Document:

Exhibit
10.7

 

CONSULTING
AGREEMENT

 

THIS AGREEMENT
is entered into effective as of January 1, 2013 by and among CTI Industries Corporation, an Illinois corporation (the “Company”),
having its principal office in Lake Barrington, Illinois and Schwan Flexible Packaging, L.L.C, an Illinois limited liability company
(“Consultant”) and Howard W. Schwan, an individual residing in Crystal Lake, Illinois (“Schwan”).

 

WHEREAS, the
Company desires to retain Consultant to provide consulting services to the Company and Consultant is willing to, and desires, to
provide consulting services to the Company pursuant to the terms hereof;

 

WHEREAS, Schwan
is the sole shareholder of Consultant.

 

NOW, THEREFORE,
in consideration of the premises and of the terms, covenants and conditions hereinafter contained, the parties hereto agree as
follows:

 

1.            Engagement
of Consultant.

 

1.1           The
Company does hereby appoint and engage the Consultant as its consultant to provide services to the Company as provided herein for
the compensation and the term provided herein.

 

1.2           The
Consultant hereby accepts the appointment and engagement by the Company as a consultant and advisor to the Company with respect
to the matters specified herein for the compensation and the term provided herein.

 

2.            Services
of Consultant.

 

2.1           Consultant
shall provide services to the Company with respect to the following matters:

 

(a)          Representation
of the Company in connection with sales of products by the Company to Dollar Tree Stores and Rapak, L.L.C.;

 

(b)          Representation
of the Company in connection with efforts to obtain, build and maintain sales of products and services by the Company to others;

 

(c)          Consulting
and advice to the Company with respect to its products, sources, materials, production, production methods, customers and markets
as the Company shall reasonably request from time to time.

 

    	 

    	 

    

 

2.2         The
services of Consultant provided for herein shall be performed principally by Schwan on behalf of Consultant. Consultant shall use
commercially reasonable efforts to maintain and enhance the sales of the Company to Dollar Tree Stores and Rapak, L.L.C. during
the term of this Agreement. Consultant shall provide such written reports concerning Consultant’s services, customers of
the Company for whom Consultant has responsibility and transactions with such customers, as the Company shall request from time
to time.

 

2.3         In
general, Consultant shall determine the time and location of the services to be provided hereunder. During the term hereof, Consultant
shall devote such time and effort to the performance of the services provided for herein so as to effectively perform such services
and to accomplish the purposes thereof; provided, however, that the parties agree Consultant shall perform services hereunder for
no more than 20 hours per month. Consistent with Consultant’s other commitments, Consultant, through Schwan, shall travel
to such locations and provide services at such locations as the Company shall reasonably request.

 

2.4         Consultant
shall not be authorized to, and shall not make or enter into, any contract or commitment for or on behalf of the Company.

 

3.            Compensation;
Benefits.

 

3.1         As
compensation for the services of Consultant hereunder, the Company shall pay to Consultant:

 

3.1.1           The
sum of $10,000 per month (the “Base Compensation”) each month during the term hereof, such amount to be paid
on the first day of each month during the term;

 

3.1.2           An
amount equal to .27% (.0027) of Net Sales of the Company to Dollar Tree Stores during the term hereof;

 

3.1.3           An
amount equal to .64% (.0064) of Net Sales of the Company to Rapak, L.L.C. during the term hereof; and,

 

3.1.4           An
amount equal to 2.5% (.025) of Net Sales of the Company to customers obtained during the term hereof through the efforts of Consultant.

 

3.2         For
purposes of this paragraph, the term Net Sales shall mean and include the invoice amount for all product sold and invoiced by the
Company to the designated customer (i) excluding any amount invoiced for shipping, handling, taxes or other services or expenses,
(ii) less any and all amounts for returns, discounts, allowances, service fees or charges.

 

3.3         The
amounts payable to Consultant pursuant to paragraphs 3.1.2, 3.1.3 and 3.1.4 hereof shall be determined and paid on a calendar quarterly
basis each calendar quarter during the term hereof. Within 30 days after the last day of each calendar quarter during the term
hereof, the Company shall (i) calculate and determine for such quarter (A) the amount of the Net Sales of the Company
to Dollar Tree Stores, Rapak L.L.C. and to each other customer covered by Section 3.1.4 hereof and (B) the amount due to Consultant
for such quarter pursuant to paragraphs 3.1.2, 3.1.3 and 3.1.4, (ii) provide to Consultant a report setting forth, separately
with respect to each such customer, the amount of the Net Sales and the amount due to Consultant for such quarter, and (iii) make
payment to Consultant for the amount due for such quarter.

 

    	 

    	 

    

 

3.4           Consultant,
and his authorized representatives shall have the right, upon request, during the term of this Agreement and for one year following
the date of expiration of the term of this Agreement, upon reasonable advance notice, to inspect the records of the Company relating
to sales of the Company to customers with respect to which amounts may be payable to Consultant hereunder. In the event that the
amounts determined to be due to Consultant for any calendar quarter shall be more than the amounts reported and paid by the Company
for such calendar quarter, the Company shall pay to Consultant the difference between the amounts due and the amounts actually
paid within 30 days of such determination. In the event that the amounts determined to be due to Consultant for any calendar quarter
shall be more than 10% greater than the amount reported and paid by the Company, the Company shall reimburse Consultant for his
reasonable expenses related to the inspection of records and audit of the amount due.

 

3.5           During
the term of the Agreement, Schwan shall be entitled to participate in the Company’s medical insurance coverage and the Company
shall pay the full cost of such coverage. The Company shall provide COBRA continuation coverage to commence at the end of the term
of this Agreement. If Company’s insurer does not permit Schwan’s continued participation in the Company’s medical
insurance coverage during the term of the Agreement, or allow the Company to provide COBRA continuation coverage commencing at
the end of the Agreement term, the Company shall purchase for Schwan during the Agreement term and/or the COBRA continuation coverage
period, as applicable, individual medical insurance coverage substantially similar in all respects to the Company’s medical
insurance coverage.

 

3.6           
During the term of the Agreement, the Company shall pay or reimburse Schwan for the premiums on the
life insurance policy covering Schwan as of the date hereof. 

 

3.7           During
the term of the Agreement, the Company will reimburse Consultant for the club dues of Schwan for up to two club memberships, up
to an aggregate annualized maximum amount of $10,000.

 

3.8           During
the term of the Agreement, the Company shall provide an office for the use of Consultant at a location mutually selected by the
Company and Consultant and shall provide administrative support for Consultant as necessary to enable Consultant to perform the
services provided for herein.

 

4.            Expenses.
The Company shall reimburse Consultant for all authorized expenses incurred by Consultant in the performance of services hereunder,
including expenses incurred for travel, meals during travel and lodging. Consultant shall obtain prior authorization from the Company
for any travel expenses and for any single or related series of expenses in excess of $500. Consultant shall maintain proper records
of all expenses incurred for which reimbursement is sought and shall provide expense reports, in the form required by the Company,
and copies of expense records to the Company.

 

    	 

    	 

    

 

5.            Independent
Contractor. The Consultant shall at all times be an independent contractor, and not a co-venturer, agent or employee of the
Company. In general, Consultant shall determine the location and time of services to be performed by Consultant.

 

6.            Term
and Termination.

 

6.1           The
term of this Agreement shall commence on January 1, 2013 and continue to December 31, 2014 at which time the consulting term of
this Agreement shall expire and terminate. At the expiration of the initial term of this Agreement and each renewal term, the term
of the Agreement automatically shall be renewed for an additional term of 12 months, unless 30 days or more prior to the expiration
of such initial term or any renewal term either party shall give notice to the other party of the termination of the Agreement
at the expiration of such initial term or renewal term. If such notice of termination shall be given, the Agreement shall terminate
at the expiration of the initial term or renewal term for which such notice is given.

 

6.2           The
Company shall be entitled to terminate this Agreement at any time, by written notice, (i) in the event of an Event of Default by
the Consultant or (ii) without an Event of Default by the Consultant, provided that the Company shall pay to Consultant, within
10 days of any termination without an Event of Default, a lump sum payment equal to the remaining Base Compensation due to Consultant
for the initial term (or renewal term, as applicable). An Event of Default with respect to Consultant shall mean and include (i) an
intentional and material breach by Consultant of the obligations of Consultant under this Agreement that is not cured by Consultant
after 30 days’ notice thereof from the Company; or (ii) commission by Consultant of any act of theft, fraud or embezzlement
against the Company.

 

6.3           The
Consultant shall be entitled to terminate this Agreement at any time, by written notice, (i) in the Event of Default by the Company
or a Change in Control (each as defined below) or (ii) for any reason during any renewal term upon 30 days notice.

 

7.            Confidentiality.

 

7.1           “Confidential
Information” for purposes of this Agreement means any and all information disclosed by the Company to Consultant, whether
provided or received orally or in writing, relating to or concerning the business, projects, products, processes, formulas, know-how,
techniques, designs or methods of the Company, whether relating to research, development, manufacture, purchasing, accounting,
engineering, marketing, merchandising, selling or otherwise. Without limitation, Confidential Information shall include all know-how,
technical information, inventions, ideas, concepts, processes and designs relating to products of the Company, whether now existing
or hereafter developed, and all prices, customer or distributor names, customer or distributor lists, marketing and other relationships,
whether contractual or not, between the Company, its suppliers, customers, distributors, employees, agents, consultants and independent
contractors.

 

7.2           Consultant
agrees that he will not disclose any Confidential Information to any person and will not use any Confidential Information for any
purpose other than in the performance of his duties for the Company, in the course of business dealings with the Company, as authorized
by the Company or as required by law. Confidential Information shall not include information, which, at the time, Consultant can
show (i) is generally known to the public other than as a result of disclosure by the Consultant or by other wrongful disclosure
or (ii) became known to the Consultant from a source other than the Company or any of its Consultants, agents or representatives
in a communication not involving a wrongful disclosure.

 

    	 

    	 

    

 

7.3           Consultant
agrees that, during the term hereof or while Consultant shall receive compensation hereunder and after termination of his employment
with the Company for so long as the Confidential Information shall not be generally known or generally disclosed (except by means
of wrongful use or disclosure), Consultant shall not use any Confidential Information, except on behalf of the Company, or disclose
any Confidential Information to any person, firm, partnership, company, corporation or other entity, except in the course of his
duties for the Company, as authorized by the Company or as required by law.

