Document:

Exhibit 10.3

 

PROMISSORY NOTE

 

	‎$10,000,000.00‎	CITY OF EL MONTE, CALIFORNIA	January 26, 2022‎

 

FOR VALUE RECEIVED, SNAIL GAMES USA INC., a California corporation
(“Borrower”), promise ‎to pay to CATHAY BANK, a California banking corporation
(“Lender"), or its order, at its office ‎located at 9650 Flair Drive, El
Monte, California 91731, or at such other place as the holder hereof ‎may designate, in lawful
money of the United States of America, the principal sum of Ten Million ‎and No/100 Dollars
($10,000,000.00), or so much thereof as shall have been advanced and is ‎outstanding together
with interest, on the outstanding principal balance, until paid in full in ‎accordance with
the terms, conditions and provisions as hereinafter set forth in this Promissory ‎Note (this
 “Note”).‎

 

LOAN AGREEMENT. This Note is the “Term Loan Note"
as defined in that certain Second Amended ‎and Restated Loan and Security Agreement (the “Loan
Agreement”) of even date herewith, entered ‎into by and between Borrower and Lender,
as it may be amended from time to time, and is subject ‎to all of the terms and conditions
thereof. All terms not defined herein shall have the same meaning ‎as in the Loan Agreement.
In the event of a conflict between the terms of this Note and the Loan ‎Agreement, the terms
of this Note shall prevail.‎

 

INTEREST RATE. Interest on the outstanding principal
balance of this Note shall be computed and ‎calculated based upon a three hundred sixty (360)-day
year and actual days elapsed and shall ‎accrue at the per annum rate (the “Note Rate”)
equal to the higher of three and three quarters of one ‎percent (3.75%) and one half of one
percent (0.50%) in excess of “The Wall Street Journal Prime ‎Rate”, as the rate
may change from time to time. The Wall Street Journal Prime Rate is and shall ‎mean the variable
rate of interest, on a per annum basis, which is announced and/or published in ‎the Money Rates
Section of The Wall Street Journal from time to time. The Note Rate shall be ‎redetermined
whenever The Wall Street Journal Prime Rate changes. Borrower understands and ‎acknowledges
that the Wall Street Journal Prime Rate is one of Lender’s base rates, and only ‎serves
as a basis upon which effective rates of interest are calculated for loans making reference ‎thereto
and may not be the lowest of Lender’s base rates. If The Wall Street Journal Prime Rate ‎becomes
unavailable during the term of this Note, Lender may designate a substitute index after ‎notice
to Borrower.‎

 

PRINCIPAL AND INTEREST PAYMENTS. Interest shall be due
and payable monthly, in arrears, ‎based upon the actual number of days elapsed for that monthly
period, commencing on February ‎‎28, 2022, and shall continue to be due and payable,
in arrears, on the last day of each and every ‎calendar month thereafter until the Maturity
Date (as hereinafter defined). Borrower understands that ‎Lender is entitled to a minimum interest
charge of $100.00 per month.‎

 

In addition to the monthly payment of interest, above, commencing
on February 28, 2022, and ‎continuing on the last day of each and every calendar month
thereafter until the Maturity Date, ‎Borrower shall pay to Lender monthly installment
payments of principal in an amount based on the ‎then outstanding principal balance
amortized over a twenty-four (24) month period of time.‎

 

     

     

    

 

Whenever increases occur in the Note Rate, Lender, at its option, may
do one or more of the ‎following: (A) increase Borrower’s payments to ensure the Loan
will pay off by the Maturity Date, ‎‎(B) increase Borrower’s payments to cover
accruing interest, (C) increase the number of Borrower’s ‎payments, and/or (D) continue
Borrower’s payments at the same amount and increase Borrower’s ‎final payment.‎

 

Upon the Maturity Date, the entire unpaid obligation outstanding under
this Note, the Loan ‎Agreement, and any other Loan Documents shall become due and payable in
full.‎

 

All payments due hereunder, including payments of principal and/or
interest, shall be made to ‎Lender in United States Dollars and shall be in the form of immediately
available funds acceptable ‎to the holder of this Note.‎

 

APPLICATION OF PAYMENTS. All payments received by Lender
from, or for the account of ‎Borrower, due hereunder shall be applied by Lender, in its sole
and absolute discretion, in the ‎following manner, or in any other order or manner as Lender
chooses:‎

 

	a.‎	First. To pay any and all interest due, owing and accrued;‎
	 
	b.‎	Second. To pay any and all costs, advances, expenses or fees due, owing ‎and payable to Lender, or paid or incurred by Lender,
arising from or out of ‎this Note, the Loan Agreement, and the other Loan Documents; and
	 
	c.	Third. To pay the outstanding principal balance on this Note.‎

 

All records of payments received by Lender shall be maintained at Lender’s
office, and the records ‎of Lender shall, absent manifest error, be binding and conclusive
upon Borrower. The failure of ‎Lender to record any payment or expense shall not limit or otherwise
affect the obligations of ‎Borrower under this Note.‎

 

MATURITY DATE. On January 26, 2023 (“Maturity
Date”), the entire unpaid principal balance, and all ‎unpaid accrued interest thereon,
shall be due and payable without demand or notice. In the event ‎that Borrower does not pay
this Note in full on the Maturity Date then, as of the Maturity Date and ‎thereafter until
paid in full, the interest accruing on the outstanding principal balance hereunder shall ‎be
computed, calculated and accrued on a daily basis at the Default Rate (as hereinafter defined).‎

 

UNPAID INTEREST, CHARGES AND COSTS. Interest, late charges,
costs or expenses that are not ‎received by Lender within ten (10) calendar days from the date
such interest, late charges, costs, or ‎expenses become due, shall, at the sole discretion
of Lender, be added to the principal balance ‎and shall from the date due bear interest at
the Default Rate.‎

 

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HOLIDAY. Whenever any payment to be made under this Note
shall be due on a day other than a ‎Business Day, including Saturdays, Sundays and legal holidays
generally recognized by banks ‎doing business in California, then the due date for such payment
shall be automatically extended to ‎the next succeeding Business Day, and such extension of
time shall in such cases be included in ‎the computation of the interest portion of any payment
due hereunder.‎

 

NO OFFSETS OR DEDUCTIONS. All payments under this Note
shall be made by Borrower without ‎any offset, decrease, reduction or deduction of any kind
or nature whatsoever, including, but not ‎limited to, any decrease, reduction or deduction
for, or on account of, any offset, present or future ‎taxes, present or future reserves, imposts
or duties of any kind or nature, that are imposed or ‎levied by or on behalf of any government
or taxing agency, body or authority by or for any ‎municipality, state or country. If at any
time, present or future, Lender shall be compelled, by any ‎Law, rule, regulation or any other
such requirement which on its face or by its application requires or ‎establishes reserves,
or payment, deduction or withholding of taxes, imposts or duties, to act such ‎that it causes
or results in a decrease, reduction or deduction (as described above) in payment ‎received
by Lender, then Borrower shall pay to Lender such additional amounts, as Lender shall ‎deem
necessary and appropriate, such that every payment received under this Note, after such ‎decrease,
reserve, reduction, deduction, payment or required withholding, shall not be reduced in ‎any
manner whatsoever.‎

 

DEFAULT. Any one or more of the following events or occurrences
shall constitute a default under ‎this Note (hereinafter “Default”):‎

 

	‎(i)‎	Lender does not receive a payment in the amount and within the time and ‎manner as set forth herein; or
	 
	‎(ii)‎	There shall be an Event of Default under the Loan Agreement; or
	 
	‎(iii)‎	There shall be a default under any of the other Loan Documents.‎

 

Upon the occurrence of a Default hereunder, Lender
may, in its sole and absolute ‎discretion, declare the entire unpaid principal balance, together
with all accrued and unpaid interest ‎thereon, and all other amounts and payments due hereunder,
immediately due and payable, without ‎notice or demand.‎

 

DEFAULT RATE. From and after the occurrence of any Default
in this Note whether by non-‎payment, maturity, acceleration, non-performance or otherwise,
and until such Default has been ‎cured, all outstanding amounts under this Note (including,
but not limited to, interest, costs and late ‎charges) shall bear interest at a per annum rate
(“Default Rate”) equal to five percent (5%) over the ‎Note Rate.‎

 

PREPAYMENT. The principal amount of this Note may
be prepaid in whole or in part; provided, ‎however, that written notice of
prepayment is received by Lender concurrently therewith. Any such ‎prepayment shall not
result in a reamortization, deferral, postponement, suspension, or waiver of ‎any and all
principal or other payments due under this Note.‎

 

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LATE CHARGES. Time is of the essence for all payments
and other obligations due under this ‎Note. Borrower acknowledges that if any payment required
under this Note is not received by ‎Lender within ten (10) days after the same becomes due
and payable, Lender will incur extra ‎administrative expenses (i.e., in addition to expenses
incident to receipt of timely payment) and the ‎loss of the use of funds in connection with
the delinquency in payment. Because, from the nature ‎of the case, the actual damages suffered
by Lender by reason of such administrative expenses and ‎loss of the use of funds would be
impracticable or extremely difficult to ascertain, Borrower agrees ‎that five percent (5%)
of the amount of the delinquent payment, together with interest accruing on ‎the entire principal
balance of this Note at the Default Rate, as provided above, shall be the amount ‎of damages
which Lender is entitled to receive upon such breach, in compensation therefor. ‎Therefore,
Borrower shall, in such event, without further demand or notice, pay to Lender, as ‎Lender’s
monetary recovery for such extra administrative expenses and loss of use of funds, ‎liquidated
damages in the amount of five percent (5%) of the amount of the delinquent payment (in ‎addition
to interest at the Default Rate). The provisions of this paragraph are intended to govern ‎only
the determination of damages in the event of a breach in the performance of Borrower to make ‎timely
payments hereunder. Nothing in this Note shall be construed as in any way giving Borrower ‎the
right, express or implied, to fail to make timely payments hereunder, whether upon payment of ‎such
damages or otherwise. The right of Lender to receive payment of such liquidated and actual ‎damages,
and receipt thereof, are without prejudice to the right of Lender to collect such delinquent ‎payments
and any other amounts provided to be paid hereunder or under any of the Loan ‎Documents, or
to declare a default hereunder or under any of the Loan Documents.‎

 

SECURITY AND ACCELERATION. This Note is secured by the
Collateral.‎

 

COSTS AND EXPENSES. Borrower hereby agrees to pay any
and all costs or expenses paid or ‎incurred by Lender by reason of, as a result of, or in connection
with the enforcement of this Note ‎or any other Loan Documents, including, but not limited
to, any and all reasonable attorneys' fees ‎and related costs when such costs or expenses are
paid or incurred in connection with the ‎enforcement of this Note and the other Loan Documents,
or any of them, the protection or ‎preservation of the collateral or security for this Note,
or any other rights, remedies or interests of ‎Lender, whether or not suit is filed. Borrower’s
agreement to pay any and all such costs and ‎expenses includes, but is not limited to, costs
and expenses incurred in or in connection with any ‎bankruptcy proceeding in enforcing any
judgment obtained by Lender and in connection with any ‎and all appeals therefrom, and in connection
with the monitoring of any bankruptcy proceeding and ‎its effect on Lender’s rights and
claims for recovery of the amounts due hereunder, any proceeding ‎concerning relief from the
automatic stay, use of cash collateral, proofs of claim, approval of a ‎disclosure statement
or confirmation of, or objections to confirmation of, any plan of ‎reorganization. All such
costs and expenses are immediately due and payable to Lender by ‎Borrower whether or not demand
therefor is made by Lender.‎

 

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WAIVERS. Borrower hereby waives grace, diligence, presentment,
demand, notice of demand, ‎dishonor, notice of dishonor, protest, notice of protest, any and
all exemption rights against the ‎indebtedness evidenced by this Note and the right to plead
any statute of limitations as a defense ‎to the repayment of all or any portion of this Note,
and interest thereon, to the fullest extent allowed ‎by law, and all compensation of cross-demands
pursuant to California Code of Civil Procedure ‎Section 431.70. No delay, omission or failure
on the part of Lender in exercising any right or remedy ‎hereunder shall operate as a waiver
of such right or remedy or any other right or remedy of Lender.‎

 

MAXIMUM LEGAL RATE. This Note is subject to the express
condition that at no time shall ‎Borrower be obligated, or required, to pay interest on the
principal balance at a rate which could ‎subject Lender to either civil or criminal liability
as a result of such rate being in excess of the ‎maximum rate which Lender is permitted to
charge. If, by the terms of this Note, Borrower is, at any ‎time, required or obligated to
pay interest on the principal balance at a rate in excess of such ‎maximum rate, then the rate
of interest under this Note shall be deemed to be immediately reduced ‎to such maximum rate
and interest payable hereunder shall be computed at such maximum rate and ‎any portion of all
prior interest payments in excess of such maximum rate shall be applied, or shall ‎retroactively
be deemed to have been payments made, in reduction of the principal balance, as the ‎case may
be.‎

 

AMENDMENT; GOVERNING LAW. This Note may be amended, changed,
modified, terminated ‎or canceled only by a written agreement signed by the party against whom
enforcement is ‎sought for any such action. This Note shall be governed by, and construed under,
the Laws of ‎the State of California.‎

 

AUTHORITY. Borrower, and each person executing this Note
on Borrower’s behalf, hereby ‎represents and warrants to Lender that, by its execution
below, Borrower has the full power, ‎authority and legal right to execute and deliver this
Note and that the indebtedness evidenced ‎hereby constitutes a valid and binding obligation
of Borrower without exception or limitation. In ‎the event that this Note is executed by more
than one person or entity, the liability hereunder ‎shall be joint and several. Any married
person who is obligated on this Note, directly or ‎indirectly, agrees that recourse may be
had to such person’s separate property in addition to ‎any and all community property
of such person.‎

 

USA PATRIOT ACT NOTICE. Federal law requires all financial
institutions to obtain, verify and ‎record information that identifies each person who opens
an account or obtains a loan. Lender ‎will ask for Borrower’s legal name, address, tax
ID number or social security number and other ‎identifying information. Lender may also ask
for additional information or documentation or take ‎other actions reasonably necessary to
verify the identity of Borrower, Guarantor or other related ‎persons.‎

 

RIGHT OF SETOFF. To the extent permitted by applicable
Law, Lender reserves a right of ‎setoff in all Borrower's accounts with Lender (whether checking,
savings,, or some other ‎account). This includes all accounts Borrower holds jointly with someone
else and all accounts ‎Borrower may open in the future. However, this does not include any
IRA or Keogh accounts, or ‎any trust accounts for which setoff would be prohibited by Law.

