Document:

EXHIBIT 10.5 

 

NOTICE TO RESIDENTS OF THE UNITED
STATES

THE OFFER AND SALE OF THIS SECURITY
INSTRUMENT HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
OR UNDER THE SECURITIES LAWS OF CERTAIN STATES. THIS SECURITY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED
EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR AN EXEMPTION
THEREFROM.

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BlackStar Digital Equity,
a product of BlackStar Enterprise Group, Inc.

SAFE

Simple Agreement for Future Equity

SAFE Series: 2018-1

THIS CERTIFIES THAT in exchange
for the payment by the undersigned purchaser (the “Purchaser”) of $[__________] (the “Purchase
Amount”) on or about [DATE], 2018, BlackStar Enterprise Group, Inc., a Delaware corporation (the “Company”),
hereby issues to the Purchaser the right (the “Right”) to certain registered digital shares of common
stock of BlackStar Enterprise Group, Inc. (the “BlackStar Digital Equity”), subject to the terms of the
Warrant to Purchase Digital Shares of Common Stock purchased on ____________, 2018, incorporated by reference herein, and the additional
terms set forth below.

This SAFE is issued as part of a series
of SAFEs designated by the SAFE Series above and issued in a series of multiple closings to certain persons and entities. All BlackStar
Digital Equity acquired pursuant to this SAFE shall be subject to the Use Restriction. The BlackStar Digital Equity shall vest
and cease to be subject to the Use Restriction in equal portions as each block of BlackStar Digital Equity is registered following
the BDTP Launch, such that all BlackStar Digital Equity acquired pursuant to this SAFE shall be fully vested at the end of the
Vesting Period (as measured starting from the BDTP Launch). “Use Restriction” means the general prohibition on the
Purchaser’s ability to sell, transfer, spend, exchange or otherwise make use of the BlackStar Digital Equity on the BDTP
until such BlackStar Digital Equity are vested as provided herein.

 

1. Events 

(a) BDTP Launch. If there
is a BDTP Launch before the expiration or termination of this instrument, the Company will issue to the Purchaser, upon Purchaser’s
exercise of the Warrant, a number of BlackStar Digital Equities equal to the number of Warrants exercised by Purchaser at $0.60
per share.

In connection with, as a condition
to, and prior to the issuance of BlackStar Digital Equities by the Company to the Purchaser pursuant to this Section 1(a):

(i) The Purchaser will execute
and deliver to the Company any and all other transaction documents related to this SAFE as are reasonably requested by the Company,
including verification of accredited investor status or non-U.S. person status under the applicable securities laws; and

(ii) The Purchaser will provide
to the Company an online account for which to deposit Purchaser's BlackStar Digital Equities upon the BDTP Launch.

(b) Dissolution Event. If
there is a Dissolution Event before this instrument expires or terminates, the Company will pay an amount equal to the Purchase
Amount allocable to the purchase of the Warrants, but not including amounts allocable to other securities received in the over
purchase (the “Returned Purchase Amount”), due and payable to the Purchaser immediately prior to, or
concurrent with, the consummation of the Dissolution Event, to the extent funds are available and prior to paying any amounts to
any equity holders of the Company. If immediately prior to the consummation of the Dissolution Event, the assets of 

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the Company
that remain legally available for distribution to the Purchaser and all holders of all other SAFEs (the “Dissolving
Purchasers”), as determined in good faith by the Company’s board of directors, are insufficient to permit the
payment to the Dissolving Purchasers of their respective Returned Purchase Amounts, then the remaining assets of the Company legally
available for distribution, following all distributions to the holders of the Company’s preferred stock, will be distributed
with equal priority and pro rata among the Dissolving Purchasers in proportion to the Returned Purchase Amounts they would otherwise
be entitled to receive pursuant to this Section 1(b). Any distributed amounts shall be in U.S. Dollars.

(c) Termination. This instrument
will expire and terminate upon the earlier of (i) the issuance of BlackStar Digital Equities to the Purchaser pursuant to Section
1(a); (ii) the payment, or setting aside for payment, of amounts due the Purchaser pursuant to Section 1(b); or (iii) February
5, 2021 (the “Expiration Date”), if the BDTP Launch has not occurred as of such date; provided that,
the Company shall have the right to extend the Expiration Date by sixty (60) days, in its sole discretion.

2. Definitions 

“BDTP”
means BlackStar Digital Trading Platform, a peer-to-peer digital equity trading platform enabling the trading of registered BlackStar
Digital Equities only.

“BDTP Launch”
means a bona fide transaction or series of transactions, pursuant to which the Company will sell the BlackStar Digital
Equities to the general public in a publicized product launch.

“BlackStar Digital
Equity” means a digitally evidenced share of BlackStar common stock holding the same characteristics as securities
evidenced by a paper certificate which has been transmitted and protected by cryptographic protocols.

“Dissolution Event”
means (i) a voluntary termination of operations of the Company, (ii) a general assignment for the benefit of the Company’s
creditors or (iii) any other liquidation, dissolution or winding up of the Company, whether voluntary or involuntary.

“Exercise Price”
means $0.60 per BlackStar Digital Equity.

