord hereunder in respect of any such continuing or subsequent default or breach
and no waiver by the Landlord shall be inferred from or implied by anything done or omitted by the Landlord unless expressed in writing and signed by the Landlord. Any consent given
by the Landlord shall operate as a consent only for the particular matter to which it relates and in no way shall be considered as a waiver or release of any of the provisions hereof
nor shall it be construed as dispensing with the necessity of obtaining the specific written consent of the Landlord in the future, unless expressly so provided.

	Landlord  can exhibit letting notices during last three months of term

	(k)

During the three months immediately preceding the expiration of the term hereby created, the Landlord shall be a liberty to affix and maintain without interference upon any external part of the said Premises a notice stating that the said Premises are to be let and such other information in connection therewith as the Landlord shall reasonably require.

	Service of notice

	(l)

Any notice required to be served hereunder shall, if to be served on the Tenant, be sufficiently served if addressed to the Tenant and sent by prepaid post to or delivered at the said Premises or the Tenant's last known place of business or residence in Hong Kong and if to be served on the Landlord, shall be sufficiently served if addressed to the Landlord and sent by prepaid post to or delivered to the Landlord's residence or registered office as shown in the Agreement.

	Stamp duty and costs

	(m)

The stamp duty and other disbursements on this Agreement and its counterpart shall be borne by the Landlord and Tenant in equal shares.

	Definitions

	(n)

Unless the context otherwise requires, words herein importing the masculine gender shall include the feminine and neuter and words herein in the singular shall include the plural and vice versa.

	No key money etc.

	(o)

No key or construction money or other premium of a similar nature have been paid or agreed to be paid by the Tenant to the Landlord and no advance payment of rent has been paid to the Landlord except in pursuance of Clause 1 hereof.

	Landlord’s right to name the Building

	(p)

The Landlord reserves the right to name the said Building with any such names or styles as in its sole discretion may determine and at any time and from time to time to change, alter, substitute or abandon any such names provided that the Landlord shall give the Tenant and to the Postal and other relevant Government Authorities not less than three months’ notice of its intention so to do.

	Lift and Air-conditioning plant

	(q)

The Landlord shall not be liable to pay compensation to the Tenant in respect of any period during which due to circumstances beyond the control of the Landlord the proper operation of the lifts and air-conditioning plant shall be interrupted as a result of mechanical failure or need for repair or overhaul nor shall the Landlord be liable thereby to grant an abatement of rent in respect of such interruption.

	Full agreement

	(r)

This Agreement sets out the full agreement reached between the parties and the Tenant hereby expressly declares that no other representations have been made or warranties given relating to the Landlord or the Tenant or the Building or the said Premises has been made given or implied the same is hereby waived.

	Additional terms

	(s)

The additional terms (if any) as set out in the Part 8 of the First Schedule hereto shall also apply but in the event that any contradiction between such additional terms and the foregoing conditions, the provisions of such additional terms shall prevail.

	No  warrant for user

	(t)

It is hereby further agreed between the parties hereto that there is no warranty and/or representation on the part of the Landlord that the said Premises are suitable for the purposes stipulated in paragraph 2(s) hereinabove mentioned.

	No warrant for air-conditioning 

	(u)

The Landlord shall at its own cost be responsible for the repairing and maintenance of the air-conditioners by its nominated contractors but the Tenant shall not make any claims against the Landlord in case of any damages caused by malfunction and any leaking of water from the air-conditioners.

	 
	 

	Tenant's deposit

	5.

(a)

The Tenant shall on the signing hereof deposit and maintain with the Landlord a deposit
of the amount as set out in the Part 6 of the First Schedule hereto to secure the due observance and performance by the Tenant of the agreements, stipulations and conditions herein
contained and on the Tenant's part to be observed and performed. The said deposit shall be retained by the Landlord throughout the said term free of any interest to the Tenant and in
 the event of any breach or non-observance or non-performance by the Tenant or any of the said agreements, stipulations or conditions aforesaid, the Landlord shall be
entitled to terminate this Agreement and to forfeit the said deposit by way of liquidated damages.  Notwithstanding the foregoing, the Landlord may in any such event at this
option elect not to terminate this Agreement and forfeit the deposit but to deduct therefrom the amount of any monetary loss incurred by the Landlord in consequence of the breach,
non-observance or non-performance by the Tenant in which event the Tenant shall as a condition precedent to the continuation of the Tenancy deposit with the Landlord the amount so
deducted and if the Tenant shall fail so to do, the Landlord shall forthwith be entitled to re-enter on the said Premises and to determine this Agreement and forfeit the deposit as hereinbefore provided.