 

Borrower authorizes Lender, to ‎the
extent permitted by applicable Law, to charge or setoff all sums owing on the indebtedness ‎against
any and all such accounts, and, at Lender's option, to administratively freeze all such ‎accounts
to allow Lender to protect Lender's charge and setoff rights provided in this ‎paragraph.‎

 

‎[Signature
page follows]‎

 

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IN WITNESS WHEREOF, Borrower has executed this
Note as of the day and year first ‎above written.‎

 

	BORROWER:‎	 
	 	 
	SNAIL GAMES USA, INC.,
 a California corporation	 
	 	 
	By:	/s/ Jim Tsai	 
	Name:	Jim Tsai	 
	Its:	 Chief Executive Officer	 

 

     6Exhibit 10.4

 

LOAN AGREEMENT

  

SNAIL GAMES USA INC.,

a California corporation, 

 

and

 

CATHAY BANK,

a California banking corporation

  

Dated as of June 17, 2021

 

    

     

    

 

THIS LOAN AGREEMENT (“Agreement”)
is entered into as of June 17, 2021 by and between SNAIL GAMES USA INC., a California corporation (“Borrower”), and
CATHAY BANK, a California banking corporation (“Lender”).

 

1.         DEFINITIONS
AND INTERPRETATIONS.

 

1.1       Definitions.
As used in this Agreement, the following terms have the meanings set forth below. Capitalized terms not defined herein shall have the
meanings set forth in the Code, as defined below.

 

“Account” has the meaning set
forth in Section 9102(a)(2) of the Code.

 

“Account Debtor” means a Person
obligated on an Account, chattel paper or General Intangibles.

 

“Advance” shall mean each advance,
loan and financial accommodation from Lender to Borrower, whether now existing or hereafter arising and however evidenced, including those
advances, loans and financial accommodations described herein or described on any exhibit or schedule attached to this Agreement from
time to time, and shall include the Loan.

 

“Affiliate” means, with respect
to any Person, a relative, partner, shareholder, director, officer, or employee of such Person, or any Parent or subsidiary of such Person,
or any Person controlling, controlled by or under common control with such Person.

 

“Agreement” means this Loan
Agreement, as amended, modified or supplemented from time to time. Each reference herein to “this Agreement,” “this
Loan Agreement” “herein,” “hereunder,” “hereof’ or other like words shall include this Agreement
, and any annex, exhibit or schedule attached hereto or referred to herein.

 

“Agreement To Furnish Insurance”
shall mean the Agreement To Furnish Insurance duly executed by Borrower in form and content as required by Lender and as it may from time
to time be supplemented, modified or amended.

 

“Anti-Money Laundering Laws”
shall mean the USA Patriot Act of 2001, the Bank Secrecy Act, as amended through the date hereof, Executive Order 1 3324-Blocking Property
and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism, as amended through the date hereof, and
other federal laws and regulations and executive orders administered by OFAC which prohibit, among other things, the engagement in transactions
with, and the provision of services to, certain foreign countries, territories, entities and individuals (such individuals include specially
designated nationals, specially designated narcotics traffickers and other parties subject to OFAC sanction and embargo programs), and
such additional laws and programs administered by OFAC which prohibit dealing with individuals or entities in certain countries regardless
of whether such individuals or entities appear on any of the OFAC lists.

 

    

     

    

 

“Appraisal” shall mean an appraisal
of the Property, or any portion thereof, performed and prepared for Lender at Borrower’s sole expense by a duly licensed or certified
appraiser designated by Lender and possessing all qualifications required by Lender and applicable Laws, setting forth the appraiser’s
opinion and determination of the fair market value of the Property; said Appraisal shall be prepared in full narrative form meeting all
requirements and approaches to value as shall be necessary or appropriate in order to comply with all customary and generally accepted
appraisal standards within the appraisal industry and in accordance with Lender’s requirements, and to Lender’s satisfaction
and all applicable Laws governing Lender’s operations.

 

“Assignment of Leases” shall
mean the Absolute Assignment of Leases, Lease Guaranties, Rents, Issues and Profits duly executed and delivered to Lender by Borrower,
assigning to Lender all present and future leases, subleases, rents, and concession rights, if any, and all related rights and interests
of Borrower thereunder, affecting the Property, or any part thereof, and in form and content acceptable to Lender in its sole opinion
and judgment, and shall include delivery to Lender of the executed originals of each of said leases.

 

“Borrower’s Operating Account”
means Borrower’s demand deposit account with Lender, into which substantially all of Borrower’s receipts from its operations
are deposited and from which substantially all of Borrower’s disbursements for its operations are made.

 

“Business Day” means any day
that is not a Saturday, Sunday, or other day on which California banks are authorized or required to close.

 

“Change of Control” shall be
deemed to have occurred at such time as a “person” or “group” (within the meaning of Sections 13(d) and 14(d)(2)
of the Securities Exchange Act of 1934) (other than the current holders of the ownership interests in Borrower) becomes the “beneficial
owner” (as defined in Rule 13d-3 under the Securities Exchange Act of 1934), directly or indirectly, as a result of any single transaction,
of fifty percent (50%) or more, of the total voting power of all classes of stock or other ownership interests then outstanding of Borrower
normally entitled to vote in the election of directors or analogous governing body.

 

“Closing Date” means the date
that all conditions precedent under Section 6.1 of this Agreement are satisfied.

 

“Code” means the Uniform Commercial
Code as adopted and in effect in the State of California, from time to time.

 

“Collateral” shall mean all
real and personal property of Borrower, or others, in which Lender has been and may hereafter be granted a lien, assignment or security
interest to secure payment and performance of Borrower’s obligation under the Loan.

 

“Debt Service Coverage
Ratio” shall mean the ratio of (i) Borrower’s EBITDA, divided by (ii) the aggregate of all interests and the
scheduled payments of principal and interest payable by Borrower to Lender under the Note, and all other scheduled payments of
principal and interest payable by Borrower to Lender under any other notes.

 

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“Deed of Trust” shall mean the
Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing duly executed and acknowledged by Borrower for the benefit of
Lender, to secure the Loan and encumbering the Property and other assets and rights as therein provided, together with all such riders
and exhibits thereto as Lender shall require.

 

“Default” means any event which,
with notice or passage of time or both, would constitute an Event of Default.

 

“Default Rate” shall have the
meaning set forth in Section 3 hereof.

 

“Dollars” or”$”
means United States dollars.

 

“EBITDA” means Net Income before
tax, plus interest expense (net of capitalized income expense), depreciation expense and amortization expense.

 

“Environmental Indemnity” shall
mean that certain Hazardous Substances Indemnity Agreement duly executed by Borrower, as it may from time to time be supplemented, modified
or amended, pursuant to which such parties shall indemnify and defend Lender from and against any loss or liability, direct or indirect,
with respect to the presence or release of any hazardous or toxic material in, on, about or under the Property.

 

“Environmental Laws” shall mean
all federal, state and local environmental, land use, zoning, health, chemical use, safety and sanitation laws, statutes, ordinances and
codes relating to the protection of the environment and/or governing the use, storage, treatment, generation, transportation, processing,
handling, production or disposal of Hazardous Substances and the rules, regulations, policies, guidelines, interpretations, decisions,
orders and directives of federal, state and local governmental agencies and authorities with respect thereto.

 

“Equipment” has the meaning
set forth in Section 9102(a)(33) of the Code and includes, without limitation, all of Borrower’s furniture, fixtures, trade fixtures,
tenant improvements owned by Borrower, all attachments, accessories, accessions, replacements, substitutions, additions or improvements
to any of the foregoing, wherever located.

 

“Event of Default” means any
of the events set forth in Section 10.1 of this Agreement.

 

“Fees and Costs” has the meaning
set forth in Section 11.12 of this Agreement.

 

“GAAP” means generally accepted
accounting principles as in effect from time to time in the United States, applied on a consistent basis, applied both to classification
of items and amounts.

 

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“General Intangibles” has the
meaning set forth in Section 9102(a)(42) of the Code and shall include, without limitation, payment intangibles, all choses in action,
causes of action, corporate or other business records, inventions, designs, drawings, blueprints, patents, patent applications, trademarks
and the goodwill of the business symbolized thereby, names, trade names, trade secrets, goodwill, copyrights, registrations, licenses,
franchises, customer lists, security and other deposits, rights in all litigation presently or hereafter pending for any cause or claim
(whether in contract, tort or otherwise), and all judgments now or hereafter arising therefrom, all claims of Borrower against Lender,
rights to purchase or sell real or personal property, rights as a licensor or licensee of any kind, royalties, telephone numbers, proprietary
information, purchase orders, and all insurance policies and claims (including without limitation, life insurance, key man insurance,
credit insurance, liability insurance, property insurance and other insurance), tax refunds and claims, software, discs, tapes and tape
files, claims under guaranties, security interests or other security held by or granted to Borrower, all rights to indemnification and
all other intangible property of every kind and nature (other than Receivables) .

 

“Governmental Agency” shall
mean any governmental or quasi-governmental agency, authority, board, bureau, commission, department, instrumentality or public body,
court, administrative tribunal, or public utility.

 

“Hazard Insurance Disclosure”
shall mean the Hazard Insurance Disclosure duly executed by Borrower in form and content as required by Lender.

 

“Hazardous Substance” shall
mean, without limitation, any flammable explosives, radon, radioactive materials, asbestos, urea formaldehyde foam insulation, polychlorinated
biphenyls, petroleum and petroleum products, methane, hazardous materials, Hazardous Wastes, hazardous or Toxic Substances or related
materials as defined in CERCLA, the Hazardous Materials Transportation Act, as amended (49 U.S.C. Sections 1801, et seq.), RCRA,
or any other applicable Environmental Law and in the regulations adopted pursuant thereto.

 

“Hazardous Wastes” shall mean
all waste materials subject to regulation under CERCLA, RCRA or applicable state law, and any other applicable Federal and state laws
now in force or hereafter enacted relating to hazardous waste disposal.

 

“Indemnified Person” has the
meaning set forth in Section 10.4(c) of this Agreement.

 

“Inventory” means all of
Borrower’s now owned and hereafter acquired goods, including software embedded in such goods, merchandise or other personal
property, wherever located, to be furnished under any contract of service or held for sale or lease (including without limitation
all raw materials, work in process, finished goods and goods in transit, and, including without limitation, all farm products), and
all materials and supplies of every kind, nature and description which are or might be used or consumed in Borrower’s business
or used in connection with the manufacture, packing, shipping, advertising, selling or finishing of such goods, merchandise or other
personal property, and all warehouse receipts, documents of title and other documents representing any of the foregoing.

 

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“Investment Property” has the
meaning set forth in Section 9102(a)(49) of the Code.

 

“Laws” shall mean, individually
and collectively, all federal, state, and local laws, rules, regulations, ordinances, and codes.

 

“Lender” shall mean Cathay Bank,
a California banking corporation.

 

“Loan” has the meaning set forth
in Section 2.1(a).

 

“Material Adverse Effect” means
a material adverse effect on (i) the business, assets, condition (financial or otherwise) or results of operations of Borrower or any
subsidiary of Borrower, (ii) the ability of Borrower to duly and punctually pay or perform its obligations under this Agreement (including,
without limitation, repayment of the Obligations as they come due), (iii) the value of the Collateral, or Lender’s liens on the
Collateral or the privity of any such lien, or (iv) the validity or enforceability of this Agreement or any other agreement or document
entered into by any party in connection herewith, or the practical realization of the benefits of Lender’s rights or remedies.

 

“Material Litigation” shall
have the meaning set forth in Section 7.10 hereof.

 

“Maturity Date” means June 30,
2031.

 

“Net Income” shall mean, for
any period, the net income of the Borrower as determined in accordance with GAAP.

 

“Note” shall mean the Promissory
Note of Borrower in the amount of the Loan payable to the order of Lender, duly executed by Borrower, as required by Lender to evidence
the Loan, as originally executed and as it may from time to time be supplemented, modified or amended.