“SAFE”
means an agreement containing a future right to BlackStar Digital Equities purchased by Purchasers, similar in form and content
to this agreement, which a significant portion of the amount raised under the SAFEs will be used to fund the Company’s development
of a decentralized blockchain-based digital trading platform (the “BDTP”) that enables registered shares
of common stock of BEGI evidenced in digital format to be traded using peer-to-peer and blockchain technologies.

“Warrant”
means that Warrant to Purchase Digital Shares of Common Stock dated ___________, 2018 received by Purchaser in connection with
the Company’s private placement offering, providing the Purchaser with the right to purchase digital shares of common stock
of the Company at $0.60 (Sixty Cents) per share.

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3. Company Representations

(a) The Company is a corporation
duly organized, validly existing and in good standing under the laws of Delaware, and has the power and authority to carry on its
business as now conducted.

(b) The execution, delivery and
performance by the Company of this instrument is to the Company’s knowledge, within the power of the Company and, other than
with respect to the actions to be taken when BlackStar Digital Equities are to be issued to the Purchaser, has been duly authorized
by all necessary actions on the part of the Company. This instrument constitutes a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as limited by bankruptcy, insolvency or other laws of general
application relating to or affecting the enforcement of creditors’ rights generally and general principles of equity. To
the knowledge of the Company, it is not in violation of (i) its current articles of incorporation or bylaws, (ii) any material
statute, rule or regulation applicable to the Company, or (iii) any material indenture or contract to which the Company is a party
or by which it is bound, where, in each case, such violation or default, individually, or together with all such violations or
defaults, could reasonably be expected to have a material adverse effect on the Company.

(c) To the knowledge of the Company,
the performance and consummation of the transactions contemplated by this instrument do not and will not: (i) violate any material
judgment, statute, rule or regulation applicable to the Company; (ii) result in the acceleration of any material indenture or contract
to which the Company is a party or by which it is bound; or (iii) result in the creation or imposition of any lien upon any property,
asset or revenue of the Company or the suspension, forfeiture, or nonrenewal of any material permit, license or authorization applicable
to the Company, its business or operations.

(d) To the knowledge of the Company,
no consents or approvals are required in connection with the performance of this instrument, other than: (i) the Company’s
corporate approvals; and (ii) any qualifications or filings under applicable securities laws.

(e) To its knowledge, the Company
owns or possesses (or can obtain on commercially reasonable terms) sufficient legal rights to all patents, trademarks, service
marks, trade names, copyrights, trade secrets, licenses, information, processes and other intellectual property rights necessary
for its business as now conducted and as currently proposed to be conducted, without an infringement of the rights of others.

4. Purchaser Representations

(a) The Purchaser has full legal
capacity, power and authority to execute and deliver this instrument and to perform its obligations hereunder. This instrument
constitutes valid and binding obligation of the Purchaser, enforceable in accordance with its terms, except as limited by bankruptcy,
insolvency or other laws of general application relating to or affecting the enforcement of creditors’ rights generally and
general principles of equity.

(b) The Purchaser has been advised
that this instrument is a security and that the offers and sales of this instrument have not been registered under any country’s
securities laws and, therefore, cannot be resold except in compliance with the applicable country’s laws. The Purchaser is
purchasing this instrument for its own account for investment, not as a nominee or agent, and not with a view to, or for resale
in connection 

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with, the distribution thereof, and the Purchaser has no present intention of selling, granting any participation
in, or otherwise distributing the same. The Purchaser has such knowledge and experience in financial and business matters that
the Purchaser is capable of evaluating the merits and risks of such investment, is able to incur a complete loss of such investment
without impairing the Purchaser’s financial condition and is able to bear the economic risk of such investment for an indefinite
period of time.

(c) The Purchaser enters into this
SAFE with the predominant expectation that he, she or it, as the case may be, will profit upon the successful development and BDTP
Launch arising from the efforts of the Company and its employees to develop and market the BDTP and any sale of the BlackStar Digital
Equities. The Purchaser understands that the Company makes no guarantee of the success or profitability of the Purchaser’s
investment, the BDTP, or the BlackStar Digital Equities.

(d) The Purchaser hereby has sufficient
knowledge and experience in business and financial matters to be able to evaluate the risks and merits of its purchase of this
SAFE and of the BlackStar Digital Equities and is able to bear the risks thereof. The Purchaser is aware of Company’s business
affairs and financial condition and has acquired sufficient information about the Company to reach an informed and knowledgeable
decision to acquire this SAFE. The Purchaser understands that the BlackStar Digital Equities involve risks, all of which the Purchaser
fully and completely assumes, including, but not limited to, the risk that (i) the technology associated with the BDTP will not
function as intended; (ii) the BDTP will not be completed; (iii) the BDTP will fail to attract sufficient interest from key stakeholders;
and (iv) the Company and/or the BDTP may be subject to investigation and punitive actions from Governmental Authorities. The Purchaser
understands and expressly accepts that the BlackStar Digital Equities will be created and delivered to the Purchaser at the sole
risk of the Purchaser on an “AS IS” and “UNDER DEVELOPMENT” basis. The Purchaser understands and expressly
accepts that the Purchaser has not relied on any representations or warranties made by the Company outside of this instrument,
including, but not limited to, conversations of any kind, whether through oral or electronic communication, or any white paper.
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, THE PURCHASER ASSUMES ALL RISK AND LIABILITY FOR THE RESULTS OBTAINED BY THE
USE OF ANY BLACKSTAR DIGITAL EQUITIES AND REGARDLESS OF ANY ORAL OR WRITTEN STATEMENTS MADE BY THE COMPANY, BY WAY OF TECHNICAL
ADVICE OR OTHERWISE, RELATED TO THE USE OF THE BLACKSTAR DIGITAL EQUITIES.