 

7.4           Consultant
acknowledges and agrees that the obligations under this Section 7 shall survive expiration or termination of this Agreement and
Consultant shall continue to be bound by this provision as provided herein.

 

8.            Inventions.

 

8.1           “Inventions”
shall mean discoveries, concepts, ideas, designs, methods, formulas, know-how, techniques or any improvements thereon, whether
patentable or not, made, conceived or developed, in whole or in part, by Consultant.

 

8.2           Consultant
and Schwan covenant and agree to communicate and fully disclose to the Company any and all Inventions made or conceived by either
of them during the performance of services for the Company with respect to product development projects, if any, in which Consultant
or Schwan are engaged on behalf of the Company, and further agree that any and all such Inventions with respect to product development
projects on behalf of the Company which either may conceive or make, during the term hereof, shall be at all times and for all
purposes regarded as acquired and held by them in a fiduciary capacity and solely for the benefit of the Company. The provisions
of this Section 8.2 shall not apply to an invention for which no equipment, supplies, facilities, Confidential Information or trade
secret information of the Company was used and which was developed entirely on the Consultant’s own time, unless the invention
relates to the product development projects, if any, in which Consultant or Schwan are engaged on behalf of the Company.

 

8.3           Consultant
acknowledges and agrees that the obligations under this Section 8 shall survive termination of this Agreement and Consultant shall
continue to be bound by this provision as provided herein.

 

9.            Writings
and Working Papers.

 

9.1           Consultant
covenants and agrees that any and all letters, pamphlets, drafts, memoranda or other writings of any kind written by him for or
on behalf of the Company or in the performance of Consultant’s duties hereunder, Confidential Information referred to in
Section 7.1 hereof and all notes, records and drawings made or kept by him of work performed in connection with Consultant’s
retention by the Company shall be and are the sole and exclusive property of the Company and the Company shall be entitled to any
and all rights relating thereto. Consultant also agrees that upon request he will place all such notes, records and drawings in
the Company’s possession and will not retain with him without the written consent of a duly authorized officer of the Company
any notes, records, drawings, blueprints or other reproductions relating or pertaining to or connected with his employment of the
business, books, textbooks, pamphlets, documents work or investigations of the Company.

 

    	 

    	 

    

 

9.2           Consultant
acknowledges and agrees that the obligations under this Section 9 shall survive termination of this Agreement and Consultant shall
continue to be bound by this provision as provided herein.

 

10.          Restrictive
Covenants.

 

10.1       For
purposes of this paragraph:

 

10.1.1           “Conflicting
Organization” means any person, firm, company, partnership, business, corporation, or other entity engaged in, or intending
to engage in, research, development, production, marketing or selling a Conflicting Product.

 

10.1.2           “Conflicting
Product” includes any balloon product, including without limitation, latex, foil or clear plastic balloon product.

 

10.1.3           “Conflicting
Film Product” means any film product (i) incorporating a zipper closure, (ii) incorporating embossed film or
(iii) constituting a pouch or bag and utilizing evacuation means, to the extent such product competes with, or is reasonably
interchangeable as a substitute for, any product produced, marketed or sold by the Company.

 

10.1.4           “Related
Film Product” means and includes any and all film products of the kind currently produced by the Company, and, in general,
includes any film product which competes with, or is reasonably interchangeable as a substitute for, any film product which is
currently produced or marketed by the Company.

 

10.1.5           “Territory”
shall mean the United States of America and its possessions and territories.

 

10.2       Consultant
and Schwan acknowledge and agree:

 

10.2.1           That
the Company has developed, and is developing and establishing, a valuable and extensive trade in its services and products, including
without limitation, latex, foil and clear balloons, bags and pouches and printed and laminated films.

 

10.2.2           That
the Company has developed, and is developing, at great expense, technical information concerning its products, production and methods
of marketing and sale which are kept and protected as Confidential Information and trade secrets and are of great value to the
Company;

 

    	 

    	 

    

 

10.2.3           That,
during the course of his employment with the Company and during the term of this Agreement, Consultant has acquired and will acquire,
possession of Confidential Information.

 

10.2.4           That
the conduct covered by the restrictive covenant in this paragraph includes only a percentage of the total number of entities and
individuals who are customers or distributors or potential customers or distributors of products with respect to which Consultant
has knowledge or expertise, that Consultant will be able to utilize his knowledge, experience and expertise for an employer or
otherwise while fully complying with the terms of this paragraph and that the terms and conditions of this paragraph are reasonable
and necessary for the protection of the Company’s business and assets.

 

10.3         Consultant
agrees that, during the term of this Agreement, whether as an employee, independent distributor, agent, officer, consultant, partner,
owner, shareholder or otherwise,

 

(i)          Consultant
and Schwan will not, in the Territory, solicit for the sale of, or participate with, provide services to, or be employed by any
Conflicting Organization which shall produce, market or sell, any Conflicting Product;

 

(ii)         Consultant
and Schwan will not, in the Territory, represent or provide services to any person, firm, company or organization other than the
Company in connection with the development, marketing or sale of any Conflicting Film Product;

 

(iii)        Consultant
and Schwan will not offer or solicit any current customer or business relationship of the Company, for the sale of any products
which are Conflicting Products, Conflicting Film Products or Related Film Products;

 

(iv)        Consultant
and Schwan will first offer to the Company, with any prospective customer, the opportunity to provide and sell any Related Film
Product (which offer the Company shall respond to within 15 days of its receipt thereof, and, if the Company fails to so timely
respond, the Company shall be deemed to have declined such offer); and

 

(v)         Consultant
and Schwan will not solicit any current supplier of the Company to become a supplier for any third party for Conflicting Products
without prior Company approval.

 

Subject to the terms
of this paragraph and the other provisions of this Agreement, the Company acknowledges and agrees that, during the term of this
Agreement, and thereafter, Consultant may provide services to persons or entities other than the Company, including, without limitation,
(i) the development of products including film products and (ii) solicitation for the sale of, marketing and distribution
of film products.

 

    	 

    	 

    

 

10.4       Notwithstanding
the foregoing, or anything herein to the contrary, upon the occurrence of an Event of Default with respect to the Company or a
Change in Control (each as defined below), the Company acknowledges and agrees that Consultant and Schwan
shall no longer be bound by the obligations under this Section 10 and may immediately thereafter provide services to persons or
entities other than the Company without any limitation.

 

10.5       For
purposes of this Agreement an Event of Default with respect to the Company shall include:

 

10.5.1           Any
failure by the Company to perform its obligations to Consultant or Schwan under this Agreement and (if such failure can be cured)
the failure by the Company to cure such failure within 30 days after written notice thereof shall have been given to the Company
by Consultant or Schwan;

 

10.5.2           During
the term of the Agreement or thereafter, the Company:

 

(a)          making
an admission in writing of its inability to pay its debts generally as they become due,

 

(b)          filing
a petition for relief under any chapter of Title 11 of the United States Code or a petition to take advantage of any insolvency
under the laws of the United States of America or any state thereof,

 

(c)          making
an assignment for the benefit of its creditors,

 

(d)          consenting
to the appointment of a receiver of itself or of the whole or any substantial part of its property,

 

(e)          suffering
the entry of an order for relief under any chapter of Title 11 of the United States Code, or

 

(f)          filing
a petition or answer seeking reorganization under the Federal Bankruptcy Laws or any other applicable law or statute of the United
States of America or any state thereof.

 

10.6         For
purposes of this Agreement, a Change in Control shall mean any one of the following events during the term of this Agreement or
thereafter:

 

10.6.1           any
“person” (as such term is used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)) becomes, after the date of this Agreement, a “beneficial owner” (as such term is defined
in Rule 13d-3 promulgated under the Exchange Act) (other than a person presently owning in excess of 20% or more of the outstanding
voting securities of the Company, the Company, any trustee or other fiduciary holding securities under an employee benefit plan
of the Company, or any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company), directly or indirectly, of securities of the Company representing fifty
percent (50%) or more of the combined voting power of the Company’s then outstanding securities; or

 

    	 

    	 

    

 

10.6.2           the
stockholders of the Company approve a merger or consolidation of the Company with any other corporation or other entity, other
than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity)
more than fifty percent (50%) of the combined voting power of the voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation; or

 

10.6.3           individuals
who constitute the Board of Directors of the Company (the “Board”) as of immediately following date of this Agreement
(the “Incumbent Board”) cease for any reason other than their deaths to constitute at least a majority of the Board;
provided that any individual who becomes a director after the the date of this Agreement whose election or nomination for election
by the Company’s stockholders was approved by a vote of at least a majority of the directors then comprising the Incumbent
Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any
such individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the
election of the directors of Company (as such terms are used in Rule 14a-12(c) under the Exchange Act); or

 

10.6.4           the
stockholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by
the Company of all or substantially all of the Company’s assets.

 

11.           Survival.
All provisions of this Agreement provided herein to survive expiration or termination of this Agreement, shall survive such termination
and the Company and Consultant shall continue to be bound by such provisions in accordance with the terms thereof. Without limiting
the foregoing, the obligations of Consultant pursuant to Sections 7, 8 and 9 provided herein shall survive such expiration or termination
and during the term hereof and thereafter Consultant and Schwan, individually, shall be bound, and continue to be bound by such
provisions in accordance with their terms.

 

12.           Benefit;
Assignment. This Agreement shall be binding upon and inure to the benefit of the parties hereto and to the successors in interest
of the Company and to the successors or assignees of Consultant. No rights or obligations under this Agreement may be assigned
by either party and any attempted assignment thereof by a party shall be void.

 

13.           Severability.
If any provision of this Agreement or any part hereof or any application hereof to any person or circumstance shall be finally
determined by a court of competent jurisdiction to be invalid or unenforceable to any extent, the remainder of this Agreement,
or the remainder of such provision or the application of such provision to persons or circumstances other than those as to which
it is be held invalid or unenforceable, shall not be affected thereby and each provision of this Agreement shall remain in full
force and effect to the fullest extent permitted by law. The parties also agree that, if any portion of this Agreement, or any
part hereof or application hereof, to any person or circumstance shall be finally determined by a court of competent jurisdiction
to be invalid or unenforceable to any extent, any court may so modify the objectionable provisions so as to make it valid, reasonable
and enforceable.