 

“Obligations” means all present
and future Advances , loans, overdrafts , debts, liabilities, obligations, including , without limitation, all obligations of Borrower
under any guaranties, covenants, duties and indebtedness at any time owing by Borrower to Lender, whether evidenced by this Agreement
or any note or other instrument or document or the Other Documents, whether arising from an extension of credit, opening of a letter of
credit, banker’s acceptance, trust receipt, loan, overdraft, guaranty, indemnification or otherwise, whether direct or indirect
(including, without limitation, those acquired by assignment and any participation by Lender in Borrower’s debts owing to others),
absolute or contingent, due or to become due, including, without limitation, all interest, charges, expenses, fees, attorneys’ fees
(including attorneys’ fees and expenses incurred in bankruptcy), expert witness fees and expenses, fees and expenses of consultants,
audit fees, letter of credit fees, closing fees, facility fees, termination fees, and any other sums chargeable to Borrower under this
Agreement or the Other Documents.

 

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“OFAC” shall mean the United
States Department of the Treasury, Office of Foreign Assets Control.

 

“OFAC Prohibited Person” shall
mean a country, territory, individual or person (i) listed on, included within or associated with any of the countries, territories, individuals
or entities referred to on The Office of Foreign Assets Control’s List of Specially Designated Nationals and Blocked Persons or
any other prohibited person lists maintained by governmental authorities, or otherwise included within or associated with any of the countries,
territories, individuals or entities referred to in or prohibited by OFAC or any other Anti-Money Laundering Laws, or (ii) which is obligated
or has any interest to pay, donate, transfer or otherwise assign any property, money, goods, services, or other benefits from the property
directly or indirectly, to any countries, territories, individuals or entities on or associated with anyone on such list or in such laws.

 

“Official Body” means any government
or political subdivision or any agency, authority, bureau, commission, court or tribunal whether foreign or domestic.

 

“Other Documents” shall mean
the Note and all other agreements, instruments and documents now or hereafter executed by Borrower and delivered to Lender in respect
of the transactions contemplated by this Agreement.

 

“Parent” means any Person holding
a majority of the equity interest in a corporation or limited liability company.

 

“Permitted Liens” means all
of the following:

 

(a)       liens
in favor of Lender;

 

(b)       purchase
money security interests in specific items of Equipment;

 

(c)       leases
of specific items of Equipment;

 

(d)       liens
for taxes not yet payable;

 

(e)       and
security interests being terminated substantially concurrently with this Agreement;

 

(f)       liens
of materialmen, mechanics, warehousemen, carriers, or other similar liens arising in the ordinary course of business and securing obligations
which are not delinquent.

 

“Permitted Encumbrances” shall
mean only those matters and exceptions to title to the Property, as shown in the preliminary report of title and all supplements thereto,
issued by the Title Company, and approved by Lender, in regard to the Property.

 

“Person” means any
individual, sole proprietorship, general partnership, limited partnership, limited liability partnership, limited liability company,
joint venture, trust, unincorporated organization, association, corporation, government, or any agency or political division
thereof, or any other entity.

 

    7

     

    

 

“Potential Default” means any
event, act or condition which, with notice or lapse of time or both, would constitute an Event of Default.

 

“Property” shall mean the real
property described in Exhibit “A” hereto and in the Deed of Trust and all present and future improvements thereon and appurtenances
thereto.

 

“RCRA” shall mean the Resource
Conservation and Recovery Act, 42 U.S.C. §§ 6901 et seq., as same may be amended from time to time.

 

“Receivables” means all of Borrower’s
now owned and hereafter acquired Accounts, letter of credit rights, license fees, contract rights, chattel paper (including tangible chattel
paper, electronic chattel paper, and intangible chattel paper), instruments (including promissory notes), drafts, securities, documents,
securities accounts, security entitlements, commodity contracts, commodity accounts, Investment Property, supporting obligations and all
other forms of obligations at any time owing to Borrower, all guaranties and other security therefore, all merchandise returned to or
repossessed by Borrower, and all rights of stoppage in transit and all other rights or remedies of an unpaid vendor, lienor or secured
party.

 

“Solvent” means, with respect
to any Person on a particular date, that on such date (a) at fair valuations, all of the properties and assets of such Person are greater
than the sum of the debts, including contingent liabilities, of such Person, (b) the present fair salable value of the properties and
assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they
become absolute and matured, (c) such Person is able to realize upon its properties and assets and pay its debts and other liabilities,
contingent obligations and other commitments as they mature in the normal course of business, (d) such Person does not intend to, and
does not believe that it will, incur debts beyond such Person’s ability to pay as such debts mature, and (e) such Person is not
engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person’s properties
and assets would constitute unreasonably small capital after giving due consideration to the prevailing practices in the industry in which
such Person is engaged. In computing the amount of contingent liabilities at any time, it is intended that such liabilities will be computed
at the amount that, in light of all the facts and circumstances existing at such time, represents the amount that reasonably can be expected
to become an actual or matured liability.

 

“Subordinated Liabilities” means
liabilities subordinated to the Borrower’s obligations to Lender in a manner acceptable to Lender, in its sole discretion.

 

“Subsidiary” of a Person
means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the
shares of securities or other interests having ordinary voting power for the election of directors or other governing (other than
securities or interest having such power only by reason of the happening of a contingency) are at the time beneficially owned, or
the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such
Person.

 

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“Supporting Obligations” has
the meaning set forth in Section 9102(77) of the Code.

 

“Title Company” shall mean the
title insurer designated by Lender, in its sole opinion and judgment, which shall issue the Title Policy.

 

“Title Policy” shall mean an
ALTA Loan Policy (2006 Policy Form), written as such at Loan Closing and issued by the Title Company, with liability equal to the
full amount of the Loan, in favor of Lender, as insured, insuring the lien of the Deed of Trust to be a valid first lien on the Property
subject only to the Permitted Encumbrances. The Title Policy shall have such endorsements thereto as Lender shall require. If required
by Lender, the title insurance coverage will provide for reinsurance.

 

“Toxic Substance” shall mean
and include any material present on any facility of Borrower which has been shown to have significant adverse effect on human health or
which is subject to regulation under the Toxic Substances Control Act (TSCA), 15 U.S.C. §§ 2601 et seq., applicable state
law, or any other applicable Federal or state laws now in force or hereafter enacted relating to toxic substances. “Toxic Substance”
includes but is not limited to asbestos, polychlorinated biphenyls (PCBs) and lead-based paints.

 

1.2       Accounting
Terms and Determinations. Unless otherwise specified herein, all accounting terms used in this Agreement, unless otherwise indicated
, shall have the meanings given to such terms in accordance with GAAP. In addition, unless otherwise specified herein all accounting terms
used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered
hereunder shall be prepared in accordance with GAAP. All other terms contained in this Agreement, unless otherwise indicated, shall have
the meanings provided by the Code, to the extent such terms are defined therein.

 

1.3       Construction.
Unless the context of this Agreement clearly requires otherwise, references to the plural include the singular and references to the singular
include the plural; references to any gender include any other gender; the part includes the whole; the term “including” is
not limiting, and the term “or’’ has, except where otherwise indicated, the inclusive meaning represented by the phrase
 “and/or”. The words, “hereof,” “herein,” “hereby,” “hereunder,” and similar
terms in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement. Article, section, subsection,
clause, exhibit and schedule references are to this Agreement , unless otherwise specified. Any reference in this Agreement or any of
the Other Documents to this Agreement or any of the Other Documents includes any and all permitted alterations, amendments , changes,
extensions, modifications, renewals, or supplements thereto or thereof, as applicable.

 

    9

     

    

 

1.4       Exhibits
and Schedules. All of the exhibits and schedules attached hereto shall be deemed incorporated herein by reference.

 

1.5       No
Presumption Against Any Party. Neither this Agreement, any of the Other Documents, any other documents, agreement, or instrument entered
into in connection herewith, nor any uncertainty or ambiguity herein or therein shall be construed or resolved using any presumption against
any party hereto, whether under any rule of construction or otherwise. On the contrary, this Agreement, the Other Documents, and all other
documents, instruments, and agreements entered into in connection herewith have been reviewed by each of the parties and by their respective
counsel and shall be construed and interpreted according to the ordinary meanings of the words used so as to accomplish fairly the purposes
and intentions of all parties hereto.

 

1.6       Independence
of Provisions. All agreements and covenants hereunder, under the Other Documents and the other documents, instruments, and agreements
entered into in connection herewith shall be given independent effect such that if a particular action or condition is prohibited by the
terms of any such agreement or covenant, the fact that such action or condition would be permitted within the limitations of another agreement
or covenant shall not be construed as allowing such action to be taken or condition to exist.

 

2.        CREDIT
FACILITIES.

 

2.1       Term
Loan. Subject to the terms and conditions of this Agreement, Lender shall make a term loan to Borrower in the principal sum of Three
Million and No/100 Dollars ($3,000,000.00) (the “Loan”).

 

(a)       Interest
and principal payments under the Loan shall be due and payable to Lender pursuant to the provisions of the Note.

 

2.2       Use
of Proceeds. All Advances made to or for the benefit of Borrower shall be used solely to refinance Borrower’s existing indebtedness
secured by the Property. Lender shall have no obligation to monitor or verify the use or application of any Advance disbursed by Lender.

 

(a)       Borrower
shall not, directly or indirectly, use all or any part of any Advance for the purpose of purchasing or carrying any margin stock within
the meaning of Regulation U of the Board of Governors of the Federal Reserve System (the “Board of Governors”) or to extend
credit to any Person for the purpose of purchasing or carrying any such margin stock or for any purpose which violates or is inconsistent
with Regulation X of the Board of Governors, unless such use has been expressly approved in writing by Lender, in its discretion.

 

2.3       Manner
of Payment. Except as expressly provided herein, all payments (including prepayments) to be made by Borrower on account of principal,
interest and fees shall be made without set off or counterclaim and shall be made to Lender in each case on or prior to 12:00 p.m., Los
Angeles time, in Dollars and in immediately available funds.

 

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3.       INTEREST.

 

3.1       Interest
Rate. The Loan shall bear interest at the rate as set forth in the Note (“Contract Rate”).

 

3.2       Default
Interest. Upon the occurrence and during the continuance of an Event of Default, Borrower shall pay interest on the unpaid principal
amount of each Advance or other Obligation owing to Lender and on the unpaid amount of all interest, fees and other amounts payable hereunder
that is not paid when due, payable on demand by Lender, at a rate per annum (the “Default Rate”) equal at all times
to five percent (5%) per annum above the Contract Rate.

 

4.       PAYMENT
OF OBLIGATIONS.

 

4.1       Maturity
Date. On the Maturity Date, Borrower shall pay and perform in full the entire principal balance of the Loan and all other Obligations,
whether for interest, costs, fees or otherwise.

 

4.2       Manner
of Payment. Principal and interest payments due under the Note and all other Obligations shall be withdrawn from Borrower’s
Operating Account with Lender, or such other account with Lender as designated in writing by Borrower. In the event that Borrower’s
Operating Account with Lender contains insufficient funds to make any payments under this Agreement, Borrower shall remit such payment
from Borrower’s own funds.

 

4.3       Late
Charge. If any payment due hereunder is not received or made within ten (10) days of the due date or there are insufficient funds
in Borrower’s Operating Account on the date Lender enters any debit authorized by this Agreement , without limitation, Lender’s
other remedies in such an event, Lender shall apply a late charge in an amount equal to five percent (5%) of the unpaid portion of the
scheduled payment or $35.00, whichever is less.

 

4.4       Loan
Fees. On the Closing Date, Borrower agrees to pay to Lender, from Borrower’s own funds, for the benefit of Lender, a loan fee
in the amount of $6,000. The loan fee shall be deemed fully earned when paid, and therefore, is nonrefundable.

 

5.       SECURITY
INTERESTS.

 

5.1       Grant
of Interest. To secure the payment and performance of all of the Obligations under Loan, as and when due, Borrower hereby grants to Lender
for the benefit of Lender a first priority security interest in all Collateral pursuant to the Deed of Trust.

 

5.2       Perfection.
Lender may file one or more financing statements disclosing Lender’s security interest in the Collateral. Borrower agrees that
a photographic, photostatic or other reproduction of this Agreement or of a financing statement is sufficient as a financing
statement. Borrower approves, authorizes and ratifies any filings or recordings made by or on behalf of Lender in connection with
the perfection and continuation of Lender’s security interest with respect to the Collateral.

 

    11

     

    

 

(a)       Lender
may file UCC-1 financing statements against specific items of Equipment, (or amend existing UCC-1 financing statements) in Lender’s
sole discretion, and Borrower agrees to furnish to Lender sufficient identifying information, such as make, model and serial numbers,
as Lender may request. Lender may also file a fixture filing in the real property records of the applicable county in California, to perfect
its security interest in such items of Equipment as are or become fixtures.

 

(b)       Upon
demand, Borrower will deliver to Lender such other items of Collateral or will execute such documents as are appropriate to grant Lender
possession or control of such Collateral as necessary to further perfect Lender’s security interest therein.

 

6.       CONDITIONS
PRECEDENT.

 

6.1       Conditions
to Loan Closing. The Loan will close if, and only if, on or before ________, 2021, subject to the satisfaction, in the sole discretion
of Lender, of each, every and all of the following conditions:

 

(a)       Accuracy
of Representations and Warranties: No Default. The representations and warranties contained in Sections 7 and 8 below shall have been
true and correct when made and shall be true and correct on and as of the Closing Date; and on the Closing Date, no Event of Default and
no Potential Default shall have occurred and be continuing.