 

(e) The Purchaser understands that Purchaser
has no right against the Company or any other Person except in the event of the Company’s breach of this instrument or intentional
fraud. THE COMPANY’S AGGREGATE LIABILITY ARISING OUT OF OR RELATED TO THIS INSTRUMENT, WHETHER ARISING OUT OF OR RELATED
TO BREACH OF CONTRACT, TORT OR OTHERWISE, SHALL NOT EXCEED THE TOTAL OF THE AMOUNTS PAID TO THE COMPANY PURSUANT TO THIS INSTRUMENT.
NEITHER THE COMPANY NOR ITS REPRESENTATIVES SHALL BE LIABLE FOR CONSEQUENTIAL, INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY, PUNITIVE
OR ENHANCED DAMAGES, LOST PROFITS OR REVENUES OR DIMINUTION IN VALUE, ARISING OUT OF OR RELATING TO ANY BREACH OF THIS INSTRUMENT.

 

(f) The Purchaser understands that Purchaser
bears sole responsibility for any taxes as a result of the matters and transactions the subject of this instrument, and any future
acquisition, ownership, use, sale or other 

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disposition of BlackStar Digital Equities held by the Purchaser. To the extent permitted
by law, the Purchaser agrees to indemnify, defend and hold the Company or any of its affiliates, employees or agents (including
developers, auditors, contractors or founders) harmless for any claim, liability, assessment or penalty with respect to any taxes
(other than any net income taxes of the Company that result from the issuance of BlackStar Digital Equities to the Purchaser pursuant
to Section 1(a) of the instrument) associated with or arising from the Purchaser’s purchase of BlackStar Digital Equities
hereunder, or the use or ownership of BlackStar Digital Equities.

 

5. Procedures for Purchase
of Rights and Valuation of Purchase Amount. 

(a) The Company will accept payment
for the Right purchased under this SAFE in U.S. Dollars. Purchaser shall make the required payment to the Company in consideration
for Purchaser’s purchase of the Right pursuant to the SAFE through the procedures set forth on Exhibit A hereof.

6. Miscellaneous 

(a) This instrument sets forth
the entire agreement and understanding of the parties relating to the subject matter herein and supersedes all prior or contemporaneous
disclosures, discussions, understandings and agreements, whether oral of written, between them, EXCEPT THAT THE TERMS OF THE WARRANT,
IF CONFLICTING, SHALL SUPERSEDE. This instrument is one of a series of similar instruments entered into by the Company from time
to time. Any provision of this instrument may be amended, waived or modified only upon the written consent of the Company and the
holders of a majority, in the aggregate, of the Purchase Amounts paid to the Company with respect to all SAFEs outstanding at the
time of such amendment, waiver or modification. Notwithstanding the foregoing, the Company may modify the SAFEs at any time and
without notice in response to regulatory changes that would affect the rights of SAFE holders and/or the ability of the Company
to fulfill obligations under the SAFEs.

(b) Any notice required or permitted
by this instrument will be deemed sufficient when sent by email to the relevant address listed on the signature page, as subsequently
modified by written notice received by the appropriate party.

(c) The Purchaser is not entitled,
as a holder of this instrument, to vote or receive dividends or be deemed the holder of capital stock of the Company for any purpose,
nor will anything contained herein be construed to confer on the Purchaser, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action or to receive notice of meetings, or to receive subscription rights or otherwise.

(d) Neither this instrument nor
the rights contained herein may be assigned, by operation of law or otherwise, by either party without the prior written consent
of the other; provided, however, that this instrument and/or the rights contained herein may be assigned without the Company’s
consent by the Purchaser to any other entity who directly or indirectly, controls, is controlled by or is under common control
with the Purchaser, including, without limitation, any general partner, managing member, officer or director 

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of the Purchaser,
or any venture capital fund now or hereafter existing which is controlled by one or more general partners or managing members of,
or shares the same management company with, the Purchaser; and provided, further, that the Company may assign this instrument
in whole, without the consent of the Purchaser, in connection with a reincorporation to change the Company’s domicile, or
if the Company assigns the instrument in whole to a wholly owned subsidiary of the Company.

(e) In the event any one or more
of the provisions of this instrument is for any reason held to be invalid, illegal or unenforceable, in whole or in part or in
any respect, or in the event that any one or more of the provisions of this instrument operate or would prospectively operate to
invalidate this instrument, then and in any such event, such provision(s) only will be deemed null and void and will not affect
any other provision of this instrument and the remaining provisions of this instrument will remain operative and in full force
and effect and will not be affected, prejudiced, or disturbed thereby.

(f) All rights and obligations
hereunder will be governed by the laws of Delaware, without regard to the conflicts of law provisions of such jurisdiction.

