Document:

Exhibit 10.17

 

LEASE AGREEMENT

 

THIS LEASE AGREEMENT (“Lease”
or “Agreement”) is made this 1st day of July, 2019 (“Effective Date”) between Texzona Industries,
Ltd. (“Landlord”), and the Tenant named below.

 

Key Definitions:

 

	Tenant:	Precision Optics Corporation, Inc.
	 	 
	Tenant’s Representative,	
        Divi Mangadu

	 	 
	Address, and Telephone:	1410 Gail Borden, Suite A-3

                                                      El Paso, TX 79935

	 	 
	 	
        Phone:

        Email:

	
         

        Premises:
	
         

        Landlord hereby demises
        and leases to Tenant, and Tenant hereby takes from Landlord, approximately 9,375 rentable square feet of that certain building
        (the “Building”) located at 1410 Gail Borden, Suite A- 3 & A-4, El Paso, Texas 79935, County of El Paso, State
        of Texas, the real property of which is more particularly described by the Legal Description attached hereto as Exhibit "B-1"
        and Site Plan attached hereto as Exhibit “B” and incorporated herein by reference, together with all rights, privileges,
        easements, appurtenances and immunities belonging to or in any way pertaining thereto, and together with the Building and other
        improvements situated or to be situated thereon (the said portion of the project’s real property, Building and improvements
        being hereinafter referred to as the ("Premises").

	 	 
	Project:	Greenway Industrial Business Center, described on Exhibit “B” and being the land and improvements thereon described on Exhibit “B-1” attached hereto.
	 	 
	Building:	The building municipally known as 1410 Gail Borden, El Paso, Texas 79935.
	 	 
	Tenants Share of Project:	3.64% (based on total square footage for the Project: 257,875 s.f.)
	 	 
	Tenant’s Share of Building:	9.34% (based on total square footage of Building: 100,375 s.f.)
	 	 
	Lease Term:	
        Beginning on the Commencement Date
and ending on the last day of the 36th full calendar month thereafter. Partial months shall be prorated.

 

 

 

    
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	Commencement Date:	June 1, 2019, Landlord may, at its option, prepare a letter to Tenant outlining the Commencement Date and the end of the original Lease Term, which is sometimes referred to as the “end date or end of the Lease Term”.
	
         

        Monthly Base Rent:
	
         

        Base Rent shall equal the following amounts
        for the respective periods set forth below:

         

        

	 	       Period	 	Monthly Base Rent
	 	       Commencement Date through Month – 12	$ 3,391.56
	 	       Months 13-24	 	$ 3,476.35
	 	       Months 25-36	 	$ 3,563.26
	
         

        Initial Estimated Annual Operating Expense
        Payments: (estimates only and subject

        to adjustment to actual
        costs and expenses according to the provisions of this Lease)*
	
         

        1. 
        Taxes:

        2. 
        Insurance:

        3. 
        Operating Expenses: Total
	
         

        $ 0.87 psf

        $ 0.21 psf

        $ 1.06 psf

        $ 2.14 psf
	
         

        $ 8,156.25 total

        $ 1,968.75 total

        $ 9,937.50 total

        $ 20,062.50 total

	*estimated only and subject to adjustment to actual costs as provided in the Lease. Any partial months shall be pro-rated for such partial month.
	Initial Monthly Base Rent and Operating Expense Payments:	
         

        $ 5,063.44
	 	 
	 	 	 	 
	Security Deposit:	$ 1,848.94 (On Account)	 	 
	 	 	 	 
	Use:	The purpose receiving, storing, shipping and selling products, materials and merchandise made and/or distributed by Tenant and for such other lawful purposes as may be incidental thereto; Tenant may also use the Premises for light manufacturing.
	 	 
	Broker:	Vista Star Realty, LLC – Per Separate Agreement.
	 	 
	Addenda:	See Paragraph 42.	 	 
	 	 	 	 
	Exhibits:	
        Exhibit A – Premises

        Exhibit B –
        Project

        Exhibit B-1 – Project Land and Improvements
        Description

        Exhibit C – Certificate of Insurance

        Exhibit D – Rules and Regulations

        Exhibit
        E – Sign Criteria

        Exhibit F – Move-out Conditions

        Exhibit
        G – Floorplan

 

 

 

    
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1.                  
Granting Clause; Quiet Enjoyment. In consideration of the obligation of Tenant to pay rent as herein provided and in
consideration of the other terms, covenants, and conditions hereof, Landlord leases to Tenant, and Tenant takes from Landlord,
the Premises, to have and to hold for the Lease Term, subject to the terms, covenants and conditions of this Lease. Tenant agrees
that the Premises does not include the roof, exterior walls or space below the floor of the Premises or Building. If Tenant shall
perform all of the covenants and agreements herein required to be performed by Tenant, Tenant shall, subject to the terms of this
Lease, at all times during the Lease Term, have peaceful and quiet enjoyment of the Premises against any person claiming by, through
or under Landlord.

 

2.                  
Use and Acceptance of Premises. The Premises shall be occupied and used by Tenant solely for the purpose of conducting
therein the business listed in the key definitions at the first of this Lease and for such lawful purposes as may be incident thereto
and for no other purpose without Landlord's prior written consent. Tenant's acceptance of occupancy from Landlord shall constitute
acknowledgment by Tenant that Tenant has inspected the Premises, the Building and the Project of which the Premises are a part
and that same are suitable for Tenant's intended use thereof as stated in this Paragraph 2. TENANT RECOGNIZES AND AGREES THAT
LANDLORD IS MAKING NO WARRANTIES EXPRESSED OR IMPLIED, AS TO THE SUITABILITY OF THE PREMISES OR THE PROJECT FOR ANY PARTICULAR
USE OR THE CONDITION OF ANY PORTION THEREOF. TENANT ACCEPTS THE SPACE “AS IS” AND WITH ALL FAULTS. TENANT WAIVES ANY
IMPLIED WARRANTY THAT THE PREMISES IS SUITABLE FOR TENANT’S INTENDED USE OR PURPOSES. NOTWITHSTANDING THE FOREGOING, LANDLORD
IS NOT AWARE OF AND HAS NO REASON TO BELIEVE THERE ARE ANY CIRCUMSTANCES OR CONDITIONS IN OR ON THE PREMISES OR THE PROPERTY WHICH
WOULD PREVENT TENANT’S INTENDED USE OR PURPOSES.

 

3.
                  Operation by Tenant.

 

(a)               
Tenant, at Tenant's expense, shall comply with all laws, rules, orders, ordinances, directions, regulations and requirements
of federal, state, county and municipal authorities regardless of when they become effective, pertaining to Tenant's use or occupancy
of the Premises and with any covenants, conditions and restrictions, including, without limitation, all applicable federal, state
and local laws, regulations or ordinances pertaining to air, soil and water quality, Hazardous Materials (as defined below), waste
disposal, air emissions and other environmental, health and safety, zoning and land use matters, including all Environmental Requirements
(as defined below), the Americans with Disabilities Act or similar laws (as amended, “ADA”) and with any directive
or order of any public officer or officers, pursuant to law, which impose any duty upon Landlord or Tenant with respect to the
use or occupancy of the Premises (the “Legal Requirements”). Landlord is not aware of and has no reason to believe
there are any such circumstances or conditions in or on the premises or the property other than the proper use, storage and disposal
of certain materials customarily used in Tenants light manufacturing activities within the
premises.

 

(b)               
Tenant will use the Premises in a careful, safe and proper manner and will not commit waste, overload the floors or structure
of the Premises or Building or subject the Premises to use that would damage the Premises, the Building or the Project. Tenant
shall not permit any objectionable or unpleasant odors, smoke, dust, gas, noise, or vibrations to emanate from the Premises, or
take any other action that would constitute a nuisance or would disturb, unreasonably interfere with, or endanger Landlord or any
tenants of the Project or any adjacent or neighboring property owners or occupants. In no event may Tenant engage in any action
or inaction which would cause a change in the zoning classification (including any variances or so-called “grandfathered”
benefits) which is currently applicable to the Premises. Outside storage, including without limitation, storage of non-operational
trucks, trailers and other vehicles, parts and supplies is prohibited without Landlord’s prior written consent. Tenant shall
not use the Premises and areas surrounding the Premises as a place of public accommodation under the ADA or similar laws. Tenant
shall not conduct an auction, liquidation, or going out of business sale on the Premises or areas surrounding the Premises, including
the Common Areas (as defined in this Lease) without Landlord’s prior written consent.

 

 

 

    
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(c)               
Tenant shall be responsible, at its sole cost and expense, for obtaining and keeping in full force and effect, under the
terms of the Legal Requirements, any and all permits, approvals, authorizations and/or licenses which are required or necessary
for the use and/or occupation of the Premises, or to establish, operate, and conduct its business operations in the Premises, as
well as for any specific new permits, approvals, authorizations and/or licenses that may be required or necessary for carrying
out Tenant made alterations or Tenant Additions (defined below).

 

(d)               
Tenant shall supply and maintain at its expense any fire extinguishers or other fire prevention equipment or systems relating
to or required by Tenant’s use of the Premises as required by Legal Requirements. Tenant shall be responsible for all keys
and security of the Premises at its sole cost and expense.

 

(e)               
Landlord shall have the exclusive right to use, rent or exploit for any purpose (provided Landlord’s use does not
unreasonably interfere with or restrict Tenant’s use of the Building or Premises) the roof and exterior walls of the Building
or Premises, or any other areas of the Project, including but not limited to erecting signs or other structures on or over all
or any part of the same, erecting scaffolds and other aids to the construction and installation of the same, and installing, maintaining,
using, repairing, and replacing pipes, ducts, solar and electronic systems or devices, conduits and wires leading through, to or
from the Building and Premises and serving other parts of the Project. Tenant shall have no right whatsoever to use the exterior
walls or roof of the Building or Premises in the Building, except as otherwise provided in this Lease. Tenant shall not penetrate
in any manner the exterior walls or roof of the Building or Premises.

 

4.                  
Base Rent. Tenant shall pay Base Rent in the amount set forth in the key definitions on the first page of this Lease.
The first month’s Base Rent, the Security Deposit, and the first monthly installment of estimated Operating Expenses (as
herein defined) shall be due and payable on the date hereof, and Tenant promises to pay to Landlord in advance, without demand,
deduction or set-off, monthly installments of Base Rent on or before the first (1st) day of
each calendar month succeeding the Commencement Date. Payments of Base Rent for any fractional calendar month shall be prorated.
All payments required to be made by Tenant to Landlord hereunder (or to such other party as Landlord may from time to time specify
in writing) may be made by Electronic Fund Transfer of immediately available federal funds, or by check (certified or cashier’s
check if requested by Landlord), at such place, within the continental United States as Landlord may from time to time designate
to Tenant in writing. The obligation of Tenant to pay Base Rent and other sums to Landlord and the obligations of Landlord under
this Lease are independent obligations. Tenant shall have no right at any time to abate, reduce, or set-off any rent due hereunder
except as may be expressly provided in this Lease.

 

5.
                  Operating Expense Payments.

 

(a)               
It is the intention of Landlord and Tenant that Landlord receive the Base Rent “net” of all other charges except
as expressly provided herein. Accordingly, beginning on the Commencement Date, Tenant shall pay as additional rent Tenant's Share
(defined below) of the Operating Expenses and relating to the Premises, the Building, and the Project. As used in this Lease, the
term “Rent” shall mean, collectively, Base Rent and additional rent. The term “Operating Expenses” shall
mean all costs and expenses incurred by Landlord with respect to the ownership, maintenance, repair and operation of the Common
Area and Project, including but not limited to: Taxes (as provided in this Lease); Insurance (as provided in this Lease); utilities;
maintenance, repair and replacement of all portions of the Project (including the buildings and Common Areas), including without
limitation, signs, sprinklers and fire suppression systems (if any), mechanical systems, including any HVAC or EVAP systems and
their components, plumbing systems, exterior surfaces (including but not limited to painting, cleaning and graffiti removal), paving
and parking areas (including striping, line painting and snow removal), dock systems, dock doors, roads, roofs, and roof systems,
alleys, landscaping (including sprinkler systems), utility lines, lighting, electrical systems, Building Systems (defined below);
trash collection, sweeping; compliance with laws, rules, regulations and orders of governmental authorities, including any Legal
Requirements; fees and assessments; amounts paid to contractors and subcontractors for work or services performed in connection
with the foregoing; property management fees (which, at Landlord’s option, may be payable to itself, an affiliate or third
party manager); and administrative fees equal to fifteen percent (15%) of the Operating Expenses (excluding Taxes and Insurance)
(which, at Landlord’s option, may be payable to itself, an affiliate or third party manager); deductibles on insurance loss;
security services (if any). Notwithstanding the foregoing, Landlord agrees that all Operating Expenses must be reasonable and customary
for the operation and maintenance of the Property and Project.

 

 

 

    
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(b)                Operating
Expenses do not include costs, expenses, depreciation or amortization for repairs and replacements required to be made by Landlord
at its expense under this Lease, unless otherwise provided therein or caused by Tenant, its agents, employees, contractors or
invitees; debt service under mortgages; ground rent or ground leases; costs of restoration to the extent of net insurance proceeds
received by Landlord with respect thereto; leasing commissions; or the costs of renovating space for tenants in the Project.

 

(c)               
Landlord has included in the Key Definitions of this Lease, a statement estimating Tenant's Share of the Operating Expenses
for the current calendar year (herein the "Estimate"). Beginning on the Commencement Date and on the first (1st)
day of each month during the Lease Term, Tenant shall pay Landlord as additional rent one-twelfth (1/12) of the Estimate. In addition,
Tenant shall pay with the rental payment for the first (1st) month following receipt of the
Estimate an amount equal to the number of months elapsed in the calendar year prior to receipt of the Estimate times one-twelfth
(1/12) of the Estimate, so as to bring said monthly payments current for the year. As soon as practical after the end of each calendar
year, Landlord shall furnish Tenant a written statement showing Tenant's Share of the total Operating Expenses actually due for
the calendar year ended (the "Actual Expenses"). If the Actual Expenses exceed the Estimate, then Tenant agrees to pay
within ten (10) days of receipt of said statement, the difference between Tenant's Share of the Actual Expenses and the Estimate.
If the Estimate exceeds the Actual Expenses, then, assuming Tenant is not in default, upon request by Tenant Landlord agrees to
refund the balance or apply such amount to amounts due by Tenant under this Lease or hold such amount as a credit for Tenant under
this Lease. Tenant’s failure to object to the written statement within thirty (30) days after receipt shall be deemed acceptance
by Tenant. For purposes of this Paragraph 5, a year shall mean a calendar year. The provisions of this Paragraph 5 shall apply
for any partial calendar year during which this Lease is effective, subject to a pro rata adjustment based upon the number of calendar
months or portions thereof that this Lease is in effect. Tenant’s obligation to pay, such difference shall survive the termination
or expiration of this Lease. This Lease is intended to comply with Section 171.1011(f) of the Texas Tax Code, as amended, for pass
through items.

 

(d)               
For purposes of calculating Tenant’s Share of Operating Expenses or charges under this Lease, a year shall mean a
calendar year except the first year, which shall begin on the Commencement Date, and the last year, which shall end on the expiration
of this Lease. With respect to Operating Expenses which Landlord allocates to the entire Project, Tenant’s Share shall be
the percentage set forth in the key definitions in this Lease as Tenant’s Share of the Project, as adjusted by Landlord in
the future for changes in the physical size of the Premises or the Project. For Operating Expenses which Landlord allocates only
to the Building, Tenant’s Share shall be the percentage set forth in the key definitions in Paragraph 1 as Tenant’s
Share of the Building as adjusted by Landlord in the future for changes in the physical size of the Premises or the Building. In
addition to Tenant’s Share of Operating Expenses, Tenant shall pay to Landlord any expenses allocated exclusively to Tenant,
including maintenance, janitorial, garbage removal, repair and replacement of Building Systems (i.e. HVAC or EVAP systems), which
Landlord may invoice to Tenant or include as allocated to Tenant as internal Operating Expenses.

 

(e)               
Landlord may equitably increase Tenant’s Share for any item of expense (including Operating Expense) or cost reimbursable
by Tenant that relates to a repair, replacement, or service that benefits only the Premises or a portion of the Building or that
Project that includes the Premises or based on occupancy or use. The estimated Operating Expenses for the Premises set forth on
the first page of this Lease are only estimates, and Landlord makes no guaranty or warranty that such estimates are accurate.

 

(f)                
[INTENTIONALLY OMITTED.]

 

 

 

    
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(g)               
Landlord and Tenant each agree that they are knowledgeable and experienced in commercial transactions and further hereby
acknowledge and agree that the provisions of this Lease for determining charges, amounts and additional rent payable by Tenant
are commercially reasonable and valid, even though such methods may not state precise mathematical formula for determining such
charges and is commercially reasonable and, as to each such charge or amount, constitutes a “method by which the charge is
to be computed.” ACCORDINGLY, LANDLORD AND TENANT HEREBY VOLUNTARILY WAIVE THE APPLICABILITY OF SECTION 93.012 OF THE
TEXAS PROPERTY CODE, TO THE TERMS OF THIS LEASE.

 

6.                   Late
Charges. Tenant agrees to pay a late charge equal to the greater of (a) $50.00, or (b) ten percent (10%) as
additional rent for each payment due hereunder that remains unpaid for more than five (5) days when due under this Lease to
cover Landlord's administrative costs of processing such late payment. In addition to said late charge, any rental or other
amount due from Tenant under this Lease which is more than ten (10) days delinquent shall bear interest from the date such
rental or other amount was due at the lesser of the rate of twelve percent (12%) per year or the then maximum non-usurious
rate under applicable law, (the lesser of said amounts being herein referred to as the "Maximum Rate.") In the
event the late charge is ever deemed to be "interest" the amount of interest on past due amounts shall be
automatically reduced so that the combination of said late charge and the interest on past due amounts, if any, does not
exceed the Maximum Rate. Any amount collected which exceeds the Maximum Rate will be deemed credited to other amounts owed by
Tenant to Landlord under this Lease, and any remaining excess after such credit shall be refunded to Tenant. It is the intent
of both Landlord and Tenant to at all times comply with the applicable law regarding the maximum non-usurious amount or rate
of interest which may be contracted for, charged, taken, reserved or received by Landlord. Any rental and/or payments due
hereunder returned to Landlord by Tenant’s bank or other financial institution, for any reason, such as
“Insufficient Funds” or otherwise, will entitle Landlord to collect an additional $40.00 from Tenant for each
such payment.

 

7.                   Utilities. Tenant shall timely pay before delinquency for all water, gas, electricity, heat, light, power, telephone,
sewer, sprinkler services, refuse and trash collection, garbage removal, water meter charges and franchise fees, and other utilities
and services used by Tenant on the Premises, all maintenance charges for utilities, and any storm sewer or meter franchise fee
charges, hook up or termination fees or other similar charges for utilities, together with any taxes, penalties, surcharges or
the like pertaining to Tenant's use of the Premises. With respect to all utilities separately metered, Tenant shall arrange for
utility services in its own name and timely pay all charges directly to the provider. Tenant shall pay to Landlord as additional
rent separately stated, or in Landlord’s discretion as Operating Expenses, its share of all reasonable and customary charges
for utilities not separately metered based upon consumption, as reasonably determined by Landlord. Landlord shall not be liable
to Tenant for any interruption in the service of any utilities to the Premises. No interruption or failure of utilities shall result
in the termination of this Lease or the abatement of any amounts owed by Tenant under this Lease. Tenant agrees to limit use of
water and sewer for normal restroom and kitchen use consistent with its current use of the facility. Tenant acknowledges that it
has inspected the utilities and has determined that the utilities are sufficient for Tenant’s use of the Premises. Tenant
shall not install any equipment or make use of the Premises which overloads the utilities available to the Premises. If Tenant
violates this Paragraph, Landlord may, in addition to any other remedies which Landlord has hereunder, require Tenant, at Tenant’s
expense, to upgrade such utility lines and related equipment including without limitation transformers.

 

 

 

    
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8.
                  Taxes.

 

(a)               
 Landlord’s Rights and Obligations. Landlord has the sole right to render the Project, land and any improvements
thereon to any appropriate taxing authorities. Tenant, as additional rent as provided in this Lease, agrees to pay Tenant's Share
of all taxes (both general and special), assessments, or governmental charges (hereinafter "Taxes") lawfully levied or
assessed against the land, the Project or any portion thereof, including without limitation any gross receipts, excise or similar
tax and all taxes or levies imposed in substitution or replacement thereof or in substitution or replacement of increases therein,
along with Taxes imposed pursuant to Section 171, et seq of the Texas Tax Code, along with amendments thereto. Tenant's Share of
the Taxes shall be payable as additional rent in accordance with this Lease, herein. Additionally, Tenant shall pay to Landlord
upon demand, Tenant's Share of all reasonable costs (including tax consultants and/or attorneys’ fees, but only to the extent
of actual tax savings resulting from the actions of said consultants or attorneys) incurred by Landlord in connection with any
protest or contest of the valuation of taxes imposed on the Project or the land. Provided, however, Landlord shall have no obligation
to take any such action. Tenant shall have the right to inspect, at Landlord's business office during regular business hours and
upon reasonable notice to Landlord, the tax bills which Landlord receives from the applicable taxing authorities.

 

(b)               
 Tenant’s Obligations. During the Lease Term, Tenant shall pay prior to delinquency all taxes assessed against
and levied upon fixtures, furnishings, equipment and all other personal property of Tenant contained in the Premises. When possible,
Tenant shall cause its personal property to be assessed and billed separately from the real property of Landlord. If any of Tenant's
personal property shall be assessed with Landlord's real property, Tenant shall pay Landlord the taxes attributable to Tenant within
ten (10) days after receipt of a written statement therefor or, at Landlord's option as provided in this Lease.