 

(b)       Documents
and Agreements. Borrower shall deliver to Lender the following documents, in form and substance satisfactory to Lender, in its sole
and absolute discretion:

 

(i)       An
executed original of this Agreement;

 

(ii)      The
Note, fully executed;

 

(iii)     The
Deed of Trust, fully executed;

 

(iv)     The
Assignment of Leases, fully executed;

 

(v)      The
Environmental Indemnity , fully executed;

 

(vi)     [Reserved]

 

(vii)    Agreement
to Furnish Insurance, fully executed;

 

(viii)   Hazard
Insurance Disclosure, fully executed;

 

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(ix)       A
Corporate Resolution to Borrow for Borrower, fully executed;

 

(x)       An
Appraisal of the Property, satisfactory in all respects to Lender, in Lender’s sole opinion and judgment;

 

(xi)       The
Title Policy or evidence of a commitment therefor. The exceptions contained in the Title Policy and all matters concerning the Property
and the operation thereof must be approved by Lender and, among other provisions, shall show no blanket exceptions for anything a survey
would show; and

 

(xii)       Such
other documents, instruments and information as Lender shall require.

 

(c)       Priority
of Lender’s Liens. Lender shall have received the results of “of record” searches satisfactory to Lender in its
sole and absolute discretion, reflecting its Uniform Commercial Code filing against Borrower indicating that Lender has a perfected, first
priority lien in and upon all of the Collateral, subject only to such Permitted Liens which are also permitted to be senior to the lien
of Lender.

 

(d)       Insurance.
Lender shall have received copies of the insurance binders or certificates evidencing Borrower’s compliance with Section 9.2 of
this Agreement , including lender’s loss payee endorsements.

 

(e)       Organizational
Documents. Lender shall have received copies of Borrower’s articles of incorporation or articles of organization, as applicable,
and all amendments thereto, and a certificate of good standing (each certified by the California Secretary of State, and dated a recent
date prior to the Closing Date), and Lender shall have received Certificates of Foreign Qualification for Borrower from the Secretary
of State of each state wherein the failure to be so qualified could have a Material Adverse Effect.

 

(f)       Certified
Resolutions/Authorizations. Lender shall have received (i) copies of Borrower’s by-laws or operating agreement, as applicable,
and all amendments thereto, and (ii) copies of the resolutions of the board of directors of Borrower authorizing the execution and delivery
of this Agreement, and the other documents contemplated hereby, and authorizing the transactions contemplated hereunder and thereunder,
and authorizing specific officers or managers of Borrower to execute the same on behalf of Borrower certified by the Secretary or other
acceptable officer, or the manager, as applicable, of Borrower as of the Closing Date.

 

(g)       [Reserved].

 

(h)       Third
Party Custody. In the event that any Collateral is in the possession of a third party, Borrower shall join with Lender in notifying
such third party of Lender’s security interest and obtaining an acknowledgement from such third party that it is holding such Collateral
for the benefit of Lender.

 

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(i)       Permits
and Approvals. Verification and approval of all permits, approvals and authorizations required to pledge the Collateral to Lender.

 

(j)       Fees.
Borrower shall have paid all Fees and Costs payable by Borrower hereunder, including legal fees and costs incurred by Lender in connection
with the preparation, negotiation and closing of this Agreement.

 

(k)       Borrower’s
Financial Statements. Review and approval of Borrower’s latest year to date month-end internally prepared consolidated financial
statements and tax returns (with all forms K-1 attached), together with the similar dated aged accounts receivable and inventory reports,
and any other financial statements and reports as required by Lender.

 

(I)       [Reserved].

 

(m)       Field
Audit. An auditor selected by Lender shall have completed a field audit verifying Borrower’s methodology and valuation of the
Accounts, Inventory and other Collateral of Borrower, in Lender’s sole opinion and judgment.

 

(n)       Other
Documents and Agreements . Lender shall have received such other agreements, instruments and documents as Lender may require in connection
with the transactions contemplated hereby, all in form and substance satisfactory to Lender in Lender’s sole and absolute discretion,
and in form for filing in the appropriate filing office, including, but not limited to, those documents listed in Section 6.1(c).

 

7.       REPRESENTATIONS,
WARRANTIES AND COVENANTS OF BORROWER. In order to induce Lender to enter into this Agreement and to make the Advance, Borrower represents
and warrants to Lender as follows, and Borrower covenants that the following representations will continue to be true, and that Borrower
will at all times comply with all of the following covenants:

 

7.1       State
of Organization, Existence and Authority. Borrower is and will continue to be, a corporation, duly incorporated, validly existing
and in good standing under the laws of the State of California. Borrower has all requisite corporate power and authority to own and operate
its properties and to carry on its business as now conducted and as presently planned to be conducted. Borrower is and will continue to
be qualified and licensed to do business in California and all jurisdictions in which any failure to do so would have a Material Adverse
Effect.

 

(a)       Borrower
is not in violation of any term of any of its organizational documents, agreement or instrument to which Borrower is a party or by which
it or any of its properties (now or hereafter acquired) may be bound (except for violations which in the aggregate do not have a Material
Adverse Effect).

 

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(b)       The
execution, delivery and performance by Borrower of this Agreement , and all other documents contemplated hereby, and the creation of
the lien granted under this Agreement: (i) have been duly and validly authorized, (ii) create legal, valid and binding obligations
of Borrower enforceable against Borrower in accordance with their terms (except as enforcement may be limited by equitable
principles and by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to creditors’ rights generally),
(iii) do not violate Borrower’s articles or certificate of incorporation, or Borrower’s by-laws, or any law which is
binding upon Borrower or its property, (iv) do not constitute a breach of, or grounds for acceleration of, any material indebtedness
or obligation under any material agreement or instrument which is binding upon Borrower or its property and (v) do not require any
consent, approval, license exemption or other action by any Official Body or any other person or entity except such as have already
been given or shall be obtained on or before the Closing Date.

 

7.2       Name;
Trade Names and Styles. The name of Borrower set forth in the heading to this Agreement is its correct name. All prior names of Borrower
and all of Borrower’s present and prior trade names are listed on Exhibit “B’’ attached hereto. Borrower shall
give Lender thirty (30) days’ prior written notice before changing its name or doing business under any other trade name. Borrower
has complied, and will in the future comply, with all laws relating to the conduct of business under a fictitious business name.

 

7.3       Place
of Business; Location of Collateral. Borrower’s address set forth in Section 12.4 hereof is the address and location of Borrower’s
chief executive office. In addition, Borrower has places of business and tangible Collateral located only at the locations set forth on
Exhibit “C” attached hereto. Borrower will give Lender at least thirty (30) days’ prior written notice before opening
any additional place of business, changing its chief executive office, or moving any of the Collateral to a location other than Borrower’s
address set forth in Section 12.4 or one of the locations set forth on Exhibit “C” hereto.

 

7.4       Title
to Collateral; Permitted Liens. Borrower is now, and will at all times in the future, be the sole owner of all the Collateral. Borrower
has rights in and the power to transfer the Collateral. The Collateral is now, and will remain, free and clear of any and all liens, charges,
security interests , encumbrances and adverse claims, except for Permitted Liens. Lender has now, and will continue to have, a first-priority
perfected and enforceable security interest in all of the Collateral, subject only to the Permitted Liens which are also permitted to
be senior to the lien of Lender, and Borrower will at all times defend Lender and the Collateral against all claims of others. Borrower
is not and will not become a lessee under any real property lease which does, or will, prohibit, restrain, impair Borrower’s right
to remove any Collateral from the leased premises. Borrower will keep in full force and effect, and will comply with all the terms of,
any lease of real property where any of the Collateral now or in the future may be located.

 

7.5       Maintenance
of Collateral. Borrower will maintain the Collateral consisting of Equipment in good working condition, and Borrower will not use
the Collateral for any unlawful purpose. Borrower will immediately advise Lender in writing of any material loss or damage to the Collateral.

 

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7.6       Books
and Records. Borrower has maintained and will maintain at Borrower’s Address complete and accurate books and records, comprising
an accounting system in accordance with GAAP.

 

7.7       Financial
Condition, Statements and Reports. All financial statements now or in the future delivered to Lender have been, and will be, prepared
in conformity with GAAP (except, in the case of unaudited financial statements, for the absence of footnotes and subject to normal year-end
adjustments) and now and in the future will fairly reflect the financial condition of Borrower, at the times and for the periods therein
stated. Between the last date covered by any such statement provided to Lender and the date hereof, there has been no Material Adverse
Effect. Borrower is now and will continue to be Solvent.

 

7.8       Tax
Returns and Payments; Pension Contributions. Borrower has timely filed, and will timely file, all tax returns and reports required
by foreign, federal, state and local law; and Borrower has timely paid, and will timely pay, all foreign, federal, state and local taxes,
assessments, deposits and contributions now or in the future owed by Borrower. As of the date hereof, Borrower is unaware of any claims
or adjustments proposed for any of Borrower’s prior tax years which could result in additional taxes becoming due and payable by
Borrower. To the best of Borrower’s knowledge, Borrower has paid, and shall continue to pay all amounts necessary to fund all present
and future pension, profit sharing and deferred compensation plans in accordance with their terms; and Borrower has not and will not withdraw
from participation in, permit partial or complete termination of, or permit the occurrence of any other event with respect to, any such
plan which could result in any liability of Borrower, including any liability to the Pension Benefit Guaranty Corporation or its successors
or any other Governmental Agency.

 

7.9       Violation
of Laws. There are no violations or notices of violations of any Laws relating to any of the Collateral.

 

7.10       Litigation.
There is no claim, suit, litigation, proceeding or investigation, pending, or to the best of Borrower’s knowledge, threatened by
or against or affecting Borrower in any court or before any Governmental Agency (or any basis therefore known to Borrower) which if
adversely determined against Borrower would result, either separately or in the aggregate, in a Material Adverse Effect (collectively,
the “Material Litigation”). Borrower will promptly inform Lender in writing of any Material Litigation.

 

7.11       No
Default. No event has occurred and is continuing and no condition exists which constitutes an Event of Default or Potential Default.

 

7.12       No
Advice. Borrower is not relying on Lender or Lender’s agents, consultants or attorneys as to the legal sufficiency, legal effect
or tax consequences of this Agreement or the acquisition of assets relating hereto (if applicable).

 

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7.13       Compliance
with Zoning Ordinances and Similar Laws. The Property complies with all applicable Laws and all permits and approvals issued
thereunder, affecting the Property, the sale, operation, leasing or financing of the Property and the intended occupancy, use and
enjoyment of the Property, including, but not limited to, applicable subdivision Laws, licenses and permits, building codes, zoning
ordinances, flood disaster, environmental protection and equal employment regulations and appropriate supervising boards of fire
underwriters and similar agencies. Borrower shall not seek, make or consent to any change in the zoning, conditions of use,
or any other applicable land use permits, approvals or regulations pertaining to the Property, or any portion thereof, which would
constitute a violation of the warranties and representations herein contained, or would change the nature of the use or occupancy of
the Property.

 

7.14       Availability
of Utilities. All utility services necessary for the proper operation of the Property for its intended purposes are available at the
Property.

 

Condition of Property. The Property is not now damaged or injured
as a result of any fire, explosion, accident, flood, or other casualty, nor subject to any action in eminent domain or any condemnation
proceeding.

 

Brokerage Commissions. No brokerage commissions are or will
be owed by Borrower in connection with the Loan, or if there are commissions due or payable, the same will be paid by Borrower. Borrower
agrees to and shall indemnify and hold harmless Lender from all liability, claims, or losses arising by reason of any such brokerage commissions
related to any or all acts of Borrower in connection with the Loan. This provision shall survive the repayment of the Loan and shall continue
in full force and effect so long as the possibility of such liability, claims or losses exists.

 

Access. The Property fronts on a publicly maintained road or
street and has both legal and practical access to the same.

 

Subordinate Financing and Leases. Borrower will not, without
the prior written consent of Lender, cause there to be deeds of trust, mortgages, security agreements, liens or encumbrances on the Property
or any portion thereof or interest therein. Borrower will not, without the prior written consent of Lender, enter into a lease for all
or any portion of the Property.

 

Air Rights. Borrower has not and will not transfer, assign,
convey, hypothecate or encumber any of the air rights pertaining to the Property.

 

Compliance with Environmental Laws. Borrower will not use,
store, manufacture, generate, transport to or from, or dispose of any toxic substances, hazardous materials, hazardous wastes,
radioactive materials, flammable explosives, or related material on or in connection with any property or the business of Borrower
on any property. Borrower will not permit any lessee on any property to use, store, manufacture, generate, transport to or from, or
dispose of any toxic substances, hazardous materials, hazardous waste , radioactive materials, flammable explosives or related
material on or in connection with any property or the business on any property. (‘Toxic substances,” “hazardous
materials,” and “hazardous waste” shall include, but not be limited to, such substances, materials and wastes
which are or become regulated under applicable Laws or which are classified as hazardous or toxic under applicable Laws.)

 

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Continuing Warranties. Borrower’s representations and
warranties set forth in this Agreement shall be true and correct at the time of execution of this Agreement and as of the Closing Date
and shall survive the Closing Date and shall remain true and correct as of the date given.

