EMPLOYMENT AGREEMENT


 


This EMPLOYMENT AGREEMENT
(“Agreement”), dated as of March 12. 2011, as revised, is made by and among LY RETAIL LLC, a limited liability
company organized under the laws of California (the “Company”), LuxeYard, Inc., a corporation organized under
the laws of Delaware and parent of the Company (the “Parent”) and Tony Winders (the “Executive”).
Each of the Company, the Parent and the Executive are referred to herein individually as a “Party” and collectively
as the “Parties.”


 


RECITALS:


 


WHEREAS, the Company
wishes to employ the Executive Vice President of Revenue wishes to accept such employment, on the terms set forth below, effective
as of March 12, 2012 (“Effective Date”);


 


NOW, THEREFORE, in
consideration of the foregoing premises, and the covenants, representations and warranties set forth herein, and for other good
and valuable consideration, the receipt and sufficiency of which is hereby acknowledged and accepted, the Parties, intending to
be legally bound, hereby agree as follows:


 


1.           Term.
The Company hereby employs the Executive, and the Executive hereby accepts such employment, for an initial term commencing as of
the Effective Date and continuing through March 11, 2015, unless sooner terminated in accordance with the provisions of Section
5 hereof (the “Initial Term”), with such employment to continue for an additional two (2) consecutive years,
contingent upon Company meeting fiscal goals for the previous year, in accordance with the terms of this Agreement (subject to
termination as aforesaid) unless either Party notifies the other Party of non-renewal in writing prior to three months before the
expiration of the initial term and each annual renewal, as applicable. (The period during which the Executive is employed hereunder
being hereinafter referred to as the “Term”).


 


2.           Duties.
During the Term, the Executive shall be employed by the Company as its Executive Vice President of Revenue reporting directly
to the Company’s Chief Operating Officer. The Executive shall devote a reasonable amount of his working time (but no less
than an average of forty (40) hours per each work week during the Term excluding holidays, vacation and sick days) and effort to
the faithful performance of his duties hereunder


 


3.           Place
of Performance. Employee shall be based at the office of the Company in Los Angeles, California, or such other location as
the parties may agree upon from time to time.


 


4.           Compensation.


 


(a)          Base
Salary. The Company shall pay the Executive during the Term a salary at a minimum rate of $120,000.00 per annum for
the period beginning on the Effective Date through the Initial Term (the “Base Salary”), in accordance with
the customary payroll practices of the Company applicable to senior executives. Should the company achieve revenue expectations
meeting or exceeding proforma projections for 2012Q3 (“Milestone 1”), then Executive’s Base Salary shall increase
to $132,500. Should the company achieve revenue expectations meeting or exceeding proforma projections for 2013Q1 (“Milestone
2), then Executive’s Base Salary shall increase to $150,000.


 



    	 



    	 



    

 


(b)          Bonuses.
For each Fiscal Year ending during the Term, the Executive shall be designated as a participant in the Parent’s Key Employee
Cash Bonus Plan. Such bonus pool of Five Hundred Thousand Dollars ($500,000) shall be shared amongst all participants of bonus
plan. The Parent’s Board, or, at the discretion of the Parent’s Board, the Committee, shall further have the discretion
to grant Executive annual bonuses in such amounts and on such terms as it shall determine in its sole discretion. Nothing contained
in the foregoing shall limit the Executive’s eligibility to receive any other bonus under any other bonus plan, stock option
or equity-based plan, or other policy or program of Parent or the Company. For all qualifying years, losses may not be larger than
$3.75 million as reflected in proforma established by the Chief Executive Office of the Company and top line sales need to be at
least equivalent to budget calendar year revenues as per proforma in attachment 1. The proforma projections shall be revisited
for the beginning of any other years, to reflect fiscal projected for top line and bottom line presented by the Company.


 


(c)          Option
Grant. Immediately after he signs this Agreement, Executive shall be granted an option under the Company’s newly adopted
stock option plan to purchase 250,000 shares of the Parent’s common stock. Upon reaching Milestone 1, Executive shall
be granted an option to purchase 250,000 additional shares of the Partent’s common stock. The vesting is ratably over
36 months and number of shares underlying the Option Grant and the exercise price thereof and all other terms and conditions of
said Grant shall be set forth in Company’s Employee Option Plan. All options granted are subject
to Internal Revenue Service IRC code section 422 limitations.  Executive also agrees and acknowledges that Employee is subject
to the terms and conditions of the lock-up agreement (the “Lock-Up Agreement”) dated as of November 8, 2011 between
Executive and Company. In the event of a conflict between the Lock-Up Agreement and this Agreement, the conflicting provision of
this Agreement will prevail.


