Document:

Exhibit 10.10

 

CONFIDENTIAL
TERM SHEET

 

June 15, 2018

 

STRIVE
WELLNESS OF NEVADA, LLC

a Nevada
limited liability company

_____________________________________

 

We
are offering
and selling
a specified portion (defined herein) of the total membership interests (collectively referred to herein as “Interests”
and each individually, as a “Interest”) in Company (defined herein) only
to Item9 (defined herein) as an accredited investor, in
reliance
upon exemptions
from
the registration
requirements
of the
Securities
Act of 1933
(the
“Act”).
Item9 shall not re-offer or
resell the acquired Interests, or otherwise
transfer
them,
unless they are
registered
under applicable securities
laws
or are exempt
from such registration.

 

This
Confidential Term
Sheet (“Term Sheet”) provides
the material terms of the offering and upon acceptance the parties agree to agree upon, prepare and execute any additional documents
between Company and Item 9 Labs Corp, a Delaware corporation (“Item9”). This
Term Sheet does
not constitute either an
offer
to sell or
a solicitation of an
offer to purchase
securities in any
jurisdiction in which an
offer
is not authorized
or to any
individual
who does
not possess
the qualifications
described
in this term
sheet. 

 

ANY
INVESTMENT IN THE
INTERESTS OF COMPANY ARE HIGHLY SPECULATIVE
AND INVOLVE SIGNIFICANT RISKS.
YOU SHOULD RETAIN
YOUR OWN
PROFESSIONAL ADVISORS TO REVIEW
AND EVALUATE
THE ECONOMIC,
TAX AND OTHER
CONSEQUENCESOF INVESTMENT
IN THIS OFFERING
(INCLUDING OUR OPERATING
AGREEMENT
AND THE
RISK FACTORS SET
FORTH
IN EXHIBIT
A). YOU
SHOULD NOT CONSTRUE
THE CONTENTS OF
THIS TERM SHEET,
OR ANY OTHER
INFORMATION
FURNISHED
BY US, AS
LEGAL OR
TAX ADVICE.

 

THE
INTERESTS HAVE NOT
BEEN REGISTERED UNDER
THE SECURITIES
LAWS
OF ANY JURISDICTION.
NEITHER
THE SECURITIES
AND EXCHANGE COMMISSION
NOR ANY FEDERAL OR
STATE
SECURITIES COMMISSION
OR REGULATORY AUTHORITY HAS
RECOMMENDED
OR APPROVED
OF THE
INTERESTS OR PASSED
UPON THE ACCURACY
OR INACCURACY OF
THIS TERM SHEET
AND THE EXHIBITS TO
IT. ANY REPRESENTATION
TO THE CONTRARY
IS A CRIMINAL OFFENSE.

 

 

    	 

    	 

    

About
This Term
Sheet: 

 

The
proposed information
in this
Term Sheet
is accurate
only as
of the date of
this Term Sheet,
regardless of the
time of sale, assignment, acquisition
or delivery of the applicable portion
of the Interests further described herein, and shall be agreed upon and enforceable upon
the execution of this Term Sheet. The Parties shall mutually work together to prepare and execute all additional ancillary documents
which may be required. 

 

Description
of the Business:

 

Strive
Wellness of Nevada, LLC, a Nevada limited liability company (“License Holder”) has been allocated a Cultivation
and Processing Licenses (“Licenses”) pursuant to the Regulation and Taxation of Marijuana Act (“Act”).
Strive II, LLC, to-be-formed as a Nevada limited liability company (“Company”) for the purpose of providing
Item9 with a vehicle for contributing, funding and benefitting from additional affiliated entities and certain contracts, agreements,
rights and assets which shall be held by the same. The following entity will be wholly owned by Company as follows:

 

(a)
Management Co.

 

Company,
as the sole Member through a to-be-formed Nevada limited liability company (“Management Co”) for the purpose
of providing services related to the development, design, construction, operation, administration and management of a cultivation
facility on behalf of License Holder, pursuant to a Cultivation and Processing Management Services Agreement “Management
Agreement”), between Management Co and License Holder. In exchange for providing such services, License Holder will
pay certain management fees to Manager. An Operating Agreement of Management Co shall be prepared and executed, among other terms,
allocating revenue earned by Management Co (after payment of taxes, obligations, debts and standard operating costs and expenses)
to Company, to be distributed pro rata pursuant to each Member’s percentage of membership interests or as the Members
otherwise agree in writing.