 

8.       RECEIVABLES/
ACCOUNTS.

 

8.1       Representations
Relating to Documents and Legal Compliance. Borrower represents and warrants to Lender as follows:

 

(a)       All
statements made and all unpaid balances appearing in all invoices, instruments and other documents evidencing the Accounts are and shall
be true and correct in all material respects and all such invoices, instruments and other documents and all of Borrower’s books
and records are and shall be genuine and in all respects what they purport to be.

 

(b)       All
sales and other transactions underlying or giving rise to each Account shall fully comply with all applicable laws and governmental rules
and regulations.

 

(c)       All
documents, instruments , and agreements relating to all Accounts are and shall be legally enforceable in accordance with their terms.

 

9.       ADDITIONAL
COVENANTS OF THE BORROWER.

 

9.1       Financial
and Other Covenants. Borrower shall at all times comply with the following covenants:

 

(a)       Operating
Account. Borrower shall, so long as any Advance remains unpaid and any commitment to make any Advance remains outstanding, maintain
Borrower’s Operating Account with Lender.

 

(b)       [Reserved]

 

(c)       Minimum
Debt Service Coverage Ratio. Borrower shall maintain a minimum Debt Service Coverage Ratio of at least 1.50 to 1.00, which shall be
measured quarterly, beginning with the calendar quarter ending March 31, 2020.”

 

(d)       [Reserved]

 

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9.2       Insurance.
Borrower shall, at all times, insure all of the tangible personal property Collateral and carry such other business insurance, with
insurers reasonably acceptable to Lender, in such form and amounts as Lender may reasonably require (including, without limitation,
credit insurance) , and Borrower shall provide evidence of such insurance to Lender, so that Lender is satisfied that such insurance
is, at all times, in full force and effect. All liability insurance policies of Borrower with respect to the Collateral shall name
Lender as an additional insured, and all property, casualty and related insurance policies of Borrower with respect to the
Collateral shall name Lender as a loss payee thereon and Borrower shall cause the issuance of a lender’s loss payee
endorsement in form reasonably acceptable to Lender. Upon receipt of the proceeds of any such insurance, Lender, at its sole option,
either (i) shall apply such proceeds to the prepayment of the Obligations in such order or manner as Lender may elect, or (ii) shall
disburse such proceeds to Borrower for application to the cost of repairs, replacements, or restorations. All repairs, replacements
or restorations shall be effected with reasonable promptness and shall be of a value at least equal to the value of the items or
property destroyed prior to such damage or destruction. Lender may require reasonable assurance that the insurance proceeds so
released will be so used. If Borrower fails to provide or pay for any insurance, Lender may, but is not obligated to, obtain the
same at Borrower’s expense. Borrower shall give Lender no less than thirty (30) days written notice of any cancellation of any
insurance required hereunder and shall promptly forward any Notice of Cancellation it receives from any of its insurers.

 

9.3       Reports.
Borrower, at its expense, shall provide Lender with the written reports set forth below, (all in form, substance and detail satisfactory
to Lender) by the dates specified:

 

(a)       As soon
as available, and in no event later than one hundred fifty (150) days after the end of Borrower’s fiscal year, commencing with the
fiscal year ending December 31, 2020, Borrower shall deliver to Lender annual consolidated financial statements of Borrower audited by
an independent certified public accountant acceptable to Lender.

 

(b)       Commencing
with the 2020 tax year, as soon as available, and in no event later than 30 days after filing, Borrower shall deliver to Lender true and
correct copies of Borrower’s Federal income tax returns (including all schedules and attachments) of Borrower (and copies of any
filing extensions) prepared by an independent certified public accountant acceptable to Lender.

 

(c)       Borrower
shall, during normal business hours, from time to time upon two (2) Business Days’ prior notice as frequently as Lender
reasonably determines to be appropriate, but in no event less than once each year: (a) provide Lender and its officers, employees
and agents access to its properties, facilities, advisors, officers and employees of Borrower and to the Collateral of Borrower, and
(b) permit Lender and any of its officers, employees and agents, to inspect, audit and make extracts from Borrower’s books and
records. Borrower shall, during normal business hours, from time to time upon two (2) Business Days’ prior notice permit
Lender and its officers, employees and agents, to inspect, review, evaluate and make test verifications and counts for the Accounts,
Inventory and other Collateral of Borrower. If an Event of Default has occurred and is continuing, Borrower shall provide such
access to Lender at all times and without advance notice. Furthermore, so long as any Event of Default has occurred and is
continuing, Borrower shall provide Lender with access to each of its suppliers and customers. Borrower shall make available to
Lender and its counsel reasonably promptly originals or copies of all books and records that Lender may reasonably request. Borrower
shall delivery any document or instrument necessary for Lender as it may from time to time reasonably request, to obtain records
from any service bureau or other Person that maintains records for Borrower, and shall maintain duplicate records or supporting
documentation on media, including computer tapes and discs owned by Borrower. Lender will give Borrower at least two (2) days’
prior written notice of regularly scheduled audits.

 

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(d)       Promptly
upon Lender’s request, such other books, records, statements, lists of property and accounts, budgets, forecasts or reports as to
Borrower as Lender may reasonably request.

 

9.4       Information.
Borrower shall also furnish, or cause to be furnished, to Lender such additional information as Lender may from time to time reasonably
request concerning Borrower’s business, and/or financial condition, or any item of Collateral.

 

(a)       Promptly
upon Borrower becoming aware of any Event of Default or Potential Default, Borrower shall give Lender notice thereof, together with a
written statement setting forth the nature thereof and the steps which Borrower has taken or is taking to cure the same.

 

(b)       Promptly
upon Borrower becoming aware thereof, Borrower shall give Lender written notice of: (i) any Material Adverse Effect and (ii) the commencement
or existence of any proceeding by or before any Official Body against or affecting Borrower which is reasonably likely to be adversely
determined and, if adversely decided, would have a Material Adverse Effect.

 

9.5       Access
to Books and Records and Collateral. Borrower agrees to reimburse Lender immediately upon demand for all fees and out-of-pocket expenses
for field exams and audits incurred a the result of the occurrence of an Event of Default which is continuing.

 

(a)       Borrower
will not enter into any agreement with any accounting firm, service bureau or third party to store Borrower’s books or records at
any location other than the location identified in Section 11.4 hereof without first notifying Lender of the same and obtaining the written
agreement from such accounting firm, service bureau or other third party to give Lender the same rights with respect to access to books
and records and related rights as Lender has under this Agreement.

 

9.6       Negative
Covenants. Borrower shall not, without Lender’s prior written consent, do any of the following:

 

(a)       create,
incur, assume or permit to exist any indebtedness or liabilities resulting from borrowings, guaranties, leasing, loans or advances, whether
secured or unsecured, matured or Un-matured, liquidated or unliquidated, direct or contingent, joint or several, except the liabilities
of Borrower to Lender, and any other liabilities of Borrower existing as of, and disclosed to Lender prior to, the date of this Agreement
;

 

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(b)       loan,
invest in, or advance money or assets to any other person, enterprise or entity other than any loan, investment or advance to Borrower’s
affiliates and subsidiaries;

 

(c)       purchase,
create or acquire any interest in any other enterprise or entity other than any purchase, creation or acquisition of interests in Borrower’s
affiliates and subsidiaries;

 

(d)       incur
any obligation as surety or guarantor other than in the ordinary course of business;

 

(e)       use
any of the proceeds extended pursuant to this Agreement except for the purposes stated in this Agreement and related documents;

 

(f)       merge
or consolidate with another entity;

 

(g)       make
any substantial change in the nature of Borrower’s business as conducted as of the date hereof;

 

(h)       acquire
all or substantially all of the assets of any other entity;

 

(i)       sell,
transfer, assign, lease, license, or dispose of, all or a substantial or material portion of Borrower’s assets, except in the ordinary
course of its business;

 

(j)       mortgage,
pledge, grant or permit to exist a security interest in, or lien upon, all or any portion of Borrower’s assets owned as of the date
of this Agreement or hereafter acquired, or accelerate payment on any existing debt, except any of the foregoing in favor of Lender or
which is existing as of, and disclosed to Lender in writing prior to, the date of this Agreement;

 

(k)       make
any change in Borrower’s capital structure which would have a Material Adverse Effect;

 

(I)       dissolve
or elect to dissolve;

 

(m)       change
the state of its incorporation;

 

(n)       change
its legal name; or

 

(o)       use
the loan proceeds for any purpose other than as set forth in this Agreement.

 

Transactions permitted by the foregoing provisions of this Section
are only permitted if no Potential Default or Event of Default is continuing or would occur as a result of such transaction.

 

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9.7       Litigation
Cooperation. Borrower shall promptly inform Lender in writing of any proceedings (whether or not purportedly on behalf of Borrower)
against Borrower involving an amount in excess of $150,000.00. Should any third-party suit or proceeding be instituted by or against Lender
with respect to any Collateral or relating to Borrower, Borrower shall, without expense to Lender, make available Borrower and its officers,
employees and agents and Borrower’s books and records, to the extent that Lender may deem them reasonably necessary in order to
prosecute or defend any such suit or proceeding.

 

9.8       Further
Assurances. Borrower agrees, at its expense, on request by Lender, to execute all documents and take all actions, as Lender, may deem
reasonably necessary or useful in order to perfect and maintain Lender’s perfected security interest in the Collateral, and in order
to fully consummate the transactions contemplated by this Agreement.

 

9.9       Operating
Account. Until such time as all of Borrower’s Advances have been paid in full and this Agreement has been terminated, Borrower
agrees to maintain Borrower’s Operating Account with Lender. Borrower authorizes Lender to automatically deduct all payments required
to be made by this Agreement from Borrower’s Operating Account.

 

9.10       Field
Audits .

 

Borrower shall permit Lender, on ten (10)
Business Days’ prior notice, to conduct a field audit of Borrower verifying Borrower’s methodology and valuation of the
Accounts, Inventory and other Collateral of Borrower, performed by an agent designated by Lender, all to the satisfaction of Lender
in its sole opinion and judgment. In addition, Borrower shall, during normal business hours, from time to time upon ten (10)
Business Days prior notice: (a) provide Lender and any of its officers, employees and agents access to its properties, facilities,
advisors, officers and employees of Borrower and to the Collateral of Borrower, and (b) permit Lender and any of its officers,
employees and agents to inspect, audit and make extracts from Borrower’s books and records. Borrower shall, during normal
business hours, from time to time upon one (1) Business Days prior notice, permit Lender, and its officers, employees and agents, to
inspect, review, evaluate and make test verifications and counts for the Accounts, Inventory and other Collateral of Borrower. If an
Event of Default has occurred and is continuing, Borrower shall, at Borrower’s expense, provide such access to Lender at all
times and without advance notice. Furthermore, so long as any Event of Default has occurred and is continuing, Borrower shall
provide Lender with access to each of its suppliers and customers. Borrower shall reasonably promptly make available to Lender and
its counsel originals or copies of all books and records that Lender may reasonably request. Borrower shall deliver any document or
instrument necessary for Lender as it may from time to time reasonably request, to obtain records from any service bureau or other
Person that maintains records for Borrower, and shall maintain duplicate records or supporting documentation on media, including
computer tapes and discs owned by Borrower. Lender will give Borrower at least ten (10) Business Days’ prior written notice of
regularly scheduled field audits. Borrower shall reimburse Lender for any cost incurred for such field audits. Unless an Event of
Default has occurred, Borrower shall be responsible for the cost of any such audit one (1) time each year and, in no event, at a
cost not to exceed $3,000.00. Borrower hereby authorized Lender to debit (without offset) any such cost from Borrower’s
Operating Account. In the event that Lender deems the results of any such audit to be unsatisfactory, in Lender’s sole
opinion and judgment, then in such event, Lender may declare an Event of Default.

 

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9.11       Terrorism
and Anti-Money Laundering. Borrower warrants and agrees as follows:

 

(a)       As of
the date hereof and throughout the term of the Loan until the Maturity Date and the repayment in full of the Obligations, (i) Borrower;
(ii) any Person controlling or controlled by Borrower; (iii) if Borrower is a privately held entity, any Person having a beneficial interest
in Borrower; or (iv) any Person for whom Borrower is acting as agent or nominee in connection with this transaction, is not an
OFAC Prohibited Person.

 

(b)       To comply
with applicable U.S. Anti-Money Laundering Laws and regulations, all payments by Borrower to Lender or from Lender to Borrower will only
be made in Borrower’s name and to and from a bank account of a bank based or incorporated in or formed under the laws of the United
States or a bank that is not a “foreign shell bank” within the meaning of the U.S. Bank Secrecy Act (31 U.S.C. § 5311
et seq.), as amended, and the regulations promulgated thereunder by the U.S. Department of the Treasury, as such regulations may be amended
from time to time.

 

(c)       To provide
Lender at any time and from time to time during the term of the Loan until the Maturity Date and the repayment in full of the Obligations
with such information as Lender determines to be necessary or appropriate to comply with the Anti-Money Laundering Laws and regulations
of any applicable jurisdiction , or to respond to requests for information concerning the identity of Borrower, any Person controlling
or controlled by Borrower or any Person having a beneficial interest in Borrower, from any governmental authority, self-regulatory organization
or financial institution in connection with its anti-money laundering compliance procedures, or to update such information.

 

(d)       The
representations and warranties set forth in this Section 9.11 shall be deemed repeated and reaffirmed by Borrower as of each date that
Borrower makes a payment to Lender under this Agreement and the Other Documents or receives any payment from Lender. Borrower agrees promptly
to notify Lender in writing should Borrower become aware of any change in the information set forth in these representations.

