Document:

strc-ex1017_77.htm

 

Exhibit 10.17

 

Lease Agreement

THIS LEASE AGREEMENT (this “Lease”) is made and entered into effective 21 July 2015, by and between B.F. ENTERPRISES, LLC, a Utah limited liability company whose address is 1948 East Michigan Avenue, Salt Lake City, Utah 84108 (“Landlord”), and SARCOS CORP., a Utah corporation whose address is 2458 Promontory Drive, Salt Lake City, UT 84109 (“Tenant”).

R E C I T A L S:

A.Landlord holds a leasehold interest in certain ground (the “Ground”), and is the owner of the buildings and improvements (the “Building”) now located on the Ground, pursuant to a certain “Lease Agreement” (the “Ground Lease”) dated 22 June 1979 between University of Utah, as lessor, and Landlord, as lessee.  The Ground, as improved with the Building, is referred to herein as the “Premises.”

B.Between 1 July 1994 (the “Occupancy Date”) and 30 June 2014, Tenant’s current or former related entities or affiliates (including Sarcos Incorporated, Sarcos Services L.C. and Raytheon Company) leased the Premises from Landlord pursuant to a series of written lease agreements.  The Premises have been vacant since 30 June 2014.

C.Tenant desires to re-lease the Premises from Landlord, and Landlord is willing to re-lease the Premises to Tenant, on the terms and conditions hereinafter set forth.

D.The parties intend to set forth herein all of the terms and conditions relating to the lease of the Premises, and to supersede hereby and consolidate herein all prior agreements and negotiations, oral and/or written, between them regarding the Premises.

A G R E E M E N T:

NOW THEREFORE, in consideration of the premises, the mutual covenants and promises herein set forth, and for other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE 1 
PREMISES

Section 1.1Description of the Premises.  The Premises consist of the Ground, the Building (containing approximately 26,770 square feet of usable floor space) and other improvements currently situated thereon.  The Premises are located at approximately 360 Wakara Way in the University Research Park project (“Research Park”) in Salt Lake City, Salt Lake County, Utah.  The Premises are more particularly described on the exhibit attached hereto.

Section 1.2Agreement to Let.  Landlord hereby demises, leases and lets to Tenant, and Tenant hereby takes, leases and receives from Landlord, the Premises on the terms and conditions described in this Lease.

 

 

Article 2
LEASE TERM

Section 2.1Lease Term.  This Lease shall be effective and shall be a binding and enforceable agreement upon the date of its execution, and each of the parties shall immediately have all rights and remedies at law for any breach or anticipatory breach hereof.  The term (the “Lease Term”) of this Lease, and Tenant’s obligation to pay Rent, shall commence (the “Commencement Date”) at 12:01 a.m. on 1 August 2015.  The initial Lease Term shall terminate at 11:59 p.m. on 31 July 2018 (the “Termination Date”).

Section 2.2Option to Extend.  Landlord grants to Tenant four (4) consecutive options (each, an “Option”) to extend the Lease Term for an additional period of three (3) years (as to each of the first three Option periods) and one (1) year and eleven (11) months (as to the fourth Option period) (each an “Extended Term”) beyond the original Termination Date, or the expiration of the prior Extended Term, as the case may be, provided that Tenant is not in default hereunder at the time each such Option is exercised or at the commencement of such Extended Term.  In no event shall the Lease Term, including any Extended Term, extend beyond 30 June 2029.  Subject to section 3.1 below, each Extended Term shall be on the same terms and conditions as the initial three years of the Lease Term.  If Tenant elects to exercise the Option for the Extended Term, Tenant shall do so by written notice to Landlord as provided in section 17.1 at least one hundred eighty (180) days prior to the Termination Date or the expiration of then applicable Extended Term.  If Tenant fails to timely exercise an Option for an Extended Term, Tenant’s right to exercise any and all remaining Options for any and all remaining Extended Terms shall be deemed automatically, irrevocably terminated.

Section 2.3Holding Over.  If at the expiration or earlier termination of this Lease Tenant remains in possession of all or part of the Premises for any reason whatever, with or without the express or implied consent of Landlord, the tenancy by which Tenant shall hold the Premises shall be for month-to-month only and shall not be a renewal or extension of this Lease for any future term.  In such case, and in the absence of a written agreement to the contrary, the monthly Rent due under this Lease shall be one and one-quarter (125%) the monthly Rent as of the Termination Date, and such month-to-month tenancy shall be subject to every other term, covenant and condition contained in this Lease.

Article 3
RENT AND PAYMENTS

Section 3.1Monthly Rent.  During the first year of the Lease Term, Tenant shall pay to Landlord as rent (“Rent”) for the Premises the amount of Twenty Thousand Seventy-seven and 50/100ths Dollars ($20,077.50) per month.  Thereafter, the monthly Rent shall increase by $1,115.42 during each of the succeeding five years of the Lease Term, so that the monthly Rent during the second year of the Lease Term shall be $21,192.92; the monthly Rent during the third year of the Lease Term shall be $22,308.34; the monthly Rent during any fourth year of the Lease Term shall be $23,423,76; the monthly Rent during any fifth year of the Lease Term shall be $24,539.18; and the monthly Rent during any sixth year of the Lease Term shall be $25,654.60.  Commencing on 1 August 2021 and continuing thereafter on each anniversary of the Commencement Date throughout the remainder of the Lease Term (i.e., as further extended 

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through Tenant’s exercise of additional Options for Extended Terms), the monthly Rent to be paid by Tenant during the following Lease year, if any, shall be increased (but not decreased) by multiplying $25,654.60 by a fraction, the numerator of which is the Consumer Price Index (defined below) for the immediately prior month (which would be July 2021 for the first such adjustment; July 2022 for the second such adjustment; etc.), and the denominator of which is the Consumer Price Index for July 2020.  If the Consumer Price Index for the month immediately preceding such anniversary is not then available, then Landlord may at its option elect to use the most recent Consumer Price Index.  As used herein, “Consumer Price Index” shall mean the “Consumer Price Index - U.S. City Average For All Items For All Urban Consumers (1982-84=100)” as published by the United States Department of Labor, Bureau of Labor Statistics.  Should the Bureau of Labor Statistics discontinue publication of said index, or publish the same less frequently, or alter the same in some other manner, then Landlord shall adopt a substitute index or similar procedure which reasonably reflects and monitors consumer prices.  Further, if the base year “(1982-84=100)” or other base year used in computing the Consumer Price Index is changed, the figures used in making the Rent adjustments required herein shall be changed accordingly so that all increases in the Consumer Price Index are taken into account notwithstanding any such change in the base year.

The monthly Rent payments shall be payable in advance on the first day of each calendar month throughout the Lease Term.  All Rent payments shall be in lawful money of the United States of America and shall be paid without deduction, offset, prior notice or demand, at Landlord’s address as set forth in section 17.1 below, or at such other place as Landlord may from time to time designate in writing.  If the Commencement Date is not the first day of a month or if the Termination Date is not the last day of a month, then Tenant shall pay Landlord a prorated installment at the then current rate for the fractional month during which this Lease commences or terminates.

Section 3.2Past Due Rent and Other Charges.  If Tenant fails to pay any Rent within ten (10)days after the date that the same is due and payable or fails to pay other charges that are due under the terms of this Lease within ten (10)days after receipt of prior written notice from Landlord, then such unpaid amounts shall bear interest from the due dates thereof to the date of payment at the rate of twelve percent (12%) per annum.  In addition, if any monthly Rent payment is not received by Landlord by the tenth (10th) day after the date on which it is due, Tenant shall pay Landlord a late charge that is equal to $500.00.  Any interest and late charges that are payable under this section 3.2 shall be deemed to be additional Rent due under this Lease.

Section 3.3Accord and Satisfaction.  No payment by Tenant or receipt by Landlord of a lesser amount than the monthly Rent provided for in this article 3 shall be deemed to be other than on account of the earliest Rent that is then due and owing hereunder.  No endorsement or statement on any check or any letter accompanying any check or payment as rent shall be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord’s right to recover the balance of such Rent or pursue any other remedy provided in this Lease.

Section 3.4Security Deposit.  Upon execution and delivery of this Lease by both Tenant and Landlord, Tenant shall immediately deposit with Landlord a payment in the amount of 

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Twenty Thousand Dollars ($20,000.00).  That sum shall be held by Landlord as a security deposit (the “Security Deposit”) according to the following terms:

a.Purpose.  Landlord shall hold the Security Deposit as security for Tenant’s full and timely performance of its obligations under this Lease.  The rights of Landlord against Tenant for a breach of this Lease shall in no way be limited or restricted by the Security Deposit.  Instead, Landlord shall have the absolute right to pursue any and all other available remedies to protect its interests hereunder in addition to its rights with respect to the Security Deposit.

b.Holding.  The Security Deposit shall not bear interest, and Landlord may commingle the Security Deposit with Landlord’s other funds.

c.Offset.  Upon the termination of this Lease, Landlord shall inspect the Premises to insure that Tenant returns the Premises in the condition required by Article 12 hereof If the Premises are not returned to Landlord in the condition required by Article 12, Landlord shall, within thirty (30) days after termination of the Lease (or 30 days after Tenant’s final departure from the Premises, if Tenant “holds over” after the Termination Date), provide Tenant with a list of all such deficiencies (the “Repair Notice”).  Upon the receipt of the Repair Notice, Tenant shall have the right to either correct the deficiencies to the reasonable satisfaction of Landlord within fifteen (15) days of receipt of Landlord’s notice or direct Landlord to use to the Security Deposit, or a portion thereof, to correct such deficiencies.  The provisions of this paragraph shall not limit or restrict Landlord’s right to use the Security Deposit as security for Tenant’s full and timely performance of its obligations under this Lease during the Lease Term (including, without limitation, the obligation to timely pay Rent and other payments due hereunder).  If Landlord fails to deliver the Repair Notice within thirty (30) days after termination of this Lease (or 30 days after Tenant’s final departure from the Premises, if Tenant “holds over” after the Termination Date) as required by this subparagraph 3.4(c), then Landlord shall be deemed to have accepted the condition of the Premises and shall be obligated to return the full Security Deposit to Tenant.

d.Refund.  Landlord shall timely refund to Tenant any portion of the Security Deposit that remains after Landlord deducts its damages therefrom as described in section 3.4(c) hereof.  Tenant shall notify Landlord within fifteen (15) days after the termination of this Lease of the location where that payment should be delivered.

e.No Right by Tenant to Use Security Deposit.  Nothing that is contained in this Lease shall give Tenant the right to treat or use the Security Deposit as payment of any amounts that Tenant owes to Landlord hereunder.  Landlord shall have the sole option to make such applications, if any.

f.Personal Obligation of Landlord; Pertinent to the Premises.  Landlord’s obligation to refund the Security Deposit shall be a personal obligation and Landlord shall not be relieved from such obligation until and unless Landlord’s successor-in-interest has agreed in writing to assume Landlord’s obligations with respect to the Security Deposit.  The Security Deposit shall be deemed appurtenant to the Premises.

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Article 4
IMPROVEMENTS AND FIXTURES

Section 4.1Tenant’s Improvements.  Tenant may, with Landlord’s prior written consent (which consent shall not be unreasonably withheld or delayed), but at Tenant’s sole cost

and expense, in a good and workmanlike manner make any other alterations and repairs (collectively, “Improvements”) to the Premises that Tenant reasonably may require for the conduct of its business.  No such alterations or repairs shall materially alter the basic character, or weaken, any part of the Premises.