 

The
aforementioned referred to as the “Business”.

 

Terms: 

 

The
License’s current total valuation is equal to or greater than Two Million Five Hundred Thousand and 00/100 Dollars ($2,500,000.00)
(“License Value”). Company is offering Item9 a total of Fifty One Percent (51%) (“Item9 Interests”)
of the total Interests in Company, unless otherwise excepted herein, contingent upon Item9’s acceptance and satisfaction
of the following terms and obligations:

 

(a)
No more than thirty (30) days following the mutual execution of this Term Sheet, Item9 shall contribute to Company, and amount
equal to One Million Five Hundred Thousand and 00/100 Dollars ($1,500,000.00)(“Item9 Contribution”) as its
initial capital contribution to Company, to be used for all costs, fees and expenses related to the acquisition, design, development
of the Property and construction of the Facility, including all required equipment and permits, and all that is required to allow
for the ongoing operation and management of the Facility by Management Co,
in providing the services further described and required in the Management Agreement with License Holder. The Operating Agreement
of Company shall describe the Item9 Contribution as its initial contribution, however, Item9 shall not be entitled to repayment
of or preferred rate of return on the Item9 Contribution. Allocation of profits, losses and distributions shall be made pursuant
to each Member’s pro rata percentage of the total Interests in Company, unless otherwise agreed to by the Board of
Managers of Company. The Item9 Contribution shall be deemed nonrefundable upon receipt by Company.

 

(b)
Upon submission of the Item9 Contribution, Company shall then take the
steps necessary to assign, transfer and convey a portion of the Item9 Interests equal to Twenty Percent (20%) (“Partial
Interests”) to Item9. Company shall also take the steps necessary to name and appoint one (1) individual designated
by Item9 (“Item9 Manager”) to the Board of Directors, which shall then be comprised of Sara Gullickson, Donald
Burton Larry Lemons and Item9 Manager. Company will also take the actions necessary to prepare and execute a restated and amended
Operating Agreement of Company evidencing the addition of Item9 as Member, the assignment, transfer and conveyance of the Partial
Interests to Item9 and the naming and appointment of the Item9 Manager to the Board of Managers, to serve in conjunction with
Sara Gullickson, Donald Burton and Larry Lemons (collectively the “Board of Managers”). The Board of Managers
and shall be responsible for the ongoing management and governance of Company. All decisions and actions on behalf of Company,
respectively, shall require consent and approval of a majority of the Board of Managers.

 

Company
shall also take the steps necessary to name and appoint the Item9 Manager to the Board of Managers of Management Co, to serve
in conjunction with Sara Gullickson, Donald Burton and Larry Lemons (collectively “MC Board of Managers”).
The MC Board of Managers and shall be responsible for the ongoing management and governance of Management Co. All decisions and
actions on behalf of Management Co, respectively, shall require consent and approval of a majority of the MC Board of Managers.
Management Co will also take the actions necessary to prepare and execute a restated and amended Operating Agreement of Management
Co evidencing the MC Board of Managers and related terms of management and governance.

 

(c)
Upon receipt of approval to operate the Facility from the State of Nevada
pursuant to the Act and any applicable rules, regulations and requirements, Company shall take the steps necessary to assign,
transfer and convey the remaining portion of the Item9 Interests, equal to Thirty One Percent (31%) of the Interests (“Remaining
Interests”), to Item9. The Company shall then take the steps necessary to prepare and execute an amendment to the Operating
Agreement of Company evidencing the assignment, transfer and conveyance of the Remaining Interests to Item9.

