Document:

Exhibit
10.21

 

COMMERCIAL-INDUSTRIAL
TRIPLE NET LEASE

BASIC TERMS SHEET

 

This Basic Terms Sheet
to that certain Commercial-Industrial Triple Net Lease (the “Lease”) between the parties listed below
is for the convenience of the parties in quickly referencing certain of the basic terms of the Lease and applicable sections of
the Lease. It is not intended to serve as a complete summary of the Lease. In the event of any inconsistency between this
Basic Terms Sheet and the Lease, the applicable Lease provision shall prevail and control for all purposes.

 

	Date of Lease (See Section 1):	August 26th, 2020
	 	 
	Name of Lessor (See Section 1):	67 VB OWNER, LP, a Delaware limited partnership
	 	 
	Name of Lessee (See Section 1):	YANDY ENTERPRISES, LLC, a Delaware
    limited liability company
	 	 
	Lessee’s Telephone Number:	800.883.0860
	 	 
	Address of Premises (See Section 2):	6750 W. Van Buren Street

Phoenix,
    Arizona 85043
	 	 
	Approximate Gross Rentable

Area of Premises (See Section 12):	Approximately 51,962 square feet
	 	 
	Lessee’s Percentage of Insurance, 

Real Property Tax and CAM

Amounts (See Section 12):	31.91%
	 	 
	Lease Commencement Date (See Section 3.1):	February 1, 2021
	 	 
	Lease Expiration Date (See Section 3.1):	May 31, 2031
	 	 
	Monthly Base Rent (See Section 4):	Payable in the amounts and at the times described in Section 4, subject to increases as described in Section 4.3
	 	 
	Additional Rent:	1.    Rental Tax (See Section 4.2)

2.    Insurance Amount (See Section 8.10)

3.    Real Property Tax Amount (Section 10.1)

4.    CAM Amount (See Section 11)
	 	 
	Lessee’s Security Deposit (See Section 5):	$150,000.00

 

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	Lessee’s Permitted Uses (See Section 6.1):	Subject to the terms of Section 6.1 below, (1) warehousing, storage, distribution, packaging and labeling of clothing and adult accessories, (2) ancillary warehousing, storage and distribution of completed cannabis finished products, which are of a nature that are sold and widely distributed in multi-product retail, (3) a photography studio for clothing and adult accessories sold by Lessee, and (4) office use related thereto, and for no other use or purpose whatsoever (the “Permitted Uses”).
	 	 
	Address for Lessor:	67 VB OWNER, LP

410, 2020 – 4th Street SW

Calgary, Alberta T2S 1W3

Attn.:  Blair Rafess, Chief Operating Officer
	 	 
	Address for Lessee (after occupancy):	YANDY ENTERPRISES, LLC

6750 W. Van Buren Street

Phoenix, Arizona 85043

Attn.:  Jeff Watton
	 	 
	Address for Lessee (before occupancy):	21615 N. 7th Avenue

Phoenix, Arizona 85027

Attn.:  Jeff Watton

 

	LESSOR:	 	LESSEE:
	 	 	 
	67 VB OWNER, L.P.	 	YANDY ENTERPRISES, LLC,
	a Delaware limited partnership	 	a Delaware limited liability company
	 	 	 
	By:	Hopewell Southwest Investor
    Holdings GP, LLC, a Delaware limited 	 	By:	/s/ Jeff Watton
	 	liability company	 	Name: 	Jeff Watton
	Its:	General Partner	 	Its:	Co-CEO
	 	 		
	 	 	 
	By:	/s/ Kevin
    Pshebniski	 	Lessee’s NAICS (North American
    Industry Classification System) Code 454
	Name: 	Kevin
    Pshebniski	 	 
	Its:	Authorized Signatory	 	 
	 	 	Lessee’s Taxpayer Number (EIN/TIN/SSN):
	 	 	84-3977089
	By:	/s/ Steve
    Toole	 	 
	Name:	Steve
    Toole	 	 
	Its:	Authorized Signatory	 	 

 

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COMMERCIAL-INDUSTRIAL
TRIPLE NET LEASE

 

1.            PARTIES.
This Lease, dated August 26th, 2020, for reference purposes only, is made by and between 67 VB OWNER, LP, a Delaware limited
partnership (“Lessor”), and YANDY ENTERPRISES, LLC, a Delaware limited liability company (“Lessee”).

 

2.            PREMISES.
Lessor hereby leases to Lessee and Lessee leases from Lessor for the term, at the rental, and upon all the conditions set forth
herein, the premises demised by this Lease, located at 6750 W. Van Buren Street, Phoenix, Arizona, as generally depicted on Exhibit “A”
attached hereto (the “Premises”), together with a nonexclusive right, as described in Section 18
to use the unreserved parking spaces within the Project (as defined below) and all of the other Common Areas surrounding the
Premises and within the Project. As used herein, the term “Common Areas” means the parking spaces within
the Project as generally depicted on Exhibit “A” attached hereto (the “Site Plan”)
and those areas within the Project more fully described in Section 28. As used herein, the term “Project”
refers to the multi-building industrial project owned by Lessor, which is generally located north and west of the northwest comer
of 67th Avenue and Van Buren Street in Phoenix, Arizona. The Project is generally depicted on the Site Plan and includes,
without limitation, two (2) industrial buildings, one (1) of which is the building in which the Premises are located
(the “Building”), the Common Areas and other improvements as generally depicted on the Site Plan. All
dimensions and areas quoted herein or in any exhibit attached hereto are approximate and arc based on gross rentable area, rather
than solely on areas designed for the exclusive use and occupancy of tenants. Notwithstanding anything to the contrary contained
herein, Lessor reserves to itself the use of the roof, exterior walls, and the area above the ceiling and below the floor of the
Premises, together with the right to install, maintain, use, repair and replace pipes, ducts, conduits, risers, wires and structural
elements leading through the Premises and which serve other parts of the Project.

 

3.            TERM.

 

3.1.            TERM.
Subject to the provisions below, the term of this Lease shall commence on February 1, 2021 (“Commencement Date”)
and end on May 31, 2031 (“Expiration Date”), unless sooner terminated pursuant to any provision
hereof (“Term”); provided, however, Lessee, Contractor (as defined in Exhibit “E”
attached hereto) and the subcontractors and material suppliers of Contractor shall be entitled to enter upon the Premises prior
to the Commencement Date (but only following the full execution of this Lease and Lessee’s compliance with the provisions
of Section 8 and Section 7.2(B)) for the sole purpose of constructing Lessee’s
Work (as defined in Section 7.2(B)) in accordance with the terms of Exhibit “E”.
In the event Lessee completes all of Lessee’s Work as required under this Lease prior to the Commencement Date, or completes
a specific portion of the Premises prior to the Commencement Date if Lessee’s Work is to be completed in phases approved
by Lessor, and obtains a certificate of occupancy (or its equivalent) for the Premises or the portion thereof which is the subject
of the applicable phase, Lessee may commence operations within the applicable portion of the Premises upon written notice to Lessor.
Notwithstanding the foregoing, or anything to the contrary set forth in this Lease, the right of Lessee to commence operations
within the Premises prior to the Commencement Date shall for all purposes be subject to Lessee’s compliance with all terms
of this Lease (including, without limitation, Sections 7.2(B). 7.2(C) and 8). Upon commencing any operations within
or from the Premises prior to the Commencement Date, Lessee shall be obligated to pay to Lessor all amounts provided for under
this Lease other than Monthly Base Rent, including, without limitation, Lessee’s share of the Insurance Amount under Section 8.8,
Real Property Tax Amount under Section 10 and Total Common Area Charges under Section 11.

 

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3.2.      DELAY
IN COMMENCEMENT. Notwithstanding the scheduled Commencement Date, if for any reason Lessor cannot deliver possession of the Premises
to Lessee on said date with Lessor’s Work (as defined below) Substantially Complete (as defined below), Lessor shall not
be subject to any liability therefor, nor shall such failure affect the validity of this Lease or the obligations of Lessee hereunder,
but in such case Lessee shall not be obligated to pay Rent until possession of the Premises is tendered to Lessee (with Lessor’s
Work Substantially Complete) and the Commencement Date has occurred; provided, however, that if Lessor shall not have delivered
possession of the Premises (with Lessor’s Work Substantially Complete) within 90 days from the scheduled Commencement Date
and such delay is absent of Force Majeure (as defined in Section 26), Lessee may, at Lessee’s option,
by notice in writing to Lessor within 10 business days thereafter, cancel this Lease, in which event the parties shall be discharged
from all obligations hereunder. If Lessor, by reason of Force Majeure, cannot deliver the Premises (with Lessor’s Work Substantially
Complete) within 120 days from the scheduled Commencement Date, Lessor or Lessee may, at their respective options, by notice in
writing within 10 business days thereafter, cancel this Lease.

 

In the event Lessor is required to improve
the Premises in the manner described on Exhibit “B” attached hereto (“Lessor’s
Work”), Lessor agrees to use reasonable diligence to have Lessor’s Work Substantially Complete on or before
the date that is 75 days after the date of execution of this Lease by Lessor (the “Lessor’s Work Completion Date”).
Subject to the terms of this Section 3.2, in the event Lessor is unable to deliver possession of the Premises to Lessee with
Lessor’s Work Substantially Complete on the scheduled Commencement Date, the scheduled Commencement Date shall be extended
on a day for day basis until possession is delivered to Lessee, and such extended Commencement Date shall thereupon become the
actual Commencement Date. Promptly after the actual Commencement Date has occurred, the parties shall execute a certificate memorializing
such dates.

 

3.3.      RENEWAL
OPTION. Subject to the following, Lessee shall have an option to extend the Term of the Lease for one additional successive term
of either (i) five (5) years or (ii) ten (10) years (sometimes referred to as the “Option Term”),
provided the following conditions are satisfied:

 

A.            Lessee
is not, at the time of exercise of such option or thereafter, in default under the Lease and no event has occurred that upon delivery
of notice, the passage of time or both would constitute a default by Lessee under this Lease.

 

B.            Lessee
has not assigned the Lease or any right hereunder or sublet the Premises, it being understood that the option to extend the term
of the Lease is personal to Yandy Enterprises, LLC.

 

C.            Lessor’s
receipt of written notice by certified mail of Lessee’s exercise of such option, which notice shall have been received by
Lessor not later than 180 days prior to the last day of the initial Term.

 

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D.            Lessee
shall be entitled to elect whether to exercise a 5-year extension or 10-year extension. Lessee acknowledges and agrees that any
such extension option elected by Lessee shall not include any further extension option beyond the Option Term, and there shall
be no Tenant Improvement Allowance (as defined in Exhibit “E” attached hereto) or other tenant
improvement allowance, and all other terms and conditions of the Lease shall remain the same, except that the Monthly Base Rent
(as defined below) shall be adjusted as follows. The Monthly Base Rent for the Option Term shall be an amount equal to the Fair
Market Rental Rate (as hereinafter defined) of the Premises multiplied by the rentable square footage of the Premises (calculated
as of the commencement date of the Option Term), but such Monthly Base Rent shall not be less than the Monthly Base Rent then
in effect for the last month of the initial Term, and such Monthly Base Rent shall increase annually and automatically as set
forth in Section 4.3 below. The determination of the Fair Market Rental Rate shall be as provided in subsections
E, F and G below.

 

E.            For
purposes of this Lease, the term “Fair Market Rental Rate” shall mean the amount per rentable square
foot that landlords have generally accepted in current transactions between non-affiliated parties from tenants of comparable credit-worthiness
for a comparable space with similar improvements and location and building, for a comparable use, for a comparable period of time.

 

F.            Determination.
Lessor shall determine the Fair Market Rental Rate by using its good faith judgment. Lessor shall provide written notice of such
amount within twenty (20) days after Lessee provides the notice to Lessor exercising Lessee’s option rights which require
a calculation of the Fair Market Rental Rate. Lessee shall have twenty (20) days (“Lessee’s Review Period”)
after receipt of Lessor’s notice of the new rental within which to accept such rental, or to reasonably object thereto in
writing, or to withdraw its exercise of such option. In the event Lessee objects, Lessor and Lessee shall attempt to agree upon
such Fair Market Rental Rate using their commercially reasonable good faith efforts. If Lessor and Lessee fail to reach agreement
within fifteen (15) days following Lessee’s Review Period (“Outside Agreement Date”) and if Lessee
does not elect to withdraw its exercise of such option by the Outside Agreement Date, then the matter shall be resolved in accordance
with subsection G below. Failure of Lessee to so object in writing within Lessee’s Review Period shall conclusively be deemed
its approval of the Fair Market Rental Rate determined by Lessor. Lessee may not withdraw its exercise of such option after the
Outside Agreement Date.

 

G.            Arbitration.
Within seven (7) days after the Outside Agreement Date, the parties shall jointly select, to act as an arbitrator, an independent
Member Appraisal Institute (MAI) appraiser or a licensed commercial real estate broker, who has experience in real estate activities,
including at least ten (10) years’ experience in leasing or appraising office or industrial space in the greater Phoenix
southwest metropolitan area. If the parties cannot agree on such an appraiser within such seven (7) day period, each party
shall then, within a second period of seven (7) days, select an independent appraiser meeting the previously described criteria,
and within a third period of seven (7) days after the appointment of the last of the two appraisers to be selected, the two
appointed appraisers shall jointly select a third appraiser meeting the aforementioned criteria. The appraiser jointly selected
by the parties or the third appraiser jointly selected by the first two appraisers (as the case may be) shall determine the Fair
Market Rental Rate, which decision shall be made and communicated to the parties within fourteen (14) days after the selection
of such appraiser. If Lessee objects to the appraisers’ determination of the Fair Market Rental Rate, Lessee may elect to
withdraw its exercise of its option rights within five (5) days of such determination by providing written notice thereof
to Lessor. In the event Lessee withdraws the exercise of its option right as provided in the preceding sentence, Lessee shall pay
to Lessor upon demand all of Lessor’s costs and expenses incurred in connection with Lessee’s exercise and revocation
of its option rights, including, without limitation, all costs of the appraiser(s). Otherwise, the decision of such appraiser shall
be binding upon Lessor and Lessee, in which event the parties shall equally share the cost of such appraiser(s). Promptly following
the determination of the Fair Market Rental Rate, and provided Lessee does not withdraw its exercise of its option rights, the
parties shall confirm such extension in writing, including the adjusted Monthly Base Rent.

 

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4.            RENT.

 

4.1.            MONTHLY
BASE RENT. For the period commencing on the Commencement Date and continuing until May 31, 2021 (the “Free Base
Rent Period”), Lessee shall not be obligated to pay Monthly Base Rent to Lessor. Notwithstanding the foregoing, during
the Free Base Rent Period and each month thereafter, Lessee shall pay to Lessor all other sums of any type or kind required to
be paid by Lessee hereunder, including, without limitation, additional rent under Section 4.2 of this Lease. Commencing on
June 1, 2021 (the “Measurement Date”), and continuing thereafter until the day prior to the first
anniversary of the Measurement Date, Lessee shall pay to Lessor a monthly base rental (“Monthly Base Rent”)
in the amount of Twenty-Nine Thousand Six Hundred Eighteen and 34/100ths dollars ($29,618.34). On each anniversary of the Measurement
Date, the Monthly Base Rent shall be increased in accordance with the provisions of Section 4.3. The Monthly
Base Rent due hereunder shall be payable to Lessor by the first day of each month during the Term (at the address stated herein
or to such other persons or at such other places as Lessor may designate in writing and shall be paid in lawful money of the United
States of America). Monthly Base Rent for any period during the Term which is for less than one (1) month shall be a pro rata
portion of the monthly installment. If the Commencement Date does not fall on the first day of a calendar month, such month’s
Monthly Base Rent shall be due and payable on the Commencement Date. The Monthly Base Rent set forth in this Section 4.1
is a negotiated figure and shall govern whether or not the actual rentable square footage of the Premises is the same as set forth
in Section 12 hereof. Lessee shall have no right to withhold, deduct or offset any amount from the Monthly Base
Rent or any other sum due hereunder even if the actual rentable square footage of the Premises is less than that set forth in Section 12.

 

4.2.           ADDITIONAL
RENT; RENTAL TAX; PAYMENT OF RENT. In addition to Monthly Base Rent, all other sums of any type or kind required to be paid by
Lessee hereunder to Lessor shall be deemed to be additional rent, whether or not the same may be designated as such herein. The
term “Rent” as used herein, unless otherwise specified, shall refer collectively to Monthly Base Rent
and any other sums required to be paid by Lessee to Lessor hereunder, except for the taxes described in the immediately following
sentence. Lessee agrees to pay to Lessor, in addition to the Rent as provided herein, all privilege, sales, excise, rental and
other taxes (except income taxes) imposed now or hereafter imposed by any governmental authority upon the Rent provided to be paid
by Lessee to Lessor. Said payment shall be in addition to and accompanying each monthly or other payment of Rent made by Lessee
to Lessor. Rent for any period during the Term which is for less than one month shall be a pro-rata portion of the monthly installment.
Rent shall be paid without deduction, offset, prior notice or demand to Lessor at the address stated on the Basic Terms Sheet attached
hereto or to such other persons or at such other places as Lessor may designate in writing. All Rent shall be paid in lawful money
of the United States of America. Lessor’s acceptance of any Rent payment that is for less than the entire amount then currently
due hereunder shall be only as an acceptance on account and shall not constitute an accord and satisfaction or a waiver by Lessor
of the balance of the Rent due or a waiver of any of the remedies available to Lessor by reason of Lessee’s continuing default
hereunder.

 

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4.3.         MONTHLY
BASE RENT INCREASES. Commencing on the first anniversary of the Measurement Date and on each subsequent anniversary thereof (each
an “Adjustment Date”), the then Monthly Base Rent (in effect immediately prior to such anniversary date)
shall be increased by an amount equal to Three and 00/100ths percent (3.00%) of such then Monthly Base Rent. The increased Monthly
Base Rent shall become the Monthly Base Rent for the next twelve (12) month period. The schedule of Adjustment Dates and applicable
Monthly Base Rent is as follows:

 

	Lease Year	Adjustment Date	Monthly Base

Rent
	Free Base Rent Period (February 1, 2021 - May 31, 2021)	 	$0.00
	1

(June 1, 2021 - May 31, 2022)	 	$29,618.34
	2

(June 1, 2022 - May 31, 2023)	June 1, 2022	$30,506.89
	3

(June 1, 2023 - May 31, 2022)	June 1, 2023	$31,422.10
	4

(June 1, 2024 - May 31, 2025)	June 1, 2024	$32,364.76
	5

(June 1, 2025 - May 31, 2026)	June 1, 2025	$33,335.70
	6

(June 1, 2026 - May 31, 2027)	June 1, 2026	$34,335.77
	7

(June 1, 2027 - May 31, 2028)	June 1, 2027	$35,365.84
	8

(June 1, 2028 - May 31, 2029)	June 1, 2028	$36,426.82
	9

(June 1, 2029 - May 31, 2030)	June 1, 2029	$37,519.62
	10

(June 1, 2030 - May 31, 2031)	June 1, 2030	$38,645.21

 

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5.            SECURITY
DEPOSIT.

