Document:

Exhibit 10.27

 

PLBY GROUP, INC.

 

NON-EMPLOYEE DIRECTOR Compensation
Policy

 

Effective February 10, 2021

 

1.            General.
This Non-Employee Director Compensation Policy (this “Policy”) sets forth the equity-based compensation that
has been approved by the board of directors (the “Board”) of PLBY Group, Inc., a Delaware corporation (the
 “Company”), as payable to eligible non-employee members of the Board (“Non-Employee Directors”).
The equity-based compensation described in this Policy shall be paid or be made, as applicable, automatically and without further
action of the Board, to each Non-Employee Director who may be eligible to receive such compensation. This Policy shall remain in
effect until it is revised or rescinded by further action of the Board.

 

2.          Equity
Compensation. Non-Employee Directors shall be granted the equity awards described below under and subject to the terms and
provisions of the Company’s 2021 Equity and Incentive Compensation Plan (the “Equity Plan”). The awards
described below in Sections 2(a) and 2(b) shall be granted pursuant to an award agreement in substantially the same form
approved by the Board on or prior to the grant date, setting forth the terms of the award, consistent with the Equity Plan. For
purposes of this Section 2, the number of shares subject to any restricted stock unit award will be determined by dividing
the grant date dollar value specified in Section 2(a) or 2(b) below by the Market Value per Share (as defined in
the Equity Plan) of a share of the Company’s common stock, par value $0.0001 per share (the “Common Stock”),
on the grant date, rounded down for any partial share.

 

		(a)	Annual Equity Award. A person who is a Non-Employee Director immediately following each annual meeting of the Company’s
stockholders and who will continue to serve as a Non-Employee Director following such annual meeting shall be automatically granted,
on the date of each such annual meeting, a restricted stock unit award with a grant date value equal to $200,000 (the “Annual
Equity Award”). The Annual Equity Award shall vest on the earlier of the first anniversary date of the grant date or
the date of the Company’s next regular annual meeting of stockholders following the grant date, subject to the Non-Employee
Director’s continued service on the Board through such vesting date.

 

		(b)	Initial Equity Award. On the date of a person’s initial appointment as a Non-Employee Director (or, if such date
is not a market trading day, the first market trading day thereafter), the Non-Employee Director shall be automatically granted
a restricted stock unit award with a grant date value equal to $200,000 (the “Initial Equity Award”). The Initial
Equity Award shall vest in three equal installments on each of the first three anniversaries of the grant date, in each case subject
to the Non-Employee Director’s continued service on the Board through the applicable vesting date. Notwithstanding the foregoing,
the Non-Employee Directors who are appointed to the Board in connection with and immediately following the consummation of the
transactions contemplated by that certain Agreement and Plan of Merger, by and among the Company (formerly known as Mountain Crest
Acquisition Corp.), MCAC Merger Sub Inc., Suying Liu and Playboy Enterprises, Inc., dated as of September 30, 2020 (the
 “Merger Agreement”), shall not receive their Initial Equity Awards upon their initial appointment to the Board
and will instead receive their Initial Equity Awards pursuant to formal Board approval within 30 days after the registration of
the offer and sale of the shares of common stock underlying such awards with the Securities and Exchange Commission on Form S-8
(which is expected to occur approximately 60 days following the consummation of the transactions contemplated by the Merger Agreement).

 

3.            Expense
Reimbursement. The Company shall reimburse all reasonable out-of-pocket expenses incurred by each Non-Employee Director in
the performance of his or her duties as a member of the Board or any committee thereof, including reasonable out-of-pocket expenses
incurred in connection with attending any meetings of the Board or any committee thereof, which reimbursement, in any case, will
be subject to the Company’s timely receipt of adequate supporting documentation of such expenses.

 

    

     

    

 

4.            Stock
Ownership Guidelines. Non-Employee Directors are required to retain ownership of at least 25% of the shares of Common Stock
awarded to him or her and maintain such ownership until departure from the Board.

 

5.            Policy
Subject to Amendment, Modification and Termination. This Policy may be amended, modified or terminated by the Board in the
future at its sole discretion.

 

6.           Miscellaneous.
The adoption and maintenance of this Policy shall not be deemed to be a contract between the Company and any Non-Employee Director
to retain his or her position as a Non-Employee Director. The rights, benefits or interests a Non-Employee Director may have under
this Policy are not assignable or transferable and shall not be subject in any manner to alienation, sale or any encumbrances,
liens, levies, attachments, pledges, charges or other legal process of the Non-Employee Director or his or her creditors.

 

    - 2 -Exhibit 10.28

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN
EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED

 

INDEX TO NEW HANDONG INVESTMENT (GUANGDONG)
CO., LTD.

PRODUCT LICENSE AGREEMENT

 

THE SCHEDULE

 

PARAGRAPH

 

	1.       	GRANT OF LICENSE	 
	 	a.	Grant	 
	 	b.	Term	 
	 	c.	License Year and License Quarter	 
	 	d.	Territory	 
	 	e.	Minimum Net Sales	 
	 	 	 	 	 
	2.       	COVENANTS OF LICENSEE	 
	 	a.	Use	 	 
	 	b.	(i)	Maintaining Goodwill	 
	 	 	(ii)	Compliance with Laws	 
	 	c.	Distribution Channels	 
	 	d.	Royalties	 
	 	 	(i)	Guaranteed Royalties	 
	 	 	(ii)	Earned Royalties	 
	 	 	(iii)	Penalty; Interest	 
	 	 	(iv)	Cash Guarantee	 
	 	e.	Statements and Payments	 
	 	f.	Records and Audit	 
	 	g.	Expenses of Conducting Examinations
	 	h.	Product Quality
	 	i.	Approval of Products and the Materials
	 	j.	Title and Protection and Preservation of Playboy Properties and Copyrights
	 	k.	Right to Subcontract, Licensee Financial Statements and Lists of Sources and Accounts
	 	l.	Inventory and Holograms
	 	m.	Playboy Properties and Non-Competitive Brands
	 	n.	Indemnification and Product Liability Insurance
	 	o.	Marketing Spend, Advertising Plans and Public Relations
	3.	ADDITIONAL COVENANTS OF THE PARTIES
	 	a.	Reservation of Rights	 
	 	b.	Certain Sales	 
	 	c.	Investment Opportunity	 
	 	 	 	 	 
	4.	TITLE AND PROTECTION	 
	 	a.	Indemnification by Licensor	 
	 	b.	Enforcement	 
	 	 	 	 	 
	5.	RELATIONSHIP BETWEEN THE PARTIES	 
	 	a.	No Joint Venture	 
	 	b.	Assignment	 
	 	c. 	Change of Control	 

 

    1

     

    

 

INDEX TO NEW HANDONG INVESTMENT (GUANGDONG)
CO., LTD.

PRODUCT LICENSE AGREEMENT

(Continued)

 

	6.	SUBLICENSING
	 	 	 
	7.	DEFAULTS AND RIGHTS OF TERMINATION
	 	a.	Defaults and Right to Cure
	 	b.	Bankruptcy or Assignment for Creditors, Business Discontinuance
	 	c.	Loss of Trademark Rights
	 	d.	Qualified Auditor’s Report
	 	e.	Cross-Default
	 	f.	Right of Termination
	 	 	 
	8.	EXPIRATION OR TERMINATION
	 	a.	Effect of Expiration or Termination
	 	b.	Reserved Rights
	 	c.	Continued Sales After Expiration
	 	 	or Termination
	 	d.	Inventory After Expiration or Termination
	 	e.	Equitable Relief and Legal Fee
	 	f.	Termination Fee
	 	 	 
	9.	NOTICES
	 	a.	Effectiveness
	 	b.	Address Change
	 	 	 
	10.	CONFIDENTIAL INFORMATION
	 	 	 
	11.	SEVERABILITY
	 	 	 
	12.	CONSENTS AND APPROVALS
	 	 	 
	13.	APPLICABLE LAW
	 	 	 
	14.	NO BROKER
	 	 	 
	15.	CONSTRUCTION
	 	 	 
	16.	LIMITATION OF LIABILITY
	 	 	 
	17.	SURVIVABILITY
	 	 	 
	18.	RIGHTS CUMULATIVE
	 	 	 
	19.	ENTIRE AGREEMENT
	 	 	 
	20.	Miscellaneous

 

    2

     

    

 

SCHEDULE TO PRODUCT LICENSE AGREEMENT

 

THIS SCHEDULE TO PRODUCT
LICENSE AGREEMENT, effective as of the lastest dated signature of the parties below (the “Effective Date”), is the
 “Schedule” referred to in the Product License Agreement entered into by and between Playboy
Enterprises International, Inc. and NEW HANDONG INVESTMENT (GUANGDONG) CO., LTD. (the “Agreement”) and is incorporated
into the Agreement in its entirety as set forth herein. In the Agreement, the below words shall have the following meanings:

 

	S.1.	LICENSOR:	PLAYBOY ENTERPRISES INTERNATIONAL, INC.
	 	 	10960 Wilshire Blvd., Suite 2200
	 	 	Los Angeles, CA 90024
	 	 	 	 
	S.2.	LICENSEE:	NEW HANDONG INVESTMENT (GUANGDONG) CO., LTD. 
	 	 	3rd Floor, Building 6, 35 Jinghu Road, Huadu,
	 	 	Guangzhou, China
	 	 	Contact:       	[***]
	 	 	Telephone:       	[TELEPHONE]
	 	 	Facsimile:       	N/A
	 	 	E-Mail:       	[EMAIL ADDRESS]
	 	 	 	 
	S.3.-1	LICENSOR’S AGENT:	CAA-GBG LLP
	 	 	6 Salem Road
	 	 	London W2 4BU, United Kingdom
	 	 	Contact:       	Heather Kamins
	 	 	Telephone:	[TELEPHONE]
	 	 	 	 
			CAA-GBG LLP
	 	 	2000 Avenue of the Stars
	 	 	Los Angeles, California 90067
	 	 	Contact:	Heather Kamins
	 	 	Telephone:	[TELEPHONE]
	 	 	 	 
	S.3.-2	COLLECTING AGENT:	CAA-GBG UK LIMITED
	 	 	6 Salem Road
	 	 	London W2 4BU, United Kingdom
	 	 	Contact:	Heather Kamins and Inam Shah
	 	 	Telephone:	[TELEPHONE]
	 	 	 	 
	S.4.	THE TRADEMARKS:	 

 

Subject to the
terms and conditions of the Agreement and this Schedule, including, without limitation, the provisions set forth in Paragraph
1. of the Agreement and as set forth below: (1) “PLAYBOY” (word mark); (2) Rabbit Head Design; and (3) the “Labels”
(as defined in Paragraph S.5. below), as depicted in Exhibit A attached hereto and made a part hereof to the extent
registered in the Territory or as authorized for use in connection with pending applications, or as otherwise authorized for use.