 

(d)
Upon execution of this Term Sheet, Item9 shall take the steps necessary to develop a comprehensive financial budget which identifies
and establishes the approximate costs, fees and expenses (“Budget”) necessary to identify, acquire, design,
develop the Property and construct the Facility, including all required equipment and permits, in conjunction with a schedule,
such that the cultivation and processing operations at the Facility, under the License, are fully operational within nine (9)
months of the mutual execution of this Term Sheet (“Project Completion Date”). Such Budget is subject to approval
by License Holder, Management Co, Company and Real Estate Co, which shall not be unreasonably withheld. Item9, License Holder,
Company, Management Co and Real Estate Co agree to work together in good faith to identify and agree upon any modifications, additions
or changes to the Budget, which the parties determine to be necessary to ensure completion of the Facility and cultivation and
processing operations, on or before the Project Completion Date, however, upon request from Item9, the Board of Managers of Company
may agree to extend the Project Completion Date, as determined reasonable and necessary. Any such extension required as a result
of regulatory, city, state and/or local municipality

 

(e)
On or before the date that is twelve (12) months following the execution of this Term Sheet (“Financed Date”),
Item9 shall undertake to raise the necessary capital (in addition to the Item9 Contribution), which the Parties agree is approximately
Four Million and 00/100 Dollars ($4,000,000.00) or any amount necessary to complete the project as provided herein (“Financed
Amount”), to be utilized and applied for the purpose of identifying, acquiring, designing, developing and constructing
the Property and the Facility, including commencement of the operation of the Facility (including all approvals and authorizations)
on behalf of License Holder. Item9 agrees the Financed Amount shall be secured pursuant to a Promissory Note (“Note”),
pursuant to which the financing party (“Lender”) shall lend to Management Co as “Borrower”,
the Financed Amount (or as the parties otherwise agree in writing) at a rate of eight percent (8%), for a term of a term of Five
(5) years and Item9 shall guarantee the total Financed Amount, executing the Note as “Guarantor”. Additional
terms and provisions to be negotiated and agreed upon in the preparation of all required loan documents.

 

The
aforementioned (a) through (e) of this “Terms” section shall be collectively referred to herein as the “Total
Item9 Contribution”).

 

In the event Item9 fails, is unable or unwilling to satisfy the Total Item9 Contribution
pursuant to the terms and provisions described herein, including securing the Financed Amount on or before the Financed Date (“Item9
Failure”), Company shall have the right to immediately assign, transfer and convey a portion of the Item9 Interests
equal to Thirty One Percent (31%) to Sara Gullickson, Donald Burton and Larry Lemons collectively, meaning Item9 shall from thereon
hold an amount equal to Twenty Percent (20%) of the total Interests in Company. Company shall also have the right to remove the
Item9 Manager from the Board of Managers and MC Board of Managers. Company shall then prepare and execute a restated and amended
Operating Agreement of Company and Management Co, evidencing these modifications and changes.

 

Operating
Agreement:

 

The parties acknowledge and agree they will work together in good faith to prepare, adopt and execute an Operating
Agreement of Company which provides all Members and individuals serving on its Board of Managers with the necessary structure,
security and protections related to ownership, management, governance, the addition and removal of members and managers, allocation
of profits and losses, management, acquisition and sale of Company assets, succession, assignment and all other l other reasonable
terms, obligations and provisions related to the management, operation and governance of Company to the mutual benefit of its Members
and Board of Managers. The parties further agree to the same mutual obligations as it relates to the preparation, adoption and
execution of Operating Agreements for Management Co, Real Estate Co and any other to-be-formed entities related to this venture.

 

Corporate
Documentation:

 

The Articles of Organization of Company, Management Co, Real Estate Co and any additional to-be-formed entities, will be filed
with the State of Nevada or applicable state of formation, and upon approval provided all the relevant parties, as well as any
additional organizational or operational documents.

 

Affiliate
Entities:

 

Sara Gullickson, Donald Burton and Larry Lemons will collectively take the steps necessary to form and create
Company and Management Co and any additional affiliate entities that may be required, in their discretion and will provide such
documentation to the appropriate parties as they become available.