 


(d)          Equity
Incentive Compensation. Executive shall be entitled to participate in any equity compensation plan of Parent or the Company
in which he is eligible to participate, and may, without limitation, be granted in accordance with any such plan options to purchase
units of Company membership interest, shares of Parent’s common stock, shares of restricted stock, and other equity awards
in the discretion of the Parent’s Board or the Committee.


 


(e)          Benefits.
The Executive shall be permitted during the Term to participate in any group life, hospitalization or disability insurance plans,
health programs, retirement plans, fringe benefit programs and other benefits that may be available to other senior executives
of the Company or Parent generally, in each case to the extent that the Executive is eligible under the terms of such plans or
programs.


 



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(f)          Vacation.
The Executive shall be entitled to vacation of no less than fifteen (15) business days per year. Unused vacation days shall not
carry-over into subsequent years.


 


(g)          Expenses.
The Company shall pay or reimburse the Executive for all ordinary and reasonable out-of-pocket expenses actually incurred (and,
in the case of reimbursement, paid) by the Executive during the Term in the performance of the Executive’s services under
this Agreement, in accordance with the Company’s policies regarding such reimbursements.


 


5.           Termination
of Employment; Change of Control.


 


(a)          Termination
upon Death or Disability. This Agreement and Executive’s employment hereunder shall automatically terminate on the date
on which Executive dies or becomes permanently incapacitated. Executive shall be deemed to have become “permanently incapacitated”
on the date that is thirty (30) days after the Company has determined that Executive has suffered a Permanent Incapacity (as defined
below) and so notifies Executive. For purposes of this Agreement, “Permanent Incapacity” shall mean that (i)
Executive is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment
that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months;
or (ii) Executive is, by reason of any medically determinable physical or mental impairment that can be expected to result in death
or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for
a period of not less than three (3) months under an accident and health plan covering employees of the service provider’s
employer.


 


(b)          Termination
by the Company for Cause. The Company may terminate this Agreement and Executive’s employment hereunder with Cause (as
defined below), effective upon delivery of written notice to Executive given at any time during the Term (without any necessity
for prior notice). For purposes of this Agreement, “Cause” shall mean the Executive’s: (i) conviction
of any felony or any other crime involving moral turpitude, (ii) material fraud against the Company or any of its subsidiaries
or affiliates or material theft of or maliciously intentional damage to the property of the Company or any of their subsidiaries
or affiliates, (iii) willful and material breach of Executive’s fiduciary duties to the Company, or (iv) material breach
by Executive of any material provision of this Agreement. Termination for Cause is only allowed if the Company gives the Executive
30 day’s notice of the termination within 30 days of Company becoming aware of the alleged incident causing the termination
under this provision, provides the basis of the claims, and the Executive is given 15 days to explain and/or correct the condition
or incident at issue to the reasonable satisfaction of Company.


 


(c)          Termination
by Company without Cause. For an initial period of ninety-(90) days from Effective date, Company may terminate without Cause
without any prior notice (“Trial Period.”) After the Trial Period, the Company may terminate this Agreement and Executive’s
employment hereunder without Cause, effective upon delivery of thirty (30) days prior written notice to Executive given at any
time during the Term (without any necessity for prior notice) provided that the Company complies with all provisions of this Agreement,
including without limitation, obligations related to severance, vesting of options and continuation of benefits as set forth herein.


 



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(d)          Termination
by the Executive for Good Reason. The Executive may terminate this Agreement and Executive’s employment hereunder with
Good Reason (as defined below). For purposes of this Agreement, “Good Reason” shall mean; i) a material reduction
in Base Salary of the Executive; ii) the Company’s material breach of this Agreement; or iii) any change in the geographic
location at which Executive must perform the services under this Agreement, which change is reasonably material to Executive. Notwithstanding
the foregoing, Good Reason shall not be deemed to exist unless notice of termination on account thereof (specifying a termination
date no later than thirty (30) days from the date of such notice) is given no later than 30 days after the time at which the event
or condition purportedly giving rise to Good Reason first occurs or arises and (y) if there exists (without regard to this clause
(y)) an event or condition that constitutes Good Reason, the Company shall have fifteen (15) days from the date notice of such
a termination is given to cure such event or condition to the Executive’s reasonable satisfaction and, if the Company does
so, such event or condition shall not constitute Good Reason hereunder.