 

5.1.          SECURITY
DEPOSIT. Lessee shall deposit with Lessor upon execution hereof One Hundred Fifty Thousand and No/100ths Dollars ($150,000.00)
as security for Lessee’s faithful performance of Lessee’s obligations hereunder. If Lessee fails to pay Rent or other
charges due hereunder, or otherwise defaults with respect to any provision of the Lease, Lessor may use, apply, or retain all or
any portion of said deposit for the payment of any Rent or other charge in default or for the payment of any other sum for which
Lessor may become obligated by reason of Lessee’s default, or to compensate Lessor for any loss or damage which Lessor may
suffer thereby. If Lessee is in default of this Lease and Lessor so uses or applies all or any portion of said deposit, Lessee
shall within 10 days after written demand therefor deposit cash with Lessor in an amount sufficient to restore said deposit to
the amount stated above, and Lessee’s failure to do so shall be a material breach of this Lease. Lessor shall not be required
to keep said deposit separate from its general accounts. If Lessee performs all of Lessee’s obligations hereunder, said deposit,
or so much thereof as has not been applied by Lessor, shall be returned, without payment of interest or other increment for its
use, to Lessee (or, at Lessor’s option, to the last assignee, if any, of Lessee’s interest hereunder) within sixty
(60) days of the expiration of the Term and after Lessee has vacated the Premises. Any mortgagee of Lessor, purchaser of the Project,
or beneficiary of a deed of trust shall be relieved and released from any obligation to return said deposit in the event such mortgagee,
beneficiary of deed of trust or purchaser comes into possession of the Premises by reason of foreclosure or trustee’s sale
(including deed in lieu thereof) or proceeding in lieu of foreclosure unless said deposit shall have been actually delivered to
such mortgagee, beneficiary of deed of trust or purchaser. Such release, however, shall not relieve the person or entity who owned
the Project immediately prior to acquisition of title by such mortgagee, beneficiary of deed of trust or purchaser of any obligation
he or it may have to return said deposit.

 

5.2.            PARTIAL
REFUND OF SECURITY DEPOSIT. On the second anniversary of the Measurement Date, provided the Lessee has complied with all terms
and conditions of this Lease, including, without limitation, the timely payment of all installments of Rent and further provided
that no default has occurred under the Lease and no event that with the delivery of notice, the passage of time or both would constitute
a default hereunder, Lessor will apply Fifty Thousand and 00/100ths Dollars ($50,000.00) of the Security Deposit against Lessee’s
next installment(s) of Rent to be paid hereunder and thereby reduce the Security Deposit to One Hundred Thousand and 00/100ths
Dollars ($100,000.00). On the fourth anniversary of the Measurement Date, provided the Lessee has complied with all terms and conditions
of this Lease, including, without limitation, the timely payment of all installments of Rent and further provided that no default
has occurred under the Lease and no event that with the delivery of notice, the passage of time or both would constitute a default
hereunder, Lessor will apply Twenty-Five Thousand and 00/100ths Dollars ($25,000.00) of the Security Deposit against Lessee’s
next installment of Rent to be paid hereunder and thereby reduce the Security Deposit to Seventy-Five Thousand and 00/100ths Dollars
($75,000.00). Any difference between the Rent amount due and payable by Lessee hereunder and the amount of the Security Deposit
to be applied by Lessor under this Section 5.2, if any, shall be paid in full by Lessee on the due date therefor. Following
the application of any portion of the Security Deposit by Lessor under this Section 5.2, the reduced amount of such deposit
shall constitute the “Security Deposit” under this Lease and shall be held by the Lessor for the remainder of the Term
in accordance with the terms of this Lease.

 

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6.            USE.

 

6.1.         PERMITTED
USES.

 

A.           The
Premises are to be used only for the Permitted Uses and for no other business or purpose whatsoever without the prior written
consent of Lessor, which will not be unreasonably withheld. Notwithstanding anything to the contrary set forth in this Lease,
in no event shall the “Permitted Uses” include, or any portion of the Premises be used for or in connection with the
following (the “Prohibited Uses”): (i) any product containing any substance, ingredient or component,
whether individually or in combination with any other substance, ingredient or component, which is prohibited under any Applicable
Laws (as such term is defined below), including, without limitation, U.S. federal law; or (ii) taking, filming or recording
photographs, videos or other images depicting adult situations, including, without limitation, sexual acts or any acts which may
be deemed lewd or pornographic by Lessor in its sole and absolute discretion. For purposes of part (ii) of the definition
of Prohibited Uses, images featured on Lessee’s website (www.yandy.com) as of the Date of Lease and attached hereto
as Exhibit G, which are incorporated herein by reference, are acceptable to Lessor and Lessee shall be entitled to use the
Premises for the production of such images under part (3) of the definition of Permitted Uses. Any use of the Premises for
or in connection with a Prohibited Use are expressly prohibited under this Lease and shall constitute a material and incurable
default and breach of this Lease by Tenant. No act shall be done in or about the Premises that is unlawful or that will increase
the existing rate of insurance on the Project. In the event of a breach of this covenant, Lessee shall pay to Lessor any and all
increases in insurance premiums resulting from such breach upon demand, and Lessor shall have all additional remedies provided
for herein to redress such breach. Lessee shall not commit or allow to be committed any waste upon the Premises, or any public
or private nuisance or other act or thing which disturbs the quiet enjoyment of any other lessee in the Project. If any of Lessee’s
machines or equipment disturbs any other lessee in the Project, then Lessee shall provide adequate insulation, or take such other
action as may be necessary to eliminate the noise or disturbance. Lessee, at its expense, shall comply with all laws relating
to its use and occupancy of the Premises. In addition, Lessee shall observe such reasonable rules and regulations as may
be adopted and made available to Lessee by Lessor from time to time for the safety, care and cleanliness of the Premises or the
Project and for the preservation of good order therein. A copy of the current rules and regulations in effect for the Project
is attached hereto as Exhibit “C”.

 

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B.         Lessee
represents, warrants and covenants that the operation of its business shall be conducted in strict compliance with all applicable
private covenants, conditions and restrictions and all applicable federal, state and local environmental, safety and other pertinent
laws, rules, regulations and ordinances (collectively sometimes referred to as “Applicable Laws”), including,
without limitation, the Americans With Disabilities Act and the Arizonans With Disability Act (collectively the “ADA”)
and Lessee agrees that any alterations necessary to the Premises in order to comply with the ADA or such other covenants, conditions,
restrictions, laws, rules, regulations and ordinances, shall be at Lessee’s sole cost and expense, but only if required
due to (i) improvements made to the Premises by the Lessee, (ii) the specific and unique use of the Premises by Lessee
as opposed to uses by tenants in general or (iii) any new Applicable Laws or changes to existing Applicable Laws, coming
into effect after the actual Commencement Date. Lessee shall indemnify, defend and hold harmless Lessor from and against any claim,
liability, expense, lawsuit, loss or other damage, including reasonable attorneys’ fees, arising from or relating to Lessee’s
use of the Premises or Lessee’s activities within the Project or any violations of the ADA due to the use of the Premises
by Lessee, its employees, subtenants, agents, guests, contractors or invitees, except to the extent caused by Lessor’s negligent
or intentional act or breach of this Lease. Notwithstanding the above, Lessor represents and warrants that the Common Areas shall,
as of the Commencement Date, be in compliance with ADA and other Applicable Laws. Lessee shall indemnify, defend, and hold harmless
Lessor from and against any claim, liability, expense, lawsuit, loss or other damage, including reasonable attorney’s fees,
arising from or related to failure of the Premises to comply with the ADA or other Applicable Laws on the Commencement Date, except
to the extent caused by Lessor’s grossly negligent or intentional act or breach of this Lease.

 

6.2.        CONDITION
OF PREMISES. Lessee hereby accepts the Premises in their condition existing as of the date of the execution hereof or in the condition
described on the attached Exhibit “B” whichever is applicable, subject to all applicable covenants,
conditions, restrictions, matters of public record, laws, ordinances and regulations governing and regulating the use of the Premises,
and subject to all matters disclosed thereby. Lessee acknowledges that neither Lessor nor Lessor’s agents has made any representation
or warranty as to the suitability of the Premises for the conduct of Lessee’s business or as to the square footage of space
over which Lessee shall have exclusive use and occupancy and that Lessee and its agents and contractors have been provided with
an opportunity to thoroughly inspect and measure the Premises and the Project.

 

6.3.        HAZARDOUS
MATERIALS.

 

A.         As
used herein, the term “Hazardous Materials” shall mean any substance or material which has been determined
by any state, federal or local governmental authority to be capable of posing a risk of injury to health, safety, property, or
the environment, including all of those materials and substances designated as hazardous or toxic by the U.S. Environmental Protection
Agency, the Consumer Product Safety Commission, the U.S. Food and Drug Administration, the department of environmental quality
or similar government agency of the state, county or municipality where the Premises are located, or any other governmental agency
now or hereafter authorized to regulate materials and substances in the environment.

 

B.           Except
for ordinary and general office supplies, such as copier toner, liquid paper, glue, ink and common household materials, all of
which are used, stored and disposed of in compliance with all applicable federal, state and local laws, rules and regulations
and in quantities not in excess of those reasonably necessary to conduct the Permitted Use, Lessee agrees not to introduce any
Hazardous Materials in, on or adjacent to the Premises or in, on or adjacent to the Project without (i) obtaining Lessor’s
prior written approval, (ii) providing Lessor with 30 days’ prior written notice of the exact amount, nature, and manner
of intended use of such Hazardous Materials, and (iii) complying with all applicable federal, state and local laws, rules,
regulations, policies and authorities 10 relating to the storage, use, disposal and clean-up of Hazardous Materials, including,
but not limited to, the obtaining of all proper permits.

 

    	 	10	 

     

    

 

C.           Lessee
shall immediately notify Lessor of any inquiry, test, investigation, or enforcement proceeding by, against or directed at Lessee
or the Premises concerning Hazardous Materials. Lessee acknowledges that Lessor, as the owner of the Premises, shall have the right,
at its election, in its own name or as Lessee’s agent, to negotiate, defend, approve, and appeal, at Lessee’s expense,
any action taken or order issued by any applicable governmental authority with regard to Hazardous Materials used, stored, disposed
of or released on or from the Premises by Lessee or its agents, employees, contractors or invitees.

 

D.            If
Lessee’s storage, use, disposal or release of any Hazardous Materials in, on or adjacent to the Premises or the Project results
in any contamination of the Premises, the Project, the soil, surface or groundwater thereunder or the air above or around the Premises
and the Project (i) requiring remediation under federal, state or local statutes, ordinances, regulations or policies, or
(ii) at levels which are unacceptable to Lessor, in Lessor’s sole and absolute discretion, Lessee agrees to clean-up
the contamination immediately, at Lessee’s sole cost and expense. Lessee further agrees to indemnify, defend and hold Lessor
harmless from and against any claims, suits, causes of action, costs, damages, loss and fees, including reasonable attorneys’
fees and costs, arising out of or in connection with (i) any clean-up work, inquiry or enforcement proceeding relating to
Hazardous Materials currently or hereafter used, stored, disposed of or released by Lessee or its agents, employees, contractors
or invitees on or about the Premises or the Project, and (ii) the use, storage, disposal or release by Lessee or its agents,
employees, contractors or invitees of any Hazardous Materials on or about the Premises or the Project.

 

E.            Notwithstanding
any other right of entry granted to Lessor under this Lease, Lessor shall have the right to enter the Premises or to have consultants
enter the Premises throughout the Term at reasonable times for the purpose of determining: (1) whether the Premises are in
conformity with federal, state and local statutes, regulations, ordinances and policies, including those pertaining to the environmental
condition of the Premises; (2) whether Lessee has complied with this Section 6 and (3) the corrective
measures, if any, required of Lessee to ensure the safe use, storage and disposal of Hazardous Materials. Lessee agrees to provide
access and reasonable assistance for such inspections. Such inspections may include, but are not limited to, entering the Premises
with machinery for the purpose of obtaining laboratory samples. Lessor shall not be limited in the number of such inspections during
the Term. If, during such inspections, it is found that Lessee’s use, storage, disposal or release of Hazardous Materials
constitutes a violation of this Lease, in addition to any other remedies available to Lessor by reason of such violation,
Lessee shall reimburse Lessor for the cost of such inspections within 10 days of receipt of a written statement therefor. If such
consultants determine that the Premises are contaminated with Hazardous Materials or in violation of any applicable environmental
law by reason of the use, storage, disposal or release of such by Lessee or its agents, employees, contractors or invitees, Lessee
shall, in a timely manner, at its expense, remove such Hazardous Materials or otherwise comply with the recommendations of such
consultants to the reasonable satisfaction of Lessor and any applicable governmental agencies. If Lessee fails to do so, Lessor,
at its sole discretion, may, in addition to all other remedies available to Lessor under this Lease and at law and in equity, cause
the violation and/or contamination to be remedied at Lessee’s sole cost and expense. The right granted to Lessor herein to
inspect the Premises shall not create a duty on Lessor’s part to inspect the Premises, or liability of Lessor for Lessee’s
use, storage or disposal of Hazardous Materials, it being understood that Lessee shall be solely responsible for all liability
in connection therewith.

 

    	 	11	 

     

    

 

F.            Lessee
shall surrender the Premises to Lessor upon the expiration or earlier termination of this Lease free of Hazardous Materials used,
stored, disposed of or released on or from the Premises or the Project by Lessee or its agents, employees, contractors, sublessees,
or invitees and in a condition which complies with all governmental statutes, ordinances, regulations and policies, recommendations
of consultants hired by Lessor, and such other reasonable requirements as may be imposed by Lessor. Lessor shall deliver the Premises
to Lessee upon the Commencement Date free of Hazardous Materials (in violation of applicable laws), used, stored, disposed of or
released on or from the Premises or the Project by Lessor or its agents, employees, contractors, sublessees, or invitees and in
a condition which complies with all governmental statutes, ordinances, regulations, and policies.

 

G.            Lessee’s
obligations under this Section 6 and all indemnification obligations of Lessee under this Lease shall survive
the expiration or earlier termination of this Lease.

 

7.            MAINTENANCE,
REPAIRS AND ALTERATIONS.

 

7.1.       LESSOR’S
OBLIGATIONS. Lessor shall deliver the Premises to Lessee on the Commencement Date in good condition with all building systems (including
the electrical, and plumbing systems) operable and in good working order. Subject to the provisions of Section 9
and except as provided for in Section 7.2(A) and elsewhere herein, and except for damage
caused by any negligent or intentional act or omission of Lessee, Lessee’s agents, employees, contractors, sublessees or
invitees, and except for Lessor’s right to include certain costs as Total Common Area Charges pursuant to Section 11,
Lessor, at Lessor’s expense, shall keep the foundations, exterior roofs and the structural portions of the structural walls
of the Building and the Common Areas (including exterior plumbing and exterior electric) in good order, condition, and repair,
and perform all repairs in a timely manner. Lessee expressly waives the benefits of any statute now or hereafter in effect which
would otherwise afford Lessee the right to make repairs at Lessor’s expense or to terminate this Lease or its obligations
hereunder because of Lessor’s failure to keep the Premises or any other portion of the Premises, the Building, or any other
portion of the Project in good order, condition, and repair.

 

7.2.        LESSEE’S
OBLIGATIONS.

 

A.           Lessee
shall, at its expense throughout the Term, maintain, service, replace, and keep in good repair the Premises (except those items
for which Lessor is specifically made responsible under Section 7.1) and mechanical equipment of the Premises
and all other aspects of the Premises, including, without limitation, such items as floors, ceilings, walls, doors, glass, plumbing,
paint, heating, ventilation and air conditioning equipment, partitions, electrical equipment, wires and electrical fixtures, and
surrender the same upon the expiration or earlier termination of the Term in the same condition as received, ordinary wear and
tear excepted. Lessee shall give Lessor prompt written notice of any item which Lessor is required to repair and of any unsafe
condition upon or within the Premises.

 

    	 	12	 

     

    

 

B.            Except
for the Lessor’s Work, Lessee agrees, at Lessee’s sole cost and expense, but subject to the Tenant Improvement Allowance
(as defined in Exhibit “E” attached hereto), to provide all work of whatever nature that is necessary
to complete the Premises and open the Premises for business (“Lessee’s Work”). Lessee’s
Work shall be completed pursuant to and in accordance with the work letter agreement attached hereto as Exhibit “E”.

 

Unless otherwise specifically provided
in this Lease (including all exhibits) to the contrary, Lessee shall be responsible for all costs relating to space planning and
architectural, engineering, construction and other fees related to Lessee’s improvement of the Premises, and Lessee shall
comply with all governmental regulations, including those of the City of Phoenix, with regard to the construction of any improvements
installed within the Premises.

 

C.            Any
and all of Lessee’s contractors (including Contractor) and/or subcontractors constructing any alterations, improvements (including
Lessee’s Work), additions, utility installations or removing any fixtures shall sign a “Contractors Hold Harmless Agreement”
in the form attached hereto as Exhibit “F”, to be provided to Lessor prior to commencement
of any of such work. Contractor(s)/sub-contractor(s) who do not currently have a certificate of insurance on file with Lessor
shall provide Lessor with certificates of insurance reflecting the coverage requirements set forth in Schedule 2 to Exhibit “E”,
naming Lessor, its manager, Lessor’s property manager and such other parties as Lessor may determine, as additional insureds.
It shall be the responsibility of Lessee to provide Lessor with a copy of its certificate of occupancy upon receipt by Lessee,
which shall be provided to Lessor prior to Lessee commencing any business operations from, within or about the Premises.

 

D.            Lessor
shall have the right to enter into and keep in force during the Term a preventive maintenance contract with a licensed heating
and air conditioning contractor providing for the regular inspection and maintenance of the heating, ventilating and air conditioning
equipment serving the Premises, and for a cost that is reasonable and customary. If Lessor elects to enter into such a preventive
maintenance contract, Lessee shall pay to Lessor, as additional rent hereunder, within 10 days after receiving request therefor
from Lessor, all sums charged by such contractor under the preventive maintenance contract. In the alternative, Lessor may include
such charges as Total Common Area changes pursuant to Section 11. Lessor may elect to enter into such a preventive
maintenance contract that covers heating, ventilating and air conditioning equipment serving the Premises as well as additional
premises. In such case, Lessee shall only be responsible for those charges under the contract relating to the heating, ventilating
and air conditioning equipment serving the Premises.

 

E.            On
the last day of the Term, or on any earlier termination, Lessee shall surrender the Premises to Lessor in the same condition as
received, broom clean, ordinary wear and tear excepted. Lessee shall repair any damage to the Premises occasioned by the removal
of its trade fixtures, furnishings and equipment pursuant to Section 7.3, which repair shall include
without limitation the patching and filling of holes and repair of structural damage.

 

    	 	13	 

     

    

 

7.3.            ALTERATIONS
AND ADDITIONS.

 

A.           Without
the prior written consent of Lessor, Lessee shall not make any alterations, improvements, additions or utility installations within
or to the Premises costing in excess of $10,000.00, nor remove, modify or alter any fixtures, nor make any alterations to the “path
of travel” (as the term is used in the ADA and in the rules and regulations implementing the ADA), whether within or
outside the Premises (collectively, “Alterations”). Any Alterations shall, at Lessor’s option,
become part of the realty and belong to Lessor upon the expiration or earlier termination of this Lease, except for furniture,
equipment and trade fixtures if and to the extent any of such furniture, equipment and trade fixtures were paid for by Lessee.
Lessee shall keep the Premises and the Project free from any liens arising out of any work performed for, material furnished to,
or obligations incurred by the Lessee. It is further understood and agreed that under no circumstance is the Lessee to be deemed
the agent of the Lessor for any alteration, repair, or construction within the Premises, the same being done at the sole expense
of the Lessee. All contractors, materialmen, mechanics, and laborers are hereby charged with notice that they must look only to
the Lessee for the payment of any charge for work done and materials furnished upon the Premises in connection with any Alterations,
repair or construction by Lessee within the Premises during the Term.