 

    	 

    	 

    

 

14.           Notices.
All notices, or other communications, required or permitted to be given hereunder shall be in writing and shall be delivered personally
or mailed, certified mail, return receipt requested, to the party, as follows:

 

	If to the Company:	Stephen M. Merrick
	 	President
	 	CTI Industries Corporation
	 	22160 N. Pepper Road
	 	Barrington, IL 60010
	 	 
	If to Consultant or Schwan:	 
	 	 
	 	Howard W. Schwan
	 	(at the address most recently
	 	on file with the Company)

 

Any notice mailed in
accordance with the terms hereof shall be deemed received on the third day following the date of mailing. Either party may change
the address to which notices to such party may be given hereunder by serving a proper notice of such change of address to the other
party.

 

15.         Entire
Agreement. This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof
and supersedes all prior written or oral negotiations, representations, agreements, commitments, contracts or understandings with
respect thereto and no modification, alteration or amendment to this Agreement may be made unless the same shall be in writing
and signed by both of the parties hereto.

 

16.         Waiver.
No failure by either party to exercise any of such party’s rights hereunder or to insist upon strict compliance with respect
to any obligation hereunder and no custom or practice of the parties at variance with the terms hereof shall constitute a waiver
by either party to demand exact compliance with the terms hereof. Waiver by either party of any particular default by the other
party shall not affect or impair such party’s rights in respect to any subsequent default of the same or of a different nature,
nor shall any delay or omission of either party to exercise any rights arising from any default by the other party affect or impair
such party’s rights as to such default or any subsequent default.

 

17.         Governing
Law. For purposes of construction, interpretation and enforcement, this Agreement shall be deemed to have been entered into
under the laws of the State of Illinois and its validity, effect, performance, interpretation, construction and enforcement shall
be governed by and subject to such laws.

 

    	 

    	 

    

 

IN WITNESS WHEREOF,
the parties hereto have executed this Agreement as of September 24, 2012.

 

 

	SCHWAN FLEXIBLE PACKAGING, L.L.C	 	CTI INDUSTRIES CORPORATION
	 	 	 
	By:	/s/ Howard W. Schwan	 	By:	/s/ Stephen M. Merrick
	 	Howard W. Schwan	 	 	Stephen M. Merrick
	 	Managing Director	 	 	President

 

	HOWARD W. SCHWAN	 
	(Individually)	 
	 	 
	/s/ Howard W. SchwanEXHIBIT 10.8

 

 

 

 LEASE

To

 

CTI Industries Corporation

800 North Church Street

Lake Zurich, IL 60047

 

September 19, 2012

 

 

 

    	Page 1 of 25

    	 

    

 

 

 

REFERENCE PAGE OF LEASE

 

	DATE OF LEASE:	September 19, 2012
	BUILDING:	as shown on Exhibit “A”
	 	 
	LESSOR:	Schultz Bros. Co.
	 	 
	LESSOR’S ADDRESS:	815 Oakwood Road Unit I
	 	Lake Zurich, IL 60047
	 	 
	LESSOR’S PHONE:	(847)438-3900
	LESSOR’S FAX:	(847)438-3987
	LESSOR’S CONTACT:	M. C. Schultz
	 	 
	LESSEE:	CTI Industries
	 	 
	LESSEE'S ADDRESS:	22160 N. Pepper Road
	 	Lake Barrington Illinois 60010
	 	 
	LESSEE’S PHONE:	(847)382-1000
	LESSEE’S FAX:	(847-382-1219)
	LESSEE’S E-MAIL ADDRESS	smerrick@ctiindustries.com
	LESSEE’S CONTACT:	Stephen M. Merricks
	 	 
	PREMISES:	800 North Church Street
	 	Lake Zurich, IL  60047
	TERM OF LEASE:	 
	Occupancy Date:	10/15/12
	Commencement Date:	11/01/12
	Termination Date:	02/28/17
	RENT:	 	 
	Minimum Annual Rent:	11/01/12 - 02/28/13	$ 00,000.00
	 	03/01/13 - 10/31/13	$200,000.00
	 	11/01/13 - 10/31/14	$332,500.00
	 	11/01/14 - 10/31/15	$365,000.00
	 	11/01/15 - 10/31/16	$397,500.00
	 	11/01/16 - 02/28/17	$143,333.33
	OPTION PERIOD:	 	 
	Minimum Annual Rent:	03/01/17 - 02/28/18	$450,000.00
	 	03/01/18 - 02/28/19	$475,000.00
	 	03/01/19 - 02//29/20	$500,000.00
	 	 	 
	SECURITY DEPOSIT:	$50,000.00	 
	 	 	 
	PERMITTED USE:	SIC# 2673 Manufacturing plastics, foil, and coated paper bags
	 	SIC# 3081 Manufacturing unsupported plastics film and sheet
	 	SIC# 5199 Wholesale nondurable goods. not elsewhere classified
	 	 	 
	EXHIBITS TO LEASE:	Exhibit “A”     (Site Plan) 
	 	Exhibit “B”     (Estoppel Certificate) 
	 	Exhibit "C"      (Lessor's Work) 
	SQUARE FEET:	 	 
	Leased Premises	116,925 sq. ft.	 
	Premises	116,925 sq. ft.	 
	Prorata Share	100.00%	 
	 	 	 
	REAL ESTATE BROKER:	Van Vlissingen & Co. / CTK Chicago Partners

 

    	Page 2 of 25

    	 

    

  

Agreement of Lease made this 19th day of
September, 2012 by and between SCHULTZ BROS. CO. licensed and authorized to do business in Illinois hereinafter called "Lessor"
and CTI INDUTRIES CORPORATION, licensed and authorized to do business in Illinois hereinafter called "Lessee",
WITNESSETH:

 

Lessor, in consideration of the rents and
covenants hereinafter set forth, hereby leases to Lessee, and Lessee hereby leases from Lessor, the property, outlined in red on
Exhibit "A" attached hereto and incorporated herein, commonly known as 800 North Church Street, in the City of Lake Zurich,
County of Lake, State of Illinois, which is hereinafter referred to as the "Premises".

 

TO HAVE AND TO HOLD the Premises unto the
Lessee for a term which shall begin on the "Occupancy Date" as shown on the Reference Page and hereinafter defined, and
shall continue for a period of four (4) years and Four (4) months following the "Commencement Date" as shown on the reference
page, on the following terms and conditions:

 

RENTAL ARTICLE I.

 

Lessee agrees to pay Lessor, Schultz Bros. Co. , 815
Oakwood Road Unit I, Lake Zurich, IL 60047, or such other place as Lessor may from time to time designate, rental for the Premises
as follows:

 

Lessee agrees for the period of 11/01/12 to 02/28/13
if all the other terms and conditions of this lease are met the guaranteed and “fixed minimum annual rent” shall abate.

 

Lessee agrees for the period of 03/01/13 to 10/31/13
to pay a guaranteed and “fixed minimum annual rent” of two hundred thousand dollars and no cents ($200,000.00) for
each eight (8) month period payable in advance in successive monthly installments of twenty-five thousand dollars and no cents
($25,000.00) each, on or before the first day of each consecutive calendar month during said period.

 

Lessee agrees for the period of 11/01/13 to 10/31/14
to pay a guaranteed and “fixed minimum annual rent” of three hundred thirty-two thousand five hundred dollars and no
cents ($332,500.00) for each twelve (12) month period payable in advance in successive monthly installments of twenty-seven thousand
seven hundred eight dollars and thirty- three cents ($27,708.33) each, on or before the first day of each consecutive calendar
month during said period.

 

Lessee agrees for the period of 11/01/14 to 10/31/15
to pay a guaranteed and “fixed minimum annual rent” of three hundred sixty-five thousand dollars and no cents ($365,000.00)
for each twelve (12) month period payable in advance in successive monthly installments of thirty thousand four hundred sixteen
dollars and sixty - seven cents ($30,416.67) each, on or before the first day of each consecutive calendar month during said period.

 

Lessee agrees for the period of 11/01/15 to 10/31/16
to pay a guaranteed and “fixed minimum annual rent” of three hundred ninety - seven thousand five hundred dollars and
no cents ($397,500.00) for each twelve (12) month period payable in advance in successive monthly installments of thirty - three
thousand one hundred twenty - five dollars and no cents ($33,125.00) each, on or before the first day of each consecutive calendar
month during said period.

 

Lessee agrees for the period of 11/01/16 to 02/28/17
to pay a guaranteed and “fixed minimum annual rent” of one hundred forty - three thousand three hundred thirty - three
dollars and thirty - three cents ($143,333.33) payable in advance in four (4) successive monthly installments of thirty - five
thousand eight hundred thirty - three dollars and thirty - three cents ($35,833.33) each, on or before the first day of each consecutive
calendar month during said period.

 

    	Page 3 of 25

    	 

    

 

The term "Lease Year" shall mean a period
of twelve consecutive calendar months, the first of which Lease Years shall commence on the Commencement Date. The words "Occupancy
Date" whenever used in this Lease shall be deemed to refer to the date as shown on the reference page of this Lease at which
time the terms of this Lease shall become effective except as set forth below. The words "Commencement Date" whenever
used in this Lease shall be deemed to refer to the date as shown on the reference page of this Lease as the commencement of minimum
rent being due and owing.

 

Any and all sums due Lessor by the terms of this Lease
shall be deemed as “rent” and shall be paid without any setoff or deduction for any reason whatsoever.

 

Rent for any period less than one month shall be prorated
on the basis of a thirty (30) day month.

 

Lessee shall pay a penalty of ten dollars ($10.00)
per day from the date when the same is first due, on each and every installment of rent which shall not be paid when due under
the terms of this Lease or if a check for same is returned. Until the same has been paid including penalty, all shall constitute
“rent” due hereunder.

 

All rent shall be paid without any setoff or deduction
for any reason whatsoever.

 

USE ARTICLE II.