 

Real
Estate Co:

 

Item9 shall take all steps necessary to form a Nevada limited liability company (“Real Estate Co”)
for the purpose of identifying, acquiring, purchasing, holding and managing certain real property in the State of Nevada (“Property”),
for the purpose of authorizing Management Co, in conjunction with License Holder, to design, develop, construct, operate, administer
and manager a state-of-the-art cultivation and extraction facility comprised of approximately twenty thousand (20,000) square feet
(“Facility”), pursuant to the License and applicable rules, requirements and regulations. In the event the parties
terminate the relationship described herein for any reason, Company shall have a first right of refusal to purchase and acquire
the Property at the current fair market value, including the assumption of the Financed Amount which may remain outstanding and
due. Upon the complete repayment of the Financed Amount, Item9 shall take all steps necessary to assign, transfer and convey an
amount equal to Forty-Nine (49%) of the membership interests in Real Estate Co (“Real Estate Co Interests”)
to Sara Gullickson, Donald Burton and Larry Lemons collectively, or their nominee. Item9 shall also prepare an amended and restated
Operating Agreement of Real Estate Co, evidencing the assignment, transfer and conveyance of the Real Estate Co Interests and the
addition of one (1) individual, designated by Sara Gullickson, Donald Burton and Larry Lemons collectively to the Board of Managers
of Real Estate Co (“RE Board of Managers”). and any other agreed upon terms and provisions related to the management
and governance of Real Estate Co.

 

 Suitability: 

 

Investment in any portion of the Interests of Company involves risk; therefor, this investment is only suitable for an investor who has such knowledge and experience in financial and business matters to be capable of evaluating the merits and risks of this offering and who can bear the economic risk of investment, including absence of liquidity and potential loss of this investment.

 

Exclusive
Relationship:

 

The parties agree the relationship between Sara Gullickson, Donald Burton, Larry Lemons and Item9 is mutually
exclusive as it relates sole to the License and joint venture described herein this Term Sheet. However, upon the occurrence of
the Item9 Failure described above, such exclusivity shall terminate, and Sara Gullickson, Donald Burton and Larry Lemons shall
have the right to seek relationships with any other third-party individual or entity as it relates to the License, Company, Management
Co and any other portion of the Business. 

 

Other
Product; Services; Business:

 

The parties expressly acknowledge and agree, the exclusivity and joint venture relationship
described herein this Term Sheet is applicable ONLY to the opportunity and activities described herein. Each party shall be free
to market its existing products, services and businesses and to develop and market additional products and services and to otherwise
conduct its business in the cannabis industry and any other market or industry, whether or not such business is now or in the future
directly or indirectly competitive with the other party's business in any location outside of the State of Nevada. The parties
expressly acknowledge and agree they shall respectively have the right to invest, participate and engage in any activity in the
cannabis industry or any other market or industry, which is outside the scope of this Term Sheet. 

 

Member
Expenses:

 

Company
and Item9 will be responsible each, for its
own legal, tax and
accounting expenses and any out-of-pocket expenses
incurred in connection with the offering
described herein and any required actions.
Company makes no representation or warranty regarding the tax consequences of your investment in Company.

 

Taxation
of Company:

 

Company shall be taxed as a partnership for purposes of state and federal taxation, until such time as changed
by the Board of Managers, in its sole discretion, pursuant to the Operating Agreement.

 

Transfer
of Interests: 

 

All Interests
of Company are subject to
restrictions designed to
ensure that we
comply with
applicable securities laws
and to satisfy
certain
tax law
considerations.
In addition,
all proposed transfers
will be subject
to other restrictions
which will be described in Company’s Operating
Agreement.

 

Forward-Looking
Information:

 

This
Term Sheet
contains
forward-looking
statements
that
involve risks and uncertainties,
many of
which are
beyond our control.
These statements relate
to future
events or our
future sales
or financial
performance.
All statements
in this
Term
Sheet other
than
statements
of historical
facts are
forward-looking
statements.
Forward-looking
statements
include statements regarding
our strategy,
future
operations,
financial
projections,
prospects,
plans, and changes in state and federal law, applicable cannabis regulatory rules
and objectives
of Company. In some
instances, you can
identify forward-looking
statements
by terminology
including
“may,”
“could,” “should,” “will,”
“expect,” “plan,”
“intend,” “believe,” “anticipate,”
“predict,”
“continue,”
“potential,”
or “opportunity,”
the negative
of these
terms
or other comparable terms.

 

Forward-looking
statements in this
Term Sheet are
only predictions.
Actual events
or results
may differ
materially.
In evaluating
these statements,
you should
specifically
consider various
factors,
including
the Risk Factors
attached as Exhibit
A and other
risk factors
described
elsewhere
in this Term
Sheet. These factors
may cause our
actual results to
differ materially
from any forward-looking
statement.
This Term Sheet
also contains
forward-looking
statements
attributed to third parties
relating to their
estimates regarding population
growth or the
growth
of our markets.