 

 

B.            Upon
the expiration or earlier termination of the Term, Lessee shall, upon written demand by Lessor, at Lessee’s sole expense,
with due diligence, remove any Alteration made by Lessee, designated by Lessor to be removed, and repair any damage to the Premises
caused by such removal. Lessee shall remove all of its movable property and trade fixtures which can be removed without damage
to the Premises at the expiration or earlier termination of this Lease and shall pay Lessor for all damages from injury to the
Premises or Project resulting from such removal.

 

C.            Any
and all of Lessee’s contractors (including Contractor) and/or subcontractors performing, constructing or removing any Alterations
shall, as a condition precedent to Lessor’s consent thereto under Section 7.3(A), sign a
 “Contractors Hold Harmless Agreement” in the form attached hereto as Exhibit “F”, to
be provided to Lessor prior to commencement of any of such work. All Contractor(s)/sub-contractor(s) shall provide Lessor
with a certificate of insurance in which the commercial general liability coverage shall not be less than $1,000,000, combined
single limit, naming Lessor, its managers and such other parties as Lessor may determine as additional insureds.

 

8.            INSURANCE;
INDEMNITY.

 

8.1.         LESSEE’S
INSURANCE. From and after the date of delivery of the Premises from Lessor to Lessee and continuing throughout the Term of this
Lease, Lessee shall carry and maintain, at its sole cost and expense, the following types of insurance, in the amounts specified
and in the form hereinafter provided for:

 

A.           Commercial
General Liability Insurance covering the Premises and Lessee’s use thereof against claims for bodily injury or death, personal
injury and property damage occurring upon, in or about the Premises regardless of when such claims may be made. Such insurance
shall have a combined single limit of at least $1,000,000 per occurrence and $2,000,000 in the aggregate. The insurance coverage
required under this subparagraph shall include coverage for liability hazards as defined in the policy forms and endorsements for
premises and operations liability, per project and aggregate endorsements, personal injury liability, broad form property damage
liability and contractual liability arising out of this Lease. If required by Lessor from time to time, acting in accordance with
its insurance advisors, Lessee shall increase the limits of its commercial general public liability insurance to commercially reasonable
amounts.

 

    	 	14	 

     

    

 

B.            Statutory
Workers’ Compensation Insurance to comply with Arizona law and Employer’s Liability Insurance with limits of not less
than $1,000,000 for bodily injury by accident or disease. This policy shall include a waiver of subrogation waiving rights of subrogation
against the Lessor and any indemnified party under this Lease.

 

C.            Special
Causes of Loss Property Insurance covering Lessee’s furniture, fixtures, merchandise and personal property from time to time
in, on or about the Premises, and all leasehold improvements to the Premises specifically including any heating and cooling facilities
serving the Premises which may be located outside the Premises provided that Lessee shall have the option to self-insure for plate
glass. Such insurance (A) shall be written on a replacement cost basis in an amount at least equal to one hundred percent
(100%) of the replacement cost of the insured property, subject to reasonable deductibles approved by the Lessor; and (B) shall
provide protection against perils that are covered under the Special Causes of Loss insurance form. Lessee’s obligation to
provide insurance pursuant to this subparagraph shall apply to all improvements and fixtures described herein, notwithstanding
that some or all of such improvements and fixtures may have been installed by Lessee, Lessor, a prior Lessee or any other party
at any time before or after the delivery of the Premises to Lessee.

 

D.           Business
Auto and Truckers Policy with minimum limits of $1,000,000 per accident including coverage for the loading and unloading of trailers,
and include the Lessor, the Lessor’s property manager and any indemnified party under the Lease as additional insured.

 

E.            Umbrella
and/or Excess insurance with minimum policy limits of $5,000,000 per occurrence and in the aggregate on a per location basis. Policy
limits required can be met with any combination of primary, umbrella or excess policies of insurance.

 

8.2.      LESSOR’S
PROPERTY INSURANCE. Lessor shall obtain and keep in force during the Term a policy or policies of insurance covering loss or damage
to the Project, in the amount of the full replacement value thereof, exclusive of footings and foundations, providing protection
against all perils included within the classification of fire, extended coverage, vandalism, malicious mischief, and special extended
perils (special form), including plate glass coverage. Lessee understands and agrees that the insurance described in this Section 8.2
will not cover Lessee’s personal property, merchandise, stock in trade, trade fixtures or equipment in or about the Premises.

 

8.3.       OTHER
INSURANCE. Lessor shall obtain and keep in force during the Term a policy of business interruption insurance in an amount sufficient
to cover any loss of income from the Project for a period of 12 months; and may, at its option, obtain and keep in force during
the Term a policy of flood insurance in an amount and upon such terms as are acceptable to Lessor.

 

    	 	15	 

     

    

 

8.4.      INSURANCE
POLICIES. Insurance required hereunder shall be in companies rated “A-XII” or better by A. M. Best Co., in Best’s
Key guide. On or prior to the Commencement Date, Lessee shall deliver to Lessor copies of policies of liability insurance required
under Section 8.1 or, at Lessor’s election, certificates evidencing the existence and amounts of such
insurance and naming Lessor, Lessor’s property manager, any indemnified party under the Lease and such other parties as
Lessor may require, as additional insureds thereunder. All such policies and certificates of insurance shall be on forms reasonably
acceptable to Lessor and shall state explicitly that such insurance shall not be cancelable or subject to reduction of coverage
or other modification except upon at least 30 days’ advance written notice by the insurer to Lessor. All deductible amounts
in the insurance required to be carried by Lessee hereunder shall be subject to Lessor’s reasonable approval. Lessee shall
furnish Lessor with renewals or “binders” thereof, or Lessor may order such insurance and charge the cost thereof
to Lessee, which amount shall be payable by Lessee upon demand. Lessee shall not do or permit to be done anything which shall
invalidate the insurance policies referred to in Sections 8.2 or 8.3. Either party may provide any
required insurance under a so-called blanket policy or policies covering other parties and locations and may maintain the required
coverage by a so-called umbrella policy or policies, so long as the required coverage is not thereby diminished.

 

8.5.      WAIVER
OF SUBROGATION. Notwithstanding any other provision in this Lease to the contrary, Lessee and Lessor each hereby waives any and
all rights of recovery against the other, or against the officers, partners, employees, members, managers, agents, and representatives
of the other, for loss of or damage to such waiving party or its property or the property of others under its control, where such
loss or damage is insured against and actually covered (or where such loss or damage is required hereunder to be insured against
and if so insured would have been covered) under any property insurance policy in force at the time of such loss or damage, but
such waiver extends only to the extent of the actual insurance coverage or the coverage that would have applied if the insurance
that is required hereunder had been obtained. Lessee and Lessor shall, upon obtaining the policies of insurance required hereunder,
give notice to the insurance carrier or carriers that the foregoing mutual waiver of subrogation is contained in this Lease.

 

8.6.      INDEMNITY.
Lessee shall indemnify, defend and hold harmless Lessor from and against any and all claims arising from Lessee’s use of
the Premises, or from the conduct of Lessee’s business or from any activity, work, or things done, permitted, or suffered
by Lessee in or about the Premises or elsewhere, and shall further indemnify, defend and hold harmless Lessor from and against
any and all claims arising from any breach or default in the performance of any obligation on Lessee’s part to be performed
under the terms of this Lease or arising from any negligence of the Lessee, or any of the Lessee’s agents, contractors, sublessees,
invitees or employees, and from and against all costs, attorneys’ fees, expenses, and liabilities incurred in the defense
of any such claim or any action or proceeding brought thereon, except to the extent occurring as a result of the gross negligence
or willful misconduct of the Lessor or its contractors, subcontractors and employees or the breach of this Agreement by Lessor.
Lessee, as a material part of the consideration to Lessor, hereby assumes all risk of damage to property or injury to persons,
in, upon, or about the Premises arising from any cause other than the gross negligence or willful misconduct of the Lessor or its
contractors, subcontractors, or employees or the breach of this Agreement by Lessor, and Lessee hereby waives all claims in respect
thereof against Lessor.

 

    	 	16	 

     

    

 

Without limiting the generality of the
foregoing, Lessee acknowledges and agrees that the decision as to whether to include dock locks, dock restraints or other safety-related
equipment, fixtures or improvements in the Building or elsewhere in the Premises shall solely be the responsibility of Lessee,
and Lessee shall indemnify, defend and hold harmless Lessor from and against any and all claims, damages, causes of action, demands,
penalties, costs, liabilities, losses, and expenses (including reasonable attorneys’ fees and expenses at the trial and appellate
levels) resulting from actual or threatened claims by third parties occasioned by injuries to any person and damage to, or theft
or loss of, property occurring in or about the Leased Premises to the extent caused or alleged to be caused by the failure of any
such safety-related equipment, fixtures or improvements to be installed or maintained at the Leased Premises.

 

8.7.           EXEMPTION
OF LESSOR FROM LIABILITY.

 

A.          Except
to the extent occurring as a result of the gross negligence or willful misconduct of the Lessor or its contractors, subcontractors
and employees or the breach of this Agreement by Lessor, or as otherwise provided elsewhere in this Lease, Lessee hereby agrees
that Lessor and its agents shall not be liable for injury to Lessee’s business or any loss of income therefrom or for damage
to the goods, wares, merchandise, equipment or other property of Lessee, Lessee’s employees, invitees, customers, or any
other person in or about the Premises, nor shall Lessor be liable for injury to the person of Lessee, Lessee’s employees,
agents or contractors, whether such damage or injury is caused by or results from fire, steam, electricity, gas, water or rain,
or from the breakage, leakage, obstruction, or other defects of pipes, sprinklers, wires, appliances, plumbing, air conditioning
or light fixtures, or from any other cause whether said damage or injury results from conditions arising upon the Premises or upon
other portions of the Building, or from other portions of the Project, or from other sources or places, and regardless of whether
the cause of such damage or injury or the means of repairing the same is inaccessible to Lessee. Lessor shall not be liable for
any damages arising from any act or neglect of any other lessee of the Project.

 

B.            No
members, managers, managers of a member(s), partners, shareholders, directors, officers, employees or agents of Lessor or individual,
member of a joint venture, tenancy in common, firm or partnership, general or limited, which may be the Lessor or any successor
in interest, shall be subject to personal liability with respect to any of the covenants or conditions of this Lease. Lessee shall
look solely to the equity of Lessor in the Project, and the rents, issues and profits derived therefrom, and to no other assets
of Lessor, for the satisfaction of the remedies of Lessee in the event of a breach by Lessor. Lessee will not seek recourse against
the members, managers, managers of a member(s), partners, shareholders, directors, officers, employees or agents of Lessor or an
individual, member of a joint venture, tenancy in common, firm or partnership, general or limited, which may be the Lessor or any
successor in interest or any of their personal assets for such satisfaction. Similarly, Lessor will not seek recourse against the
members, managers, managers of a member(s), partners, shareholders, directors, officers or employees of Lessee (or of any successor
in interest thereto) for the obligations of Lessee under this Lease. It is mutually agreed that this clause is and shall be considered
an integral part of this Lease.

 

    17

     

    

 

8.8.          LESSEE’S
PROPORTIONATE SHARE OF INSURANCE PREMIUMS. Lessee shall pay during the Term, as additional Rent and in addition to all other charges
due hereunder, Lessee’s proportionate share (calculated in the manner described in Section 12)
of the premiums for the insurance required or permitted to be carried by Lessor hereunder (the “Insurance Amount”),
whether the Insurance Amount shall be the result of the nature of Lessee’s occupancy, any act or omission of Lessee, requirements
of the holder of a mortgage or deed of trust covering the Premises, increased valuation of the Premises or the Project, or otherwise.
Lessee shall pay Lessor in advance its monthly estimated proportionate share of the Insurance Amount together with all applicable
rental taxes due thereon, at the same time as Lessee pays Monthly Base Rent, or if no Monthly Base Rent is due, within 10 days
after receipt of an invoice from Lessor setting forth Lessor’s estimate of such amount. Within 90 days following the end
of each calendar year during the Term, or as soon thereafter as is reasonably possible, Lessor shall furnish Lessee with a statement
of all of Lessor’s insurance costs for the Project for the previous calendar year indicating the computation of Lessee’s
proportionate share of such costs for such calendar year and the payments made by Lessee during such calendar year. If Lessee’s
aggregate estimated monthly payments actually paid to Lessor for the calendar year are greater than Lessee’s proportionate
share of all of Lessor’s insurance costs for the Project for such calendar year, Lessor shall apply the excess to any past
due amounts owing from Lessee to Lessor or, in the event no such past due amounts are then owing, Lessor shall credit such excess
to amounts to become due from Lessee under this Section 8.8. If the payments made are less than Lessee’s
proportionate share, Lessee shall pay the difference to Lessor within 10 days of its receipt of such statement.

 

9.              DAMAGE
OR DESTRUCTION.

 

9.1.           RECONSTRUCTION
OF PREMISES. If during the Term all or part of the Premises should be destroyed partially or totally by fire or other casualty,
this Lease shall continue thereafter in full force and effect, except as hereinafter provided, and the Lessor shall use commercially
reasonable diligent efforts to cause the reconstruction of the Premises as soon as reasonably possible following such destruction
to substantially the same condition in which it existed at the time immediately preceding such destruction. Lessee’s obligation
to pay Rent to Lessor hereunder shall abate from the date of such destruction until completion of such reconstruction and the Term
hereof shall be automatically extended for a period of time equivalent to that during which Rent is abated as provided herein.
Should the Premises be partially damaged or destroyed, Rent shall be abated in the same proportion as the destruction materially
affects Lessee’s ability to occupy and use the Premises for the Permitted Use. Notwithstanding the foregoing, within 30 days
of the loss (or such longer period as may be reasonably necessary), Lessor shall reasonably determine and communicate in writing
to Lessee (the “Lessor’s Repair Notice”) whether or not the Premises can be reasonably repaired
within 180 days following such casualty, and if Lessor determines that the Premises cannot reasonably be repaired within such 180
day period, then either party may, by written notice to the other party within 30 days after Lessee’s receipt of Lessor’s
Repair Notice, terminate this Lease (the “Termination Right”). Notwithstanding the foregoing, Lessor
shall have 90 days following the partial or total destruction of the Premises to elect in writing not to commence reconstruction,
repair or replacement of the Premises and to terminate this Lease, and if Lessor’s lender fails to allow insurance proceeds
to be made available for reconstruction of the Premises following a fire or other casualty or if such fire or other casualty is
not covered by the insurance maintained by Lessor (or the insurance that Lessor would have maintained if it had maintained the
insurance required under Section 8.4) Lessor shall have the option, within 30 days following the date
Lessor learns of either of such facts, to terminate this Lease. Notwithstanding any language herein to the contrary, if (i) the
Premises are damaged by a casualty loss not caused by Lessee or its agents, employees or licensees, and (ii) in Lessee’s
reasonable judgment the Premises are not repaired sufficiently within 180 days of the date of loss (the “Repair Period”)
so that Lessee can reasonably operate its business in the Premises, and (iii) Lessor at its sole expense has not made available
to Lessee (which availability may be elected by Lessor in its sole discretion) alternative space reasonably acceptable to Lessee
in which Lessee can continue its business, then Lessee may terminate this Lease upon written notice to Lessor given within 30 days
after the expiration of the Repair Period (the “Second Termination Right”). If Lessor makes available
to Lessee alternative space to keep this Lease in effect, then Lessor shall also be responsible at its sole expense to move Lessee
back into the Premises after repair of the Premises to a substantially equivalent condition as existed prior to the casualty date.
Lessor and Lessee shall cooperate with each other in connection with any such relocation.

 

    18

     

    

 

9.2.           FORCE
MAJEURE. Except for Lessee’s Termination Right and the Second Termination Right, if Lessor is bona fide delayed or hindered
in or prevented from the performance of any term, covenant or act required in Section 9.1 by reason of Force
Majeure, then the performance of that term, covenant or act is excused for the period of the delay and the reconstruction period
shall be deemed correspondingly extended.

 

9.3.           ABATEMENT
SOLE REMEDY. Except for Lessee’s Termination Right and the Second Termination Right, and except for abatement of rent, if
any, as described in Section 9.1 above, Lessee shall have no claim against Lessor for any damage suffered by
reason of any such damage, destruction, repair or restoration of the Premises.

 

9.4.           NOTICE
OF LOSS OR DAMAGE. Lessee shall give immediate telephonic notice to Lessor in cases of accident or material casualty in the Premises
or in the Building, and Lessee shall thereafter promptly confirm such notice in writing.

 

9.5.           WAIVER.
Lessee hereby expressly waives the benefit of A.R.S. § 33-343 or any other statute now or hereafter in effect which would
otherwise afford Lessee the right to terminate this Lease or its obligations hereunder due to damage to or destruction of the Premises
or the Project and agrees that the terms of this Lease shall govern the effect of any damage to or destruction thereof.

 

10.            REAL
PROPERTY TAXES.

 

10.1.         PAYMENT
OF LESSEE’S PROPORTIONATE SHARE OF TAXES. Lessor shall pay all real property taxes applicable to the Premises; provided,
however, that Lessee shall pay, as additional Rent hereunder and in addition to all other charges due hereunder, Lessee’s
proportionate share (calculated in the manner described in Section 12) of Real Property Taxes (as defined
below) applicable to the Project during the Term (the “Real Property Tax Amount”). Lessee shall pay Lessor
in advance its monthly estimated share of the Real Property Tax Amount, together with all applicable rental taxes due thereon,
at the same time as Lessee pays Monthly Base Rent, or if no Monthly Base Rent is due, within 10 days after receipt of an invoice
from Lessor setting forth Lessor’s estimate of such amount. Within 90 days following the end of each calendar year during
the Term or as soon thereafter as is reasonably possible, Lessor shall furnish Lessee with a statement of all Real Property Taxes
relating to the Project for the previous calendar year indicating the computation of Lessee’s proportionate share of such
Real Property Taxes for such calendar year and the payments made by Lessee during such calendar year. If Lessee’s aggregate
estimated monthly payments actually paid to Lessor for the calendar year are greater than Lessee’s proportionate share of
all Real Property Taxes relating to the Project for such calendar year, Lessor shall apply the excess to any past due amounts owing
from Lessee to Lessor or, in the event no such past due amounts are then owing, Lessor shall credit such excess to amounts to become
due from Lessee under this Section 10.1. If the payments made are less than Lessee’s proportionate share,
Lessee shall pay the difference to Lessor within 10 days of its receipt of such statement. If the Term does not commence or expire
concurrently with the commencement or expiration of the tax year, Lessee’s liability for Real Property Taxes for such partial
year shall be prorated on an annual basis.

 

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10.2.         DEFINITION
OF “REAL PROPERTY TAX(ES)”. As used herein, the term “Real Property Tax” or “Real
Property Taxes” shall include any form of assessment, fee, levy, improvement bond, penalty or tax (other than personal
income, inheritance or estate taxes), imposed by any authority having the direct or indirect power to tax or assess, including
any city, county, state, or federal government, any school, agricultural, lighting, drainage, or other improvement district thereof,
or any private owners association created by covenants, conditions and restrictions binding on the Premises, as against any legal
or equitable interest of Lessor in the Premises, the Project and the real property of which the Premises and the Project are a
part, or as against Lessor’s business of leasing space in the Project. The term Real Property Tax shall also include any
tax, fee, levy, assessment or charge, or any increase therein, imposed by reason of events occurring during the Term, including,
but not limited to, a change in the ownership of the Project, but shall not include any tax on the income of Lessor.