 

The Premises shall be used and occupied by Lessee
for the permitted use shown on the reference page of this lease and for no other purpose. The permitted use is sometimes referred
to herein as a “use or Lessee’s use”. Lessee's use and occupancy shall be in compliance with all applicable laws,
ordinances, rules, and government regulations. Lessee shall not store, display, distribute or sell any alcohol, liquors or intoxicating
beverages without first receiving Lessor’s written consent at its sole discretion.

 

Lessee at its sole cost shall procure any and all
licenses, permits and the like and maintain same in good standing, as may be required for Lessee to lawfully conduct its business
and occupy the Premises according to any and all applicable laws, rules, regulations and/or ordinances.

 

Lessee covenants not to do or suffer any waste or
damage, disfigurement or injury to any improvements now or hereafter forming a part of the Premises and indemnifies and holds Lessor
harmless from any and all costs, fees including but not limited to reasonable attorneys fees and/or expenses associated with same.
Lessee shall, during the entire term, continuously use the Premises for the purpose stated in this Lease carrying on therein Lessee’s
business undertaking in a reputable manner, diligently and energetically.

 

CONDITION ON POSSESSION ARTICLE III.

 

Lessor agrees to provide Lessee with the Premises
in an “as is” condition.

 

Lessee has examined and knows the condition of the
Premises and has received the same in good order and repair, and acknowledges that Lessee is accepting same in “as is”
condition, and no agreements or promises to decorate, alter, repair or improve the Premises, have been made by Lessor or its agent(s)
if any, prior to or at the execution of this Lease, that are not herein expressed in Exhibit "C" Lessor's Work attached
hereto and made a part hereof.

 

    	Page 4 of 25

    	 

    

 

Lessee agrees that on or before taking possession
of the Premises it will comply with all the terms and conditions of this Lease and Lessee’s obligation for Real Estate Tax
Reimbursement and Proof of Insurance shall begin as of the Occupancy Date. Lessor reserves the right to withhold Lessee’s
right to occupancy if any or all conditions required of Lessee prior to or after its occupancy are not timely met without changing
the dates, terms, conditions and/or obligations of this Lease.

 

CERTIFICATE OF ESTOPPEL ARTICLE IV.

 

Lessor and Lessee agree at the commencement of the
term hereof, and thereafter, at any time during the term hereof, upon notice as defined herein, to execute, acknowledge and deliver
the certificate of estoppel attached hereto as Exhibit “B” within five (5) days of such notice without charge or fee.

 

TAXES ARTICLE V.

 

As of and following the Commencement Date. Lessee
shall pay, in advance of the first month and each month thereafter, as additional rent, an amount equal to one-twelfth (1/12) of
Lessor's estimation of real property taxes, assessments, and similar charges, " impositions" which may be levied or assessed
by taxing authorities against the land and building and all other improvements (hereinafter collectively called "taxes")
against the Premises. If the actual taxes and impositions exceed the sum already paid by Lessee, Lessee shall pay the excess to
Lessor within (30) days after receipt of an invoice therefore and documentation of the actual amount paid by Lessor. If the actual
taxes and impositions are less than that already paid by Lessee, Lessor shall, at Lessee's option, credit the difference to future
payments of taxes and impositions owed by Lessee hereunder or refund it to Lessee.

 

If at any time during the Term of this Lease the
method of taxation prevailing at the commencement of the Term hereof shall be altered so that any new tax, assessment, levy, imposition,
or charge, or any part thereof, shall be measured by or be based in whole or. in part upon the Lease or Premises, or the rent,
additional rent or other income therefrom and shall be imposed upon the Lessor, then all such taxes, assessments, levies, impositions
or charges, or the part thereof, to the extent that they are so measured or based, shall be deemed to be included within the term
impositions for the purposes hereof, to the extent that such impositions would be payable if the Premises were the only property
of Lessor subject to such impositions. There shall be excluded from impositions all federal, state, and local income taxes, federal
excess profit taxes, franchise, capital stock and federal or state estate or inheritance taxes of Lessor.

 

LANDSCAPING ARTICLE VI.

 

The parking areas, drives, walkways and landscaped
areas (all the foregoing being hereinafter referred to as "Landscaping"), shall be available to Lessee and its employees,
customers and invitees, subject to the following:

 

Lessee shall not make any alterations or additions
to the Landscaping without first procuring Lessor’s written consent, which in Lessor’s sole discretion may be withheld.
All work and/or alterations shall fully comply with all applicable laws, ordinances, rules and regulations as well as drawings
submitted to and approved by Lessor and shall be performed in a good and workmanlike manner.

 

    	Page 5 of 25

    	 

    

 

As of and following the Occupancy Date. Lessee shall
maintain the Landscaping in a good, clean, orderly and workmanlike first class manner using new materials and or healthy plantings
of first rate quality (as applicable) and cause all driveways and sidewalks to be snow plowed and kept free of debris and snow
and ice. All costs incurred in the operation and maintenance of all Landscaping, including, without limiting the generality of
the foregoing; the cost of lighting, cleaning, security, removing snow and ice, maintenance, care and replacement of trees, shrubbery,
policing, repairing, and insuring Lessee, and Lessee's agents and employees for activities relating to the Leased Premises and
Landscaping shall be at Lessee’s sole cost and expense.

 

If Lessee fails to comply with the terms of this provision,
Lessor may, after thirty (30) days written notice, undertake the maintenance and charge Lessee the costs thereof plus an additional
10% for the management of such maintenance and upkeep, repairs and replacements.

 

UTILITIES ARTICLE VII.

 

As of and following the Occupancy Date. Lessee shall
pay for all utility services used by Lessee including but not limited to heat, gas, water, sewer, electricity, data lines and telephone
used in the Premises, said services are hereinafter referred to as "utilities". Lessee shall at all times keep the Premises
at a temperature sufficiently high to prevent the freezing of water in pipes and fixtures. Lessee shall pay directly any sums which
are due to any utility company or governmental body furnishing utilities to the Premises, throughout the term of this Lease. Lessee
shall indemnify Lessor and save it harmless against any costs, liability or damages on such account.

 

CARE AND MAINTENANCE OF THE PREMISES ARTICLE VIII.

 

Lessee covenants not to perform any acts which may
suffer any waste, damage, disfigure, injure any improvements now or hereinafter forming a part of the Premises, or any invitees,
or persons at, in or around, the Premises, or be a nuisance or menace to nearby businesses and/or neighboring property owners.
Lessee shall keep the Premises, including the roof, sidewalks, parking areas, drives, service and delivery areas of the Premises,
clean and free from rubbish, dirt, ice and snow at all times, keeping the Premises in a good clean and healthy condition and free
from any and all refuse discharged by Lessee in the operation of its business and store all trash and garbage as directed by Lessor
and/or applicable governmental statute, code, rule, or regulation and arrange for the regular removal thereof at Lessee’s
cost.

 

Lessee at all times during the term of this Lease
shall have and keep in force a maintenance contract (in form and with a contractor reasonably satisfactory to Lessor) providing
for inspection and necessary repairs at least once each six months of the heating, air conditioning and ventilating equipment.
The inspection shall include a check of the performance of major components, lubricating moving parts, check of refrigerant charges,
inspect for oil and refrigerant leaks, check operating and safety controls, check pressures and temperatures, inspect condensers,
inspect fans, motors and starters, check electrical connections amperages, and voltages, check belts and drives and change oil,
filters, or dryers. Said contract shall not be cancelable by either contractor and/or Lessee without a prior thirty (30) day written
notice to Lessor.

 

    	Page 6 of 25

    	 

    

 

Lessee at all times during the term of this Lease
shall have and keep in force a maintenance contract (in form and with a contractor reasonably satisfactory to Lessor) providing
for inspection and necessary repairs, not less than once each six months , of the sprinkler " fire suppression" systems.
keeping the fire suppression systems in good working order, code, regulation and ordinance compliant. Lessee shall provide any
and all required inspection and performance reports to the Insurance company and or governmental agency requiring same with copies
to Lessor. Said contract shall not be cancelable by either contractor and/or Lessee without a prior thirty (30) day written notice
to Lessor.

 

Lessee shall not burn any trash or garbage nor shall
Lessee dispose of and/or store any toxic and/or hazardous materials in, on, or about the Premises. Lessee shall not obstruct the
sidewalks, fire lanes or areaways of the Premises.

 

The Lessee at its sole cost and expense shall regularly
clean all waste, and garbage from the Premises which shall be thrown away in receptacles appropriate for the handling of such refuse
and the Lessee shall keep the Premises in a good clean and healthy condition and free from any and all refuse discharged by Lessee
in the operation of its business.

 

REPAIRS ARTICLE IX.

 

Lessee shall at all times, at its own cost and expense,
keep the Premises, including, but not limited to, all interior and/or exterior, nonstructural, plumbing, electrical, building fixtures,
walls, ceilings, floors, lighting, doors, windows, foundations, downspouts, gutters, heating, air conditioning, signs and any and
all other building systems, whether ordinary or extra ordinary, in good order, condition, and repair, normal wear and tear excepted..
If Lessee fails to maintain, replace, portions of the Premises requiring same promptly and/or properly, and if such failure is
not cured within thirty (30) days after Lessees receipt of Lessors written notice, Lessor may at its option perform such maintenance,
repairs, and/or replacements on behalf of Lessee and Lessee will upon demand, pay to Lessor, as rent, the cost plus ten percent
(10%) thereof for Lessor’s administrative costs associated with same.

 

Lessor shall at all times at its own cost and expense
keep the structural and roof portions of the Premises in good order, condition and repair. Lessee shall immediately give Lessor
written notice of any defect or need for repairs, after which Lessor shall have a reasonable opportunity to repair the same or
cure such defect.

 

Lessor's liability with respect to any defects, repairs
or maintenance for which Lessor is responsible under any of the provisions of this Lease shall be limited to the cost of such repairs
or maintenance or the curing of such defect, provided however, that if such repairs, replacements, or maintenance become necessary
by reason of any act of negligence or construction by Lessee, its agents, contractors, or employees, then Lessee shall pay the
total cost of such repairs, replacements or maintenance.

 

At all times all such maintenance, repairs, and/or
replacements shall be performed in a good and workmanlike manner using new materials of high quality.