 

Although
we believe the
expectations
reflected
in the forward-looking
statements
are reasonable,
we cannot and
do not guarantee
future results,
performance
or achievements.
All forward-looking statements
speak
only as of
the date
of this Term
Sheet. We
are under
no duty to
update any
of the forward-looking
statements
after the
date
of this
Term
Sheet
to conform them
to actual
results
or to changes
in our expectations.

 

Risk
Factors:

 

THIS INVESTMENT
IS SUBJECT
TO A HIGH
DEGREE OF RISK. YOU
SHOULD NOT INVEST
UNLESS YOU CAN
BEAR THE RISK OF
LOSING YOUR INVESTMENT.
WE HAVE IDENTIFIED THE PRIMARY RISKS IN
THE ATTACHED DESCRIPTION
OF RISK
FACTORS
IN EXHIBIT
A. YOU SHOULD
CAREFULLY CONSIDER
THOSE RISK
FACTORS, ALONG WITH OTHER
RISKS RELEVANT
TO THE OFFERING, WITH
YOUR PROFESSIONAL ADVISORS
BEFORE DECIDING TO INVEST.
YOU ACKNOWLEDGE AND AGREE THAT COMPANY IS MAKING NO REPRESENTATION OR WARRANTY REGARDING
THE PERFORMANCE OF COMPANY OR THE BUSINESS AND THAT YOU ARE RELYING SOLELY ON YOUR OWN JUDGMENT IN DETERMINING WHETHER TO MAKE
ANY INVESTMENT IN COMPANY AND ITS BUSINESS.

 

You will be
given the
opportunity
to meet
with management
and conduct
your own due
diligence
investigations, upon
which you
must rely
in making
your investment
decision.

 

THIS
TERM SHEET IS
SUBMITTED IN CONNECTION
WITH THE OPPORTUNITIES, OBLIGATIONS AND
TERMS DESCRIBED HEREIN, AND MAY NOT
BE REPRODUCED OR
USED FOR ANY
OTHER PURPOSE. BY ACCEPTING
THIS TERM
SHEET, YOU AGREE
THAT ALL OF
THE INFORMATION
CONTAINED
HEREIN
IS OF A CONFIDENTIAL
AND PROPRIETARY NATURE, THAT
YOU WILL TREAT SUCH
INFORMATION IN A CONFIDENTIAL
MANNER, AND THAT
YOU WILL
NOT, DIRECTLY
OR INDIRECTLY,
DISCLOSE
OR PERMIT
YOUR EMPLOYEES, AGENTS
OR AFFILIATES TO
DISCLOSE ANY OF
SUCH INFORMATION
WITHOUT THE PRIOR
WRITTEN
CONSENT
OF COMPANY,
WHICH MAY BE WITHHELD IN COMPANY’S SOLE AND ABSOLUTE DISCRETION. IF YOU
DO NOT PARTICIPATE
IN THIS
OFFERING,
YOU AGREE
TO RETURN
THIS TERM SHEET, AND
ANY ACCOMPANYING DOCUMENTATION,
TO COMPANY IMMEDIATELY.

 

    	 	 	 

     

    

EXHIBIT A

RISK
FACTORS

THE INTERESTS ARE
SPECULATIVE AND INVOLVE A HIGH DEGREE OF RISK. ACCORDINGLY,
YOU SHOULD NOT INVEST IN
THE INTERESTS IF YOU LACK SUFFICIENT MEANS
TO SUSTAIN THE LOSS OF PART OR ALL OF YOUR
INVESTMENT. YOU SHOULD
CAREFULLY CONSIDER
THE FOLLOWING RISK FACTORS BEFORE MAKING
A DECISION TO PROCEED WITH ANY INVESTMENT
IN COMPANY:

 

1.
The Risk of Regulatory or Political Change.
 The success of our Business depends on the ongoing legality of the cannabis industry
as it relates to the cultivation of cannabis (“cannabis”) and manufactured and derivative products which contain
cannabis. The political environment surrounding the cannabis industry in general can be volatile and the regulatory framework remains
in flux. There is a growing movement in the United States supporting the legalization of cannabis for medical, as well as non-medical
purposes, and as such, as of the date of this offering, nine (9) states and Washington D.C. have implemented laws and regulations
to legalize and regulate the adult use of cannabis, twenty nine (29) states and Washington D.C. have implemented laws and regulations
to legalize and regulate the medical use of cannabis, and thirteen (13) states have pending legislation regarding the medical use
of cannabis, however, the risk remains that a shift in the regulatory or political realm could occur and have a drastic impact
on the industry as a whole, adversely impacting Company and Business.