 

Licensor
authorizes Licensee's use of the Chinese translation of
the PLAYBOY (wordmark)

Trademark ,
namely (pronounced HUA HUA
GONG ZI), with the PLAYBOY (word mark) Trademark only as follows : on
Product hangtags , associated Product packaging and for
marketing/advertising purposes as approved by Licensor.

 

Licensee understands
and acknowledges that Licensor owns other trademarks, which Licensor has licensed and/or may license to other third parties in
the Territory.

 

Under no circumstances
shall Licensee modify the Labels or use any component thereof independently of the Labels.

 

    3

     

    

 

The Labels must
be used only on the Products in the Product categories as specifically set forth in Paragraphs S.5. and S.7. below.

 

Notwithstanding
the foregoing, Licensee's rights with respect to PLAYBOY (word mark) and Rabbit Head Design are limited to advertising and promoting
the Products in the Territory, subject to Licensor's prior approval thereof.

 

All Products
and packaging must bear the Licensor’s designated approved Trademarks, and must be submitted to Licensor for approval prior
to being sold into the market pursuant to Paragraph 2.i. of the Agreement.

 

THE IMAGES:

 

Certain images,
patterns and graphics from Licensor’s art and photo archives and style guides, which are approved in advance in writing by
Licensor on a case-by-case basis.

 

Although Licensee
may submit to Licensor a request to use certain images, patterns and graphics, any specific images to be added to the Agreement
will be granted in Licensor’s sole discretion in writing and based on appropriateness for the Products, Licensor’s
current strategic or business plans and availability of rights.

 

All Products and associated packaging,
marketing, advertising, promotional and point of sale materials must be pre-approved in writing by Licensor prior to use.

 

		S.5.	THE TYPE OF LICENSE:

 

Non-Exclusive

 

	Label	
        For Use Only With 

	 	 
	PLAYBOY ESTABLISHED 1953 & Rabbit Head Design Label	
        The Products set forth in S.7.1. of this Schedule. 

	 	 
	PLAYBOY BUNNY & Rabbit Head Design Label	
        The Products set forth in S.7.3. of this Schedule. 

	 	 
	
        V(RHD)P Label
	
        

        The Products set forth in S.7.2. of this Schedule. 

 

The PLAYBOY ESTABLISHED 1953 &
Rabbit Head Design Label (the "Playboy Established 1953 Label"), the PLAYBOY BUNNY & Rabbit Head Design Label (the
 "Playboy Bunny Label") and the V(RHD)P LABEL may sometimes be collectively referred to herein as the "Labels."

 

The design of the Labels may be
changed only by Licensor.

 

In such event, Licensor shall provide
prior written notice to Licensee.

 

The Playboy Established 1953 Label
does not require the use of "Established 1953" in all creative applications on or associated with Products, for example
on advertising, point of sale materials, store fixtures or the Products themselves, except, however, that the use of "Established
1953" will occur on hangtags, garment labels and similar branding items as Licensor may determine in its discretion from time
to time.

 

No labels other than the Labels
may be used in connection with the Products without the prior written approval of Licensor.

 

    4

     

    

 

		S.6.	DISTRIBUTION CHANNELS:

 

		(i)	Playboy-branded retail stores located in the Territory
(including Playboy's official ecommerce website located at www.playboyshop.com to the extent customers are located or reside in
the Territory;

 

		(ii)	Playboy-branded catalogues;

 

		(iii)	Mid-tier department stores and specialty stores located in the Territory that have been approved
by Licensor in writing (which may or may not have their own "E-Commerce Web Site" (as such term is defined below));

 

		(iv)	E-Commerce/E-tailers (as specifically defined below) only as specified here or as approved in writing
by Licensor on a case by case basis.

 

“E-Commerce Web Site”
shall mean a website located at a common uniform resource locator (“URL”) in an Internet protocol based network used
for promoting, offering, providing or selling merchandise.

 

“E-tailers” shall
mean any entity engaged in the promotion and sale of the Products whose primary means of promotion, sale or distribution is via
an “E-Commerce Web Site.

 

For the avoidance of any doubt,
any and all online or e-commerce rights shall be non-exclusive unless otherwise explicitly agreed in writing.

 

All rights granted under the
License shall be subject to the terms and conditions of the E-Commerce Guidelines attached hereto as Exhibit B and made a part
hereof.

 

In the event that Licensee
or any affiliated third-party fails to adhere to the terms and conditions of the E-Commerce Guidelines, such failure shall be deemed
as a default under the terms and conditions of the Agreement.

 

Licensee may
not sell and distribute the Products to or through duty-free outlets as duty-free avenues of distribution are not included in the
definition of such physical stores.

 

Licensee may
not sell to supermarkets or discount retailers except those set forth in paragraph (iii) of this Paragraph S.6.

 

		S.7.	THE PRODUCTS:

 

		1.	Playboy Established 1953 Label

 

		(a)	Men’s non-technical casual fashion apparel, specifically
t-shirts, polo shirts, dress shirts, sweaters, cardigans, handkerchiefs, hoodies, suits, vests, pants, trousers, shorts, wool
sweaters, cashmere sweaters, knit sweaters, leather clothing, trench coats, down jackets, overcoats, jackets, denim apparel, blazers,
scarves, gloves and hats, but specifically excluding socks, underwear, and sleepwear.

 

		(b)	Men’s leather and non-leather goods, specifically
bags, belts, backpacks without trolley wheels, wallets, money purses, key chains, leather folders, slim briefcases (i.e., for
avoidance of doubt as in office cases for papers and folders), small satchels without trolley wheels, leather travel bags and
travel luggage.

 

		(c)	Women’s non-technical wool sweaters, cashmere and
cashmere-blend sweaters, knit sweaters, cotton and cotton-blend sweaters, wool pants, scarves, gloves, hats, denim apparel, leather
apparel, umbrellas, down jackets, skirts, dresses, pants, leggings, coats, hoodies, furs, shorts, blouses, waistcoats, t-shirts
and raincoats.

 

		(d)	Women’s leather and non-leather accessories, specifically
belts, handbags, backpacks, wallets, luggage and travel bags.

 

    5

     

    

 

		2.	V(RHD)P Label

 

		(a)	Men’s formal suits (i.e., business suits), specifically
suits, formal rimmed hats, dress shirts, neckties, cufflinks, tie clips, and tie pins.

 

		(b)	Men’s non-technical casual fashion apparel, specifically
t-shirts, polo shirts, dress shirts, sweaters, cardigans, handkerchiefs, hoodies, suits, vests, pants, trousers, shorts, wool
sweaters, cashmere sweaters, knit sweaters, leather clothing, trench coats, down jackets, overcoats, jackets, denim apparel, blazers,
scarves, gloves and hats, but specifically excluding socks, underwear, and sleepwear.

 

		(c)	Men’s leather and non-leather goods, specifically
bags, belts, backpacks without trolley wheels, wallets, money purses, key chains, leather folders, slim briefcases (i.e., for
avoidance of doubt as in office cases for papers and folders), small satchels without trolley wheels, leather travel bags and
travel luggage.

 

		3.	Playboy Bunny Label

 

		(a)	Women’s leather and non-leather goods, specifically
bags, handbags, belts, backpacks without trolley wheels, wallets, money purses, key chains, leather folders, slim briefcases (i.e.,
for avoidance of doubt as in office cases for papers and folders), small satchels without trolley wheels, leather travel bags
and travel luggage.

 

		(b)	Women’s non-technical wool sweaters, cashmere and
cashmere-blend sweaters, knit sweaters, cotton and cotton-blend sweaters, wool pants, scarves, gloves, hats, denim apparel, leather
apparel, umbrellas, down jackets, skirts, dresses, pants, leggings, coats, hoodies, furs, shorts, blouses, waistcoats, t-shirts
and raincoats.

 

All Products and associated Product
packaging, marketing, advertising, promotional and point-of-sale materials will require the prior written approval of Licensor
prior to being sold into or exposed to the market and comply with the terms of this Schedule and the Agreement, and all Products
shall bear anti-counterfeit Holograms to be purchased by Licensee from Licensor’s designated supplier of such materials,
pursuant to Paragraph 2.l.(ii) of the Agreement.

 

All Products must comply with all
applicable laws and regulations that cover the Product category.

 

		S.8.	THE TERRITORY:

 

China (excluding Hong
Kong, Taiwan and Macao).