 

10.3.         PERSONAL
PROPERTY TAXES.

 

A.           Lessee
shall pay prior to delinquency all taxes assessed against and levied upon trade fixtures, furnishings, equipment, and all other
personal property of Lessee contained in the Premises or elsewhere. When possible, Lessee shall cause said trade fixtures, furnishings,
equipment, and all other personal property to be assessed and billed separately from the real property of Lessor.

 

B.            If
any of Lessee’s personal property shall be assessed and billed with Lessor’s real property, Lessee shall pay Lessor
the taxes attributable to Lessee within 10 days after receipt of a written statement setting forth the taxes applicable to Lessee’s
property.

 

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11.           COMMON
AREA CHARGES. In addition to any other charges herein provided to be paid by Lessee to
Lessor, Lessee shall pay to Lessor, as additional Rent and as Lessee’s share of the cost of maintaining, operating, repairing
and managing the Project, Lessee’s proportionate share (as calculated in the manner described in Section 12)
of the Total Common Area Charges (as hereinafter defined) for any calendar year during the Term (the “CAM Amount”).
Lessee shall pay Lessor in advance its monthly estimated proportionate share (as calculated in the manner described in Section 12)
of the Total Common Area Charges, together with all applicable rental taxes due thereon, at the same time as Lessee pays Monthly
Base Rent, or if no Monthly Base Rent is due, within 15 days after receipt of an invoice from Lessor setting forth Lessor’s
estimate of such amount. Within 90 days following the end of each calendar year during the Term or as soon thereafter as is reasonably
possible, Lessor shall furnish Lessee with a statement of all Total Common Area Charges for the Project for the previous calendar
year indicating the computation of Lessee’s proportionate share of the Total Common Area Charges for such calendar year and
the payments made by Lessee during such calendar year. If Lessee’s aggregate estimated monthly payments actually paid to
Lessor for the calendar year are greater than Lessee’s proportionate share of the Total Common Area Charges for such calendar
year, Lessor shall apply the excess to any past due amounts owing from Lessee to Lessor or, in the event no such past due amounts
are then owing, Lessor shall credit such excess to amounts to become due from Lessee under this Section 11.
If the payments made are less than Lessee’s proportionate share, Lessee shall pay the difference to Lessor within 30 days
of its receipt of such statement. “Total Common Area Charges” shall consist of all customary costs and
expenses of every type associated with the management, repair, maintenance, and insuring of the Project during the Term including,
without limitation, costs and expenses for the following: gardening and landscaping; utilities, water and sewer charges; actual
premiums for liability, property damage and casualty, workman’s compensation and other insurance as required by Lessor or
its lenders; all personal property taxes levied on or attributable to personal property used in connection with the Project; rental
or lease payments paid by Lessor for rented or leased personal property used in the operation or maintenance of Project; fees for
required licenses and permits; refuse disposal charges; repairing, resurfacing, repaving, maintaining, painting, lighting, cleaning,
janitorial, refuse removal, security and similar items; repair and maintenance of exterior roofs and reserves for roof replacement
and exterior painting of the Project and other appropriate reserves; fees paid to property managers; amortization of capital expenses,
including financing costs if (i) required by a governmental entity for energy conservation, life safety, ADA, or environmental
purposes, (ii) reasonably made by Lessor to reduce Total Common Area Charges, or (iii) the replacement of the HVAC systems
under Section 7.2 above, the cost of which capital expenses shall be reasonably amortized by Lessor over the useful
life of the improvement, in accordance with generally accepted accounting principles; compensation (including employment taxes
and fringe benefits) of all persons who perform duties connected with the operation, maintenance, repair or overhaul of the Project,
but only to the extent of the time performed working on the Project; and other similar costs and expenses relating to the operation
and maintenance of the Project. Said Total Common Area Charges shall further include all charges for utilities supplied to the
Premises and to other Lessees of the Project which are not separately metered, all charges for regular preventive maintenance service
of mechanical equipment including, without limitation, heating, ventilating and air conditioning equipment, which serves the Common
Areas, the cost of lighting, maintenance and repair of the Project identification signs, all charges for repair and maintenance
of mechanical equipment, including, without limitation, heating, ventilating and air conditioning equipment which is attributable
to the Project, and the cost of repairing and maintaining the plumbing, electrical and other off-Premises facilities serving the
Premises or the Project. The Total Common Area Charges will also include an administrative fee equal to 4% of all other common
area charges for the Project under this Lease, the Insurance Amount and the Real Property Taxes.

 

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Common Area Charges shall not include interest,
amortization or other payments on loans required to be paid by Lessor; leasing commissions; income, excess profits or franchise
taxes or other such taxes imposed on or measured by the income of Lessor from the operation of the Premises or the Project; the
cost of providing tenant improvements to any tenants or the cost of renovating space leased to new tenants or space vacated by
any tenant; goods or materials provided to any tenant for which separate charge to such tenant is made; advertising costs incurred
in renting space in the Building or Project; any costs or expenses for which Lessor is or will otherwise be reimbursed or indemnified
(whether by an insurer, condemnor, tenant or otherwise); overhead and administrative costs of Lessor not directly incurred in the
operation and maintenance of the Project; depreciation or amortization of the Building or its contents or components; expenses
for repairs or other work the cost of which is covered by insurance carried by Lessor or required to be carried by Lessor hereunder;
expenses in addition to leasing commissions incurred in leasing or obtaining new tenants or retaining existing tenants, including
legal expenses, entertaining or promotion; interest, amortization or other costs, including legal fees, associated with any mortgage,
loan or refinancing of the Project or any interest of Lessor in the Project; transfer or recordation taxes and other charges in
connection with the transfer of ownership in the Building, or land trust fees; expenses incurred for any necessary replacement
of any item to the extent that it is covered under warranty, provided the warranty is honored; the cost of any item or service
for which Lessee separately reimburses Lessor, or which Lessor provides selectively to one or more tenants of the Project, other
than Lessee, whether or not Lessor is reimbursed by such other tenant(s); legal fees relating to the ownership, construction, leasing,
sale of or relating to any litigation in any way involving the Project, or to the enforcement of the terms of any lease; any interest
or penalty incurred due to the late payment of any operating expense and/or real estate tax; the cost of any penalty or fine incurred
for noncompliance with any applicable building or fire code or any other applicable law relating to the Project, any personal property
taxes of the Lessor for equipment or items not used directly in the operation or maintenance of the Project, nor connected therewith;
Lessor’s general office expenses, and expenses for travel, entertainment, gifts, dues, subscriptions, memberships, tuition,
seminars, errors and omissions insurance, automobile allowances, and charitable or political donations, provided that in no event
shall the payroll, payroll related and other expenses related to any employees of Lessor above the building manager or equivalent
operational level or not working full-time on the management or operation of the Project be included in Common Area Charges, and
further provided that such expenses of part-time workers may be included if equitably allocated to reflect actual time spent on
the Project; the cost of overtime or other expense to Lessor in performing work expressly provided in this Lease to be borne at
Lessor’s expense; all bad debt loss, rent loss, or reserve for bad debt or rent loss; and any amount paid to an entity related
to Lessor which exceed the amount that would have been paid for comparable goods or services in an arms-length transaction between
unrelated parties in the greater Phoenix metropolitan area.

 

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Lessee shall have the right, at Lessee’s
cost, to audit Lessor’s books and records relating to Total Common Area Charges, Real Property Taxes and the Insurance Amount.
Lessee shall provide not less than thirty (30) days’ prior written notice of its intent to audit. Lessee’s right to
audit Lessor’s books and records may be exercised no more than once per calendar year. Lessee’s written notice of its
intent to audit must be received by Lessor no later than 60 days after Lessee’s receipt of the statement(s) from Lessor
relating to Total Common Area Charges, Real Property Taxes and the Insurance Amount. Lessee shall provide the results of such audit
to the Lessor immediately upon receipt by Lessee. If such audit reveals that Lessor has over-charged Lessee, then within thirty
(30) days after the results of such audit are delivered to Lessor, Lessor shall reimburse to Lessee the amount of such over-charge.
If such audit reveals that Lessor has under-charged Lessee, then within thirty (30) days after the results of such audit are delivered
to Lessor, Lessee shall pay to Lessor the amount of such under-charge. Lessee agrees to pay the cost of such audit unless it is
subsequently determined that Lessor’s original statement(s) relating to Total Common Area Charges, Real Property Taxes
and the Insurance Amount overstated such costs by five percent (5%) or more of the actual Total Common Area Charges, Real Property
Taxes and Insurance Amount verified by such audit, in which case Lessor shall reimburse Lessee for the reasonable cost of such
audit (but in no event shall such reimbursement exceed the amount the Total Common Area Charges, Real Property Taxes and the Insurance
Amount were overstated). Lessee shall be specifically restricted and prohibited from engaging an auditor pursuant to this Section 11
on any sort of fee-for-results or contingent fee arrangement basis.

 

12.          PROPORTIONATE
SHARE. For purposes of Sections 8.8, 10.1 11 and 13,
Lessee’s proportionate share to be used to calculate the Insurance Amount, the Real Property Tax Amount, the CAM Amount and
Lessee’s responsibility for any utilities supplied to the Premises which are not separately metered shall be a fraction,
the numerator of which is the total gross rentable square footage of the Premises, and the denominator of which is the total gross
rentable square footage of the entire Project, from time to time. The parties agree that as of the Commencement Date, Lessee’s
proportionate share will be 31.91%. Lessor estimates the CAM Amount for calendar year 2021 to be approximately $0.13 per square
foot of rentable area per month. Lessee’s proportionate share as of the Commencement Date, as described above, is a negotiated
figure and shall govern whether or not the actual rentable square footage of the Premises and/or the actual rentable square footage
of the entire Project as of the Commencement Date is the same as that described above.

 

13.            UTILITIES;
UTILITIES DEREGULATION.

 

13.1.         UTILITIES.
Lessee shall contract directly with the local utilities suppliers and pay for all water, gas, heat, light, power, telephone, and
other utilities and services supplied to the Premises during the Term, together with any taxes thereon. If any utility supplied
to the Premises is not separately metered, Lessee shall pay its proportionate share of the cost thereof as Total Common Area Charges.

 

13.2.         LESSOR
CONTROLS SELECTION. If permitted by law, Lessor shall have the right at any time and from time to time during the Term to contract
for service from a company or companies providing electricity service different from the utility company currently providing electricity
service to the Project (each such different company shall hereinafter be referred to as an “Alternate Service Provider”).

 

13.3.        LESSEE
SHALL GIVE LESSOR ACCESS. Lessee shall cooperate with Lessor, the utility company currently providing electricity to the Project
(the “Electric Service Provider”), and any Alternate Service Provider at all times and, as reasonably
necessary, shall allow Lessor, Electric Service Provider and any Alternate Service Provider reasonable access to the Project’s
electric lines, feeders, risers, wiring and any other machinery within the Premises.

 

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13.4.        LESSOR
NOT RESPONSIBLE FOR INTERRUPTION OF SERVICE. Lessor shall in no way be liable or responsible for any loss, damage, or expense that
Lessee may sustain or incur by reason of any change, failure, interference, disruption, or defect in the supply or character of
the electric energy or any other utility or service furnished to the Premises, or if the quantity or character of the electric
energy supplied by the Electric Service Provider or any Alternate Service Provider is no longer available or suitable for Lessee’s
requirements, and no such change, failure, defect, unavailability, or unsuitability shall constitute an actual or constructive
eviction in whole or in part, or entitle Lessee to any abatement or diminution of Rent, or relieve Lessee from any obligations
under the Lease; provided, however, that if any interruption of services persists for a period in excess of five (5) consecutive
business days and such interruption is not related to any act or omission of Lessee, Lessee shall, as Lessee’s sole remedy,
be entitled to an abatement of Rent pro rata for each day thereafter that Lessee is without any such services.

 

14.            ASSIGNMENT
AND SUBLETTING.

 

14.1.         LESSOR’S
CONSENT REQUIRED. Except as provided in Section 14.6 below, Lessee shall not voluntarily or by operation of
law, assign, transfer, mortgage, sublet, or otherwise transfer or encumber all or any part of Lessee’s interest in this Lease
or in the Premises, without Lessor’s prior written consent, which consent may be granted, conditioned or withheld in Lessor’s
sole and absolute discretion. Any attempted assignment, transfer, mortgage, encumbrance, or subletting without such consent shall
be void, and shall constitute a breach of this Lease.

 

14.2.         NO
RELEASE OF LESSEE. Regardless of Lessor’s consent, no subletting or assignment shall release Lessee of Lessee’s obligation
or alter the primary liability of Lessee to pay the Rent and to perform all other obligations to be performed by Lessee hereunder,
and no assignment shall be effective unless and until the assignee executes a written instrument, in form reasonably acceptable
to Lessor, assuming all of Lessee’s obligations under this Lease. The acceptance of Rent by Lessor from any other person
shall not be deemed to be a waiver by Lessor of any provision hereof. Consent to one assignment or subletting shall not be deemed
consent to any subsequent assignment or subletting.

 

14.3.         PAYMENT
OF COSTS AND FEES. Lessee shall pay in advance all costs, expenses and reasonable attorneys’ fees that may be incurred by
Lessor in processing, documenting or administering the request of Lessee for Lessor’s consent required pursuant to this Section (whether
or not such consent is granted) in addition to a $500 assignment/subletting fee in the event Lessor consents to any assignment
or sublease. This Section 14.3 does not apply to a Permitted Transfer (as defined in Section 14.6
below).

 

14.4.         PROFITS
ON ASSIGNMENT OR SUBLEASE. Without affecting any of its other obligations under this Lease, Lessee shall pay to Lessor 50% of all
money or other economic consideration received by Lessee as a result of (1) subletting any or all of the space covered by
this Lease, and/or (2) assignment of this Lease. Such amounts, together with all applicable rental taxes due thereon, shall
be paid by Lessee to Lessor at the same time as Lessee pays Monthly Base Rent, or if no Monthly Base Rent is due, within 5 days
after receipt thereof by Lessee. This amount shall be in addition to any Rent due under this Lease, and shall apply to all amounts
received by the Lessee whether or not described as payments of Rent. For example, if a lessee is renting 2,000 square feet of space
for $10,000 per year, and sublets 1,000 square feet of the space to another tenant for $8,000, lessee owes Lessor a total of $11,500
per year during the term of the sublease. This consists of $1,500 received by the lessee from the sublease (constituting lessee’s
 “profit” on the sublease) plus $10,000 (the annual base rent due under the lease).

 

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14.5.         CHANGE
IN CONTROL OF LESSEE. If Lessee is a corporation, a limited liability company, partnership or other entity, any change in control
of such entity shall constitute a transfer of Lessee’s interest in this Lease. As used in this Section and Section 14.6
 “control” means the possession directly or indirectly, of the power to direct, or cause the direction of, the management
or policies of a person or entity, whether through ownership of voting securities, by contract or otherwise.

 

14.6.         PERMITTED
TRANSFERS. Lessee may, upon notice to Lessor but without obtaining Lessor’s consent, assign this Lease or sublet all or any
portion of the Premises to any individual(s) or entity: (a) that owns a majority of the equity interests in Lessee; (b) a
majority of the equity interests in which are owned by Lessee; or (c) a majority of the equity interests in which are owned
by the same individual(s) or entity that owns a majority of the equity interests in Lessee. Furthermore, Lessor’s consent
shall not be required in connection with any merger of Lessee into a different entity or a transfer of a substantial portion of
Lessee’s assets to another entity provided, in either event, that there is no change in the control of Lessee as a result
thereof. An assignment, sublease, merger or transfer described in this Section 14.6 is referred to herein as
a “Permitted Transfer”.

 

15.           DEFAULTS;
REMEDIES.

 

15.1.        DEFAULTS.
The occurrence of any one or more of the following events shall constitute a material default and breach of this Lease by Lessee:

 

A.           The
abandonment of the Premises by Lessee.

 

B.            The
failure by Lessee to make any payment of Rent or any other payment required to be made by Lessee hereunder when due, where such
failure shall continue for a period of five (5) days after written notice thereof from Lessor to Lessee.

 

C.            The
failure by Lessee to observe or perform any of the covenants, conditions or provisions of this Lease to be observed or performed
by Lessee, other than described in Subsection (B) above, where such failure shall continue for a period of 30 days after written
notice thereof from Lessor to Lessee; provided, however, that if the nature of Lessee’s obligation is such that more than
30 days are reasonably required for performance, then Lessee shall not be in default if Lessee commences performance with such
30-day period and thereafter diligently prosecutes the same to completion; provided, however, in no event shall Lessee have more
than 60 days to complete the cure of such default.

 

D.             (i) The
making by Lessee of any general assignment or general arrangement for the benefit of creditors; (ii) the filing by or against
Lessee of a petition to have Lessee adjudged a bankrupt or a petition for reorganization or arrangement under any law relating
to bankruptcy (unless, in the case of a petition filed against Lessee, the same is dismissed within 60 days); (iii) the appointment
of a trustee or receiver to take possession of substantially all of Lessee’s assets located at the Premises or of Lessee’s
interest in this Lease, where possession is not restored to Lessee within 30 days; or (iv) the attachment, execution, or other
judicial seizure of substantially all of Lessee’s assets located at the Premises or of Lessee’s interest in this Lease,
where such seizure is not discharged within 30 days.

 

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E.            The
chronic delinquency by Lessee in the payment of monthly Rent, or any other periodic payment required to be paid by Lessee under
this Lease. “Chronic delinquency” shall mean failure by Lessee to pay monthly Rent, or any other periodic
payment required to be paid by Lessee under this Lease, within five (5) days as described in Section 15.1(B) above,
for any three (3) months (consecutive or nonconsecutive) during any 12 month period. In the event of the chronic delinquency,
at Lessor’s option, Lessor shall have the additional right to require that monthly Rent be paid by Lessee quarter-annually,
in advance, for the remainder of the Term.

 

F.             If
applicable, any guarantor of this Lease, if any, dies, dissolves (including, without limitation, administrative dissolution), revokes,
or otherwise terminates, or purports to revoke or otherwise terminate (by operation of law or otherwise), any guarantees of all
or any portion of Lessee’s obligation under this Lease.

 

15.2.         REMEDIES.
In the event of any such default by Lessee, Lessor may at any time thereafter, with or without notice or demand and without limiting
Lessor in the exercise of any other right or remedy which Lessor may have by reason of such default or breach:

 

A.            Terminate
this Lease by any lawful means, in which case Lessee shall immediately surrender possession of the Premises to Lessor. In such
event, Lessor shall be entitled to recover from Lessee all damages incurred by Lessor by reason of Lessee’s default including,
but not limited to, the cost of recovering possession of the Premises; expenses of reletting, including necessary renovation and
alteration of the Premises, reasonable attorneys’ fees, and any real estate commission actually paid; the “worth at
the time of award” established by the court having jurisdiction thereof of the amount by which the unpaid Rent and other
charges due for the balance of the Term after the time of Lessee’s default exceeds the amount of such rental loss for the
same period that Lessee proves by clear and convincing evidence could have been reasonably avoided; and that portion of the leasing
commission paid by Lessor applicable to the unexpired term of this Lease. For purposes of this Section 15.2(A),
 “worth at the time of award” of the amount referred to above shall be computed by discounting each amount by a rate
equal to the Prime Rate at the time of the award, but in no event more than an annual rate of ten percent (10%). As used herein,
the “Prime Rate” means the then current prime rate published in the Wall Street Journal; provided,
however, if the Wall Street Journal no longer publishes a prime rate then the Prime Rate shall be an equivalent rate established
by a financial institution or financial publication designated by Lessor.