	Repayment of deposit

	(b)

Subject as aforesaid, the said deposit shall be refunded to the Tenant by the Landlord

		
	 

	 

without interest within thirty days after the expiration or sooner determination of this Agreement and the delivery of vacant possession to the Landlord within thirty days of the settlement of the last outstanding claim by the Landlord against the Tenant in respect of any unsettled reinstatement charge, any breach, non-observance or non-performance of any of the agreements, stipulations or conditions herein contained and on the part of the Tenant to be observed and performed, whichever is the later.

	 
	(c)

Unless the Landlord consents in writing, the deposit shall not be used to set off the rent and/or Management and Maintenance Charges and/or Air-Conditioning payable by the Tenant to the Landlord at any time during the Term of this Tenancy.

	Assignment of ownership

	(d)

If the said Premises shall be assigned by the Landlord during the said term, the
Landlord shall have the right but is not obliged to transfer the said deposit or any part thereof after deduction (if any) to the assignee by giving notice in writing to the
Tenant notifying the Tenant of such transfer.  Upon completion of such transfer and subject to (i) the Landlord having informed the Tenant in writing of any deduction
which the Landlord has made from the said deposit and (ii) the assignee having given a written undertaking to the Tenant undertaking to hold the said deposit or such part hereof
transferred to the assignee and to refund the same to the Tenant in accordance with the terms and conditions hereof, the Landlord shall notwithstanding anything contained herein
to the contrary be released from any further liability and all obligations to return the said deposit or any part thereof to the Tenant.  In addition and without prejudice
 to the generality of the foregoing, the Landlord may but is not obliged to request the Tenant and Tenant shall upon request by the Landlord at the Tenant’s costs and expenses
 sign and execute such document as may be reasonably required by the Landlord to release the Landlord from all claims liabilities demands and proceedings in respect of the refund of the said deposit or any part thereof.

	Re-development

	(e)

The Landlord shall enter into a contract for the sale of the said building or
 any part thereof or the said Premises or any part thereof or shall resolve to redevelop the said building or any part thereof whether wholly by demolition and rebuilding
or otherwise or partially by renovation, refurbishment or otherwise which shall include or affect the said Premises or any part thereof (a copy of a Resolution of the
 Landlord’s Board of Directors certified true and correct by the Landlord’s Secretary) shall be conclusive evidence of the aforesaid contract or resolution,
 as the case may be and be binding on the Tenant, then in any of such events the Landlord shall be entitled to terminate this Agreement by giving six calendar months’
 notice in writing to the Tenant and immediately upon the expiration of such notice this Agreement shall cease and determine but without prejudice to the rights and remedies
 of either party against the other in respect of any antecedent claim or breach of any of the agreements stipulations terms and conditions herein set out.  Save as hereinbefore
 expressly provided the Tenant shall have no claim against the Landlord or any other party(ies) for any loss, compensation, damages, costs or expenses arising out of or in connection
 with the aforesaid or the Landlord’s exercising its rights under this clauses.

	Claim for all expenses and legal charges in regard to any payment in arrears

	(f)

The Tenant shall reimburse or pay to the Landlord all expenses and charges (including legal costs on a solicitor and client basis) incurred by the Landlord in connection with the demand of payment of the arrears of the said rent, the maintenance and management fees, the rates, air-conditioning charges and all other outgoings payable by the Tenant hereunder and enforcement of any other provisions and terms herein in Court of otherwise.