 

9.
                  Insurance; Waiver.

 

(a)               
Landlord's Obligation. During the Lease Term and any extensions of this Lease, Landlord shall procure and maintain
such property (“all risk”) and commercial general liability insurance coverage on the Project (including buildings
and Common Areas) as Landlord deems appropriate, including if Landlord so elects, loss of rental insurance. In addition, Landlord
may procure such other insurance as may be reasonably required by Landlord’s lender with respect to the Project.

 

 (b)                Tenant's Obligations.

 

(i)                
All Risk Property, General Liability and Other Insurance. Tenant, as additional rent, shall pay to Landlord an amount
equal to Tenant's Share of all premiums paid by Landlord for insurance described in this Lease. Tenant's Share of such premiums
is payable as additional rent under Paragraph 5.

 

(ii)               
Plate Glass. During the Lease Term, Tenant shall carry full coverage insurance on all plate glass in the Premises
and cause the same to be replaced if chipped, cracked or broken, including the replacement thereof in the event of an illegal or
malicious act by any third party.

 

 

 

    
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(iii)             
Liability. During the Lease Term, Tenant shall procure and maintain a Commercial General Liability coverage policy
or policies of insurance, insuring both Landlord and Tenant, against all claims, damages or actions arising out of or in connection
with Tenant's use or occupancy of the Premises, the Building, or the Project (including the Common Areas), and adjoining streets,
sidewalks, and passageways, or by the condition of the Premises, the limits of such policy or policies to be in an amount not less
than $1,000,000.00 per occurrence and in an amount not less than $2,000,000.00 in the general aggregate for personal injury including,
without limitation, bodily injury, death or property. Such policy or policies shall additionally include Contractual Liability
insurance in support of the indemnity sections of this Lease and Fire Legal Liability insurance coverage in the maximum allowable
amount which shall include insurance coverage for any damage to the Premises leased by Tenant. Tenant shall also maintain (i) business
interruption insurance covering for at least 12 months, and (ii) workers compensation insurance on its employees in the required
statutory amounts. All of Tenant’s policies shall contain a waiver of subrogation and right of recovery.

 

(iv)             
Property Insurance. During the Lease Term, Tenant shall carry insurance against fire and such other risks as are
from time to time included in standard extended coverage insurance, for the full insurable value, covering all of Tenant's equipment,
furniture, merchandise, trade fixtures, including Trade Fixtures (as defined below), furnishings, wall covering, floor covering,
carpeting, drapes, equipment, improvements, betterments and all items of property of Tenant located on or within the Premises.
All property of Tenant kept in the Premises shall be so kept at Tenant's risk only. Such policy shall contain a waiver of subrogation
and right of recovery.

 

(v)              
Construction Liability. Tenant, at its own cost and expense, shall obtain and maintain at all times when demolition,
excavation, or construction work being done by Tenant and is in progress on the Premises, construction liability insurance with
limits of not less than $1,000,000.00 and

$2,000,000.00 in the general
aggregate for personal injury, including, without limitation, bodily injury, death, or property damage, protecting Landlord and
Tenant as well as such other person or persons as Tenant may designate against any and all liability for injury or damage to any
person or property in any way arising out of such demolition, excavation, or construction work.

 

(vi)             
Form of Insurance. Policies required of Tenant hereunder shall: (A) be issued by a reputable insurance company qualified
to do business in the state where the Premises and the Project are located with an AM Best rating of A minus or better; (B) list
Landlord, and any Property Manager if any, as an additional insured; (C) provide that they cannot be cancelled or amended in any
material respects unless Landlord is given thirty (30) days prior written notice by Tenant; (D) state that such insurance is primary
and non-contributory over any insurance carried by Landlord; (E) contain an endorsement in favor of Landlord waiving such insurance
company's right of subrogation against Landlord. Landlord shall have the right to review said insurance amounts at least yearly
during the Lease Term and require Tenant to increase said insurance policies to provide coverage in such amounts agreed to herein.
Tenant shall provide Landlord with any renewal of insurance required under this Paragraph at least ten (10) days prior to the expiration
of any such policy. Tenant will also reimburse Landlord for any increased premiums or additional insurance which Landlord reasonably
deems necessary as a result of Tenant's use or occupancy of the Premises or any vacancy or abandonment thereof by Tenant. In addition,
Tenant’s insurance as required in this Lease shall apply as primary insurance with respect to any other insurance or self-insurance
programs afforded to or obtained by Landlord. TENANT WAIVES ALL RIGHTS AGAINST LANDLORD FOR RECOVERY OF DAMAGES TO THE EXTENT
THE DAMAGES ARE COVERED (OR SHOULD HAVE BEEN COVERED) BY THE LIABILITY INSURANCE AND OTHER INSURANCE OBTAINED OR REQUIRED TO HAVE
BEEN OBTAINED BY TENANT UNDER THIS LEASE. The insurance required by Landlord hereunder may be maintained under a blanket or
master policy which includes properties other than the Project.

 

 

 

    
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(vii)            
Certificate of Insurance. A duly executed certificate of insurance substantially similar to the form attached as
Exhibit “C” to this Lease shall be delivered by Tenant to Landlord: (A) within fifteen (15) days of the Effective Date,
(B) at least fifteen (15) days prior to the expiration of the respective insurance policy for any renewals, or (C) within fifteen
(15) days after receipt of a written request by Landlord during this Lease.

 

(c)               
Mutual Waiver of Subrogation Rights. Landlord and Tenant and all parties claiming under them mutually release
and discharge each other and their respective officers, directors, partners, employees and agents from all claims and liabilities
arising from or caused by any casualty, hazard or event to the extent they could be covered by valid and collectible insurance
required to be carried under this Lease by Landlord or Tenant, respectively, and waive any right of subrogation which might otherwise
exist in or accrue to any person on account thereof; provided that such release shall not operate in any case where the effect
is to invalidate such insurance coverage. The failure of a party to carry the required insurance shall not void this waiver. This
clause shall survive the termination of this lease. THIS RELEASE SHALL APPLY EVEN IF THE LOSS OR DAMAGE SHALL BE CAUSED BY THE
FAULT OR NEGLIGENCE OF A PARTY HERETO OR FOR ANY PERSON FOR WHICH SUCH PARTY IS RESPONSIBLE.

 

(d)               
Waiver. LANDLORD, ITS OFFICERS, DIRECTORS, PARTNERS, AGENTS, MANAGERS, CONTRACTORS, LICENSEES AND EMPLOYEES (INDIVIDUALLY,
THE “LANDLORD” AND COLLECTIVELY THE “LANDLORD PARTIES”), SHALL NOT BE LIABLE FOR, AND TENANT WAIVES ALL
CLAIMS FOR DAMAGE OR LOSS (EXCEPT CLAIMS CAUSED BY OR RESULTING FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE LANDLORD
OR ANY LANDLORD PARTY, INCLUDING BUT NOT LIMITED TO CONSEQUENTIAL DAMAGES AND BUSINESS INTERRUPTIONS, TO PERSON, PROPERTY OR OTHERWISE,
SUSTAINED BY TENANT OR ANY PERSON CLAIMING THROUGH TENANT RESULTING FROM ANY ACCIDENT OR OCCURRENCE IN OR UPON ANY PART OF THE
PREMISES OR THE PROJECT. THIS WAIVER SHALL INCLUDE WITHOUT LIMITATION CLAIMS FOR DAMAGES RESULTING FROM BUT NOT LIMITED TO: (i)
ANY EQUIPMENT OR APPURTENANCES BECOMING OUT OF REPAIR; (ii) INJURY DONE OR CAUSED BY WIND, WATER, ICE OR OTHER NATURAL ELEMENTS;
(iii) ANY DEFECT IN OR FAILURE OF PLUMBING, HEATING OR AIR-CONDITIONING EQUIPMENT, BUILDING SYSTEMS, ELECTRIC WIRING OR INSTALLATION
THEREOF, GAS, WATER, SEWER AND STEAM PIPES, STAIRS, PORCHES, RAILINGS, SIDEWALKS DRIVEWAYS OR WALKS; (iv) BROKEN GLASS;(v) THE
BACKING UP OF ANY SEWER PIPE OR DOWNSPOUT; (vi) THE BURSTING, LEAKING OR RUNNING OF ANY TANK, TUB, WASHSTAND, WATER, SNOW OR
ICE UPON THE PREMISES OR THE PROJECT; (vii) THE FALLING OF ANY FIXTURE, PLASTER, BRICK OR STUCCO; (viii) DAMAGE TO OR LOSS BY
THEFT OR OTHERWISE OF PROPERTY OF TENANT OR OTHERS; (ix) ACTS OR OMISSIONS OF OTHER PERSONS IN THE PREMISES, OTHER TENANTS IN
THE PROJECT, OCCUPANTS OF NEARBY PROPERTIES, OR ANY OTHER PERSONS; AND (x) ANY ACT OR OMISSION OF OWNERS OF ADJACENT OR CONTIGUOUS
PROPERTY. ALL PROPERTY OF TENANT KEPT IN THE PREMISES SHALL BE SO KEPT AT TENANT'S RISK ONLY AND TENANT SHALL INDEMNIFY, DEFEND
AND SAVE LANDLORD AND THE LANDLORD PARTIES HARMLESS FROM CLAIMS ARISING OUT OF DAMAGE TO THE SAME, INCLUDING SUBROGATION CLAIMS
BY TENANT'S INSURANCE CARRIER.

 

NOTWITHSTANDING
ANYTHING IN THIS LEASE TO THE CONTRARY, LANDLORD AND TENANT WAIVE ALL CLAIMS AGAINST EACH OTHER (AND AGAINST EACH OTHER’S
PARENT COMPANY AND AFFILIATES AND THEIR OFFICERS, DIRECTORS, EMPLOYEES, MANAGERS AND AGENTS) FOR ANY CONSEQUENTIAL, INCIDENTAL,
INDIRECT, SPECIAL, EXEMPLARY OR PUNITIVE DAMAGES, INCLUDING, BUT NOT LIMITED TO, LOSS OF ACTUAL OR ANTICIPATED PROFITS, REVENUES
OR PRODUCT AND REGARDLESS OF WHETHER ANY SUCH CLAIM ARISES OUT OF BREACH OF CONTRACT OR WARRANTY, TORT, NEGLIGENCE, PRODUCT LIABILITY,
MISREPRESENTATION, INDEMNITY, CONTRIBUTION, STRICT LIABILITY, EQUITY, OR ANY OTHER LEGAL THEORY.

 

 

 

    
	 	9	 

     

    

 

(h)               
Failure to Comply. Notwithstanding the foregoing, should Tenant fail to comply with any insurance requirements set forth
above, Landlord shall have the right, but not the obligation, after five (5) days’ prior written notice to Tenant, to purchase
said insurance premiums required for compliance under this Lease and Tenant agrees to pay Landlord, upon demand, the premium cost
thereof, as additional rent under this Lease.

 

10.
                Landlord’s Maintenance and Repairs.

 

(a)              
 Landlord’s Obligations. Landlord shall maintain or cause to be maintained, at its expense, the structural
soundness of the roof, foundation, structural columns and girders, and exterior walls of the Building, in good order, repair, condition
except for damage thereto due to the acts or omissions of Tenant, or Tenant’s employees, agents, invitees, and contractors,
or use beyond ordinary wear and tear by Tenant. The term “walls” as used in this Paragraph shall not include windows,
glass or plate glass, doors or overhead doors, store fronts, dock bumpers, dock plates or levelers, or office entries. Tenant shall
promptly give Landlord written notice of any repair required by Landlord pursuant to this Paragraph, after which Landlord shall
have a reasonable opportunity to repair.

 

(b)              
 Landlord’s Obligations at Tenant’s Cost. Tenant shall pay as additional rent, in accordance with Paragraph
5 (as Operating Expenses), Tenant’s share of the expenses incurred by Landlord in keeping or causing to be kept, reasonable
wear and tear excluded: (i) all utility lines serving the Building located in Common Areas that are not controlled by applicable
utilities; and (ii) the Common Areas of the Project, exterior Building glass and doors, and non-structural roof components of the
Project. Tenant shall promptly give Landlord written notice of any repair required by Landlord pursuant to this Paragraph, after
which Landlord shall have a reasonable opportunity to repair (not to exceed thirty (30) days, unless such repairs cannot reasonably
be repaired within such period).

 

(c)               
Maintenance Contracts. Landlord reserves the right to maintain itself or enter into contracts (which, at Landlord’s
option, may be payable to itself, an affiliate or third party) for the maintenance of all heating, ventilation and air-conditional
equipment, Building Systems (defined below), or other equipment or fixture, which serves the Building or the Premises, including
those located on the roof or exterior of the Premises. Landlord shall bill Tenant for Tenant’s Share of such expenses as
provided in Paragraph 5. Tenant shall pay Landlord for such expenses within ten (10) business days upon written request of Landlord.
Except as provided in this Paragraph, Landlord shall not be obligated to make repairs, replacements or improvements of any kind
upon the Premises, or to any equipment, merchandise, stock in trade, facilities or fixtures therein, all of which shall be Tenant's
responsibility.

 

11.
                Tenant’s Maintenance and Repairs.

 

(a)             
 Tenant’s Obligations. Tenant shall at all times keep the Premises (including all entrances and vestibules)
and all partitions, windows and window frames and moldings, glass, doors, door openers, fixtures, equipment and appurtenances thereof
(including lighting, electrical, and plumbing equipment and appurtenances and all interior heating, ventilation and air-conditioning
equipment) and all parts of the Premises and all areas, improvements, and Building Systems (defined below) in and serving the Premises,
not required in this Lease to be maintained by Landlord, in good order, condition and repair and in a clean, orderly, sanitary
and safe condition, damage by unavoidable casualty excepted (including but not limited to doing such things as necessary to cause
the Premises to comply with all applicable laws, rules, regulations and orders of governmental and public authorities and agencies)
and all Legal Requirements. If replacement of equipment, fixtures and appurtenances thereto are necessary, Tenant shall replace
the same with equipment, fixtures and appurtenances of the same quality, and shall repair all damages done in or by such replacement.
Such repairs and replacements shall include, without limitation, dock and loading areas, truck doors, dock plates or levelers,
dock bumpers, dock doors and dock door systems, warehouse floors, floors (including carpet, VCT or tile), plumbing and all plumbing
fixtures, hot water heaters, telephone, water and sewer, electrical, cable (including fiber) and other utilities up to points of
common connection, Building Systems (defined below), lighting and light fixtures, entries, doors, ceilings, windows, interior walls,
and the interior side of Premises demising walls.

 

 

 

    
	 	10	 

     

    

 

(b)              
Building Systems. For purposes of this Lease, the term “Building Systems” shall mean the electrical,
heating, ventilation and air conditioning systems (including HVACs and EVAPs and all their components), sprinklers and fire suppression
systems, life safety or security systems, and other mechanical and building systems serving the Premises. Such repairs and replacements
include expenditures and repairs whose benefit may extend beyond the Lease Term. At Landlord’s discretion, Building Systems
may be maintained at Tenant’s expense pursuant to maintenance contracts entered into by Landlord under this Lease.

 

(c)               
Landlord’s Right to Perform. If Tenant fails to perform any repair or replacement for which it is responsible,
Landlord may, after five (5) days’ notice to Tenant, perform such work and be reimbursed by Tenant within ten (10) days
after demand therefor. Tenant shall bear the full reasonable, customary and necessary cost of any repair or replacement to any
part of the Premises, the Building or the Project that results from damage caused by Tenant, its agents, employees, contractors,
or invitees.

 

(d)              
Notice to Tenant. Tenant and its agents, employees and contractors shall not (i) penetrate walls or roofs of the
Premises or the Building, or (ii) install any devices, equipment or wiring on the exterior of the Premises or the Building (including
the roof), including, but not limited to, satellite dishes, cable or other communication devises, for any reason whatsoever without
the advance written consent of Landlord. Tenant acknowledges that accessing the roof of the Building could void Landlord’s
roof warranties and Tenant shall be liable for any damages to Landlord.

 

 12.                Alterations; Trade Fixtures; Liens.

 

(a)              
Alterations. Tenant shall not make any addition, alteration or improvement, including painting, decorating or changing
the architectural treatment of any part of the exterior of the Premises or Project, without Landlord’s prior written approval
thereto, and will promptly remove any paint, decoration, alteration, addition or changes applied or installed without Landlord’s
approval or take such other action with respect thereto as Landlord directs. Tenant shall not make structural alterations or
changes to the Premises or the Building Systems. Tenant shall not make any alterations that result in the penetration of the roof,
foundation or walls without Landlord’s advance written consent. Any such penetrations, even with Landlord’s consent,
will be performed in a manner so as not to invalidate any roof or other warranty with respect to the Building or the Project. If
Landlord grants consent to any requested alterations, the alterations shall be performed in a good, workmanlike and lien free manner
in accordance with the all applicable Legal Requirements and any restrictions which may be imposed by Landlord as a condition to
its consent. All alterations, changes, additions and leasehold improvements made by Tenant or made by Landlord on Tenant’s
behalf and all fixtures installed by Tenant which are not Trade Fixtures are herein collectively referred to as “Tenant Additions,”
and shall be property of Landlord. Such Tenant Additions shall not be removed by Tenant on, before or following expiration or termination
of this Lease without Landlord’s consent except as may be required by this lease.

 

(b)              
Trade Fixtures. Tenant, at its own cost and expense may erect such shelves, bins, machinery and trade fixtures (collectively
the “Trade Fixtures”) in the ordinary course of its business provided that such items do not alter the basic character
of the Premises, do not overload or damage the Premises, including floors or walls and may be removed without injury to the Premises,
and the construction, erection, and installation thereof complies with all Legal Requirements and other provisions of this Lease.
Subject to the terms of this Lease (including Paragraph 22 below), upon the expiration or termination of this Lease, Tenant shall
remove its Trade Fixtures and shall repair any damage to the Premises or the Building caused by such removal unless requested otherwise
in writing by Landlord.

 

 

 

    
	 	11	 

     

    

 

(c)               
Liens. Tenant shall promptly pay all contractors and materialmen, and not permit or suffer any lien to attach to
the Premises or the Project or any part thereof, and indemnify and save harmless Landlord against the same. Landlord shall have
the right to require Tenant to furnish a bond or other indemnity satisfactory to Landlord prior to the commencement of any work
by Tenant on the Premises. If any lien attaches or is claimed, Tenant, within ten (10) days following the imposing of any such
lien, shall cause the same to be released of record by payment or posting of a bond as provided in the Texas Property Code. Tenant
has no express or implied authority to create or place any lien or encumbrance of any kind upon, or in any manner to bind the interest
of Landlord in the Premises or the Project or to charge the rentals payable hereunder for any claim in favor or any person dealing
with Tenant, including, without limitation, those who may furnish materials or perform labor for any construction or repairs.

 

13.               
Signs. Tenant shall not make any changes to the exterior of the Premises or the Building, install any exterior lights,
signs, decorations, balloons, flags, pennants, banners, or painting, or erect or install any signs, windows or door lettering,
placards, decorations, or advertising media of any type which can be viewed from the exterior of the Premises, without Landlord’s
prior written consent. Tenant shall not penetrate the outside walls or roofs of the Premises or the Building without Landlord’s
advanced written consent. Upon surrender or vacation of the Premises, Tenant shall remove all signs and repair, paint, and/or
replace the Building fascia surface to which its signs are attached. Tenant shall obtain all applicable governmental permits and
approvals for sign and exterior treatments. All signs, decorations, advertising media, blinds, draperies and other window treatment
or bars or other security installations visible from outside the Premises shall be subject to Landlord’s approval and conform
in all respects to Landlord's requirements. Tenant shall be responsible for all costs of installing, maintaining, and removing
its signs.

 

14.
                Parking and Use of Common Areas and the Project.

 

(a)               
Common Area. For purposes of this Lease, “Common Areas” means all areas and facilities as provided by
Landlord from time to time for the use or enjoyment of all tenants in the Project or the Building, including, if applicable, all
roads and facilities on the Project furnished, made available or maintained by Landlord in or near the Project, including parking
areas, truck loading areas, driveways, sidewalks, landscaped areas, retaining walls, fences and rock walls, lighting facilities,
and other areas and improvements provided by Landlord for the general use in common of the tenants and their business invitees
and customers in the Project. The Common Areas shall at all times be subject to the exclusive control and management of Landlord.
Tenant acknowledges that it does not have an exclusive interest in the Common Areas. Landlord reserves the right to grant such
easements and other rights in the Common Areas as Landlord may from time to time deem necessary, including without limitation,
easements for mutual ingress and egress, truck turning and similar matters for the benefit of adjacent properties. Landlord may,
at its sole option, modify the Common Areas or make such changes thereto as Landlord deems reasonably necessary. Landlord shall
not be obligated to maintain or provide any security services or systems for the Project. Tenant agrees that Landlord shall not
be liable for, and Tenant waives any claim against Landlord with respect to, any loss by theft or any other damage suffered or
incurred by Tenant in the Common Areas or in connection with any unauthorized entry into the Premises or other criminal or willful
acts of third parties. Landlord shall have no obligation to provide any particular number of parking spaces or to provide designated
parking spaces for the employees or customers of Tenant.

 

(b)               
Use of Common Area. Tenant and Tenant's business invitees, employees and customers shall have the nonexclusive right,
in common with Landlord and all others to whom Landlord has granted or may hereafter grant rights, to use the Common Areas, subject
to such reasonable rules and regulations as Landlord may from time to time impose and the rights of Landlord set forth above, including
those attached hereto as Exhibit “D.” Tenant shall not, nor shall it allow its business invitees, employees or customers
to park vehicles, trucks, trailers or leave or store property of any kind in the truck loading and unloading areas, truck courts
or truck lanes without Landlord’s advance written approval, which Landlord may revoke or modify at any time. The Common Areas
shall include the parking lot areas in front of and/or next to doors (include overhead dock doors) to the Premises. Landlord may
at any time close temporarily all or any part of the Common Areas to make repairs or changes, to prevent the acquisition of public
rights therein or for any other reasonable purpose. Tenant shall not interfere with the other tenants' rights to use any part of
the Common Areas. Landlord may allocate parking spaces among Tenant and other tenants of the Project if, in Landlord's opinion,
such parking facilities are becoming crowded. Landlord shall not be obligated to enforce Tenant's parking rights against third
parties.