 

9.12       Payment
of Taxes

 

Borrower shall pay, or cause to be paid, and
discharge, or cause to be discharged, (a) before delinquency all taxes , assessments, and governmental charges or levies imposed
upon it, upon its income or profits, or upon any property belonging to it (including, without limitation, the Property); (b) when
due all lawful claims, which, if unpaid, might become a lien, charge or encumbrance upon any of its assets or property (including,
without limitation, the Property); and (c) all its other obligations and indebtedness when due.

 

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9.13       Insurance.

 

Borrower shall obtain and at all times maintain
liability insurance in amount, form and issued by a company or companies satisfactory to Lender, as required under the Deed of Trust and/or
the Agreement To Furnish Insurance.

 

9.14       Maintenance
of Property.

 

Borrower shall maintain and preserve, or cause
to be maintained and preserved, all of its properties, necessary or useful in the proper conduct of its business, including such as may
be under lease, in good working order and condition, ordinary wear and tear excepted.

 

9.15       Appraisals.

 

In addition to any rights or remedies accorded
to Lender under this Agreement or any of the Other Documents, Lender may, at any time and from time to time and as and when Lender deems
it to be appropriate, in its sole and absolute discretion, whether or not an Event of Default has occurred, cause to be performed and
prepared an updated Appraisal of the Property (each, an Updated Appraisal”). All costs and expenses incurred by Lender in connection
with any such inspection or Updated Appraisal shall be payable by Borrower to Lender upon demand if any such Updated Appraisal is ordered
at such time as an Event of Default exists.

 

9.16       Comply
With Applicable Laws.

 

Borrower shall comply with all applicable restrictive
covenants, zoning and subdivision ordinances, building codes, health and environmental Laws and all other applicable Laws, directions,
orders and notices of violations issued by any Governmental Agency relating to or affecting the premises or the business or activity being
conducted thereon, whether by Borrower or by any occupant thereof, including without limitation, any and all Laws relating to hazardous
or toxic waste or waste products or hazardous substances. Further, Borrower shall indemnify and hold Lender and the Trustee under the
Deed of Trust harmless from the failure by Borrower to comply with such Laws in any respect.

 

10.       EVENTS
OF DEFAULT AND REMEDIES.

 

10.1       Events
of Default. The occurrence of any of the following events shall constitute an “Event of Default” under this Agreement:

 

(a)       Borrower
shall fail to pay any amounts owed under this Agreement or any interest thereon or any other monetary Obligation; or

 

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(b)       Borrower
shall fail to provide to Lender any notices or financial reports specified in this Agreement; or

 

(c)       Borrower
shall fail to perform any other non-monetary Obligation; or

 

(d)       Any
warranty, representation, statement, report or certificate made or delivered to Lender by Borrower or any of Borrower’s officers,
employees or agents, now or in the future, shall be untrue or misleading and results in a Material Adverse Effect; or

 

(e)       Borrower
shall fail to give Lender access to its books and records or the Collateral as provided herein, or shall breach any negative covenant
set forth in Section 9.6 above; or

 

(f)       Borrower
shall fail to comply with the financial covenants (if any) set forth in Section 9.1 or shall fail to perform any other non-monetary Obligation
which by its nature cannot be cured; or

 

(g)       Any
levy, assessment, attachment, seizure, lien or encumbrance (other than a Permitted Lien) is made on all or any part of the Collateral;
or

 

(h)       Any
default or event of default occurs under any obligation secured by a Permitted Lien, which is not cured within any applicable cure period
or waived in writing by the holder of the Permitted Lien; or

 

(i)       Borrower
breaches any material contract, lease or other obligation, which has or may reasonably be expected to have a Material Adverse Effect;
or

 

(j)       Dissolution,
termination of existence, termination of business, insolvency or business failure of Borrower; or the appointment of a receiver, trustee
or custodian, for all or any part of the other property of Borrower; or the assignment for the benefit of creditors by, or the commencement
of any proceeding by Borrower under any reorganization, bankruptcy, insolvency, arrangement, readjustment of debt, dissolution or liquidation
law or statute of any jurisdiction, now or in the future in effect; or

 

(k)       Commencement
of any proceeding against Borrower under any reorganization, bankruptcy, insolvency, arrangement, readjustment of debt, dissolution or
liquidation law or statute of any jurisdiction, now or in the future in effect, which is not dismissed within sixty (60) days after the
date commenced; or

 

(I)       Borrower
shall conceal, remove or transfer any part of its property, with intent to hinder, delay or defraud its creditors, or make or suffer any
transfer of any of its property which would constitute a fraudulent, void or voidable transfer or transaction under the California Uniform
Voidable Transactions Act; or

 

    25

     

    

  

(m)       Revocation
or termination of, or limitation or denial of liability upon, any pledge of any material asset of any kind pledged by any third
party to secure any or all of the Obligations, or any attempt to do any of the foregoing, or commencement of proceedings by or
against any such third party under any bankruptcy or insolvency law; or

 

(n)       Borrower
makes any payment on account of any indebtedness or obligation which has been subordinated to the Obligations, other than as permitted
in the applicable subordination agreement, or if any Person who has subordinated such indebtedness or obligations terminates or in any
way limits his subordination agreement; or

 

(o)       Borrower
shall suffer or experience any Change of Control without Lender’s prior written consent, which consent shall be in the discretion
of Lender in the exercise of its reasonable business judgment; or

 

(p)       Lender
shall not have a valid first priority security interest in any item of Collateral, except as to items of Collateral which are subject
to Permitted Liens that are also permitted to be prior; or

 

(q)       There
is any Material Adverse Effect; or

 

(r)       Borrower
or any of its Affiliates fails to comply with or to perform any other term, obligation, covenant or condition contained in this Agreement
or in any of the Other Documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement
between Lender and Borrower or Affiliate of Borrower; or

 

(s)       Borrower
or any of its Affiliates commits a breach or default in the payment or performance of any other obligation of Borrower or such Affiliate
under any instrument, agreement, guaranty or document evidencing, supporting or securing any other loan or credit extended by any other
creditor to Borrower or its Affiliates; or

 

(t)       Any
lien for labor, material, taxes or otherwise shall be filed against the Property and such lien shall not be either satisfied or bonded
over within thirty (30) days of such filing in the full amount, to Lender’s satisfaction; or

 

(u)       Execution
shall have been levied against the Property or any lien creditor(s) commence(s) suit to enforce a judgment lien against the Property and
such action or suit shall not have been bonded over and shall continue unstayed and in effect for a period of more than thirty (30) calendar
days; or

 

(v)       Borrower
shall voluntarily or by operation of Law, sell, transfer, convey, lease, or encumber the Property, or any interest therein, or shall contract
for such sale, transfer, conveyance, or encumbrance without the prior written consent of Lender, which consent Lender may either give
or withhold in its sole and absolute opinion and judgment; or

 

(w)       The
Property shall be the subject of an eminent domain proceeding or a taking adverse to the interest of Lender; or

 

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(x)       The
Property is damaged or destroyed by fire or other casualty and the loss shall prove to be inadequately covered by insurance actually collected
or in the process of collection; or

 

(y)       The
Property is or becomes subject to any proceedings for abatement of a public nuisance.

 

10.2       Remedies.
Upon the occurrence and during the continuance of any Event of Default, Lender, at its option, and without notice or demand of any kind
(all of which are hereby expressly waived by Borrower), may do any one or more of the following:

 

(a)       Cease
making any Advances under this Agreement or otherwise extending credit to Borrower under this Agreement or any other document or agreement;

 

(b)       Accelerate
and declare all or any part of the Obligations to be immediately due, payable and performable, notwithstanding any deferred or installment
payments allowed by any instrument evidencing or relating to any Obligation;

 

(c)       Exercise
all rights and remedies available to a secured party under the Code;

 

(d)       Take
possession of, or obtain the appointment of a receiver to take control of, any or all of the Collateral wherever it may be found. For
that purpose Borrower hereby authorizes Lender and Lender’s representatives to enter onto any of Borrower’s premises without
interference to take possession of any of the Collateral, and remain on the premises, without charge for so long as Lender deems it reasonably
necessary in order to complete the enforcement of its rights under this Agreement.

 

(e)       Require
Borrower to assemble any or all of the Collateral and make it available to Lender or Lender’s representatives at places designated
by Lender which are reasonably convenient to Lender or Lender’s representatives and Borrower;

 

(f)       Complete
the processing or repair of any Collateral prior to a disposition thereof; and, for such purpose and for the purpose of removal, Lender
shall have the right to use Borrower’s premises, vehicles and other equipment and all other property without charge. Lender is hereby
granted a license or other right to use, without charge, Borrower’s labels, patents, copyrights, rights of use of any name, trade
secrets, trade names, trademarks, service marks, as it pertains to the Collateral, in completing production of, advertising for sale,
and selling or otherwise disposing of any Collateral as provided in the Code;

 

(g)       Sell,
lease, license or otherwise dispose of any of the Collateral as provided in the Code, in its condition at the time Lender obtains
possession of it or after further manufacturing, processing or repair, at one or more public and/or private dispositions, in lots or
in bulk, for cash, exchange or other property, or on credit, and to adjourn any such sale from time to time without notice other
than oral announcement at the time scheduled for sale. Lender shall have the right to conduct such disposition on Borrower’s
premises without charge, for such time or times as Lender deems reasonable, or on Lender’s premises, or elsewhere and the
Collateral need not be located at the place of disposition. Lender may directly or through any affiliated company purchase or lease
any Collateral at any such public disposition, and if permissible under applicable law, at any private disposition. Any sale, lease,
license or other disposition of Collateral shall not relieve Borrower of any liability Borrower may have if any Collateral is
defective as to title or physical condition or otherwise at the time of sale;

 

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Notwithstanding the foregoing, Lender shall not
dispose of any trademarks, trade names, copyrights, registrations, licenses, franchises or customer lists except in connection with foreclosure
upon substantially all of Borrower’s assets as provided in the Code.

 

All expenses, costs, liabilities and obligations
incurred by Lender (including attorneys’ Fees and Costs with respect to the foregoing) shall be due from Borrower to Lender on demand.
Lender may charge the same to Borrower’s Loan Account, and the same shall thereafter bear interest at the same rate as is applicable
in this Agreement.

 

In addition to the specific rights and remedies
hereinabove mentioned, Lender shall have the right to avail itself of any other rights or remedies to which it may be entitled under any
then existing Laws including, but not limited to, the right to realize upon any or all of its security, and to do so in any order. Furthermore,
the rights and remedies set forth above are not exclusive, and Lender may avail itself of any individual right or remedy set forth in
this Agreement, or available under such Laws, without utilizing any other right or remedy.

 

10.3       Standards
for Determining Commercial Reasonableness. Borrower and Lender agree that any disposition, as defined in the Code (“disposition”)
of any Collateral which complies with the following standards will conclusively be deemed to be commercially reasonable:

 

(i)       Notice
of the disposition is given to Borrower at least ten (10) days prior to the sale, and, in the case of a public sale, notice of the sale
is published at least ten (10) days before the sale in a newspaper of general circulation in the county where the sale is to be conducted;

 

(ii)       Notice
of the disposition describes the Collateral in general, non-specific terms;

 

(iii)       The
disposition is conducted at a place designated by Lender, with or without the Collateral being present;

 

(iv)       The
disposition commences at any time between 8:00 a.m. and 6:00 p.m., Los Angeles time; and

 

(v)       With
respect to any disposition of any of the Collateral, Lender may (but is not obligated to) direct any prospective purchaser to ascertain
directly from Borrower any and all information concerning the same.

  

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(b)       Lender
shall be free to employ other methods of noticing and disposing of the Collateral, in its discretion.

 

(c)       Lender
shall have no obligation to attempt to satisfy the Obligations by collecting them from any third Person which may be liable for them or
any portion thereof, and Lender may release, modify or waive any collateral provided by any other third Person as security for the Obligation
or any portion thereof, all without affecting Lender’s rights against Borrower. Borrower waives any right it may have to require
Lender to pursue any third Person for any of the Obligations.

 

(d)       Lender
may comply with any applicable state or federal law requirements in connection with a disposition of the Collateral, and Lender’s
compliance therewith will not be considered to adversely affect the commercial reasonableness of any sale of the Collateral.

 

(e)       Lender
may dispose of the Collateral without giving any warranties as to the Collateral. Lender may specifically disclaim any warranties of title
or the like. This procedure will not be considered to adversely affect the commercial reasonableness of any sale of the Collateral.

 

(f)       If Lender
disposes of any of the Collateral upon credit, Borrower will be credited only with payments actually made by the purchaser, received by
Lender and applied to the indebtedness of the purchaser. In the event that the purchaser fails to pay for the Collateral, Lender may resell
the Collateral and Borrower will be credited with the proceeds of such disposition.