 

ALTERATIONS AND INSTALLATIONS ARTICLE X.

 

Lessee shall not make any alterations in or additions
to the Premises without first procuring Lessor's Prior written consent, which consent shall not unreasonably be withheld. All alterations,
additions and improvements, shall remain and be surrendered with the Premises at the termination of the Term of this Lease, whether
by lapse of time or otherwise, all without credit to Lessee, unless such removal has been consented to or required at the time
of Lessor's consent to the alteration.

 

    	Page 7 of 25

    	 

    

 

Lessee shall make all of the alterations and installations
at Lessee's sole cost and expense. All work and materials shall be furnished and conducted in a good and workmanlike manner. If
a permit is required for any alteration and/or installation Lessee agrees to give Lessor copies of any all applications, inspection
reports and approvals.

 

If Lessor shall not allow an alteration or improvement
to remain after termination, Lessee shall remove the alterations, improvements and installations placed in the Premises by Lessee
and repair any damage occasioned by such removals. All removals and repairs are to be performed in a good and workmanlike manner,
no less than 10 days prior to the termination of this Lease, all at Lessee's sole cost and expense.

 

The foregoing shall not apply to any of Lessee's personal
property, furniture, trade fixtures, machinery, equipment or production facilities, all of which shall at all times remain the
property of Lessee and Lessee shall have the right to install and/or remove all of Lessee’s trade fixtures, machinery, equipment,
and production facilities without Lessor’s written consent. For any installations and/or removals Lessee agrees that all
work will be compliant with all applicable laws, ordinances, rules and regulations and that any adverse condition “Damage”
will be repaired and the premises restored by Lessee at the termination of the Lease, at Lessee’s sole cost and expense.

 

UNTENANTABILITY ARTICLE XI.

 

In the event the Premises shall be destroyed, or so
damaged by fire, explosion, windstorm or other casualty so as to be untenantable, Lessor may restore the Premises within a reasonable
time after such destruction or damage, or may terminate the Lease and the term demised as of the date of the destruction or damage,
in either case by giving Lessee notice within one hundred eighty (180) days after the date of the destruction or damage, and rent
shall abate on a per diem basis during the period of restoration.

 

In the event the Premises shall be damaged as aforesaid
but are not thereby rendered untenantable, Lessor shall restore the Premises with reasonable dispatch, and while such damage is
being repaired, Lessee shall be entitled to an equitable abatement of rent as reasonably and equitably
determined by Lessor. Lessor shall not be liable or responsible for any delays in rebuilding or repairing due to labor
controversies, riots, acts of God, national emergency, acts of a public enemy, government laws or regulations, inability to procure
materials or labor, or any other cause or causes beyond its control.

 

If Lessee is inconvenienced but its business is not
interrupted, there shall be no abatement of rent.

 

EMINENT DOMAIN ARTICLE XII.

 

In case all of the Premises is taken by the exercise
of the power of eminent domain, this Lease shall terminate as of the date possession is taken, and Lessor shall refund any rent
paid in advance in the ratio of thirty days to the number of days between the date possession is so taken and the first day of
the next calendar month.

 

If thirty five per cent (35%) or more of the Premises
is so taken, further provided that the taking of the portion of said Premises does materially affect the operation and conduct
of Lessee’s business, then this Lease shall terminate at the election of either party upon notice to the other within thirty
(30) days after the payment, or the deposit with the appropriate public officer, of the compensation awarded to Lessor, and in
that event the term shall terminate on the date possession of the part condemned is taken by the condemning authority and the rent
shall be paid to that date. In the event of a partial taking, rent shall equitably abate as
of the effective date the government takes possession and/or such possession by Lessee is lost.

 

    	Page 8 of 25

    	 

    
 

If the Lease and term are not terminated, Lessor,
at its expense and within thirty days after the payment or deposit of the compensation as aforesaid, shall commence to reconstruct
the Premises not affected by the taking and with reasonable diligence proceed with such construction, and during the reconstruction
and thereafter, the minimum rent shall be reduced in the proportion that the part taken bears to the Leased Premises.

 

In any event, the entire compensation awarded shall
belong to Lessor without any deduction there from for any present or future estate or interest of Lessee, and Lessee hereby assigns
to Lessor all of its right, title and interest in and to any and all such compensation together with any and all rights, estate
and interest of Lessee now existing or hereafter arising in and to the same or any part thereof.

 

SIGNS ARTICLE XIII. 

 

Lessee shall have the right at its sole cost to
use sign "Standards" or structures presently existing on the Premises and to erect signs identifying Lessee's business.
All such signs shall have Lessor’s prior written consent and be in conformance with all applicable laws, ordinances, rules
and regulations applicable thereto. Lessee shall give Lessor copies of all applications, approvals and permits required for any
signage. Lessee shall not use any advertising medium that shall be deemed objectionable to Lessor in its sole discretion.

 

Lessee shall remove all signage it has installed,
repairing any damage caused by such removals returning the sign standards and the Premises to its original “blank”
condition at its sole cost and expense at the end or termination of this Lease.

 

ASSIGNMENT OR SUBLETTING ARTICLE XIV.

 

Lessee shall not sublet, assign or permit the use
or occupancy of the Premises or any part or parts thereof by anyone other than Lessee without the prior written consent of Lessor,
which consent shall not unreasonably be withheld; provided, that Lessee shall be entitled to sublet or permit the use and occupancy
of portions of the Premises by Associated Persons. For purposes of this Lease, the term “Associated Persons” shall
mean and include (i) The Merrick Company LLC, (ii) Clever Container Company LLC, (iii) any subsidiary of Lessee and (iv) persons
or entities with whom Lessee is engaged in a business relationship including without limitation as supplier, customer or co-venturer.
No use by an Associated Person shall be outside the scope of permitted use under this lease and no use or occupancy by an Associated
Person shall increase the risk to Lessor or increase Lessor’s insurance costs and no such Sublease or use by an Associated
Person shall relieve the Lessee of its obligations under this Lease.

 

Should any Sublease, assignment, use or occupancy
be consented to, all future subleases, assignments, uses or occupancies will still require Lessor's prior written consent. In the
event of any subletting, assignment, use or occupancy Lessee shall remain liable for all the terms and conditions of this Lease.

 

Should Lessee attempt to sublease, assign or permit
the use or occupancy, by anyone other than Lessee, except as provided herein, without Lessor's written consent, such sublease,
assignment, use or occupancy shall be null and void and any options granted under this Lease shall be null and void.

 

    	Page 9 of 25

    	 

    
 

REMEDIES ARTICLE XV.

 

Lessor may terminate Lessee's right of possession
and repossess the Premises without terminating this Lease and/or terminate the estate and term demised by giving ten (10) days
written notice to Lessee upon the happening of one or more of the following events which are not cured within said period:

 

a) the making by Lessee of an assignment for the benefit
of its creditors;

 

b) the levying of a writ of execution or attachment
on or against the property of Lessee;

 

c) the taking of any action for the voluntary dissolution
of Lessee or of consolidation with or merger into another corporation;

 

d) the doing, or permitting to be done by Lessee of
any act which creates a mechanic's lien or claim therefore against the Premises;

 

e) the failure of Lessee to pay an installment of
rent when due;

 

f) if proceedings are instituted in a court of competent
jurisdiction for the reorganization, liquidation or involuntary dissolution of Lessee, or for its adjudication as bankrupt or insolvent,
or for the appointment of a receiver of the property of Lessee, and said proceedings are not dismissed, and any receiver, trustee
or liquidator appointed therein discharged within thirty days after the institution of said proceedings;

 

g) the recording of any document by Lessee against
Lessor’s title without, first receiving Lessor’s written consent;

 

h) the failure of Lessee to perform any other of its
covenants under this Lease for thirty (30) days or more after notice of such default or failure shall have been given to Lessee
specifying the default..

 

Lessee shall not do any act which shall in any way
encumber the title of Lessor in and to the Premises, nor shall the interest or estate of Lessor in the Premises be in any way subject
to any claim by way of lien or encumbrance, whether by operation of law or by virtue of any express or implied contract by Lessee.
Any claim to, or lien upon, the Premises arising from any act or omission of Lessee shall accrue only against the leasehold estate
of Lessee and shall be subject and subordinate to the paramount title and rights of Lessor in and to the premises. Any lien or
encumbrance caused by Lessee or its agents to Lessor's title which is not removed within the notice period set forth above shall
constitute a default hereunder.

 

Upon the termination of the estate or Lessee's right
to possession, Lessor may re-enter the Premises with process of law using such force as may be necessary, and remove all persons
and chattels therefrom and Lessor shall not be liable for damages or otherwise by reason of re-entry or termination of the term
of the Lease. Notwithstanding such termination, the liability of Lessee for the rent provided for hereinabove shall not be extinguished
for the balance of the term remaining after said termination, and Lessor shall be entitled to recover immediately as liquidated
damages an amount equal to the minimum rent for the said balance of the term less the fair rental value of the Premises for the
said balance of the term. Alternatively, upon and after entry into possession without termination of this Lease, Lessor may, shall
utilize reasonable commercial efforts to, relet the Premises or any part thereof for the account of Lessee for such rent, for such
time and upon such terms as Lessor, in Lessor's sole discretion, shall determine, and Lessee shall be responsible for any resulting
deficiency along with all costs of reletting including but not limited to brokerage commissions, decorating and/or rehabilitation
of the Premises. At Lessor's election, Lessor may sue the Lessee for rent due and owing Lessor by Lessee under this Lease, as many
times as is necessary to recover all rents and sums due hereunder, if the Premises are not relet or if eventually relet, for any
deficiency which results by virtue of the default by Lessee and Lessor reletting the Premises for rental which is less than that
which Lessee was required to pay hereunder. Lessee waives any defense of Res Judicata concerning any successive suits which are
brought by Lessor pursuant to this provision unless Lessor has specifically received a judgment for the identical amount for an
identical period in a previous suit of Lessor. Lessor and Lessee acknowledge and agree that all rent, common area maintenance charges
and taxes, fees, expenses, penalties and/or any other sum payable hereunder or pursuant to the terms of this Lease sometimes referred
to as "rent" shall be deemed rent which is due and payable as required under this Lease.