 

 

 

    
	 	12	 

     

    

 

(c)               
Expense of Operating and Maintaining the Common Areas. Tenant shall pay as additional rent, in accordance with Paragraph
5, Tenant's Share of the reasonable, necessary, and customary expenses incurred by Landlord in operating and maintaining the Common
Areas, which shall be included as Operating Expenses.

 

15.              
Damage and Destruction. If the Premises are hereafter damaged or destroyed or rendered partially untenantable for their
accustomed use by fire or other casualty and such fire or other casualty, Landlord shall, unless this Lease is terminated as below,
promptly repair the same to substantially the condition which they were in immediately prior to the happenings of such casualty
(excluding stock in trade, fixtures, furniture, furnishings, carpeting, floor covering, wall covering, drapes and equipment), and
from the date of such casualty until the Premises are so repaired and restored, the monthly Rent hereunder shall abate in such
proportion as the part of said Premises thus destroyed or rendered untenantable bears to the total Premises; provided, however,
Landlord shall not be obligated to expend for such repair or restoration an amount in excess of the insurance proceeds received
by Landlord as a result of such damage. Landlord’s obligation to rebuild is contingent upon its receipt of insurance proceeds
sufficient to make such repairs. In the event any mortgagee or lender requires such sums to be applied to any debt, Landlord will
not be deemed to have received the proceeds. Notwithstanding the above, if the Premises or any material portion of the Project
is wholly or partially damaged, destroyed or rendered untenantable for their accustomed use by fire or other casualty then Landlord
shall have the right to terminate this Lease effective as of the date of such casualty by giving to Tenant, within ninety (90)
days after the happening of such casualty, written notice of such termination. In the event that Landlord is unable or unwilling
to rebuild the Premises in their entirety to the condition existing prior to the casualty, whether as a result of failure to obtain
insurance proceeds, failure to obtain sufficient insurance proceeds or for any other reason, within ninety (90) days after the
casualty, then, unless the casualty was caused by Tenant, Tenant shall have the right to terminate this Lease effective as of the
date of such casualty by giving to Landlord written notice of such termination unless the casualty was caused by Tenant in which
case Tenant will have no right to terminate this Lease. If any notice of termination is given by either party, this Lease shall
terminate and provided Tenant is not in default hereunder, Landlord shall promptly repay to Tenant any rent theretofore paid in
advance which was not earned at the date of such casualty. If said notice is not given and Landlord is required or elects to repair
or restore the Premises as herein provided and this Lease is not terminated by Tenant, then Tenant shall repair or replace its
stock in trade fixtures, furnishings, furniture, carpeting, wall covering, floor covering, drapes and equipment to the same condition
as they were in immediately prior to the casualty.

 

16.
               Condemnation.

 

(a)               
Eminent Domain. If any portion of the Premises or the Project shall be acquired, condemned or damaged as a result
of the exercise of any power of eminent domain, condemnation or sale under threat thereof or in lieu thereof, then Landlord at
its election may terminate this Lease by giving notice to the Tenant of its election, within one hundred eighty (180) days of the
date the condemning authority shall have the right to possession of the Premises or portion of the Project condemned. Moreover,
if any portion of the Project is taken and in Landlord’s judgment such taking would materially interfere with or impair its
ownership or operation of the Project, Landlord may terminate this Lease. If this Lease shall not be terminated as aforesaid, then
it shall continue in full force and effect, and Landlord shall within a reasonable time after possession is physically taken by
the condemning authority (subject to delays due to shortage of labor, materials or equipment, labor difficulties, breakdown of
equipment, governmental restrictions, fires, other casualties or other causes beyond the reasonable control of Landlord) restore
the remaining portion of the Premises to the extent reasonably possible, to render it reasonably suitable for the use permitted
by Paragraph 2; provided, however, Landlord shall not be obligated to expend an amount greater than the proceeds received from
the condemning authority less all expenses incurred in connection therewith (including attorneys’ fees) for the restoration.
Base Rent as provided in this Lease, shall be reduced in the proportion that the area of the Premises so taken bears to the total
Premises. No taking of the Common Areas shall entitle Tenant to an abatement.

 

 

 

    
	 	13	 

     

    

 

(b)               
Damages. Landlord reserves and Tenant assigns to Landlord all rights to damages on account of any taking or condemnation
or sale under threat or in lieu thereof or any act of any public or quasi-public authority for which damages are payable. Tenant
shall execute such instruments of assignment as Landlord requires, join with Landlord in any action for the recovery of damages
if requested by Landlord, and turn over to Landlord any damages recovered in any proceeding. If Tenant fails to execute instruments
required by Landlord, or undertakes such other steps as requested, Landlord shall be deemed the duly authorized irrevocable agent
and attorney-in-fact of Tenant to execute such instruments and undertake such steps on behalf of Tenant. Landlord shall not reserve
any Tenant damages that are part of the Premises, the Building or the Project.

 

17.               
Assignment and Subletting. Tenant shall not assign this Lease or any interest therein, whether voluntarily, by operation
of law, or otherwise, and shall not sublet the Premises or any part thereof except by written permission and consent of Landlord
being first had and obtained. Consent of Landlord to any such assignment or subletting shall not be unreasonably withheld if: (a)
at the time of such assignment or subletting Tenant is not in default in the performance and observance of any of the covenants
and conditions of this Lease; (b) the assignee or subtenant of Tenant shall expressly assume in writing all of Tenant's obligations
hereunder; (c) Tenant shall provide proof to Landlord that the assignee or subtenant has a financial condition which is satisfactory
to Landlord and Landlord's lender; (d) the Premises continue to be used solely for the purpose set forth in this Lease; and (e)
Landlord is furnished with and approves the form of the proposed sublease. In connection with any such assignment or sublease,
Tenant or the assignee or subtenant of Tenant shall pay to Landlord any legal and administrative costs incurred by Landlord in
approving such assignment or subletting, not to exceed $2,000.00. Any such assignment or sublease, even with the approval of Landlord,
shall not relieve Tenant from liability for payment of all forms of rental and other charges herein provided or from the obligations
to keep and be bound by the terms, conditions and covenants of this Lease. The acceptance of rent from any other person shall not
be deemed to be a waiver of any of the provisions of this Lease, or a consent to the assignment or subletting of the Premises.
Consent to any assignment or subletting shall not be deemed a consent to any future assignment or subletting. Any merger, consolidation
or single transaction transfer of corporate shares of Tenant, if Tenant is a corporation, so as to result in a change of control
of the Tenant representing 75% of the outstanding equity at the time of the event, shall constitute an assignment and be subject
to the conditions of this Section. If Tenant is a general partnership having one or more corporations as partners or if Tenant
is a limited partnership having one or more corporations as general partners, the provisions of the preceding sentence shall apply
to each of such corporations as if such corporation alone had been the Tenant hereunder. If Tenant is a partnership, the withdrawal
of a general partner shall be an assignment subject to the provisions hereof. Moreover, in the event that the rental due and payable
by a sublessee or assignee, or a combination of the rental payable under such sublease or assignment plus any bonus or other consideration
therefor or incident thereto exceeds the rental payable under this Lease, or if with respect to an assignment, sublease, license
or other transfer by Tenant permitted by Landlord, the consideration payable to Tenant by the assignee, subtenant, licensee or
other transferee exceeds the rental payable under this Lease, then Tenant shall be bound and obligated to pay Landlord, in addition
to all rental required hereunder, such excess rental and other excess consideration within ten (10) days following receipt thereof
by Tenant from such sublessee, assignee, licensee or other transferee, as the case may be. Finally, in the event of any assignment
or subletting it is understood and agreed that all rentals paid to Tenant by an assignee or sublessee shall be received by Tenant
in trust for Landlord, to be forwarded immediately to Landlord without reduction of any kind, and upon election by Landlord such
rentals shall be paid directly to Landlord. Without limitation of Landlord’s approval rights as provided above, Tenant shall
provide a copy of any executed sublease to Landlord within ten (10) days of the execution thereof.

 

 

 

    
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18.                 INDEMNIFICATION.
TENANT SHALL INDEMNIFY, DEFEND AND HOLD HARMLESS LANDLORD, AND LANDLORD’S AGENTS, MANAGERS, OFFICERS, DIRECTORS, EMPLOYEES
AND CONTRACTORS, FROM AND AGAINST ANY AND ALL LOSSES, LIABILITIES, LIENS, CLAIMS, DEMANDS, FINES, PENALTIES, SUITS, PROCEEDINGS,
ACTIONS, CAUSES OF ACTIONS, DAMAGES, COSTS AND EXPENSES (INCLUDING ATTORNEYS’ FEES) OF EVERY KIND AND NATURE, WHETHER RESULTING
FROM CLAIMS BY THIRD PARTIES FOR INJURIES TO ANY PERSON AND DAMAGE TO OR THEFT OR MISAPPROPRIATION OR LOSS OF PROPERTY ARISING
FROM OR GROWING OUT OF THE USE, OCCUPANCY, MANAGEMENT OR CONTROL OF THE PREMISES OR FROM ANY ACTIVITY, WORK, OR THING DONE, PERMITTED
OR SUFFERED BY TENANT, ITS SUBTENANTS, ASSIGNEES, INVITEES, EMPLOYEES, CONTRACTORS AND AGENTS, IN OR ABOUT THE PREMISES, COMMON
AREAS OR THE PROJECT, TENANT’S FAILURE TO FULLY COMPLY WITH APPLICABLE LAWS OR LEGAL REQUIREMENTS, OR DUE TO ANY OTHER ACT
OR OMISSION OF TENANT, ITS SUBTENANTS, ASSIGNEES, INVITEES, EMPLOYEES, CONTRACTORS AND AGENTS, INCLUDING, WITHOUT LIMITATION:
(I) LIABILITY FOR DAMAGE RESULTING FROM THE PERSONAL INJURY OR DEATH OF AN EMPLOYEE OF TENANT, REGARDLESS OF WHETHER THE TENANT
HAS PAID SUCH EMPLOYEE UNDER THE WORKMAN’S COMPENSATION LAW OF ANY STATE OR OTHER SIMILAR FEDERAL OR STATE PROGRAM FOR THE
PROTECTION OF EMPLOYEES, (II) DAMAGE TO ANY REAL OR PERSONAL PROPERTY OF TENANT, LANDLORD OR ANY THIRD PARTIES, AND (III) DAMAGES
TO THE PREMISES, COMMON AREAS AND THE PROJECT (INCLUDING DIMINUTION IN VALUE) CAUSED BY BREACH OF TENANT’S OBLIGATIONS UNDER
PARAGRAPH 28 (ENVIRONMENTAL). IN THE EVENT TENANT FAILS TO UNDERTAKE ITS INDEMNITY OBLIGATIONS HEREUNDER, TENANT AUTHORIZES LANDLORD
(ALTHOUGH EXPRESSLY RECOGNIZING THAT LANDLORD IS UNDER NO OBLIGATION TO DO SO) TO DEFEND, SETTLE OR COMPROMISE ANY CLAIMS, DEMANDS,
SUITS, PROCEEDINGS OR THE LIKE WHICH MAY REPRESENT AN INDEMNIFIABLE OBLIGATION OF TENANT HEREUNDER. SUCH ACTION OR INACTION BY
LANDLORD SHALL IN NO WAY AFFECT TENANT'S INDEMNITY OBLIGATIONS AS PROVIDED HEREIN. TENANT'S INDEMNITY OBLIGATIONS UNDER THIS PARAGRAPH
AND ELSEWHERE IN THIS LEASE SHALL SURVIVE THE EXPIRATION OR EARLIER TERMINATION OF THIS LEASE. THE FURNISHING OF INSURANCE REQUIRED
UNDER THIS LEASE SHALL NOT BE DEEMED TO LIMIT TENANT’S OBLIGATIONS UNDER THIS PARAGRAPH.

 

19.               
Inspection and Access. Landlord and its agents, representatives, and contractors shall have the right to enter the Premises
from time to time during regular business hours after advance written notice to Tenant to examine, to show them to prospective
purchasers and other persons, and to make such repairs, alterations, improvements or additions as Landlord deems desirable. Rent
shall not abate during any such entry by Landlord, including without limitation, during the period of any such repairs, alterations,
improvements, or addition. During the last six (6) months of the Lease Term, Landlord may exhibit the Premises to prospective tenants
and maintain upon the Premises notices deemed advisable by Landlord. In addition, during any apparent emergency, Landlord, its
agents and employees, may enter the Premises forcibly without liability therefor and without in any manner affecting Tenant's obligations
under this Lease. Nothing herein contained, however, shall be deemed to impose upon Landlord any obligation, responsibility or
liability whatsoever, for any care, maintenance or repair except as otherwise herein expressly provided.

 

20.               
Subordination and Attornment. Tenant accepts this Lease subject and subordinate to any mortgage, deed of trust, or other
lien presently existing on the Project or the land or subsequently created on the Project, and to any renewals and extensions thereof,
but Tenant agrees that any such mortgagee shall have the right at any time to subordinate such mortgage, deed of trust, or other
lien to this Lease. Landlord is hereby irrevocably vested with full power and authority to subordinate this Lease to any mortgage,
deed of trust, or other lien hereafter placed on the Project or the land, and Tenant agrees on demand to execute such further instruments
subordinating this Lease as Landlord may request, provided such subordination shall be on the express condition that this Lease
shall be recognized by the mortgagee, and that the rights of Tenant shall remain in full force and effect during the Lease Term
so long as Tenant shall continue to perform all of the covenants and conditions of this Lease. No such mortgagee shall be required
to assume any liabilities for defaults occurring prior to its ownership of the Project. Tenant covenants and agrees that upon foreclosure
of any deed of trust, mortgage or other instrument of security and the sale of the Project or the land pursuant to any such document,
to attorn to any purchaser at such a sale and to recognize such purchaser as the Landlord under this Lease. The agreement of Tenant
to attorn to any purchaser pursuant to such a foreclosure sale or trustee's sale in the immediately preceding sentence shall survive
any such sale.

 

 

 

    
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21.               
Surrender; Successors.

 

(a)               
Surrender. Upon the expiration or earlier termination of this Lease, whether by forfeiture, lapse of time, or otherwise,
or upon the termination of Tenant's right to possession of the Premises, Tenant will surrender and deliver up the Premises to Landlord
in good clean order and repair and in the condition when delivered to Tenant under this Lease, reasonable ordinary wear and tear
and loss by fire or other casualty excepted. Tenant shall make good and repair all damages to the Premises as shall be caused by
Tenant. At such time, Tenant shall deliver all keys to the Premises, including all internal keys. All Tenant Additions will, following
the expiration or termination of this Lease, remain in the Premises as Landlord’s property unless Landlord directs Tenant
to remove all or any portion of same whereupon Tenant agrees that it shall, at its expense, remove such Tenant Additions (or portion
thereof directed by Landlord) and repair and damage caused by the removal at its expense. Provided Tenant is not in default, it
will remove its Trade Fixtures, inventory, and other personal property upon the Lease Term. If Tenant is in default, it shall remove
its Trade Fixtures only if specifically directed to do so in writing by Landlord. Tenant shall repair any damage to the Premises
caused by the installation or removal of such Tenant Additions, Trade Fixtures, or other improvements or equipment, along with
damage to the Premises caused by Tenant’s use of the Premises. Further, Tenant will repair any penetrations it has made to
the walls, slab, roof or structure in a manner and to comply with the specifications imposed by Landlord along with any damage
caused by such installation or removal by Tenant. Anchor bolts installed in the foundation will be cored out and filled with epoxy
to the standards required by Landlord. Foundation and flooring damage caused by any use by Tenant will be repaired or replaced
by Tenant. In no event will any Building Systems, fire sprinklers, fire suppression equipment, EVAP or HVAC system units, equipment
or components, floor tiles, carpeting, ceiling tiles, plumbing fixtures, or similar building system items or any equipment or fixtures
attached to the realty be considered "Trade Fixtures" or be removed unless directed by Landlord in writing to do so.
Tenant agrees that following an Event of Default, Landlord may, at its option, allow any party claiming to be a lessor of Tenant
to remove equipment, Trade Fixtures, and similar items leased from such lessor. Landlord shall have no liability to Tenant therefor.
Landlord may condition its consent upon such lessor agreeing to repair any damage to the Premises caused by such removal and providing
adequate financial assurances of its ability to pay for any such damages; provided, however, no such agreement, or Landlord’s
failure to obtain such an agreement, shall relieve Tenant of its obligations hereunder including without limitation, Tenant’s
obligation to repair said damage. Tenant shall also properly remove all Hazardous Materials from the Premises and placed on the
Project by Tenant. Any Trade Fixtures or Tenant Additions not removed by Tenant as required herein shall be deemed abandoned and
may be stored, removed and disposed of by Landlord at Tenant's expense, and TENANT WAIVES ALL CLAIMS AGAINST LANDLORD FOR ANY
DAMAGES RESULTING FROM LANDLORD'S RETENTION OR DISPOSAL OF SAME. Tenant shall be entitled to no payment or offset for the value
of any such property (even if sold by Landlord) and shall pay on demand all costs incurred by Landlord in connection with such
removal or disposal. No retention, disposal or sale of such items shall limit remedies otherwise available to Landlord hereunder
for a breach by Tenant. Moreover, any period following the termination or expiration of this Lease during which there is Hazardous
Material, Tenant Alterations or Trade Fixtures which are not removed as herein required or when other repairs or conditions to
surrender are not completed, shall be considered a holdover by Tenant and, in addition to all other remedies available to Landlord
hereunder, shall obligate Tenant to the increased rental payments pursuant to Paragraph 22 below. All obligations of Tenant hereunder
not full performed as of the termination or expiration of this Lease shall survive such termination or expiration.

 

 

 

    
	 	16	 

     

    

 

(b)               
Abandoned Property. If at any time during the term of this lease, Tenant abandons the Premises or any part thereof,
Landlord may, at its option, enter the Premises by any means without being liable for any prosecution therefore, and without becoming
liable to Tenant for damages or for any payment of any kind whatever, and may, at his discretion, as agent for Tenant, re-let the
Premises, or any part thereof, for the whole or any part of the then unexpired term, and may receive and collect all rent payable
by virtue of such re-letting, and, at Landlord’s option, hold Tenant liable for any difference between the rent that would
have been payable under this lease during the balance of the unexpired term, if this Lease had continued in force, and the net
rent for such period realized by Landlord by means of such re-letting. If Landlord’s right of re-entry is exercised following
abandonment of the Premises by Tenant, then Landlord may consider any personal property, inventory or equipment belonging to Tenant
and left on the Premises to also have been abandoned, in which case Landlord may dispose of all such personal property, inventory
or equipment, in any manner Landlord shall deem proper and is hereby relieved of all liability for doing so. “Abandonment”
is defined as any absence of Tenant from the Premises for fifteen (15) consecutive days while all or any of the rent or other amounts
payable and due is unpaid. Abandonment also includes a failure on the part of the Tenant to respond to telephone calls, emails
or text messages regarding the leased premises, while money is owed, for a period of 5 days. Landlord is not obligated to provide
notice to Tenant of the Landlord’s intent to retain, destroy, deem the inventory, equipment, or remaining property to be
junk, or dispose of any property left on the premises. Any notice of default, lock-out or termination of the lease shall be considered
notice to Tenant of Landlord’s intent to retain, destroy, deem the inventory or personal property or equipment, to be junk,
or dispose of any property left on the Premises. Landlord, may, but is not required to, store any of Tenant’s property away
from the Premises, and charge reasonable storage fees for the property which is equal to a minimum of 50% of the rent owed under
the lease or the actual storage costs incurred by Landlord, whichever is greater. Landlord may also charge as additional costs,
any costs incurred by Landlord for moving the property left on site or disposing of any items or property determined to be junk,
and will not be responsible for any damage or loss of property that occurs as a result of any move or disposal. Landlord, may,
but is not required to, keep said stored property for a period of 30 days, in which case, Tenant will be obligated to pay all sums
due under the lease as well as the storage fee, moving costs or disposal costs, prior to obtaining access to the property. This
provision also applies to any items left on the premises at the end of the Term of the Lease. Landlord may retain, destroy, deem
the inventory or remaining property to be junk, or dispose of any property left on the Premises in any manner, at the sole discretion
of Landlord, at the end of the Term, including termination as result of Tenant’s actions. Landlord shall have no responsibility
for any items left on the Premises after Abandonment, termination of the Lease, or the end of the Term of the Lease.

 

(c)               
Successors. All rights and liabilities herein given or imposed upon the respective parties hereto shall bind and
inure to the several respective heirs, successors, administrators, executors and assigns of the parties and if Tenant is more than
one person, they shall be bound jointly and severally by this Lease. No rights, however, shall inure to the benefit of any assignee
of Tenant unless the assignment is approved by Landlord as required herein.