 

10.4       Power
of Attorney. Borrower grants to Lender an irrevocable power of attorney coupled with an interest, authorizing and permitting Lender
(acting through any of its employees, attorneys or agents) at any time, at its option, but without obligation, with or without notice
to Borrower, and at Borrower’s expense, to do any or all of the following, in Borrower’s name or otherwise, but Lender agrees
to exercise the following powers in a commercially reasonable manner:

 

(i)       Execute
on behalf of Borrower any documents that Lender may, in its sole discretion, deem advisable in order to perfect and maintain Lender’s
security interest in the Collateral, or in order to exercise a right of Borrower or Lender, or in order to fully consummate all the transactions
contemplated under this Agreement, and all other present and future agreements;

 

(ii)       Execute
on behalf of Borrower any document exercising, transferring or assigning any option to purchase, sell or otherwise dispose of or to lease
(as lessor or lessee) any real or personal property which is part of Lender’s Collateral or in which Lender has an interest;

 

(iii)       Execute
on behalf of Borrower, any invoices relating to any Receivable, any draft against any Account Debtor and any notice to any Account Debtor,
any proof of claim in bankruptcy, any notice of lien, claim of mechanic’s, materialman’s or other lien, or assignment or satisfaction
of mechanic’s, materialman’s or other lien;

 

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(iv)       Take
control in any manner of any cash or non-cash items of payment or proceeds of Collateral; endorse the name of Borrower upon any instruments,
or documents, evidence of payment or Collateral that may come into Lender’s possession;

 

(v)       Endorse
all checks and other forms of remittances received by Lender;

 

(vi)       Pay,
contest or settle any lien, charge, encumbrance, security interest and adverse claim in or to any of the Collateral, or any judgment based
thereon, or otherwise take any action to terminate or discharge the same;

 

(vii)       Grant
extensions of time to pay, compromise claims and settle Receivables and General Intangibles for less than face value and execute all releases
and other documents in connection therewith;

 

(viii)       Pay
any sums required on account of Borrower’s taxes or to secure the release of any liens therefore, or both;

 

(ix)       Settle
and adjust, and give releases of, any insurance claim that relates to any of the Collateral and obtain payment therefore;

 

(x)       Instruct
any third party having custody or control of any books or records belonging to, or relating to, Borrower to give Lender the same rights
of access and other rights with respect thereto as Lender has under this Agreement; and

 

(xi)       Take
any action or pay any sum required of Borrower pursuant to this Agreement and any other present or future agreements.

 

(b)       Any
and all sums paid and any and all costs, expenses, liabilities, obligations and attorneys’ fees incurred by Lender (including attorneys’
fees and expenses incurred pursuant to bankruptcy) with respect to the foregoing shall be added to and become part of the Obligations,
and shall be payable on demand. Lender may charge the foregoing to Borrower’s Loan Account and the foregoing shall thereafter bear
interest at the same rate specified in this Agreement. In no event shall Lender’s rights under the foregoing power of attorney,
or any of Lender’s other rights under this Agreement, be deemed to indicate that Lender, is in control of the business, management
or properties of Borrower.

 

(c)       Borrower
shall pay, indemnify, defend, and hold Lender and each of its respective officers, directors, employees, counsel, agents, and
attorneys-in-fact (each, an “Indemnified Person”) harmless (to the fullest extent permitted by law) from and against any
and all claims, demands, suits, actions, investigations, proceedings, and damages, and all attorneys fees and disbursements and
other costs and expenses actually incurred in connection therewith (as and when they are incurred and irrespective of whether suit
is brought), at any time asserted against, imposed upon, or incurred by any of them in connection with, or as a result of, or
related to: (i) the execution, delivery, enforcement, performance, and administration of this Agreement and any Other Documents or
the transactions contemplated herein, or (ii) any investigation, litigation, or proceeding related to this Agreement, any Other
Document, or (iii) the use of the proceeds of the Advances provided hereunder (irrespective of whether any Indemnified Person is a
party thereto), or (iv) any act, omission, event or circumstance in any manner related thereto (all the foregoing, collectively, the
 “Indemnified Liabilities”).

 

    30 

     

    

 

(d)       Borrower
shall have no obligation to any Indemnified Person hereunder with respect to any Indemnified Liability that a court of competent jurisdiction
finally determines to have resulted from the gross negligence or willful misconduct of such Indemnified Person.

 

This Section 10.4 shall survive the termination of this Agreement and
the repayment of the Obligations.

 

10.5       Application
of Proceeds After Event of Default. Notwithstanding any other provisions of this Agreement to the contrary, after the occurrence and
during the continuance of an Event of Default, all amounts collected or received by the Lender on account of the Obligations or any other
amounts outstanding under any of the Other Documents or in respect of the Collateral may, at Lender’s discretion, be paid over or
delivered as follows:

 

FIRST, to the payment of all reasonable out-of-pocket costs and expenses
(including reasonable attorneys’ fees) of the Lender in connection with enforcing its rights and the rights of Lender under this
Agreement and the Other Documents and any protective advances made by the Lender with respect to the Collateral under or pursuant to the
terms of this Agreement;

 

SECOND, to payment of any fees owed to the Lender;

 

THIRD, to the payment of all reasonable out-of-pocket costs and expenses
(including reasonable attorneys’ fees) of Lender to the extent owing to Lender pursuant to the terms of this Agreement;

 

FOURTH, to the payment of interest and fees due with respect to the
Obligations;

 

FIFTH, to the payment of the outstanding principal amount of the Obligations;

 

SIXTH, to all other Obligations and other obligations which shall have
become due and payable under the Other Documents or otherwise and not repaid pursuant to clauses “FIRST” through “FIFTH”
above; and

 

SEVENTH, to the payment of the surplus, if any, to the Borrower and/or
whoever may be lawfully entitled to receive such surplus.

 

In carrying out the foregoing, (i) amounts received shall be applied
in the numerical order provided until exhausted prior to application to the next succeeding category; and (ii) Lender shall receive amounts
available to be applied pursuant to clauses “FOURTH” and “FIFTH” above.

 

    31 

     

    

 

10.6       Remedies
Cumulative. In addition to the rights and remedies set forth in this Agreement , Lender shall have all the other rights and remedies
accorded a secured party in equity and under all other applicable laws, and under any other instrument or agreement now or in the future
entered into between Lender and Borrower, and all of such rights and remedies are cumulative and none is exclusive. Exercise or partial
exercise by Lender of one or more of its rights or remedies shall not be deemed an election, nor bar Lender from subsequent exercise or
partial exercise of any other rights or remedies. The failure or delay Lender to exercise any rights or remedies shall not operate as
a waiver thereof, but all rights and remedies shall continue in full force and effect until all of the Obligations have been indefeasibly
paid and performed.

 

11.       GENERAL
PROVISIONS.

 

11.1      Application
of Payments and Waiver of Marshalling. Subject to Section 10.5 of this Agreement, all payments with respect to the Obligations may
be applied, and in Lender’s sole discretion reversed and re-applied, to the Obligations, in such order and manner as Lender shall
determine in its sole discretion. In addition, Borrower hereby waives all rights, legal and equitable, it may now or hereafter have to
require marshaling of assets or to direct the order in which the Property will be sold, or how the proceeds of any such sale will be allocated,
in the event of any sale under the Deed of Trust, including, but not limited to, any and all rights provided by California Civil Code
Sections 2899 and 3433, as such Sections may be amended from time to time.

 

11.2       Charges
to Accounts. Lender may, in its discretion, require that Borrower pay monetary Obligations in cash to Lender, or charge them to Borrower’s
Loan Account, in which event they will bear interest from the date due to the date paid at the same rate applicable to the Advances.

 

11.3       Notice
of Right to Copy of Appraisal Report. California Law provides that applicants on loans secured by real estate are entitled to receive
a copy of an appraisal report which has been prepared as a result of a property appraisal. If Borrower qualifies and pays for the appraisal,
it may request a copy of the appraisal report by writing to the Lender. Such written request must be received by Lender no later than
90 days after (a) Lender provides notice of the action taken on Borrower’s loan application, including a notice of incompleteness,
or (b) in the case of a withdrawn application, after Borrower withdraws its application. Lender’s transmittal of a copy of the appraisal
will be conditioned upon Borrower’s payment of the cost of the appraisal. Notices. Any notice, demand or request required
hereunder shall be given in writing (at the addresses set forth below) by any of the following means: (a) personal service; (b) electronic
communication, whether by telex, telegram or telecopying; (c) overnight courier; or (d) registered or certified, first class U.S. mail,
return receipt requested.

 

    32 

     

    

 

	To Borrower:	 	To Lender:
	SNAIL GAMES USA, INC.	 	CATHAY BANK
	12049 Jefferson Boulevard

Los Angeles, California 90230 	 	9650 Flair Drive, 7th Floor 

El Monte, CA 91731 
 
	Attn: 	 	 	Attn: Jane Ho, SVP

 

or at such other address as such party may designate by ten (10) days’
advance written notice to the other party hereto pursuant to this section. Any notice, demand or request sent pursuant to subsection (c),
above, shall be deemed received on the business day immediately following deposit with the overnight courier, and, if sent pursuant to
subsection (d), above, shall be deemed received forty-eight (48) hours following deposit into the U.S. mail.

 

11.4       Severability.
Should any provision of this Agreement be held by any court of competent jurisdiction to be void or unenforceable, such defect shall not
affect the remainder of this Agreement, which shall continue in full force and effect.

 

11.5       Integration.
This Agreement and the Other Documents and such other written agreements, documents and instruments as may be executed in connection herewith
are the final, entire and complete agreement between Borrower and Lender and supersede all prior and contemporaneous negotiations and
oral representations and agreements, all of which are merged and integrated in this Agreement. There are no oral understandings, representations
or agreements between the parties which are not set forth in this Agreement or in other written agreements signed by the parties in connection
herewith . Lender and Borrower agree that this Agreement and the Other Documents reflect the intentions of the parties thereto and
that parol evidence is not required to interpret them.

 

11.6       Amendment
and Waivers. The terms and provisions of this Agreement may not be waived or amended, except in a writing executed by Borrower and
a duly authorized officer of Lender and clearly specifying the extent of the amendment or the waiver. Any waiver of an Event of Default
or Potential Default shall not be deemed as continuing and shall not extend to any subsequent or other Event of Default or Potential Default.
The failure of Lender at any time or times to require Borrower to strictly comply with any of the provisions of this Agreement or any
other present or future agreement between Borrower and Lender shall not waive or diminish any right of Lender later to demand and receive
strict compliance therewith.

 

11.7       Borrower
Waivers. Unless otherwise expressly required by this Agreement, Borrower hereby waives: (i) demand, protest, notice of protest and
notice of dishonor, notice of payment and nonpayment, release, compromise, settlement, extension or renewal of any commercial paper, instrument,
account, General Intangible, document or guaranty at any time held by Lender on which Borrower is or may in any way be liable, (ii) notice
of default and (iii) notice of any action taken by Lender, unless expressly required by this Agreement.

 

11.8       No
Liability for Ordinary Negligence. Neither Lender nor any of its directors, officers, employees, agents, attorneys or any other
Person affiliated with or representing Lender shall be liable for any claims, demands, losses or damages, of any kind whatsoever,
made, claimed, incurred or suffered by Borrower or any other party through the ordinary negligence of Lender, or any of its
directors, officers, employees, agents, attorneys or any other Person affiliated with or representing Lender, but nothing herein
shall relieve Lender from liability for its own gross negligence or willful misconduct.

 

    33 

     

    

 

11.9        Actions
.. Whether or not an Event of Default has occurred, Lender shall have the right, but not the obligation, to commence, appear in, or
defend any action or proceeding which affects or which Lender determines may affect (a) the Collateral; (b) Borrower’s or Lender’s
respective rights or obligations under this Agreement; (c) the Advances; or (d) the disbursement of any proceeds of any Advance. Whether
or not an Event of Default or Potential Default has occurred, Lender shall at all times have the right to take any or all actions which
Lender determines to be necessary or appropriate to protect Lender’s interest in connection with the Advances .

 

11.10       Time
of Essence. Time is of the essence in the performance by Borrower of each and every obligation under this Agreement.

 

11.11       Attorneys’
Fees, Costs and Charges. On demand, Borrower shall reimburse Lender for all costs and expenses, including, without limitation, reasonable
attorneys’ fees costs and disbursements (and fees and disbursements of Lender’s in-house counsel) (collectively the “Fees
and Costs”) expended or incurred by Lender in any way in connection with: (i) the enforcement of this Agreement or any Other Documents
and the rights and remedies thereunder, including, without limitation, Fees and Costs incurred in connection with any workout, attempted
workout, and/or in connection with the rendering of legal advice as to Lender’s rights, remedies and obligations under this Agreement
in connection with such enforcement or workout; (ii) collecting any sum which is or becomes due to Lender; (iii) any proceeding, or any
appeal ; or (iv) the exercise of the power of attorney granted to Lender in this Agreement. Fees and Costs shall include, without limitation,
all out-of-pocket fees and costs incurred by Lender in connection with the appraisal, inspection, assessment, evaluation and insuring
of the Collateral, and all fees and costs incurred by Lender in connection with the negotiation and preparation of the this Agreement
and the Other Documents, including reasonable attorneys’ fees. If litigation or other legal action is filed or commenced in connection
with this Agreement or any of the Other Documents the prevailing party shall be entitled to its Fees and Costs. Fees and Costs shall include,
without limitation, attorneys fees and costs incurred in connection with the following: (1) contempt proceedings; (2) discovery; (3) any
motion, adversary proceeding, contested matter, submission or confirmation or opposition to plan of reorganization or any other activity
of any kind in connection with a bankruptcy case or relating to any petition or the filing thereof under Title 11 of the United States
Code; (4) garnishment, levy, and debtor and third party examinations; and (5) post judgment motions and proceedings of any kind taken
to clarify, collect or enforce any judgment or award.