 


(e)          Termination
by the Executive other than for Good Reason. The Executive may terminate this Agreement and Executive’s employment hereunder
other than for Good Reason, provided that the Executive gives the Company no less than thirty (30) days prior written notice of
such termination. The Company agrees that if it elects to end Executive’s employment at any time before the end of the notice
period provided by Executive, the Company will continue to pay all Executive’s compensation and benefits during the notice
period provided by Executive. Any failure of the Company to comply with this provision shall constitute a termination without cause
as provided in this Agreement.


 


6.           Payments
Upon Termination.


 


(a)          Upon
termination of this Agreement and Executive’s employment hereunder due to Executive’s death or disability pursuant
to Section 5(a) hereof, (i) the Executive (or the Executive’s estate or beneficiaries in the case of the death of
the Executive) shall be entitled to receive: (i) all earned Base Salary, benefits, compensation and bonuses; (ii) a prorated bonus
for the year of the Executive’s death or disability; (iii) a continuation of the Executive’s disability and death benefits;
(iv) reimbursement of all unpaid expenses on behalf of the Company; (v) all unpaid and unused vacation days; (vi) all outstanding
stock options granted shall immediately vest under the Company’s Employee Option Plan, under the Equity Incentive Compensation
or any other Company plan granted to Executive during his employment. Executive (or the Executive’s estate or beneficiaries
in the case of the death of the Executive) shall have no further rights to any other compensation or benefits hereunder, or any
other rights hereunder.


 


(b)          Upon
termination of this Agreement and Executive’s employment hereunder (i) by the Company for Cause pursuant to Section
5(b) hereof or by Executive other than for Good Reason pursuant to Section 5(e) hereof, (i) the Company shall pay to
Executive an amount equal to Executive’s then Base Salary, unused vacation days and other benefits earned and accrued under
this Agreement prior to the date of termination (and reimbursement under this Agreement for expenses incurred prior to the date
of termination) and (ii) the Executive shall have no further rights to any other compensation or benefits under this Agreement
on or after the termination of employment.


 



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(c)          Upon
termination of this Agreement and Executive’s employment hereunder by the Company without Cause pursuant to Section 5(c)
hereof or by Executive for Good Reason pursuant to Section 5(d) hereof, if during the Trial Period, Executive shall only
be entitled to one month of severance pay at the then current Base Salary rate and any other benefits of vesting that would occur
during that period, or, if after the Trial Period, then (i) an amount equal to Executive’s then Base Salary and other benefits
(including any bonus for a calendar year completed before termination) earned and accrued under this Agreement prior to the date
of termination and reimbursement under this Agreement for expenses incurred prior to the date of termination; (ii) six-(6) consecutive
bi-weekly payments equal to Executive’s then current bi-weekly payments; iii) a lump sum payment for all unused vacation
time; and iv) a continuation of Executive’s health insurance benefits for a period of six-(6) consecutive months; and iv)
all outstanding stock options granted shall immediately vest under the Company’s Employee Option Plan, under the Equity Incentive
Compensation or any other Company plan including but not limited to the NQSO between Executive and Company and subject to all of
the terms and conditions set forth in the NQSO, granted to Executive during his employment. Executive shall have no further rights
to any other compensation or benefits under this Agreement on or after the termination of employment.


 


(d)          In
the event of any conflict between any provision in this Agreement and any term of an applicable employee stock option plan, stock
option grants, or other equity-based compensation plan, the express terms of this Agreement shall prevail and control. All other
provisions of any employee stock option plans, stock grants and/or any other equity-based compensation plan that do not conflict
with a provision of this Agreement shall continue to be governed by their own terms and conditions as they apply to any and all
stock options issued by the Company to the Executive.


 


(e)          Unless
the payment is required to be delayed pursuant to Code Section 409A (as defined below), the cash amounts payable to the Executive
(or the Executive’s estate or beneficiaries in the case of the death of the Executive) under this Section 6 shall
be paid to the Executive (or the Executive’s estate or beneficiaries in the case of the death of the Executive) in a single-sum
payment within 60 days following the effective date of termination of this Agreement and Executive’s employment hereunder.