 

		S.9.	THE COMMENCEMENT DATE:

 

January 1, 2020

 

		S.10.	THE EXPIRATION DATE:

 

June 30, 2030

 

    6

     

    

 

		S.11.	THE MINIMUM NET SALES:

 

	 	License Year	Amount
	 	LY 1 (01/01/20 – 06/30/21) 	[***]
	 	LY 2 (07/01/21 – 06/30/22) 	[***]
	 	LY 3 (07/01/22 – 06/30/23)	[***]
	 	LY 4 (07/01/23 – 06/30/24) 	[***]
	 	LY 5 (07/01/24 – 06/30/25) 	[***]
	 	LY 6 (07/01/25 – 06/30/26) 	[***]
	 	LY 7 (07/01/26 – 06/30/27)	[***]
	 	LY 8 (07/01/27 – 06/30/28)	[***]
	 	LY 9 (07/01/28 – 06/30/29)	[***]
	 	LY 10 (07/01/29 – 06/30/30)	[***]

 

		S.12.	GUARANTEED ROYALTIES:

 

	 	License Year	Amount	Payment Due Date
	 	LY 1 (01/01/20 – 06/30/21)	[***]	[***]
	 	 	 	 
	 	LY 2 (07/01/21 – 06/30/22)	[***]	[***]
	 	 	 	 
	 	LY 3 (07/01/22 – 06/30/23)	[***]	[***]
	 	 	 	 
	 	LY 4 (07/01/23 – 06/30/24)	[***]	[***]
	 	 	 	 
	 	LY 5 (07/01/24 – 06/30/25)	[***]	[***]
	 	 	 	 
	 	LY 6 (07/01/25 – 06/30/26)	[***]	[***]
	 	 	 	 
	 	LY 7 (07/01/26 – 06/30/27)	[***]	[***]
	 	 	 	 
	 	LY 8 (07/01/27 – 06/30/28)	[***]	[***]
	 	 	 	 
	 	LY 9 (07/01/28 – 06/30/29)	[***]	[***]
	 	 	 	 
	 	LY 10 (07/01/29 – 06/30/30)	[***]	[***]

 

Subject to the
provisions of Paragraphs 2.e.(vi)(a) and (b) of the Agreement, Licensee understands and accepts that all “Guaranteed
Royalties” (as defined in Paragraph 2.d.(i) of the Agreement) and “Earned Royalties” (as defined in Paragraph
2.d.(ii) of the Agreement) payments to be remitted to Licensor hereunder are intended to be gross amounts without any deductions
whatsoever, except as set forth in Paragraph S.20(8) of the Schedule.

 

Notwithstanding
anything in the Agreement to the contrary, the Agreement shall not be binding on Licensor until such time as the first payment
of Guaranteed Royalties for the first License Year 1 (i.e., [***]) has been paid in full, and the Agreement has been signed by
both parties.

 

		S.13.	ROYALTY RATE:

 

[***] of “Net
Retail Sales” (as defined in the Agreement) and [***] of “Net Wholesale Sales” (as defined in the Agreement)..

 

		S.14.	EARNED ROYALTIES:

 

The “Earned
Royalties,” calculated at the Royalty Rate, on the total “Net Sales” (as defined in Paragraph 2.e.(ii)
of the Agreement) of all Products sold during the Term and Sell-Off Period (if any).

 

All Earned Royalties
are due and payable within fifteen (15) days after “License Quarter” (as defined in Paragraph 1.c.(ii) of the
Agreement).

 

		S.15.	MARKET DATE:

 

January 1, 2020

 

    7

     

    

 

		S.16.	MARKETING SPEND:

 

For each “License Year”
(as defined in Paragraph 1.c.(i) of the Agreement), three percent (3%) of the total Net Sales or three percent (3%) of the
Minimum Net Sales amount for such License Year, whichever is greater.

 

		S.17.	SELL-OFF PERIOD:

 

Ninety (90) days after the Expiration
Date or notice of termination together with Licensor’s consent (pursuant to Paragraph 8.c. of the Agreement).

 

		S.18.	SAMPLES:

 

In each License
Year, at Licensor’s request, Licensee will provide for Licensor’s promotional purposes, at no charge to Licensor, two
(2) units of each of the Products in such mix and in such quantities as Licensor may request.

 

		S.19.	THE ADDRESS WHERE BOOKS KEPT: See Paragraph
S.2. above of this Schedule.

 

		S.20.	ADDITIONAL TERMS AND CONDITIONS (WHICH ARE HEREBY
INCORPORATED INTO EXHIBIT F OF THE AGREEMENT):

 

Notwithstanding anything in the Agreement
to the contrary:

 

		1.	If, by June 30, 2021, Licensee has not commercially launched
the Products set out in Paragraph S.7.3.(b) of the Schedule in quantities consistent with Licensee’s other Labels
as determined by Licensor in Licensor’s sole discretion, then, at Licensor’s option and by written notice to Licensee,
such Product category may be deleted from the definition of Products hereunder and all rights granted to Licensee hereunder with
respect to such Product category immediately and automatically shall revert to Licensor.

 

		2.	Licensor will make commercially reasonable efforts to assist in an orderly sell off of footwear
inventory previously held by [***].

 

		3.	Licensee shall ensure that the Products are produced in adult sizes and have a consumer target
age exceeding 18 years.

 

		4.	Before the Commencement Date, Licensee shall create a centralized database (e.g. Brand Comply)
consisting of a comprehensive catalog of Licensor-approved Products and all designs of Products currently sold in the marketplace
by Licensee, its distributors, its distributor’s sellers, and any of its affiliates (the “Authorized Products Database”).

 

Licensee shall continually maintain
the Authorized Products Database and shall provide Licensor and Licensor’s Agent with access to the Authorized Products Database.

 

		5.	Upon completion of the Authorized Products Database, Licensee shall immediately cease sales of
unapproved Products that are based on designs not contained in the Authorized Products Database (“Unauthorized Products”).

 

Any sales of Unauthorized Products
shall be deemed a breach of the Agreement and, in addition to all other rights and remedies available to Licensor at law or in
equity, including, without limitation, the right to require Licensee to stop selling and/or destroy the Unauthorized Products at
Licensee’s cost, require Licensee to provide an appropriate certificate of destruction, and/or terminate the Agreement, Licensor
shall have the right to assess against Licensee (and Licensee shall pay to Licensor upon demand) an Unauthorized Product royalty
equal to an amount up to [***] of the retail price of all Unauthorized Products sold.

 

		6.	Licensee represents and warrants that it will submit the Agreement for registration with official
Chinese tax authorities within thirty (30) days of full execution of this Agreement.

 

    8

     

    

 

		7.	Licensee shall and shall cause any representatives or affiliated companies to, execute and deliver
all documents and take such further action as Licensor may request to de-record and/or de-register any license agreement or other
document submitted to any trademark office or other government agency pertaining to any understandings between the parties and
their affiliates at any time.

 

		8.	Licensee undertakes to assume all obligations for any applicable withholding taxes and other taxes
which shall be due and payable to official Chinese tax authorities and shall obtain in a timely manner all government permits necessary
to pay any amounts due to Licensor under the Agreement.

 

It is understood and agreed
that in the event that any payment due by the Licensee under this Agreement is prevented from being transferred to Licensor due
to any tax or deductions required by official Chinese tax authorities, Licensee shall:

 

		(a)	ensure that the amount by which the payment is reduced
(the “Withholding”) does not exceed the minimum legally required;

 

		(b)	account in full for the Withholding to the official Chinese tax authorities on or before its due
date;

 

		(c)	provide to Licensor an official receipt of the official Chinese tax authorities for the Withholding
within fifteen (15) days of the receipt by Licensee thereof or, if such receipts are not issued by the official Chinese tax authorities
concerned, a certificate of deduction or equivalent evidence relating to the Withholding; and

 

		(d)	fully cooperate with Licensor and give to Licensor all reasonable assistance, without charge to
Licensor, in minimizing such withholding tax to the extent allowed and to recover (under the provisions of any relevant double
tax conventions or other lawful manner) the Withholding including, without limitation, obtaining any necessary authorizations to
enable Licensee lawfully to pay without deduction of tax or to enable Licensor to recover such tax or to obtain a credit in respect
of the Withholding.

 

In the
event that proof of the Withholding is not received in full by Licensor within sixty (60) days of the due date for such payment
Licensee shall immediately remit to Licensor a payment increased sufficiently by the percentage of such tax deduction described
above so as to allow the sum actually received by Licensor to equal the full Withholding as if it had not been subject to any deduction
in the manner described in this Paragraph S.20.(8).

 

		9.	Licensee acknowledges and agrees that Licensor shall have no obligation to record and/or register
trademarks licensed pursuant to the Agreement.

 

For the avoidance of doubt and purposes of clarification, the
terms and conditions in this Paragraph S.20. are intended to supplement the terms and conditions contained in the Agreement.

 

In the event that the terms and conditions in this Paragraph
S.20. contradict the other terms and conditions in the Agreement, the terms and conditions in this Paragraph S.20. shall
control.

 

[Signature Page Follows]

 

	NEW HANDONG INVESTMENT (GUANGDONG) CO., LTD. 	 	PLAYBOY ENTERPRISES
	 	 	 	INTERNATIONAL, INC.
	(LICENSEE)	 	(LICENSOR)
	 	 	 	 	 
	 	 	 	 	 
	By: 	/s/
Hong Jianqiao	 	By: 	/s/ Jared Dougherty
	 	 	 	 	 
	Name: 	Hong
Jianqiao	 	Name: 	Jared Dougherty
	 	 	 	 	 
	Title: 	Chairman 	 	Title: 	President
	 	 	 	 	 
	Date: 	December
6, 2019	 	Date: 	December 6, 2019 

 

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PRODUCT LICENSE AGREEMENT

 

This PRODUCT LICENSE
AGREEMENT (the “Agreement”) is made as of the Effective Date, by and between the entity described in Paragraph S.1.
of the Schedule attached hereto and made a part hereof (hereinafter referred to as “Licensor”) and the entity described
in Paragraph S.2. of the Schedule (hereinafter referred to as “Licensee”).