Section 4.2Procedures.  Tenant shall comply with the following provisions in connection with any work on the Premises required or permitted under this article 4:

a.Plans and Specifications.  If Tenant desires to undertake the construction (the “Construction”) of Improvements to the Premises, Tenant shall inform Landlord in writing of Tenant’s intentions not later than ten (10) days before the Construction is to commence.  Such notification shall be accompanied by reasonably detailed plans and specifications (the “Plans and Specifications”) in sufficient detail to allow Landlord to evaluate the proposed changes to the Premises to be effected by such construction.  Landlord shall have the right to require such reasonable modifications and changes to the Plans and Specifications as shall be necessary (in Landlord’s judgment) to preserve and protect the nature and the structural integrity of the Premises.

b.Governmental Approvals.  Tenant shall, at its sole expense, obtain all necessary governmental approvals, including any conditional use and building permits, in connection with Construction of the Improvements.

c.Construction.  All Construction undertaken by or on behalf of Tenant on the Premises shall be performed by reputable, licensed workmen.  Tenant shall undertake to inform each such workman that Tenant is the lessee only of the Premises and, if required by Landlord, shall require a signed acknowledgment by each such workman to that effect.

d.Status Reports; Inspections.  Tenant shall inform Landlord on a regular basis (as reasonably requested by Landlord) during any time period when Construction is occurring on the Premises, of the status of such Construction and the projected timetable for completion of the remaining phases of the Construction.  Landlord, and/or its agents or representatives, shall have the right at any time during normal business hours and upon reasonable prior notice to inspect the status of Construction on the Premises accompanied by an authorized agent of Tenant.

e.Liens.  Tenant shall maintain the Premises free of all mechanics’, materialmen’s or other liens relating in any way to Construction carried on by or on behalf of Tenant on the Premises.

f.Ownership of Improvements.  Any alterations or improvements to the Premises, including partitions, all electrical fixtures, lights and wiring, installed or existing on the Premises shall, at the option of Landlord, become the property of Landlord at the expiration or sooner termination of this Lease.  Should Landlord request Tenant to remove all or any part of the 

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above mentioned items, Tenant shall do so prior to the expiration of this Lease and repair the Premises as described below.

g.ADA Compliance.  Except as agreed by Landlord and Tenant in writing, all Construction of the Improvements shall comply with Title III of the Americans with Disabilities Act, 42 U.S.C. § 12181-12213; 42 U.S.C. §§ 225 and 661 and all rules and regulations adopted or enacted in furtherance thereof (collectively, the “ADA”).

Section 4.3Trade Fixtures.  Tenant shall be entitled to use and keep on the Premises any trade fixtures, personal property, portable interior partitioning, furniture and equipment necessary and appropriate for the conduct of Tenant’s business, subject to the following conditions:

a.Removal of Trade Fixtures During Lease Term.  At any time during the Lease Term while Tenant is not in default, Tenant may remove from the Premises trade fixtures, personal property, portable interior partitioning, furniture and equipment that is practically removable.

b.Removal of Trade Fixtures Upon Termination of Lease.  At the termination of this Lease, and if Tenant is not then in default of any covenants or conditions of this Lease, then Tenant shall be allowed to remove all or any of such trade fixtures, personal property, portable interior partitioning, furniture and equipment that is practically removable, provided that all marring or defacing of, or damages to, the Premises that occurs during such removal shall be promptly repaired at Tenant’s expense in a competent, workmanlike and finished manner.

Article 5
TAXES, ASSESSMENTS AND UTILITIES

Section 5.1General Statement of Responsibility.  Except as otherwise provided in this Lease, (a) it is the intent of Landlord and Tenant that the Rent payments due hereunder be absolutely net to Landlord, so that this Lease shall yield net to Landlord the Rent as provided herein; and (b) all costs and expenses relating to the Premises shall be paid by Tenant and Landlord shall be indemnified by Tenant from and against the same.  Nothing herein contained, however, shall be deemed to require Tenant to pay or discharge any liens or mortgages or encumbrances of any character whatsoever which may presently exist or hereafter be placed on the Premises by the act or neglect of Landlord.

Section 5.2Obligation to Pay Taxes and Assessments.  As part of the consideration for this Lease, and in addition to the monthly Rent payments described in article 3 above, Tenant shall pay, in a timely fashion, throughout the entire Lease Term: (a) all real estate taxes levied against the Premises; and (b) all special or general assessments, payable during the Lease Term, against the Premises.  Landlord will bill Tenant for such taxes and assessments as they become due or, at Landlord’s option, will forward all relevant tax notices to Tenant.  Within twenty (20) days after the due date of such taxes or assessments, Tenant shall provide Landlord with proof of payment in such form as reasonably may be required by Landlord.  Notwithstanding the foregoing, Tenant shall not be chargeable with nor obligated to pay any income, inheritance, devolution, gift, franchise, corporate, gross receipts, capital levy or estate taxes with respect to Landlord.  Instead, 

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Landlord covenants and warrants to discharge the same at its own cost and expense so as to keep the Premises free of all liens.  Tenant shall be required to pay all taxes, governmental impositions and assessments that are properly known as real estate taxes or real estate assessments and are assessed against the Premises, as well as Tenant’s own personal property taxes, sales taxes, business license fees, and all other taxes, fees and charges incurred by Tenant pursuant to its use of the Premises.  Tenant may at any time during the Lease Term, in its own name, and, if the occasion requires, in Landlord’s name and under its authority, file an application for reduction in assessed values of the Premises with the property county, city or state authorities, and Landlord will cooperate and assist in such action.  All expenses of both Landlord and Tenant with respect to and resulting from such applications shall be assumed by Tenant.  Tenant shall be entitled to any refunds of taxes paid by Tenant.

Section 5.3Apportionment at Beginning and End of Lease Term.  The real estate taxes, governmental impositions, special assessments and general assessments for the respective tax years in which this Lease shall commence and terminate, and whether or not the same have become liens upon the Premises, shall be apportioned at the Commencement Date and at the Termination Date, respectively, so that Tenant shall pay only those portions thereof which correspond with the portions of said respective tax years as are within the Lease Term.

Section 5.4Utilities.  Tenant acknowledges that the Premises are supplied with adequate facilities for the delivery and distribution to the Premises of water, electricity, natural gas, telephone services and the removal of sewage.  Throughout the Lease Term, Tenant shall timely pay all charges and expenses for utility services relating to the Premises including, but not limited to, expenses and charges for natural gas, electricity, water, garbage removal, telephone services and sewer services.  Except as caused by Landlord’s negligence or intentional acts, Landlord shall not be liable for any failure or interruption of any such utility services, and no such failure or interruption shall entitle Tenant to be relieved of its obligations under this Lease.

Section 5.5Electrical Overload.  If Tenant installs upon the Premises any electrical equipment or appliance which does, or may, overload the electrical lines of the Premises, Tenant shall immediately inform Landlord of that fact and shall, at its own expense, make whatever changes are necessary to comply with the requirements of insurance underwriters and any governmental authority having jurisdiction; provided, however, that nothing herein contained shall be deemed to constitute Landlord’s consent to such overloading.

Section 5.6Right to Cure.  If at any time either Tenant or Landlord fails to pay any of the taxes, impositions, assessments, charges or expenses mentioned above in accordance with the provisions of this article 5, the other party shall have the right to pay the same and to collect such amount(s), together with interest thereon at the rate of twelve percent (12%) per annum.  If Tenant fails to pay those amounts to Landlord within fifteen (15) days after Landlord’s written demand, Tenant shall be deemed to be in default under this Lease.

Article 6
LIABILITY INSURANCE; INDEMNIFICATION

Section 6.1Obligation of Tenant to Maintain Insurance.  Throughout the Lease Term, Tenant shall obtain, keep and maintain in full force and effect for the mutual benefit of 

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Landlord, Tenant, and such additional individuals as may be designated in writing by the parties, a broad form comprehensive liability insurance policy or policies (hereinafter collectively referred to as the “Liability Policy”) against claims for damage or injury to persons or property arising out of the use or occupancy of the Premises.  The Liability Policy shall be maintained on the minimum basis of Two Million Dollars ($2,000,000) for damage to property, Two Million Dollars ($2,000,000) for bodily injury to or death of any one person in any one accident, and an aggregate of Four Million Dollars ($4,000,000) for bodily injury to or death of more than one person in one accident.  If in the future Landlord reasonably determines that the insurance limit provided for in this section 6.1 is insufficient, either as a result of inflation or as a result of an increase in recoveries by plaintiffs in the types of litigation against which the Liability Policy provides protection, Tenant agrees to increase the limits of the Liability Policy to reasonable higher levels to be determined by mutual agreement between the parties.  The Liability Policy may provide for a deductible not in excess of Five Thousand Dollars ($5,000.00) irrespective of the number of persons, parties or entities involved.  Any deductible under the Liability Policy shall be paid by Tenant.  A duplicate original, certificate or binder of the Liability Policy shall be furnished to Landlord on or before the Commencement Date and thereafter promptly on Landlord’s demand.  The Liability Policy shall contain an affirmative statement by the insurer that such policy shall not be canceled without twenty (20) days’ prior written notice to Landlord.

If Tenant fails to cause the Liability Policy to be written and/or to pay the premiums for the same and deliver all such certificates of insurance or duplicate originals thereof to Landlord within the time provided for in this Lease, Landlord shall nevertheless have the right, without being obligated to do so, to effect such insurance coverage and pay the premiums therefor.  All such premiums paid by Landlord, together with interest thereon at the rate of twelve percent (12%) per annum, shall be repaid to Landlord on demand as additional Rent hereunder, and Tenant’s failure to repay the same shall constitute a default under this Lease.

Landlord may, at its option, obtain the Liability Policy.  If Landlord so acts, Tenant shall pay the cost of the Liability Policy within ten days after receipt of bills therefor from Landlord.  Landlord may, at its option, bill Tenant monthly for one-twelfth of the annual premium for the Liability Policy based on the most recent available premium notice(s), with reconciliation of such payments made at least annually based on the actual cost of the Liability Policy during the applicable time period.

Section 6.2Release from Liability.  Subject to the provisions of this Lease, throughout the Lease Term Landlord shall not be liable or responsible for damages for any personal injury or injuries, death(s), damages or losses to any person(s) or property that may be suffered or sustained by Tenant or its subtenant(s), if any, or any of their respective agents, servants, employees, patrons, customers, invitees, visitors, licensees and concessionaires or by any other person or persons in, on or about the Premises or any part thereof, arising from Tenant’s failure to keep or cause to be kept the Premises in good condition and repair or arising from the use or occupancy of the Premises by Tenant or its subtenant(s) or any of their respective agents, servants, employees, patrons, customers, invitees, visitors, licensees or concessionaires.

Section 6.3Indemnification.  Tenant shall indemnify and hold Landlord harmless from and against any and all claims, actions, liabilities, costs and expenses (including attorneys’ fees) for damages, losses, injuries or death to persons or damages or losses to property which may be 

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imposed upon or incurred by or asserted against Landlord as to any of the matters, provisions and conditions set forth in this article 6; provided, however, that such indemnification shall not extend to any misconduct by Landlord, its agents or its employees that is either negligent or intentional in nature.

Section 6.4Subrogation.  Landlord and Tenant hereby waive the right to maintain any action against the other for damages arising out of the other’s negligence or otherwise tortious acts or omissions, but only to the extent that the costs of repairing such damage is covered by insurance.  Each policy of such insurance shall, if obtainable without additional expense, either: (a) contain a waiver of subrogation by the insurer against Landlord or Tenant, as the case may be, or (b) include the name of Landlord or Tenant, as the case may be, as an additional insured but not a party to whom any losses shall be payable.

Article 7
MAINTENANCE AND USE

Section 7.1Acceptance of Premises.  Tenant has inspected the Premises and accepts the Premises in its present condition.

Section 7.2Tenant’s Maintenance and Repair Obligations.  Throughout the Lease Term, Tenant shall at its own cost repair and maintain in good, safe, clean, lawful and attractive condition (at least comparable to other properties in Research Park) the Premises and every part thereof.  By way or example and not by way of limitation, and subject only to section 7.5 below, Tenant shall at all times maintain in a clean, orderly and attractive fashion, free from trash, garbage, refuse, insects, rodents, vermin, and other pests, all exterior entrances; adjoining sidewalks; the roof of the Building; all electrical, plumbing, air-conditioning, and heating systems (including quarterly servicing/maintenance by a licensed HVAC contractor reasonably acceptable to Landlord) on the Premises; the parking lot and drive areas on the Premises, interior and exterior painting of the Building; all glass in the Building, except glass breakage due to latent defects (and shall obtain at its sole cost insurance coverage for damage to any glass in the Building); all window moldings, partitions, walls, roof, floor coverings, doors; and all landscaped and other outside areas of the Premises (including, without limitation, cutting and watering lawns, trimming and watering shrubs, fertilizing lawns, shrubs and growing areas, weeding all growing areas and removing snow from all sidewalks, drive areas and parking lots on the Premises), except as detailed in section 7.5 below.