 

B.            Re-enter
the Premises, without terminating this Lease, and remove any property from the Premises, in which case Lessor shall be entitled
to enforce all of Lessor’s rights and remedies under this Lease, including the right to recover the Rent and all other amounts
due hereunder as they become due. No re-entry or taking possession of the Premises by Lessor pursuant to this Section 15.2
or other action on Lessor’s part shall be construed as an election to terminate this Lease unless a written notice of such
intention is given to Lessee or unless the termination thereof is decreed by a court of competent jurisdiction. Lessor’s
election not to terminate this Lease pursuant to this Section 15.2(B) or pursuant to any other provision
of this Lease shall not preclude Lessor from subsequently electing to terminate this Lease or pursuing any of its other remedies.

 

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C.            Maintain
Lessee’s right to possession, in which case this Lease shall continue in effect, whether or not Lessee shall have abandoned
the Premises. In such event Lessor shall be entitled to enforce all of Lessor’s rights and remedies under this Lease, including
the right to recover the Rent and all other amounts due hereunder as they become due.

 

D.            Pursue
any other remedy, at law or in equity, now or hereafter available under the laws or judicial decisions of the state wherein the
Premises are located. The expiration or termination of this Lease and/or the termination of Lessee’s right to possession
shall not relieve Lessee from liability under any indemnity provision of this Lease as to matters occurring or accruing during
the Term hereof or by reason of Lessee’s occupancy of the Premises.

 

The remedies set forth
herein shall be deemed cumulative and not exclusive.

 

15.3.        DEFAULT
BY LESSOR. Lessor shall not be deemed in default unless Lessor fails to perform obligations required of Lessor within a reasonable
time, but in no event earlier than 30 days after written notice by Lessee to Lessor and to the holder of any mortgage or deed of
trust covering the Premises whose name and address shall have theretofore been furnished to Lessee in writing specifying wherein
Lessor has failed to perform such obligations; provided, however, that if the nature of Lessor’s obligation is such that
more than 30 days are required for performance, then Lessor shall not be in default if Lessor commences performance within such
30-day period and thereafter diligently prosecutes the same to completion; provided, however, in no event shall Lessor have more
than 90 days to complete the cure of such default. If Lessor does not perform, Lessor’s mortgagee may perform in Lessor’s
place and Lessee must accept such performance. Except as otherwise specifically provided in this Lease, in no event shall Lessee
have the right to terminate this Lease as a result of Lessor’s default, and Lessee’s remedies shall be limited to damages
and/or an injunction.

 

15.4.         LATE
CHARGES. Lessee hereby acknowledges that late payment by Lessee to Lessor of Rent and other sums due hereunder will cause Lessor
to incur costs not contemplated by this Lease, the exact amount of which will be extremely difficult to ascertain. Such costs include,
but are not limited to, processing and accounting charges, and late charges which may be imposed on Lessor by the terms of any
mortgage or trust deed covering the Premises. Accordingly, if any installment of Rent or any other sum due from Lessee shall not
be received by Lessor or Lessor’s designee on or before the date when due, Lessee shall pay to Lessor a late charge equal
to five percent (5%) of such overdue amount; provided, however, that with respect to the third and any further late charges in
any calendar year, such late charges shall be equal to 10% of such overdue amount. The parties hereby agree that such late charge
represents a fair and reasonable estimate of the costs Lessor will incur by reason of late payment by Lessee. Acceptance of such
late charge by Lessor shall in no event constitute a waiver of Lessee’s default with respect to such overdue amount nor prevent
Lessor from exercising any of the other rights and remedies granted hereunder.

 

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16.           CONDEMNATION.
Except as provided in the following sentence, if less than 20% of the gross rentable floor area of the Premises is taken under
the power of eminent domain, or sold under the threat of the exercise of said power (all of which are herein called “Condemnation”),
this Lease shall terminate as to the part so taken as of the date one (1) day prior to the earlier of the date when the condemning
authority takes title or possession, and in addition, Lessor shall have the option in such event to terminate this Lease in full
by providing Lessee with written notice thereof within 10 days following the date when the condemning authority takes title or
possession, whichever first occurs. If (i) 20% or more of the floor area of the Premises, or (ii) any portion of the
Project, including parking areas, which makes it commercially and materially impractical for Lessee to utilize the Premises for
its Permitted Use, is taken by condemnation, either Lessor or Lessee may terminate this Lease by providing the other with written
notice thereof within 10 days following the date when the condemning authority takes title or possession, whichever first occurs.
If neither Lessor nor Lessee elects to terminate this Lease in accordance with the foregoing, this Lease shall remain in full force
and effect as to the portion of the Premises remaining, except that the Rent shall be reduced in the proportion that the gross
rentable floor area taken bears to the total gross rentable floor area of the original Premises. Any award for the taking of all
or any part of the Premises under the power of eminent domain or any payment made under threat of the exercise of such power shall
be the property of Lessor, whether such award shall be made as compensation for diminution in value of the leasehold or for the
taking of the fee, or as severance damages; provided, however, that Lessee shall be entitled to any award for loss or damage to
Lessee’s trade fixtures and removable property. In the event that this Lease is not terminated by reason of such condemnation,
Lessor shall, to the extent of damages actually received by Lessor in connection with such condemnation, repair any damage to the
Premises caused by such condemnation except to the extent that Lessee has been reimbursed therefor by the condemning authority.

 

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17.            GENERAL
PROVISIONS.

 

17.1.         ESTOPPEL
CERTIFICATE.

 

A.           Lessee
shall at any time upon not less than 15 days’ prior written notice from Lessor execute, acknowledge and deliver to Lessor
a written estoppel certificate (addressed to Lessor, any proposed purchaser of the Project and/or Lessor’s lender or proposed
lender) or a three- party agreement among Lessor, Lessee and Lessor’s lender or proposed lender (i) certifying that
this Lease is unmodified and in full force and effect (or, if modified, stating the nature of such modification and certifying
that this Lease, as so modified, is in full force and effect, if applicable) and the date to which the rent and other charges are
paid in advance, if any; (ii) acknowledging that there are not, to Lessee’s knowledge, any uncured defaults on the part
of Lessor hereunder, or specifying such defaults if any are claimed; (iii) setting forth such other statements (if true) with
respect to this Lease as may be reasonably requested by Lessor or Lessor’s lender or proposed lender or any proposed purchaser
of the Project; and (iv) agreeing to such notice provisions and other matters as Lessor’s lender or proposed lender
or any proposed purchaser of the Project may reasonably require in connection with Lessor’s financing or proposed sale of
the Project. Any such estoppel certificate or three-party agreement may be conclusively relied upon by any prospective purchaser
or encumbrancer of the Project.

 

B.            Lessee’s
failure to deliver such statement within such time shall be conclusive upon Lessee (i) that this Lease is in full force and
effect, without modification except as may be represented by Lessor, (ii) that there are no uncured defaults in Lessor’s
performance, and (iii) that not more than one month’s Rent has been paid in advance.

 

C.            If
Lessor desires to finance or refinance the Project, or any part thereof, Lessee hereby agrees to deliver to any lender designated
by Lessor such financial statements of Lessee as may be reasonably required by such lender, provided, that Lessee shall not be
required to have any financial statements audited (which are not currently audited), but such financial statements shall be required
to be prepared in accordance with generally accepted accounting principles, consistently applied. Such statements shall include
the past three years’ financial statements of Lessee or, if Lessee shall not have been in existence for three (3) years,
financial statements covering the entire time of Lessee’s existence. All such financial statements shall be received by Lessor
and its lender in confidence and shall be used only for the purposes herein set forth.

 

17.2.         LESSOR’S
LIABILITY. The term “Lessor” as used herein shall mean only the owner or owners at the time in question
of the fee title or a lessee’s interest in a ground lease of the Project. In the event of any transfer of such title or interest,
Lessor herein named (and in case of any subsequent transfers the then grantor) shall be released from and after the date of such
transfer of all liability as respects Lessor’s obligations thereafter to be performed, provided that any funds in the hands
of Lessor or the then grantor at the time of such transfer, in which Lessee has an interest, shall be delivered to the grantee,
and further provided that Lessor shall remain responsible for all indemnification and other obligations hereunder accrued prior
to the transfer of title. The obligations contained in this Lease to be performed by Lessor shall, subject as aforesaid, be binding
on Lessor’s successors and assigns, only during their respective periods of ownership.

 

17.3.         SEVERABILITY.
The invalidity of any provision of this Lease as determined by a court of competent jurisdiction, shall in no way affect the validity
of any other provision hereof.

 

17.4.         INTEREST
ON PAST-DUE OBLIGATIONS. Except as expressly herein provided, any amount due to Lessor not paid when due shall bear interest at
the Prime Rate plus seven percent (7%) per annum from the date due. Payment of such interest shall not excuse or cure any default
by Lessee under this Lease.

 

17.5.         TIME
OF ESSENCE. Except as specifically otherwise set forth in this Lease, time is of the essence with respect to each and every obligation
of the parties hereunder.

 

17.6.         CAPTIONS.
Section and paragraph captions are not a part hereof.

 

17.7.        INCORPORATION
OF PRIOR AGREEMENTS; AMENDMENTS. This Lease contains all agreements of the parties with respect to any matter mentioned herein
and expressly supersedes and renders null and void any letter of intent that may have been previously executed between the parties
relating to the Project or the Premises. No prior agreement or understanding pertaining to any such matter shall be effective.
This Lease may be modified in writing only, signed by the parties in interest at the time of the modification.

 

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17.8.         NOTICES
AND PAYMENTS. All notices and demands which may be required or permitted to be given to either party hereunder shall be in writing,
and all such notices and demands hereunder shall be sent by certified United States mail, return receipt requested, postage prepaid,
hand-delivered, or delivered by an overnight courier service to the addresses set out below or to such other person or place as
each party may from time to time designate in a notice to the other. All payments due hereunder shall be sent by first class United
States mail, postage prepaid, hand-delivered, or delivered by an overnight courier service to the address of the Lessor set out
on the Basic Terms Sheet attached hereto or to such other person or place as Lessor may from time to time designate in a notice
to Lessee. Notices and payments shall be deemed given and made upon actual receipt. Any notice or demand required or permitted
to be given or made hereunder shall be addressed to Lessor and Lessee, respectively, at the addresses set forth below:

 	If to Lessor:	67 VB Owner, LP
	 	c/o Hopewell Development LP
	 	410, 2020 – 4th Street SW
	 	Calgary, Alberta T2S 1W3

 

	With
    Copies of Notices and Demands to:	Osborn Maledon, PA
	 	2929 North Central Avenue, 21st Floor
	 	Phoenix, Arizona 85012
	 	Attn: Jack Dearing

 

	 	and

 

	 	Colliers International
 2390 East Camelback Road, Suite 100
 Phoenix, Arizona 85016
 Attn: Pam Zachgo

 

	If to Lessee:	Yandy Enterprises, LLC
 6750 West Van Buren Street
 Phoenix, Arizona 85043
 Attn: Jeff Watton

 

	With
    Copies of Notices and Demands to:	Playboy Enterprises, Inc.
	 	10960 Wilshire Blvd., Suite 2200
	 	Los Angeles, CA. 90024
	 	Attn: General Counsel

 

	 	and

 

	 	Burch & Cracchiolo, P.A.
 1850 North Central Avenue, Suite 1700
 Phoenix, Arizona 85004

 

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17.9.        MORTGAGEE
PROTECTION.

 

A.        If,
in connection with obtaining financing for the Project or any portion thereof, Lessor’s lender shall request reasonable modifications
to this Lease as a condition to such financing, Lessee shall not unreasonably withhold, delay or defer its consent to such modifications,
provided such modifications do not materially adversely affect Lessee’s rights or increase Lessee’s obligations under
this Lease.

 

B.         Lessee
agrees to give to any trust deed or mortgage holder (“Holder”), by prepaid certified mail, return receipt
requested, at the same time as it is given to Lessor, a copy of any notice of default given to Lessor, provided that prior to such
notice Lessee has been notified, in writing, (by way of notice of assignment of rents and leases, or otherwise) of the address
of such Holder. Lessee further agrees that if Lessor shall have failed to cure such default within the time provided for in this
Lease, then the Holder shall have an additional 30 days after expiration of such period, or after receipt of such notice from Lessee
(if such notice to the Holder is required by this Section 17.9(B)) whichever shall last occur,
within which to cure such default or if such default cannot be cured within that time, then such additional time as may be necessary
if within such 30-day period, any Holder has commenced and is diligently pursuing the remedies necessary to cure such default (including
but not limited to commencement of foreclosure proceedings, if necessary, to effect such cure), in which event this Lease shall
not be terminated.

 

17.10.      WAIVERS.
No waiver by Lessor of any provision hereof shall be deemed a waiver of any other provision hereof or of any subsequent breach
by Lessee of the same or any other provision. Lessor’s consent to or approval of any act shall not be deemed to render unnecessary
the obtaining of Lessor’s consent to or approval of any subsequent act by Lessee. The acceptance of Rent hereunder by Lessor
shall not be a waiver of any preceding breach by Lessee of any provision hereof, other than the failure of Lessee to pay the particular
Rent so accepted, regardless of Lessor’s knowledge of such preceding breach at the time of acceptance of such rent.

 

17.11.      RECORDING.
Lessee shall not record this Lease without Lessor’s prior written consent, and such recordation shall, at the option of Lessor,
constitute a non-curable default of Lessee hereunder.

 

17.12.      HOLDING
OVER. If Lessee remains in possession of the Premises or any part thereof after the expiration of the Term hereof, without the
written consent of Lessor, such occupancy shall be a tenancy at sufferance, for which Lessee shall pay a Monthly Base Rent of one
150% of the Monthly Base Rent in effect immediately prior to the expiration of the Term plus all other charges payable hereunder,
and upon all the terms hereof applicable to such a tenancy at sufferance.

 

17.13.      CUMULATIVE
REMEDIES. No remedy or election hereunder shall be deemed exclusive but shall, wherever possible, be cumulative with all other
remedies at law or in equity.

 

17.14.      COVENANTS
AND CONDITIONS. Each provision of this Lease performable by Lessee shall be deemed both a covenant and a condition.

 

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17.15.          BINDING
EFFECT; CHOICE OF LAW. Subject to any provisions hereof restricting assignment or subletting and subject to the provisions of
Section 17.2, this Lease shall bind the parties, their personal representatives, successors and assigns. This
Lease shall be governed by the laws of the State of Arizona.

 

17.16.      SUBORDINATION.

 

A.           This
Lease shall be automatically subordinate to any ground lease, mortgage, deed of trust, or any other hypothecation for security
now in existence or hereafter placed upon the Project and to any and all advances made on the security thereof and to all renewals,
modifications, consolidations, replacements and extensions thereof. If any mortgagee, trustee, or ground lessor shall elect to
have this Lease prior to the lien of a mortgage, deed of trust or ground lease, and shall give written notice thereof to Lessee,
this Lease shall be deemed prior to such mortgage, deed of trust or ground lease, whether this Lease is dated prior or subsequent
to the date of said mortgage, deed of trust, or ground lease or the date of recording thereof.

 

B.            Lessee
agrees to execute any reasonable documents required to effectuate such subordination or to make this Lease prior to the lien of
any mortgage, deed of trust or ground lease, as the case may be, (including, without limitation, a Subordination, Non-Disturbance
and Attornment Agreement in the standard form used by Lessor’s lender and reasonably acceptable to Lessee) and failing to
do so within 10 days after written demand, does hereby make, constitute, and irrevocably appoint Lessor as Lessee’s attorney
in fact and in Lessee’s name, place and stead, to do so. Upon Lessee’s written request to Lessor, Lessor shall request
that its lender issue to Lessee a non-disturbance agreement on such lender’s standard form, which shall be reasonably acceptable
to Lessee; provided, however, the failure of such lender to issue such a non-disturbance agreement shall in no way affect Lessee’s
obligations under this Lease, including this Section 17.16.

 

17.17.      ATTORNEYS’
FEES. If either party brings an action to enforce the terms hereof or declare rights hereunder, the prevailing party shall be entitled
to its reasonable attorneys’ fees and costs in any such action, on trial or appeal, to be paid by as fixed by the court.
If Lessee or Lessor shall be in breach or default under this Lease, such party (the “Defaulting Party”)
shall reimburse the other party (the “Nondefaulting Party”) upon demand for any costs or expenses that
the Nondefaulting Party incurs in connection with any breach or default of the Defaulting Party under this Lease, whether or not
suit is commenced or judgment entered. Such costs shall include reasonable attorneys’ fees and costs incurred for the negotiation
of a settlement, enforcement of rights or otherwise.

 

17.18.      LESSOR’S
ACCESS. Lessor and Lessor’s agents shall have the right to enter the Premises at reasonable times with reasonable advance
notice (which shall be at least 48 hours’ except in the event of an emergency) between 7 a.m. and 6 p.m. weekdays
for the purpose of inspecting the same, showing the same to prospective purchasers, lenders, consultants and other professionals
and making such alterations, repairs, improvements, or additions to the Premises or to the Building as Lessor may deem necessary
or desirable. In connection with such entry and in connection with carrying out any of its responsibilities hereunder or its privileges
as the owner of the Project, Lessor shall be entitled to erect such scaffolding and other necessary structures or equipment as
reasonably may be required by the character of the work to be performed, provided that Lessor shall not unreasonably interfere
with the conduct of Lessee’s business. Except as specifically provided herein to the contrary, no entry by Lessor hereunder
nor any work performed by Lessor to the Premises or the Project shall entitle Lessee to terminate this Lease or to a reduction
or abatement of Rent or other amounts owed by Lessee hereunder nor to any claim for damages. Lessor may at any time place about
the Premises any ordinary “For Sale” and “For Lease” signs. Lessor and Lessor’s agent shall have
the right to enter the Premises at any time in the case of an emergency and Lessor shall notify Lessee of such entry within 24
hours thereafter.

 

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17.19.       SIGNS
AND AUCTIONS. Lessee shall not place any sign upon the Premises or conduct any auction from the Premises without Lessor’s
prior written consent, not to be unreasonably withheld, conditioned or delayed; provided, however, that Lessee shall be allowed
reasonable and customary signage for the Premises subject to Lessor’s reasonable approval. Any signage as to which Lessor
gives its prior written consent shall be in accordance with the sign criteria for the Project as attached hereto as Exhibit “D”.

 

17.20.       MERGER.
The voluntary or other surrender of this Lease by Lessee or a mutual cancellation thereof shall, at the option of Lessor, terminate
all or any existing subtenancies or may, at the written election of Lessor, operate as an assignment to Lessor of any or all of
such subtenancies.

 

17.21.       AUTHORITY.
If Lessee is a corporation, a limited liability company, partnership or other entity, Lessee represents and warrants that each
individual executing this Lease on behalf of said entity is duly authorized to execute and deliver this Lease on behalf of said
entity, and that this Lease is binding upon said entity in accordance with its terms.

 

17.22.       NSF
CHECKS. There will be a $50.00 service charge payable to Lessor on all NSF checks, which charge shall be in addition to, and not
in substitution for, any late charges and interest due hereunder.