 


7.           Parachutes.
If any amount payable to or other benefit receivable by the Executive pursuant to this Agreement would be deemed to constitute
a Parachute Payment (as defined below), alone or when added to any other amount payable or paid to or other benefit receivable
or received by the Executive which is deemed to constitute a Parachute Payment (whether or not under an existing plan, arrangement
or other agreement), and would result in the imposition on the Executive of an excise tax under Section 4999 of the Code, then
the Parachute Payments shall be reduced (but not below zero) so that the maximum amount of the Parachute Payments (after reduction)
shall be one dollar ($1.00) less than the amount which would cause the Parachute Payments to be subject to the excise tax imposed
by Section 4999 of the Code. Any such reduction shall be made by first reducing severance benefits (if any). Notwithstanding the
foregoing, if the reduction of Parachute Payments under this Section 7 would be equal to or greater than $50,000, then there
shall be no such reduction and the full amount of the Parachute Payment shall be payable. “Parachute Payment” shall
mean a “parachute payment” as defined in Section 280G of the Code. The calculation under this Section 7 shall
be as determined by the Parent’s accountants.


 



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8.           Execution
of Release. The Executive acknowledges that, if required by the Company prior to making the payments and benefits set forth
in Section 5 (other than accrued but unpaid Base Salary and other benefits), all such payments and benefits are subject
to his execution of a general release from liability of the Company, Parent, and their respective Officers (including his successor),
Directors/Managers and employees, and such release becoming irrevocable by its terms. The release will be limited to claims relating
exclusively to Executive’s employment with the Company as of the date of termination and conditioned on the Company’s
payment of all terms and conditions set forth in this Agreement. The Release will not release claims for the payment of any future
stock option payments provided and detailed above. The Release will not add any terms or conditions relating to post employment
that are not included in this Agreement..


 


9.           Application
of Code Section 409A.


 


(a)          This
Agreement shall be interpreted to avoid any penalty sanctions under Section 409A of the Code (“Code Section 409A”).
If any payment or benefit cannot be provided or made at the time specified herein without incurring sanctions under Code Section
409A, then such benefit or payment will be provided in full (to the extent not paid in part at earlier date) at the earliest time
thereafter when such sanctions will not be imposed. For purposes of Code Section 409A, all payments to be made upon a termination
of employment under this Agreement may only be made upon Executive’s “separation from service” (within the meaning
of such term under Code Section 409A) with the Company, each payment made under this Agreement will be treated as a separate payment,
and the right to a series of installment payments under this Agreement will be treated as a right to a series of separate payments.
In no event will Executive, directly or indirectly, designate the calendar year of payment, except as permitted under Code Section
409A.


 


(b)          Notwithstanding
anything herein to the contrary, if, at the time of Executive’s “separation from service” with the Company, the
Company has securities which are publicly traded on an established securities market and Executive is a “specified employee”
(as such term is defined in Code Section 409A) and it is necessary to postpone the commencement of any payments or benefits otherwise
payable under this Agreement as a result of such termination of employment to prevent any accelerated or additional tax under Code
Section 409A, then the Company will postpone the commencement of the payment of any such payments or benefits hereunder (without
any reduction in such payments or benefits ultimately paid or provided to Executive), until the first payroll date that occurs
after the date that is six (6) months following Executive’s “separation of service” with the Company. If any
payments are postponed due to such requirements, such postponed amounts will be paid with interest at the applicable federal rate
as provided under Section 7872(f)(2)(A) of the Code in a lump sum to Executive on the first payroll date that occurs after the
date that is six (6) months following Executive’s “separation of service” with the Company. If Executive dies
during the postponement period prior to the payment of the postponed amount, the amounts withheld on account of Code Section 409A
will be paid to the personal representative of Executive’ s estate within sixty (60) days after the date of Executive’s
death. Payments pursuant to Section 6 of this Agreement are intended to satisfy the short-term deferral exception under
Code Section 409A.


 



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(c)          All
reimbursements and in-kind benefits provided under this Agreement will be made or provided in accordance with the requirements
of Code Section 409A, including, where applicable, the requirement that (i) any reimbursement will be for expenses incurred during
Executive’s lifetime (or during a shorter period of time specified in this Agreement), (ii) the amount of expenses eligible
for reimbursement, or in kind benefits provided, during a calendar year may not affect the expenses eligible for reimbursement,
or in kind benefits to be provided, in any other calendar year, (iii) the reimbursement of an eligible expense will be made on
or before the last day of the calendar year following the year in which the expense is incurred, and (iv) the right to reimbursement
or in kind benefits is not subject to liquidation or exchange for another benefit.


 


(d)          To
the extent applicable, all grants, awards, bonuses or other payments made to Executive or for which Executive is eligible under
any Company bonus, incentive, deferred compensation plan or program or any other compensation arrangement will be structured to
comply with the requirements of Code Section 409A or an exception from such requirements.