Section 7.3(This section is intentionally omitted).

Section 7.4Landlord’s Right to Cure.  If Tenant refuses or neglects to repair and/or to maintain the Premises as required in Section 7.2 in a manner reasonably satisfactory to Landlord within ten (10)days after Landlord’s written notice to do so (or such additional time as it takes Tenant to complete such repair or maintenance, provided Tenant is diligently pursuing the repair or maintenance), Landlord may, at its sole option, enter upon the Premises, perform such repairs or maintenance, and charge to Tenant the actual costs thereof plus twelve percent (12%) thereon for overhead and supervision, which Tenant shall pay within fifteen (15) days after receipt of a bill therefor.  Nothing herein contained shall imply any duty on the part of Landlord to do any work required to be performed by Tenant, nor shall it constitute a waiver of Tenant’s default in failing 

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to do the same.  No exercise by Landlord of any rights herein reserved shall entitle Tenant to any damage for injury or inconvenience occasioned thereby nor to any abatement of Rent.

Section 7.5Landlord’s Maintenance and Repair Obligations.  Landlord shall only be responsible for maintaining the structural sufficiency of the original construction of the Building (i.e., foundation, exterior walls and interior bearing walls and the structural portions of the roof and the floor of the Building) and for any repairs of the Building which may be occasioned by a structural failure or latent structural defect that is attributable to the original construction of the Building.  Major repairs to (a) the HVAC system costing $5,000.00 or more per occurrence, or (b) to the roof, the electrical system or the plumbing system of the Building costing $2,000.00 or more per occurrence, shall be paid by Landlord.  If Landlord fails to commence and diligently prosecute such maintenance, repairs and replacements as required by this section 7.5 within a reasonable time after having received written notice from Tenant of the need for such maintenance, repairs or replacements, then Tenant may, upon at least five (5) additional days’ prior written notice to Landlord from Tenant, have any reasonably necessary work done by a qualified contractor, selected after receiving three bona fide bids, and deduct the costs of said work from the Rent.

Notwithstanding the foregoing, however:

a.Damage Caused by Tenant.  Landlord shall not be obligated to perform any of the foregoing repair obligations to the extent that the same are caused by the act, or the failure to comply with a duty to act, of Tenant, its employees, agents and/or invitees; and

b.Notice to Landlord.  Landlord shall not be obligated to repair any such damage until Tenant gives written notice of a need for repair, and after such notice is given Landlord shall be given reasonable time in which to make such repairs.

Section 7.6Use.  Tenant shall use the Premises for all uses permitted by applicable zoning and restrictive covenant regulations.  Tenant shall comply with all rules and regulations binding on property located in Research Park, as such rules and regulations may be changed from time to time.  Tenant shall not use the Premises for any other purpose without Landlord’s prior written consent.

Section 7.7Waste and Nuisance.  Tenant shall not commit any waste upon the Premises and shall not conduct any business activity on the Premises that is or becomes unlawful, prohibited or a nuisance or that may cause damage to Landlord, to occupants of the vicinity or to other third parties.

Section 7.8Compliance with Laws.  Tenant shall comply with and abide by all laws, ordinances, rules and regulations of all municipal, county, state and federal authorities that are now in force or that may hereafter become effective with respect to the use and occupancy of the Premises.

Section 7.9Right to Enter.  Landlord, its agents and its other representatives shall have the right when accompanied by an authorized agent of Tenant, without abatement of rent, to enter upon the Premises or any part thereof at reasonable hours upon reasonable advance notice to Tenant, while accompanied by Tenant’s authorized agent, for the purposes of inspecting the same 

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and making such repairs and alterations to the Premises as may be necessary for the maintenance, safety and repair thereof.

Section 7.10No Privity.  Tenant acknowledges that Landlord’s right to occupy the Ground arises pursuant to the Ground Lease, a copy of which has been made available for Tenant’s review.  Nothing contained herein shall be construed to create privity of estate or contract between Tenant and the lessor under the Ground Lease.  Tenant shall not do or permit to be done any act or thing which will constitute a breach or violation of any of the terms, covenants, conditions or provisions of the Ground Lease.  Landlord shall have no liability to Tenant for any matter involving in any way the Ground Lease for which Landlord does not have at least co-extensive rights as lessee against the lessor under the Ground Lease.

Article 8
SUBLEASES, ASSIGNMENTS AND TRANSFERS

Section 8.1Subleases and Assignments.  Tenant shall have the right to assign this Lease or sublet the whole or any portion of the Premises to any related company and shall provide Landlord with written notice of such assignment or subletting.  Tenant shall not otherwise assign this Lease or sublet the whole or any portion of the Premises without first obtaining the written consent of Landlord, which consent shall not be unreasonably withheld or delayed.  Notwithstanding Landlord’s consent to any such assigning or subleasing, Tenant shall continue to be responsible for payment of rent and performance of all obligations imposed upon Tenant under this Lease unless Tenant is specifically released from such obligations in a writing signed by Landlord.

Section 8.2Successors Bound.  The covenants and agreements of this Lease shall inure to the benefit of and shall be binding upon Landlord and Tenant and their respective successors and assigns.  No rights, however, shall inure to the benefit of any assignee or subtenant of Tenant unless the assignment or sublease to such assignee or subtenant has been approved by Landlord in writing.

Section 8.3Right to Show Premises.  Tenant shall permit Landlord, or the authorized agent of Landlord, to show the Premises to persons wishing to rent or purchase the Premises at any reasonable time throughout the Lease Term upon reasonable prior notice and while accompanied by Tenant’s authorized agent.

Article 9
FINANCING

Section 9.1Definition.  As used in this article 9, the term “mortgage” shall include mortgages, deeds of trust and other similar security instruments and modifications, consolidations, extensions, renewals, replacements and substitutions thereof

Section 9.2Estoppel Certificate.  From time to time within fifteen (15) days after Landlord makes a request therefor, Tenant shall execute and deliver to Landlord a written certificate of declaration setting forth such information regarding the status of this Lease and the rental that is payable hereunder that Landlord may reasonably request.

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Section 9.3Subordination of Lease.  From time to time Tenant shall subordinate its interest in this Lease in accordance with the following conditions:

a.Recitals.  Tenant acknowledges that from time to time Landlord may desire to secure mortgage loan financing to refinance the acquisition price for the Premises or with respect to Landlord’s other operations.  Tenant also acknowledges that the lender interested in making such a loan may desire that Tenant’s interest under this Lease be either superior or subordinate to the mortgage then held or to be taken by said lender.

b.Subordination to Lender.  Accordingly, upon the request of Landlord in writing, Tenant shall subordinate this Lease and the lien hereof from time to time to the lien of any present or future mortgage of a lender designated by Landlord, irrespective of the time of execution or time of recording of any such mortgages.  However, Tenant may condition such subordination upon the requirement that the holder of any such mortgage shall enter into an agreement with Tenant, in recordable form, that in the event of foreclosure or other right asserted under the mortgage by the holder or any assignee thereof, this Lease and the rights of Tenant hereunder shall continue in full force and effect, notwithstanding Landlord’s default in connection with the mortgage concerned or any resulting foreclosure or sale or transfer in lieu of such proceedings, and that this Lease shall not be terminated or disturbed except in accordance with the provisions of this Lease.  If requested by the holder of any such mortgage, Tenant will be a party to said agreement upon the condition outlined above and will agree in substance that if the mortgagee or any person claiming under the mortgagee shall succeed to Landlord’s interest in this Lease, Tenant will recognize said mortgagee or person as its Landlord under the terms of this Lease.  Upon the request of Landlord, Tenant shall execute, acknowledge and deliver any and all instruments necessary or desirable to give effect to or notice of such subordination.

c.Subordination to Other Parties.  Tenant shall not subordinate its interests under this Lease or in the Premises to any lien or encumbrance other than the mortgages described in and specified pursuant to this section 9.3 without the prior written consent of Landlord and the lender interested under each mortgage then affecting the Premises.  Any such unauthorized subordination by Tenant shall be void and of no force and effect whatsoever.

Section 9.4Attornment.  Any sale, assignment or transfer of the Landlord’s interest under this Lease or in the Premises, including any such disposition resulting from Landlord’s default under a mortgage, shall upon Tenant’s receipt of a reasonably acceptable nondisturbance agreement, be subject to the rights and obligations of this Lease.  In the event of any such transfer, Tenant shall upon Tenant’s receipt of a reasonably acceptable nondisturbance agreement, attorn to Landlord’s successor and shall recognize such successor as Landlord under this Lease, regardless of any rule of law to the contrary or absence of privity of contract.

Article 10
CASUALTY INSURANCE; INDEMNIFICATION

Section 10.1Obligation to Maintain Insurance.  Throughout the entire Lease Term, Landlord shall maintain in effect, at Tenant’s sole cost and expense, a policy or policies (hereinafter collectively referred to as the “Casualty Policy”) of insurance with a reputable insurance company covering the Premises.  The Casualty Policy shall be in an amount not less 

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than the replacement cost (which is, as of this date, at least $3,750,000.00) of all Buildings and improvements that are at any time part of the Premises; shall not provide for a deductible in excess of Five Thousand and No/100ths Dollars ($5,000.00); and shall insure against at least the perils of fire, earthquake, vandalism, malicious mischief and such other hazards as are currently embraced in the standard “building all risk” casualty insurance coverage in Utah.  In addition, the Casualty Policy shall provide for at least six (6) months (or such longer period as may be reasonably required by any mortgagee of the Premises) loss of rents/income coverage upon a casualty to the Premises.  Tenant shall pay the cost of the Casualty Policy within ten days after receipt of bills therefor from Landlord.  Landlord may, at its option, bill Tenant monthly for one-twelfth of the annual premium for the Casualty Policy based on the most recent available premium notice(s), with reconciliation of such payments made at least annually based on the actual cost of the Casualty Policy during the applicable time period.

Section 10.2Insured Parties.  The Casualty Policy on the Premises shall name Landlord and Tenant as insureds and shall name Landlord as the loss payee hereunder.  Any funds paid to Landlord pursuant to its status as loss payee under the Casualty Policy shall be apportioned as hereinafter described.

Section 10.3Insurance Proceeds.  If the Premises shall at any time or times during the Lease Term be damaged or destroyed by an insured risk, Landlord shall retain all insurance money as may be received by Landlord and/or by Tenant pursuant to the Casualty Policy by reason of such loss or destruction (the “Insurance Proceeds”), to be used by Landlord for the reconstruction of the Premises as provided in Article 11.  Tenant shall pay to Landlord as part of the Insurance Proceeds any deductible under the Casualty Policy.  Any and all monies which Landlord shall so receive by reason of any loss or destruction to the Premises shall be considered as a trust fund to be used for the repair, restoration or rebuilding of the Premises as provided in Article 11.

Section 10.4Insufficient Proceeds; Excess Proceeds.  If the Insurance Proceeds are insufficient to restore, repair or rebuild the Premises because of changes in building code requirements only, Tenant and Landlord agree that such additional monies as may be required solely as a result of such changes in building code requirements will be borne by both parties.  Tenant’s portion of such costs shall be the fraction that the remaining life of the Lease Term bears to the total Lease Term (or the useful life of components affected by such change in building code requirements, if such useful life is shorter than the total Lease Term), and Landlord’s portion shall be the balance.  If, for any reason other than changes in building code requirements, the Insurance Proceeds are insufficient to restore, repair or rebuild the Premises to their former state, Tenant agrees to pay the balance of the amount necessary to effect such restoration, repair or replacement.  Any excess of Insurance Proceeds over the cost of such repairing or rebuilding shall belong to Tenant.

Section 10.5Proration at End of Term.  At the end of the Lease Term, or upon earlier termination of this Lease not caused by Tenant’s default hereunder, Landlord will pay or apply to Tenant’s account the unearned premiums paid by Tenant on the remaining term of the Casualty Policy; provided, however, that should such remaining term exceed one year in length, Landlord shall be obligated to pay to Tenant only that amount attributable to the first year of said remaining term.