 

2.
Risk of Synthetic Production and Technological Advancements. The pharmaceutical industry
continues to attempt to dominate the cannabis industry, and in particular, legal cannabis, through the development and distribution
of synthetic products which emulate the effects and treatment of cannabis. If they are successful the widespread popularity of
such synthetic products could change the demand, volume and profitability of the cannabis industry and adversely affect our ability
to ensure long term success and expansion.

 

3.
Unknown Regulatory Fees and Taxes.
Company is aware that the State of Nevada will implement certain special taxes and fees on business, which may be further amended
and implemented from time to time. This would have an impact on the net income and return on Company’s Business, however,
the extent of such impact is not yet known.

 

4.
Legality of Cannabis. The State of Nevada enacted the Regulation and Taxation of Marijuana
Act, which legalizes the recreational cannabis for adults that are twenty-one (21) years or older, in the State of Nevada. Twenty-nine
(29) other states and Washington D.C. have also enacted legislation legalizing the medical use of cannabis; thirteen (13) states
have pending legislation regarding the legalization of the medical use of cannabis, and; nine (9) states and Washington D.C. have
enacted legislation legalizing the adult use of cannabis as well. However, the Federal Government has not enacted similar legislation
and the sale and disbursement of cannabis remains illegal under Federal Law. The Federal Government has specifically reserved the
right to enforce Federal Law in regard to the sale and disbursement of cannabis even if such sale and disbursement is sanctioned
by state law. Further, there is no guaranty that at some future date, voters and/or the applicable legislative bodies will not
repeal, overturn or limit any such legislation legalizing the sale, disbursement and consumption of cannabis. It is also important
to note that local and city ordinances may strictly limit and/or restrict disbursement of cannabis in a manner that will make it
extremely difficult or impossible to transact business that is necessary to the continued operation of the cannabis industry. Federal
actions against any individual or entity engaged in the cannabis industry or a substantial repeal of cannabis related legislation
could adversely affect Company. 

 

5.
Large Scale Competition.  Currently, the cannabis
industry is comprised of individuals and small to medium-sized entities, however, the risk
remains that large conglomerates and companies who also recognize the potential for financial success through investment in this
industry could strategically purchase or assume control of larger dispensaries and cultivation facilities and in doing so establish
price setting and cost controls which would effectively “price out” many of the individuals and small to medium-sized
entities who currently make up the bulk of the industry. While the trend in most state laws and regulations seemingly deters this
type of takeover, this industry remains at its infancy stage, so what the landscape will be in the future remains largely unknown,
which in itself is a risk.

 

6.
Start-Up Stage Business. Company will
be formed and incorporated as a Nevada limited liability company, pursuant to the Nevada Limited Liability Company Act,
upon the submission of its Articles of Organization to the State of Nevada. We are in the formation and start-up stage
and have no past revenues. Our proposed plans for proceeding are subject to all business risks associated with new business enterprises,
including the absence of an operating
history upon which to evaluate an investment. The likelihood
of our success must be considered in light
of the problems, expenses, difficulties,
complications and delays frequently encountered in connection with the formation
of a new business, the development of
new strategy and the competitive
environment in which
we will operate. It is possible that we will incur a loss in the future. We cannot
guarantee that we will be profitable.

 

7.
General Regulatory Risks. The Business is subject to the Regulation and Taxation of
Marijuana Act, as may be amended from time to time, as well as the applicable state and local statutes, ordinances, rules and regulations,
including, among others, zoning and land use ordinances, building, plumbing and electrical
codes, contractors’ licensing laws and health and safety regulations and laws. Local municipalities have imposed (or may
in the future impose) various
fees related to the legal cannabis industry and ancillary businesses some of which
were enacted to fund, among other
things, schools, road improvements and
low and moderate-income
housing. Additionally, various municipalities have proposed or enacted additional initiatives
restricting the growth and expansion of cannabis dispensaries and cultivation facilities. We
cannot assure you that these general regulatory issues will not have an adverse impact
on the Business or our Company, operating results and financial condition.