 

RECITALS

 

WHEREAS, Licensor has
certain rights in and to the Trademarks and to Images. The Trademarks and Images may sometimes be collectively hereinafter referred
to as the “Playboy Properties;”

 

WHEREAS, Licensee recognizes
that Licensor is an international multimedia entertainment company that licenses the Playboy Properties internationally for a range
of consumer products and services, including retail stores; and

 

WHEREAS, the parties
hereto desire that Licensor grant to Licensee a license to use the Playboy Properties in the design, manufacture, advertising,
promotion, sale and distribution of the Products.

 

NOW, THEREFORE, in
consideration of the mutual promises herein contained, it is mutually agreed as follows:

 

		1.	GRANT OF LICENSE.

 

a.Grant:

 

(i)Upon
and subject to the terms and conditions hereinafter set forth, Licensor hereby grants to Licensee, and Licensee hereby accepts,
the right, license and privilege specified in Paragraph S.5. of the Schedule to use the Playboy Properties in connection
with, and only with, Products in the Territory through the Distribution Channels. Such right, license and privilege is hereinafter
referred to as the “License.” It is understood and agreed that while the manufacture of the Products may take place
outside the Territory, none of the Products may be advertised, promoted, sold or distributed outside the Territory by Licensee.

 

(ii)Anything
in this Agreement to the contrary notwithstanding, Licensor (on behalf of itself, its subsidiary and affiliated companies) reserves
the right to use the Playboy Properties on and/or in connection with any consumer goods, including, but not limited to products
similar or identical to the Products in any manner whatsoever in any area of the world including, but not limited to, the Territory
and/or to grant the rights for any such use to any third party.

 

(iii)Licensee
acknowledges that there are a number of authorized Playboy-branded stores in various countries around the world. In the event the
licensees for any such Playboy-branded stores wish to purchase any of the Products from Licensee or its distributors for sale through
the Playboy-branded stores, Licensee may fulfill such orders subject to the provisions of this Paragraph 1.a.(iv). While
fulfillment of such orders may consist of Licensee or its distributors shipping the Products outside of the Territory, such shipments
of the Products to such authorized Playboy-branded stores outside of the Territory will not be a violation of the Territory restrictions
set forth in this Agreement, provided, however, that (a) Licensee may not solicit such orders outside of the Territory; (b) Licensee
must report such sales separately on the “Statements” (as defined in Paragraph 2.e.(i) hereof); (c) Licensee
will include such sales in the calculation of “Net Sales” for the purpose of computing “Minimum Net Sales”
and “Earned Royalties;” and (d) Licensee must notify Licensor in advance in writing of any such order and must obtain
Licensor’s prior written approval to fulfill such orders. Further, in the event Playboy has opened or opens, itself or through
a third party, a Playboy-branded store in the Territory, the licensee for such Playboy-branded store in the Territory may source
the Products or similar products through any third party anywhere in the world and sell such Products or similar products through
such Playboy-branded store in the Territory and such sourcing and selling will not be a violation of the License.

 

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(iv)
Unless otherwise expressly indicated in this Agreement, Licensee shall have no right through the License to open or operate a free-standing
retail store using the Playboy Properties or any of Licensor’s other intellectual property on or in connection with such
store or the signage for such store.

 

(v)Anything
in this Agreement to the contrary notwithstanding, Licensor shall have the right, and such right shall not be a violation of the
License, to enter into trademark license agreements directly with (A) any retailers in the Territory, including, but not limited
to, the type of retailers set forth in Paragraph S.6. of the Schedule to this Agreement, for the design, manufacture, advertisement,
promotion, sale and distribution of the Products and any other products and/or services not included in the License, which sale
and distribution of the Products and such other products and services shall be directly through such retailers’ stores and
E-Commerce Web Sites in the Territory, and/or (B) any third party for the design, manufacture, advertisement, promotion, sale
and/or distribution in the Territory of the Products bearing any of the Trademarks and/or Images, as well as the intellectual
property owned or controlled by such third party (commonly known as co-branding), which sale and distribution may occur through
any channel of distribution in the Territory, including but not limited to the channels of distribution set forth in Paragraph
S.6. of the Schedule hereto. Further, anything in this Agreement to the contrary notwithstanding, none of the Territory restrictions
shall apply to any sale or distribution of the Products by Licensor on or through any E-Commerce Web Site including, but not limited
to, the E-Commerce site located at www.playboyshop.com and/or any other E-Commerce Web Sites or online marketplaces.

 

(vi)Licensee
shall be responsible for and shall assume and pay for all costs and expenses arising out of or in connection with Licensee’s
responsibilities, duties and obligations set forth in this Agreement, including, but not limited to, those costs and expenses related
to Licensee’s design, manufacture, advertising, promotion, sale and distribution of the Products.

 

b.Term:

 

(i)The
term of the License and this Agreement (hereinafter referred to as the “Term”) shall commence on the Commencement Date
and shall expire at 11:59 p.m., Pacific Standard Time (“PST”), on the Expiration Date, unless sooner terminated as
provided in this Agreement.

 

(ii) 

 

c.License
Year and License Quarter:

 

(i)For
all purposes under this Agreement, a “License Year” shall be each twelve (12) consecutive calendar month period commencing
on each July 1 of the Term and ending at 11:59 p.m., Los Angeles time, on each following June 30 of the Term, except that the first
License Year shall commence on the Commencement Date and end at 11:59 p.m., Los Angeles time, on June 30, 2021. If the termination
of this Agreement is effective other than at the end of any such period, then the final period ending on the effective date of
such termination shall be deemed to be a License Year.

 

(ii) For
all purposes under this Agreement, a “License Quarter” shall be each three (3) consecutive calendar months of each
License Year. If the termination of the License and this Agreement is effective other than at the end of a License Year, then the
final period ending on the effective date of such termination shall be deemed to be a License Quarter.

 

d.Territory:
The License shall extend only to the Territory, and the use by Licensee of the Playboy Properties shall be confined to the Territory.
Any sales or distribution of the Products or use of the Playboy Properties by Licensee outside of the Territory shall be deemed
as a default under this Agreement. Such sales of the Products or use of the Playboy Properties shall include any sales by Licensee
of the Products in the Territory for resale outside of the Territory.

 

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e.Minimum
Net Sales: Notwithstanding anything in this Agreement to the contrary, if Licensee’s “Net Sales” in any License
Year are less than the Minimum Net Sales (either in its entirety, for a specified category of the Products or in a specific country
in the Territory, as applicable), such failure to attain the Minimum Net Sales shall be deemed as a default under this Agreement.

 

 

		2.	COVENANTS
OF LICENSEE.

 

a.Use:

 

(i) Subject
to Licensor’s prior approval as hereinafter required, Licensee shall commence bona fide commercial sales of the Products
as soon as practicable after the Commencement Date, but in no event later than the Market Date. Licensee will promptly notify Licensor
of the date of first sale of Products in each country in the Territory together with associated details concerning the distributor
and/or sales agent (if any) and top customer accounts pertaining to such sale. Such notification shall be provided in writing.
If Licensee fails to commence such sales by the Market Date, such failure shall be deemed as a default under this Agreement. In
the event during any License Year, Licensee has not on a regular and ongoing basis: (y) sold and distributed one or more of the
Products within all categories of the Products under Paragraph S.7. of the Schedule; or (z) sold and distributed the Products
in all countries of the Territory, then Licensor shall have the right to delete, from the Schedule upon not less than thirty (30)
days’ prior written notice to Licensee, any Products which, any Product category from which, or any country to which Licensee
has not so sold and distributed. In the event that all Products are deleted from the Schedule or all countries are deleted from
the Territory, such failure shall be deemed as a default under this Agreement. For purposes of clarification, the sales discussed
in this Paragraph 2.a.(i) are bona fide commercial sales, which are volume sales to the Distribution Channels for sale or
distribution to consumers and will specifically exclude sample sales to distributors or wholesalers.

 

(ii)Licensee
shall not cause or authorize any use of the Playboy Properties in any area of the world outside the Territory and shall not knowingly
manufacture, sell or otherwise deal with or distribute any of the Products on behalf of or to any individual or entity that Licensee
believes or has reason to believe intends or intend or is or are likely to sell, deal with or distribute any of the Products in
any way outside the Territory. Licensee shall ensure that all of its distributors, whether affiliated or third-party, to which
Licensee sells or through which Licensee otherwise moves any Products are aware of all Territory restrictions on the use of the
Playboy Properties and the distribution of the Products and shall obtain an executed “Distributor Contract” (as defined
in Paragraph 2.k.(ii) hereof) from all of its third-party distributors as set forth in Paragraph 2.k.(ii) hereof.
Licensee shall immediately notify Licensor should Licensee become aware that any of its distributors, whether third-party or affiliated,
have distributed or dealt with the Playboy Properties or Products in any way outside the Territory.

 

(iii)Licensee
warrants and represents that it has and will continue to have throughout the Term and the Sell-Off Period the legal right and authority
to enter into this Agreement and to assume and perform its duties and obligations hereunder and that there is or are no, and Licensee
shall not enter into during the Term or the Sell-Off Period, if any, contract, agreement or understanding with any individual or
entity which would in any way restrict or prevent Licensee from the performance of its duties and obligations under this Agreement.