(g) Each of the Company and the Purchaser
agree to treat this instrument as a forward contract for U.S. federal, state and local income tax purposes, and will not take any
position on any tax return, report, statement or other tax document that is inconsistent with such treatment, unless otherwise
required by a change in law occurring after the date hereof, a closing agreement with an applicable tax authority or a final non-appealable
judgment of a court of competent jurisdiction.

 

(h) The Purchaser shall, and shall cause
its affiliates to, execute and deliver such additional documents, instruments, conveyances and assurances and take such further
actions as may be reasonably requested by Company to carry out the provisions of this instrument and give effect to the transactions
contemplated by this instrument, including, without limitation, to enable the Company or the transactions contemplated by this
instrument to comply with applicable laws.

 

(i) The Company shall not be liable or
responsible to the Purchaser, nor be deemed to have defaulted under or breached this instrument, for any failure or delay in fulfilling
or performing any term of this instrument, including without limitation, launching the BDTP or consummating the BDTP Launch, when
and to the extent such failure or delay is caused by or results from acts beyond the affected party's reasonable control, including,
without limitation: (a) acts of God; (b) flood, fire, earthquake or explosion; (c) war, invasion, hostilities (whether war is declared
or not), terrorist threats or acts, or other civil unrest; (d) Law; or (e) action by any Governmental Authority.

 

(Signature page follows)

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IN WITNESS WHEREOF, the undersigned have caused this
instrument to be duly executed and delivered.

 

BlackStar Enterprise Group, Inc.

By: _______________________

Joseph E. Kurczodyna

Chief Financial Officer

Address:4450 Arapahoe Ave.

Suite 100

Boulder, CO 80303

Email:

 

 

 

PURCHASER: 

By: _______________________

Name:

Title:

Address:

Email:

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Exhibit A

Wire Transfer Instructions

(Payment may also be made via certified check)Exhibit 10.1

 

SUBLEASE AGREEMENT

 

THIS SUBLEASE AGREEMENT (this “Sublease”)
is entered into as of the latest of the signature dates on this Sublease by and between Affirmative Agencies Inc., a Texas corporation,
having an address of 7711 Center Ave., Suite 200, Huntington Beach, CA 92647, (“Sublessor”) and JetPay
Payment Services, TX, LLC (“Sublessee”), having an address care of its parent JetPay Corporation located
at 7450 Tilghman Street, Allentown, PA 18106.

 

R E C I T A L S:

 

A.            WHEREAS, effective, June 3, 1999 Wilcox Soujourn Development Ltd, as Landlord entered into that certain Lease
Agreement with Old American Insurance Services, Inc. Successive owners of the Building and predecessors of Sublessor have entered
into amendments to the June 3, 1999 Lease Agreement, collectively (“Primary Lease”), for the lease of certain
premises (the “Premises”) currently containing approximately 56,888 rentable square feet located in 4450 Sojourn
Dr, Addison, TX 75001 of the property commonly known as Sojourn Plaza (the “Building”). Sojourn Office,
LLC, a Texas limited liability company, is the current owner of the Building (“Landlord”).

 

B.            WHEREAS, true and correct copies of the Primary Lease, including all subsequent amendments is attached hereto as
Exhibit A, respectively and incorporated herein by reference for all purposes. The subsequent amendments and
assignments forming a part of the Primary Lease are a: First Amendment dated July 26, 1999, Second Amendment to Lease dated August
1, 2000, Third Amendment to Lease dated August 4, 2003, Fourth Amendment to Lease dated December 14, 2004, Fifth Amendment to Lease
dated November 23, 2009, Sixth Amendment to Lease dated October 25, 2013, Seventh Amendment to Lease dated May 2, 2016, and assignments
of lease dated September 26, 2013 and August 25, 2015.

 

C.            WHEREAS, the Lease Agreement dated June 3, 1999 forming part of the Primary Lease identified the Premises as consisting
of approximately 45,000 square feet designated as Suite No. 500 in the Building. The Premises were expanded to the current 56,888
rentable feet by some of the subsequent amendments. The Sublandlord has obtained the Landlord’s consent for the Premises
to be divided to form a separate suite designated as Suite 500B having 28,646 rentable square feet, as shown in the attached Exhibit
B (“Subleased Premises”). The Subleased Premises are to be occupied by the Sublessee under the terms
of this Sublease.

 

TERMS:

 

NOW, THEREFORE, for
and in consideration of the mutual covenants and agreements contained herein, Sublessor and Sublessee agree as follows:

 

1.             Recitals. The Sublessor warrants and represents to the Sublessee that: (i) the recitals above are true and correct,
(ii) the Primary Lease is not in default, is in full force and effect and has not been modified or amended except as set forth
in the Recitals, (iii) there exists no event which with the passage of time could allow the Landlord or Sublessor to declare a
default of the Primary Lease, (iv) the Improvements, as identified in the Sixth Amendment to Lease have all been made and paid
for by Sublessor or its predecessors , and (v) a security deposit of $0.00 Dollars is being held by the Landlord under the Primary
Lease. Sublessor further warrants and represents that it is the current tenant under the Primary Lease, and Sojourn Office, LLC
is the current owner of the Building.