 

18.           PARKING
AND COMMON AREAS. The Lessee, its agents, employees and invitees shall be entitled to
park in common with other lessees of Lessor in the unreserved parking spaces at the Project at a ratio of 1.67 spaces per 1,000
rentable square feet of the Premises (“Lessee’s Parking Ratio”), which the parties agree equals
86 total unreserved parking spaces. Lessee agrees not to overburden the parking facilities of the Project and agrees to cooperate
with the Lessor and other lessees in the use of the parking facilities. The Lessor specifically reserves the right, in its reasonable
discretion, to determine whether parking facilities are becoming overburdened and in such event to allocate the parking spaces
among the Lessee and other lessees, their agents, employees, and business invitees using the parking facilities. All loading operations
for receipt or shipment of goods, wares and merchandise by the Lessee shall be done in the rear of the Premises or in such area
therein which is specifically designated in writing by the Lessor.

 

19.           SAFETY.
Lessee shall maintain on the Premises at all times during the Term an adequate number, size and type of fire extinguishers as are
appropriate to Lessee’s business. Lessee will at all times adhere to good safety practices or as may be required by safety
inspectors. No goods, merchandise or materials shall be kept, stored or sold by Lessee on or about the Premises which are in any
way hazardous, and Lessee shall not suffer, permit or perform any acts on or about the Premises which will increase the existing
rate of fire or liability insurance. If said insurance rate is increased by such an act, then the increased cost of such insurance
shall be paid by Lessee to Lessor with the next succeeding installment of Rent. Lessee, at its sole expense, shall comply with
any and all requirements of any insurance organization or company necessary for the maintenance of reasonable fire and public liability
insurance covering the Premises, the Project or any portion thereof.

 

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20.           ATTORNMENT.
In the event any proceedings are brought for foreclosure, or in the event of the exercise of the power of sale under any mortgage
or deed of trust covering the Premises, the Lessee shall attorn to the purchaser upon any such foreclosure or sale and recognize
such purchaser as the Lessor under this Lease.

 

21.           NO
ACCESS TO ROOF. Except as may be necessary for Lessee to perform its maintenance obligations
under this Lease, Lessee shall have no right of access to the roof of the Premises or the Building and shall not install, repair
or replace any aerial, fan, air conditioner, satellite dish, or other device on the roof of the Premises or the Building without
the prior written consent of Lessor, which consent may be granted, conditioned or withheld in Lessor’s sole and absolute
discretion. Any aerial, fan, air conditioner, satellite dish or other or device installed without such written consent shall be
subject to removal, at Lessee’s expense, without notice, at any time. As a condition of giving such written consent Lessor
may require that Lessee execute an amendment to this Lease setting forth the terms applicable to any roof-mounted equipment and
obligating Lessee to pay additional rental for the right to install and maintain such roof-mounted equipment.

 

22.           SUCCESSORS
AND ASSIGNS. Subject to any provisions hereof restricting assignment or subletting and
subject to the provisions of Section 17.2 the covenants and conditions herein contained, inure to and bind the
heirs, successors, executors, administrators and assigns of the parties hereto.

 

23.           FINANCIAL
STATEMENTS. No later than 30 days after Lessor’s request, Lessee shall deliver
to Lessor the current financial statements of Lessee, and financial statements of the two (2) years prior to the current
financial statements year, including a balance sheet and profit and loss statement for the most recent prior year, all
prepared in accordance with generally accepted accounting principles consistently applied. Such financial statement, balance
sheet and profit and loss statement shall be certified as accurate by Lessee or a properly authorized representative of
Lessee if Lessee is a corporation, partnership or other business entity.

 

24.           NO
ACCORD OR SATISFACTION. No payment by Lessee or receipt by Lessor of a lesser amount than
the monthly Rent and other sums due hereunder shall be deemed to be other than on account of the earliest Rent or other sums due,
nor shall any endorsement or statement on any check or accompanying any check or payment be deemed an accord and satisfaction;
and Lessor may accept such check or payment without prejudice to Lessor’s right to recover the balance of such Rent or other
sum or pursue any other remedy provided in this Lease.

 

25.           ACCEPTANCE.
This Lease shall only become effective and binding upon full execution hereof by Lessor and delivery of a fully executed copy to
Lessee.

 

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26.           INABILITY
TO PERFORM. This Lease and the obligations of the Lessee hereunder shall not be affected
or impaired because the Lessor is unable to fulfill any of its obligations hereunder or is delayed in doing so, if such inability
or delay is caused by reason of strike, labor troubles, inability to procure materials or service, power failure, rebellion, war,
acts of God, pandemics or epidemics, or any other cause beyond the reasonable control of the Lessor, financial inability excepted
(individually and collectively “Force Majeure”).

 

27.           RIGHT
OF FIRST REFUSAL.

 

27.1.        The
parties hereby acknowledge that approximately 26,188 square feet of rentable space located within the Building and contiguous to
the Premises (the “Contiguous Space”) is currently vacant and available for lease from Lessor. Lessor grants
to Lessee a right of first refusal (the “ROFR”) to lease the Contiguous Space for, subject to the terms and
conditions of this Section 27. The ROFR shall remain in effect for a period of one (1) year from the Date of Lease (the
 “ROFR Period”). During the ROFR Period, upon receipt by Lessor of a bona fide third party offer at substantially
final negotiated terms that are acceptable to Lessor for the leasing of any of the Contiguous Space (the “ROFR Lease Terms”),
Lessor shall give Lessee written notice of the ROFR Lease Terms and of Lessor’s intent to enter into a lease with such third
party tenant for the Contiguous Space. Lessee shall have five (5) days from the date of Lessor’s notice to advise Lessor
in writing whether Lessee elects to lease the Contiguous Space and agrees that the Contiguous Space shall become a part of the
Premises pursuant to the ROFR Lease Terms (except as otherwise set forth herein). Lessee’s failure to notify Lessor within
the time specified shall constitute Lessee’s waiver of its right to add such Contiguous Space to the Premises, and Lessor
shall thereafter have the right to enter into a lease with the third party tenant on any terms solely acceptable to Lessor and
such third party tenant.

 

27.2.        In
the event Lessee timely elects in writing to lease the Contiguous Space pursuant to the ROFR Lease Terms (the “ROFR Election”),
the terms and conditions for the leasing of the Contiguous Space by Lessee shall be based upon the ROFR Lease Terms, except as
set forth herein. Prior to occupancy of the Contiguous Space, Lessee shall execute an amendment to this Lease reflecting the ROFR
Lease Terms; provided, however, (a) the term of the lease for the Contiguous Space shall be for a period of no less than the
term of this Lease and shall be coterminous with the term of this Lease; (b) if the proposed term for the Contiguous Space
is extended pursuant to the preceding clause (a), then the Monthly Base Rent payable by Lessee for the Contiguous Space during
such extension period shall increase annually by an amount equal to Three and 00/100ths percent (3.00%) of the then applicable
Monthly Base Rent; (c) if the ROFR Lease Terms provide for a term longer than that for the Premises under this Lease, the
term of the Lease for the Premises will be extended to be coterminous with the term for the Contiguous Space; and (d) if the
term of the Lease is extended pursuant to the preceding clause (c), then the Monthly Base Rent payable by Lessee for the Premises
during such extension period shall increase annually by an amount equal to Three and 00/100ths percent (3.00%) of the then applicable
Monthly Base Rent. Such amendment also will include, without limitation, the addition of the Contiguous Space to the Premises,
the change in Lessee’s proportionate share under Section 12 of the Lease and any other revisions reasonably necessary
because of such additional space being added to the Premises. All other terms and conditions of this Lease shall apply to the Contiguous
Space.

 

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28.          ALTERATIONS
AND CONTROL OF COMMON AREAS.

 

28.1.        CONTROL
OF COMMON AREAS BY LESSOR. All Common Areas shall at all times be subject to the exclusive control and management of Lessor, and
Lessor shall have the right from time to time to establish, modify and enforce rules and regulations with respect to all Common
Areas. Lessee agrees to abide by and conform with such rules and regulations; to cause its concessionaires and suppliers,
officers, agents, employees, independent contractors and sublessees to so abide and conform; and to use its best efforts to cause
its customers, invitees and licensees to so abide and conform. Lessor shall have the right, but in no event the obligation, to
construct, maintain and operate lighting facilities in and on all Common Areas; to police the same; to close temporarily all or
a portion of the parking areas or parking facilities; and to do and perform such other acts in and to the Common Areas as, in the
use of good business judgment, Lessor shall determine to be advisable with a view to the improvement of the convenience and use
thereof by the lessees of the Project, their officers, agents, employees and customers. Lessor will operate and maintain the Common
Areas in such manner as Lessor, in its sole discretion, shall determine from time to time. Without limiting the scope of such discretion,
Lessor shall have the full right and authority to employ all personnel and to make all rules and regulations pertaining to
and necessary for the proper operation and maintenance of the Common Areas.

 

28.2.        ALTERATIONS.
Lessor shall have the right to make changes in the Common Areas or any part thereof, including, without limitation, changes in
the location of driveways, entrances, exits, vehicular parking spaces and the direction of traffic flow, and designation of restricted
areas, as Lessor deems necessary or advisable for the proper and efficient operation and maintenance of the Common Areas. Notwithstanding
the foregoing, Lessor shall not make changes in the Common Areas which materially and adversely affect access to, or visibility
of, the Premises, except temporarily during periods of construction.

 

29.          REVISIONS
OF EXHIBIT “A”. It is expressly agreed that the depictions of the Premises,
the Project and the Common Areas on Exhibit “A” do not constitute representations, covenants, or
warranties of any kind by Lessor, and Lessor reserves the right to change the size, location, type and number of buildings within
the Project and the location, type, design and dimensions of the Common Areas.

 

30.          OTHER
TENANTS. Lessor reserves the absolute right to permit such other tenancies and businesses
in the Project as Lessor, in the exercise of its sole business judgment, shall determine to best promote the interests of the Project.
Lessee is not relying on the understanding, nor does Lessor represent, any specific lessee or number of lessees shall during the
Term occupy any space in the Project. Except for Lessor’s gross negligence or intentional act or breach of this Lease, Lessee
hereby waives all defenses arising from, and Lessor shall not be liable for damages solely arising from, any act or neglect of
any other lessee or from Lessor’s acts or omissions in enforcing any provision of its lease against another lessee, whether
or not Lessor has notice of the offending lessee’s disturbing or unlawful act or the opportunity to cure the disturbance
by invoking its powers under such other lease.

 

31.          NAME
OF PROJECT. Lessor shall have the right to change the name of the Project upon not less
than 30 days prior written notice to Lessee. Lessee agrees that the name of the Project shall be the sole property of and belong
to Lessor. From and after the termination or expiration of the Term for any reason whatsoever, Lessee shall cease using the name
of the Project for any purpose.

 

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32.          JOINT
OBLIGATION. If there be more than one Lessee, the obligations hereunder imposed shall
be joint and several.

 

33.          CONSENTS
AND APPROVALS. Except as specifically otherwise stated herein, all consents or approvals
requested of Lessor hereunder may be granted or denied by Lessor in its sole and absolute discretion.

 

34.          BASIC
TERMS SHEET. The Basic Terms Sheet to which this Lease is attached is for the convenience
of the parties in quickly referencing certain of the basic terms of the Lease. It is not intended to serve as a complete summary
of the Lease. In the event of any inconsistency between the Basic Terms Sheet and the Lease, the applicable Lease provision shall
prevail and control.

 

35.          TRIPLE
NET LEASE. Lessee acknowledges that this is a Triple Net Lease and that Lessee shall do
all acts and make all payments connected with or arising out of its use and occupation of the Premises to the end that Lessor shall
receive all Rent provided for herein free and undiminished by any expenses, charges, fees, taxes and assessments, and Lessor shall
not be obligated to perform any acts or be subject to any liabilities or to make any payments, except as otherwise specifically
and expressly provided in this Lease.

 

36.          QUIET
POSSESSION. Subject to payment by Lessee of the Rent and performance of all of the covenants,
conditions, and provisions on Lessee’s part to be observed and performed under this Lease, Lessor shall not disturb Lessee’s
quiet possession and quiet enjoyment of the Premises during the Term.

 

37.          SECURITY
MEASURES. Lessee hereby acknowledges that the Rent payable to Lessor hereunder does not
include the cost of guard service or other security measures and that Lessor shall have no obligation whatsoever to provide same.
Lessee assumes all responsibility for the protection of the Premises, Lessee, its agents and invitees and their property from the
acts of third parties.

 

38.          OFFER.
Preparation of this Lease by either party or their agent and submission of same to the other party shall not be deemed an offer
to lease to the other party. This Lease is not intended to be binding until executed and delivered by all parties hereto.

 

39.          ANTI-TERRORISM.
Lessee represents, warrants and covenants that: (i) it is not acting, directly or indirectly, for or on behalf of any person,
group, entity, or nation named by an Executive Order or the United States Treasury Department as a terrorist, “Specially
Designated National and Blocked Person,” or other banned or blocked person, entity, nation, or transaction pursuant to any
law, order, rule, or regulation that is enforced or administered by the Office of Foreign Assets Control; and (ii) it is not
executing this Lease, directly or indirectly on behalf of, or instigating or facilitating this Lease, directly or indirectly on
behalf of, any such person, group, entity, or nation. Lessee hereby agrees to defend, indemnify, and hold harmless Lessor from
and against any and all claims, damages, losses, risks, liabilities, and expenses (including attorney’s fees and costs) arising
from or related to any breach of the foregoing representations, warranties and covenants.

 

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40.          BROKERS.
Lessor and Lessee hereby represent and warrant that no broker or agent negotiated or was instrumental in negotiating or consummating
this Lease except Cushman Wakefield (“Lessor’s Broker”) and Transwestern (“Lessee’s
Broker”). Neither party knows of any other real estate broker or agent who is or might be entitled to a commission
or compensation in connection with this Lease. Lessor will pay all fees, commissions or other compensation payable to Lessor’s
Broker pursuant to a separate agreement between Lessor’s Broker and Lessor. Lessee and Lessor will indemnify and hold each
other harmless from all damages paid or incurred by the other resulting from any claims asserted against either party by brokers
or agents claiming through the other party.

 

41.          EXHIBITS.
The following exhibits, which are attached to this Lease, are incorporated herein by this reference:

 

Exhibit “A”     Depiction
of Premises

Exhibit “B”     Description
of Lessor’s Work

Exhibit “C”      Project
Rules and Regulations

Exhibit “D”     Sign
Criteria

Exhibit “E”      Work
Letter Agreement – Lessee’s Work

Exhibit “F”      Contractor’s
Hold Harmless Agreement

Exhibit “G”      Acceptable
Image Examples

 

SIGNATURE PAGE FOLLOWS

 

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The parties hereto have executed this
Lease on the dates specified immediately adjacent to their respective signatures.

 

	LESSOR:	LESSEE:
	67 VB OWNER, L.P.	YANDY ENTERPRISES, LLC,
	a Delaware limited partnership	a Delaware limited liability company

 

	By:	Hopewell Southwest Investor	By:	/s/ Jeff Watton
		Holdings GP, LLC, a Delaware	Name:	Jeff Watton
	 	limited liability company	Its:	Co-CEO
	Its:	General
    Partner	Date:	8/26/2020
	 	 	 	 
	 	 	 	 
	By:	/s/ Kevin Pshebniski	 
	Name:	Kevin Pshebniski	 
	Its:	Authorized Signatory	 
	Date:	08/26/2020	 
	 	 
	 	 
	By:	/s/ Steve Toole	 
	Name:	Steve Toole	 
	Its:	Authorized Signatory	 
	Date:	8/26/2020	 

 

 

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EXHIBIT “A”

 

DEPICTION OF PREMISES

 

    Exhibit “A” - 1

     

    

 

 

    Exhibit “A” - 2

     

    

 

 

    Exhibit “A” - 3

     

    

 

EXHIBIT “B”

 

DESCRIPTION OF LESSOR’S WORK

 

1.            Lessor’s
Work. “Lessor’s Work” is as follows (and shall be at Lessor’s expense, except as
may be otherwise provided below):

 

A.           Warehouse
area of the Premises: a full height drywall demising wall to separate the Premises from the remaining vacancy in the Building to
the south of the Premises.

 

B.            Exterior
of the Premises: a masonry wall along the eastern property line of the property adjacent to Building One matching the existing
wall along the north and west property lines.

 

2.            Miscellaneous.
Lessee, its agents, contractors, or employees may enter the Premises at its own risk during the construction of Lessor’s
Work for the purpose of taking measurements, reviewing the space, or similar purposes, provided that such entry does not delay
or interfere with Lessor’s Work. Subject to the terms of the Lease, including, without limitation Sections 7.2(B) and
8, and provided that such entry does not delay or interfere with Lessor’s Work, Lessee, its agents, contractors, or employees
may enter the Premises at its own risk during the construction of Lessor’s Work for the purpose of performing Lessee’s
Work. Lessee shall indemnify, defend, and hold Lessor harmless from and against and all costs, claims, demands, expenses, liabilities,
damages, actions, or causes of action, including without limitation attorney’s fees and costs, which may arise in connection
with the presence of Lessee or its agents, employees, or invitees in the Premises at any time prior to completion of the Lessor’s
Work and tendering of the Premises to Lessee by Lessor, unless caused by the intentional act or gross negligence of Lessor. Lessor
and Lessee shall cooperate with each other in connection with the installation of Lessor’s Work in the Premises.

 

3.            Substantial
Completion.

 

A.          The
Lessor’s Work shall be deemed “substantially complete” (“Substantially Complete” or
 “Substantial Completion”) when all of the work contemplated pursuant to the Lessor’s Work shall
have been completed by Lessor (with the exception of the normal Punch List Items, as hereinafter defined).

 

B.           Not
more than 10 days after the date Lessee and Lessor perform a final walk through of the Premises to inspect the Lessor’s Work,
Lessee, exercising commercially reasonable judgment, shall prepare a written notice to Lessor of any deficiencies or defects in
the work to have been performed by Lessor pursuant to the Lessor’s Work (the “Punch List Items”).
Lessor agrees to exert commercially reasonable efforts to complete all Punch List Items within 30 days of its receipt of such notice
from Lessee.

 

4.       Lessee
Delay. The term “Lessee Delay” means any delay in Lessor’s substantial completion of Lessor’s
Work caused by (i) Lessee’s interference with Lessor’s Work or Lessee’s activities in the Premises, Building
or on the Project, or (ii) any other action or omission of Lessee or any default by Lessee under the Lease.

 

    Exhibit “B” - 1

     

    

 

EXHIBIT “C”

 

RULES AND REGULATIONS

 

		1.	The sidewalks, halls, corridors, passageways and stairwells will not be obstructed by the lessees
or used by the lessees for any purpose other than for ingress and egress to and from their respective Premises.

 

		2.	The delivery or shipping of merchandise, supplies and fixtures to and from the Premises shall be
subject to such rules and regulations as in the judgment of the Lessor are necessary for the proper operation of the Premises
or the Project.

 

		3.	Any electric wiring that the Lessee desires to introduce into its Premises must be connected as
directed by the Lessor. No boring or cutting for wires will be allowed except with the specific consent of the Lessor.

 

		4.	All garbage and refuse shall be kept in the kind of container specified by the Lessor, and shall
be placed outside of the Premises prepared for collection in the manner and at the times and places specified by the Lessor. If
Lessor shall provide or designate a service for picking up refuse and garbage, Lessee shall use same at Lessee’s cost. Lessee
shall pay the cost of removal of any of Lessee’s refuse or rubbish.

 

		5.	The exterior areas immediately adjoining the Premises shall be kept clean and free from dirt and
rubbish by Lessee to the satisfaction of Lessor, and Lessee shall not place or permit any obstruction or merchandise in such areas.