 

(iv)Licensee
shall be responsible for obtaining, at its own expense prior to the Commencement Date, and maintaining at its own expense throughout
the Term, any and all licenses, permits and approvals (including governmental and all other licenses, permits and approvals) necessary
for Licensee to: (a) design, manufacture, advertise, promote, sell and distribute the Products; (b) pay “Guaranteed Royalties,”
 “Earned Royalties” and taxes; and (c) fulfill any and all other duties and obligations and exercise the rights of Licensee
under this Agreement. In the event Licensee is unable, for any reason, to obtain prior to the Commencement Date or maintain throughout
the Term all of such licenses, permits or approvals, such inability shall be a default under this Agreement.

 

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b.             (i)Maintaining
Goodwill: Licensee recognizes that the Trademarks are associated with Licensor on a worldwide basis and, therefore, Licensee
shall, throughout the Term and the Sell-Off Period, constantly use its best efforts in the advertising, promoting, selling, distributing
and in all other dealing with or disposal of the Products to protect the good name and goodwill associated with the Trademarks
and Licensor, and to obtain the greatest “Net Sales” throughout the entire Territory and the entire Term and the Sell-Off
Period. Should Licensee directly or indirectly take any action which negatively affects or impacts the good name, goodwill or reputation
of Licensor, such action shall be deemed as a default by Licensee under this Agreement.

 

(ii)Compliance
with Laws: Licensee shall take all necessary actions to ensure that all aspects of its obligations in connection with this
Agreement comply with any and all international, regional, federal, state or local law, rule or regulation, including, but not
limited to, any and all Chinese tax laws, anti-corruption and anti-bribery laws, laws governing privacy, technology, software and
trade secrets, the United States Department of the Treasury’s economic and trade sanctions, which include, but are not limited
to, any Executive Order Blocking Property of Certain Persons for any reason in any country of the Territory set by the United States
Department of the Treasury Office of Foreign Assets Control (collectively, “Laws”). Licensee will not create, initiate,
transmit or otherwise participate in the creation, initiation or transmission of any unsolicited bulk email in connection with
the Products. Licensee shall not cause, condone or authorize in any country of the Territory any violation of Laws. All distributors
of Licensee must also agree in writing not to cause, condone or authorize any such violations. Any such violation by Licensee or
any of its distributors shall be a default under the Agreement. Licensee agrees to indemnify, protect and hold harmless Licensor
and Licensor’s parent, subsidiary and affiliated entities and its and their employees, officers and directors for, from and
against any and all costs, claims, suits or causes of action arising out of or in connection with any such violation.

 

c.             Distribution
Channels: The Products may only be sold in the Territory through and only through the Distribution Channels and only pursuant
to Paragraph S.6. of the Schedule to this Agreement. Licensee acknowledges and agrees that nothing in this Agreement shall
prevent Licensor from using (or licensing to any third party the right to use) the Playboy Properties on or in connection with
the Products or any goods similar to the Products in any channel of distribution. Licensor shall have the sole and absolute discretion
to determine if a store, club or other distribution channel falls within the definition of Distribution Channel.

 

d.             Royalties:

 

(i)Guaranteed
Royalties: Licensee will pay to Licensor or its designee Guaranteed Royalties in the amount and for each License Year specified
in Paragraph S.12. of the Schedule. Guaranteed Royalties for each such License Year shall be paid in accordance with Paragraph
S.12. of the Schedule. Under no circumstances whatsoever will Licensor return to Licensee all or any part(s) of Guaranteed
Royalties, except as provided in Paragraph 8.b. hereof. In the event that Licensee is late in making any Guaranteed Royalty
installment payment in any License Year, Licensor will have the right upon written notice to Licensee to accelerate the payment
of the unpaid remaining Guaranteed Royalty installments due and payable for the remainder of the License Year in which such installment
was late, which along with the past due amount will be due and payable to Licensor within not more than five (5) days after the
date of such notice and declare the Guaranteed Royalties due and payable for remaining License Years to be payable in full on or
before the first day of each such License Year, respectively. Any such notice from Licensor is without prejudice to Licensor’s
default and termination rights set forth in Paragraphs 7.a.(i) and 7.a.(ii).

 

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(ii)Earned
Royalties: Licensee shall pay to Licensor or its designee Earned Royalties (as defined in Paragraph S.14 of the Schedule) but
only to the extent that for each License Year the amount of the Earned Royalties exceeds Guaranteed Royalties for such License
Year. Earned Royalties shall be payable in accordance with the terms and conditions of Paragraph 2.e. hereof. In the event
Licensee marks down its standard invoice price for any Product in excess of thirty percent (30%), Earned Royalties on such sales
will be computed as if such invoice price was marked down not more than thirty percent (30%). In the event the amount of the Earned
Royalties exceeds the amount of the Guaranteed Royalties in any License Year, Licensee may not use the amount of such overage as
an offset against any other minimums or guarantees hereunder including, but not limited to, any Guaranteed Royalties due and payable
in any other License Year.

 

(iii)Penalty;
Interest: Each sum, including, but not limited to, Guaranteed Royalties and Earned Royalties, that shall not be paid on the
due date by Licensee shall bear interest from such due date until the date on which such sum is paid in full at an amount equal
to four percent (4%) over the prime rate of interest as established by JP Morgan Chase on the date such sums should have been paid.
In addition, should any payment due to Licensor from Licensee hereunder be more than fifteen (15) days overdue, an additional one-time
charge at an amount equal to the prevailing market interest rate as established by the Hongkong and Shanghai Banking Corporation
Limited shall be automatically added to the amount due. Should any such payment (including the interest payment due thereon) remain
outstanding for thirty (30) days from the original due date, Licensor may treat such failure as an incurable default hereunder.

 

(iv)Cash
Guarantee: Licensee agrees that it will forward to Licensor, as more fully described below, a non-refundable cash payment in
the total amount of [***] (the "Cash Guarantee"). Licensor confirms that Licensee’s Cash Guarantee obligation under
the first sentence of this Paragraph 2.d.(iv) has been initially fulfilled at the execution of this Agreement. Licensor
shall apply the Cash Guarantee as partial payment of Guaranteed Royalties for the final License Year of the Term. Notwithstanding
the foregoing, Licensor will have the right, at any time, to apply the Cash Guarantee if Licensee fails to make any payment as
provided under this Agreement and, if during the Term, a partial or full application of the Cash Guarantee becomes necessary, the
Cash Guarantee will automatically be reinstated to the original value pursuant to the terms and conditions of this Paragraph 2.d.(iv)
of this Agreement. Licensor will give notice of its intention to draw on the Cash Guarantee if Licensee fails to make any payment
due as provided under this Agreement. Licensor shall deem any failure by Licensee to provide and maintain the Cash Guarantee of
[***] pursuant to the provisions of this Paragraph 2.d., to be a default. All costs and expenses associated with the Cash Guarantee,
including, but not limited to, creating and maintaining the required amount, will be borne by Licensee. Licensee's failure to provide
Licensor with the Cash Guarantee as herein above provided shall be a default under this Agreement. For the avoidance of doubt,
Licensor’s application of the Cash Guarantee does not relieve Licensee of Licensee’s obligation to fully cure the payment
breach that gave rise to the application of the Cash Guarantee.

 

e.             Statements
and Payments:

 

(i)Within
not more than fifteen (15) days after each License Quarter during the Term and the Sell-Off Period, if any, or within ten (10)
days of a written request by Licensor Licensee shall furnish to Licensor or its designee a complete and accurate statement in a
format acceptable to Licensor and certified to be true by the Chief Financial Officer of Licensee (hereinafter referred to as the
 “Statement”) showing for such License Quarter and the License Year through such period or for the Sell-Off Period:
(a) a listing of Licensee’s accounts and the accounts of Licensee’s affiliated and third-party distributors in the
Territory and the units and description of all of the Products sold and distributed to each such account or otherwise disposed
of by Licensee or by Licensee’s affiliated and third-party distributors; (b) the computations of “Net Sales”
on all such sales; (c) the computation of Earned Royalties and the amount of Earned Royalties due and payable; (d) the Marketing
Spend made by Licensee pursuant to Paragraph 2.o.(i) hereof and the details of all such expenditures, supported by copies
of vouchers and copies of all advertising for or relating to the period covered by such Statement; (e) a list of Licensee Online
Stores (as defined in Paragraph 4.a. of Exhibit B); and (f) an accounting of Holograms (as hereinafter defined) comprising
identification of the quantity of Holograms placed on Product sold or otherwise distributed (with an explanation of where the Product
was distributed to), the quantity of Holograms placed on Product in inventory, and the quantity of Holograms in storage and not
yet placed on Products, as well as the corresponding Hologram numbers for each of the above. When, during any License Year, the
amount of Guaranteed Royalties for such License Year has been exceeded by Earned Royalties for such License Year, Licensee shall
commence payment of Earned Royalties. Licensee shall pay all accrued and unpaid Earned Royalties by remittance accompanying each
of the Statements.

 

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(ii)As
used in this Agreement, the term “Net Retail Sales” means the actual retail price of the Products sold by Licensee
directly to consumers in the Territory, less (a) refunds, credits and allowances actually made or allowed to customers for returned
defective Products, and (b) value added tax assessed on sales (only where applicable); “Net Wholesale Sales” means
the actual invoice price of the Products sold through all other Distribution Channels permitted under this Agreement, whether from
cash, check, credit and/or debit card, barter exchange, trade credit or other credit transactions less (a) refunds, credits and
allowances actually made or allowed to customers for returned defective Products, and (b) value added tax assessed on sales (only
where applicable); “Net Sales” means both Net Retail Sales and Net Wholesale Sales, collectively. For the avoidance
of doubt, no other deduction or recoupments of any kind shall be deducted from the gross retail or wholesale invoice price (as
applicable), including by way of example, cash discounts, early payment discounts, year-end rebates, costs incurred in manufacturing,
selling, distributing, advertising (including cooperative and promotional allowances, fixturing, merchandising guides, displays
and/or the like), uncollectible accounts, commissions, rush-transportation costs on otherwise late deliveries, make-good costs
for defective product, design errors or lost or damaged product. Products will be considered “sold” and, therefore,
subject to inclusion in the calculation of Earned Royalties, as of the date on which such Products are invoiced, shipped or paid
for, whichever first occurs. For the avoidance of doubt, there will be no deduction from “Net Sales” for uncollectable
accounts. Under no circumstances may any bad debt or uncollected amounts or uncollectible accounts be deducted when computing Net
Sales.