 

8.
There has not been and there is not expected to be, a trading market for the Interests,
and there are restrictions on resale. Prior to this offering, there has been no trading market for the Interests, and Company
has no expectation that any market will develop for its Interests. Resale of the Interests offered hereby is further limited because
such securities have not been registered under federal or state securities laws. Any Interests purchased hereunder will be subject
to the Company’s Operating Agreement. The Company’s Operating Agreement will prohibit a Member from selling or transferring
its portion of the Interests in Company, except in compliance with the Operating Agreement. Neither Company nor any Member has
any obligation to purchase any Member's portion of the Interests although certain provisions regarding rights of first refusal
apply.

 

9.
No SEC Reporting Contemplated. This offering of a portion of the Interests is not being
registered with the Securities and Exchange Commission under the Securities Act of 1933 in reliance on an exemption from such registration.
Company is not now, and after the completion of this offering will not be, subject to the periodic reporting requirements, proxy
rules and certain other provisions of the Securities Exchange Act of 1934. Company plans to make available to future Members, annual
audited financial reports.

 

10.
Leverage. Company’s Operating Agreement will
permit Company to incur debt, necessary to develop, operate, manage and expand
the Business. As funds are borrowed, such financing will increase the risk of your
investment because debt
service increases the expense of operation. In addition, lenders may require
restrictions on future borrowing, distributions and operating policies.
Our ability to meet our debt obligations
will depend upon our future performance
and will be subject to financial, business and other factors affecting our business and operations,
including general economic conditions. We cannot assure you that
we will be able to meet
our debt obligations.

 

11.
Need for Additional Capital; Issuance of Additional
Interests. We cannot assure you that the Business will generate proceeds sufficient
to distribute a positive return,
and it is possible that we will need
additional capital to continue and maintain the necessary management and operations of Company and the Business. 

 

12.
Restrictions on Transfer; No Registration of Interests. The Interests are subject to
substantial restrictions on transfer under federal and state laws regulating the sale or transfer of securities. Accordingly, you
must be willing to bear the economic
risk of your investment for an indefinite period of time.
We have no commitment
or intention to register
the Interests with the
Securities and Exchange Commission or
any state regulatory authority.
In addition, at this time, our Operating Agreement will contain transfer restrictions
(including a right of first refusal in
favor of Company and the Members), and transferees
may be admitted
as substitute Members
only as provided in our
Operating Agreement. The voluntary withdrawal of a Member will not permitted.

 

13.
Financial Projections/Assumptions. We
may provide certain financial
estimates, projections and other forward-looking
information. Such forward- looking information
is based on assumptions of future events that may
or may not occur, which assumptions may
not be disclosed in such documents. YOU SHOULD INQUIRE OF THE MANAGER AND BECOME FAMILIAR
WITH THE ASSUMPTIONS
UNDERLYING ANY PROJECTIONS.
Projections are inherently subject to varying degrees of uncertainty and their achievability depends on the timing
and probability of a complex series of future events. We
cannot assure you that the assumptions upon which these projections are based will
be realized. ACTUAL RESULTS MAY DIFFER
MATERIALLY FROM
PROJECTED RESULTS FOR A NUMBER OF REASONS
INCLUDING INCREASES
IN OPERATING EXPENSES,
CHANGES OR SHIFTS IN REGULATORY RULES, UNDISCOVERED
ADVERSE CONDITIONS WITH THE BUSINESS
OPPORTUNITIES AND INCREASED COMPETITION. ACCORDINGLY,
YOU SHOULD NOT RELY UPON ANY PROJECTIONS
TO INDICATE THE ACTUAL RESULTS
WE MIGHT ACHIEVE.

 

14.
ERISA Risks. There may
be special concerns for Members subject to ERISA and any rules or regulations promulgated
thereunder. You should consult your own ERISA advisors before investing in Company.