 

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2.             Sublease. Sublessor hereby subleases to Sublessee, and Sublessee hereby subleases from Sublessor, upon the terms
and conditions set forth herein, the Subleased Premises.

 

3.             Term. The term of the Sublease shall be for a period of 72 months and sixteen days commencing on October 15, 2018
(the “Commencement Date”) and ending October 31, 2024 (the “Sublease Term”), provided, however,
that this Sublease shall terminate earlier upon a default of this Sublease as specified herein. Notwithstanding the Sublease Term,
this Sublease shall not commence, until the Landlord executes a written consent to the Sublease as set forth at the end of this
Sublease or in another form acceptable to the Sublessee. If for any reason the Landlord does not execute and deliver the Landlord
Consent within five business days of the date of this Sublease, this Sublease shall terminate, and the parties shall have no further
obligation to each other. Notwithstanding anything to the contrary in this Sublease, the Sublessee shall not be required to remit
any funds to Sublessor until five days after the Landlord Consent is executed and delivered to Sublessee.

 

4.             Rent. The Base Rental and Additional Rental under the Primary Lease is greater than the Base Rental and Additional
Rental that is due under this Sublease. The parties agree that it is the Sublessor’s sole responsibly to pay the shortfall
in Base Rental and Additional Rental to the Landlord and that Sublessor shall pay such shortfall timely as set forth in the Primary
Lease. Sublessee shall not be in default of this Sublease or the Primary Lease as long as it pays direct to the Landlord the Base
Rental and Additional Rental that is due for the Subleased Premises under this Sublease.

 

a)                 
During the period commencing upon Commencement Date and terminating with this Sublease, Sublessee covenants to pay to Landlord,
without any demand or notice and without any offset or reduction whatsoever, a Base Rental, payable in advance, as specified in
Exhibit C attached hereto. Sublessee shall pay all Base Rental monthly direct to Landlord without notice or demand
to the below address or any other address which the Landlord notifies Sublessee of in writing.

 

Payable to: Sojourn Office, LLC

Attn: Property Manager

4455 Camp Bowie Blvd.

Suite 114 PMB 26

Fort Worth, Texas 76107

b)                 
Sublessee shall pay Landlord at the address set forth in 4.a) above Additional Rental in the amount of any increases in
operating expenses over base year 2019. Sublessee’s Additional Rental shall be based on the square footage of the Subleased
Premises. Sublessor or Landlord shall deliver direct to Sublessee the calculation of the amount due for Additional Rental using
a base year of 2019 and the square footage of the Subleased Premises in accordance with the Primary Lease. The shortfall of Additional
Rental being paid by Sublessee under this Sublease, versus the amount of Additional Rental due under the Primary Lease shall be
the sole responsibility of Sublessor.

 

c)                 
Non-payment or late payment of monthly rent will be penalized and enforced in accordance with sections 3.7 and 3.8 of the
Primary Lease.

 

		5.	Primary Lease.

 

a)                 
The terms and conditions of the Primary Lease are hereby incorporated herein by reference for all purposes, and Sublessor
has furnished Sublessee with a copy of the Primary Lease which is attached as Exhibit A. The parties acknowledge that Sublessee
has examined the Primary Lease and is familiar with the terms thereof. Except as otherwise expressly provided in this Sublease,
Sublessee hereby agrees to comply in all respects with the terms and conditions of the Primary Lease insofar as the same are applicable
to the Subleased Premises.

 

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b)                 
As between Sublessor and Sublessee, Sublessor shall be entitled to all of the rights and remedies reserved by and granted
to the Landlord in the Primary Lease as if Sublessor was the “Landlord” under the Primary Lease and Sublessee was the
 “Tenant” under the Primary Lease, and such rights and remedies are hereby incorporated herein by reference for all
purposes. No such rights, insofar as they would conflict with the Landlord’s exercise of rights under the Primary Lease,
shall be conferred upon or exercised by Sublessor, for example the Landlord, and not the Sublessor shall have the right to make
rules and regulations pertaining to the Building and Subleased Premises.

 

c)                 
This Sublease is subject and subordinate to all of the terms, covenants and conditions of the Primary Lease and to all of
the rights of Landlord under the Primary Lease.

 

d)                 
Notwithstanding anything to the contrary in this Sublease, the parties agree and acknowledge that Sublessee is responsible
for paying the Base Rental and Additional Rental set forth in this Sublease and not the amounts set forth in the Primary Lease
and Sublessee is not responsible for any terms and conditions of the Primary Lease which apply to or effect portions of the Premises
which are not part of the Subleased Premises.

 

e)                 
In the event the Primary Lease terminates for any reason prior to the expiration or termination of this Sublease, Sublessee
shall not have any claim whatsoever against Sublessor arising or resulting from such termination of the Primary Lease, unless the
Primary Lease was terminated due to actions or inactions on the part of the Sublessor which constituted gross negligence or willful
misconduct on the part of same. Sublessor agrees to fully perform its obligations under the Primary Lease and this Sublease; it
shall be willful misconduct of the Sublessor if the Sublessor fails to perform its obligations under the Primary Lease or this
Sublease. Sublessor hereby indemnifies and holds harmless Sublessee against all damages incurred by Sublessee, including all relocation
costs, litigation costs and attorneys’ fees, caused by the cancellation of the Sublease due to Landlord’s terminating
the Primary Lease due to the default of Sublessor of its obligations under this Sublease. Sublessor may not terminate or buyout
of the Primary Lease or begin such negotiations, without prior written consent from Sublessee. Sublessor may not modify or amend
the Primary Lease in any way that would be detrimental to the Sublessee or which would negatively impact the Sublessee or the Sublease.