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Article 11
CALAMITIES

Section 11.1Destruction.  The following provisions shall govern the effect of this Lease in the event of destruction of all or part of the Premises caused by a calamity not intended to be covered by the Casualty Policy:

a.Extensive Destruction.  Either party shall have the right to terminate this Lease in the event of destruction of or damage to the Premises that is so extensive as to make impractical Tenant’s use and occupancy thereof for a period reasonably expected to be in excess of ninety (90) days.  Such termination must be accomplished through written notice given to the other party within thirty (30) days following the date of the destruction or damage.  In the event of such termination, there shall be a proration of the rental payments contemplated by article 3 hereof, and Landlord shall refund any excess rental payment theretofore paid by Tenant.  Termination shall be effective and rent shall be prorated as of the date on which the destruction or damage occurred.

b.Other Destruction.  In the event of any other destruction of or damage to the Premises, or in the event neither party exercises the right of termination provided for in subsection 11.1(a) above, Landlord shall forthwith repair and reconstruct the Premises.  Landlord shall commence such work within thirty (30) days after the date of the destruction or damage to the Premises and shall complete such work within a reasonable time.  During the period of damage and repair, Rent shall be proportionately abated on the basis of and by taking into account: (1) the area or portion of the Premises which is not capable of use and occupancy by Tenant; and (2) the period of time during which that portion of the Premises remains incapable of such use and occupancy by Tenant.

c.No Liability.  Landlord shall have no liability or responsibility (whether for damage to or loss of Tenant’s personalty on the Premises, loss of business to Tenant, injury or death of persons, or otherwise) arising from any damage or destruction that are not directly results of Landlord’s negligence or intentional misconduct.

Section 11.2Condemnation.  The following provisions shall govern the effect of this Lease in the event of condemnation of all or part of the Premises:

a.Definition.  As used in this section 11.2, the term “Condemnation Proceedings” includes any action or proceeding in which any interest in the Premises is taken for any purpose by any lawful authority through exercise of the power of eminent domain, right of condemnation, right of purchase or other proceeding in lieu of the foregoing.

b.Termination and Rent Abatement.  If the whole of the Premises is taken through Condemnation Proceedings, this Lease shall automatically terminate as of the date of taking.  If any part of the Premises is taken through Condemnation Proceedings such that the taking thereof would be reasonably considered a material and substantial hinderance to Tenant’s normal business operation, either party to this Lease shall have the right to terminate this Lease by giving the other party written notice of such election at any time within sixty (60) days after the date of taking.  In all other cases, or if neither party exercises its right to so terminate, this Lease shall 

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remain in effect and the rent that is payable under article 3 hereof (but no other sums) shall, if applicable, be proportionately reduced from and after the date of the taking on the basis of the area of the Premises that is capable of occupancy after the taking compared to the area of the Premises that was capable of occupancy prior to the taking.  In the event of any termination of this Lease or any rental reduction as provided for in this subsection 11.2(b), there shall be a proration of the rent payable under this Lease for any fractional month up to the date of taking and Landlord shall refund to Tenant any excess rental theretofore paid by Tenant.

c.Condemnation Proceeds.  Each party shall give the other reasonable (under the then circumstances) prior notice of the pendency of any Condemnation Proceedings involving the Premises of which that party becomes aware.  Although Landlord retains the exclusive right to direct the prosecution of any Condemnation Proceedings, Tenant shall be entitled to participate in such proceedings under Landlord’s reasonable direction.  Whether or not this Lease is terminated as a consequence of Condemnation Proceedings, all damages or compensation awarded for a partial or total taking of the Premises, including any sums compensating Tenant for diminution in the value of or deprivation of its leasehold estate, shall be the sole and exclusive property of Landlord; provided that if an amount is separately awarded with the intent to compensate Tenant for (1) costs connected with a relocation by it to a new facility; (2) costs incurred by Tenant in constructing Tenant’s optional Improvements; (3) the taking of Tenant’s personal property; or (4) the interruption of Tenant’s business, then such amount shall be the property of Tenant.

d.Construction.  If this Lease is not terminated as provided in this section 11.2, then Landlord shall, as soon as practical after the taking, restore the Premises to a complete unit as similar under the circumstances as possible to the design, character and quality of the Premises as they existed prior to the taking.  Landlord shall commence such work within ninety (90) days after the date the Condemnation Proceedings are finalized.  Restoration of the Premises shall be completed by Landlord within a reasonable time, due regard being had to conditions then prevailing.

Article 12
SURRENDER OF PREMISES

Upon the expiration or earlier termination of this Lease, Tenant shall surrender the Premises in broom clean condition and otherwise in the same condition as received (but including all Improvements desired by Landlord), ordinary wear and tear and damage by fire, earthquake, act of God or the elements alone excepted, and shall promptly remove or cause to be removed at Tenant’s expense from the Premises any signs, notices and displays placed thereon by Tenant.  Tenant shall, at its cost, repair any damage to the Premises caused in connection with the removal from the Premises of any personal property, business or trade fixtures, machinery, equipment, cabinetwork, signs, furniture, movable partitions or other leasehold improvements.  Tenant shall indemnify Landlord against any loss or liability resulting from delay by Tenant in so surrendering the Premises, including without limitation any claim(s) made by any succeeding tenant founded on such delay.  Tenant’s obligations to observe and perform these covenants shall survive the expiration or other termination of this Lease.

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Article 13
DEFAULT; REMEDIES

Section 13.1Tenant’s Default.  The following-listed occurrences, and any of them, shall be events of default (“Events of Default”) under this Lease:

a.Rent.  Tenant’s failure to pay when due any payment required to be paid to Landlord hereunder including, but not limited to, rental payments, and such failure shall continue ten (10)days after notice thereof in writing by Landlord to Tenant; or

b.Other Monetary Defaults.  Tenant’s failure to pay any of the taxes or assessments or other amounts herein required to be paid by it to other parties within the applicable time periods, and such failure shall continue twenty (20) days after notice thereof in writing by Landlord to Tenant; or

c.Insolvency, Etc.  Tenant’s creation of an assignment for the benefit of creditors, the liquidation of Tenant, the appointment of a receiver for Tenant or the voluntary or involuntary declaration by Tenant or against Tenant of bankruptcy; or

d.Other Defaults.  Tenant’s failure in the performance or observation of any of the other agreements of this Lease to be kept, observed or performed by Tenant and such failure shall continue for thirty (30) days after notice thereof in writing by Landlord to Tenant; provided, however, that if Tenant proceeds with due diligence during such thirty (30) days to cure such default, and it is unable by reason of the nature of the work involved or action required or unavoidable delays to cure the same within said thirty (30) days, the time to so cure shall be extended by an additional period not to exceed a reasonable time.

Section 13.2Landlord’s Remedies.  Upon the occurrence of an Event of Default, Landlord shall have all of the rights and remedies available to it under applicable law including, without limitation, the right to re-enter the Premises and remove all persons and property therefrom.  Such property may be used by Landlord at the Premises or, at Landlord’s option, may be removed and stored in a public warehouse or elsewhere at Tenant’s sole cost.  Should Landlord elect to re-enter as herein provided, or should it take possession of the Premises pursuant to legal proceeding, or pursuant to any notice provided by law, it may either terminate this Lease, or it may from time to time without terminating this Lease, relet the Premises, or any part thereof, for such term(s) and at such rental(s) and upon such other terms and conditions as Landlord in its sole discretion may deem advisable.  Rental received by Landlord from such reletting shall be applied as follows: First, to the payment of all costs of taking possession, maintenance, remodeling and reletting and any indebtedness other than rent due hereunder from Tenant to Landlord; Second, to the payment of rent due and unpaid hereunder; Third, any residue shall be applied in payment of future rent and costs of maintenance and reletting as the same may be due and payable hereunder.  Should such rentals received from such reletting be less than that agreed to be paid by Tenant, then Tenant shall immediately pay such deficiency to Landlord upon Landlord’s demand.  Notwithstanding any provisions hereof to the contrary, no such re-entry or taking possession of the Premises by Landlord shall be construed as an election on its part to terminate this Lease unless a written notice of such intention be given to Tenant or unless the termination thereof be decreed as an election by a court of competent jurisdiction.  Further, notwithstanding any such reletting 

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without termination, Landlord may at any time thereafter elect to terminate this Lease for any breach hereof by Tenant and, in addition to any other remedy it may have, it may recover from Tenant all damages it may incur by reason of such breach, including attorneys’ fees and the costs of re-entering the Premises.

Section 13.3Landlord’s Default.  Landlord shall be in default hereunder if Landlord fails to perform or observe any agreements of this Lease to be kept, observed or performed by Landlord and such failure shall continue for thirty (30) days after notice thereof in writing by Tenant to Landlord; provided, however, that if Landlord proceeds with due diligence during such thirty (30) days to cure such default, and it is unable by reason of the nature of the work involved or action required or unavoidable delays to cure the same within said thirty days, the time to so cure shall be extended by an additional period not to exceed a reasonable time.  Upon Landlord’s default in this Lease, Tenant shall have all rights and remedies available to it under applicable law.

Article 14
LANDLORD’S LIEN

The following-listed obligations, and any of them, shall be, and are hereby declared as, liens on any buildings and other improvements (except the Improvements) which Tenant may cause to be placed on the Premises during the Lease Term, on all property of Tenant brought or kept on the Premises, and on the leasehold estate hereby created:

a.All Rent payments due under this Lease;

b.All taxes and assessments due under this Lease; and

c.All other payments of money by Tenant required by this Lease.

Article 15
HAZARDOUS SUBSTANCES/WASTES

Section 15.1Landlord’s Representations and Warranties.  Landlord warrants and represents that, to the best of Landlord’s current actual knowledge (but without any inquiry or other due diligence), (a) no portion of the Premises and existing improvements located thereon, including the soil, groundwater, surface water and sediment (collectively “Property”), contains Hazardous Substances, (b) Landlord has not placed or discharged any Hazardous Substances onto the Property, (c) neither Landlord nor, to Landlord’s actual knowledge (but without any inquiry or other due diligence), the Property is subject to any existing, pending, or threatened investigation by any governmental authority under any applicable federal, state or local law, regulation or ordinance pertaining to air and water quality, the hauling, transportation, storage, treatment, usage or disposal of Hazardous Substances, air emissions, and other environmental matters, (d) no handling, transportation, storage, treatment, or use of Hazardous Substances that has occurred on the Property to date has not been in compliance with all federal, state, and local laws, regulations and ordinances, (e) no leak, spill, release, discharge, emission, or disposal of Hazardous Substances has occurred on the Property to date, (f) there has been no violation of any Environmental Laws relating to the Property or any Hazardous Substances on, beneath, or above the Property or emanating or migrating, or threatening to emanate or migrate, from the Property to off-site properties that could form the basis of any Environmental Claims against Landlord or the 

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Property, (g) there are no outstanding violations, notices of potential liability, or administrative or judicial consent decrees or orders respecting the Property under any applicable Environmental Laws concerning protection of human health and the environment to which the Landlord is subject, (h) there has been no communication, whether from a government authority, citizens’ group, employer or otherwise, that alleges that Landlord is not in full compliance with all applicable Environmental Laws relating to the Property and there are no circumstances that may prevent or interfere with such full compliance in the future, and (i) there are no pending or threatened Environmental Claims with regard to the Property.

Section 15.2Hazardous Substance Removal.

a.Prior to Tenant’s Possession. If, at any time prior to the Commencement Date, Hazardous Substances are determined to be present on the Property, Tenant shall have the right to terminate this Lease and Landlord or Tenant shall be released from all further obligations to each other.

b.After Tenant’s Possession.  If, at any time after the Commencement Date, Hazardous Substances are determined to be present on the Property, and provided such Hazardous Substances came to exist or were located on the Premises either prior to the Commencement Date or through no fault of Tenant, then Landlord shall have the right to either (a) terminate this Lease, or (b) take all steps necessary to promptly remove or otherwise abate all such Hazardous Substances in accordance with all rules, regulations and laws, in which event Landlord shall use its best efforts not to materially interfere with the conduct of Tenant’s business during any such removal or abatement process.

If Landlord reasonably determines to terminate this Lease rather than remove or abate all such Hazardous Substances, then Landlord shall so notify Tenant in writing.  Tenant thereafter shall have thirty (30) days to elect to expend, at its sole cost, such sums as Tenant reasonably determines are necessary to correct the condition.  Upon any such election by Tenant, Landlord shall not be entitled to terminate this Lease as provided above in this section 15.2(b).