 

		6.	The Premises shall be kept clean and free from dirt and rubbish by Lessee to the satisfaction of
Lessor.

 

		7.	Lessees shall not change locks or install other locks on doors without the written consent of the
Lessor.

 

		8.	Except for the Permitted Uses, Lessee shall not permit or suffer the Premises to be occupied or
used in a manner offensive or objectionable to Lessor or other occupants of the Project by reason of noise, odors or vibrations
or interfere in any way with the other tenants or those having business therein, nor shall any animals or birds be kept in or about
the Premises.

 

		9.	Each lessee upon the termination of the tenancy, shall deliver to the Lessor all the keys of the
offices, rooms and toilet rooms which shall have been furnished to the lessee.

 

		10.	The plumbing facilities shall not be used for any other purpose than that for which they are constructed,
and no foreign substance of any kind shall be thrown therein, and the expense of any breakage, stoppage, or damage resulting from
a violation of this provision shall be borne by the Lessee who shall, or whose employees, agents or invitees shall, have caused
it.

 

		11.	Lessees shall see that doors of the Premises are closed and securely locked before leaving the
Premises and must observe strict care not to leave such doors open and exposed to the weather or other elements, and each Lessee
shall exercise extraordinary care and caution that all water faucets or water apparatus are entirely shut off before the Lessee
or the Lessee’s employees leave the Premises, and that all electricity, gas and air-conditioning shall likewise be carefully
shut off, so as to prevent waste or damage, where controlled by Lessee.

 

    Exhibit “C” - 1

     

    

 

		12.	Canvassing, soliciting and peddling in the Project are prohibited. Lessees shall cooperate to prevent
same.

 

		13.	No cigarette, pipe, cigar or other smoking shall be permitted within any indoor portions of the
Building or indoor portions of the Common Areas or within any portion of the outdoor Common Areas except those portions of the
outdoor Common Areas designated from time to time as smoking areas by Lessor.

 

Lessor reserves the right, at any time,
provided Lessee is notified at least thirty (30) days in advance, to rescind any one or more of these rules and regulations,
or to make such other and further reasonable rules and regulations as in the Lessee’s judgment may from time to time
be necessary for the safety, care and cleanliness of the Project and for the preservation of order therein.

 

    Exhibit “C” - 2

     

    

 

EXHIBIT “D”

 

SIGN CRITERIA

 

SIGN CRITERIA FOR

6750 W. VAN BUREN STREET

PHOENIX, ARIZONA

 

All signs shall comply with the following
criteria:

 

Such sign criteria as Lessor may reasonably
promulgate from time to time, including (without limitation) compliance with applicable municipal and other laws and regulations,
but which is reasonable and customary for similarly situated buildings in Phoenix, Arizona.

 

Lessor reserves the right to grant exceptions
from the sign criteria listed above. No exception granted to any other tenant of the Project shall prevent Lessor from strictly
enforcing these Sign Criteria against Lessee.

 

    Exhibit “D” - 1

     

    

 

EXHIBIT “E”

 

WORK LETTER AGREEMENT

LESSEE’S WORK

 

This Work Letter Agreement
supplements that certain Commercial-Industrial Triple Net Lease (the “Lease”) dated and executed concurrently
herewith, by and between 67 VB OWNER, LP, a Delaware limited partnership, as Lessor, and YANDY ENTERPRISES, LLC,
a Delaware limited liability company, as Lessee, which relates to the Premises described in the Lease. All terms not defined herein
shall have the same meanings as set forth in the Lease.

 

1.            CONSTRUCTION
OF TENANT IMPROVEMENTS.

 

1.1.      Lessee’s
Work. Lessee, at its sole cost and expense, shall construct only through ________________ (the “Contractor”),
and Contractor’s subcontractors and material suppliers, the Lessee’s Work, including, without limitation, the improvements
to the Premises shown on the Final Plans (as defined in Section 2.1 below), in compliance with all applicable
laws, codes and regulations. Lessee shall not change contractors without the prior written consent of Lessor. Lessee’s Work
includes, without limitation, providing power and wiring pathways and termination wall and floor boxes for the Premises, as well
as installation of all telephone and data cabling and security systems as deemed necessary by Lessee to facilitate operation of
the Permitted Use in the Premises.

 

1.2.         Construction
Representatives. Lessor hereby appoints Don Larke as Lessor’s representative (“Lessor’s Representative”)
to act for Lessor in all matters covered by this Work Letter Agreement. Lessee hereby appoints Jeff Watton as Lessee’s representative
(“Lessee’s Representative”) to act for Lessee in all matters covered by this Work Letter Agreement.
Except as expressly set forth otherwise herein, all communications with respect to the matters covered by this Work Letter Agreement
shall be made to Lessor’s Representative or Lessee’s Representative, as the case may be. Either party may change its
representative at any time by written notice to the other party.

 

1.3.          Notwithstanding
the foregoing, or anything to the contrary set forth in the Lease, to the extent any of Lessee’s Work affects the base Building,
Lessee hereby acknowledges and agree that Lessor’s Base Building Contractor(s) must be used for all such work, including,
without limitation, work to the following Building systems:

 

1.3.1          Sprinklers
 – Lessee shall have its sprinkler system design certified by Lessor’s base building sprinkler contractor at Lessee’s
expense (subject to the Tenant Improvement Allowance) and provide a sprinkler verification report to Lessor;

 

1.3.2           Fire
Alarms – Tying in Lessee’s fire alarm system to the base Building fire alarm system must be performed by the Lessor’s
Electrical Contractor at the Lessee’s expense (subject to the Tenant Improvement Allowance);

 

1.3.3            Mechanical
 – Lessee must contact the Lessor’s base Building mechanical contractor to coordinate an air balancing of the Lessee’s
HVAC and exhaust system. A copy of the air balancing report shall be delivered to Lessor for Lessor’s prompt review upon
completion.

 

    Exhibit “E” - 1

     

    

 

1.3.4            Electrical
 – Any relocation of the electrical panel or service upgrade must be approved by the Lessor in Lessor’s sole discretion.
All such work shall be performed by Lessor’s base Building electrical contractor at Lessee’s expense (subject to the
Tenant Improvement Allowance).

 

2.            CONSTRUCTION
PLANS FOR PREMISES.

 

2.1.        Preparation
of Plans and Specs. Attached as Schedule 1 to this Work Letter Agreement is a space plan for the Premises (the
 “Space Plan”) prepared by Ware Malcomb (the “Architect”). Lessor and Lessee
hereby approve the Space Plan, which may be adjusted after the Date of Lease with Lessor’s consent, which consent shall not
be unreasonably withheld. Based on the Space Plan, Lessee, at its sole cost, shall cause the Architect to prepare complete architectural
plans, drawings and specifications and complete engineering, mechanical, structural and electrical working drawings for the Premises
(collectively, the “Plans and Specs”). Following completion thereof, Lessee shall submit the Plans and
Specs to Lessor for Lessor’s reasonable approval. Such submittal shall be to both Lessor’s Representative and to Lessor
in accordance with the notice provision of the Lease. If Lessor shall reasonably disapprove the Plans and Specs, Lessor shall notify
Lessee in writing of such disapproval and in such disapproval notice shall specify, in reasonable detail, the reasons therefor
within 10 business days from Lessor’s receipt of the Plans and Specs. Failure of Lessor to timely notify Lessee shall be
deemed Lessor’s approval of the Plans and Specs. If Lessor reasonably disapproves any portion of the Plans and Specs, Lessee
shall then submit to Lessor for Lessor’s reasonable approval, a redesign of the Plans and Specs, incorporating those revisions
required by Lessor. The Plans and Specs once agreed upon by Lessee and Lessor in writing (or deemed approved by Lessor as described
above) shall be referred to herein as the “Final Plans.”

 

2.2.         Requirements
of Plans and Specs. The Plans and Specs shall include locations and complete dimensions and shall: (a) be compatible with
the Building shell and with the design, construction and equipment of the Building; (b) include any phasing plans for the
completion of any work under this Work Letter Agreement; and (c) comply with all applicable laws and ordinances, recorded
covenants, and the rules and regulations of all governmental authorities having jurisdiction, and all applicable insurance
regulations.

 

2.3.         Approvals.
Lessee, at its sole cost, shall be solely responsible for obtaining approval of the Final Plans by all governmental agencies having
jurisdiction, including all necessary permits and the certificate of occupancy (or other equivalent approval from the local governmental
authority permitting occupancy of the Premises). Lessor shall reasonably cooperate with Lessee in obtaining such approvals.

 

3.            TENANT
IMPROVEMENT ALLOWANCE.

 

3.1.          Allowance.
As used herein, “Maximum Allowance Amount” means $779,430.00. Lessee shall receive from Lessor an allowance
equal to the lesser of (a) the Work Cost (as that term is defined in Paragraph 5 below), and (b) the Maximum
Allowance Amount (the lesser of (a) and (b), the “Tenant Improvement Allowance”). The Tenant Improvement
Allowance shall be used solely to contribute toward payment of the Work Cost. All Lessee’s Work, whether or not the cost
thereof is covered by the Tenant Improvement Allowance, shall be the property of Lessor and shall remain on the Premises at all
times during the Term.

 

    Exhibit “E” - 2

     

    

 

3.2.        Excess
Work Costs.  In the event that the Work Cost exceeds the Maximum Allowance Amount, Lessee shall pay such excess and Lessor
shall have no responsibility therefor.

 

3.3.         Changes.
In the event that changes to the Final Plans are requested by Lessee or required by any governmental agency, such changes and the
costs thereof shall be forwarded to Lessor for prompt approval (which approval shall not be unreasonably withheld, conditioned
or delayed) prior to incorporation into the Lessee’s Work. After Lessor’s approval of the changes and the costs thereof,
the changes shall be incorporated into the Lessee’s Work by means of a change order. If any change in the Final Plans allowed
by the terms of the immediately preceding sentences is made, references to the Final Plans and Lessee’s Work in the Lease
and this Work Letter Agreement shall be deemed to mean such Final Plans and Lessee’s Work as amended to include such change.
If Lessee provided Lessor with notice of a change and cost as provided for herein and Lessor does not object in writing to such
changes within 10 days of Lessee providing such notice, the Lessor is deemed to have accepted such change.

 

3.4.         Payment
of Allowance. No more than once per calendar month and no more than four times over the course of Lessee’s construction
of Lessee’s Work, Lessee shall provide Lessor with an invoice setting forth the Work Cost payable for the applicable time
frame. Such invoice shall, to the extent applicable, be accompanied by (i) a certificate from the Architect certifying that
the Lessee’s Work constructed to date have been constructed in accordance with Final Plans, (ii) copies of all invoices
from Contractor and subcontractors included in the Work Cost on the invoice, and (iii) copies of lien waivers in a form complying
with applicable statutes, from the Contractor and all subcontractors, materialmen and other suppliers of work, services or materials
with lien rights under Arizona law (such waivers shall be conditional with respect to the Work Cost set forth in the invoice that
they are accompanying and unconditional with respect to the Work Cost on prior invoices). Lessor shall pay Lessee within twenty
(20) days of receipt of all of the foregoing, the Work Cost set forth on the invoice. Upon final completion of all work to be undertaken
by Lessee (including all punch list items), Lessee shall provide Lessor with (i) a final certificate from the Architect certifying
that all Lessee’s Work has been constructed in accordance with the Final Plans, (ii) copies of final, unconditional
lien waivers as described above, (iii) a written acknowledgment from Lessee that the Lessee’s Work is approved by Lessee,
and (iv) a copy of the certificate of occupancy for the Premises issued by the appropriate governmental agency. Notwithstanding
anything to the contrary herein, in no event shall the payments made pursuant to this Paragraph 3.4 exceed the amount
of the Maximum Allowance Amount, and Lessee shall not be entitled to any credit or offset of Rent (as defined in the Lease) if
the Work Cost exceeds the Maximum Allowance Amount.

 

3.5.         Lessor’s
Obligation. Lessor will have no obligation to disburse any portion of the Tenant Improvement Allowance after the date that
is six (6) months following the Commencement Date (as defined in the Lease).

 

    Exhibit “E” - 3

     

    

 

4.            construction.

 

4.1.         Construction
Contract. Prior to commencement of construction of the Lessee’s Work, Lessee shall enter into a construction contract
with the Contractor. Lessee shall be solely responsible for causing Lessee’s Work to be performed by the Contractor and any
and all subcontractors, suppliers and the like performing services or providing materials for Lessee and/or the Contractor.

 

4.2.       Construction
Schedule. Prior to commencement of construction of any Lessee’s Work, Lessee shall furnish to Lessor’s Representative
in writing a schedule setting forth projected completion dates.

 

4.3.       Prosecution
of Lessee’s Work. Following Lessor’s approval of the Final Plans, and Lessee and the Contractor’s selection
of subcontractors and execution of the construction contract, Lessee shall direct the Contractor and such subcontractors to immediately
commence and diligently pursue construction of the Lessee’s Work. All Lessee’s Work shall be performed diligently,
in a first-class, workmanlike manner and in accordance with all applicable laws and recorded private covenants. Prior to commencing
such work, Lessee shall furnish Lessor with sufficient evidence that Lessee, the Contractor and, as applicable, any subcontractors
are carrying such insurance coverage as is required under Schedule 2 to this Work Letter and all other insurance
in compliance with the Lease. Lessor shall have the right to enter the Premises at all times to inspect the work. Lessee shall
ensure lien-free completion of the Lessee’s Work, and Lessee shall comply with all provisions of the Lease regarding liens.

 

5.            WORK
COST.

 

“Work Cost”
means: (a) all design and engineering fees incurred in connection with the preparation of the Space Plan and Final Plans (including
the cost of consulting engineers, the Architect and other consultants); (b) costs of permits, fees and taxes; (c) testing
and inspecting costs; (d) costs and charges for material and labor, Contractor’s profit and Contractor’s general
overhead incurred by Lessee in having the Lessee’s Work constructed; (e) all other costs expended or to be expended
in the construction of the Lessee’s Work.

 

    Exhibit “E” - 4

     

    

 

SCHEDULE 1

to Work Letter Agreement

 

    Exhibit “E” - 5

     

    

 

SCHEDULE 2

to Work Letter Agreement

 

1.            Mandatory
Insurance Requirements. Before performing work or conducting any activities at the site
of the Project, Contractor shall, at its expense, procure and maintain insurance coverages on all its operations, in admitted companies
having at least an A. M. Best rating of no less than A-X. Lessor may consider accepting coverage from a non-admitted carrier. Coverage
requirements on forms acceptable to Lessor are as follows:

 

		1.1	Workers’ Compensation and Employers Liability Insurance as required by applicable law or
regulation.

		1.1.1	Employers Liability Insurance with a $1,000,000 limit;

		1.1.2	Waiver of Subrogation endorsement in favor of the Lessor;

		1.1.3	If there is an exposure to injury to Contractor’s employees under the U.S. Longshoreman and
Harbor Workers’ Compensation Act, the Jones Act or under laws, regulations or statutes applicable to maritime employees,
coverage shall be included for such injuries or claims.

		1.1.4	Acceptance of insurance programs underwritten by any Self-Insured Group (SIG) is subject to prior
approval by Lessor.

 

		1.2	General Liability Insurance on a coverage form at least as broad as 2001 Insurance Office (ISO)
occurrence form CG 0001, including coverage for:

	 	1.2.1	Premises and Operations;

		1.2.2	Products and Completed Operations;

		1.2.3	Broad Form Property Damage (including Completed Operations);

		1.2.4	Explosion, Collapse, Underground Hazards (including subsidence);

		1.2.5	Contractual Liability insuring obligations assumed in this agreement;

		1.2.6	Personal Injury and Advertising Liability;

		1.2.7	Severability of Interest Clause;

		1.2.8	Waiver of Subrogation endorsement in favor of Lessor as required by contract;

		1.2.9	General Aggregate Limits of Insurance shall apply separately to the project.

		1.2.10	“Claims Made” and “Modified Occurrence” policy forms are not acceptable.

		1.2.11	“Risk Retention Groups” are not acceptable.

		1.2.12	Self-insured retention or deductible greater than $25,000 must be declared to Lessor at time of
bid.

		1.2.13	Contractor shall maintain general liability and completed operations coverage through the expiration
of the construction statute of repose period established per the civil code of the state where the project is located.

		1.2.14	Minimum Limits of Liability shall be:

		1.2.14.1	$1,000,000 Each Occurrence; OR, the full per occurrence limit of the Contractor’s policy whichever is greater;

		1.2.14.2	$1,000,000 Personal Injury Liability;

		1.2.14.3	$2,000,000 Products & Completed Operations Aggregate;

 

    Exhibit “E” - 6

     

    

 

		1.2.14.4	$2,000,000 General Aggregate;

		1.12.5	This policy must cover mobile equipment; if it does not, coverage must be included on the Automobile
Liability policy.

 

		1.3	Automobile Liability Insurance on a coverage form at least as broad as ISO form CA 0001, including:

		1.3.1	Coverage on any automobile, or on all owned, non-owned and hired automobiles and mobile equipment
if not covered under the General Liability

		1.3.2	$1,000,000 Combined Single Limit for bodily injury and property damage.

		1.3.3	Waiver of Subrogation endorsement in favor of Lessor.

 

		1.4	Umbrella or Excess Liability Insurance:

		1.4.1	$5,000,000 minimum limit, OR, the full per occurrence limit of the Contractor’s excess liability
policy, whichever is

		1.4.2	Coverage in excess of primary CGL, Auto and Employers Liability

		1.5	Additional Insured and Primary Insurance Requirement:

		1.5.1	Under the Commercial General Liability policy the Contractor shall add Lessor, its officers, directors
and employees as additional insured. The policy shall stipulate that the insurance afforded Lessor as additional insured shall
apply as primary insurance. Any other insurance carried by Lessor will be excess only and will not contribute with this insurance.
The insurance afforded to the additional insured parties shall be at least as broad as that afforded to the first named insured
on Contractor’s policy.

		1.5.2	The additional insured coverage, including ongoing and completed operations, shall be provided
by an endorsement providing coverage at least as broad as:

		1.5.2.1	Additional Insured (Form B) ISO endorsement form CG 2010 11/85, or equivalent, or;

		1.5.2.2	A combination of Additional Insured ISO endorsement form CG 2010 10/01, and Additional Insured endorsement form CG 2037 10/01,
(or equivalent).

		1.5.3	Additional insured endorsements shall be provided to the end of the contract and through the expiration
of the construction statute of repose period established per the civil code of the state where the project is located.

 

		1.6	Certificates of Insurance:

		1.6.1	Certificates of Insurance, including copies of Additional Insured, primary and noncontributory,
and Waiver of Subrogation endorsements, shall be furnished by the Contractor to Lessor before any work is commenced hereunder by
the Contractor.

		1.6.2	At any time during the term of the contract, upon certificate holder’s reasonable request,
the Contractor, or their appointed representative, agrees to promptly supply evidence that the insurance coverage required by the
contract is in force. Contractor will notify Lessor in writing within 24 hours of receiving a notice of cancellation on any insurance
policy from their insurer or broker. Notices of cancellation should be emailed to the attention of the Lessor’s risk manager
or designee.

 

    Exhibit “E” - 7

     

    

 

		1.6.3	Allowance of any additional exclusions or coverage limiting endorsements is at the discretion of
Lessor, and Contractor’s bid shall be subject to adjustment to compensate for the existence of such exclusions.

		1.6.4	Payment may be withheld, at the option of the Lessor, until such certificates have been furnished,
or upon receipt of a cancellation notice on a policy, until withdrawal of the notice or the reinstatement of the canceled policy.
Copies of Contractors policies shall be furnished upon request from Lessor.