 

22.                
Holding Over. If Tenant holds over or occupies the Premises beyond the Lease Term (it being agreed there shall be no
such holding over or occupancy without Landlord's written consent), Tenant shall pay Landlord for each day of such holding over
a sum equal to the following percentage of the monthly rent applicable hereunder at the expiration of the Lease Term (including
Operating Expenses), prorated for the number of days of such holding over: (a) one hundred twenty-five percent (125%) for the first
thirty (30) days of the hold over period; (b) one hundred fifty percent (150%) for the second thirty (30) days of the hold over
period; (c) one hundred seventy- five percent (175%) for the third thirty (30) days of the hold over period; and (d) two hundred
percent (200%) thereafter. In such event, Tenant shall occupy the Premises as a tenant at sufferance, and all of the terms and
provisions of this Lease shall be applicable, with the exception of the rent applicable during such holding over period, which
shall be increased as aforesaid. Tenant agrees that Landlord may institute a forcible detainer or similar action against Tenant
or any other party in possession of the Premises without serving any demand for possession, demand to vacate, notice of termination
or similar demand or notice upon Tenant or such party in possession. Tenant will also be liable to Landlord for and indemnify Landlord
against: (i) any payment or rent concession which Landlord may be required to make to any tenant obtained by Landlord for all or
any part of the Premises (a “New Tenant”) by reason of the late delivery of space to the New Tenant as a result of
Tenant’s holding over or failure to surrender the Premises in the manner required by this Lease or in order to induce such
New Tenant not to terminate its lease by reason of the holding over by Tenant or failure to surrender the Premises in the manner
required by this Lease; and (ii) any claim for damages by any New Tenant. No holding over by Tenant after the Lease Term shall
operate to extend the Lease Term. Notwithstanding the foregoing, the acceptance of any use and occupancy charges paid by Tenant
pursuant to this Paragraph shall not preclude Landlord from commencing and prosecuting a holdover or summary eviction proceeding.

 

 

 

    
	 	17	 

     

    

 

23.                
Events of Default by Tenant. Each of the following events shall be an event of default (an “Event of Default”)
by Tenant under and a breach of this Lease provided however that Tenant shall have in each case a thirty (30) day cure period,
other than in the case of (a) and (b) Tenant shall have a ten (10) day cure period: (a) any failure of Tenant to pay any rent
(including Base Rent) or other amount when due under this Lease; (b) any failure of Tenant to obtain and maintain the insurance
required by this Lease that is to be maintained by Tenant; (c) any failure by Tenant to perform or observe any of the other terms,
provisions, conditions and covenants of this Lease for more than thirty (30) days after written notice of such failure; (d) Tenant
shall become bankrupt or insolvent, or file or have filed against it a petition in bankruptcy or for reorganization or arrangement
or for the appointment of a receiver or trustee of all or a portion of Tenant's property, or Tenant makes an assignment for the
benefit of creditors; (e) if Tenant abandons or vacates the Premises; (f) this Lease, Tenant's interest herein or in the Premises,
any improvements thereon, or any property of Tenant is executed upon or attached; (g) the Premises come into the hands of any
person other than expressly permitted under this Lease; or (h) Tenant provides and has provided Landlord with any report or statement
which is materially false, including credit information.

 

24.                 
Landlord’s Remedies. Upon the occurrence of any event of default specified in this Lease (including but not limited
to those described in Paragraph 23 of this Lease), Landlord, after providing the applicable cure period, and upon providing written
notice of default which shall start the cure period and in addition to all other rights or remedies Landlord may have for such
default, shall have the right to pursue any one or more of the following remedies:

 

(a)                
Terminate Lease. Terminate this Lease in which event Tenant shall immediately surrender the Premises to Landlord,
and if Tenant fails to do so, Landlord may, without prejudice to any other remedy which it may have for possession or arrearages
in rent, enter upon and take possession of the Premises and expel or remove Tenant and any other person who may be occupying said
Premises or any part thereof, by force if necessary, without notice or the need to resort to legal process and without being deemed
guilty of trespass or becoming liable for any loss or damage occasioned thereby; and Landlord may recover from Tenant the amount
of all loss and damage which Landlord may suffer by reason of such termination, including, without limitation, all costs of retaking
the Premises and the total rent (including the Rent), Operating Expenses and charges reserved in this Lease for the remainder of
the Lease Term (i.e., the duration of this Lease had it not been terminated) all of which shall be immediately due and payable
by Tenant to Landlord; and/or

 

(b)               
Not Terminate Lease.  Without terminating this Lease, enter upon and take
possession of the Premises, and expel or remove Tenant and any other person who may be occupying said Premises, or any part thereof,
by force if necessary, without notice or the need to resort to legal process and without being deemed guilty of trespass or becoming
liable for any loss or damage occasioned thereby. In the event the Lease is terminated by Landlord as provided in section 24 (a)
above, Landlord may make such alterations and repairs as it deems advisable to relet the Premises, and relet the Premises or any
part thereof for such term or terms (which may extend beyond the Lease Term) and at such rentals and upon such other terms and
conditions as Landlord in its sole discretion deems advisable. Upon each such reletting all rentals received by Landlord therefrom
shall be applied: first, to any indebtedness other than rent due hereunder from Tenant to Landlord; second, to pay any costs and
expenses of reletting, including brokers' and attorneys' fees and costs of alterations and repairs; third, to rent due hereunder;
and fourth, the residue, if any, shall be held by Landlord and applied in payment of future rent as it becomes due hereunder. No
such reletting shall relieve Tenant or any guarantors from their obligations hereunder. If rentals received from such reletting
during any month are less than that to be paid during that month by Tenant hereunder, Tenant shall immediately pay any such deficiency
to Landlord. In no event shall Tenant be entitled to any excess rent obtained by reletting the Premises over and above the rent
reserved herein.

 

 

 

    
	 	18	 

     

    

 

(c)               
No Election. No re-entry or taking possession of the Premises by Landlord shall be construed as an election to terminate
this Lease unless a written notice of such termination is given by Landlord to Tenant. Notwithstanding any such reletting or re-entry
or taking possession, without termination, Landlord may at any time thereafter terminate this Lease for any prior breach or default.
Pursuit of any of the foregoing remedies shall not preclude pursuit of any of the other remedies herein provided or any other
remedies provided by at law or in equity, nor shall pursuit of any remedy herein provided constitute a forfeiture or waiver of
any rent due to Landlord hereunder or of any damages accruing to Landlord. Following termination of this Lease, re-entry or repossession
of the Premises Landlord shall use reasonable efforts to relet the Premises, at a minimum, Landlord shall list the Premises for
lease with a licensed real estate broker of Landlord’s choosing (which may be an affiliate of Landlord) for a period of
three (3) months. If no party acceptable to Landlord executes a lease with Landlord on terms reasonably acceptable to Landlord
within this three (3) month period, Tenant agrees that Landlord shall conclusively have satisfied any such duty to release or
mitigate. In no event will Landlord have any duty to lease the Premises before Landlord leases other vacant space which it has
in the Project or other buildings owned by Landlord nor shall Landlord have any duty to lease to and Landlord will not be considered
to be acting unreasonably in refusing to lease to any party if: (i) the prospective lessee has a financial condition which is
unacceptable to Landlord or Landlord’s lenders; (ii) the prospective lessee requires any alterations which are unacceptable
to Landlord or Landlord’s lenders; (iii) the prospective lessee requires tenant improvements to be paid by Landlord; or
(iv) the prospective lessee requires terms different from this Lease or which are otherwise unacceptable to Landlord or Landlord’s
lender.

 

(d)               
Lock Out. Upon the occurrence of an Event of Default under this Lease, Landlord shall be entitled to change or modify
the locks at the Premises. Tenant agrees that entry may be gained for that purpose through use of a duplicate or master key or
any other means, that same may be conducted out of the presence of Tenant if Landlord so elects, that no notice shall be required
to be posted by Landlord on any door to the Premises (or elsewhere) disclosing the reason for such action or any other information,
and that Landlord shall not be obligated to provide a key to the changed lock to Tenant unless Tenant shall have first: (i) brought
current all payments due to Landlord under this Lease; provided, however, that if Landlord has theretofore formally and permanently
repossessed the Premises, or has terminated this Lease, then Landlord shall be under no obligation to provide a key to the new
lock(s) to Tenant regardless of Tenant’s payment of past-due rent or other past-due amounts, damages, or any other payment
or amounts of any nature or kind whatsoever; (ii) fully cured and remedied to Landlord’s satisfaction all other defaults
of Tenant under this Lease (but if such defaults are not subject to cure, such as early abandonment or vacation of the Premises,
then Landlord shall not be obligated to provide the new key to Tenant under any circumstances); and (iii) given Landlord security
and assurances satisfactory to Landlord that Tenant intends to and is able to meet and comply with its future obligations under
this Lease, both monetary and nonmonetary. The provisions of this Paragraph are intended to override and supersede any conflicting
provisions of the Texas Property Code (including, without limitation, Chapter 93 thereof, and any amendments or successor statutes
thereto), and of any other law, to the maximum extent permitted by applicable law.

 

(e)               
Landlord’s Performance for Tenant. If Tenant shall continue in default in the performance of any of the covenants
or agreements herein contained after the time limit for the curing thereof, then Landlord may perform the same for the account
of Tenant. Any amount paid or expense or liability (together with interest thereon at the Maximum Rate from the date upon which
any such expense shall have been incurred) incurred by Landlord in the performance of any such matter for the account of Tenant
shall be deemed to be additional rent and the same (together with interest thereon at the Maximum Rate from the date upon which
any such expense shall have been incurred) may, at the option of Landlord, be added to any rent then due or thereafter falling
due hereunder or shall be payable by Tenant to Landlord on demand.

 

 

 

    
	 	19	 

     

    

 

(f)               
Application of Payments Received From Tenant. Landlord shall have the right to apply any payments made by Tenant
to the satisfaction of any debt or obligation of Tenant to Landlord according to Landlord's sole discretion and regardless of the
instructions of Tenant as to application of any such sum, whether such instructions be endorsed upon Tenant's check or otherwise,
unless otherwise agreed upon by both parties in writing. The acceptance by Landlord of a check or checks drawn by a party other
than Tenant shall not affect Tenant's liability hereunder nor shall it be deemed an approval of any assignment or sublease of this
Lease by Tenant.

 

(g)               
Waiver of Rights of Redemption. To the extent permitted by law, Tenant waives any and all rights of redemption granted
by or under any present or future laws if Tenant is evicted or dispossessed for any cause, or if Landlord obtains possession of
the Premises due to Tenant's default hereunder or otherwise.

 

(h)               
No Waiver. No delay or omission in the exercise of any right or remedy of Landlord on any default by Tenant shall
impair such a right or remedy or be construed as a waiver. The receipt and acceptance by Landlord of delinquent rent shall not
constitute a waiver of any other default; it shall constitute only a waiver of timely payment for the particular rent payment involved.
No act or conduct of Landlord, including, without limitation, the acceptance of the keys to the Premises, shall constitute an acceptance
of the surrender of the Premises by Tenant before the expiration of the Lease Term. Only a notice from Landlord to Tenant shall
constitute acceptance of the surrender of the Premises and accomplish a termination of this Lease. Landlord's consent to or approval
of any act by Tenant requiring Landlord's consent or approval shall not be deemed to waive or render unnecessary Landlord's consent
to or approval of any subsequent act by Tenant. Any waiver by Landlord or any default must be in writing and shall not be a waiver
of any other default concerning the same or any other provision of this Lease.

 

25.               
Default by Landlord. Landlord shall not be in default hereunder unless Landlord fails to perform any of its obligations
hereunder within thirty (30) days after written notice from Tenant specifying such failure (unless such performance will, due to
the nature of the obligation, require a period of time in excess of thirty (30) days, then after such period of time as is reasonably
necessary). All obligations of Landlord hereunder shall be construed as covenants, not conditions; and, except as may be otherwise
expressly provided in this Lease, Tenant may not terminate this Lease for breach of Landlord’s obligations hereunder. All
obligations of Landlord under this Lease will be binding upon Landlord only during the period of its ownership of the Premises
and not thereafter. The term “Landlord” in this Lease shall mean only the owner, for the time being of the Project,
and in the event of the transfer by such owner of its interest in the Project, such owner shall thereupon be released and discharged
from all obligations of Landlord thereafter accruing, but such obligations shall be binding during the Lease Term upon each new
owner for the duration of such owner’s ownership. Any liability of Landlord under this Lease shall be limited solely to its
interest in the Project, and in no event shall any personal liability be asserted against Landlord in connection with this Lease
nor shall any recourse be had to any other property or assets of Landlord.

 

26.               
Waiver of Jury Trial. TENANT AND LANDLORD WAIVE ANY RIGHT TO TRIAL BY JURY OR TO HAVE A JURY PARTICIPATE IN RESOLVING ANY
DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, BETWEEN LANDLORD AND TENANT ARISING OUT OF THIS LEASE OR ANY OTHER
INSTRUMENT, DOCUMENT, OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED HERETO. LANDLORD AND
TENANT ACKNOWLEDGE THE DELAY, EXPENSE AND UNCERTAINTY RELATING TO A JURY TRIAL INVOLVING A COMPLEX COMMERCIAL LEASE AS A BASIS
FOR THIS PARAGRAPH.

 

 

 

    
	 	20	 

     

    

 

27.                
Estoppel Certificates. Tenant and Landlord shall at any time, upon the request of the other party, execute, acknowledge
and deliver a statement in writing certifying that this Lease is unmodified and in full force and effect (or if modified stating
the nature of such modification and certifying that this Lease as modified is in full force and effect), the dates to which the
rent and other charges are paid in advance, if any, and acknowledging that there are not, to the party’s knowledge, any uncured
defaults on the part of the other party, or specifying such defaults if any are claimed. The parties hereto agree that any such
statement may be relied upon by any prospective purchaser or encumbrancer of all or any portion of the Project or the land or any
assignee or sublessee of Tenant. A party’s failure to deliver such statement within ten (10) days after request for the same,
shall be conclusive that: (a) this Lease is in full force and effect; (b) this Lease has not been modified or amended other than
expressly stated; (c) there are no uncured defaults in Landlord’s performance; and (d) not more than one (1) month's rent
or other charge has been paid in advance.

 

28.
                Environmental Requirements.

 

(a)               
No Hazardous Materials. Tenant shall not cause, permit or allow any Hazardous Material (other than standard cleaning
materials) to be brought upon, stored, used, processed, generated, disposed of on or released or discharged in or about the Premises
or the Project by Tenant, its agents, employees, contractors or invitees without the prior written consent of Landlord, which Landlord
shall not unreasonably withhold provided Tenant demonstrates to Landlord's satisfaction that such Hazardous Material is necessary
or useful to Tenant's business and will be used, kept and stored in a manner that complies with all laws regulating any such Hazardous
Material so brought upon or used or kept in or about the Premises or the Project, including any and all Environmental Laws (defined
below). Tenant agrees that its operations or activities conducted at the Premises or the Project shall not violate any local, state
or federal law, rule or regulation or duty under applicable common law pertaining to human health, safety, protection of the environment,
natural resources, conservation, waste management or pollution, including any and all Environmental Laws.

 

(b)               
Hazardous Material. As used herein, the term "Hazardous Material" means any pollutant or contaminant (including,
without limitation, asbestos or asbestos-containing materials, lead based paint, polychlorinated biphenyls, petroleum or petroleum
products or byproducts, flammable explosives, radioactive materials or infectious substances), toxic substance, regulated substance,
hazardous waste, hazardous material, hazardous substance, oil, hydrocarbon, asbestos or similar item as defined in or pursuant
to the Resource Conservation and Recovery Act, as amended, the Comprehensive Environmental Response, Compensation, and Liability
Act, as amended, the Federal Clean Water Act, as amended, the Safe Drinking Water Act, as amended, the Federal Water Pollution
Control Act, as amended, the Texas Water Code, as amended, the Texas Solid Waste Disposal Act, as amended, the Emergency Planning
and Community Right to Know Act, the Endangered Species Act, the Toxic Substances Control Act , the Occupational Safety and Health
Act, the Hazardous Materials Transportation Act or any other federal, state or local environmental or health and safety related,
constitutional provisions, law, regulation, ordinance, rule, or bylaw, whether existing as of the date hereof, previously enforced
or subsequently enacted (collectively the "Environmental Laws").

 

(c)               
Notice of Certain Events and Curative Actions. Tenant shall immediately advise Landlord in writing of (i) any governmental
or regulatory actions instituted or threatened under any Environmental Law affecting the Tenant or the Premises; (ii) all claims
made or threatened by any third party against Tenant or the Premises or the Project relating to damage, contribution, cost recovery,
compensation, loss or injury resulting from any Hazardous Materials; (iii) the discovery of any occurrence or condition on any
real property adjoining or in the vicinity of the Premises that could cause the Premises or the Project to be classified in a manner
which may support a claim under any Environmental Law; and (iv) the discovery of any occurrence or condition on the Premises or
the Project or any real property adjoining or in the vicinity of the Premises or the Project which could subject Tenant, the Premises
or the Project to any restrictions in ownership, occupancy, transferability or use of the Premises under any Environmental Law.
Landlord may elect to join and participate in any settlements, remedial actions, legal proceedings or other actions initiated in
connection with any claims under any Environmental Law and to have its reasonable attorneys’ fees paid by Tenant. At its
sole cost and expense, Tenant agrees when applicable or upon request of Landlord to promptly and completely cure and remedy every
violation of an Environmental Law caused by Tenant, its agents, employees, contractors or invitees.

 

 

 

    
	 	21	 

     

    

 

(d)               
Environmental Review. In the event reasonable evidence exists of the occurrence or existence of the violation of
any Environmental Law or the presence of any Hazardous Material on the Premises or the Project, caused by Tenant, its agents, employees,
contractors, or invitees, Landlord (by its officers, employees and agents) at any time and from time to time may contract for the
services of persons (the "Site Reviewers") to perform environmental site assessments ("Site Assessments") on
the Premises, the Project or neighboring properties for the purpose of determining whether there exists on the Premises, the Project
or neighboring properties any environmental condition which could reasonably be expected to result in any liability, cost or expense
to Landlord. The Site Reviewers are hereby authorized to enter upon the Premises for purposes of conducting Site Assessments. The
Site Reviewers are further authorized to perform both above and below the ground testing for environmental damage or the presence
of Hazardous Materials and such other tests on the Premises, Project or neighboring properties as may be necessary to conduct the
Site Assessments in the reasonable opinion of the Site Reviewers. Tenant agrees to supply to the Site Reviewers such historical
and operational information regarding the Premises as may be reasonably requested by the Site Reviewers to facilitate the Site
Assessments and will make available for meetings with the Site Reviewers appropriate personnel having knowledge of such matters.
The results of Site Assessments shall be furnished to Tenant upon request. The cost of performing such Site Assessments shall be
paid by Tenant.

 

(e)              
ENVIRONMENTAL INDEMNITY. IN ADDITION TO, AND WITHOUT LIMITATION ON THE GENERAL
INDEMNITY OBLIGATIONS OF TENANT UNDER THIS LEASE, TENANT SPECIFICALLY AGREES THAT IT SHALL INDEMNIFY, DEFEND AND HOLD LANDLORD
HARMLESS FROM ANY AND ALL CLAIMS, JUDGMENTS, DAMAGES, PENALTIES, FINES, COSTS, LIABILITIES OR LOSSES (INCLUDING, WITHOUT LIMITATION,
DIMINUTION IN VALUE OF THE PREMISES OR THE PROJECT, DAMAGES FOR THE LOSS OR RESTRICTION ON USE OF RENTABLE OR USABLE SPACE OR OF
ANY AMENITY OF THE PREMISES OR THE PROJECT, AND SUMS PAID IN SETTLEMENT OF CLAIMS, ATTORNEYS' FEES, CONSULTANT FEES AND EXPERT
FEES) WHICH ARISE DURING OR AFTER THE TERM AS A RESULT OF ANY BREACH BY TENANT OF ITS OBLIGATIONS UNDER THIS PARAGRAPH OR ANY CONTAMINATION
OF THE PREMISES OR THE PROJECT RESULTING FROM THE PRESENCE OF HAZARDOUS MATERIALS ON OR ABOUT THE PREMISES CAUSED OR PERMITTED
BY TENANT. THIS INDEMNIFICATION OF LANDLORD BY TENANT INCLUDES, WITHOUT LIMITATION, COSTS INCURRED IN CONNECTION WITH ANY INVESTIGATION
OF SITE CONDITIONS OR ANY CLEAN UP, REMEDIAL, REMOVAL OR RESTORATION WORK REQUIRED BY ANY FEDERAL, STATE OR LOCAL GOVERNMENTAL
AGENCY OR POLITICAL SUBDIVISION BECAUSE OF HAZARDOUS MATERIALS PRESENT IN THE SOIL OR GROUND WATER ON OR UNDER THE PREMISES OR
THE PROJECT. WITHOUT LIMITING THE FOREGOING, IF THE PRESENCE OF ANY HAZARDOUS MATERIAL ON THE PREMISES OR THE PROJECT CAUSED OR
PERMITTED BY TENANT RESULTS IN ANY CONTAMINATION OF THE PREMISES OR THE PROJECT, TENANT SHALL PROMPTLY TAKE ALL ACTIONS AT ITS
SOLE COST AND EXPENSE AS ARE NECESSARY TO RETURN THE PREMISES OR THE PROJECT TO THE CONDITION EXISTING PRIOR TO THE INTRODUCTION
OF ANY SUCH HAZARDOUS MATERIAL TO THE PREMISES, PROVIDED THAT LANDLORD'S APPROVAL OF SUCH ACTIONS SHALL FIRST BE OBTAINED. TENANT
FURTHER AGREES TO DEFEND LANDLORD, ITS AGENTS, EMPLOYEES, AND ASSIGNS IN ANY ADMINISTRATIVE OR JUDICIAL PROCEEDING COMMENCED BY
PRIVATE INDIVIDUALS OR GOVERNMENTAL ENTITIES SEEKING RECOVERY OF DAMAGES FOR PERSONAL INJURY OR PROPERTY DAMAGE, OR RECOVERY OF
CIVIL PENALTIES OR FINES ARISING OUT OF, CONNECTED WITH, OR RELATING TO ANY BREACH BY TENANT OF ITS OBLIGATIONS UNDER THIS PARAGRAPH
OR ANY CONTAMINATION OF THE PREMISES OR THE PROJECT RESULTING FROM THE PRESENCE OF HAZARDOUS MATERIALS ON OR ABOUT THE PREMISES
OR THE PROJECT CAUSED OR PERMITTED BY TENANT. THE FOREGOING INDEMNITY SHALL SURVIVE THE EXPIRATION OR EARLIER TERMINATION OF THIS
LEASE.