Section 15.3Environmental Indemnification by Landlord.  Subject to violation of any Environmental Laws by Tenant, its employees, agents, licensees, invitees, contractors or permittees, resulting in the following claims, and covering only occurrences during the time period up to and ending on the Occupancy Date, Landlord hereby agrees to indemnify, protect, defend and hold Tenant harmless from and against:

a.All claims, including Environmental Claims (legal or equitable) by any person under any Environmental Laws arising from or relating to (i) the actual or alleged presence, release, threatened release, discharge, emission or management of Hazardous Substances at or from the Property, or (ii) the study, testing, investigation, cleanup, removal, remediation, abatement, response, containment, restoration, corrective action and closure of any Hazardous Substances existing or arising on, beneath or above the Property and/or emanating or migrating, or that threaten to emanate or migrate from the Property to any off-site properties.

b.All claims, including Environmental Claims (legal or equitable), for damage to property or business or other losses resulting from or relating to the actual or alleged presence, release, threatened release, discharge, emission or management of Hazardous Substances 

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(1) existing or arising on, beneath or above the Property, (2) emanating or migrating from the Property to an off-site properties, and (3) threatening to emanate or migrate from the Property to any off-site properties.

c.All claims, including Environmental Claims, for injunctive relief or for damages resulting from the study, testing, investigation, cleanup, removal, remediation, abatement, response, containment, restoration, corrective action and closure of any Hazardous Substances, (1) existing or arising on beneath or above the Property, (2) emanating or migrating from the Property to any off-site properties, and (3) threatening to migrate or emanate from the Property to any off-site properties, conducted by any person, including, without limitation, any federal, state or local agency.

d.All toxic tort, bodily injury, wrongful death, or other claims by any person arising from or relating to actual or alleged exposure to any Hazardous Substances on, beneath or above the Property, and/or emanating or migrating, or threatening to emanate or migrate, from the Property.

e.All claims, including Environmental Claims (legal or equitable), in connection with or resulting from or incurred by reason of any breach of any environmental representation or warranty set forth in section 15.1 of this Lease.

Section 15.4Environmental Indemnification by Tenant.  Subject to violation of any Environmental Laws by Landlord, its employees, agents, licensees, invitees, contractors or permittees, resulting in the following claims and provided such claims result principally from the actions of Tenant, its contractors, agents, employees, licensees, permittees, invitees, or customers, from and after the Commencement Date, Tenant hereby agrees to indemnify, protect, defend and hold Landlord harmless from and against:

a.All claims, including Environmental Claims, (legal or equitable) by any person under any Environmental Laws arising from or relating to (1) the actual or alleged presence, release, threatened release, discharge, emission or management of Hazardous Substances at or from the Premises, or (2) the study, testing, investigation, cleanup, removal, corrective action and closure of any Hazardous Substances existing or arising on, beneath or above the Premises and/or emanating or migrating, or that threaten to emanate or migrate from the property to any off-site properties.

b.All claims, including Environmental Claims, (legal or equitable) for damage to property or business or other losses resulting from or relating to the actual or alleged presence, release, threatened release, discharge, emission or management of Hazardous Substances (1) existing or arising on, beneath or above the Premises, (2) emanating or migrating from the Premises to any off-site properties, and (3) threatening to emanate or migrate from the Premises to any off-site properties.

c.All claims, including Environmental Claims, for injunctive relief or for damages resulting from the study, testing, investigation, cleanup, removal, remediation, abatement, response, containment, restoration, corrective action and closure of any Hazardous Substance (1) existing or arising on, beneath or above the Premises, (2) emanating or migrating 

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from the Premises to any off-site properties, and (3) threatening to migrate or emanate from the Premises to any off-site properties, conducted by any person, including, without limitation, any federal, state or local agency.

d.All toxic tort, bodily injury, wrongful death or other claims by any person arising from or relating to actual or alleged exposure to any Hazardous Substances on, beneath or above the Premises, and/or emanating or migrating, or threatening to emanate or migrate, from the Premises.

Section 15.5Environmental Definitions.

a.Environmental Substances.  “Hazardous Substances” for purposes of this Lease shall be interpreted broadly to include, but not be limited to, any material or substance that is defined or classified under federal, state, or local laws as (a) a “hazardous substance” pursuant to section 101 of the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9601(14), and section 311 of the Federal Water Pollution Control Act, 33 U.S.C. § 1321, as now or hereafter amended; (b) a “hazardous waste” pursuant to section 1004 or section 3001 of the Resource Conservation and Recovery Act, 42 U.S.C. §§ 6903, 6921, as now or hereafter amended; (c) a toxic pollutant under section 307(a)(1) of the Federal Water Pollution Control Act, 33 U.S.C. § 1317(a)(1); (d) a “hazardous air pollutant” under section 112 of the Clean Air Act, 42 U.S.C. § 7412, as now or hereafter amended; (e) “hazardous material” under the Hazardous Materials Transportation Uniform Safety Act of 1990, 49 U.S.C. App. § 1802(4), as now or hereafter amended; or hereafter under the aforementioned laws; or (g) presenting a risk to human health or the environment under other applicable federal, state or local laws, ordinances, or regulations, as now or as may be passed or promulgated in the future.  “Toxic or Hazardous Substances” specifically includes, but is not limited to, asbestos, polychlorinated biphenyls (“PCBs”), petroleum and petroleum-based derivatives, and urea formaldehyde.

b.Environmental Claims.  “Environmental Claims” for purposes of this Lease shall be interpreted broadly to mean any and all claims, actions, causes of action, damages, losses, liabilities, obligations, penalties, notices of violation, notices of potential liability, administrative or judicial orders and decrees, litigation, demands, judgments, amount paid in settlement, assessments, suits, proceedings, costs, disbursements, or expenses (including, without limitation, attorneys’ fees and costs, experts’ fees and costs, and consultants’ fees and costs) of any kind or of any nature whatsoever (whether based on common law, statute or contract, fixed or contingent) suffered or incurred that arise or are given, prior to or after the effective date of this Lease, by any person or entity alleging liability (including, without limitation, liability for study, testing or investigatory costs, cleanup costs, response costs, removal costs, remediation costs, containment costs, restoration costs, corrective action costs, closure costs, natural resources damages, property damages, business losses, personal injuries, penalties or fines) arising out of, based on or resulting (1) the presence, release, threatened releases, discharge or emission into the environment of any Hazardous Substance existing or arising on, beneath or above the Premises and/or emanating or migrating and/or threatening to emanate or migrate from the Premises to off-site properties or (2) the violation or alleged violation of any Environmental Laws.

c.Environmental Laws.  “Environmental Laws” for purposes of this Lease shall be interpreted broadly to mean all federal, state and local statutory or common laws and any regulations, codes, ordinances, plan, order, decree, judgment, permit, restriction, agreement, 

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requirement or injunction issues, entered, promulgated or approved relating to pollution or protection of human health and the environment, including, without limitation, laws and regulations relating to the presence, release, threatened release, discharge or emission of any Hazardous Substances into the environment (including, without limitation, air, sediment, surface water, ground water and soil), or otherwise relating the presence, generation, treatment, storage, disposal, transport, arranging for transportation, treatment or disposal, or handling of Hazardous Substances, including, without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. §§ 9601 et seq.,  as amended by the Superfund  Amendments and Reauthorization Act, the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq.,  the Federal Water Pollution Control Act, 33 U.S.C. §§ 1251 et seq., the Safe Drinking Water Act, 42 U.S.C. §§ 300f et seq., the Clean Air Act, 42 U.S.C. §§ 7401 et seq., the Toxic Substances Control Act, 7 U.S.C. § 136 et seq.,  the Utah Hazardous Substances Mitigation Act, Utah Code Ann. 19-6-301 et seq.,  the Utah Solid and Hazardous Waste Act, Utah Ann. 19- 6-101 et seq.,  the Utah Water Quality Act, Utah Code Ann. 19-5-101 et seq., the Utah Safe Drinking Water Act, Utah 19-4-101 et seq., the Utah Air Conservation Act, Utah Code Ann. 19- 2-101 et seq., the Utah Underground Storage Tank Act, Utah Code Ann. 19-6-401 and the Utah Solid Waste Management Act, Utah Code Ann. 19-6-501, all as amended from time to time, and any and all corresponding federal and state implementing regulations.

Article 16
LANDLORD’S REPRESENTATIONS AND WARRANTIES

Section 16.1Representations and Warranties.  Landlord represents, warrants and covenants to Tenant as follows:

a.Zoning.  Landlord has not received from any governmental authority any written notice of any noncompliance of the Premises with applicable zoning or land use ordinances or regulations.

b.Condemnation.  To the best of Landlord’s current actual knowledge, but without any inquiry or other due diligence, no portion of the Premises is located or is scheduled for any condemnation or demolition, or is the subject matter of any condemnation proceeding.

c.Authority.  Landlord has the full right, power and authority to execute this Lease and to lease the Premises as provided in this Lease and to carry out all obligations hereunder.

d.Ground Lease.  It shall be an additional event of default under this Lease if Landlord shall materially default under the Ground Lease.  Upon the execution of this Lease, Tenant shall be entitled to seek (at Tenant’s cost) from the lessor under the Ground Lease a written nondisturbance agreement, in a form reasonably acceptable to Tenant and Landlord, granting Tenant notice of and an opportunity to cure any default by Landlord under the Ground Lease.

Article 17
GENERAL

Section 17.1Notices.  Any notice, demand, request or other instrument (collectively referred to herein as the “Notice”) required or permitted under this Lease to be given or transmitted 

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between the parties shall be either personally delivered or mailed postage prepaid by certified or registered mail, addressed as follows:

To Landlord:

B.F. Enterprises, LLC 
1948 Michigan Avenue 
Salt Lake City, UT 84108

With a copy to:

Wm. Shane Topham
Callister Nebeker & McCullough
10 East South Temple, 9th Floor
Salt Lake City, UT 84133

To Tenant:

Sarcos Corp.
2458 Promontory Drive
Salt Lake City, UT 84109
Attn. Fraser Smith

Any Notice which is mailed shall be effective on the third business day following its date of mailing.  Either party may, by Notice to the other party given as prescribed in this section 16.1, change its above-described address for any future Notices that are mailed under this Lease.

Section 17.2Quiet Enjoyment.  Landlord covenants that so long as Tenant performs all of its obligations under this Lease Tenant shall peacefully and quietly have, hold and enjoy the Premises for the Lease Term.

Section 17.3Waiver.  The failure of Landlord to insist in one or more instances upon a strict performance of any of Tenant’s obligations under this Lease or to exercise any option or right given to Landlord hereunder shall not be construed as a waiver or relinquishment of any right, remedy or option under this Lease.  If Landlord does waive any breach of any term, covenant or condition contained in this Lease, such waiver shall not be deemed to be a waiver of any subsequent breach of the same term, covenant or condition or of any other term, covenant or condition contained in this Lease.  The acceptance of rent under this Lease by Landlord shall not be deemed to be a waiver of any preceding breach by Tenant of any term, covenant or condition of this Lease, other than the failure of Tenant to pay the particular rental so accepted, regardless of Landlord’s knowledge of such preceding breach at the time of acceptance of such rent.  No covenant, term or condition of this Lease shall be deemed to have been waived by Landlord unless such waiver is in writing signed by Landlord.

Section 17.4Entire Agreement and Modification of Agreement.  This Lease and the exhibits and/or addenda attached hereto and forming a part hereof set forth all the covenants, agreements, conditions and understandings between Landlord and Tenant concerning the Premises and there are no covenants, agreements, conditions or understandings, either oral or written, 

-22-

 

between Landlord and Tenant other than those that are herein set forth.  Except as otherwise provided herein, no subsequent alteration, amendment, change or addition to this Lease shall be binding upon the parties unless reduced to writing and signed by them.

Section 17.5Captions and Section Numbers.  The captions and section numbers occurring in this Lease are inserted only as a matter of convenience and in no way define, limit, construe or describe the scope or intent of such section of this Lease.

Section 17.6Number and Gender.  Words in the neuter gender as used in this Lease shall be deemed to include the masculine and feminine genders, and words in the singular shall be held to include the plural whenever the sense requires.