 

6.             Limitation of Liability and Indemnity. All indemnification, hold harmless and release provisions contained in the
Primary Lease running to the benefit of Landlord are incorporated herein by reference for the benefit of Sublessor as if Sublessor
was the “Landlord” and Sublessee was the “Tenant” under the Primary Lease. All indemnification, hold harmless
and release provisions contained in the Primary Lease running to the benefit of the Tenant are incorporated herein by reference
for the benefit of Sublessee as if Sublessee was the “Tenant” under the Primary Lease and Sublessor was the “Landlord”
under the Primary Lease. This paragraph is for the benefit of the Sublessee, Sublessor and Landlord only, and no right of action
shall accrue hereunder to any third party by way of subrogation or otherwise. The indemnification, hold harmless and release above
also only apply to the Subleased Premises and the conduct of Sublessor and Sublessee, as applicable. Sublessee shall not be obligated
or responsible for the environmental condition of the Subleased Premises, under paragraph 5.6 of the Primary Lease or otherwise,
caused by Sublessor.

 

7.             Access, Alterations, Improvements and Additions. On or before September 24, 2018, Sublessee and its contractors shall
be granted access to the Subleased Premises for purposes of (a) the physical separation of the Subleased Premises from the remaining
portion of the Premises, and (b) the fit-up, modification and furnishing of the Subleased Premises to Sublessee’s satisfaction
(“Sublessee’s Work”). The Sublessor shall vacate the Subleased Premises, including the removal of all
the Sublessor’s employees, furniture, equipment and fixtures, as further set forth in Exhibit E. Sublessee may not make any
alterations, improvements or additions to the Subleased Premises (collectively, “Improvements”) without
the express prior written consent of Landlord and Sublessor, which consent by Landlord and Sublessor shall not be unreasonably
withheld or delayed. Excepting the Sublessee’s Work, any Improvements must be constructed and installed in accordance with
(i) all requirements contained in the Primary Lease and (ii) Sublessee will only be responsible for improvements, which have been
made during the Sublease term. Exhibit D sets forth the procedures regarding the Sublessee’s Work, and a cash allowance to
be paid by Sublessor to Sublessee with regards to the Sublessee’s Work.

 

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8.             Parking. Sublessee shall receive 145 parking spaces for its use, out of the parking spaces allotted to Sublandlord
under the Primary Lease, under the terms and conditions set forth in Exhibit F of Primary Lease. The parties agree that
Sublessee’s pro rata share has been calculated based on 5 parking spaces per each 1,000 sq. feet in the Subleased Premises
rounded to the nearest whole number.

 

9.             Security Deposit. Sublessee shall provide an equivalent of the last month’s Base Rent in the amount of $38,791.46
to be held as Security Deposit by the Landlord, until termination of the Sublease. The parties agree that the Sublessee’s
security deposit shall be a security deposit for the Subleased Premises under the terms of the Primary Lease.

 

10.           Pre-Paid Rent: Upon receipt of Landlord’s Consent, Sublessee shall prepay to Landlord Base Rent in the amount
of $32,823.54, the prepaid Base Rent shall be applied to the Base Rent due in the fifth and sixth month of the Term, when the prepayment
is exhausted the normal payment of Base Rent shall commence.

 

11.           Total due of Security Deposit and Pre-Paid Rent: $71,615.00, upon Landlord’s Consent and full execution of
this Sublease.

 

12.           Brokers. Sublessor and Sublessee hereby recognize Kurt North, Northpointe Commercial as the broker for Sublessee
and Jackson Cooksey as the broker for Sublessor, as the only brokers involved in this Sublease transaction. The Sublessor is responsible
for paying any commission or fee due to both Kurt North, Northpointe Commercial and Jackson Cooksey.

 

13.           FF&E.
As further described in Exhibit “E”. Sub lessee will be granted use of all of the

Furniture, fixtures and equipment (“FF&E”)
currently located in the Premises. The Sublessor acknowledges that this FF&E will be subject to normal wear and tear during
the course of normal business and Sublessor will not hold the Sublessee liable for any damage incurred during the normal course
of business. Obsolete or non-functioning FF&E may be discarded by Sublessee without liability or replacement obligation.

 

14.           Signage. Sublessee shall have the right at its own cost, to install signage in the reception area and on the suite
in accordance with the Primary Lease.

 

15.           Condition of Subleased Premises and Surrender of the Sublease Premises. The Subleased Premises shall be surrendered
in the condition it was in at the start of the Term, except consented to Improvements and ordinary wear & tear.

 

16.           Primary Lease. As set forth and limited by this Sublease, Sublessee is to perform Sublessor’s obligations under
the Primary Lease.

 

17.           Insurance, Certificates, Licenses and/or Permits. Sublessee shall as to the Subleased Premises provide the insurance
required by the Tenant under Article X of the Primary Lease.