 

    	Page 10 of 25

    	 

    
 

In the event of any breach by Lessee of any of the
provisions of this Lease, Lessor may immediately or at any time thereafter, without additional notice, cure such breach for the
account of and at the expense of Lessee such expense to constitute additional rent. If Lessor at any time, by reason of such breach,
is compelled to pay any sum of money or do any act which will require the payment of any sum of money, or incurs any expense, including
but not limited to reasonable attorney fees, in instituting or prosecuting any action or proceeding to enforce Lessor's rights
hereunder, the sum or sums so paid by Lessor, with interest thereon at the rate set forth below from the date of payment thereof,
shall be deemed to be additional rent hereunder and shall be due from Lessee to Lessor on the first day of the month following
the payment of such respective sums or expenses by Lessor.

 

If Lessee shall fail to pay to Lessor, when due, any
installment of rent or other payment due hereunder, Lessee shall pay to Lessor interest on such rent or other payment at the rate
of the greater of the prime rate ("prime rate" is defined as the monthly average of the daily rate published in the Wall
Street Journal [eastern edition] or if none or said publication ceases to exist the monthly average of the daily interest rate
announced by the Federal Reserve Bank with jurisdiction in New York, New York being the rate charged by the Federal Reserve to
the banks and generally thought of as their cost of money) established and in force by the Federal Reserve plus three percent (3%)
per annum or eighteen per cent (18%) per annum from the due date of such rent or payment until the date same is paid, whichever
is greater, or, if for some reason the term and calculation of the term "prime rate" hereunder is deemed ambiguous, then
eighteen per cent (18%) per annum shall be utilized.

 

Lessee will, at the expiration or termination of this
Lease, yield up possession to Lessor, and failing so to do, at Lessor's option Lessee will pay as liquidated damages for each day
possession is withheld, an amount equal to double the amount of the daily rent, computed on a thirty day month basis; provided,
however, that Lessor's right to recover such liquidated damages shall not preclude Lessor from recovering any greater amount of
damages sustained by it or as otherwise allowed by law.

 

No receipt of money by Lessor from Lessee after breach
by Lessee or after the termination of this Lease or after the service of any notice or after the commencement of any suit, or after
final judgment for possession of the Premises shall operate to waive any breach or to reinstate, continue or extend the term of
this Lease or affect any such notice, demand or suit.

 

No waiver by one party of any default of the other
party under this lease or any provision hereof shall be implied from any omission by a party to take any action on account of such
default if such default persists or is repeated and no express waiver shall affect any default other than the default specified
in the express waiver, and that only for the time and to the extent therein stated. One or more waivers of any condition of this
Lease by either party shall not be construed as a waiver of a subsequent breach of the same covenant, term, or condition or as
an amendment to this Lease’s terms, covenants and conditions.

 

    	Page 11 of 25

    	 

    
 

Upon a breach hereof by Lessee which results in a
judgment for possession and/or rent in a court of competent jurisdiction, and when, after the entrance of such judgment Lessee
remains in possession or control of the Premises as a tenant at sufferance, then Lessee shall also be liable for all rent, damages,
costs, and expense which Lessor incurs during such period after judgment and Lessor shall be entitled to file an additional lawsuit
for recovery of same without Lessee offering a defense of Res Judicata and such recovery and/or law suit shall not operate as a
renewal of this Lease or Lessee's right of possession.

 

All rights and remedies of Lessor herein enumerated
shall be cumulative and none shall exclude any other right or remedy allowed by law and/or in equity, and said rights and remedies
may be exercised and enforced concurrently and whenever and as often as occasion therefore arises.

 

SURRENDER ARTICLE XVI.

 

Upon the termination of this Lease, whether by forfeiture,
lapse of time or otherwise, or upon termination of Lessee's right to possession of the Premises, Lessee will at once surrender
and deliver up the Premises, together with all improvements thereon, to Lessor in a fully operational, clean, safe, good condition
and repair, reasonable wear and tear excepted. All improvements shall include but not be limited to all landscaping, plumbing,
lighting, electrical, and equipment and other articles or personal property used in the operation of the Premises. Lessee shall
also surrender all keys and inform Lessor of any combinations on any locks, safes and vaults, if any, on the Premises.

 

Lessee shall remove all of Lessee's personal property,
equipment and signs other than such personal property and equipment as are referred to above; provided,

 

a) that Lessee at its sole cost shall repair any injury
or damage to the Premises which may result from such removals

 

b) If Lessee does not remove Lessee's furniture, machinery,
signs, and all other items of personal property of every kind and description from the Premises prior to the end of the term, however
ended, Lessor may, at its option, remove the same and consider same to be abandoned and dispose of such property. Lessee shall
pay to Lessor on demand the cost of removal, repair of any damage resulting from the removal and for disposal. Lessor may treat
such property as having been conveyed to Lessor with the Lease as a Bill of Sale, without further payment or credit by Lessor to
Lessee.

 

If Lessee retains possession of the Premises or any
part thereof after the termination of the term by lapse of time or otherwise that such holding over constitutes renewal of this
Lease on a month to month basis at a monthly rate equal to 150% of the monthly rental then in effect for the last month of the
lease term. Lessee shall also pay all damages, consequential as well as direct, sustained by Lessor by reason of such retention.

 

All other additions, hardware, non-trade fixtures
and all improvements, temporary or permanent, in or upon the Premises placed there by Lessee shall become Lessor's property and
shall remain upon the Premises upon such termination of this Lease by lapse of time or otherwise, without compensation or allowance
or credit to Lessee.

 

    	Page 12 of 25

    	 

    
 

If prior to said termination, or within fifteen days
thereafter, Lessor so directs by written notice to Lessee, Lessee shall, at its sole cost, promptly remove the additions, improvements,
fixtures, trade fixtures and installations which were placed in the Premises by Lessee, and repair any damage occasioned by such
removals and should Lessee not remove all alteration as directed by Lessor, Lessee upon demand shall pay as rent all costs of removal
and restoration of such alterations and additions together with and a management fee equal to 10% of such costs to Lessor.

 

INSURANCE ARTICLE XVII.

 

Prior to the Commencement Date of this Lease, Lessee
shall procure from companies reasonably satisfactory to Lessor and maintain at Lessee’s own cost and expense, for the benefit
of Lessee, its agents, employees and contractors, and Lessor, its beneficiaries, agents, employees, contractors and mortgagee,
the following insurance:

 

a) public liability covering the Leased Premises and
the use and operation thereof in broad form with limits of not less than $1,000,000.00 combined single limit per occurrence/aggregate
for each person and $2,000,000.00 for each accident or bodily injury and $500,000.00 for property damage.

 

b) workman’s compensation in accordance with
statutorily required limits.

 

c) fire and extended coverage insurance covering Lessee’s
fixtures, personal property and contents of Lessee located in the Leased Premises in an amount equal to the 100% replacement cost
of such property.

 

d) if directed by Lessor, fire and extended coverage
insurance covering the building in the Leased Premises against loss from the risks normally covered by a policy with fire and extended
coverage, loss or damage by boiler or internal explosion by boiler equal to one hundred percent (100%) of its replacement cost
under Standard Fire and Extended Coverage Policy and all other risks of direct physical loss as insured against under Special Form
(“all risk”) coverage. Such insurance shall be primary to and non-contributing to any insurance carried by Lessor.
Endorsements for inflation and ordinance changes shall be included with such coverage. Loss by explosion will be covered. Loss
of rents for up to one year will be provided to Lessor. Lessor may procure this coverage and have Lessee pay 100% of the cost thereof
if Lessor does not request Lessee to procure this coverage. Where Lessor Permits Lessee to procure such coverage Lessor shall be
a named insured.

 

If at any time during the term of this Lease, Lessee
owns or rents more than one location, the policy shall contain an endorsement to the effect that the aggregate limit in the policy
shall apply separately to each location owned or rented by Lessee. Lessee shall cause its liability insurance to include contractual
liability coverage fully covering the indemnity hereinabove set forth. All of the aforesaid insurance shall be in responsible companies
and written on an “occurrence” basis and not on a “claims made” basis.

 

Lessee at its sole cost and expense agrees to furnish
certificates evidencing the insurance Lessee is required to procure and deliver them to Lessor without delay. Certificates for
the renewal of such insurance shall be delivered by Lessee to Lessor at least thirty (30) days prior to their respective expiration
dates.

 

Lessor, Lessor’s agent, and mortgagee (if the
name of any such mortgagee is provided to Lessee) shall be named as an additional insured on the above mentioned policies called
for in paragraph a and c of this article. Any insurance required hereunder shall not be subject to cancellation except after 30
days prior written notice to Lessor.

 

    	Page 13 of 25

    	 

    
 

Lessee shall not do anything which will in any way
impair the obligation of any policy of insurance covering the Leased Premises or any part thereof nor shall Lessee take any action
either by omission or commission which directly or indirectly causes the insurance costs to materially increase, and should Lessee
take such action it shall be solely responsible for any and all excess or extraordinary premium or cost resulting therefrom.

 

Lessee shall cause each insurance policy carried
to be written in a manner so as to provide that the insurance company waives all right of recovery by way of subrogation in connection
with any loss or damage covered by any such policies. Neither party shall be liable to the other for any loss or damage caused
by fire or any of the risks enumerated in the standard extended coverage insurance to the extent same is covered by insurance which
actually pays the entire claim in question.

 

Companies having an A.M. Bests’ or Standard
and Poors rating of A+ or better will be utilized. A certificate of insurance evidencing coverage is in place without disclaimer
that such certificate is not evidence of in force coverage shall be furnished to Lessor prior to the Commencement Date and thereafter
a current certificate of insurance evidencing coverage is in place without disclaimer that such certificate is not evidence of
in force coverage shall be deposited with Lessor.

 

Lessee shall maintain at Lessee’s own cost and
expense, for the benefit of Lessee, its agents, employees and contractors, and Lessor, its beneficiaries, agents, employees contractors
and mortgagee the insurance called for herein.

 

Any moneys paid out from the standard fire and extended
coverage policy on the building shall first be utilized to repair or replace the damaged portion of the Leased Premises or paid
to Lessor, unless Lessor otherwise elects in writing.

 

ENVIRONMENTAL MATTERS ARTICLE XVIII.