Section 17.7Savings Clause.  If any provision of this Lease or the application thereof to any person or circumstance shall be found to be illegal or void to any extent, then the remainder of this Lease, or the application of the provisions of this Lease to persons or to circumstances other than those to which it is held invalid and unenforceable, shall nevertheless continue in force and effect to the fullest extent possible.

Section 17.8No Option.  The submission of this Lease to a prospective tenant for examination does not constitute a reservation of or option for the Premises.  This Lease becomes effective as a Lease only upon execution and delivery thereof by Landlord and Tenant.

Section 17.9Time of the Essence.  Time is the essence of this Lease.

Section 17.10Force Majeure.  Either party to this Lease shall be excused for the period of any delay in the performance of any obligations that are required hereunder, other than an obligation to pay rent or other monies, when prevented from doing so by cause or causes beyond its control, including labor disputes, civil commotion, war, governmental regulations or controls, fire or other casualty, weather, inability to obtain any material services or acts of God.

Section 17.11 Broker’s Commission.  Landlord and Tenant each represent and warrant to the other that there are no claims for brokerage commissions or finder’s fees in connection with this Lease.  Each party shall indemnify the other party hereto against all liabilities arising from any such claim that may be made through the indemnifying party, including any attorney’s fees connected therewith.

Section 17.12Governing Law.  The laws of the state of Utah shall govern the validity, performance, interpretation and enforcement of the obligations that are contained herein.

Section 17.13Liability.  All of Tenant’s obligations under this Lease shall be the joint and several obligations and liabilities of each of the parties composing Tenant, its successors and assigns.

Section 17.14Exhibits and Addenda.  All exhibits and/or addenda attached hereto shall be considered to be fully integrated into and made a part of this Lease as if such exhibits and/or addenda were fully and completely set forth herein.

-23-

 

Section 17.15Recording.  Tenant or Landlord shall be entitled to record a memorandum of this Lessee, in a form reasonable acceptable to both parties, in the official records of the Salt Lake County, Utah Recorder.  No such memorandum of this Lease shall disclose any of the economic terms of this Lease.

Section 17.16Authority.  Each individual executing this Lease does thereby represent and warrant to each other person(s) so signing (and to each other entity for which another person may be signing) that he has been duly authorized to execute and deliver this Lease in the capacity and for the entity indicated.

Section 17.17No Partnership.  Landlord does not by this Lease, in any way or for any purpose, become a partner or joint venturer of Tenant.

Section 17.18Counterparts.  This Lease may be executed in any number of counterpart originals, each of which shall be deemed an original instrument for all purposes, but all of which shall comprise but one and the same instrument.

Section 17.19Attorneys’ Fees.  If either party defaults under this Lease, the defaulting party shall pay all of the non-defaulting party’s costs and expenses, including a reasonable attorneys’ fee, which may arise or accrue from the enforcement of this Lease, whether such costs and expenses are incurred with or without suit, before or after judgment, at trial, on appeal or in any bankruptcy or insolvency proceeding.

Section 17.20Annual Financial Statements.  Within 120 days after the end of each fiscal year of Tenant occurring during the Lease Term, Tenant shall supply to Landlord complete and correct copies of Tenant’s internally prepared or, if available, audited financial statements and other financial data as Landlord reasonably may require to keep fully apprised of Tenant’s financial status.  The financial statements, and all information therein, shall be kept strictly confidential.

 

 

-24-

 

 

DATED effective the date first written above

LANDLORD:

B.F. ENTERPRISES, LLC, a Utah limited 

liability company

 

	
By:
	
 
	
/s/ Karen B. Brewster

	
Name:
	
 
	
Karen B. Brewster

	
Its:
	
 
	
Manager

 

	
By:
	
 
	
/s/ Don R. Brown

	
Name:
	
 
	
Don R. Brown

	
Its:
	
 
	
Manager

 

	
By:
	
 
	
/s/ Diane B. Whittaker

	
Name:
	
 
	
Diane B. Whittaker

	
Its:
	
 
	
Manager

 

 

TENTANT:

 

	
ATTEST:
	
 
	
SARCOS CORP., a Utah corporation

 

 

					
	
By:
	
/s/
	
 
	
By:
	
/s/ Fraser Smith

	
 
	
Its: V.P. of Technology
	
 
	
 
	
Fraser Smith, President

 

 

 

 

 

Exhibit to 

Lease Agreement

DESCRIPTION OF PREMISES

 

		
	
Location:
	
360 Wakara Way

	
 
	
Salt Lake City, Salt Lake County, Utah

 

Legal Description:

The tract of land affected by this Lease is located in Salt Lake County, Utah, within the boundaries of the University of Utah Research Park, and is described as follows:

Beginning at a point on the Northwesterly line of Wakara Way, said point being North 48°10’49” West 4043.10 feet from the Southeast corner of Section 3, Township 1 South, Range 1 East, Salt Lake Base and Meridian, said point also being North 3774.20 feet and West 170.85 feet from the Salt Lake City Survey Monument at the intersection of Sunnyside Avenue and Arapeen Drive; and running thence along the Northerly line of Lot 6, North 48°56’00” West 380.00 feet; thence North 37°45’22” East 210.73 feet along a radial line to a point on the Southerly line of Chipeta Way; thence along said Southerly line along the arc of a 1910.10 foot radius curve to the right 374.84 feet (the chord of which bears South 46°37’19” East 374.24 feet) to a point of compound curvature; thence Southwesterly along the arc of a 45.00 foot radius curve to the right 70.68 feet (the chord of which bears South 04°00’00” West 63.64 feet) to the point of tangency; thence South 49°00’00” West 145.90 feet to the point of beginning.Exhibit 10.1

 

CTAKUNG
ART CO., LTD

 

Executive Employment
Agreement

 

This EXECUTIVE EMPLOYMENT AGREEMENT (the "Agreement"), entered
into as of September 30, 2021, by and between Takung Art Co., Ltd., a Delaware corporation (the "Company") and Wing
Yan Leung (the "Executive"). The Company and Executive are collectively referred to herein as the "Parties." This
Agreement automatically shall supersede any agreement between the Company and Executive concerning Executive's employment by the Company.

 

RECITALS

 

A.           The
Company desires to employ the Executive as its Chief Financial Officer (CFO), and to assure itself of the services of the Executive for
the Initial Period and Extended Period (each as defined below).

 

B.           The
Executive desires to be employed by the Company as its CFO for the Initial Period and Extended Period and upon the terms and conditions
of this Agreement.

 

C.            Executive
agrees to use her best efforts, and apply her skill and experience, to the proper performance of her duties hereunder and to the business
and affairs of the Company. Executive agrees to serve the Company faithfully, diligently and to the best of her ability.

 

AGREEMENT

 

ACCORDINGLY, the Parties agree as follows:

 

1.           Term
of Employment.  The Company shall employ the Executive to render services to the Company in the position and with the duties
and responsibilities described in Section 2 for a period of three (3) months starting from the date of this Agreement (the “Initial
Period”), which period shall be automatically extended for an additional nine (9) months (the "Extended Period
"), unless the Company provides notice to the Executive of its election not to extend the period prior to the expiration of the
Initial Period, or unless the Initial Period or Extended Period, as applicable, is terminated sooner in accordance with Sections 4
or 5 below or extended upon mutual agreement of the Parties.

 

2.           Position,
Duties, Responsibilities.

 

2.1           Position.  The
Executive shall render services to the Company in the positions of CFO and shall perform all services appropriate to such position. The
Executive's principal place of employment shall be at any location mutually acceptable to the board of directors of the Company and the
Executive.  The Executive shall devote her best efforts to the performance of her duties.  The Executive shall report
to the board of directors of the Company.

 

2.2           Execution
of Other Employment Agreements.  The Executive shall upon request of the Company execute an employment agreement with
any direct or indirect subsidiary of the Company (in each case, a "Subsidiary Employment Agreements") in accordance
with Hong Kong or China laws and regulations, in the form substantially identical to this Agreement except for adjustments or alterations
required to comply with the relevant laws and regulations of the Hong Kong or China as the case may be.

 

     

     

    

 

3.           Compensation
and Holiday.  In consideration of the services to be rendered under this Agreement, the Executive shall be entitled to the
following:

 

3.1           Base
Salary.  The Company shall pay the Executive a "Base Salary" of HKD 60,000 per month, subject to adjustment
in accordance with Section 3.2 below.  The Base Salary shall be paid in accordance with the Company's regularly established
payroll practices.

 

3.2           Salary
Adjustment.  The Executive's Base Salary will be reviewed from time to time in accordance with the established procedures
of the Company for adjusting salaries for similarly situated employees and may be adjusted in the sole discretion of the Company.

 

3.3           Benefits.  The
Executive shall be eligible to participate in the benefits made generally available by the Company to similarly-situated executives, in
accordance with the benefit plans established by the Company (including the Company’s Equity Incentive Plan), and as may be amended
from time to time in the Company's sole discretion. Nothing contained in this Article shall affect or in any way limit Executive's
rights as an executive employee of the Company to participate in any profit sharing plan, supplemental compensation arrangements or any
other fringe benefits offered by the Company to its employees as set forth in the Company's employee handbook, and compensation received
by Executive hereunder shall be in addition to the foregoing except that the severance benefits set forth in this Agreement shall be exclusive.

 

3.4           Bonus.  The
Executive shall not be entitled to any bonus unless otherwise approved by the board of directors of the Company in its sole discretion.

 

3.5           Holidays.  The
Executive shall be entitled to applicable statutory public holidays in each full calendar year.  If the Executive's employment
commences or terminates part way through a calendar year, her entitlement to holidays will be assessed on a pro-rata basis in accordance
with the Company's holiday policy, as it may change from time to time.

 

4.           Termination
By Company.

 

4.1           Termination for
Cause.  For purposes of this Agreement, "For Cause" shall mean the occurrence of any of the following,
subject only to any statutory requirement of any applicable law: (i) the failure of the Executive to properly carry out her duties
after notice by the Company of the failure to do so and a reasonable opportunity for the Executive to correct the same within a reasonable
period specified by the Company; (ii) any breach by the Executive of one or more provisions of any written agreement with, or written
policies of, the Company or her fiduciary duties to the Company likely to cause material harm to the Company and its affiliates, at the
Company's reasonable discretion, or (iii) any theft, fraud, dishonesty or serious misconduct by the Executive involving her duties
or the property, business, reputation or affairs of the Company and its affiliates.  The Company may terminate the Executive's
employment For Cause at any time, without any advance notice or payment in lieu of notice.  The Company shall pay to the Executive
all compensation prescribed under Section 3 hereof to which the Executive is entitled up through the date of termination, subject
to any other rights or remedies of the Company under law, and thereafter all obligations of the Company under this Agreement shall cease.

 

4.2           By Disability.  In
the event Executive shall, by reason of illness or other incapacity, become unable to perform the services agreed upon herein ("Disability"
or "Disabled"), the Company shall continue to compensate Executive for six (6) months commencing from the date of such
Disability at her base monthly salary less any amounts actually received by Executive from the disability insurance policies carried by
the Company for the benefit of Executive pursuant to Section 3. "Disability" shall mean 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 Executive's duties with
the Company for three (3) consecutive months, and within thirty (30) days after written notice of termination is given Executive
shall not have returned to the full-time performance of Executive's duties. The determination of Disability will be established by the
Company’s benefit provider. The determination of such benefit provider shall be made in writing to the Company and Executive and
shall be final and conclusive for purposes of this Agreement.

 

4.3           Other
Termination by Company.  In addition to Sections 4.1 through 4.2, the Company may at any time terminate the employment of
the Executive without cause: (i) at any time during the Initial Period, in which case the Executive will not be eligible to receive
any severance; or (ii) by giving one (1) month written notice to the Executive during the Extended Period, in which case the
Executive will be eligible to receive an amount equal to one (1) month of the then-current Base Salary of the Executive payable in
the form of salary continuation (the “Severance”). The Executive's eligibility for Severance is conditioned on the Executive
having first signed a Termination Certificate in the form attached as Exhibit A.  The Executive shall not be
entitled to any Severance payments if the Executive's employment is terminated For Cause, by death or by Disability (as provided above)
or if the Executive's employment is terminated by the Executive for any reason other than Good Reason, as defined below.