 

(iii)In
the event the percentage of returns of Products in any License Year exceeds twenty percent (20%) of Net Sales for such License
Year, such an occurrence shall be deemed as a default by Licensee under this Agreement.

 

(iv)Licensee
acknowledges that any significant reduction in the wholesale price (or the retail price where Licensee sells directly to the public)
or material liquidation of the Products would cause serious and perhaps irreparable harm to Licensor and Licensor’s business
activities and reputation in the Territory.

 

(v)If
Licensee sells any of the Products to any individual or entity that is directly or indirectly owned or controlled by Licensee or
is under common ownership with Licensee, in whole or in part, the invoice price used to compute Net Sales hereunder shall be the
invoice price that would have been charged to an unrelated purchaser in an arm’s-length transaction for such Products.

 

(vi) (a)All
Guaranteed Royalty and Earned Royalty and other Royalty payments that Licensee is required to make by the terms of this Agreement
shall be made by wire transfer in US Dollars in cleared funds to the Collecting Agent by bank transfer to an account designated
in writing by the Collecting Agent. Any and all costs associated with the wire transfer payments shall be borne by Licensee. No
deduction shall be made for income or other taxes without Licensor’s written permission unless Licensee is compelled to do
so by law; in which case Licensee shall provide Licensor with evidence that such tax has been paid in the proper amount. Licensee
shall give due notice to Licensor of any such proposed deductions. Licensee shall make no further deductions without prior approval
from Licensor based on satisfactory documentation present by Licensee to Licensor.

 

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(b)Licensor
and Licensee agree that the Licensor will not be liable for any Withholding, including any interest, penalties or other associated
costs, relating to any Withholding obligation imposed by the government or taxing authority of any country, state, province, municipality
or any other government jurisdiction arising as a result of this Agreement. Licensee further agrees to indemnify, reimburse and
otherwise hold harmless, Licensor for any such costs imposed on Licensor. Licensee’s obligation to pay taxes shall survive
any expiration or termination of this Agreement. In the event payments in the manner provided in this Paragraph 2.e. shall
become impossible or illegal by reason of the action of governmental authority, then, at Licensor’s option, this Agreement
may be terminated; and whether or not Licensor exercises such option, while such restrictions remain in effect, all payments due
Licensor shall be made to an account in the Territory, or elsewhere where permitted by law, to be designated by Licensor.

 

(c)In
determining the proper rate of exchange to be applied to the payments due hereunder, it is agreed that:

 

(1)Licensee
shall calculate Earned Royalties and the other Royalty on a quarterly basis in local currency (with each such License Quarter considered
to be a separate accounting period for the purpose of computing Earned Royalties and the other Royalty);

 

(2)Licensee
shall compute a conversion of each such total into United States currency utilizing the mid-range rates as quoted by Reuters and
other sources as published from Bank of America on the last business day of each relevant License Quarter;

 

(3)The
converted amounts (in U.S. currency) shall be added together on a cumulative basis and will be reflected in the Statement required
under this Paragraph 2.e.

 

f.Records
and Audit: Licensee shall: (i) keep accurate books of account and records (including but not limited to utilization of consecutively
numbered invoices which reconcile to each Statement and Licensee’s general ledger) covering all transactions relating to
or arising out of the License and this Agreement (which books and records shall be maintained separately from Licensee’s
documentation relating to other items manufactured or sold by Licensee); and (ii) permit Licensor or its nominees, employees, agents
or representatives to have full access to such books and records in order to inspect such books and records at all reasonable hours
of the day, to conduct an examination of and to copy (at Licensor’s expense), all such books and records. Licensee shall
maintain in good order and condition all such books and records for a period of two (2) years after the expiration or termination
of the License and this Agreement or, in the event of a dispute between the parties hereto, until such dispute is resolved, whichever
date is later, and such books and records shall be kept at the address stated in Paragraph S.19. of the Schedule, except
as such address may be changed from time to time in accordance with Paragraph 9.b. hereof. Receipt or acceptance by Licensor
of any Statement furnished pursuant hereto or any sums paid by Licensee hereunder shall not preclude Licensor from questioning
the correctness thereof at any time, and if one or more inconsistencies or mistakes are discovered by Licensor in such Statement,
it or they shall be rectified in an amended Statement received by Licensor no later than ten (10) days after the date of receipt
by Licensee of notice of that which should be rectified.

 

g. Expenses
of Conducting Examinations: If any inspection or examination referred to in Paragraph 2.f. hereof discloses, or Licensor
or Licensee otherwise discovers, an underpayment of Earned Royalties or other royalty required to be hereunder or either thereof,
the amount of such underpayment shall be paid by Licensee to Licensor no later than thirty (30) days after receipt of notice or
knowledge thereof by Licensee. In the event of such an underpayment by Licensee in excess of nine percent (9%) in any License Year
then such occurrence shall be deemed as a default by Licensee under this Agreement. If such inspection or examination: (i) discloses
or Licensor or Licensee otherwise discovers an overpayment of Earned Royalties (or, pursuant to Paragraph 8.b. hereof, an
overpayment of Guaranteed Royalties), the amount of such overpayment shall be credited against future payment of any or all of
the Guaranteed Royalties and Earned Royalties or, in the event of the expiration or termination of the License and this Agreement
and there is or are no such future payments, such amount shall be paid by Licensor to Licensee not later than thirty (30) days
after the discovery thereof by Licensor, subject to Licensor’s rights of setoff, recoupment and counterclaim; or (ii) reveals
that for the period covered by such inspection or examination there is an error of five percent (5%) or more in the Earned Royalties
or, the Marketing Spend previously reported on the Statement(s) as being due from Licensee, all expenses involved in the conducting
of such inspection or examination shall be borne by Licensee. Licensee shall pay to Licensor the amount of such expenses no later
than ten (10) days after Licensee’s receipt of Licensor’s invoice therefor made. If such error is less than five percent
(5%), such expenses shall be borne by Licensor. Additionally, if such inspection or examination reveals that for the period covered
by such inspection or examination there is an error of thirty percent (30%) or more in the Earned Royalties accruing from Licensee
Online Stores previously reported on the Statement(s) as being due from Licensee, Licensor shall have the right to assess against
Licensee (and Licensee shall pay to Licensor upon demand) a royalty equal to twenty (20%) of the highest price reported for each
Product sold in the applicable reporting period. For the avoidance of doubt, such royalty shall not be credited to or offset against
any Guaranteed Royalties or Earned Royalties or other Royalties payable under this Agreement.

 

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h.Product
Quality: Licensee hereby warrants and agrees that the Products designed, manufactured, advertised, promoted, sold or distributed
under this Agreement shall bear the Playboy Properties faithfully produced and shall meet the high standards of quality, workmanship,
material, design, size, color, taste, and style established by Licensor from time to time and in accordance with the terms and
conditions of this Agreement. Licensee will not knowingly or negligently cause or authorize any or all of the Products not conforming
to this Agreement to be sold or distributed, as doing so may adversely affect Licensor’s goodwill in the Trademarks and any
such non-conforming Products shall be destroyed at Licensee’s expense. All of the Products shall conform to and comply with,
in all respects, all federal, state and local laws, rules and regulations governing the design, quality, labeling and safety of
such Products. Licensee shall not cause, condone or authorize: (i) the use of any substandard or offensive materials in or in connection
with any of the Products; (ii) any violation of any federal, state or local law or regulation, including, but not limited to, provisions
thereof imposing advertising standards or requiring trade or content description of the Products; or (iii) the use of the Playboy
Properties or any other word, device or symbol associated in any way with any or all of Licensor and its subsidiaries and affiliates
in connection with any product or activity that is not the subject of the License and this Agreement.

 

i.Approval
of Products and the Materials:

 

(i)Licensee
understands and agrees that each of the Products and any other items bearing the Playboy Properties or intended for use in connection
with the Products (hereinafter collectively referred to as the “Materials”) must be approved in advance by Licensor.
The Materials include, but are not limited to, prototypes, photography, cartons, containers, labels, wrappers, packaging and other
inner and outer packaging materials, fixtures, displays, artwork and printing, advertising, sales, marketing and promotional materials.
Licensee shall, at its own expense, submit to Licensor or its designee for written approval, samples of each of the Products and
the Materials at each stage of development thereof, which shall include, but not be limited to: (a) an initial sketch or photograph;
(b) a sample prototype (pre-production sample) or equivalent acceptable to Licensor; and (c) two final production-quality samples
of that which will be mass produced or manufactured. Licensee must obtain Licensor’s written approval of each stage of development
before proceeding to the next stage, and in no event shall Licensee commence or permit the mass manufacture, advertising, promotion,
sale or distribution of any of the Products or the Materials unless and until Licensee has received Licensor’s written approval
of the samples provided pursuant to (b) of this Paragraph 2.i.(i). In the event Licensor fails to provide its approval or
disapproval of any or all things submitted to Licensor pursuant to this Paragraph 2.i.(i) within fourteen (14) days of Licensor’s
receipt thereof, Licensee may send written notice to Licensor advising no response was received. If Licensor does not respond within
five (5) days of Licensor’s receipt thereof, then Licensor shall be deemed to have given disapproval. In the event Licensee
fails to provide the two final production-quality samples pursuant to (c) of this Paragraph 2.i.(i), Licensor may either
purchase the two final production-quality samples and Licensee shall immediately pay Licensor for all related costs and expenses
incurred by Licensor including the purchase prices and all delivery and shipment costs or such Products or Materials shall be considered
unapproved.