 

 

 

    
	 	22	 

     

    

 

29.               
Rules and Regulations. Tenant shall, at all times during the Lease Term and any extension thereof, comply with all reasonable
rules and regulations at any time or from time to time established by Landlord covering use of the Premises and the Project. The
current rules and regulations are attached hereto as Exhibit “D” and Exhibit “F.” In the event of any conflict
between said rules and regulations and other provisions of this Lease, the other terms and provisions of this Lease shall control.
Landlord shall not have any liability or obligation for the breach of any rules or regulations by other tenants in the Project.

 

30.               
Security Service. Tenant acknowledges and agrees that, while Landlord may, in its sole discretion, patrol the Project,
Landlord is not providing any security services with respect to the Premises and that Landlord shall not be liable to Tenant for,
and Tenant waives any claim against Landlord with respect to, any loss by theft or any other damage suffered or incurred by Tenant
in connection with any unauthorized entry into the Premises or any other breach of security with respect to the Premises.

 

31.               
Force Majeure. Landlord shall not be held responsible for delays in the performance of its obligations hereunder when
caused by strikes, lockouts, labor disputes, acts of God, inability to obtain labor or materials or reasonable substitutes therefor,
governmental restrictions, governmental regulations, governmental controls, delay in issuance of permits, enemy or hostile governmental
action, civil commotion, fire or other casualty, and other causes beyond the reasonable control of Landlord (“Force Majeure”).

 

32.               
Entire Agreement. This Lease constitutes the complete agreement of Landlord and Tenant with respect to the subject matter
hereof. No representations, inducements, promises or agreements, oral or written, have been made by Landlord or Tenant, or anyone
acting on behalf of Landlord or Tenant, which are not contained herein, and any prior agreements, promises, negotiations, or representations
are superseded by this Lease. This Lease may not be amended except by an instrument in writing signed by both parties hereto.

 

33.               
Severability. If any clause or provision of this Lease is illegal, invalid or unenforceable under present or future
laws, then and in that event, it is the intention of the parties hereto that the remainder of this Lease shall not be affected
thereby. It is also the intention of the parties to this Lease that in lieu of each clause or provision of this Lease that is illegal,
invalid or unenforceable, there be added, as a part of this Lease, a clause or provision as similar in terms to such illegal, invalid
or unenforceable clause or provision as may be possible and be legal, valid and enforceable.

 

34.               
Brokers. Tenant represents and warrants
that it has dealt with no broker, agent or other person in connection with this transaction and that no broker, agent or other
person brought about this transaction, other than the Broker, if any, set forth on the first page of this Lease, and Tenant agrees
to indemnify and hold Landlord harmless from and against any claims by any other broker, agent or other person claiming a commission
or other form of compensation by virtue of having dealt with Tenant with regard to this leasing transaction. Lessor represents
that some of its partners and/or owners are Texas licensed Real Estate Brokers and Agents

 

35.                
Notices. All notices or communications required or permitted to be given under this Lease shall be in writing and shall
be transmitted by (a) personal delivery, (b) nationally recognized overnight courier service, (c) certified or registered mail,
return receipt requested, postage prepaid, or (iv) electronic mail, along with a secondary form of transmission. Except where otherwise
expressly provided to the contrary, all notices and communications shall be deemed to have been given and received by a party on
(i) the date of delivery if transmitted by personal delivery, (ii) the first business day after the date of posting if delivered
by a nationally recognized overnight courier service, (iii) three (3) days after the date of posting if transmitted by certified
or registered mail, or (iv) if by electronic mail, the earlier of the date of written reply by the recipient or confirmation from
the recipient or the deemed date of delivery of the secondary form of transmission.

 

Any notice
to Tenant shall be sent to Tenant at the Premises and may include the email address next to Tenant’s signature below. Any
notice to Landlord shall be sent to Landlord at P.O. Box 522541, El Paso, Texas 79952, Email: ptgordon@vistastarinc.com
and manager@vistastarinc.com. Landlord may by notice given aforesaid change its address for all
subsequent notices.

 

 

 

    
	 	23	 

     

    

 

36.
                Miscellaneous.

 

(a)   
Any payments or charges due from Tenant to Landlord hereunder shall be applied to any outstanding charges on the Tenants
account as determined in the sole discretion of the Landlord.

 

(b)   
If and when included within the term “Tenant”, as used in this instrument, there is more than one person, firm
or corporation, each shall be jointly and severally liable for the obligations of Tenant.

 

(c)   
This Lease may be executed in any number of counterparts, by original, electronic, scanned or faxed signature, each of which
shall be deemed to be an original and all of which shall constitute one and the same agreement.

 

(d)   
Except as otherwise expressly provided in this Lease or as otherwise required by law, Landlord retains the absolute right
to withhold any consent or approval.

 

(e)   
Neither this Lease nor a memorandum of lease shall be filed by or on behalf of Tenant in any public record, except as required
by law. Landlord may in Landlord’s sole discretion, prepare and file, and upon request by Landlord, Tenant will execute,
a memorandum of lease.

 

(f)    
The normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not
be employed in the interpretation of this Lease or any exhibits or amendments hereto.

 

(g)   
The submission by Landlord to Tenant of this Lease shall have no binding force or effect, shall not constitute an option
for the leasing of the Premises, nor confer any right or impose any obligations upon either party until execution of this Lease
by both parties.

 

(h)   
Words of any gender used in this Lease shall be held and construed to include any other gender, and words in the singular
number shall be held to include the plural, unless the context otherwise requires. The captions inserted in this Lease are for
convenience only and in no way define, limit or otherwise describe the scope or intent of this Lease, or any provision hereof,
or in any way affect the interpretation of this Lease.

 

(i)    
CONSTRUCTION AND INTERPRETATION OF THIS LEASE SHALL BE GOVERNED BY THE LAWS OF THE STATE OF TEXAS, EXCLUDING ANY PRINCIPLES
OF CONFLICTS OF LAWS. LANDLORD AND TENANT CONSENT TO EXCLUSIVE JURISDICTION AND VENUE IN EL PASO COUNTY, TEXAS.

 

 (j)     Time is of the essence as to the performance of Tenant’s obligations under this Lease.

 

(k)   
All exhibits and addenda attached hereto are hereby incorporated into this Lease and made a part hereof. In the event of
any conflict between such exhibits or addenda and the terms of this Lease, such exhibits or addenda shall control.

 

 

 

    
	 	24	 

     

    

 

(l)      In
the event either party hereto initiates litigation to enforce the terms and provisions of this Lease, the
non-prevailing party in such action shall reimburse the prevailing party for its reasonable attorneys’ fees, filing
fees, and court and other costs associated with such litigation or dispute. Without limitation on the foregoing, Tenant
agrees that should Landlord ever file a forcible detainer action or a forcible entry and detainer action, Landlord shall be
entitled to its reasonable attorney’ fees and costs in such action, and Landlord shall not be required to give Tenant
written notice to vacate or any other notice in order to recover such attorneys’ fees and costs as provided in Section
24.06 of the Texas Property Code, as amended, or similar statutes.

 

37.                 
Landlord's Lien/Security Interest. [INTENTIONALLY OMITTED.]

 

38.                
Security Deposit. The Security Deposit shall be held by Landlord as security for the performance of Tenant's obligations
under this Lease. The Security Deposit is not an advance rental deposit or a measure of Landlord's damages in case of Tenant's
default. Upon each occurrence of an Event of Default, Landlord may use all or part of the Security Deposit to pay delinquent payments
due under this Lease, and the cost of any damage, injury, expense or liability caused by such Event of Default, without prejudice
to any other remedy provided herein or provided by law. Tenant shall pay Landlord on demand the amount that will restore the Security
Deposit to its original amount. Landlord's obligation respecting the Security Deposit is that of a debtor, not a trustee; no interest
shall accrue thereon. The Security Deposit shall be the property of Landlord, but shall be paid to Tenant when Tenant's obligations
under this Lease have been completely fulfilled. Landlord shall be released from any obligation with respect to the Security Deposit
upon transfer of this Lease and the Premises to a person or entity assuming Landlord's obligations under this Paragraph.

 

39.                
Sale by Landlord. The term “Landlord” in this Lease shall mean only the owner, for the time being of the
Premises. In the event of any sale of the Project or the Building by Landlord, or any part thereof, Landlord shall be and is hereby
entirely freed and relieved of all liability under any and all of its covenants and obligations contained in or derived from this
Lease arising out of any act, occurrence or omission occurring after the consummation of such sale; and the purchaser, at such
sale or any subsequent sale of the Project or the Building shall be deemed, without any further agreement between the parties or
their successors in interest or between the parties and any such purchaser, to have assumed and agreed to carry out any and all
of the covenants and obligations of Landlord under this Lease. Furthermore, in the event of a sale or conveyance by Landlord of
the Project or the Building, this Lease shall not be affected by any such sale, and Tenant agrees to attorn to the purchaser thereof.

 

40.                
Confidentiality. Tenant agrees that except as may be required by law, it shall not, without the prior written consent
of Landlord, make any public announcement about any of the terms, conditions, or provisions of this Lease, or modifications thereof,
including without limitation, the Base Rent, Operating Expenses or other amounts due under this Lease (including, but not limited
to reporting services such as “Co-Star”, “Loop Net” or broker database). Tenant shall not transmit this
Lease or any of the information contained in this Lease to any third party except Tenant’s counsel, consultants, actual or
prospective lenders and purchasers, and other advisors engaged to help Tenant or such lenders or purchasers in connection with
this Lease pursuant to this Lease and/or any financing or refinancing for Tenant (collectively, the “Permitted Parties”),
on a need-to-know basis, provided such Permitted Parties are advised of the confidentiality and nondisclosure obligations of Landlord
and agree to be bound thereby. Tenant agrees to indemnify and hold Landlord harmless from and against any actual loss, injury,
damage, claim, lien, cost or expenses, including attorneys’ fees, arising from a breach of the foregoing confidentiality
agreement. The covenants set forth in this Paragraph shall survive the termination or closing of this Lease.

 

 

 

    
	 	25	 

     

    

 

41.                
Addendums. The following addendums (if checked) are attached hereto and incorporated herein for all purposes (check
as applicable):

 

	 	[_]	Cost of Living Increase Addendum
	 	[X]	Renewal Option Addendum
	 	[_]	Guaranty(s)
	 	[_]	Construction Addendum
	 	[_]	Broker Agreement

 

42.                 
Guarantors. [INTENTIONALLY OMITTED.]

 

43.
                Additional Provisions.

 

 (a)    Landlord will repair or replace one overhead dock door in the rear of the premises. 

 

 

[Signature page follows]

 

 

 

 

 

    
	 	26	 

     

    

 

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

 

 

 

 

	 	LANDLORD:
	 	
        Texzona Industries, Ltd.

         

        By:  Texzona
        Management, LLC    

        Its:  General Partner                         

	 	 
	 	By:   /s/ Patrick Gordon
	 	Name:    Patrick Gordon
	 	Title: President
	 	 
	 	Address:
	 	
        PO Box 522541

        El Paso, Texas 79952

        Email:

	 	 
	 	 
	 	 
	 	 
	 	TENANT:
	 	Precision Optics Corporation, Inc.
	 	
         

        By:  /s/ Donald Major

	 	Name:   Donald Major
	 	Title:  Chief Financial Officer
	 	 
	 	
        Address: Premises address

         

        1410 Gail Borden, Suite A-3

         

        El Paso, TX 79935

         

        Cell                                                    

        Email:                                                

 

 

 

    
	 	27	 

     

    

 

ADDENDUM I

 

RENEWAL OPTION

 

ATTACHED TO AND A PART OF THE

LEASE AGREEMENT BETWEEN

 

Texzona Industries, Inc.

 

and

 

Precision Optics Corporation,
Inc.

 

RENEWAL OPTION ADDENDUM

 

This Renewal Option Addendum (Renewal Addendum)
dated July 1, 2019, is made by and between Texzona Industries, Inc., ("Landlord”), and Precision Optics Corporation,
Inc., (“Tenant”), and is hereby incorporated into and made a part of that certain Standard Industrial Lease between
the parties (the "Lease").

 

For good and valuable
consideration, Landlord and Tenant agree as follows:

 

1.       Provided
that Tenant has not defaulted with respect to any provision of the Lease, Tenant shall have the right to extend the term of the
Lease for one (1) additional period(s) of thirty six (36) months each from the expiration of the prior term, provided, however,
that written notice is given to Landlord of such intention to extend the Lease six (6) months prior to the applicable expiration
date and further provided that all provisions of the Lease (other than rental as may be modified as provided below) shall continue
in full force and effect for the period of such extension.

 

2.       Rent.
Monthly Base Rent for the renewal period(s) shall be paid by Tenant as follows:

 

Month 01
– Month 12 – Monthly Base Rent $3,652.34

Month 13
– Month 24 – Monthly Base Rent $3,743.65

Month 25
– Month 36 – Monthly Base Rent $3.837.24

 

3.      Tenant
shall continue to be responsible for Taxes, Insurance and Operating expenses as provided in the Lease Agreement.

 

4.      All capitalized terms used in this
Addendum and not defined herein shall have the same meaning provided for in the Lease.

 

5.      This Addendum shall
be incorporated into and made a part of the Lease for all purposes.

 

 

 

 

 

 

 

 

(Signatures on Next Page)

 

 

 

    
	 	28	 

     

    

 

	AGREED AND ACCEPTED:	LANDLORD:
	 	 
	 	 
	 	                                                               
	 	By:	Texzona
Management, LLC.
	 	Its:	General
Partner
	 	 
	 	By:
	 	 
	 	Its:
	 	 
	 	 
	 	TENANT
	 	 
	 	 
	 	                                                               
	 	Precision
Optics Corporation, Inc.
	 	 
	 	By: Donald
A. Major
	 	 
	 	Its: Chief
Financial Officer

 

 

 

    
	 	29Exhibit 4.1

 

CONVERTIBLE PROMISSORY NOTE

 

 

NEITHER THE ISSUANCE AND SALE OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE
TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144
OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES. ANY TRANSFEREE OF THIS CONVERTIBLE PROMISSORY NOTE SHOULD
CAREFULLY REVIEW THE TERMS OF THIS CONVERTIBLE PROMISSORY NOTE, INCLUDING SECTIONS 3(c)(iii) AND 15(a) HEREOF. THE PRINCIPAL AMOUNT REPRESENTED
BY THIS CONVERTIBLE PROMISSORY NOTE AND, ACCORDINGLY, THE SECURITIES ISSUABLE UPON CONVERSION HEREOF MAY BE LESS THAN THE AMOUNTS
SET FORTH ON THE FACE HEREOF PURSUANT TO SECTION 3(c)(iii)  OF THIS CONVERTIBLE PROMISSORY NOTE.

 

DPW HOLDINGS, INC.

CONVERTIBLE PROMISSORY NOTE DUE DECEMBER
31, 2019

 

	Issuance Date: September 26, 2019	Principal Amount: $815,218.02 

 

 

FOR VALUE RECEIVED,
DPW Holdings, Inc., a Delaware corporation (the “Company”), hereby promises to pay to the order of [●],
or its registered assigns (“Holder”) the amount set forth above as the original principal amount (the “Principal”)
when due, whether upon December 31, 2019 (the “Maturity Date”), or upon acceleration, prepayment or otherwise
(in each case in accordance with the terms hereof) and to pay interest (“Interest”) on any outstanding Principal
at the applicable Interest Rate (as defined below) from the date set forth above as the Issuance Date (the “Issuance Date”)
until the same becomes due and payable, whether upon the Maturity Date or upon acceleration, conversion, prepayment or otherwise
(in each case in accordance with the terms hereof). This Convertible Promissory Note (this “Note”) is issued
to the Holder as of the Issuance Date by the Company pursuant to the Exchange Agreement entered into by and between the Company
and the Holder of even date herewith. Certain capitalized terms used herein are defined in Section 28.

 

1.       PAYMENTS
OF PRINCIPAL.

  

On the Maturity
Date, the Company shall pay to the Holder an amount in cash representing all outstanding Principal, accrued and unpaid Interest
and accrued and unpaid Late Charges on such Principal and Interest. Other than as specifically permitted by this Note, the Company
may not prepay any portion of the outstanding Principal, accrued and unpaid Interest or accrued and unpaid Late Charges on Principal
and Interest, if any.

  

2.       INTEREST;
INTEREST RATE.

  

   (a)       Interest
on this Note shall commence accruing as of the date hereof at 12% per annum subject to adjustment in accordance with the terms
of this Section 2 (the “Interest Rate”), shall be calculated on the basis of a 360-day year and twelve 30-day
months, compounded daily, and shall be payable by the Company to the Holder, in cash, on the Maturity Date.

  

   (b)       From
and after the occurrence and during the continuance of any Event of Default, the Interest Rate shall automatically be increased
to the lower of 18.0% per annum or the highest amount permitted by law, shall compounded daily (the “Default Interest”),
and shall be due and payable on the first Trading Day of each calendar month during the continuance of such Event of Default (a
“Default Interest Payment Date”). In the event that such Event of Default is subsequently cured (and no other
Event of Default then exists (including, without limitation, for the Company’s failure to pay such Interest at the Default
Rate on the applicable Default Interest Payment Date), the adjustment referred to in the preceding sentence shall cease to be effective
as of the day immediately following the date of such cure; provided that the Interest as calculated and unpaid at such increased
rate during the continuance of such Event of Default shall continue to apply to the extent relating to the days after the occurrence
of such Event of Default through and including the date of such cure of such Event of Default.

    	 	1	 

     

    

 

3.       CONVERSION
OF NOTES. Provided that Exchange Approval shall have been obtained at such time, commencing on October 31, 2019 (the “Initial
Conversion Date”), this Note shall be convertible into validly issued, fully paid and non-assessable shares (the “Conversion
Shares”) of the Company’s common Stock, par value $0.001 per share (the “Common Stock”), on
the terms and conditions set forth in this Section 3.

  

   (a)       Conversion
Right. Subject to the provisions of Section 3(d), at any time following the Issuance Date, the Holder shall be entitled to
convert any portion of the outstanding and unpaid Conversion Amount (as defined below) into Conversion Shares in accordance
with Section 3 (b), at the Conversion Rate (as defined below). The Company shall not issue any fraction of a Conversion Share
upon any conversion. If the issuance would result in the issuance of a fraction of a share of Common Stock, the Company shall
round such fraction of a share of Common Stock up to the nearest whole share. The Company shall pay any and all transfer,
stamp, issuance and similar taxes, costs and expenses (including, without limitation, fees and expenses of the Transfer Agent
(as defined below)) that may be payable with respect to the issuance and delivery of Common Stock upon conversion of any
Conversion Amount.

  

   (b)       Conversion
Rate. The number of Conversion Shares issuable upon conversion of any Conversion Amount pursuant to Section 3(a) shall be determined
by dividing (x) such Conversion Amount by (y) the Conversion Price (the “Conversion Rate”).

  

(i)       “Conversion
Amount” means the sum of (x) portion of the Principal to be converted, prepaid or otherwise with respect to which this
determination is being made and (y) all accrued and unpaid Interest with respect to such portion of the Principal amount and accrued
and unpaid Late Charges with respect to such portion of such Principal and such Interest, if any.

  

(ii)       “Conversion
Price” means, as of any Conversion Date, $4.00 per share, subject to equitable adjustments resulting from any stock splits,
stock dividends, combinations, recapitalizations or similar events. The Company shall issue irrevocable instructions to its Transfer
Agent regarding conversions such that the transfer agent shall be authorized and instructed to issue shares of Common Stock upon
its receipt of a Conversion Notice without further approval or authorization from the Company.

  

   (c)       Mechanics
of Conversion.

  

(i)       Optional
Conversion. To convert any Conversion Amount into Conversion Shares on any date following the Initial Conversion Date (a “Conversion
Date”), the Holder shall deliver to the Company (whether via facsimile, electronic mail or otherwise), for receipt on
or prior to 11:59 p.m., New York time, on such date, a copy of an executed notice of conversion in the form attached hereto as
Exhibit I (the “Conversion Notice”). If required pursuant to Section 3(c)(iii) hereof, within two Trading
Days following a conversion of this Note as aforesaid, the Holder shall surrender this Note to a nationally recognized overnight
delivery service for delivery to the Company (or an indemnification undertaking with respect to this Note in the case of its loss,
theft or destruction as contemplated by Section 15(b)). On or before the first Trading Day following the date of receipt of a Conversion
Notice, the Company shall transmit by facsimile or electronic mail an acknowledgment of confirmation and representation as to whether
such Conversion Shares may then be resold pursuant to Rule 144 or an effective and available registration statement, in the form
attached hereto as Exhibit II, of receipt of such Conversion Notice to the Holder and the Transfer Agent which confirmation
shall constitute an instruction to the Transfer Agent to process such Conversion Notice in accordance with the terms herein. On
or before the second Trading Day following the date on which the Company has received a Conversion Notice (or such earlier date
as required pursuant to the 1934 Act or other applicable law, rule or regulation for the settlement of a trade initiated on the
applicable Conversion Date of such shares of Common Stock issuable pursuant to such Conversion Notice) (the “Share Delivery
Deadline”), the Company shall (1) provided that the Transfer Agent is participating in the DTC Fast Automated Securities
Transfer Program, credit such aggregate number of shares of Common Stock to which the Holder shall be entitled pursuant to such
conversion to the Holder’s or its designee’s balance account with DTC through its Deposit/Withdrawal at Custodian system
or (2) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, upon the request of the
Holder, issue and deliver (via reputable overnight courier) to the address as specified in the Conversion Notice, a certificate,
registered in the name of the Holder or its designee, for the number of shares of Common Stock to which the Holder shall be entitled
pursuant to such conversion. If this Note is physically surrendered for conversion pursuant to Section 3(c)(iii) and the outstanding
Principal of this Note is greater than the Principal portion of the Conversion Amount being converted, then the Company shall as
soon as practicable and in no event later than two Trading Days after receipt of this Note and at its own expense, issue and deliver
to the Holder (or its designee) a new Note (in accordance with Section 15(d)) representing the outstanding Principal not converted.
The Person or Persons entitled to receive the Conversion Shares shall be treated for all purposes as the record holder or holders
of such shares of Common Stock on the Conversion Date.