 

     

     

    

 

5.           Termination
By Executive.

 

5.1           Termination
by Executive other than for Good Reason.  The Executive may terminate employment with the Company at any time for any reason
or no reason at all, upon three (3) months' advance written notice.  During such notice period the Executive shall continue
to diligently perform all of the Executive's duties hereunder.  The Company shall have the option, in its sole discretion, to
make the Executive's termination effective at any time prior to the end of such notice period as long as the Company pays the Executive
all compensation under Section 3 hereof to which the Executive is entitled up through the actual termination date.  Thereafter
all obligations of the Company shall cease.  Unless the Executive terminates her employment for Good Reason, as provided in
Section 5.2, no Severance or other separation benefits shall be paid to the Executive.

 

5.2           Termination
for Good Reason.  The Executive's termination shall be for Good Reason (as defined below) if the
Executive provides written notice to the Company of the Good Reason within ten (10) days of the event constituting Good Reason and
provides the Company with a period of ten (10) days to cure the Good Reason and the Company fails to cure the Good Reason within
that period.  For purposes of this Agreement, "Good Reason" shall mean, without the Executive’s express written
consent, the occurrence of any of the following circumstances: (a) The assignment to Executive of any duties inconsistent with Executive’s
status as an executive officer of the Company or a substantial adverse alteration in the nature or status of Executive’s responsibilities
from those in effect upon the date hereof; (b) A reduction by the Company by more than twenty percent (20%) in Executive’s
Base Salary as in effect on the date hereof; (c) The failure by the Company, without Executive’s consent, to pay to Executive
any portion of Executive’s compensation due hereunder more than twice in any 12 month period except pursuant to an across-the-board
compensation deferral similarly affecting all executives of the Company; (d) The failure by the Company to continue to provide Executive
with benefits or arrangements (including, without limitation, income tax services, car allowances, and other fringe benefits) at least
as favorable to those enjoyed by Executive upon the start of employment hereunder, the taking of any action by the Company which would
directly or indirectly materially reduce any of such benefits or deprive Executive of any material fringe benefit enjoyed by Executive
upon the start of employment hereunder. Executive’s continued employment shall not constitute consent to, or a waiver of rights
with respect to, any circumstance constituting Good Reason hereunder. Upon occurrence of any of the foregoing events which Executive believes
constitutes "Good Reason," Executive must notify the Company in writing within ten (10) days and give the Company ten (10) days
to cure or correct the alleged action or failure. After the expiration of twenty (20) days, Executive may quit for "Good Reason"
by giving written notice within an additional fourteen (14) days.

 

6.           Termination
Obligations.

 

The Executive agrees that on or before termination
of employment, she will promptly return to the Company all documents and materials of any nature pertaining to her work with the Company,
including all originals and copies of all or any part of any Proprietary Information or Inventions (as defined below) along with any and
all equipment and other tangible and intangible property of the Company.  The Executive agrees not to retain any documents or
materials or copies thereof containing any Proprietary Information or Inventions.

 

The Executive further agrees that:  (i) all
representations, warranties, and obligations under Articles 6, 7, 8, 9, 10, 11, 12, 14.1, 14.2, 14.3 and 14.4 contained in this Agreement
shall survive the termination of the Initial Period and Extended Period, as applicable; (ii) the Executive's representations, warranties
and obligations under Articles 6, 7, 8, 9, 10, 11, 12, 14.1, 14.2, 14.3 and 14.4 shall also survive the expiration of this Agreement;
and (iii) following any termination of the Initial Period or Extended Period, as applicable, the Executive shall fully cooperate
with the Company in all matters relating to her continuing obligations under this Agreement, including but not limited to the winding
up of pending work on behalf of the Company, the orderly transfer of work to the other employees of the Company, and the defense of any
action brought by any third party against the Company that relates in any way to the Executive's acts or omissions while employed by the
Company.  The Executive also agrees to sign and deliver the Termination Certificate attached hereto as Exhibit A prior
to her termination of employment with the Company.

 

     

     

    

 

7.           Post-Termination
Activity.

 

7.1           No
Use of Proprietary Information.  The Executive acknowledges that the pursuit of the activities forbidden by this subsection
would necessarily involve the use or disclosure of Proprietary Information in breach of this Agreement, but that proof of such a breach
would be extremely difficult.  To forestall such disclosure, use, and breach, and in consideration of the employment under this
Agreement, the Executive also agrees that while employed by the Company, and for a period of six (6) months after termination of
the Executive's employment, the Executive shall not, directly or indirectly:

 

(i)           divert
or attempt to divert from the Company or any Affiliate ("Affiliate" shall mean any person or entity that directly, or
indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with such entity).  For
the purposes of this definition "control" means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a person, whether through the ownership of voting securities, by contract or otherwise,
and includes (a) ownership directly or indirectly of 50% or more of the shares in issue or other equity interests of such person,
(b) possession directly or indirectly of 50% or more of the voting power of such person or (c) the power directly or indirectly
to appoint a majority of the members of the board of directors or similar governing body of such person, and the terms "controlling"
and "controlled" have meanings correlative to the foregoing) any business of any kind in which it is engaged, including,
without limitation, soliciting business from or performing services for, any persons, company or other entity which at any time during
the Executive's employment by the Company is a client, supplier, or customer of the Company or prospective client, supplier, or customer
of the Company if such business or services are of the same general character as those engaged in or performed by the Company;

 

(ii)           solicit
or otherwise induce any person to terminate her employment or consulting relationship with the Company or any Affiliate; or

 

(iii)         
engage, invest or assist in any business activity that directly or indirectly competes with any business plan of the Company or any Affiliate.

 

In addition, because the Executive acknowledges
the difficulty of establishing when any intellectual property, invention, or proprietary information is first conceived or developed by
the Executive, or whether it results from access to Proprietary Information or the Company equipment, supplies, facilities, or data, the
Executive agrees that any intellectual property, invention, or proprietary information shall be reported to the Company and, unless proven
otherwise to the reasonable satisfaction of the Company, shall be presumed to be an Invention (as defined below) for the purpose of this
Agreement and shall be subject to all terms and conditions hereof, if reduced to practice by the Executive or with the aid of the Executive
within six (6) months after termination of the Initial Period or Extended Period, as applicable.

 

7.2           No
Competition.  Notwithstanding Section 7.1 above, while employed by the Company and for a period of six (6) months
after the termination of the Executive's employment with the Company for any reason whatsoever, the Executive shall not, directly or indirectly,
as an executive, employer, employee, consultant, agent, principal, partner, manager, stockholder, officer, director, or in any other individual
or representative capacity, engage, aid, counsel or participate in any business within Hong Kong and the People’s Republic of China
that is competitive with the business of the Company or any Affiliate.  Notwithstanding the foregoing, the Executive may own
less than one percent (1%) of any class of stock or security of any corporation listed on an internationally recognized securities exchange
which competes with the Company.

 

     

     

    

 

7.3           Enforceability.  The
covenants of this Article 7 are several and separate, and the unenforceability of any specific covenant shall not affect the provisions
of any other covenant.  If any provision of this Article 7 relating to the time period or geographic area of the restrictive
covenants shall be declared by a court of competent jurisdiction to exceed the maximum time period or geographic area, as applicable,
that such court deems reasonable and enforceable, then this Agreement shall automatically be considered to have been amended and revised
to reflect the maximum time period or geographic area that such court deems enforceable.

 

7.4           Independent
Covenants.  All of the covenants in this Article 7 shall be construed as an agreement independent of any other provision
in this Agreement, and the existence of any claim or cause of action of the Executive against the Company or any of its Affiliates, whether
predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of such covenants.

 

8.           Proprietary
Information.

 

The Executive agrees during her employment with
the Company and within three (3) years thereafter, to hold in strictest confidence and trust, and not to use or disclose to any person,
firm or corporation any Proprietary Information without the prior written consent of the Company, except as necessary in carrying out
her duties as an employee of the Company for the benefit of the Company.  "Proprietary Information" means any
information of a proprietary, confidential or secret nature that may be disclosed to the Executive that relates to the business of the
Company or of any parent, subsidiary, Affiliate, customer or supplier of the Company or any other party with whom the Company agrees to
hold information of such party in confidence ("Relevant Parties").  Such Proprietary Information includes,
but is not limited to, Inventions (as defined below), research, product plans, products, services, business strategies, personnel
information, customer lists, customers, markets, technical information, forecasts, marketing, finances or other business information of
the Company and its Affiliates.  This information shall remain confidential whether it was disclosed to the Executive either
directly or indirectly in writing, orally or by drawings or observation.  The Executive understands that Proprietary Information
does not include any of the foregoing items which has become publicly known and made generally available through no wrongful act of the
Executive or others who were under confidentiality obligations as to the items involved.

 

9.           Former
Employer Information.

 

The Executive agrees that she will not, during
her employment with the Company, improperly use or disclose any proprietary information or trade secrets, or bring onto the premises of
the Company any unpublished document or proprietary information belonging to any former or concurrent employer or other person or entity
(excluding any direct or indirect subsidiary of the Company).

 

10.           Third
Party Information.

 

The Executive recognizes that the Company has received
and in the future will receive confidential or proprietary information from third parties.  The Executive agrees to hold all
such confidential or proprietary information in the strictest confidence and trust, and not to disclose it to any person, firm or corporation
or to use it except as necessary in carrying out her work for the Company consistent with the Company's agreement with such third party.

 

11.           No
Conflict.

 

The Executive represents and warrants that the
Executive's execution of this Agreement, her employment with the Company, and the performance of her proposed duties under this Agreement
shall not violate any obligations she may have to any former employer or other party, including any obligations with respect to proprietary
or confidential information or intellectual property rights of such party or require the consent or approval of any third party.

 

     

     

    

 

12.           Inventions.

 

12.1           Inventions
Retained and Licensed.  The Executive has attached, as Exhibit B, a list describing all inventions, original
works of authorship, developments, improvements, and trade secrets which were made by the Executive prior to the Executive's employment
with the Company ("Prior Inventions"), which belong to the Executive, and which relate to the Company's actual and/or
proposed business, products or research and development.  If, in the course of her employment with the Company, the Executive
incorporates into a Company product, process or machine a Prior Invention owned by the Executive or in which the Executive has an interest,
the Company is hereby granted and shall have a non-exclusive, royalty-free, irrevocable, perpetual, worldwide license to make, have made,
modify, use and sell such Prior Invention as part of or in connection with such product, process or machine.

 

12.2           Assignment
of Inventions.  The Executive agrees that she will promptly make full written disclosure to the Company, will hold in trust
for the sole right and benefit of the Company, and hereby irrevocably assigns to the Company, or its designee, all the Executive's right,
title, and interest in and to any and all inventions, original works of authorship, developments, concepts, improvements, designs, drawings,
discoveries, ideas, formulas, processes, compositions of matter, software, databases, mask works, computer programs (including all source
codes) and related documentation, algorithms, engineering and reverse engineering, technology, hardware configuration information, logos,
trade names, trademarks, patents, patent applications, copyrights, trade secrets or know-how, which the Executive may solely or jointly
conceive or develop or reduce to practice, or cause to be conceived or developed or reduced to practice ("Inventions"),
while the Executive is employed by the Company.  The Executive further acknowledges that all original works of authorship which
are made by the Executive (solely or jointly with others) within the scope of and during her employment with the Company and which are
protectable by copyright are "works made for hire," as that term is defined in the United States Copyright Act and that
the Company will be considered the author and owner of such works.  The Executive understands and agrees that the decision whether
or not to commercialize or market any Invention developed by the Executive solely or jointly with others is within the Company's sole
discretion and for the Company's sole benefit and that no royalty will be due to the Executive as a result of the Company's efforts to
commercialize or market any such Invention.

 

12.3           Waiver
of Moral Rights.  To the utmost extent legally permitted, the Executive also hereby forever waives and agrees never to assert
any and all Moral Rights (as defined below) he may have in or with respect to any Invention, even after termination of her work on behalf
of the Company.  "Moral Rights" mean any rights to claim authorship of an Invention to object to or prevent
the modification of any Invention, or to withdraw from circulation or control the publication or distribution of any Invention, and any
similar right, existing under judicial or statutory law of any country in the world, or under any treaty, regardless of whether or not
such right is denominated or generally referred to as a "moral right."