 


10.           Covenants
of the Executive.


 


(a)          Confidentiality.
During the Term, the Company has and will continue to provide Executive with access to, and may confide in her, information, business
methods and systems, techniques and methods of operation developed at great expense by the Company and which are assets of the
Company. Executive recognizes and acknowledges that: (i) all Confidential Information (defined below) is the property of the Company
and is unique, extremely valuable and developed and acquired by great expenditures of time, effort and cost; (ii) the misuse, misappropriation
or unauthorized disclosure by Executive of the Confidential Information would constitute a breach of trust and would cause serious
irreparable injury to the Company; and (iii) it is essential to the protection of the Company’s goodwill and to the maintenance
of the Company’s competitive position that the Confidential Information be kept secret and that Executive not disclose the
Confidential Information to others or use same to his own advantage or to the advantage of others. Accordingly, Executive shall
not, during the Term or thereafter, directly or indirectly, in any manner, utilize or disclose to any person, firm, corporation,
association or other entity, or use on his own behalf, any confidential and proprietary information of the Company, including,
but not limited to, information relating to strategic plans, sales, costs, client lists, client preferences, client identities,
investment strategies, computer programs, profits or the business affairs and financial condition of the Company, or any of its
clients, or any of the Company’s business methods, systems, marketing materials, clients or techniques (collectively “Confidential
Information”), except for (i) such disclosures where required by law, but only after written notice to the Company detailing
the circumstances and legal requirement for the disclosure; or (ii) as authorized during the performance of Executive’s duties
for such use or purpose as are reasonably believed by Executive to be in the best interests of the Company. At any time, upon request,
Executive shall deliver to the Company all of its property including, but not limited to, it’s Confidential Information (whether
electronically stored or otherwise) which are in his possession or under his control. Property to be returned includes, but is
not limited to, notebook pages, documents, records, prototypes, client files, drawings, electronically stored data, computer media
or any other materials or property in Executive’s possession.


 



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(b)          Noninterference.
During the Term and for a period of one (1) year following the end of the Term or Executive’s active engagement (meaning
that Executive’s services have been terminated by Company has exercised the Executive Opt Out or Executive has terminated
the Agreement for Good Reason all of which are as set forth hereinabove) by Company whichever is earlier (the “Restricted
Period”), for whatever reason, he will not, directly for Executive or on behalf of any third party, at any time or in
any manner:


 


(i)          persuade,
induce, solicit, influence or attempt to influence, or cause any person who is an employee of the Company to terminate his or her
relationship with the Company or refer any such employee to anyone, without prior written approval from the Company;


 


(ii)          request
or cause any of the Company’s clients or potential clients to cancel, modify or terminate any existing or continuing or,
to Executive’s knowledge, prospective business relationship with the Company;


 


(iii)          persuade,
induce, solicit, influence or attempt to influence, or cause any client or, to Executive’s knowledge, prospective client
of the Company to cease or refrain from doing business, or to decline to do business, or to change or alter any existing or prospective
business relationship, with the Company;


 


(iv)          provide
any third party with any information concerning any client, or to Executive’s knowledge, prospective client of the Company,
including but not limited to, the disclosure of any client name or data, in whatever form, to such third party.


 


(c)          Noncompetition.
During the Term, Executive shall not, directly engage or participate in, or become employed by, or affiliated with, or enter
into or maintain a contractual relationship with, or render advisory or any other services to, any person or business entity
or organization, of whatever form, that competes with the Company in the United States or
any other location in which the Company conducts business prior to Executive’s termination date.


 