  

    	 	2	 

     

    

  

(ii)       Company’s
Failure to Timely Convert. If the Company shall fail, for any reason or for no reason, on or prior to the applicable Share
Delivery Deadline, if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, to issue and
deliver to the Holder (or its designee) a certificate for the number of shares of Common Stock to which the Holder is entitled
and register such shares of Common Stock on the Company’s share register or, if the Transfer Agent is participating in the
DTC Fast Automated Securities Transfer Program, to credit the balance account of the Holder or the Holder’s designee with
DTC for such number of shares of Common Stock to which the Holder is entitled upon the Holder’s conversion of this Note (as
the case may be) (a “Conversion Failure”), then, in addition to all other remedies available to the Holder,
(1) the Company shall pay in cash to the Holder on each day after such Share Delivery Deadline that the issuance of such shares
of Common Stock is not timely effected an amount equal to 2% of the product of (A) the sum of the number of shares of Common Stock
not issued to the Holder on or prior to the Share Delivery Deadline and to which the Holder is entitled, multiplied by (B) any
trading price of the Common Stock selected by the Holder in writing as in effect at any time during the period beginning on the
applicable Conversion Date and ending on the applicable Share Delivery Deadline and (2) the Holder, upon written notice to the
Company, may void its Conversion Notice with respect to, and retain or have returned (as the case may be) any portion of this Note
that has not been converted pursuant to such Conversion Notice, provided that the voiding of a Conversion Notice shall not affect
the Company’s obligations to make any payments which have accrued prior to the date of such notice pursuant to this Section
3(c)(ii) or otherwise. In addition to the foregoing, if on or prior to the Share Delivery Deadline, if the Transfer Agent is not participating
in the DTC Fast Automated Securities Transfer Program, the Company shall fail to issue and deliver to the Holder (or its designee)
a certificate and register such shares of Common Stock on the Company’s share register or, if the Transfer Agent is participating
in the DTC Fast Automated Securities Transfer Program, the Transfer Agent shall fail to credit the balance account of the Holder
or the Holder’s designee with DTC for the number of shares of Common Stock to which the Holder is entitled upon the Holder’s
conversion hereunder or pursuant to the Company’s obligation pursuant to clause (II) below, and if on or after such Share
Delivery Deadline the Holder purchases (in an open market transaction or otherwise) shares of Common Stock corresponding to all
or any portion of the number of shares of Common Stock issuable upon such conversion that the Holder is entitled to receive from
the Company and has not received from the Company in connection with such Conversion Failure or Notice Failure, as applicable (a
“Buy-In”), then, in addition to all other remedies available to the Holder, the Company shall, within two Trading
Days after receipt of the Holder’s request and in the Holder’s discretion, either: (I) pay cash to the Holder in an
amount equal to the Holder’s total purchase price (including brokerage commissions and other out-of-pocket expenses, if any)
for the shares of Common Stock so purchased (including, without limitation, by any other Person in respect, or on behalf, of the
Holder) (the “Buy-In Price”), at which point the Company’s obligation to so issue and deliver such certificate
(and to issue such shares of Common Stock) or credit the balance account of such Holder or such Holder’s designee, as applicable,
with DTC for the number of shares of Common Stock to which the Holder is entitled upon the Holder’s conversion hereunder
(as the case may be) (and to issue such shares of Common Stock) shall terminate, or (II) promptly honor its obligation to so issue
and deliver to the Holder a certificate or certificates representing such shares of Common Stock or credit the balance account
of such Holder or such Holder’s designee, as applicable, with DTC for the number of shares of Common Stock to which the Holder
is entitled upon the Holder’s conversion hereunder (as the case may be) and pay cash to the Holder in an amount equal to
the excess (if any) of the Buy-In Price over the product of (x) such number of shares of Common Stock multiplied by the Conversion
Price during the period commencing on the date of the applicable Conversion Notice and ending on the date of such issuance and
payment under this clause (II) (the “Buy-In Payment Amount”). Nothing shall limit the Holder’s right to
pursue any other remedies available to it hereunder, at law or in equity, including, without limitation, a decree of specific performance
and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing shares of Common
Stock (or to electronically deliver such shares of Common Stock) upon the conversion of this Note as required pursuant to the terms
hereof.

  

    	 	3	 

     

    

 

(iii)       Registration;
Book-Entry. The Company shall maintain a register (the “Register”) for the recordation of the names and
addresses of the Holder of the Note and the principal amount of the Note (the “Registered Note”). The entries
in the Register shall be conclusive and binding for all purposes absent manifest error. The Company and the holder or holders of
the Note shall treat each Person whose name is recorded in the Register as the owner of a Note for all purposes (including, without
limitation, the right to receive payments of Principal and Interest hereunder) notwithstanding notice to the contrary. The Registered
Note may, subject to Section 27 hereof, be assigned, transferred or sold in whole or in part only by registration of such assignment
or sale on the Register. Upon its receipt of a written request to assign, transfer or sell all or part of the Registered Note by
the holder thereof, the Company shall record the information contained therein in the Register and issue one or more new Registered
Notes in the same aggregate principal amount as the principal amount of the surrendered Registered Note to the designated assignee
or transferee pursuant to Section 15, provided that if the Company does not so record an assignment, transfer or sale (as
the case may be) of all or part of any Registered Note within two Trading Days of such a request, then the Register shall be automatically
deemed updated to reflect such assignment, transfer or sale (as the case may be). Notwithstanding anything to the contrary set
forth in this Section 3, following conversion of any portion of this Note in accordance with the terms hereof, the Holder
shall not be required to physically surrender this Note to the Company unless (A) the full Conversion Amount represented by this
Note is being converted (in which event this Note shall be delivered to the Company following conversion thereof) or (B) the Holder
has provided the Company with prior written notice (which notice may be included in a Conversion Notice) requesting reissuance
of this Note upon physical surrender of this Note. The Holder and the Company shall maintain records showing the Principal, Interest
and Late Charges converted and/or paid (as the case may be) and the dates of such conversions, and/or payments (as the case may
be) or shall use such other method, reasonably satisfactory to the Holder and the Company, so as not to require physical surrender
of this Note upon conversion. If the Company does not update the Register to record such Principal, Interest and Late Charges converted
and/or paid (as the case may be) and the dates of such conversions, and/or payments (as the case may be) within two Trading Days
of such occurrence, then the Register shall be automatically deemed updated to reflect such occurrence.

  

   (d)       Limitations
on Conversions. The Company shall not effect the conversion of any portion of the Note and the Holder shall not have the right
to convert any portion of the Note and any such conversion shall be null and void and treated as if never made, to the extent that
after giving effect to such conversion, the Holder would beneficially own in excess of 4.99% of the shares of Common Stock outstanding
immediately after giving effect to such conversion (the “Maximum Percentage”) (which provision may be waived
by the Holder by written notice from the Holder to the Company, which notice shall be effective 61 days after the date of such
notice). For purposes of the foregoing sentence, the aggregate number of shares of Common Stock beneficially owned by the Holder
shall include the number of shares of Common Stock held by the Holder plus the number of shares of Common Stock issuable upon conversion
of the Note and all other Convertible Securities with respect to which the determination of such sentence is being made subject
to a limitation on conversion or exercise analogous to the limitation contained in this Section 3(d). For purposes of this Section
3(d), beneficial ownership shall be calculated in accordance with Section 13(d) of the 1934 Act. For purposes of determining the
number of outstanding shares of Common Stock the Holder may acquire upon the conversion of the Note without exceeding the Maximum
Percentage, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (x) the Company’s most
recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other public filing with the Securities
and Exchange Commission (the “SEC”), as the case may be, (y) a more recent public announcement by the Company
or (z) any other written notice by the Company or the Transfer Agent, if any, setting forth the number of shares of Common Stock
outstanding (the “Reported Outstanding Share Number”). If the Company receives a Conversion Notice from the
Holder at a time when the actual number of outstanding shares of Common Stock is less than the Reported Outstanding Share Number,
the Company shall notify the Holder in writing of the number of shares of Common Stock then outstanding and, to the extent that
such Conversion Notice would otherwise cause the Holder’s beneficial ownership, as determined pursuant to this Section 3(d),
to exceed the Maximum Percentage, the Company must notify the Holder of a reduced number of Conversion Shares to be acquired pursuant
to such Conversion Notice. For any reason at any time, upon the written or oral request of the Holder, the Company shall within
one Trading Day confirm orally and in writing or by electronic mail to the Holder the number of shares of Common Stock then outstanding.
In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise
of securities of the Company, including such Note, by the Holder since the date as of which the Reported Outstanding Share Number
was reported. In the event that the issuance of shares of Common Stock to the Holder upon conversion of such portion of the Note
results in the Holder being deemed to beneficially own, in the aggregate, more than the Maximum Percentage of the number of outstanding
shares of Common Stock (as determined under Section 13(d) of the 1934 Act and Rule 13b-3 thereunder), the number of conversion
shares so issued by which the Holder’s beneficial ownership exceeds the Maximum Percentage (the “Excess Shares”)
shall be deemed null and void and shall be cancelled ab initio, and the Holder shall not have the power to vote, sell, or to transfer
the Excess Shares. For purposes of clarity, the shares of Common Stock issuable to the Holder pursuant to the terms of this Note
in excess of the Maximum Percentage shall not be deemed to be beneficially owned by the Holder for any purpose including for purposes
of Section 13(d) or Rule 16a-1(a)(1) of the 1934 Act. No prior inability to convert the Note pursuant to this Section 3(d) shall
have any effect on the applicability of the provisions of this Section 3(d) with respect to any subsequent determination of convertibility.
The provisions of this Section 3(d) shall be construed and implemented in a manner otherwise than in strict conformity with the
terms of this Section 3(d) to the extent necessary to correct any portion of this Section 3(d) which may be defective or inconsistent
with the intended beneficial ownership limitation contained in this Section 3(d) or to make changes or supplements necessary or
desirable to properly give effect to such limitation. The provisions of this Section 3(d) shall be of no further force or effect
if the Holder participates in a subsequent transaction with the Company and acquires Common Stock and/or securities convertible
into Common Stock which do not contain a beneficial ownership limitation. In such event, the Maximum Percentage limitation shall
be (i) deemed modified to be identical to any limitation on beneficial ownership contained in the subsequent transaction or (ii)
eliminated if there is no such limitation on beneficial ownership.

  

    	 	4	 

     

    

  

   (e)       Forced
Conversion. Notwithstanding anything herein to the contrary, if at any time after the Closing Date, the closing price of the
shares of Common Stock (the “Closing Price”) for any 3 consecutive Trading Days (such period the “Threshold
Period”) equals or exceeds $7.00 (subject to adjustment for reverse and forward stock splits, stock dividends, stock
combinations and other similar transactions of the Common Stock that occur after the Issuance Date, the “Forced Conversion
Price”), the Company may, within 1 Trading Day of the end of any such period, deliver a notice to the Holder (a “Forced
Conversion Notice” and the date such notice is received by the Holder, the “Forced Conversion Notice Date”)
to cause the Holder to immediately convert all or part of the then outstanding principal amount of Note pursuant to this Section
3 at the Forced Conversion Price. For purposes of clarification, a Forced Conversion shall be subject to all of the provisions
of this Section 3, including, without limitation, limitations on conversions.

  

4.       RIGHTS
UPON EVENT OF DEFAULT.

  

   (a)       Event
of Default. Each of the following events shall constitute an “Event of Default”:

  

(i)       the
suspension from trading or the failure of the Common Stock to be trading or listed (as applicable) on a Principal Market for a
period of five consecutive Trading Days. For the avoidance of doubt, the delisting of the Common Stock from the NYSE American shall
be an event of Default;

  

(ii)       the
Company’s default under this Note or the other Transaction Documents, including a failure to pay to the Holder any amount
of Principal, Interest, Late Charges or other amounts when and as due under this Note, the other Transaction Documents, subject
to a cure period of ten (10) Trading Days;

  

(iii)       bankruptcy,
insolvency, reorganization or liquidation proceedings or other proceedings for the relief of debtors shall be instituted by or
against the Company or any Subsidiary and, if instituted against the Company or any Subsidiary by a third party, shall not be dismissed
within 30 days of their initiation;

  

(iv)       the
commencement by the Company of a voluntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent
by it to the entry of a decree, order, judgment or other similar document in respect of the Company in an involuntary case or proceeding
under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or other similar law or to the commencement
of any bankruptcy or insolvency case or proceeding against it, or the filing by it of a petition or answer or consent seeking reorganization
or relief under any applicable federal, state or foreign law, or the consent by it to the filing of such petition or to the appointment
of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the
Company of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the execution
of a composition of debts, or the occurrence of any other similar federal, state or foreign proceeding, or the admission by it
in writing of its inability to pay its debts generally as they become due, the taking of corporate action by the Company in furtherance
of any such action or the taking of any action by any Person to commence a Uniform Commercial Code foreclosure sale or any other
similar action under federal, state or foreign law;

  

(v)       the
entry by a court of (i) a decree, order, judgment or other similar document in respect of the Company of a voluntary or involuntary
case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or other similar law or
(ii) a decree, order, judgment or other similar document adjudging the Company as bankrupt or insolvent, or approving as properly
filed a petition seeking liquidation, reorganization, arrangement, adjustment or composition of or in respect of the Company under
any applicable federal, state or foreign law or (iii) a decree, order, judgment or other similar document appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or of any substantial part of its
property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree, order, judgment or
other similar document or any such other decree, order, judgment or other similar document unstayed and in effect for a period
of 10 consecutive days;

 

    	 	5	 

     

    

  

(vi)       other
than as specifically set forth in another clause of this Section 4(a), the Company breaches any representation or warranty in any
material respect (other than representations or warranties subject to materiality limitations, which may not be breached in any
respect) or any covenant or other term or condition of this Note or any other Transaction Document, except, in the case of a breach
of a covenant or other term or condition that is curable, only if such breach remains uncured for a period of ten (10) consecutive
Trading Days;

  

(vii)     a
false or inaccurate certification (including a false or inaccurate deemed certification) by the Company as to whether any Event
of Default has occurred, subject to a cure period of ten (10) Trading Days;

  

(viii)    any
Material Adverse Effect occurs and remains uncured for a period of ten (10) Trading Days;

  

(ix)      any
provision of any Transaction Document shall at any time for any reason (other than pursuant to the express terms thereof) cease
to be valid and binding on or enforceable against the parties thereto, or the validity or enforceability thereof shall be contested
by any party thereto, or a proceeding shall be commenced by the Company or any Subsidiary or any governmental authority having
jurisdiction over any of them, seeking to establish the invalidity or unenforceability thereof, or the Company or any Subsidiary
shall deny in writing that it has any liability or obligation purported to be created under any Transaction Document, subject to
a cure period of ten (10) Trading Days;

  

(x)       the
Company or any “Significant Subsidiary” as defined in Rule 1.02 of Reg S-X shall default on any of its obligations
under any mortgage, credit agreement or other facility, indenture agreement, factoring agreement or other instrument under which
there may be issued, or by which there may be secured or evidenced, any indebtedness for borrowed money or money due under any
long term leasing or factoring arrangement that (a) involves an obligation greater than $250,000, whether such indebtedness now
exists or shall hereafter be created, and (b) results in such indebtedness becoming or being declared due and payable prior to
the date on which it would otherwise become due and payable;

  

(xi)      the
Common Stock shall not be eligible for listing or quotation for trading on a Trading Market and shall not be eligible to resume
listing or quotation for trading thereon within five (5) Trading Days;

  

(xii)     the
Company fails to file any reports required under the 1934 Act, subject to a cure period of ten (10) Trading Days.

  

   (b)       Notice
of an Event of Default; Holder Right to Compel Prepayment upon Event of Default. Upon the occurrence of an Event of Default
with respect to this Note, the Company shall within one Trading Day deliver written notice thereof via facsimile or electronic
mail and overnight courier (with next day delivery specified) (an “Event of Default Notice”) to the Holder.
At any time after the earlier of the Holder’s receipt of an Event of Default Notice and the Holder becoming aware of an Event
of Default and ending (such ending date, the “Event of Default Right Expiration Date”) on the 20th
Trading Day after the later of (x) the date such Event of Default is cured and (y) the Holder’s receipt of an Event of Default
Notice that includes (I) a reasonable description of the applicable Event of Default, (II) a certification as to whether, in the
opinion of the Company, such Event of Default is capable of being cured and, if applicable, a reasonable description of any existing
plans of the Company to cure such Event of Default and (III) a certification as to the date the Event of Default occurred and,
if cured on or prior to the date of such Event of Default Notice, the applicable Event of Default Right Expiration Date, the Holder
may require the Company to prepay (regardless of whether such Event of Default has been cured on or prior to the Event of Default
Right Expiration Date) all or any portion of this Note by delivering written notice thereof (the “Event of Default Prepayment
Notice”) to the Company, which Event of Default Prepayment Notice shall indicate the portion of this Note the Holder
is electing to have prepaid. Each portion of this Note (which may include all outstanding Principal, accrued and unpaid Interest
and accrued and unpaid Late Charges on such Principal and Interest) subject to prepayment by the Company pursuant to this Section
4(b) shall be prepaid by the Company at a price equal to the product of: (i) the portion of this Note being prepaid; multiplied
by (ii) the Prepayment Premium. To the extent prepayments required by this Section 4(b) are deemed or determined by a court of
competent jurisdiction to be prepayments of this Note by the Company, such prepayments shall be deemed to be voluntary prepayments.
In the event of the Company’s prepayment of any portion of this Note under this Section 4(b), the Holder’s damages
would be uncertain and difficult to estimate because of the parties’ inability to predict future interest rates and the uncertainty
of the availability of a suitable substitute investment opportunity for the Holder. Accordingly, any Prepayment Premium due under
this Section 4(b) is intended by the parties to be, and shall be deemed, a reasonable estimate of the Holder’s actual loss
of its investment opportunity and not as a penalty. Any prepayment upon an Event of Default shall not constitute an election of
remedies by the Holder, and all other rights and remedies of the Holder shall be preserved.

 

    	 	6	 

     

    

  

5.       RIGHTS
UPON CHANGE OF CONTROL. The Company shall not enter into or consummate a transaction constituting a Change of Control
unless: (i) No sooner than 20 Trading Days nor later than 10 Trading Days prior to the consummation of a Change of Control,
but not prior to the public announcement of such Change of Control, the Company shall deliver written notice thereof via
facsimile or electronic mail and overnight courier to the Holder; (ii) the Successor Entity assumes in writing all of
the obligations of the Company under this Note and the other Transaction Documents in accordance with the provisions of this
Section 5 pursuant to written agreements in form and substance satisfactory to the Holder and approved by the Holder prior to
such Change of Control, including agreements to deliver to each holder of the Note in exchange for such Note a security of
the Successor Entity evidenced by a written instrument substantially similar in form and substance to the Note, including,
without limitation, having a principal amount and interest rate equal to the principal amounts then outstanding and the
interest rates of the Note held by such holder, having similar conversion rights as the Note and having similar ranking and
security to the Note, and satisfactory to the Holder and (iii) the Successor Entity (including its Parent Entity) is a
publicly traded corporation whose common stock is quoted on or listed for trading on a Principal Market. Upon the occurrence
of any Change of Control, the Successor Entity shall succeed to, and be substituted for (so that from and after the effective
date of such Change of Control, the provisions of this Note and the other Transaction Documents referring to the
“Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and
shall assume all of the obligations of the Company under this Note and the other Transaction Documents with the same effect
as if such Successor Entity had been named as the Company herein. Upon consummation of a Change of Control, the
Successor Entity shall deliver to the Holder confirmation that there shall be issued upon conversion or prepayment of this
Note at any time after the consummation of such Change of Control, in lieu of the shares of Common Stock (or other
securities, cash, assets or other property (except such items still issuable under Sections  6 and 15, which shall continue
to be receivable thereafter) issuable upon the conversion or prepayment of the Note prior to such Change of Control, such
shares of the publicly-traded common stock (or their equivalent) of the Successor Entity (including its Parent Entity) which
the Holder would have been entitled to receive upon the happening of such Change of Control had this Note been converted
immediately prior to such Change of Control (without regard to any limitations on the conversion of this Note), as adjusted
in accordance with the provisions of this Note. Notwithstanding the foregoing, the Holder may elect, at its sole option, by
delivery of written notice to the Company to waive this Section 5 to permit the Change of Control to occur without the
assumption of this Note. The provisions of this Section 5 shall apply similarly and equally to successive transactions
constituting a Change of Control and shall be applied without regard to any limitations on the conversion of this Note.

  

6.       RIGHTS
UPON ISSUANCE OF PURCHASE RIGHTS AND OTHER CORPORATE EVENTS.

  

    (a)       Purchase
Rights. In addition to any adjustments pursuant to Section 7 below, if at any time the Company grants, issues or sells any
Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to all or substantially
all of the record holders of any class of Common Stock (the “Purchase Rights”), then the Holder will be entitled
to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired
if the Holder had held the number of shares of Common Stock acquirable upon complete conversion of this Note immediately prior
to the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken,
the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase
Rights (provided, however, that to the extent that the Holder’s right to participate in any such Purchase Right
would result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, then the Holder shall not be entitled
to participate in such Purchase Right to the extent of the Maximum Percentage (and shall not be entitled to beneficial ownership
of such shares of Common Stock as a result of such Purchase Right (and beneficial ownership) to the extent of any such excess)
and such Purchase Right to such extent shall be held in abeyance (and, if such Purchase Right has an expiration date, maturity
date or other similar provision, such term shall be extended by such number of days held in abeyance, if applicable) for the benefit
of the Holder until such time or times, if ever, as its right thereto would not result in the Holder and the other Attribution
Parties exceeding the Maximum Percentage, at which time or times the Holder shall be granted such right (and any Purchase Right
granted, issued or sold on such initial Purchase Right or on any subsequent Purchase Right held similarly in abeyance (and, if
such Purchase Right has an expiration date, maturity date or other similar provision, such term shall be extended by such number
of days held in abeyance, if applicable)) to the same extent as if there had been no such limitation).