	Condition and state of the said Premises

	(g)

The said Premises shall be handed over to the Tenant with the standard fitting-out
 supplied by the Landlord.  No warranty whatsoever is given by the Landlord on the physical state and condition of the said Premises or any part thereof or the
installation, additions, alterations, fittings and fixtures therein.  The Tenant expressly acknowledges and confirms that he has inspected the said Premises and the
installation, additions, alterations, fittings and fixtures therein prior to entering into this Agreement and had satisfied himself in all respects as to the area size
suitability and condition in relation to the aforementioned or any other matter pertaining to the tenancy or relating to the installation, additions, alterations,
 fittings and fixtures in the said Premises.  The Tenant shall take up the said Premises on an “as is” basis including all fixtures, fittings, additions, erections
and alteration made or installed upon or in the said Premises prior to the commencement of the said term.

	House Rules and Regulations

	(j)

Such Rules and Regulations shall be in addition to and not in substitution of the terms and conditions in this Agreement.  In the event of conflict between the terms and conditions set out in such Rules and Regulations and the terms and conditions of this Agreement, the Landlord or the Manager of the Building shall have the absolute discretion to elect as to which set of terms and conditions are applicable.

	 
	 

	Takeover of Fixtures and Fittings

	6.

The Tenant agrees to (if applicable) takeover the fixtures and fittings including the glass or wooden door(s) left by the previous tenant and shall at its own cost be solely responsible for their repairing and maintenance and to comply with the regulations and ordinance of the concerned government authority including replacement of the existing glass door to a wooden door.  The Tenant shall be fully responsible for reinstating the said Premises to its original states and making good any damages to the satisfaction of the Landlord (if required by the Landlord) upon the expiration or sooner determination of this Tenancy Agreement.

		
	 
	 

	Applicable Law

	7.

This Agreement shall be construed and take effect in accordance with the Laws of The Hong Kong Special Administrative Region.

	 
	 

	Marginal Notes

	8.

The marginal notes are intended for guidance only and do not form 

part of this Agreement nor shall any of the provisions in this   Agreement be construed or interpreted by reference thereto or in   any way affected or limited thereby.

THE FIRST SCHEDULE ABOVE REFERRED TO

Part 1- The Landlord

LANDLORD

:

THE CHUNG SHUN LAND INVESTMENT COMPANY LIMITED whose registered office is situate at Unit 2203, 22nd Floor, 88 Hing Fat Street, Causeway Bay, Hong Kong acting by their agent MUTUAL PROPERTY MANAGEMENT COMPANY LIMITED whose registered office is situate at Unit 2103, 21st Floor, 88 Hing Fat Street, Causeway Bay, Hong Kong 

Part 2 – The Tenant

TENANT

:

Artifical Life Asia Limited whose registered address is situate at 26th Floor, 88 Hing Fat Street, Causeway Bay, Hong Kong

(Business Registration Certificate No. 31171834-000-07-09-9)

Part 3 – The said Premises

PREMISES

:

ALL THAT the of 26th FLOOR of No. 88 HING FAT STREET, HONG KONG (“the Building”) erected on ALL THAT piece of parcel of ground registered in the Land Registry as THE REMAINING PORTION OF INLAND LOT NO.2234

Part 4 – The said Term

TERM

:

Two-Year Fixed Term commencing on 1st January 2010 

Part 5 – The said Rent

RENT

:

HONG KONG DOLLARS ONLY (HK$69,300.00) per month (exclusive of government rates, management fee, and air-conditioner fee) payable in advance on the 1st day of each successive calendar month.

MANAGEMENT 

:

HONG KONG DOLLARS ONLY   (HK$9,660.00) per month

FEE

AIR-CONDITIONING:

HONG KONG DOLLARS ONLY (HK$12,180.00) per month

CHARGES

Part 6 – The said Deposit

RENTAL DEPOSIT:

HONG KONG DOLLARS TWO HUNDRED SEVENTY THREE THOUSAND  AND  FORTY TWO HUNDRED ONLY  (HK$273,420.00)

Part 7 – The said User

USER

:

For commercial use only

Part 8 – The Special Conditions

1

Subject to the provisions of Clause 2ss herein, the Tenant shall only trade his business at the said Premises in which he is sole proprietor or major partner and he shall notify the Landlord in writing the said business name within one month from the date hereof.