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(d)          Injunctive
Relief. Executive acknowledges that his compliance with the covenants in Sections 9(a), 9(b) and 9(c)
hereof (the “Restrictive Covenants”) is necessary to protect the good will, Confidential Information and other
proprietary interests of the Company, that such covenants are supported by adequate and sufficient consideration, and that, in
the event of any violation or threatened violation by Executive of any such provision, the Company will sustain serious, irreparable
and substantial harm to its business, the extent of which will be difficult to determine and impossible to remedy by an action
at law for money damages. Accordingly, Executive agrees that, in the event of such violation or threatened violation by her, the
Company shall be entitled to seek an injunction before trial from any court of competent jurisdiction as a matter of course and
upon the posting of not more than a nominal bond, in addition to all such other legal and equitable remedies as may be available
to the Company. Executive further acknowledges that he has carefully considered the nature and extent of the restrictions contained
herein and the rights and remedies conferred upon the Company under this Agreement, and hereby acknowledges and agrees that the
same are reasonable, are designed to protect the legitimate business interests of the Company, and do not confer benefits upon
the Company disproportionate to the detriment upon her. In the event that Executive violates any of the covenants in this Agreement
and the Company commences legal action for injunctive or other relief, the Company shall have the benefit of the full period of
the covenants, computed from the date Executive ceased violation of the covenants, either by order of the court or otherwise. Executive
acknowledges that any claim or cause of action he may have against the Company shall not constitute a defense to the enforcement
by the Company of his covenants in Article 5 of this Agreement (e.g., these covenants are independent of any other provision in
this Agreement and of any other promise made to Executive). Executive also acknowledges that his experience and capabilities are
such that he can obtain suitable employment otherwise than in violation of the covenants in this Agreement and that the enforcement
of these covenants will not prevent the earning of a livelihood nor cause undue hardship. Without limiting the foregoing, in the
event of a breach by Executive of any Restrictive Covenant, the Company’s obligations under this Agreement shall immediately
terminate, Executive shall not be entitled to any additional monetary payments or benefits of any kind whatsoever and Executive
shall reimburse the Company for all of its attorneys fees and costs associated with any legal or equitable proceedings or litigation
seeking to enforce the terms of this Agreement.


 


(e)          Remedies
Cumulative and Concurrent. The rights and remedies of the Company as provided in this Section 10 shall be cumulative
and concurrent and may be pursued separately, successively or together, at the sole discretion of the Company, and may be exercised
as often as occasion therefor shall arise. The failure to exercise any right or remedy shall in no event be construed as a waiver
or release thereof.


 


(f)          Executive’s
Authorization. Executive authorizes the Company to inform any third parties, including future employers, prospective employers
and the Company’s clients or prospective clients, of the existence of this Agreement and his obligations under it.


 


(g)          Survivability.
The provisions of this Section 10 shall survive the cessation of Employee’s employment for any reason, as well as
the expiration of this Agreement at the end of its Term or at any time prior thereto.


 


(h)          Definition
of Company. For purposes of this Section 10, the term “Company” shall include the Company and any of its
parents (including the Parent), subsidiaries, affiliates or any related companies including their respective successors and assigns.


 



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11.           Other
Provisions.


 


(a)          Severability.
The Executive acknowledges and agrees that (i) he has had an opportunity to seek advice of counsel in connection with this Agreement.
If it is determined that any of the provisions of this Agreement or any part thereof, including, without limitation, any of the
Restrictive Covenants, is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement
will remain in full force and effect. Any provision of this Agreement held invalid or unenforceable only in part or degree will
remain in full force and effect to the extent not held invalid or unenforceable.


 


(b)          Duration
and Scope of Covenants. If any court or other decision-maker of competent jurisdiction determines that any of the Restrictive
Covenants contained in this Agreement, including, without limitation, any of the Restrictive Covenants, or any part thereof, is
unenforceable because of the duration or geographical scope of such provision, then, after such determination has become final
and unappealable, the duration or scope of such provision, as the case may be, shall be reduced so that such provision becomes
enforceable and, in its reduced form, such provision shall then be enforceable and shall be enforced.


 


(c)          Arbitration.


 


(i)          Subject
to the limitations of this Section 11(c), if any dispute arises between the Parties under or concerning this Agreement or
the terms hereof, or regarding the manner in which Executive was treated while employed by the Company, the termination of his
employment, or any alleged violation by the Company of Executive’s rights under any common law theory, or any applicable
federal, state, or local law, statute, regulation, or ordinance (including without limitation 42 U.S.C. § 1981, Title VII
of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Americans with Disabilities Act, and any other local,
state, or federal legislation that pertains to employee rights or discrimination in employment), the Parties agree to submit such
issue to final and binding arbitration in accordance with the then existing National Rules for the Resolution of Employment Disputes
of the American Arbitration Association. Nothing in this Section 11(c), however, will preclude the Company from seeking
the judicial relief set forth under Section 10 of this Agreement.


 


(ii)          The
Parties agree that the interpretation and enforcement of the arbitration provisions in this Agreement will be governed exclusively
by the Federal Arbitration Act (the “FAA”), 9 U.S.C. § 1 et seq., provided that they are enforceable under the
FAA, and will otherwise be governed by the law of the State of California.