 

		1.7	Insurance Requirements for Subcontractors, Truckers, Trucking Brokers, Sub-haulers Vendors and
Suppliers:

		1.7.1	Contractor shall ensure that its subcontractors, truckers, trucking brokers, subhaulers vendors
and suppliers of any tier shall maintain insurance in like form and amounts (except excess liability), including the Additional
Insured requirements set forth above, and will provide Contractor evidence of sub-subcontractors, truckers, vendors and suppliers
insurance and additional insured compliance prior to their starting work. A $5,000,000 excess liability limit is recommended for
all subcontractors performing work on site, but Contractor is responsible for establishing subcontractor excess liability limit
requirements.

 

		1.8	Builder’s Risk Insurance:

 

		1.8.1	Contractor shall satisfy itself as to the existence and extent of Builder’s Risk insurance
prior to commencement of Contractor’s work.

		1.8.2	If Builder’s Risk insurance purchased by Lessor provides coverage to Contractor for loss
or damage to Contractor’s or subcontractor’s work, Contractor shall be responsible for the insurance policy deductible.
Contractor is authorized to pass deductible responsibility to subcontractors for loss or damage to subcontractor’s work through
the Subcontract Agreement.

		1.8.3	If Lessor has not purchased Builder’s Risk insurance including the full insurable value of
Contractor’s work, then Contractor may procure such insurance at its own expense to protect the interests of Contractor and
its subcontractors in the work. Such insurance shall also apply to any of Lessor’s property to be installed by Contractor
as part of the Work.

		1.8.4	Lessor and Contractor waive all rights against each other and against all other subcontractors
for loss or damage to the extent reimbursed by Builder’s Risk or any other property or equipment insurance applicable to
the work, except such rights as they may have to the proceeds of such insurance.

 

		1.9	Property Insurance:

		1.9.1	Contractor and subcontractors of every tier shall procure and maintain at their own expense property
and equipment insurance for their tools, equipment, and temporary structures. A waiver of subrogation in favor of Lessor is required.

 

    Exhibit “E” - 8

     

    

 

		1.10	Other Requirements:

		1.10.1	Acceptance of insurance certificates by Lessor shall in no way limit Contractor’s duties
and responsibilities under this Agreement, including the duty to indemnify Lessor.

		1.10.2	Insurance coverage in the minimum amounts set forth herein shall not be construed to relieve Contractor
for liability in excess of such coverage, nor shall it preclude Lessor from taking other available actions under any other provision
of this Agreement or law.

		1.10.3	If higher limits or other forms of insurance are required by Lenders or other Stakeholders, Contractor
will comply with such requirements.

		1.10.4	Contractor shall be responsible for any deductible amount in insurance policies required of Contractor
under these insurance requirements, or any loss arising out of coverage denials by its insurance carrier(s).

 

		1.10.5	Should any insurance policy lapse or be canceled during the contract period, Contractor shall,
prior to the effective expiration or cancellation date, furnish Lessor with evidence of renewal or replacement of the policy. Failure
of the Contractor to provide timely notice of pending cancellation shall be considered a material breach of contract.

		1.10.6	Failure to continuously satisfy insurance requirements as herein provided is a material breach
of contract.

		1.10.7	In the event Contractor fails to maintain any insurance coverage required, Lessor may, but is not
required to, maintain such coverage and charge the expense to Contractor (including premium and claims expense), or terminate this
contract.

		1.10.8	Contractor’s obligations for loss or damage arising out of Contractor’s work are not
limited to the types or amounts of insurance set forth above. To the extent Contractor maintains insurance greater than these minimum
requirements; Contractor agrees that such insurance shall be applicable to any of Contractor’s liability obligations.

		1.10.9	In specifying minimum insurance requirements herein, Lessor doesn’t recommend this insurance
as adequate to protect Contractor’s interests.

 

2.            Scope
Specific Additional Required Insurance Coverages

 

		2.1	Professional Liability Insurance:

		2.1.1	A Professional Liability Insurance Policy shall be carried by Contractor with limits of $1,000,000
per claim and aggregate if work under this contract includes any professional services, design assist, design-build, or LEED certification
services.

		2.1.2	Evidence of coverage in the form of a Certificate of Insurance shall be provided prior to the start
of the project.

		2.1.3	Claims-made policies must have a retroactive date prior to the design services performed under
the Scope of Work, and coverage must extend a minimum of five (5) years beyond completion of the Scope of Work or end of the
Agreement, whichever is later.

 

    Exhibit “E” - 9

     

    

 

		2.1.4	If Claims-Made coverage is cancelled or non-renewed, and not replaced with another claims-made
policy with a retroactive date prior to the Agreement effective date, the Contractor must purchase Extended Reporting (Tail) coverage
for a minimum of three (3) years beyond completion of Scope of Work or end of the Agreement, whichever is later.

		2.1.5	Designers, consultants or subcontractors retained by Contractor whose work includes any professional
services, design assist, design-build, or LEED certification services shall also be required to maintain Professional Liability
Insurance coverage with limits of $1,000,000 per claim and aggregate. Higher limits may be required of certain designers, consultants
or subcontractors depending on the scope of their services.

 

		2.2	Commercial Crime/Employee Dishonesty Insurance:

		2.2.1	If the Contractor performs operations in an occupied, operating building, a $500,000 Commercial
Crime policy providing blanket employee dishonesty must be maintained by Contractor, including an endorsement for third party liability.

 

		2.3	Aircraft/ UAV/ Drone / Helicopter Insurance:

		2.3.1	If the Contractor or its subcontractors use any owned, leased, chartered or hired aircraft of any
type in the performance of this contract, they shall maintain aircraft liability insurance in an amount of not less than $10,000,000
per occurrence including Passenger Liability. A UAV (Unmanned Aviation Vehicle) Liability policy for a minimum of $1,000,000 limit
is required if Drones will be used in the Contractor or subcontractor’s operations.

		2.3.2	Evidence of coverage in the form of a certificate of insurance shall be provided prior to the start
of the project.

		2.3.3	Contractor or its subcontractors shall name Lessor as Additional Insured as respects aircraft liability
or UAV Liability and provide a Waiver of Subrogation endorsement in favor of Lessor as respects physical damage to the aircraft,
drone, or helicopter hull.

 

		2.4	Pollution Liability:

		2.4.1	If Contractor or its subcontractors or suppliers of any tier bring pollutants to the job site,
if their operations create a pollution exposure, or as deemed necessary by the Lessor, they shall maintain a Contractor’s
Pollution Liability policy with limits not less than $1,000,000 per occ

		2.4.2	If Contractor or its subcontractors or suppliers of any tier are performing work on the building
envelope, dealing with water, or as deemed necessary by the Lessor, they shall maintain a Contractor’s Pollution Liability
policy, including mold coverage, with limits not less than $1,000,000 per occurrence and $2,000,000 annual aggregate.

		2.4.3	Lessor is to be afforded Additional Insured status on the Contractor and subcontractor’s
Pollution Liability policies.

 

    Exhibit “E” - 10

     

    

 

		2.5	Hazardous Materials Abatement:

		2.5.1	If Contractor or its subcontractors or suppliers of any tier are required to perform remediation
of hazardous materials as those terms are defined in federal, state, or local law, or if their operations involve an exposure to
hazardous materials, they must carry a Contractor’s Pollution Liability policy with limits not less than $5,000,000 per occurrence
and $5,000,000 annual aggregate.

		2.5.2	Lessor is to be afforded Additional Insured status on the Contractor and subcontractor’s
Pollution Liability policies.

		2.5.3	If Contractor or it subcontractors haul hazardous material, the policy must extend pollution coverage
to the transportation of hazardous materials or pollutants by waste hauling vehicles. If Contractor is subject to the Motor Carrier
Act of 1980, the Motor Carrier Act endorsement MCS-90 must be obtained and attached to the policy.

 

    Exhibit “E” - 11

     

    

 

EXHIBIT “F”

 

CONTRACTOR’S HOLD HARMLESS AGREEMENT

 

The undersigned ___________________________________,
(the “Contractor”), hereby agrees to protect, defend, indemnify and hold harmless 67 VB OWNER, LP, a
Delaware limited partnership (the “Owner”), and its successors-in-interest and assigns (collectively
the “Indemnitees”), the Indemnitees’ members, managers, partners and affiliates, and each of their
respective officers, agents, servants, employees and independent contractors from and against any and all loss, cost, expense,
liability, damage, claim and demand incurred in connection with, or arising from, any cause relating to the performance of any
work done in the building located at 6750 W. Van Buren Street, Phoenix, Arizona by the Contractor, or its agents, servants, or
employees (collectively the “Contractor’s Agents”), including, without limiting the generality
of the foregoing, any default in the observance or performance of any of the terms, covenants or conditions of the Contract (as
hereinafter defined), any injury to persons, including death, or damage to property in connection with the performance of the Contract,
or any acts, omissions or negligence of Contractor or Contractor’s Agents or any person claiming by, through or under Contractor
or Contractor’s Agents. Contractor hereby agrees that Contractor shall, at Contractor’s sole cost and expense, defend
any and all actions brought against Indemnitees based upon any of the foregoing with attorneys reasonably acceptable to Owner and
shall pay any and all costs and expenses incurred in such actions, including, without limitation, court costs and professional
fees such as appraisers’, accountants’ and attorneys’ fees, and promptly discharge any judgments arising therefrom.
This covenant by Contractor shall survive the expiration or sooner termination of the Contract and the Lease in connection with
which Contractor performed the Contract. Indemnitees, their members, managers, partners and affiliates and each of their respective
officers, agents, servants, employees and independent contractors shall not be liable for any damage either to person, including
death, or property, which is sustained by Contractor or Contractor’s Agents or by any other person or entity claiming through
Contractor or Contractor’s Agents or by any other person or entity claiming through Contractor or Contractor’s Agents
in connection with Contractor’s or Contractor’s Agents’ performance of the Contract or any subcontracted operations.
Contractor hereby agrees to insert the provisions of the preceding sentence in any subcontract relating to the Owner’s property.

 

Contractor hereby further
agrees that Contractor will perform the work and services in connection with the Contract as an independent contractor and not
as an employee or agent of Indemnitees.

 

As used herein, the
term “Contract” shall include any agreement, whether oral or written, relating to any work performed
and/or required to be performed by Contractor or Contractor’s Agents with respect to the leased premises within the building
located at 6750 W. Van Buren Street, Phoenix, Arizona.

 

SIGNATURE PAGE FOLLOWS

 

    Exhibit “F” - 1

     

    

 

IN WITNESS WHEREOF, the undersigned has
executed this Contractor’s Hold Harmless Agreement on the ____ day of _____________, 20___.

 

	 	CONTRACTOR:
	 	 
	 	 
	 	a	        
	 	 	 
	 	By:	 
	 	Name:	 
	 	Its:	             

 

    Exhibit “F” - 2

     

    

 

EXHIBIT “G”

 

Acceptable Image Examples

 

    Exhibit “G” - 1Exhibit 10.22

 

 

PLAYBOY ENTERPRISES, INC.

 

December 20, 2012

 

David Israel

[ADDRESS]

 

Dear David:

 

Playboy
Enterprises, Inc. (the "Company") is pleased to confirm its offer of employment to you under the following terms:

 

		1.	Position:
                                         Your title will be President of Playboy Media and you shall carry out all duties reasonably
                                         assigned to you by the Company. For the avoidance of doubt, your duties and powers shall
                                         not violate any contractual obligations of the Company or any of its direct or indirect
                                         subsidiaries. You will be reporting directly to Scott Flanders, CEO. Your role will include
                                         being responsible for improving the operational efficiency and profitability of PEI's
                                         print businesses (US Magazine and International Publications), coordinating PEI's digital
                                         content initiatives, maximizing the success and minimizing the operational risk of PEI's
                                         strategic relationships, ensuring tight alignment of the brand strategy across the content
                                         of all media platforms, and providing direct oversight of Alta Loma Entertainment.

 

		2.	Cash
                                         Compensation: The Company will pay you a starting salary at the rate of $480,000
                                         per year, payable in accordance with the Company's standard payroll schedule. This salary
                                         will be subject to adjustment pursuant to the Company's employee compensation policies
                                         in effect from time to time.

 

		3.	Bonus Compensation: You will be
                                         eligible to participate in an annual bonus program with a maximum annual potential of
                                         sixty percent (60%) of your earned base salary payable when the annual bonus cycle is
                                         complete. Your actual bonus payment will be at the discretion of the Company and will
                                         take into consideration not only the financial performance of the Company but also your
                                         individual performance measured against a series of specific goals and objectives that
                                         will be developed. Specific terms and conditions of your Bonus Compensation shall be
                                         memorialized under separate cover.

 

		4.	Consulting Success Fee: You will
                                         continue to be eligible for the potential success fee of $100,000 as outlined in your
                                         consulting agreement payable in March 2013.

 

		5.	Relocation:
                                         PEI will pay
                                         to transport your remaining personal belongings from North Carolina to California, each
                                         at costs reasonably determined between you and Human Resources. Additionally, we will
                                         continue to provide you with temporary, furnished
                                         housing through February 2013.

 

9346 CIVIC CENTER
DRIVE STE. 200 /BEVERLY HILLS, CA 90210

 

     

     

    

 

		6.	Equity Participation: Subject
                                         to board approval and your satisfaction of the terms and conditions of our form of unit
                                         grant agreement, the parent company of Playboy, Icon Acquisitions Holdings LLC,
                                         will issue to you a specified number of Class B units (which are subject to various
                                         vesting and other conditions).

 

		7.	Employee Benefits: As a regular
                                         employee of the Company, you will be eligible to participate in a number of Company-sponsored
                                         benefits. In general, these benefits include medical insurance, life insurance and participation
                                         in the Company's 401(k) plan.

 

		8.	Employment
                                         Relationship: Employment with the Company is for no specific period of time. Your employment
                                         with the Company will
                                         be "at will,"
                                         meaning that either you or the Company may terminate
                                         your employment at any time and for any reason, with or without cause. Any contrary representations
                                         that may have been made to you are superseded by this letter agreement. This is the full
                                         and complete agreement between you and the Company on this term. Although your job duties,
                                         title, compensation and benefits, as well as the Company's personnel policies and procedures,
                                         may change from time to time, the "at will" nature of your employment may only
                                         be changed in an express written agreement signed by you and a duly authorized officer
                                         of the Company (other than you).

 

		9.	If
                                         your employment is terminated by the Company at any time
                                         without cause and you agree to sign a release of claims that is satisfactory to the Company,
                                         you will receive twelve (12) months of your then base salary in severance pay, payable
                                         in equal installments on a biweekly basis on the Company's normal payroll dates.

 

		10.	Copy right:You
                                         acknowledge that all original works of authorship by you, whether created alone or jointly
                                         with others, relating to your employment with the Company, and which are protectable
                                         by copyright, are "works made for hire" and will be owned by the Company.

 

		11.	Withholding
                                         Taxes: All forms of compensation referred to in this letter agreement are subject to
                                         reduction to reflect applicable withholding and payroll taxes and other deductions required
                                         by law.

 

		12.	Location
                                         : You will be based in Beverly Hills, and will be expected to do such traveling as may
                                         be necessary and appropriate for the performance of your duties.

 

		13.	Confidentiality:
                                         You recognize and acknowledge that you will have access to confidential information relating
                                         to the business or interests of the Company or of persons with whom the Company may have
                                         business relationships. You will not during or after the term of your employment
                                         use or disclose to any other person or entity, any confidential information of the Company
                                         (except as required by applicable law).

 

9346 CIVIC CENTER
DRIVE STE. 200 /BEVERLY HILLS, CA 90210

 

     

     

    

 

		14.	Interpretation,
                                         Amendment and Enforcement: This letter agreement constitutes the complete agreement between
                                         you and the Company, contains all of the terms of your employment with the Company and
                                         supersedes any prior agreements, representations or understandings (whether written,
                                         oral or implied) between you and the Company. This letter agreement may not be amended
                                         or modified, except by an express written agreement signed by both you and a duly authorized
                                         officer of the Company. The terms of this letter agreement and the resolution of any
                                         disputes as to the meaning, effect, performance or validity of this letter agreement
                                         or arising out of, related to, or in any way connected with, this letter agreement, your
                                         employment with the Company or any other relationship between you and the Company (the
                                         "Disputes") will be governed by California
                                         law, excluding laws relating to conflicts or choice of law. You and the Company submit
                                         to the exclusive personal jurisdiction of the federal and state courts located in
                                         California in connection with any Dispute or any claim
                                         related to any Dispute.

 

David, we sincerely hope that you will
indicate your agreement with these terms and accept this offer by signing and dating this letter agreement and returning it to
me. We would like your start date to be January 1, 2013. As required by law, your employment with the Company is contingent
upon your providing legal proof of your identity and authorization to work in the United States.

 

	Very truly yours,	 
	 	 
	Playboy Enterprises, Inc.	 
	 	 
	/s/
    KENDICE K. BRIGGS	 
	 	 
	Kendice K. Briggs	 
	SVP, Human Resources	 
	 	 
	I have read and accept this
    employment offer:	 
	 	 
	/s/
    DAVID ISRAEL	 
	 	 
	 	 
	Signature of David Israel	 
	 	 
	Dated: 12/20/2012	 

 

9346 CIVIC CENTER
DRIVE STE. 200 /BEVERLY HILLS, CA 90210

 

     

     

    

 

FIRST AMENDMENT TO

EMPLOYMENT LETTER AGREEMENT

 

This First Amendment
(this “First Amendment”), dated February 8, 2021, by and between David Israel (“you”) and Playboy
Enterprises, Inc. (“Company”), hereby amends that certain employment letter agreement between the parties dated
December 20, 2012 (the “Letter Agreement”). This First Amendment is hereby incorporated into the Letter Agreement
by reference.

 

WHEREAS, the parties
desire to amend the Letter Agreement as set forth below.

 

NOW THEREFORE, in
consideration of the mutual promises and covenants herein and for other good and valuable consideration the sufficiency and receipt
of which are hereby acknowledged, you and Company agree to amend the Letter Agreement as follows:

 

		1.	SECTION 409A. The following paragraph is added to the Letter
                                         Agreement:

 

Notwithstanding any provision
of this letter agreement to the contrary, in the event that you are a “specified employee” within the meaning of Section 409A
of the Internal Revenue Code (“Code”) (as determined in accordance with the methodology established by the Company
as in effect on your date of termination), any payments or benefits that are considered non-qualified deferred compensation under
Code Section 409A payable under this letter agreement on account of a “separation from service” during the six-month
period immediately following your date of termination shall, to the extent necessary to comply with Code Section 409A, instead
be paid, or provided, as the case may be, on the first business day after the date that is six months following your “separation
from service” within the meaning of Code Section 409A.

 

2.            NO
OTHER CHANGES. Except as expressly modified above, all of the other terms and conditions of the Letter Agreement shall remain
in full force and effect and shall be applicable to the terms hereof; provided that, to the extent a provision of this First Amendment
conflicts with a provision of the Letter Agreement, the provision in this First Amendment shall govern and control.

 

IN WITNESS WHEREOF
AND INTENDING TO BE LEGALLY BOUND THEREBY, the parties hereto have executed and delivered this Letter Agreement as of the date
first written above.

 

	PLAYBOY ENTERPRISES, INC.	 	 
	 	 	 
	/s/
    JENNY GREENWALD	 	/s/
    DAVID G. ISRAEL
	Jenny Greenwald	 	David Israel
	Chief People Officer	 	 

 

9346 CIVIC CENTER
DRIVE STE. 200 /BEVERLY HILLS, CA 90210

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