 

12.4           Maintenance
of Records.  The Executive agrees to keep and maintain adequate and current written records of all Inventions made by the
Executive (solely or jointly with others) during the Executive's employment with the Company.  The records will be in the form
of notes, sketches, drawings, and any other format that may be specified by the Company.  The records will be provided to, and
remain the sole property of, the Company at all times.

 

12.5           Patent
and Copyright Registrations.  The Executive agrees to assist the Company, or its designee, at the Company's expense, in
every proper way, to secure the Company's rights in the Inventions and any copyrights, patents, mask work rights, trade secret rights
or other intellectual property rights relating thereto in any and all countries.  The Executive will disclose to the Company
all pertinent information and data which the Company deems necessary for the execution of all applications, specifications, oaths, assignments
and execute all instruments necessary to apply for and obtain such rights and in order to assign and convey to the Company, its successors,
assigns, and nominees, the sole and exclusive right, title and interest in and to such Inventions, and any copyrights, patents, mask work
rights, or other intellectual property rights relating thereto.  The Executive further agrees that the Executive's obligation
to execute or cause to be executed, when it is in the Executive’s power to do so, any such instrument or papers shall continue after
the termination of this Agreement.  If the Company is unable, because of the Executive's mental or physical incapacity or for
any other reason, to secure her signature to apply for or to pursue any application for any patents or copyright registrations covering
the Inventions assigned to the Company as above, then the Executive hereby irrevocably designates and appoints the Company and its duly
authorized officers and agents as her agent and attorney in fact, to act for and in the Executive's behalf and stead to execute and file
any such applications and to do all other lawfully permitted acts to further the prosecution and issuance of letters, patent or copyright
registrations thereon with the same legal force and effect as if executed by the Executive.

 

     

     

    

 

13.           Alternative
Dispute Resolution.

 

Except with respect to any proceeding brought under Section 7
hereof, the Company and Executive mutually agree that any controversy or claim arising out of or relating to this Agreement or the breach
thereof, or any other dispute between the parties, shall be submitted to mediation before a mutually agreeable mediator, which cost is
to be borne equally by the parties hereto. In the event the Parties fail to agree on a mediator, or mediation is unsuccessful in resolving
the claim or controversy within one (1) month after the commencement of mediation, such claim or controversy shall be resolved by
arbitration in Hong Kong. Any dispute, controversy, difference or claim arising out of or relating to this Agreement, including the existence,
validity, interpretation, performance, breach or termination thereof or any dispute regarding non-contractual obligations arising out
of or relating to it shall be referred to and finally resolved by arbitration administered by the Hong Kong International Arbitration
Centre (HKIAC) under the UNCITRAL Arbitration Rules in force when the Notice of Arbitration is submitted , as modified by the HKIAC
Procedures for the Administration of International Arbitration. The law of this arbitration clause shall be Hong Kong law. The seat of
arbitration shall be in Hong Kong. The number of arbitrators shall be one. The arbitration proceedings shall be conducted in English.

 

14.           Miscellaneous.

 

14.1           Continuing
Obligations.  The obligations in this Agreement will continue in the event that the Executive is hired, renders services
to or for the benefit of or is otherwise retained at any time by any present or future Affiliates of the Company.  Any reference
to the Company in this Agreement will include such Affiliates.  Upon the expiration or termination for any reason whatsoever
of this Agreement, the Executive shall forthwith resign from any employment of office with an Affiliate of the Company unless the board
of directors of the Company requests otherwise.

 

14.2           Notification.  The
Executive hereby authorizes the Company to notify her actual or future employers of the terms of this Agreement and her responsibilities
hereunder.

 

14.3           Name and
Likeness Rights.  The Executive hereby authorizes the Company to use, reuse, and to grant others the right to use and reuse,
her name, photograph, likeness (including caricature), voice, and biographical information, and any reproduction or simulation thereof,
in any media now known or hereafter developed (including but not limited to film, video and digital or other electronic media), both during
and after her employment, for whatever purposes the Company deems necessary.

 

14.4           Injunctive
Relief. The Executive understands that in the event of a breach or threatened breach of this Agreement by her, the Company
may suffer irreparable harm and will therefore be entitled to injunctive relief to enforce this Agreement.

 

14.5           Entire
Agreement.  This Agreement, including the exhibits attached hereto, is intended to be the final, complete, and exclusive
statement regarding their subject matter, except for other agreements specifically referenced herein.  Unless otherwise specifically
provided for herein, this Agreement supersedes all other prior and contemporaneous agreements and statements pertaining to this subject
matter, and may not be contradicted by evidence of any prior or contemporaneous statements or agreements.  To the extent that
the practices, policies, or procedures of the Company, now or in the future, apply to the Executive and are inconsistent with the terms
of this Agreement, the provisions of this Agreement shall control.

 

14.7           Amendments,
Renewals and Waivers.  This Agreement may not be modified, amended, renewed or terminated except by an instrument in writing,
signed by the Executive and by a duly authorized representative of the Company other than the Executive.  No failure to exercise
and no delay in exercising any right, remedy, or power under this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, or power under this Agreement preclude any other or further exercise thereof, or the exercise of
any other right, remedy, or power provided herein or by law or in equity.

 

     

     

    

 

14.8           Assignment;
Successors and Assigns.  The Executive agrees that she will not assign, sell, transfer, delegate or otherwise dispose of,
whether voluntarily or involuntarily, or by operation of law, any rights or obligations under this Agreement, nor shall the Executive's
rights be subject to encumbrance or the claims of creditors.  Any purported assignment, transfer, or delegation shall be null
and void.  Nothing in this Agreement shall prevent the consolidation of the Company with, or its merger into, any other corporation,
or the sale by the Company of all or substantially all of its properties or assets, or the assignment by the Company of this Agreement
and the performance of its obligations hereunder to any successor in interest.  In the event of a change in ownership or control
of the Company, the terms of this Agreement will remain in effect and shall be binding upon any successor in interest.  Notwithstanding
and subject to the foregoing, this Agreement shall be binding upon and shall inure to the benefit of the parties and their respective
heirs, legal representatives, successors, and permitted assigns, and shall not benefit any person or entity other than those enumerated
above.

 

14.9            Indemnification. The
Company shall indemnify the Executive, to the maximum extent permitted by applicable law, against all costs, charges and expenses incurred
or sustained by the Executive in connection with any action, suit or proceeding to which she may be made a party by reason of being an
officer, director or employee of the Company or of any subsidiary or affiliate of the Company or any other corporation for which the Executive
serves in good faith as an officer, director, or employee.  The Company will cover Executive under its directors and officers liability
insurance in the same amount and to the same extent as the Company covers its other officers and directors.

 

14.10           Notices.  All
notices and other communications given or made pursuant hereto shall be in writing and shall be deemed to have been duly given or made
as of the date delivered or mailed if delivered personally or by nationally recognized courier or mailed by registered mail (postage prepaid,
return receipt requested) or by telecopy to the parties at the following addresses (or at such other address for a party as shall be specified
by like notice, except that notices of changes of address shall be effective upon receipt):

 

	 	To:	Company
	 	Contact Address:	Takung Art Co., Ltd
	 	 	Room 709, Tower 2 ,Admiralty Center, 18 Harcourt Road, Admiralty, Hong Kong
	 	Attention:	Kwok Leung Li, Chief Executive Officer
	 	 	 
	 	To:	Executive
	 	Contact Address:	Room 709, Tower 2 ,Admiralty Center, 18 Harcourt Road, Admiralty, Hong Kong
	 	 	 
	 	Attention:	Wing Yan Leung

 

14.11           Waiver
of Immunity.  To the extent that any Party (including its assignees of any such rights or obligations hereunder) may be
entitled, in any jurisdiction, to claim for itself (or himself or herself) or its revenues or assets or properties, immunity from service
of process, suit, the jurisdiction of any court, an interlocutory order or injunction or the enforcement of the same against its property
in such court, attachment prior to judgment, attachment in aid of execution of an arbitral award or judgment (interlocutory or final)
or any other legal process, and to the extent that, in any such jurisdiction there may be attributed such immunity (whether claimed or
not), such Party hereby irrevocably waives such immunity.

 

     

     

    

 

14.12           Severability;
Enforcement.  If any provision of this Agreement, or its application to any person, place, or circumstance, is held by an
arbitrator or a court of competent jurisdiction to be invalid, unenforceable, or void, such provision shall be enforced (by blue-penciling
or otherwise) to the maximum extent permissible under applicable law, and the remainder of this Agreement and such provision as applied
to other persons, places, and circumstances shall remain in full force and effect.

 

14.13           Governing
Law.  This Agreement shall in all respects be construed and enforced in accordance with and governed by the laws of Hong
Kong, without regard to principles of conflict of laws.

 

14.14           Interpretation.  This
Agreement shall be construed as a whole, according to its fair meaning, and not in favor of or against any party.  Sections
and section headings contained in this Agreement are for reference purposes only, and shall not affect in any manner the meaning or interpretation
of this Agreement.  Whenever the context requires, references to the singular shall include the plural and the plural the singular.  References
to one gender include both genders.

 

14.15           Counterparts.  This
Agreement may be executed in any number of counterparts, each of which shall be deemed an original of this Agreement, but all of which
together shall constitute one and the same instrument.

 

     

     

    

 

EXECUTIVE ACKNOWLEDGEMENT.  The Executive
acknowledges (i) that she has consulted with or has had the opportunity to consult with independent counsel of her own choice concerning
this Agreement and has been advised to do so by the Company, and (ii) that she has read and understands the Agreement, is fully aware
of its legal effect, and has entered into it freely based on her own judgment.  The Executive hereby agrees that her obligations
set forth in Sections 7, 8, and 9 hereof and the definitions of Proprietary Information and Inventions contained therein shall be equally
applicable to Proprietary Information and Inventions relating to any work performed by the Executive for the Company prior to the execution
of this Agreement.

 

The parties have duly executed this Agreement as
of the date first written above.

 

	 	EXECUTIVE:
	 	 	 
	 	 	 
	 	 /s/ Wing Yan Leung
	 	Name: Wing Yan Leung
	 	 	 
	 	 	 
	 	COMPANY:
	 	 	 
	 	Takung Art Co., Ltd
	 	 	 
	 	 	 
	 	By:	/s/ Kwok Leung Li
	 	Name: Kwok Leung Li
	 	Title:   Chief Executive Officer

 

     

     

    

 

EXHIBIT A

 

TERMINATION CERTIFICATE

 

This is to certify that I have returned all property of Takung Art
Co., Ltd. (the "Company") and the Relevant Parties, including, without limitation, all books, manuals, records,
models, drawings, reports, notes, contracts, lists, blueprints, and other documents and materials, electronic data recorded or retrieved
by any means, Proprietary Information, and equipment furnished to or prepared by me in the course of or incident to my employment with
the Company, and that I did not make or distribute any copies of the foregoing.

 

I further certify that I have reviewed the Executive Employment Agreement
(the "Agreement") signed by me and that I have complied with and will continue to comply with all of its terms, including,
without limitation, (i) the reporting of any Inventions or any improvement, rights, or claims related to the foregoing, conceived
or developed by me and covered by the Agreement; (ii) the preservation as confidential of all Proprietary Information pertaining
to the Company and the Relevant Parties; (iii) not participating in any business competitive with the business of the Company; (iv) not
acting as the legal representative or an executive officer of any other company within and outside Hong Kong, and (v) the reporting
of any remuneration paid to me due to any employment or self-employment during the severance period, if any.  This certificate
in no way limits my responsibilities or liabilities to the Company or the Company's rights under the Agreement.

 

On termination of my employment with the Company, I will be employed
by [name of new employer] in the [division name] division and I will be working in connection with the
following projects:

 

[generally describe the projects]

 

	 
	 
	 
	 

 

	Date:	 	 	 
	 	 	 	Print Executive's Name
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	Executive's Signature

 

     

     

    

 

EXHIBIT B

 

LIST OF PRIOR INVENTIONS

 

AND ORIGINAL WORKS OF AUTHORSHIP

 

 

Title                   Date              Identifying
Number or Brief Description

 

 

	X	No inventions or improvements
	 	Additional Sheets Attached

 

	Signature of Executive:	/s/	 
	Printed Name of Executive: Wing Yan Leung

	Date:	September 30, 2021

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