 

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(ii)Licensee
understands and agrees that if Licensor approves any Products or Materials for production or manufacture, such approval shall be
valid for one License Year only. In each and every season that Licensee seeks to manufacture, advertise, promote, sell or distribute
previously approved Products or Materials, Licensee must resubmit such Products or Materials to Licensor for written approval.
When resubmitting Products or Materials for approval for another License Year, Licensee shall utilize the same Product style number/
designation for the Products or Materials and shall indicate that such Products and/or Materials were previously approved for production
and/or manufacture. If Licensee fails to resubmit Products or Materials for approval and manufactures, promotes, or sells such
Products or Materials in a License Year for which Licensor has not granted written approval, then such Products and Materials shall
be considered unapproved.

 

(iii)Licensee
shall not use the same style number/designation on more than one style or design for Products or Materials. The determination as
to whether Products or Materials conform to a prior submission for the same style number/designation in all respects, including
without limitation, with respect to materials, colors, workmanship, dimensions, styling, detail and quality, and whether Licensee
should have used a different style number/designation because of variations shall be made by Licensor in its sole and absolute
discretion. Licensee shall not use an approved style number/designation in connection with non-conforming Products or Materials.

 

(iv)To
ensure that each of the Products and the Materials are constantly maintained per License Year in conformance with the samples previously
approved such License Year pursuant to this Paragraph 2.i.(iv), Licensee shall, within seven (7) days of receipt of a request
from Licensor, send or cause to be sent to Licensor at Licensee’s expense: (a) such actual samples requested by Licensor
of the Products and the Materials Licensee is using, manufacturing, selling, distributing or otherwise disposing of; and (b) a
listing of each location where any of the Products and the Materials or either thereof are designed, manufactured, stored or otherwise
dealt with. Licensor and its nominees, employees, agents and representatives shall have the right to enter upon and inspect, at
all reasonable hours of the day, any and all such location(s) and to take, without payment, such samples of any of the Products
and the Materials as Licensor reasonably requires for the purposes of such inspection.

 

(v)If
any of the Products or Materials sent or taken pursuant to Paragraph 2.i.(ii) above or that otherwise come to the attention
of Licensor does or do not conform in Licensor’s sole opinion to the previously approved samples for the relevant License
Year, Licensor shall so notify Licensee, in writing, specifying in what respect such of the Products or Materials is or are unacceptable.
Immediately upon receipt of such notice, Licensee shall suspend all manufacture, sale and distribution of and shall obtain back
from Licensee’s accounts all such Products and Materials and shall not resume the manufacture, sale or distribution thereof
unless and until Licensee has made all necessary changes to the satisfaction of Licensor and has received Licensor’s written
reapproval of each of such Products and Materials.

 

(vi)All
of the Products and the Materials that are not approved by Licensor or that are determined by Licensor to be unapproved, non-conforming
or unacceptable shall not be sold, distributed or otherwise dealt with by Licensee. All such Products and Materials may be confiscated,
seized and/or destroyed by Licensor or, if directed by Licensor, by Licensee at Licensee’s cost and expense, with an appropriate
certificate of destruction furnished by Licensee.

 

(vii)Any
and all sales, distribution or use by Licensee of unapproved, non-conforming or unacceptable Products or Materials shall not only
constitute a default under the terms of this Agreement, but such Products or Materials also shall be considered unlicensed and
an infringement of Licensor’s proprietary rights, and Licensor shall have the right to bring legal action against Licensee
for any and all remedies available to Licensor in addition to the remedies available under this Agreement.

 

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(a)So
that there is no misunderstanding regarding the approval process, Licensee hereby agrees that in the submission of requests for
approvals of proposed Products, unless Licensor gives written approval in advance, Licensee will: [1] use an Image in its entirety;
[2] not crop the Image; [3] reproduce the Image with fidelity to the original; [4] not distort or mutilate the Image; and [5] not
create a reproduction of the Image which would be prejudicial to the honor or reputation of the artist. Licensee further acknowledges
that there may be certain works of art which Licensor, in its sole discretion, may determine are not appropriate for use on the
Products. Licensor’s refusal of an approval request based on a violation of any of the foregoing shall be a legitimate reason
for the refusal of an approval pursuant to this License and the Agreement.

 

(b)Licensor
shall have final approval with respect to the following elements of the Products:

 

(i)Selection
of Licensor’s Images for use on the Products.

 

(ii)Manipulation
and adaptation of the Playboy Properties for reproduction on the Products.

 

(iii)Approval
of “strike offs” or other pre-production samples as the parties may agree.

 

(iv)Approval
of actual materials to be used for manufacture of the Products.

 

(c)It
is specifically agreed by Licensee that there shall be no approval by default. Products may not be manufactured unless there is
a written approval by Licensor.

 

(viii)Licensee
agrees and acknowledges that Licensor shall own all right, title and interest to the sample prototypes, final production-quality
samples, and actual samples submitted by Licensee pursuant to this paragraph (the “Samples”). Licensor may store, display,
destroy, sell (including without limitation sample sales to the trade), or otherwise dispose of the Samples as determined by Licensor
in its sole discretion and without any obligation or payment to Licensee.

 

j.Title
and Protection and Preservation of Playboy Properties and Copyrights:

 

(i)Licensee
hereby acknowledges each of the following: the great value of the goodwill associated with the Trademarks; the worldwide recognition
thereof; that the proprietary rights therein and goodwill associated therewith are solely owned by and belong to Licensor; that
the Trademarks and other related words, devices, designs and symbols are inherently distinctive or have secondary meaning firmly
associated in the mind of the general public with Licensor, its subsidiaries and affiliates and its or their activities; and that
all additional goodwill associated with the Trademarks created through the use of such Trademarks by Licensee shall inure to the
sole benefit of Licensor. During and after the Term, Licensee shall not:

 

(a)attack
or question the validity of, or assist any individual or entity in attacking or questioning, the title or any rights of or claimed
by Licensor, its subsidiaries and affiliates and their respective licensees and sublicensees in and to the Playboy Properties or
any other trademarks, copyrights or such other intellectual or intangible property associated or connected with any or all of Licensor,
its subsidiaries and affiliates, their publications, published material, activities, licensees and sublicensees;

 

(b)directly
or indirectly seek for itself, or assist any third party or parties to use or acquire, any rights, proprietary or otherwise, in
any patent, trademark, copyright or such other intellectual or intangible property so associated or connected (including without
limitation URLs and domain names), without the prior written approval of Licensor;

 

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(c)in
any way seek to avoid Licensee’s duties or obligations under this Agreement because of the assertion or allegation by any
individual(s), entity or entities that any or all of the Playboy Properties are invalid or by reason of any contest concerning
the rights of or claimed by Licensor; or

 

(d)file
or prosecute one or more trademark applications regarding the Playboy Properties, unless first requested to do so in writing by
Licensor. (Licensee will cooperate with Licensor in connection with any and all such filings.)

 

(ii)Licensee
shall:

 

(a)use
the Playboy Properties as permitted under this Agreement in each jurisdiction strictly in accordance with the legal requirements
in such jurisdiction. At Licensor’s request, Licensee shall cooperate fully with Licensor in preparing and causing to be
recorded in every jurisdiction designated by Licensor registered user agreements and all other documents or filings which may be
necessary or desirable to evidence, protect and implement the rights of or claimed by Licensor pursuant to this Agreement. In the
event of any ambiguities between any registered user agreement or other similar document or filing and this Agreement, the terms
and conditions of this Agreement shall govern and control. Upon expiration or termination of this Agreement for any reason whatsoever,
Licensee shall execute and file any and all documents, as required and directed by Licensor and at Licensee’s expense, terminating
any and all registered user agreements or other filings. Licensee hereby authorizes and empowers Licensor to terminate all registered
user or other filings on Licensee’s behalf and in Licensee’s name;

 

(b)affix
or imprint irremovably and legibly on each of the Products and on or within all of the Materials such Playboy Properties, trademark
notices, copyright notices, legends and Licensor’s Hologram as Licensor directs;

 

(c)manufacture,
sell, distribute or otherwise deal with the Materials solely in connection with the Products (except for any or all of the Materials
which do not bear one or more of the Playboy Properties or otherwise are not associated with any or all of the Products by virtue
of, but not limited to, such things as design, color or content); and

 

(d)not
cause or grant permission to any third party or parties to acquire any copyright or other proprietary right in connection with
any word, device, design or symbol used by Licensee in connection with any of the Products or the Materials.

 

		k.	Right to Subcontract, Licensee Financial Statements and Lists of Sources and Accounts:

 

(i)Licensee
may subcontract the manufacture of any or all component parts of any or all of the Products bearing the Playboy Properties pursuant
to this Agreement, provided: (A) Licensee notifies Licensor in advance of any intended supplier/subcontractor and obtains Licensor’s
prior written approval of such supplier/subcontractor; (B) Licensee obtains from each such supplier/subcontractor an executed written
agreement in the form attached hereto and made a part hereof as Exhibit C; (C) furnishes an original copy of each such executed
agreement to Licensor, if an original copy is not available, a copy affixed with the company chop of Licensee shall be furnished
by Licensee to Licensor; and (D) without limiting this Paragraph 2.k.(i) and 2.k.(ii) below or any of Licensee’s
obligations and/or Licensor’s approval rights, within ten (10) days of request from Licensor, Licensee shall furnish to Licensor
a list and description of all factories, warehouses and distribution facilities utilized by Licensee for all Products and packaging
as well as any other relevant information reasonably requested by Licensor, where said list shall be certified by an officer of
Licensee as accurate and true. Licensee shall comply, and shall procure any supplier/subcontractor to comply, with the Code of
Conduct set out in Exhibit D in connection with the manufacture, packaging, supply and distribution of Products.