 


(iii)          The
Parties agree and understand that one of the objectives of this arbitration agreement is to resolve disputes expeditiously, as
well as fairly, and to those ends it is the obligation of all Parties to raise any disputes subject to arbitration hereunder in
an expeditious manner. Accordingly, the Parties agree that, as to any dispute that can be brought hereunder, a demand for arbitration
must be postmarked or delivered in person to the other Party no later than six (6) months after the date the demanding Party knows
or should have known of the event or events giving rise to the claim. Failure to demand arbitration on a claim within these time
limits is intended to, and will to the furthest extent permitted by law, and is a waiver and release with respect to such claims.
If, and only if, the waiver and release of claims referenced in the immediately preceding sentence is found by a court of competent
jurisdiction to be unenforceable as against Executive or the Company under this Agreement, then the Parties will nevertheless submit
such claims to arbitration pursuant to this Section 11(c) within the time permitted by law.


 



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(iv)          The
Company will pay the arbitrator’s fees.


 


(v)          Unless
otherwise agreed by the Parties, arbitration will take place in Los Angeles, California.


 


(vi)          In
rendering an award, the arbitrator will determine the rights and obligations of the Parties according to federal law and the substantive
law of the State of California without regard to any principles governing conflicts of laws and the arbitrator’s decision
will be governed by state and federal substantive law, including state and federal discrimination laws referenced in Section
11(c)(i) hereof, as though the matter were before a court of law.


 


(vii)          Any
arbitration award will be accompanied by a written statement containing a summary of the issues in controversy, a description of
the award, and an explanation of the reasons for the award. The decision of the arbitrator will be made within thirty (30) days
following the close of the hearing. The Parties agree that the award will be enforceable exclusively by any state or federal court
of competent jurisdiction within Los Angeles, California.


 


(viii)          It
is understood and agreed by the Parties that their agreement herein concerning arbitration does not contain, and cannot be relied
upon Executive to contain, any promises or representations concerning the duration of the employment relationship, or the circumstances
under or procedures by which the employment relationship may be modified or terminated.


 


(ix)          If
any part of this arbitration procedure is in conflict with any mandatory requirement or applicable law, the law will govern, and
that part of this arbitration procedure will be reformed and construed to the maximum extent possible in conformance with the applicable
law. The arbitration procedure will remain otherwise unaffected and enforceable.


 


(d)          Notices.
All notices, demands, consents, requests, instructions and other communications to be given or delivered or permitted under or
by reason of the provisions of this Agreement or in connection with the transactions contemplated hereby shall be in writing and
shall be deemed to be delivered and received by the intended recipient as follows: (i) if personally delivered, on the business
day of such delivery (as evidenced by the receipt of the personal delivery service), (ii) if mailed certified or registered mail
return receipt requested, two (2) business days after being mailed, (iii) if delivered by overnight courier (with all charges having
been prepaid), on the business day of such delivery (as evidenced by the receipt of the overnight courier service of recognized
standing), or (iv) if delivered by facsimile transmission or other electronic means, including email, on the business day of such
delivery if sent by 6:00 p.m. in the time zone of the recipient, or if sent after that time, on the next succeeding business day.
If any notice, demand, consent, request, instruction or other communication cannot be delivered because of a changed address of
which no notice was given (in accordance with this Section 11(d), or the refusal to accept same, the notice, demand, consent,
request, instruction or other communication shall be deemed received on the second business day the notice is sent (as evidenced
by a sworn affidavit of the sender). All such notices, demands, consents, requests, instructions and other communications will
be sent to the following addresses or facsimile numbers as applicable:


 



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	If to the Company or Parent, to:	 	
        LuxeYard, Inc.

        8884 Venice Blvd

        Los Angeles, CA, 90034

        Attention: Braden Richter, President and CEO

        Telephone No.: 248-730-5805

        Email.: brichter@luxeyard.com

	 	 	 
	If to the Executive, to:	 	 
	 	 	 
	 	 	 
	 	 	Telephone No.:	 	 
	 	 	Email.:	 	 	 


 


Any such person may by notice given in
accordance with this Section 11(d) to the other Parties hereto designate another address or person for receipt by such person
of notices hereunder.


 


(e)          Section
Headings. The headings of Sections in this Agreement are provided for convenience only and will not affect its construction
or interpretation. All references to or “Section” or “Sections” refer to the corresponding Article or Section
or Sections of this Agreement, unless the context indicates otherwise.