 

(a)       All
Fees and Costs to which Lender may be entitled pursuant to this Agreement may be charged by Lender to Borrower’s Loan Account and
shall thereafter bear interest at the Contract Rate specified in this Agreement.

 

    34 

     

    

 

11.12       Benefit
of Agreement and Assignment. The provisions of this Agreement shall be binding upon and inure to the benefit of the respective successors,
assigns, heirs, beneficiaries and representatives of Borrower and Lender; provided, however, that Borrower may not assign or transfer
any of its rights under this Agreement without the prior written consent of Lender, and any prohibited assignment shall be void.

 

(a)       No consent
by Lender to any assignment shall release Borrower from its liability for the Obligations. Lender may assign its rights and delegate their
duties hereunder without the consent of Borrower.

 

(b)       Lender
reserves the right to syndicate all or a portion of the transaction created herein or sell, assign, transfer, negotiate, or grant participations
in all or any part of, or any interest in Lender’s rights and benefits hereunder. In connection with any such syndication, assignment
or participation, Lender may disclose all documents and information which Lender now or hereafter may have relating to Borrower or Borrower’s
business. Any such syndication by Lender shall not require the consent of the Borrower or any other Lender. To the extent that Lender
assigns its rights and obligations hereunder to a third Person, Lender thereafter shall be released from such assigned obligations to
Borrower.

 

11.13       Entire
Understanding. This Agreement and the documents executed concurrently herewith contain the entire understanding between Borrower and
Lender and supersedes all prior agreements and understandings, if any, relating to the subject matter hereof. Any promises, representations,
warranties or guarantees not herein contained and hereinafter made shall have no force and effect unless in writing, signed by Borrower’s
and Lender’s respective officers. Neither this Agreement nor any portion or provisions hereof may be changed , modified, amended,
waived, supplemented, discharged, cancelled or terminated orally or by any course of dealing, or in any manner other than by an agreement
in writing, signed by the party to be charged. Borrower acknowledges that it has been advised by counsel in connection with the execution
of this Agreement and Other Documents and is not relying upon oral representations or statements inconsistent with the terms and provisions
of this Agreement.

 

11.14       Successors
and Assigns; Participations.

 

(a)       This
Agreement shall be binding upon and inure to the benefit of Borrower, Lender, all future holders of the Obligations and their respective
successors and permitted assigns, except that Borrower may not assign or transfer any of its rights or obligations under this Agreement
without the prior written consent of Lender.

 

(b)       Participations.

 

(i)       Lender
may at any time, without the consent of, or notice to Borrower, sell participations (each a “Participation”) in all or a
portion of Lender’s rights and obligations under this Agreement; provided that (x) Lender’s obligations under this
Agreement shall remain unchanged; (y) Lender shall remain solely responsible to Borrower for the performance of such obligation; and
(z) Borrower shall continue to deal solely and directly with Lender in connection with such Lender’s rights and obligations
under this Agreement. Any agreement pursuant to which Lender sells such a participation shall provide that Lender shall retain the
right to enforce this Agreement and approve any amendment, modification, or waiver of any provision of this Agreement.

 

    35 

     

    

 

(ii)       Borrower
acknowledges that in the regular course of commercial banking business, Lender may at any time and from time to time sell participating
interests in the Advances to other financial institutions (each such transferee or purchaser of a participating interest, a “Participant”).
Each Participant may exercise all rights of payment (including rights of set-off) with respect to the portion of such Advances held by
it or other Obligations payable hereunder as fully as if such Participant were the direct holder thereof provided that Borrower shall
not be required to pay to any Participant more than the amount which it would have been required to pay to Lender which granted an interest
in its Advances or other Obligations payable hereunder to such Participant had Lender retained such interest in the Advances hereunder
or other Obligations payable hereunder and in no event shall Borrower be required to pay any such amount arising from the same circumstances
and with respect to the same Advances or other Obligations payable hereunder to both Lender and such Participant. Borrower hereby grants
to any Participant a continuing security interest in any deposits, moneys or other property actually or constructively held by such Participant
as security for the Participant’s interest in the Advances.

 

(c)       Borrower
authorizes Lender to disclose to any Participant, or any prospective Participant, any and all financial information in Lender’s
possession concerning Borrower which has been delivered to such Lender by or on behalf of Borrower pursuant to this Agreement or in connection
with such Lender’s credit evaluation of Borrower.

 

11.15       Application
of Payments. Lender shall have the continuing and exclusive right to apply or reverse and re-apply any payment and any and all proceeds
of Collateral to any portion of the Obligations. To the extent that Borrower makes a payment or Lender receives any payment or proceeds
of the Collateral for Borrower’s benefit, which are subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, debtor in possession, receiver, custodian or any other party under any bankruptcy law, common law
or equitable cause, then, to such extent, the Obligations or part thereof intended to be satisfied shall be revived and continue as if
such payment or proceeds had not been received by Lender.

 

    36 

     

    

 

11.16       Indemnity. Borrower
hereby indemnifies and agrees to hold Lender and each of Lender’s respective officers, directors, Affiliates, attorneys,
employees and agents (individually and collectively, “Indemnitee(s)”) from and against any and all liabilities,
obligations, losses, damages , penalties, actions, judgments, suits, costs, expenses and disbursements of any kind or nature
whatsoever (including fees and disbursements of counsel) which may be imposed on, incurred by, or asserted against Lender in any
claim, litigation, proceeding or investigation instituted or conducted by any Governmental Agency or instrumentality or any other
Person with respect to any aspect of, or any transaction contemplated by, or referred to in, or any matter related to, this
Agreement or the Other Documents, whether or not Lender is a party thereto , except to the extent that any of the foregoing arises
out of the willful misconduct of the party being indemnified (as determined by a court of competent jurisdiction in a final and
non-appealable judgment). Without limiting the generality of the foregoing, this indemnity shall extend to any liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses and disbursements of any kind or nature
whatsoever (including reasonable fees and disbursements of counsel) asserted against or incurred by any of the Indemnitees described
above in this Section 11.17 by any Person (i) under any Environmental Laws or similar laws by reason of Borrower’s or any
other Person’s failure to comply with laws applicable to solid or hazardous waste materials, including Hazardous Substances
and Hazardous Waste, or other Toxic Substances; or (ii) which arise from or relate to any mechanics’ lien or related
proceeding relating to the Property or any other actual or alleged failure to pay or perform in connection with the Property.
Additionally, if any taxes (excluding taxes imposed upon or measured solely by the net income of Lender, but including any
intangibles taxes, stamp tax, recording tax or franchise tax) shall be payable by Lender or Borrower on account of the execution or
delivery of this Agreement, or the execution, delivery, issuance or recording of any of the Other Documents, or the creation or
repayment of any of the Obligations hereunder, by reason of any applicable law now or hereafter in effect, Borrower will pay (or
will promptly reimburse Lender for payment of) all such taxes, including interest and penalties thereon, and will indemnify and hold
the indemnitees described above in this Section 11.17 harmless from and against all liability in connection therewith.

 

11.17       Captions.
Headings have been set forth herein for convenience only and shall not affect the interpretation or meanings of any provisions of
this Agreement. Unless the contrary is compelled by the context, everything contained in each article and section applies equally to this
entire Agreement.

 

11.18       Independent
Counsel. Borrower and Lender each acknowledge that: (i) they have had the opportunity to be represented by independent counsel in
connection with this Agreement; (ii) they have executed this Agreement with the advice of such counsel, as applicable; (iii) this Agreement
is the result of negotiations between the parties hereto and the advice and assistance of their representative counsel, as applicable;
and (iv) the fact that this Agreement was prepared by Lender’s counsel as a matter of convenience shall have no import or significance.

 

11.19       Publicity.
Lender is hereby authorized , at its expense and in its sole discretion, to issue appropriate press releases and to cause a tombstone
to be published announcing the consummation of this transaction and the aggregate amount thereof.

 

    37 

     

    

 

11.20       Governing
Law; Jurisdiction; Venue. This Agreement and all acts and transactions hereunder and all rights and obligations of Lender and Borrower
shall be governed by the internal laws of the State of California, without regard to its conflicts of law principles.

 

(a)       As
a material part of the consideration to Lender to enter into this Agreement , Borrower (a) agrees that all actions and proceedings
relating directly or indirectly to this Agreement shall, at Lender’s option, be litigated in courts located within California,
and that the exclusive venue therefore shall be Los Angeles County; (b) consents to the jurisdiction and venue of any such court and
consents to service of process in any such action or proceeding by personal delivery or any other method permitted by law; and (c)
waives any and all rights Borrower may have to object to the jurisdiction of any such court, or to transfer or change the venue of
any such action or proceeding.

 

11.21       Relationship
of Parties. Lender shall not be deemed to be, nor does Lender or Borrower intend that Lender shall ever become, a partner, joint venturer,
fiduciary, manager, controlling person or participant of any kind in the business or affairs of Borrower, whether as a result of this
Agreement or any of the transactions contemplated by this Agreement. In exercising its rights and remedies under this Agreement, Lender
shall at all times be acting only as a lender to Borrower within the normal and usual scope of activities of a Lender.

 

11.22       Counterparts.
This Agreement may be executed in counterparts, each of which shall constitute an original, and all of which together shall constitute
one and the same document.

 

11.23      Change In Laws. In the event of
the enactment, after the date of this Agreement, of any Laws: (a) deducting from the value of property for the purpose of taxation any
lien or security interest thereon; (b) imposing upon Lender the payment of the whole or any part of the taxes or assessments or charges
or liens herein required to be paid by Borrower; (c)changing in any way the Laws relating to the taxation of deeds of trust or mortgages
or security agreements, or debts secured by deeds of trust or mortgages or security agreements, or the interest of the mortgagee or secured
party in the property covered thereby; or (d) changing the manner of collection of such taxes; then, to the extent any of the foregoing
may affect the Deed of Trust or the indebtedness secured thereby or Lender, then, and in any such event, Borrower, upon ten (10) days’
written demand by Lender, shall pay such taxes, assessments, charges, or liens, or reimburse Lender therefor. If Borrower shall be prohibited
from paying such tax or from reimbursing Lender for the amount thereof, Borrower shall execute a modification to the Other Documents and
the Note, which modification shall increase the interest rate payable pursuant to the Note so as to permit Lender to maintain its yield
as if such tax had not been imposed. If Borrower shall be prohibited from executing the above-referenced modifications, Lender may, in
Lender’s sole discretion, declare the principal of all amounts disbursed and owing under the Note, this Agreement, and the Other
Documents (including all obligations secured by the Other Documents) and all other indebtedness of Borrower to Lender, together with interest
thereon, to be forthwith due and payable within forty-five (45) days of written demand, regardless of any other specified maturity or
due date.

 

[REMAINDER OF PAGE INTENTIONALLY
LEFT BLANK]

 

    38 

     

    

 

JUDICIAL REFERENCE. The parties hereby agree
that any claims, controversies, disputes, or questions of interpretation, whether legal or equitable, arising out of, concerning or related
to this Agreement and all loan documents executed by Borrower shall be heard by a single referee by consensual general judicial reference
pursuant to the provisions of California Code of Civil Procedure Sections 638 et seq., who shall determine all issues of fact or law and
to report a statement of decision. The referee shall also have the power to hear and determine proceedings for ancillary relief, including,
but not limited to, applications for attachment, issuance of injunctive relief, appointment of a receiver, and/or claim and delivery.
The costs of the proceeding shall be borne equally by the parties to the dispute, subject to the discretion of the referee to allocate
such costs based on a determination as to the prevailing party(ies) in the proceeding. By initialing below the parties acknowledge
that they have read and understand the foregoing Judicial Reference provisions and understand that they are waiving their right to a
jury trial.

 

	/s/ H.C.	 	/s/ K.C.
	Borrower’s Initials	 	Lender’s Initials

 

[Signature page follows.]

 

     

     

    

 

IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the date set forth in the heading to this Agreement.

 

BORROWER:

 

	SNAIL GAMES USA, INC.,

a California corporation	 
	 	 
	By:	/s/ Shi Hai	 
	 	Name:  Shi Hai	 
	 	Title:   CEO	 

 

LENDER:

 

	CATHAY BANK,

a California banking corporation	 
	 	 
	By:	/s/ Kevin Chen	 
	 	Name:  Kevin Chen	 
	 	Title:   AVP / LPO	 

 

     

     

    

 

EXHIBIT “A”

LEGAL DESCRIPTION

 

The land hereinafter referred to is situated in the City of Los Angeles,
County of Los Angeles, State of CA, and is described as follows:

 

Lots 346, 347 and 348 of Tract No. 9483, in the City of Los Angeles,
County of Los Angeles. State of California, as per map recorded in Book 132 Pages 81 to 83 inclusive of maps, in the Office of the County
Recorder of said County.

 

Excepting all oil, gas and mineral rights of said land, lying below
a depth of 500 feet from the present surface thereof, but without right of surface entry reserved unto Douglas Mark Apatow and Andrea
Gardner Apatow, husband and wife as community property by Grant Deed dated June 12 , 1997 recorded as Instrument No. 97-904149 of Official
Records.

 

APN: 4220-008-028

 

    EXHIBIT A-1 

     

    

 

EXHIBIT “B”

TRADE NAMES

 

[To be attached.]

 

    EXHIBIT B-1 

     

    

 

EXHIBIT “C”

LOCATIONS OF COLLATERAL

 

1._________________________________

 

2._________________________________

 

3._________________________________

 

 

 

 

    EXHIBIT C-1

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