 

    	 	7	 

     

    

 

   (b)       Other
Corporate Events. In addition to and not in substitution for any other rights hereunder, prior to the consummation of any Fundamental
Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities or other assets with respect
to or in exchange for shares of Common Stock (a “Corporate Event”), the Company shall make appropriate provision
to ensure that the Holder will thereafter have the right to receive upon a conversion of this Note, at the Holder’s option
(i) in addition to the shares of Common Stock receivable upon such conversion, such securities or other assets to which the Holder
would have been entitled with respect to such shares of Common Stock had such shares of Common Stock been held by the Holder upon
the consummation of such Corporate Event (without taking into account any limitations or restrictions on the convertibility of
this Note) or (ii) in lieu of the shares of Common Stock otherwise receivable upon such conversion, such securities or other assets
received by the holders of shares of Common Stock in connection with the consummation of such Corporate Event in such amounts as
the Holder would have been entitled to receive had this Note initially been issued with conversion rights for the form of such
consideration (as opposed to shares of Common Stock) at a conversion rate for such consideration commensurate with the Conversion
Rate. Provision made pursuant to the preceding sentence shall be in a form and substance satisfactory to the Holder. The provisions
of this Section 6 shall apply similarly and equally to successive Corporate Events and shall be applied without regard to any limitations
on the conversion or prepayment of this Note.

  

7.       RIGHTS
UPON ISSUANCE OF OTHER SECURITIES.

 

 

   (a)       Adjustment
of Conversion Price upon Subdivision or Combination of Common Stock. If the Company at any time on or after the Issuance
Date subdivides (by any stock split, stock dividend, recapitalization or other similar transaction) one or more classes of
its outstanding shares of Common Stock into a greater number of shares, the Conversion Price in effect immediately prior to
such subdivision will be proportionately reduced. If the Company at any time on or after the Issuance Date combines (by any
reverse stock split, or stock combination, recapitalization or other similar transaction) one or more classes of its
outstanding shares of Common Stock into a smaller number of shares, the Conversion Price in effect immediately prior to such
combination will be proportionately increased. Any adjustment pursuant to this Section  7(a) shall become effective
immediately after the effective date of such subdivision or combination. If any event requiring an adjustment under this
Section 7(a)  occurs during the period that a Conversion Price is calculated hereunder, then the calculation of such
Conversion Price shall be adjusted appropriately to reflect such event.

  

   (b)       Calculations.
All calculations under this Section 7 shall be made by rounding to the nearest cent or the nearest 1/100th of a
share, as applicable. The number of shares of Common Stock outstanding at any given time shall not include shares owned or held
by or for the account of the Company, and the disposition of any such shares shall be considered an issue or sale of Common Stock.

  

8.       NONCIRCUMVENTION.
The Company hereby covenants and agrees that the Company will not, by amendment of the Company’s Certificate of
Incorporation or other charter documents, bylaws or through any reorganization, transfer of assets, consolidation, merger,
scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Note, and will at all times in good faith carry out all of the
provisions of this Note and take all action as may be required to protect the rights of the Holder of this Note. Without
limiting the generality of the foregoing or any other provision of this Note or the other Transaction Documents, the Company
(a) shall not increase the par value of any shares of Common Stock receivable upon conversion of this Note above the
Conversion Price then in effect, and (b) shall take all such actions as may be necessary or appropriate in order that
the Company may validly and legally issue fully paid and non-assessable shares of Common Stock upon the conversion of this
Note. Notwithstanding anything herein to the contrary, if after the 60 day anniversary of the Issuance Date, the Holder is
not permitted to convert this Note in full for any reason (other than pursuant to restrictions set forth in Section 3(d)
hereof), the Company shall use its best efforts to promptly remedy such failure, including, without limitation, obtaining
such consents or approvals as necessary to permit such conversion into shares of Common Stock.

  

    	 	8	 

     

    

 

9.       RESERVATION
OF AUTHORIZED SHARES.

  

   (a)       Reservation.
So long as the Note remains outstanding, the Company shall at all times reserve 5 million shares of its Common Stock, subject to
adjustment for stock splits, stock dividends, combinations and similar events (the “Required Reserve Amount”).

  

   (b)       Insufficient
Authorized Shares. If, notwithstanding Section 9(a), and not in limitation thereof, at any time while any of the Note remains
outstanding the Company does not have a sufficient number of authorized and unreserved shares of Common Stock to satisfy its obligation
to reserve for issuance upon conversion of the Note at least a number of shares of Common Stock equal to the Required Reserve Amount
(an “Authorized Share Failure”), then the Company shall immediately take all action necessary to increase the
Company’s authorized shares of Common Stock to an amount sufficient to allow the Company to reserve the Required Reserve
Amount for the portion of the Note then outstanding. Without limiting the generality of the foregoing sentence, as soon as practicable
after the date of the occurrence of an Authorized Share Failure, but in no event later than 60 days after the occurrence of such
Authorized Share Failure, the Company shall hold a meeting of its stockholders for the approval of an increase in the number of
authorized shares of Common Stock. In connection with such meeting, the Company shall provide each stockholder with a proxy statement
and shall use its best efforts to solicit its stockholders’ approval of such increase in authorized shares of Common Stock
and to cause its board of directors to recommend to the stockholders that they approve such proposal. In the event that the Company
is prohibited from issuing shares of Common Stock pursuant to the terms of this Note due to the failure by the Company to have
sufficient shares of Common Stock available out of the authorized but unissued shares of Common Stock (such unavailable number
of shares of Common Stock, the “Authorized Failure Shares”), in lieu of delivering such Authorized Failure Shares
to the Holder, the Company shall pay cash in exchange for the prepayment of such portion of the Conversion Amount convertible into
such Authorized Failure Shares at a price equal to the sum of (i) the product of (x) such number of Authorized Failure Shares and
(y) the Conversion Price during the period commencing on the date the Holder delivers the applicable Conversion Notice with respect
to such Authorized Failure Shares to the Company and ending on the date of such issuance and payment under this Section 9(b); and
(ii) to the extent the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction
of a sale by the Holder of Authorized Failure Shares, any brokerage commissions and other out-of-pocket expenses, if any, of the
Holder incurred in connection therewith.

  

10.      OPTIONAL
PREPAYMENT. At any time during the period beginning on the Issuance Date and expiring upon the Maturity Date, the Company
shall have the right, exercisable on not less than ten (10) days prior written notice to the Holder of the Note, to prepay the
outstanding Note (principal and accrued interest), in full, in accordance with this Section 10. Any notice of prepayment hereunder
(an “Optional Prepayment Notice”) shall be delivered to the Holder of the Note at its registered addresses
and shall state: (1) that the Company is exercising its right to prepay the Note, and (2) the date of prepayment which shall be
no later than thirty (30 days from the date of the Optional Prepayment Notice. On the date fixed for prepayment (the “Optional
Prepayment Date”), the Company shall make payment of the Optional Prepayment Amount (as defined below) to or upon the
order of the Holder as specified by the Holder in writing to the Company at least three (3) Trading Days prior to the Optional
Prepayment Date. If the Company exercises its right to prepay the Note, the Company shall make payment to the Holder of an amount
in cash (the “Optional Prepayment Amount”) equal to the Multiple (as hereinafter defined), multiplied by the
sum of: (w) the then outstanding Principal of this Note plus (x) accrued and unpaid interest on the unpaid Principal of this Note
to the Optional Prepayment Date plus (y) if applicable, Default Interest, if any, on the amounts referred to in clauses (w) and
(x). For purposes hereof, the “Multiple” shall be: (i) 105% if the Optional Prepayment Notice is delivered
within three (3) months of the Issuance Date, and (ii) 110% if the Optional Prepayment Notice is delivered at any time thereafter.

 

11.      COVENANTS.
Until all of the principal amount of and accrued but unpaid interest under Note has been repaid, prepaid or otherwise satisfied
in accordance with their terms:

   

   (a)       Rank.
All payments due under this Note (a) shall rank senior to all other notes of the Company issued prior to the Closing Date and (b)
shall be senior to all other Indebtedness of the Company and its Subsidiaries, except as provided on Schedule 11(a).

  

   (b)       Preservation
of Existence, Etc. The Company shall maintain and preserve, and cause each of its Subsidiaries to maintain and preserve, its
existence, rights and privileges, and become or remain, and cause each of its Subsidiaries to become or remain, duly qualified
and in good standing in each jurisdiction in which the character of the properties owned or leased by it or in which the transaction
of its business makes such qualification necessary.

  

    	 	9	 

     

    

 

    (c)       Maintenance
of Properties, Etc. The Company shall maintain and preserve, and cause each of its Subsidiaries to maintain and preserve, all
of its properties which are necessary or useful in the proper conduct of its business in good working order and condition, ordinary
wear and tear excepted, and comply, and cause each of its Subsidiaries to comply, at all times with the provisions of all leases
to which it is a party as lessee or under which it occupies property, so as to prevent any loss or forfeiture thereof or thereunder.

  

    (d)       Maintenance
of Intellectual Property. The Company will, and will cause each of its Subsidiaries to, take all action necessary or advisable
to maintain all of the rights or licenses to use all trademarks, trade names, service marks, service mark registrations, service
names, original works of authorship, patents, patent rights, copyrights, inventions, licenses, approvals, governmental authorizations,
trade secrets and other intellectual property rights and all applications and registrations therefor of the Company and/or any
of its Subsidiaries that are necessary or material to the conduct of its business in full force and effect.

  

    (e)       Maintenance
of Insurance. The Company shall maintain, and cause each of its Subsidiaries to maintain, insurance with responsible and reputable
insurance companies or associations (including, without limitation, comprehensive general liability, hazard, rent and business
interruption insurance) with respect to its properties (including all real properties leased or owned by it) and business, in such
amounts and covering such risks as is required by any governmental authority having jurisdiction with respect thereto or as is
carried generally in accordance with sound business practice by companies in similar businesses similarly situated.

  

12.       DISTRIBUTION
OF ASSETS. In addition to any adjustments pursuant to Section 7, if the Company shall declare or make any dividend or other
distributions of its assets (or rights to acquire its assets) to any or all holders of shares of Common Stock, by way of return
of capital or otherwise (including without limitation, any distribution of cash, stock or other securities, property or Options
by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction)
(the “Distributions”), then the Holder will be entitled to such Distributions as if the Holder had held the
number of shares of Common Stock acquirable upon complete conversion of this Note (without taking into account any limitations
or restrictions on the convertibility of this Note and assuming for such purpose that the Note was converted at the Conversion
Price) on the date immediately prior to the date on which a record is taken for such Distribution or, if no such record is taken,
the date as of which the record holders of Common Stock are to be determined for such Distributions (provided, however, that to
the extent that the Holder’s right to participate in any such Distribution would result in the Holder and the other Attribution
Parties exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Distribution to the extent
of the Maximum Percentage (and shall not be entitled to beneficial ownership of such shares of Common Stock as a result of such
Distribution (and beneficial ownership) to the extent of any such excess) and the portion of such Distribution shall be held in
abeyance for the benefit of the Holder until such time or times, if ever, as its right thereto would not result in the Holder and
the other Attribution Parties exceeding the Maximum Percentage, at which time or times the Holder shall be granted such Distribution
(and any Distributions declared or made on such initial Distribution or on any subsequent Distribution held similarly in abeyance)
to the same extent as if there had been no such limitation).

  

13.       AMENDING
THE TERMS OF THIS NOTE. The prior written consent of the Holder shall be required for any change, waiver or amendment to this
Note. Any change, waiver or amendment so approved shall be binding upon all existing and future holders of this Note; provided,
however, that no such change, waiver or, as applied to the Note held by any particular holder of the Note, shall, without the written
consent of that particular holder, (i) reduce the amount of Principal, reduce the amount of accrued and unpaid Interest, or extend
the Maturity Date, of the Note, (ii) disproportionally and adversely affect any rights under the Note of any holder of any other
portion of the Note; or (iii) modify any of the provisions of, or impair the right of any holder of the Note under this Section
13.

  

14.       RESERVED.

  

15.       REISSUANCE
OF THIS NOTE.

  

    (a)       Transfer.
If this Note is to be transferred, the Holder shall surrender this Note to the Company, whereupon the Company will forthwith issue
and deliver upon the order of the Holder a new Note (in accordance with Section 15(d)), registered as the Holder may request, representing
the outstanding Principal being transferred by the Holder and, if less than the entire outstanding Principal is being transferred,
a new Note (in accordance with Section15(d)) to the Holder representing the outstanding Principal not being transferred. The Holder
and any assignee, by acceptance of this Note, acknowledge and agree that, by reason of the provisions of Section3(c)(iii)  following conversion
or prepayment of any portion of this Note, the outstanding Principal represented by this Note may be less than the Principal stated
on the face of this Note.

 

    	 	10	 

     

    

  

    (b)       Lost,
Stolen or Mutilated Note. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Note (as to which a written certification and the indemnification contemplated below shall suffice
as such evidence), and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company
in customary and reasonable form and, in the case of mutilation, upon surrender and cancellation of this Note, the Company shall
execute and deliver to the Holder a new Note (in accordance with Section 15(d)) representing the outstanding Principal.

  

    (c)       Note
Exchangeable for Different Denominations. This Note is exchangeable, upon the surrender hereof by the Holder at the principal
office of the Company, for a new Note or Notes (in accordance with Section 15(d) and in principal amounts of at least $1,000) representing
in the aggregate the outstanding Principal of this Note, and each such new Note will represent such portion of such outstanding
Principal as is designated by the Holder at the time of such surrender.

  

    (d)       Issuance
of New Notes. Whenever the Company is required to issue a new Note pursuant to the terms of this Note, such new Note (i) shall
be of like tenor with this Note, (ii) shall represent, as indicated on the face of such new Note, the Principal remaining outstanding
(or in the case of a new Note being issued pursuant to Section 15(a) or Section 15(c), the Principal designated by the Holder which
does not exceed the Principal remaining outstanding under this Note immediately prior to such issuance of a new Note), (iii) shall
have an issuance date, as indicated on the face of such new Note, which is the same as the Issuance Date of this Note, (iv) shall
have the same rights and conditions as this Note, and (v) shall represent accrued and unpaid Interest and Late Charges on the Principal
and Interest of this Note, from the Issuance Date.

  

16.       REMEDIES,
CHARACTERIZATIONS, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Note shall be cumulative
and in addition to all other remedies available under this Note and any of the other Transaction Documents at law or in equity
(including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the Holder’s
right to pursue actual and consequential damages for any failure by the Company to comply with the terms of this Note. The Company
covenants to the Holder that there shall be no characterization concerning this instrument other than as expressly provided herein.
Amounts set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof) shall
be the amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation
of the Company (or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause
irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that,
in the event of any such breach or threatened breach, the Holder shall be entitled, in addition to all other available remedies,
to specific performance and/or temporary, preliminary and permanent injunctive or other equitable relief from any court of competent
jurisdiction in any such case without the necessity of proving actual damages and without posting a bond or other security. The
Company shall provide all information and documentation to the Holder that is requested by the Holder to enable the Holder to confirm
the Company’s compliance with the terms and conditions of this Note (including, without limitation, compliance with Section
7).

  

17.       PAYMENT
OF COLLECTION, ENFORCEMENT AND OTHER COSTS. If (a) this Note is placed in the hands of an attorney for collection or enforcement
or is collected or enforced through any legal proceeding or the Holder otherwise takes action to collect amounts due under this
Note or to enforce the provisions of this Note or (b) there occurs any bankruptcy, reorganization, receivership of the Company
or other proceedings affecting Company creditors’ rights and involving a claim under this Note, then the Company shall pay
the costs incurred by the Holder for such collection, enforcement or action or in connection with such bankruptcy, reorganization,
receivership or other proceeding, including, without limitation, attorneys’ fees and disbursements. The Company expressly
acknowledges and agrees that no amounts due under this Note shall be affected, or limited, by the fact that the purchase price
paid for this Note was less than the original Principal amount hereof.

  

18.       CONSTRUCTION;
HEADINGS. This Note shall be deemed to be jointly drafted by the Company and the initial Holder and shall not be construed
against any such Person as the drafter hereof. The headings of this Note are for convenience of reference and shall not form part
of, or affect the interpretation of, this Note. Unless the context clearly indicates otherwise, each pronoun herein shall be deemed
to include the masculine, feminine, neuter, singular and plural forms thereof. The terms “including,” “includes,”
“include” and words of like import shall be construed broadly as if followed by the words “without limitation.”
The terms “herein,” “hereunder,” “hereof” and words of like import refer to this entire Note
instead of just the provision in which they are found. Unless expressly indicated otherwise, all section references are to sections
of this Note. Terms used in this Note and not otherwise defined herein, but defined in the other Transaction Documents, shall have
the meanings ascribed to such terms on the Closing Date in such other Transaction Documents unless otherwise consented to in writing
by the Holder.

 

    	 	11	 

     

    

 

19.       FAILURE
OR INDULGENCE NOT WAIVER. No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other
or further exercise thereof or of any other right, power or privilege. No waiver shall be effective unless it is in writing and
signed by an authorized representative of the waiving party. Notwithstanding the foregoing, nothing contained in this Section 19
shall permit any waiver of any provision of Section 3(d).

  

20.       DISPUTE
RESOLUTION.

  

    (a)       Submission
to Dispute Resolution.

  

(i)        In
the case of a dispute relating to a Conversion Price, or a fair market value or the arithmetic calculation of a Conversion Rate,
or the applicable Prepayment Price (as the case may be) (including, without limitation, a dispute relating to the determination
of any of the foregoing), the Company or the Holder (as the case may be) shall submit the dispute to the other party via facsimile
or electronic mail (A) if by the Company, within two Trading Days after the occurrence of the circumstances giving rise to such
dispute or (B) if by the Holder at any time after the Holder learned of the circumstances giving rise to such dispute. If the Holder
and the Company are unable to promptly resolve such dispute relating to such Conversion Price, such Redemption Conversion Price,
or such fair market value, or the arithmetic calculation of such Conversion Rate or such applicable Prepayment Price (as the case
may be), at any time after the second Trading Day following such initial notice by the Company or the Holder (as the case may be)
of such dispute to the Company or the Holder (as the case may be), then the Holder may, at its sole option, select an independent,
reputable investment bank to resolve such dispute.

  

(ii)       The
Holder and the Company shall each deliver to such investment bank (A) a copy of the initial dispute submission so delivered in
accordance with the first sentence of this Section 20 and (B) written documentation supporting its position with respect to such
dispute, in each case, no later than 5:00 p.m. (New York time) by the fifth Trading Day immediately following the date on which
the Holder selected such investment bank (the “Dispute Submission Deadline”) (the documents referred to in the
immediately preceding clauses (A) and (B) are collectively referred to herein as the “Required Dispute Documentation”)
(it being understood and agreed that if either the Holder or the Company fails to so deliver all of the Required Dispute Documentation
by the Dispute Submission Deadline, then the party who fails to so submit all of the Required Dispute Documentation shall no longer
be entitled to (and hereby waives its right to) deliver or submit any written documentation or other support to such investment
bank with respect to such dispute and such investment bank shall resolve such dispute based solely on the Required Dispute Documentation
that was delivered to such investment bank prior to the Dispute Submission Deadline). Unless otherwise agreed to in writing by
both the Company and the Holder or otherwise requested by such investment bank, neither the Company nor the Holder shall be entitled
to deliver or submit any written documentation or other support to such investment bank in connection with such dispute (other
than the Required Dispute Documentation).

  

(iii)      The
Company and the Holder shall cause such investment bank to determine the resolution of such dispute and notify the Company and
the Holder of such resolution no later than 10 Trading Days immediately following the Dispute Submission Deadline. The fees and
expenses of such investment bank shall be borne solely by the Company and the Holder in equal parts, and such investment bank’s
resolution of such dispute shall be final and binding upon all parties absent manifest error.

  

    (b)       Miscellaneous.
The Company expressly acknowledges and agrees that (i) this Section 20 constitutes an agreement to arbitrate between the Company
and the Holder (and constitutes an arbitration agreement) under the New York  Civil
Practice Law and Rules, as amended, (ii) the terms of this Note and each other applicable Transaction Document shall serve
as the basis for the selected investment bank’s resolution of the applicable dispute, such investment bank shall be entitled
(and is hereby expressly authorized) to make all findings, determinations and the like that such investment bank determines are
required to be made by such investment bank in connection with its resolution of such dispute and in resolving such dispute such
investment bank shall apply such findings, determinations and the like to the terms of this Note and any other applicable Transaction
Documents, (iii) the Holder (and only the Holder), in its sole discretion, shall have the right to submit any dispute described
in this Section 20 to any state or federal court sitting in New York County, New York in lieu of utilizing the procedures set forth
in this Section 20 and (iv) nothing in this Section 20 shall limit the Holder from obtaining any injunctive relief or other equitable
remedies (including, without limitation, with respect to any matters described in this Section 20).

 

    	 	12	 

     

    

 

21.       NOTICES.
Whenever notice is required to be given under this Note, unless otherwise provided herein, such notice shall be given in writing
with an e-mail copy to the last address provided by the Holder or its agents in writing to the Company. The Company shall provide
the Holder with prompt written notice of all actions taken pursuant to this Note, including in reasonable detail a description
of such action and the reason therefore. Without limiting the generality of the foregoing, the Company will give written notice
to the Holder (i) immediately upon any adjustment of the Conversion Price, setting forth in reasonable detail, and certifying,
the calculation of such adjustment and (ii) at least 15 days prior to the date on which the Company closes its books or takes a
record (A) with respect to any dividend or distribution upon the Common Stock, or (B) for determining rights to vote with respect
to any Fundamental Transaction, dissolution or liquidation, provided in each case that such information shall be made known to
the public prior to or in conjunction with such notice being provided to the Holder.