 

In the event Lessee shall conduct or authorize the
generation, transportation, storage, treatment, or disposal at the Premises of any substance regulated under the Resource Conservation
and Recovery Act, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, the Superfund Amendments
and Reauthorization Act of 1986, the Federal Water Pollution Control Act and all other federal, state, and local laws relating
to emissions, discharges, releases, or threatened releases of industrial, toxic, or hazardous substances or wastes of other pollutants,
contaminants, petroleum products or chemicals (collectively “Hazardous Substances”) into the environment (including,
without limitation, ambient air, surface water, ground water, land surface, or subsurface strata) or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal, transport, or handling of Hazardous Substances (the “Environmental
Laws”):

 

(a) Lessee shall, at its own cost, comply with all
Environmental Laws.

 

(b) Lessee shall promptly provide Landlord with copies
of all communications, permits, or agreements with any governmental authority or agency (federal, state, or local) or any private
entity relating in any way to the presence, release, threat of release, placement on or in the Premises, or the generation, transportation,
storage, treatment, or disposal at the Premises, of any Hazardous Substance.

 

    	Page 14 of 25

    	 

    
 

(c) Lessor and Lessor's agents and employees shall
have the right to enter the Premises and/or conduct appropriate tests for the purpose of ascertaining that Lessee complies with
all Environmental Laws relating in any way to the presence of Hazardous Substances on the Premises.

 

(d) Upon written request by Lessor, Lessee shall
provide Lessor with the results of appropriate tests of air, water, or soil to demonstrate that Lessee complies with all Environmental
Laws relating in any way to the presence of Hazardous Substances on the Premises.

 

If, as a result of Lessee's action, or the actions
of Lessee's agents, employees, guests, invitees, or independent contractors, the presence, release, threat of release, placement
on or in the Premises, or the generation, transportation, storage, treatment, or disposal at the Premises of any Hazardous Substance:
(i) gives rise to liability (including, but not limited to, a response action, remedial action, or removal action) under RCRA,
CERCLA, the IEPA, or any common law theory based on nuisance or strict liability, (ii) causes a significant public health effect,
or (iii) pollutes or threatens to pollute the environment, Lessee shall promptly take any and all remedial and removal action necessary
to clean up the Premises and mitigate exposure to liability arising from the Hazardous Substance, whether or not required by law.

 

Lessee hereby represents that the intended operation
of Lessee's business on the Premises is not currently subject to reporting under Section 312 of the Federal Emergency Planning
and Community Right-To-Know Act of 1986, and federal regulations promulgated thereunder , and in event Lessee's business at any
time becomes subject to the afore-described Act and regulations, Lessee shall fully comply therewith and shall promptly provide
Lessor with copies of all reporting materials filed or submitted under such Act and regulations.

 

Lessee shall indemnify, defend, and hold Lessor harmless
from all damages, costs, losses, expenses (including, but not limited to, reasonable attorney's fees and engineering fees) arising
from or attributable to any breach by Lessee of any of the provisions of this Section. Lessee's obligations hereunder shall survive
the termination of this Lease.

 

SUBORDINATION TO MORTGAGE ARTICLE XIX.

 

Lessee will, upon written demand by Lessor, execute
such instruments as may be required to subordinate the rights and interest of Lessee under this Lease to the lien of any mortgage
at any time placed on the Premises provided that such subordination shall not affect Lessee's right to the possession of the Premises
so long as Lessee is not in default hereunder.

 

NOTICES ARTICLE XX.

 

Any notice under this Lease shall be deemed sufficiently
given if sent by registered mail, or certified return receipt mail, to Lessee, and/or to Lessor at the address as shown on the
reference page of this Lease, and either party may by like notice designate a different address to which notices shall be sent.
Notices shall be deemed received three (3) days from the date when mailed. Notice may also be given by overnight messenger service
effective upon delivery with proof of delivery being available.

 

    	Page 15 of 25

    	 

    
 

Notices may also be given via electronic transmission
including by e-mail and by facsimile transmission "fax". In the event of an e-mail or a fax transmission, notice shall
be effective on the day of the e-mail or fax notification is received during normal business hours on a business day or if notice
is sent at a time other than during normal business hours on a business day on the next business day immediately following the
day of transmission. Copies of all electronic transmission including by e-mail and by fax transmissions shall also be forwarded
on the same day by regular first class mail.

 

INSPECTION AND MARKETING ARTICLE XXI.

 

Lessor, or Lessor’s agent, may enter the Premises
at any time for the purpose of making its repairs or repairs which Lessee may neglect or refuse to make in accordance with the
covenants and agreements of this Lease without being deemed guilty of any eviction or disturbance of Lessee’s use or possession
of the Premises, and without being liable in any manner to Lessee.

 

Lessor, or Lessor’s agent may at any time during
normal business hours with a phone notice to Lessee, to the person and number shown on the reference page of this Lease, one hour
prior thereto enter the Premises for the purpose of inspecting, marketing, and/or showing the Premises.

 

Lessor, or Lessor’s agent within twelve (12)
months prior to the expiration of the lease term, may place the usual notice or sign of “For Sale” or “For Rent”
on the Premises, such signs to remain thereon without molestation. Lessor, or Lessor’s agent may at any time during normal
business hours with a phone notice to Lessee, to the person and number shown on the reference page of this Lease, one hour prior
thereto enter the Premises for the purpose of inspecting, marketing, and/or showing the Premises to persons or representatives
of entities wishing to Lease same.

 

OPTIONS ARTICLE XXII.

 

Lessor hereby grants to Lessee an option to renew
this Lease for one additional term of three (3) years, beginning at the expiration of the original term of this Lease, on the same
terms and conditions provided herein, except that the annual minimum rental will be changed as follows:

 

Lessee agrees for the period of 03/01/17 – 02/28/18
the guaranteed and “fixed minimum annual rental shall be four hundred fifty thousand Dollars and No cents ($450,000.00) payable
in equal monthly installments of thirty- seven thousand five hundred dollars and no cents ($37,500.00). This option may be exercised
once and no subsequent options shall be implied once exercised.

 

Lessee agrees for the period of 03/01/18 – 02/28/19
the guaranteed and “fixed minimum annual rental shall be to four hundred seven-five thousand Dollars and No cents ($475,000.00)
payable in equal monthly installments of thirty- nine thousand five hundred eighty-three dollars and thirty-three cents ($39,583.33).

 

Lessee agrees for the period of 03/01/19 – 02/29/20
the guaranteed and “fixed minimum annual rental shall be five hundred thousand Dollars and No cents ($500,000.00) payable
in equal monthly installments of forty-one thousand six hundred sixty-six dollars and sixty-six cents ($41,666.66).

 

This option may be exercised once and no subsequent
options shall be implied once exercised.

 

    	Page 16 of 25

    	 

    
 

If Lessee elects to exercise said option, it shall
do so by giving Lessor notice in writing of such election at least twelve (12) Months prior to the expiration of the original term
of this Lease, or this Lease as extended. Lessee agrees to give Lessor peaceful possession of said premises at the end of the term
of this Lease or any renewal thereof in accordance with the terms of the Lease.

 

In the event of a sublease, and/or a failure to timely
notify Lessor as called for herein and/or a breach of this agreement then this option(s) shall be deemed terminated and shall be
null and void.

 

COVENANT TO HOLD HARMLESS ARTICLE XXIII.

 

Lessee indemnifies and agrees to save Lessor harmless
against any and all claims, liability, damages, costs and expenses of whatever nature, including but not limited to reasonable
attorney's and accountant's fees, and/or costs of other consultants or experts arising from the conduct of the business and/or
operation by Lessee or from any default on the part of Lessee in the performance or failure to perform any agreement, obligation
and/or covenant to be performed pursuant to the terms of this Lease, or from any act of negligence whether by omission or commission
of Lessee, its agent, contractor, employee, sublessee, concessionaire, licensee or invitee in or about the Premises or arising
from or by virtue of Lessee's possession, use and/or control over the Premises or the conduct of its business in or therefrom.
In the event Lessee has insurance, Lessor shall first look to Lessee’s insurance and to the extent Lessor is able to recover
entirely under Lessee’s insurance, Lessee shall have no personal liability. However, to the extent Lessee’s insurance
is inadequate (for any reason including the insurance companies refusal to pay) to reimburse Lessor for Lessor’s damages,
Lessee shall be liable for same.

 

Except to the extent directly caused by the negligence
of Lessor and/or its agents and/or resulting from Lessor or its agents failure to perform an act required of Lessor under this
Lease, if any action, claim or proceeding is brought against Lessor by reason of any such action, claim or proceeding, Lessee covenants
to defend such action, claim or proceeding at Lessee's sole cost and expense. Lessor shall not be liable, and Lessee waives and
releases all claims for damage to person or property sustained by Lessee, Lessee's employees, invitees and customers, resulting
from the Premises, or any equipment or appurtenance, becoming out of repair, or resulting from any accident in or about said building
or the Premises. Lessor shall have the right to choose and appoint legal counsel should same become necessary as a result of the
provisions hereof.

 

Lessor indemnifies and agrees to hold Lessee harmless
against any claims, liability, damages, costs and expenses of whatsoever nature, including but not limited to, reasonable attorneys
fees and/or costs of other consultants or experts arising from the negligent conduct of Lessor in connection with the Premises.
In the event of a claim against Lessor, Lessee shall first look to Lessor’s insurance and to the extent Lessee is able to
recover entirely under Lessor’s insurance, Lessor shall have no personal liability. However, to the extent Lessor’s
insurance is inadequate to reimburse Lessee for Lessee’s damages, Lessor shall be liable for same. Any liability of the Lessor
shall be limited to Lessor's interest in the Premises.

 

LESSOR'S LIEN ARTICLE XXIV.

 

Lessor shall have a first lien upon the interest of
Lessee under this Lease, to secure payment of all rent or monies due under this Lease, which lien may be foreclosed in equity at
any time when rent or money are overdue under this Lease; and the Lessor shall be entitled to name a receiver of said leasehold
interest, to be appointed in any such foreclosure proceeding, who shall take possession of said Premises and who may relet the
same under the orders of the court appointing him.