 

15.
Federal Income Tax Risks – In General. The federal
income tax aspects of an investment
in Company are complex, and their impact
may vary depending on an Investor’s individual circumstances.
Potential Investors should consider the following tax risks, among others:

 

(a)
Members will be
taxed currently on
their allocable portion of the Interests
of Company’s taxable income,
even if they
receive no distributions
of cash from
Company; accordingly,
there
is a risk that in some years your tax liabilities arising out of your portion
of the Interests in Company may exceed your cash distributions,
and these tax liabilities will be out-of-pocket expenses to you;

 

(b)
Company was not
formed
with the intent
to produce deductions
in excess of
income
that could
be used to
offset income
from
other sources;

 

(c)
any net
losses
of Company and any
interest expenses on
any debt incurred by
a Member to acquire
or carry
an interest
in Company are likely
to be subject
to the limitations
on deduction of
passive activity losses;

 

(d)
the Internal
Revenue Service (the
“IRS”) may challenge
Company’s allocation
and/or characterization
of income,
gain, loss,
deduction
and credit;

 

(e)
Members may be
precluded
from claiming
certain
deductions
by virtue of
limitations
on miscellaneous
itemized
deductions and/or application
of the at-risk
rules;

 

(f)
Company may claim
deductions or other
tax benefits
to which it
believes it is entitled,
but there can
be no assurance
that the deductions
or other benefits
will be allowed on
audit;

 

(g)
the IRS may challenge reporting positions taken by Company on its
tax returns and, if the challenge is successful, seek to impose interest and penalties on taxes found to be due; and

 

(h)
tax laws,
rules, regulations
and rulings
may change,
with or without
retroactive effect.

 

Company
does not intend to
seek any
advance ruling
from
the IRS
on any tax
issue,
nor does Company intend to
seek any opinion
of counsel regarding
the tax aspects
associated with Company’s
operations or the
potential tax impact
of an investment
in Company by a Member.
Each potential
Investor must consult
his or her
own tax
advisor regarding the
tax consequences
(including federal
and state
income tax
consequences) of investing
in Company, with
specific
reference to his own
tax situation.

 

16.
Federal Income Tax Risks – Non-U.S. Investors.  The rules governing federal income
taxation of non-resident alien individuals, foreign corporations, foreign partnerships
and other foreign
entities, which we refer to collectively
as Non-U.S. Investors, are complex. Although tax treaties may
reduce our withholding obligations, based on current law, if you are a non-U.S. Investor
in Company you will generally be subject to U.S. withholding tax on your distributions as well as applicable
foreign taxes. Company will be required
by law to withhold such federal taxes from your distributions. Non-U.S. Investors should consult with their own tax advisors to
determine the impact of federal,
state and local
income tax laws with respect to an investment
in the Interests, including reporting requirements.
They should also consider the tax treatment of the investment
under the tax laws of their home country.

 

The Parties acknowledge and agree by
executing this Confidential Term Sheet they are agreeing to the terms herein and will mutually work together to prepare the documents
and materials required to proceed as described herein.

 

ACCEPTED AND AGREED BY:

 

Sara Gullickson,

an individual

 

By:                                                 

Date:                                               

 

Donald Burton,

an individual

 

By:                                               

Date:                                            

 

Larry Lemons,

an individual

 

By:                                               

Date:                                             

 

ITEM 9 LABS CORP,

a Delaware corporation

 

By:                                                

Name: Bryce Skalla                       

Its: Chief Executive OfficerExhibit (10)(a)

    

    

    

    

    

    

    Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm

    

    

    

    

    We consent to the reference to our firm under the caption “Independent Registered Public Accounting Firm” in
      Post-Effective Amendment No. 37 to the 1933 Act Registration Statement (Form N-4 No. 333-141759) and Amendment No. 503 to the 1940 Act Registration Statement (Form N-4 No. 811-09763), and to the use therein of our reports dated (a) April 1, 2019, with respect to the financial statements of Lincoln
      Life & Annuity Company of New York and (b) April 16, 2019, with respect to the financial statements of Lincoln New York Account N For Variable Annuities for the registration of
      interests in a separate account under individual flexible payment deferred variable annuity contracts.

    

    

    

    

               /s/ Ernst & Young LLP

    

    

    

    

    

    Philadelphia, Pennsylvania

    August 22, 2019

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