 


(f)          Construction.
The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question
of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption
or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this
Agreement. Any reference to any federal, state, local, or foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. Unless otherwise expressly provided, the word “including”
shall mean including without limitation. The Parties intend that each representation, warranty, and covenant contained herein
shall have independent significance. If any Party has breached any representation, warranty, or covenant contained herein in any
respect, the fact that there exists another representation, warranty, or covenant relating to the same subject matter (regardless
of the relative levels of specificity) which the Party has not breached shall not detract from or mitigate the fact that the Party
is in breach of such representation, warranty, or covenant. All words used in this Agreement will be construed to be of such gender
or number as the circumstances require


 


(g)          Counterparts.
This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original copy of this Agreement
and all of which, when taken together, will be deemed to constitute one and the same agreement. In the event that any signature
is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create
a valid and binding obligation of the Party executing (or on whose behalf such signature is executed) with the same force and effect
as if such facsimile or “.pdf” signature page were an original thereof.


 



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(h)          Entire
Agreement. This Agreement contains the entire agreement between the Parties with respect to the subject matter hereof and supersedes
all prior agreements, written or oral, with respect thereto. Any subsequent agreement that includes any term that conflicts in
any way with any term of this Agreement must be in writing, specifically identify the term in this Agreement that is being superceded
and be signed by both Parties.


 


(i)          Waivers
and Amendments. This Agreement may be amended, superseded, canceled, renewed or extended, and the terms hereof may be waived,
only by a written instrument signed by the Parties or, in the case of a waiver, by the Party waiving compliance. No delay on the
part of any Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any waiver
on the part of any Party of any such right, power or privilege nor any single or partial exercise of any such right, power or privilege,
preclude any other or further exercise thereof or the exercise of any other such right, power or privilege.


 


(j)          Assignment.
This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors, heirs (in the case
of the Executive) and assigns. No rights or obligations of the Company under this Agreement may be assigned or transferred by the
Company except that such rights or obligations may be assigned or transferred pursuant to a merger or consolidation in which the
Company is not the continuing entity, or the sale or liquidation of all or substantially all of the assets of the Company; provided,
however, that the assignee or transferee is the successor to all or substantially all of the assets of the Company and such assignee
or transferee assumes the liabilities, obligations and duties of the Company, as contained in this Agreement, either contractually
or as a matter of law.


 


(k)          Withholding.
The Company shall be entitled to withhold from any payments or deemed payments any amount of tax withholding it determines to be
required by law.


 


(l)          Binding
Effect. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors, permitted
assigns, heirs, executors and legal representatives.


 


(m)          Survival.
Anything contained in this Agreement to the contrary notwithstanding, the provisions of Section 10 and any other provisions
of this Agreement expressly imposing obligations that survive termination of Executive’s employment hereunder, and the other
provisions of this Section 11 to the extent necessary to effectuate the survival of such provisions, shall survive termination
of this Agreement and any termination of the Executive’s employment hereunder.


 


(n)          Existing
Agreements. The Executive represents to the Company that he is not subject or a Party to any employment or consulting agreement,
non-competition covenant or other agreement, covenant or understanding which might prohibit her from executing this Agreement or
limit his ability to fulfill his responsibilities hereunder.


 



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(o)          GOVERNING
LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA WITHOUT REGARD
TO ANY PRINCIPLES OF CONFLICTS OF LAW WHICH COULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF
CALIFORNIA.


 


(p)          Waiver
of Jury Trial. EACH OF THE PARTIES HEREBY IRREVOCABLY WANES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING
OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.


 


[Signatures follow on next page]


 



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IN WITNESS WHEREOF,
the Parent, Company and the Executive have caused their respective signature pages to this Agreement to be duly executed as of
the date first written above.


 


	 	PARENT:
	 	LuxeYard, Inc.
	 	 
	 	By:	 
	 	Name:	Steve Beauregard
	 	Title:	COO & Emerging Categories


 





	 	COMPANY:
	 	LY RETAIL, LLC
	 	 
	 	By:	 
	 	Name:	Steve Beauregard
	 	Title:	COO & Emerging Categories


 





	 	EXECUTIVE:
	 	 	 
	 	Name:	Tony Winders


 



    	 



    	 



    

 


* “Revenue”
shall mean the revenue of the Company as reflected in the financial statements contained in the Company’s Annual Report on
Form 10-K filed with the Securities and Exchange Commission for the applicable Fiscal Year. “Net Loss” shall
mean the net loss, if any, of the Company as reflected in the financial statements contained in the Company’s Annual Report
on Form 10-K filed with the Securities and Exchange Commission for the applicable Fiscal Year.