  

22.       CANCELLATION.
After all Principal, accrued Interest, Late Charges and other amounts at any time owed on this Note have been paid in full, this
Note shall automatically be deemed canceled, shall be surrendered to the Company for cancellation and shall not be reissued.

  

23.       WAIVER
OF NOTICE. To the extent permitted by law, the Company hereby irrevocably waives demand, notice, presentment, protest and all
other demands and notices in connection with the delivery, acceptance, performance, default or enforcement of this Note.

  

24.       GOVERNING
LAW. This Note shall be construed and enforced in accordance with, and all questions concerning the construction, validity,
interpretation and performance of this Note shall be governed by, the internal laws of the State of New York, without giving effect
to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would
cause the application of the laws of any jurisdictions other than the State of New York. Except as otherwise required by Section
20 above, the Company hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in New York
County, New York, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an
inconvenient forum or that the venue of such suit, action or proceeding is improper. Nothing contained herein shall be deemed to
limit in any way any right to serve process in any manner permitted by law. Nothing contained herein (i) shall be deemed or operate
to preclude the Holder from bringing suit or taking other legal action against the Company in any other jurisdiction to collect
on the Company’s obligations to the Holder, to realize on any collateral or any other security for such obligations, or to
enforce a judgment or other court ruling in favor of the Holder or (ii) shall limit, or shall be deemed or construed to limit,
any provision of Section 20. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST,
A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS NOTE OR ANY TRANSACTION
CONTEMPLATED HEREBY.

  

25.       SEVERABILITY.
If any provision of this Note is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent
jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the
broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect
the validity of the remaining provisions of this Note so long as this Note as so modified continues to express, without material
change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability
of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties
or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good
faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which
comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).

  

26.       MAXIMUM
PAYMENTS. Nothing contained herein shall be deemed to establish or require the payment of a rate of interest or other charges
in excess of the maximum permitted by applicable law. In the event that the rate of interest required to be paid or other charges
hereunder exceed the maximum permitted by such law, any payments in excess of such maximum shall be credited against amounts owed
by the Company to the Holder and thus refunded to the Company.

 

    	 	13	 

     

    

 

27.       ASSIGNMENT.
Neither this Note nor the rights contained herein may be assigned, by operation of law or otherwise, by either party without the
prior written consent of the other; provided, however, that this Note and/or the rights contained herein may be assigned without
the Company’s consent by the Holder to any other entity who controls, is controlled by or is under common control with the
Holder.

  

28.       CERTAIN
DEFINITIONS. For purposes of this Note, the following words and terms shall have the following meanings:

  

    (a)       “1933
Act” means the Securities Act of 1933, as amended, and the rules and regulations thereunder.

  

    (b)       “1934
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.

  

   (c)       “Affiliate”
means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common
control with, such Person, it being understood for purposes of this definition that “control” of a Person means the
power directly or indirectly either to vote 10% or more of the stock having ordinary voting power for the election of directors
of such Person or direct or cause the direction of the management and policies of such Person whether by contract or otherwise.

  

   (d)       “Attribution
Parties” means, collectively, the following Persons and entities: (i) any investment vehicle, including, any funds, feeder
funds or managed accounts, currently, or from time to time after the Issuance Date, directly or indirectly managed or advised by
the Holder’s investment manager or any of its Affiliates or principals, (ii) any direct or indirect Affiliates of the Holder
or any of the foregoing, (iii) any Person acting or who could be deemed to be acting as a Group together with the Holder or any
of the foregoing and (iv) any other Persons whose beneficial ownership of the Company’s Common Stock would or could be aggregated
with the Holder’s and the other Attribution Parties for purposes of Section 13(d) of the 1934 Act. For clarity, the purpose
of the foregoing is to subject collectively the Holder and all other Attribution Parties to the Maximum Percentage.

  

    (e)       
“Bloomberg” means Bloomberg, L.P., or any successor.

  

    (f)       
“Change of Control” means any Fundamental Transaction other than (i) any merger of the Company or any of its,
direct or indirect, wholly-owned Subsidiaries with or into any of the foregoing Persons, (ii) any reorganization, recapitalization
or reclassification of the shares of Common Stock in which holders of the Company’s voting power immediately prior to such
reorganization, recapitalization or reclassification continue after such reorganization, recapitalization or reclassification to
hold publicly traded securities and, directly or indirectly, are, in all material respects, the holders of the voting power of
the surviving entity (or entities with the authority or voting power to elect the members of the board of directors (or their
equivalent if other than a corporation) of such entity or entities) after such reorganization, recapitalization or reclassification,
(iii) pursuant to a migratory merger effected solely for the purpose of changing the jurisdiction of incorporation of the Company
or any of its Subsidiaries, or (iv) a reorganization or other change in the composition in the Company’s board of directors.

  

    (g)       “Common
Stock” means (i) the Company’s shares of Class A common stock, $0.001 par value per share, and (ii) any capital
stock into which such Common Stock shall have been changed or any share capital resulting from a reclassification of such Common
Stock.

  

    (h)       “Convertible
Securities” means any stock or other security (other than Options) that is at any time and under any circumstances, directly
or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire, any
shares of Common Stock.

  

    (i)       “Current
Subsidiary” means any Person in which the Company on the Issuance Date, directly or indirectly, (i) owns any of the outstanding
capital stock or holds any equity or similar interest of such Person or (ii) controls or operates all or any part of the business,
operations or administration of such Person, and all of the foregoing, collectively, “Current Subsidiaries”.

 

    	 	14	 

     

    

  

    (j)       
“Exchange Agreement” means that certain Exchange Agreement, dated as of September 26, 2019, by and between the
Company and the Holder.

  

    (k)       “Exchange
Approval” means the approval of the NYSE American required to be obtained by Company no later than October 31, 2019,
pursuant to any applicable rules of the NYSE American to issue the Conversion Shares, including, if applicable approval by the
Company’s stockholders.

  

    (l)       
“Fundamental Transaction” means (A) that the Company shall, directly or indirectly, including through subsidiaries,
Affiliates or otherwise, in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company
is the surviving corporation) another Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially
all of the properties or assets of the Company or any of its “significant subsidiaries” (as defined in Rule 1-02 of
Regulation S-X) to one or more Subject Entities, or (iii) make, or allow one or more Subject Entities to make, or allow the Company
to be subject to or have its Common Stock be subject to or party to one or more Subject Entities making, a purchase, tender or
exchange offer that is accepted by the holders of at least either (x) 50% of the outstanding shares of Common Stock, (y) 50% of
the outstanding shares of Common Stock calculated as if any shares of Common Stock held by all Subject Entities making or party
to, or Affiliated with any Subject Entities making or party to, such purchase, tender or exchange offer were not outstanding; or
(z) such number of shares of Common Stock such that all Subject Entities making or party to, or Affiliated with any Subject Entity
making or party to, such purchase, tender or exchange offer, become collectively the beneficial owners (as defined in Rule 13d-3
under the 1934 Act) of at least 50% of the outstanding shares of Common Stock, or (iv) consummate a stock or share purchase agreement
or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement)
with one or more Subject Entities whereby all such Subject Entities, individually or in the aggregate, acquire, either (x) at least
50% of the outstanding shares of Common Stock, (y) at least 50% of the outstanding shares of Common Stock calculated as if any
shares of Common Stock held by all the Subject Entities making or party to, or Affiliated with any Subject Entity making or party
to, such stock purchase agreement or other business combination were not outstanding; or (z) such number of shares of Common Stock
such that the Subject Entities become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of at least
50% of the outstanding shares of Common Stock, or (v) reorganize, recapitalize or reclassify its Common Stock, (B) that the Company
shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions, allow
any Subject Entity individually or the Subject Entities in the aggregate to be or become the “beneficial owner” (as
defined in Rule 13d-3 under the 1934 Act), directly or indirectly, whether through acquisition, purchase, assignment, conveyance,
tender, tender offer, exchange, reduction in outstanding shares of Common Stock, merger, consolidation, business combination, reorganization,
recapitalization, spin-off, scheme of arrangement, reorganization, recapitalization or reclassification or otherwise in any manner
whatsoever, of either (x) at least 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock,
(y) at least 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock not held by all such
Subject Entities as of the date of this Note calculated as if any shares of Common Stock held by all such Subject Entities were
not outstanding, or (z) a percentage of the aggregate ordinary voting power represented by issued and outstanding shares of Common
Stock or other equity securities of the Company sufficient to allow such Subject Entities to effect a statutory short form merger
or other transaction requiring other shareholders of the Company to surrender their shares of Common Stock without approval of
the shareholders of the Company or (C) directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one
or more related transactions, the issuance of or the entering into any other instrument or transaction structured in a manner to
circumvent, or that circumvents, the intent of this definition in which case this definition shall be construed and implemented
in a manner otherwise than in strict conformity with the terms of this definition to the extent necessary to correct this definition
or any portion of this definition which may be defective or inconsistent with the intended treatment of such instrument or transaction.

  

    (m)       “GAAP”
means United States generally accepted accounting principles, consistently applied.

  

    (n)       “Group”
means a “group” as that term is used in Section 13(d) of the 1934 Act and as defined in Rule 13d-5 thereunder.

  

    	 	15	 

     

    

 

     (o)       
“Indebtedness” means (A) all indebtedness for borrowed money, (B) all obligations issued, undertaken or assumed
as the deferred purchase price of property or services (including, without limitation, “capital leases” in accordance
with GAAP) (other than trade payables entered into in the ordinary course of business consistent with past practice), (C) all reimbursement
or payment obligations with respect to letters of credit, surety bonds and other similar instruments, (D) all obligations evidenced
by notes, bonds, debentures or similar instruments, including obligations so evidenced incurred in connection with the acquisition
of property, assets or businesses, (E) all indebtedness created or arising under any conditional sale or other title retention
agreement, or incurred as financing, in either case with respect to any property or assets acquired with the proceeds of such indebtedness
(even though the rights and remedies of the seller or bank under such agreement in the event of default are limited to repossession
or sale of such property), (F) all monetary obligations under any leasing or similar arrangement which, in connection with GAAP,
consistently applied for the periods covered thereby, is classified as a capital lease, (G) all indebtedness referred to in clauses
(A) through (F) above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise,
to be secured by) any Lien upon or in any property or assets (including accounts and contract rights) owned by any Person, even
though the Person that owns such assets or property has not assumed or become liable for the payment of such indebtedness, and
(H) all Contingent Obligations in respect of indebtedness or obligations of others of the kinds referred to in clauses (A) through
(G) above; and “Contingent Obligation” means, as to any Person, any direct or indirect liability, contingent
or otherwise, of that Person with respect to any Indebtedness, lease, dividend or other obligation of another Person if the primary
purpose or intent of the Person incurring such liability, or the primary effect thereof, is to provide assurance to the obligee
of such liability that such liability will be paid or discharged, or that any agreements relating thereto will be complied with,
or that the holders of such liability will be protected (in whole or in part) against loss with respect thereto.

  

     (p)       “Late
Charge” means any amount of Principal or other amounts due under the Transaction Documents which is not paid when due
which shall result in a late charge being incurred and payable by the Company in an amount equal to interest on such amount at
the rate of 18% per annum from the date such amount was due until the same is paid in full.

  

     (q)       “Material
Adverse Effect” means any material adverse effect on (i) the business, properties, assets, liabilities, operations (including
results thereof), condition (financial or otherwise) or prospects of the Company or any Subsidiary, individually or taken as a
whole, (ii) the transactions contemplated hereby or in any of the other Transaction Documents or any other agreements or instruments
to be entered into in connection herewith or therewith or (iii) the authority or ability of the Company or any of its Subsidiaries
to perform any of their respective obligations under any of the Transaction Documents (as defined below). As of the date hereof
and as of the Closing Date, the Company has no Subsidiaries.

  

     (r)       “Maturity
Date” shall mean the date listed in the preamble hereto as the Maturity Date; provided, however, the Maturity
Date may be extended at the option of the Holder (i) in the event that, and for so long as, an Event of Default shall
have occurred and be continuing or any event shall have occurred and be continuing that with the passage of time and the
failure to cure would result in an Event of Default or (ii) through the date that is 20 Trading Days after the consummation
of a Fundamental Transaction in the event that a Fundamental Transaction is publicly announced or a Change of Control Notice
is delivered prior to the Maturity Date, provided further that if a Holder elects to convert some or all of this Note
pursuant to Section  3 hereof, and the Conversion Amount would be limited pursuant to Section 3(d)  hereunder, the Maturity
Date shall automatically be extended until such time as such provision shall not limit the conversion of this Note.

  

     (s)       “New
Subsidiary” means, as of any date of determination, any Person in which the Company after the Issuance Date, directly
or indirectly, (i) owns or acquires any of the outstanding capital stock or holds any equity or similar interest of such Person
or (ii) controls or operates all or any part of the business, operations or administration of such Person, and all of the foregoing,
collectively, “New Subsidiaries”.

  

     (t)       “Options”
means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.

  

     (u)       “Parent
Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person and whose common stock
or equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one such Person or Parent Entity,
the Person or Parent Entity with the largest public market capitalization as of the date of consummation of the Fundamental Transaction.

 

    	 	16	 

     

    

 

(v)       “Permitted
Indebtedness” means (i) Indebtedness evidenced by this Note, (ii) Indebtedness set forth on Schedule 2.16 of the
Exchange Agreement, as in effect as of the Issuance Date and (iii) Indebtedness secured by Permitted Liens or unsecured but as
described in clauses (iv) and (v) of the definition of Permitted Liens.

  

(w)       “Permitted
Liens” means (i) any Lien for taxes not yet due or delinquent or being contested in good faith by appropriate proceedings
for which adequate reserves have been established in accordance with GAAP, (ii) any statutory Lien arising in the ordinary course
of business by operation of law with respect to a liability that is not yet due or delinquent, (iii) any Lien created by operation
of law, such as materialmen’s liens, mechanics’ liens and other similar liens, arising in the ordinary course of business
with respect to a liability that is not yet due or delinquent or that are being contested in good faith by appropriate proceedings,
(iv) Liens (A) upon or in any equipment acquired or held by the Company or any of its Subsidiaries to secure the purchase price
of such equipment or Indebtedness incurred solely for the purpose of financing the acquisition or lease of such equipment, or (B)
existing on such equipment at the time of its acquisition, provided that the Lien is confined solely to the property so acquired
and improvements thereon, and the proceeds of such equipment, in either case, with respect to Indebtedness in an aggregate amount
not to exceed $50,000, (v) Liens incurred in connection with the extension, renewal or refinancing of the Indebtedness secured
by Liens of the type described in clause (iv) above, provided that any extension, renewal or replacement Lien shall be limited
to the property encumbered by the existing Lien and the principal amount of the Indebtedness being extended, renewed or refinanced
does not increase, (vi) Liens in favor of customs and revenue authorities arising as a matter of law to secure payments of custom
duties in connection with the importation of goods, and (vii) Liens arising from judgments, decrees or attachments in circumstances
not constituting an Event of Default under Section 4(a).

  

(x)       “Person”
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization,
any other entity or a government or any department or agency thereof.

  

(y)       “Principal
Market” means any of The New York Stock Exchange, the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Select
Market, the Nasdaq Global Market, the OTCQB, the OTCQX, the OTC Pink or any other market operated by the OTC Markets Group Inc.
or any successors of any of these exchanges or markets.

  

(z)       “Subsidiaries”
means, as of any date of determination, collectively, all Current Subsidiaries and all New Subsidiaries, and each of the foregoing,
individually, a “Subsidiary.”

  

(aa)    “Subject
Entity” means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons or Group.

  

(bb)   “Successor
Entity” means the Person (or, if so elected by the Holder, the Parent Entity) formed by, resulting from or surviving
any Fundamental Transaction or the Person (or, if so elected by the Holder, the Parent Entity) with which such Fundamental Transaction
shall have been entered into.

  

(cc)    “Trading
Day” means, as applicable, (x) with respect to all price or trading volume determinations relating to the Common Stock,
any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the principal trading market
for the Common Stock, then on the principal securities exchange or securities market on which the Common Stock is then traded,
provided that “Trading Day” shall not include any day on which the Common Stock is scheduled to trade on such exchange
or market for less than 4.5 hours or any day that the Common Stock is suspended from trading during the final hour of trading on
such exchange or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange
or market, then during the hour ending at 4:00 p.m., New York time) unless such day is otherwise designated as a Trading Day in
writing by the Holder or (y) with respect to all determinations other than price determinations relating to the Common Stock, any
day on which The New York Stock Exchange (or any successor thereto) is open for trading of securities.

  

(dd)   “Transaction
Documents” means this Note, the Exchange Agreement, the Registration Rights Agreement and any other documents relating
to the issuance of this Note by the Company to the Holder.

 

    	 	17	 

     

    

  

29.       TRUE-UP.
In the event the Holder’s proceeds from the sale of all the shares of Common Stock received by the Holder pursuant to the
Conversion Notice(s) under this Note, do not equal at least 100% of the sum of the deemed outstanding Principal balance of this
Note and the interest accrued thereon, the Company shall owe the difference to the Holder (the “True-Up Amount”).
Upon notice from the Holder (the “True-Up Notice”), the Company shall within three (3) Trading Days have the
option to pay the True-Up Amount to the Holder in cash or through the delivery of shares of Common Stock; provided, however,
that if the approval of the Principal Market is required for the Common Stock to be issued for the True-Up Amount, the three (3)
Trading Days shall be delayed until the Company has obtained such approval, which the Company shall use its best efforts to obtain
as promptly as practicable. The number of shares of Common Stock to be issued for the True-Up Amount shall be determined using
the average closing price of the Common Stock on the Principal Market for the ten (10) Trading Days immediately preceding the date
of the True-Up Notice.

  

30.       DISCLOSURE.
Upon receipt or delivery by the Company of any notice in accordance with the terms of this Note, unless the Company has in good
faith determined that the matters relating to such notice do not constitute material, non-public information relating to the Company
or any of its Subsidiaries, the Company shall within one Trading Day after any such receipt or delivery publicly disclose such
material, non-public information on a Current Report on Form 8-K or otherwise. In the event that the Company believes that a notice
contains material, non-public information relating to the Company or any of its Subsidiaries, the Company so shall indicate to
the Holder contemporaneously with delivery of such notice, and in the absence of any such indication, the Holder shall be allowed
to presume that all matters relating to such notice do not constitute material, non-public information relating to the Company
or any of its Subsidiaries. If the Company or any of its Subsidiaries provides material non-public information to the Holder that
is not simultaneously filed in a Current Report on Form 8-K and the Holder has not agreed to receive such material non-public information,
the Company hereby covenants and agrees that the Holder shall not have any duty of confidentiality to the Company, any of its Subsidiaries
or any of their respective officers, directors, employees, Affiliates or agents with respect to, or a duty to any of the foregoing
not to trade on the basis of, such material non-public information.

  

 

[signature page follows]

 

    	 	18	 

     

    

 

IN WITNESS WHEREOF,
the Company has caused this Note to be duly executed as of the Issuance Date set out above.

  

 

 

	DPW HOLDINGS, INC.
	 
	 
	By: 	__________________________
	 
	Name:   Milton C. Ault, III
	 
	Title:     Chief Executive Officer

 

    	 	19	 

     

    

  

EXHIBIT
I

 

DPW HOLDINGS, INC.

 

CONVERSION NOTICE

 

 

Reference is made to
the Convertible Promissory Note (the “Note”) issued to the undersigned by DPW Holdings, Inc., a Delaware corporation
(the “Company”). In accordance with and pursuant to the Note, the undersigned hereby elects to convert the Conversion
Amount (as defined in the Note) of the Note indicated below into shares of Class A Common Stock, $0.001 par value per share (the
“Common Stock”), of the Company, as of the date specified below. Capitalized terms not defined herein shall
have the meaning as set forth in the Note.

  

	Date of Conversion:	 

 

	Aggregate Principal to be converted:	 	 
	 	 	 
	Aggregate accrued and unpaid Interest and accrued and unpaid Late Charges with respect to such portion of the Aggregate Principal and such Aggregate Interest to be converted:	 	 

 

	AGGREGATE CONVERSION AMOUNT

 TO BE CONVERTED:	 

 

	Please confirm the following information:
	 
	Conversion Price:	 

 

	Number of shares of Common Stock to be issued:	 

 

	
        Please issue the Common Stock into which
        the Note is being converted to Holder, or for its benefit, as follows:

         

        £        Check
        here if requesting delivery as a certificate to the following name and to the following address:

         

	Issue to:	 
	 	 
	 	 

 

£        Check here if requesting delivery by Deposit/Withdrawal at Custodian as follows: 

 

	
	DTC Participant:	 
	 	 
	DTC Number:	 
	 	 
	Account Number:	 

 

    	 	1	 

     

    

   

 

	Date: _____________ __, 
	 	 
	Name of Registered Holder

 

 

	By:  	
	 	Name:
	 	Title:
	 	 
	 	 
	 	Tax ID:	 
	 	Facsimile:	 
	 
	E-mail Address: 

 

 

    	 	2	 

     

    

 

EXHIBIT II

 

ACKNOWLEDGMENT

 

 

 

The Company hereby
(a) acknowledges this Conversion Notice, (b) certifies that the above indicated number of shares of Common Stock [are][are not]
eligible to be resold by the Holder either (i) pursuant to Rule 144 (subject to the Holder’s execution and delivery to the
Company of a customary 144 representation letter) or (ii) an effective and available registration statement and (c) hereby directs
_________________ to issue the above indicated number of shares of Common Stock in accordance with the Transfer Agent Instructions
dated _____________, 20__ from the Company and acknowledged and agreed to by ________________________.

 

	
        DPW HOLDINGS, INC.

         

	By:______________________________________
	Name: 
	Title:

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