2

Should the tenant be found repeated breach of the material terms and conditions as stipulated in this tenancy agreement, the Landlord is entitled to terminate this agreement at any time without any compensation to the tenant during the tenancy

3

The said Premises is let on an “as is” condition together with the Landlord’s fixtures. No additional work shall be provided by the Landlord.

4

The Landlord shall have no objection to any lawful business purpose for which the said Premises shall be used by the Tenant but the Landlord does not warrant that the said Premises are fit for any particular purpose.  The Tenant shall be responsible for obtaining all necessary permits or licences from the appropriate Government authorities for the user of the said Premises and shall at all times comply with all rules and regulations laid down by such authorities for giving such permits and the Tenant shall indemnify the Landlord from and against all proceedings action fines damages claims and demands whatsoever which may arise as a result of the non-compliance by the Tenant of such rules and regulations or any of them.

5

At the expiration or sooner determination of the tenancy at the Tenant’s own cost reinstate and restore the same to the plan and design as if such addition or alteration (or such of them as may be specified by the Landlord) has not been made and make good all damages thereto to the satisfaction of the Landlord.

6

In the event of the said Premises hereby resumed by the Government
or if the said Premises shall be required by the Government for any other purpose whatsoever, then upon the issue of any notice of resumption by the Government
or upon any notice being published in the Government Gazette that (1) the said Premises shall be resumed or (2) that the said Premises shall be so required by
the Government, then this Agreement shall forthwith be terminated and the Tenant shall vacate the said Premises forthwith whereupon the deposit payable hereunto
shall be returned to the Tenant but without compensation interest or costs and the Tenant shall not have any claim against the Landlord for such early determination
of this Agreement  BUT  without prejudice to the right of action of the Landlord in respect of any breach of the Tenant's terms and conditions herein contained
and on the Tenant's part to be observed and performed.

7

Should the said Premises be declared or condemned dangerous by the Building Authority or any other competent Government Authority during the continuance of the term hereby created, the Tenant shall forthwith vacate the said Premises and waive all his rights and privilege to any claim or demand for damages or compensation which may be afforded to the Tenant by any Ordinance in force and in particular the Demolished Building (Re-development of Sites) Ordinance Cap.337.

8

Tenant shall comply with the Fitting Out and House Rules of the Building. 

9

So far as permitted by law, the Landlord and its servants, agents, visitors, invitees and/or licensees shall not in any circumstances be liable or responsible to the Tenant, its servants, agents, visitors, invitees and or licensees or any of them and/or any other person whomsoever for any loss, injury, damage, nuisance, annoyance and/or inconvenience which may be sustained by the Tenant, its servants, agents, visitors, invitees and licensees or any of them and/or any other person whomsoever (whether personally or to their respective properties) notwithstanding any provision to the contrary.

10

The Tenant acknowledge that Mutual Property Management Co. Ltd. (“Mutual”) is the Landllord’s agent in respect of this tenancy and the Tenant agrees and for the avoidance of doubt, hereby confirms that Mutual shall be entitled to the benefit of all provisions for the benefit of the Landlord and Mutual shall be entitled to enforce all provisions enforceable by the Landlord under this Tenancy Agreement.

11

For any decoration regarding the captioned premises, Tenant is required to submit the Application Form for decoration to the Building Manger for Landlord’s approval before any commencement of works, such approval not to be unreasonably withheld.

12

The Tenant shall be entitled to put up a signboard at its own cost bearing the name(s) “Artificial Life Asia Limited” which name(s) shall also be displayed at the directory board(s) on the main lobby and the 26th Floor of the Building.  Provided that the Tenant shall procure the company namely “Artificial Life Asia Limited” to observe and comply with the terms of this Agreement.  The Tenant shall indemnify the Landlord for any costs expenses or damages which maybe incurred or suffered by the Landlord in the event that the said company contravenes any provision of this Agreement.

AS WITNESS  the hands of the parties hereto the day and year first above written.

SIGNED  by  /s/ Timothy Lam Jr. 

for and on behalf of the Landload

Mutual Property Management Co., Ltd.

SIGNED  by  /s/ Eberhard Schoneburg 

for and on behalf of the Tenant

Artificial Life Asia Ltd.

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