 

    	Page 17 of 25

    	 

    
 

SECURITY DEPOSIT ARTICLE XXV.

 

Lessee has deposited with Lessor fifty thousand dollars
and no cents ($50,000.00) as security for the full and faithful performance of the terms, covenants and conditions of this Lease.
In event default shall be made in the payment of rent or other sums required to be made by Lessee or default shall be made by Lessee
in performance of any of the other covenants, agreements or conditions by it to be kept and performed hereunder, Lessor may, at
its election without notice and without terminating this Lease, apply the funds so deposited in payment of rent or other sums due
hereunder or in remedying any other default hereunder, Lessor may terminate this Lease by reason of any such default and retain
the portion said funds which applies to damages Lessor sustained and if such funds are inadequate, Lessee shall be liable for the
excess and if such funds are more than sufficient the amount in excess of Lessor’s actual damages shall be refunded to Lessee.

 

After Lessee surrenders the Premises, Lessor provided
Lessee shall not be in default hereunder and shall have complied with all of the terms of this Lease, including the yielding up
of the immediate possession of the Premises in a good and clean condition to Lessor, Lessor shall, upon being furnished with satisfactory
evidence by Lessee that Lessee has paid all bills incurred by it in connection with its performance of the terms of this Lease,
return to Lessee such portion of said deposit then remaining with Lessor hereunder, without interest. Lessor may withhold possession
of the security deposit until all adjustments to rent have been finalized.

 

Should the Premises be conveyed by Lessor, the security
deposit or any portion thereof, not previously applied, may be turned over to Lessor's grantee or new agent. The Lessee hereby
releases the Lessor from any and all liability with respect to the security deposit. Lessor shall have no personal liability with
respect to said sum and Lessee shall look exclusively to Agent or Lessor's successors for return of said sum on the expiration
of this Lease; and that Agent or Lessor's successor shall not be obligated to hold said Security Deposit as a separate fund, but
on the contrary may commingle the same with its other funds.

 

GENERAL ARTICLE XXVI.

 

Nothing contained in this Lease shall be deemed or
construed by the parties hereto or by any third person to create a principal and agent relationship, a partnership, a joint venture,
or any other association between Lessor and Lessee, it being expressly understood and agreed that neither the method of computation
of rent nor any other provisions contained in this Lease nor any act of the parties hereto shall be deemed to create any relationship
between Lessor and Lessee other than the relationship of Lessor and Lessee.

 

The consent or approval by Lessor to or of any act
by Lessee requiring Lessor's consent or approval shall not be deemed to waive or render unnecessary Lessor's consent or approval
to or of any subsequent similar act by Lessee.

 

    	Page 18 of 25

    	 

    
 

The invalidity or unenforceability of any provision
hereof shall not affect or impair any other provisions. The necessary grammatical changes required to make the provisions of this
Lease apply in the plural sense where there is more than one Lessee and to either corporations, associations, partnerships, sole
proprietorship or individuals, males or females, shall in all instances be assumed as though in each case fully expressed. The
headings of the articles contained herein are for convenience only and do not define, limit or construe the contents of such articles.

 

MISCELLANEOUS ARTICLE XXVII.

 

a) This Lease may not be altered, changed or amended
except by an instrument in writing signed by both parties hereto.

 

b) The Individuals executing the terms of this Lease
certify that they have authority to enter into this Lease, that it is binding and enforceable upon the party upon whose behalf
they have signed and that the terms of this agreement do not and will not violate any other agreement between either of the parties
and any third party.

 

c) All covenants, promises, representations and agreements
herein contained shall be binding upon, apply and inure to the benefit of Lessor and Lessee and their respective heirs, legal representatives,
successors and assigns.

 

d) Time is of the essence of this Lease, and all provisions
herein relating thereto shall be strictly construed.

 

e) The words "Lessor" and "Lessee"
wherever used in this Lease shall be construed to mean Lessors or Lessees in all cases where there is more than one Lessor or Lessee,
and to apply to individuals, male or female, or to firms or corporations, as the same may be described as Lessor or Lessee herein,
and the necessary grammatical changes shall be assumed in each case as though fully expressed.

 

f) Whenever any sum due hereunder, including but not
limited to rent for a period of less than either or both a lease year or calendar month, then all such sums shall be prorated on
a per diem basis, and shall be payable in accordance with the terms of this Lease.

 

g) Neither party shall record this Lease or a memorandum
hereof without the prior written consent of the other party and the party seeking the recording shall pay all charges and taxes
incident thereto. Recording this Lease without the prior written consent of Lessor shall be a default of this lease.

 

h) Each of the parties represents and warrants to
the other that it has not dealt with any broker or finder in connection with this Lease except as designated on the Reference Page,
and agrees to defend, indemnify and hold, the other completely harmless and free from any and all loss, liability, costs, damages
or expenses (including but not limited to attorneys' fees) incurred as a result of any breach of the foregoing warranty. Lessor
agrees to pay the broker, if any, listed above in accordance with its listing agreement.

 

i) The submission of this document for examination
and negotiation does not constitute an offer to Lease, or a reservation of, or option for, the Leased Premises and this document
shall become effective and binding only upon execution and delivery hereof by Lessor and by Lessee. All negotiations, considerations,
representations and understandings between Lessor and Lessee are incorporated herein.

 

    	Page 19 of 25

    	 

    
 

j) This Lease shall be construed and enforced in accordance
with the laws of the state where the Leased Premises are located.

 

k) Where more than one lessee is executing this Lease
all Lessees shall be joint and severally liable.

 

L) To the best of Lessor’s actual knowledge In
the last 12 months Lessor has not received notice, and has no knowledge of, any violation of applicable federal state or local
laws or regulations, including without limitation zoning or environmental laws or regulations with respect to the Premises that
have not been corrected and there are no pending or threatened claims, actions or proceedings with respect to the Premises.

 

    	Page 20 of 25

    	 

    

 

IN WITNESS WHEREOF, the parties hereto have executed
this Lease as of the day and year first above written.

 

LESSEE:

CTI INDUSTRIES

 

	By: __________________________________________	Dated: ______________, 200___

 

LESSOR:

Schultz Bros. Co.

 

	By: __________________________________________	Dated: _______________, 200___

M. C. Schultz, President

 

    	Page 21 of 25

    	 

    

 

STATE OF ____________________ )

                                              )SS:

COUNTY OF __________________ )

 

Before me, the undersigned, Notary Public
in and for said county and state, this ______ day of  , 20__, personally appeared ______________________________, and executed
or acknowledged the execution of the above and aforementioned Lease for uses and purposes therein set forth.

 

	WITNESS my hand and Official Seal.	My Commission Expires:________________________
	 	 
	 	Resident of The County of ________________________

 

	Seal	 
	 	_______________________________
	 	Signature of Notary Public

 

STATE OF   ILLONIS____________ )

                                              )SS:

COUNTY OF __________________ )

 

Before me, the undersigned, Notary Public
in and for said county and state, this ______ day of  , 20__, personally appeared M. C. Schultz, President, and executed
or acknowledged the execution of the above and aforementioned Lease for uses and purposes therein set forth.

 

	WITNESS my hand and Official Seal.	My Commission Expires:________________________
	 	 
	 	Resident of The County of _________________________
	 	 
	Seal	
	 	_________________________________
	 	Signature of Notary Public

 

    	Page 22 of 25

    	 

    

 

Exhibit “A”

Site Plan

 

 

    	Page 23 of 25

    	 

    
 

EXHIBIT “B”

Estoppel Certificate

 

Lessee and Lessor, hereby state,
represent and certified the following:

 

1. The undersigned are the Lessee and Lessor under
that certain Lease dated ____________ for the Premises commonly known as 800 North Church Street, Lake Zurich, Illinois;

 

2. Lessee has accepted delivery of the premises and
has entered into occupancy thereof;

 

3. The Lease represents the entire agreement between
the parties as to the leasing, is in full force and effect and has not been assigned, modified, supplemented or amended in any
way; except as follows (if none, so state);

 

4. The primary term of the Lease commenced on ________________
and continues to _____________________, and contains a _____ (__) year renewal option(s);

 

5. The monthly base rental and other charges are current
and have not been paid more than one month in advance;

 

6. Except as stated below, as of this date neither
Lessee nor Lessor is in default under any of the terms, conditions, provisions or agreements of the Lease and neither Lessee nor
Lessor has any offsets, claims, defenses against the other with respect to the Lease:______________________________________________________________________________________________________________________________________

___________________________________________________________________________________________________________________________________________

 

The foregoing statements, representations, and certifications
are delivered pursuant to Article IV of the Lease agreement, and may be relied upon by a prospective purchaser or mortgagee of
the Leased Premises or their respective successors and assigns. The undersigned certifies that he or she has the authority to execute
this Estoppel Certificate on behalf of Lessee and/or Lessor.

 

	Lessee:	Lessor:
	CTI Industries	Schultz Bros. Co.
	 	 
	By ____________________________________	By________________________________________
	 	M. C. Schultz, President

 

    	Page 24 of 25

    	 

    

 

EXHIBIT “C”

Lessor’s Work

 

The following is a list of items "Lessor's Work" that
Lessor shall complete and/or provide at it's sole cost and expense. All of the heating, air conditioning, ventilating, plumbing
and electrical systems and equipment in the Premises will be in good working order and condition as of the Occupancy Date

 

1) Paint (one color) in the office. Color to be chosen by Lessee
from Lessors Building Standards.

 

2) Paint (white) the unpainted wall areas of the warehouse.

 

3) Carpet and install base board molding in the office. Color
to be chosen by Lessee from Lessors Building Standards.

 

4) Clean the warehouse floor restoring it to a broom clean condition.
Removing dust and debris from the demolition. Provide flat unfinished concrete surface including removal of any previous flooring
and adhesive. Subject to Lessee's reasonable approval.

 

5) All restrooms, plumbing and fixtures are to be in good working
order.

 

6) All existing 110 volt outlets to be made active and in working
order.

 

7) Any unfinished electrical wiring to be made safe and brought
to code.

 

8) Remove electrical conduit and wiring from previous phone/IT
room; provide finished floor and walls in this room; wall with phone and data punch down blocks to be removed in this room.

 

END OF EXHIBIT

 

    	Page 25 of 25

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