 

18.           Complete Agreement and Amendment. This Sublease sets forth the complete agreement between Sublessor and Sublessee
with respect to the subject matter hereof, and this Sublease may not be terminated, amended or modified in any respect except by
mutual agreement in writing executed by both Sublessor and Sublessee.

 

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19.           Survival. All duties and obligations of Sublessee under this Sublease that are intended to be performed after the
Term shall survive the termination of expiration of this Sublease.

 

20.           Binding Effect. This Sublease and all the terms and conditions hereof shall be binding upon and inure to the benefit
of Sublessor and Sublessee and their respective successors, legal representatives and assigns.

 

21.           Assignment and Subletting. Sublessee shall not be entitled to sublet or assign all or any part of its interest in
the Subleased Premises without the prior written consent of Landlord per the terms of the Primary Lease, which shall not be unreasonably
withheld or delayed. Regardless of any assignment or sublease hereof, Sublessee shall at all times remain fully responsible and
liable for compliance with its obligations under the terms of this Sublease.

 

22.           Right of First Refusal. Sublessor shall provide Sublessee a one-time Right of First Refusal (ROFR) on any future
contiguous vacancy that may become available upon the same terms and conditions as this Sublease for the first year of the Term.
After the first year of the Term, Sublessee’s ROFR shall be at the same terms and conditions of a bona-fide 3rd
party offer. Sublessee shall be given five (5) business days to respond.

 

23.           Relationship of Parties. The relationship between the parties under this Sublease is that of Sublessor and Sublessee.
Nothing in this Sublease shall be deemed to make either party a partner or associate of the other in the conduct of its business,
nor shall either party be liable for any debts incurred by the other party in the conduct of such party’s business.

 

24.           Notices. Any notice received by Sublessor from the Landlord shall be transmitted to Sublessee within five (5) business
days.

 

25.           List of Exhibits: Attached hereto and made a part of this Agreement.

 

		·	Exhibit “A”: Master Lease

		·	Exhibit “B”: Sublease Premises
Floor Plan

		·	Exhibit “C”: Base Rent Schedule

		·	Exhibit “D”: Sub-Tenant Improvement
Allowance

		·	Exhibit “E”: Additional Terms
and Conditions

 

 

THE SIGNATURES OF THE
PARTIES AND LANDLORD FOLLOW ON THE NEXT PAGE

 

    	 	 	5

     

    

 

EXECUTED as of the day, month and year
set forth below.

 

	SUBLESSOR: Affirmative Agencies Inc., a
Texas corporation	 
	 	 	 
	By:	/s/ Coleen McNally	 
	Name:	Coleen McNally	 
	Title:	SVP Operations	 
	Date:	August 29, 2018	 
	 	 	 
	SUBLESSEE: JetPay Payment Services, TX,
LLC	 
	 	 	 
	By:	/s/ Diane Faro	 
	Name:	Diane Faro	 
	Title:	CEO	 
	Date:	August 28, 2018	 

 

 

    	 	 	6

     

    

 

Exhibit “A”

 

Master Lease and Amendments

 

  

    	 	 	7

     

    

 

Exhibit “B”

  

 Sublease Premises Floor Plan

 

 

    	 	 	8

     

    

 

Exhibit “C”

 

Base Rent
Schedule

 

	Month During Lease Term	
        Monthly Installment

         

        of Base Rent

         
	
        Annual Rent per

         

        Square Foot

         

	Commencement Date to February 15, 2019	$0.00 + Electric	$0.00/SF + Electric
	February 16, 2019 to February 28, 2019	15,239.50 + Electric	
        $13.75/SF+ Electric 

        Pro-Rated for Partial Month 

	6-12	$32,823.54 + Electric	$13.75/SF + Electric
	13	$0.00 + Electric	$0.00/SF + Electric
	14-25	$34,017.13 + Electric	$14.25/SF + Electric
	26-37	$35,210.71 + Electric	$14.75/SF + Electric
	38-49	$36,404.29 + Electric	$15.25/SF + Electric
	50-61	$37,597.88 + Electric	$15.75/SF + Electric
	62-73	$38,791.46 + Electric	$16.25/SF + Electric

 

Sublessee shall pay their pro-rata share of the electric.

 

The parties acknowledge that there may be electrical
equipment in the Subleased Premises which controls or effects the portion of the Premises which is not sublet (including but not
limited to panels, fuse boxes, shut-offs, etc). During the Sublease Term, Sublessee will provide Sublessor reasonable supervised
access to the electrical equipment in the Subleased Premises which controls or effects the portion of the Premises which are not
sublet.

 

    	 	 	9

     

    

 

Exhibit “D”

 

Sublessee
Improvement Allowance

 

Sublessor
shall pay to Sublessee a one-time cash allowance up to and not to exceed the total of (a) Thirteen ($13.00) Dollars per
square foot of the Subleased Premises (i.e., $372,398.00 based on the Subleased Premises area of 28,646 square feet) ("Sublessee
Improvement Allowance").

 

The
Sublessee Improvement Allowance shall be used to pay for the costs of Sublessee’s Work, including the costs of construction
(labor and material), design services, architectural services, permitting costs, governmental approvals, supervisory services,
furniture, trade fixtures, equipment and moving costs. Any and all costs to complete Sublessee's Work in excess of the Sublessee
Improvement Allowance shall be timely paid by the Sublessee.

 

Before
the start of the Sublessee’s Work, Sublessee shall provide Sublessor with (i) an estimate of the total cost of the Sublessee’s
Work, (ii) reasonably detailed plans of the modification to be made to the Subleased Premises, and (iii) reasonable assurance that
Sublessee has the financial ability to timely pay the cost of the Sublessee’s Work in excess of the Sublessee Improvement
Allowance.

 

Sublessee shall submit to the Sublessor
the invoices incurred with respect to the Sublessee’s Work. Within thirty days of the date of the submission of each invoice
by Sublessee, the Sublessor shall pay the Sublessee the dollar amount of invoices submitted with respect to the Sublessee’s
Work, until all such payments total the Sublessee Improvement Allowance. Sublessor’s obligation to pay Sublessee is subject
to the satisfaction of the following conditions:

 

		a.	Sublessee is not in default or breach in any manner under the Sublease;

 

		b.	Sublessee has provided Sublessor with a written request for payment of a submitted invoice for
Sublessee’s Work (to the extent possible Sublessee shall submit Sublessor for payment invoices for the costs of construction
(labor and material), design services, architectural services, and supervisory services, before submitting for payment invoices
for furniture, trade fixtures, equipment and moving costs; and

 

		c.	Sublessee shall have provided Sublessor a lien waiver with respect to the submitted invoices.

 

Sublessee shall be responsible for obtaining any required Certificate
of Occupancy or comparable authorization from the local municipality having jurisdiction that is necessary for the Subleased Premises
to be legally occupied. Sublessor and Landlord will co-operate with Sublessee and render any necessary aid required for Sublessee
to obtain the Certificate of Occupancy or comparable authorization.

 

    	 	 	10

     

    

 

Exhibit “E”

 

Additional Terms and Conditions

 

		Sublessee:	Sublessee shall have use of certain furniture that Sublessor has in the building currently. Prior
to the execution of the Sublease, the Sublessee has walked the Premises with a Sublessor authorized person and has tagged and inventoried
the furniture that Sublessor will provide the Sublessor for use in the Subleased Premises. Any furniture or parts tagged for Sublessee
use that are not in the Subleased Premises, shall be placed in the Subleased Premises at the expense of Sublessee. Sublessee shall
have full discretion to determine what furniture it wishes to use in the Subleased Premises, including the office cubicles. No
later than September 24, 2018, Sublessor, at its expense, shall vacate the Subleased Premises and remove all its employees, and
the furniture, fixtures and equipment, including office cubicles, from the Subleased Premises that Sublessee does not want to use.
Sublessee shall be responsible for the rearranging and movement of the furniture tagged for its use in the Subleased Premises during
and after the construction. At the end of the term, the furniture shall become the property of the Sublessee.

 

		Sublessee:	On and after September 10, 2018, Sublessor shall allow Sublessee access to the Subleased Premises
that are not occupied by Sublessor to conduct certain limited construction activity. It is agreed that the portion of the Subleased
Premises that will be unoccupied by Sublessor on and after September 10, 2018 are the current operations area, board room, galley
and reception area and any other area Sublessor decides to vacate (“Unoccupied Area”). Sublessor shall remove from
the Unoccupied Area all personal property that is not tagged for the Sublessee’s use by September 10, 2018. The construction
activity the Sublessee is allowed to conduct in the Subleased Premises on and after September 10, 2018 is:

 

		a.	prepare for and start painting and carpet work and millwork;

 

		b.	as allowed by Sublessor, access to the external electrical room located by the large break room
(Sublessor agrees not to unreasonably refuse access for the wiring); and

 

		c.	construction of vestibule as required by building permit.

 

Sublessee shall contact the Sublessor’s
designated employee prior to arriving at the Subleased Premises between September 10, 2018 and September 24, 2018 to conduct any
work. The above restrictions in Sublessee’s activities no longer apply on and after September 24, 2018 when Sublessee has
full access to the Subleased Premises to conduct the Sublessee’s Work. Sublessee hereby indemnifies and hold Sublessor harmless
against any damages, including legal defense costs, caused by Sublessee or its employees or contractors in the Subleased Premises
prior to the Commencement Date.

 

		Sublessee:	Sublessee may use magnetic key card entry if Sublessee desires but must pay the cost of setup for
its use, and work in conjunction with the Landlord to tie into the system.

 

		Sublessee:	Sublessor has a generator on the Premises, which are not part of the Subleased Premises. Sublessee
will have use of the generator for the term of the Sublease. The generator supplies electricity to entire Premises, and so regular
maintenance, and all other expenses, of the generator shall be divided between Sublessee and Sublessor on a pro-rata basis based
on the square footage of the Subleased Premises and the square footage of the Premises, less the Subleased Premises. Sublessor
is responsible for arranging for the maintenance and repair of the generator. The generator shall be in good working order at the
start of the Sublease term and shall have been maintained by Sublessor in accordance with its manufacture’s recommended maintenance
schedule.

 

    	 	 	11

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