 

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(ii)Licensee
may subcontract with a third-party distributor for the distribution of the Products in the Territory pursuant to this Agreement,
provided: (x) Licensee notifies Licensor in advance of any intended third-party distributor and obtains Licensor’s prior
written approval of any such third-party distributor; (y) Licensee obtains from each Licensor-approved third-party distributor
an executed written agreement (the “Distributor Contract”) attached hereto and made a part hereof as Exhibit E;
and (z) Licensee furnishes a n original copy of each Distributor Contract to Licensor, if an original copy is not available, a
copy affixed with the company chop of Licensee shall be furnished by Licensee to Licensor. For purposes of this Paragraph 2.k.(ii),
third-party distributors shall not include any distribution entity which is wholly-owned or controlled by Licensee. However, nothing
contained in this Paragraph 2.k.(ii) shall be construed to relieve Licensee of its obligation and responsibility to ensure
that its distributors, whether third-party or wholly or partially owned, perform their duties in accordance with the terms and
conditions of this Agreement (including, but not limited to, the E-Commerce Guidelines) and the Distributor Contract, including,
but not limited to approved distribution channels and Territory restrictions. Licensee shall be responsible to Licensor for any
violations by its distributors, whether third-party or affiliated, of the terms and conditions of this Agreement (which responsibility
shall be included as part of Licensee’s obligations under Paragraph 2.n.(i) hereof) or the Distributor Contract. In
the event of any such violation, Licensor shall have the right, but not the obligation, to do any of the following: (i) require
Licensee to immediately terminate, upon receipt of written notice from Licensor, the Distributor Contract with such distributor,
at which time Licensee shall immediately and permanently cease supplying any or all of the Products to such distributor; (ii) declare
the License to be non-exclusive; or (iii) deem any such violation to be a default by Licensee under this Agreement. In addition,
Licensee shall be responsible for obtaining from each of its distributors, whether third-party or affiliated, a complete listing
of each such distributor’s inventory of the Products on hand at the time of expiration or termination of this Agreement and
upon the expiration or termination of the Sell-Off Period (if any) and supplying a copy to Licensor of such inventory listing within
the time frames set forth in Paragraph 8.d. hereof.

 

(iii)With
the Statement submitted at the end of each License Quarter pursuant to Paragraph 2.e.(i) hereof and at any other time so
requested by Licensor during the Term and the Sell-Off Period, Licensee shall provide Licensor with: (a) original copies of Licensee’s
most recent audited financial statements (including without limitation footnotes) and annual reports, annual tax filings, 10-K’s,
balance sheets or other similar documents that indicate Licensee’s financial status, if original copies are not available,
copies affixed with the company chop of Licensee shall be furnished by Licensee to Licensor, and (b) an updated list of the names
and addresses of all manufacturing sources, subcontractors, distributors, suppliers, dealers, wholesalers, retailers, accounts
and others which have been engaged in the design, manufacture, advertising, promotion, sale, distribution or other dealings with
any or all of the Products and the Materials during the Term and the Sell-Off Period or either thereof. Such list shall, if so
requested by Licensor, contain the full specification of all designs, utility models, patents or trademarks that may be involved,
directly or indirectly, in the manufacture, production or distribution of any or all of the Products and the Materials. Licensee
shall obtain the consent of any and all relevant third parties for such disclosure.

 

		l.	Inventory and Holograms:

 

(i)Insofar
as reasonable, Licensee shall at all times during the Term be able to fulfill all orders for the Products promptly and yet not
have an excessive inventory on hand at the time of the expiration or termination of the License. Within forty-five (45) days after
each License Year or within ten (10) days of receipt of a request from Licensor, Licensee will furnish Licensor with a complete
and accurate statement (the “Inventory Statement”) signed by the Chief Financial Officer of Licensee, setting forth
in detail the quantities and description of each of the Products in process and finished goods inventories of the Products and
the locations thereof.

 

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(ii)All
Products shall have affixed to the label, hang tag, packaging, or elsewhere on the Products, as approved by Licensor, Licensor’s
official hologram (“Hologram”). Licensee shall purchase Holograms from Licensor’s official Hologram supplier
(“Hologram Supplier”) (which Licensor may change from time to time in its sole discretion) through completed purchase
orders (“Purchase Orders”) which shall be sent to Licensor with a report (hereinafter referred to as the “Hologram
Report”) identifying (a) the quantity of Holograms used on Products sold by Licensee or otherwise distributed (with an explanation
of where such Products were sold or distributed) since the prior submission of a Purchase Order; (b) the quantity of Holograms
on Products on hand and intended for placement on Products in process; and (c) the requested quantity of Holograms. Licensor (itself
or through the Hologram Supplier) may withhold approval of Purchase Orders if Licensee fails to provide the Hologram Report. Licensor
(itself or through the Hologram Supplier) may reject Licensee’s Purchase Orders, if, in Licensor's sole and absolute discretion,
the Hologram request is excessive or otherwise inconsistent with (i) the sales information in Licensee's Statements; (ii) royalty
payment history; (iii) submissions for Products approvals; or (iv) Inventory Statements. Licensee shall pay for all Hologram costs
and expenses, including without limitation shipping and handling costs, required by Licensor’s Hologram Supplier. If Licensee,
directly or indirectly, ships, sells or otherwise distributes Products without Licensor’s approved hang tags and Holograms,
Licensee shall be in default of this Agreement. Licensee agrees that any and all such Products may, at Licensor’s sole and
absolute discretion, be treated as unapproved and/or counterfeit merchandise and may be seized, confiscated, and/or destroyed.
Within ten (10) days of receipt of a request from Licensor, Licensee will furnish to Licensor or its designee a report in a format
acceptable to Licensor identifying (a) the quantity of Holograms used on Products sold by Licensee or otherwise distributed (with
an explanation of where such Products were sold or distributed); and (b) the quantity of Holograms on Products on hand and intended
for placement on Products in process. If Licensor determines that a significant discrepancy exists between (i) the total quantity
of Holograms used on Products sold, Products on hand, and Products in process; and (ii) the quantity of Holograms sent to Licensee,
such discrepancy shall be a default under the terms and conditions of this Agreement.

 

(iii)Licensee
shall at all times during the Term and the Sell-Off Period be responsible for the safekeeping, protecting, and tracking of the
inventory of Licensor’s Holograms, including any actions or inactions taken by Licensee's manufacturing sources, subcontractors,
distributors, suppliers, dealers, and/or wholesalers regarding the Holograms. If any Holograms sent to or for Licensee are misplaced,
lost, stolen, sold or misused, in any manner whatsoever (including use on unapproved, non-conforming or unacceptable Products or
Materials pursuant to Paragraph 2.i. hereof), it shall be deemed as a default. Licensee shall be responsible for and shall
pay Licensor for any and all expenses incurred by Licensor to recover such Holograms, including without limitation, legal fees
and costs, investigative fees and costs, and/or expenses to purchase unapproved Products bearing such Holograms to have the Products
removed from commerce, or to otherwise protect Licensor’s rights.

 

		m.	Playboy Properties and Non-Competitive Brands:

 

(i)During
and after the Term, Licensee shall not use, cause or authorize to be used any word, device, design, slogan or symbol confusingly
similar, in whole or in part, to any or all of the Playboy Properties, or any permutation of the Playboy Properties. During the
Term and the Sell-Off Period, any or all of the following shall not be used on or in connection with the Products or the Materials
without Licensor’s prior written consent: (a) portions or permutations of any or all of the Playboy Properties; (b) secondary
marks; or (c) new words, devices, designs, slogans or symbols. Upon such authorization by Licensor and use by Licensee, any use
by Licensee of a portion, permutation, secondary mark, word, device, design, slogan and/or symbol shall inure to the benefit of
the Licensor, shall be the property of Licensor and shall be included as one of the Playboy Properties subject to this Agreement.
Should Licensee create or develop any advertising, promotion, packaging or trade dress unique to the Products, all such advertising,
promotion, packaging or trade dress shall be the property of Licensor and shall not be used by Licensee on or in connection with
any other product or merchandise during and after the Term. No later than ten (10) days after expiration or termination of this
Agreement or at any other time Licensor so requests, Licensee will assign to Licensor, without charge, all of Licensee’s
right, title and interest (including without limitation all goodwill associated therewith and all copyrights) in and to such advertising,
promotion, packaging or trade dress and shall cooperate fully with Licensor in preparing and recording whatever documentation may
be necessary or desirable or requested by Licensor to effect such assignment.

 

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(ii)Without
Licensor’s prior written consent, Licensee shall not design, manufacture, advertise, promote, distribute, sell or deal with
in any way in the Territory any product or material that is or are in Licensor’s sole and absolute judgment competitive with
or confusingly similar to any or all of the Products and the Materials.

 

(iii)Licensee
shall not use color combinations, designs, styles, logo treatments, graphics or packaging unique to any or all of the Products
on or in connection with any other product, and Licensee, without charge, will assign to Licensor ownership of all right, title
and interest, including, but not limited to, all rights of copyright and trademark (including goodwill associated therewith), that
Licensee has acquired or may acquire in such color combinations, designs or styles no later than ten (10) days after expiration
or termination of this Agreement or at any other time Licensor so requests.

 

(iv)Licensee
hereby assigns, transfers and conveys to Licensor, to the maximum extent permitted by applicable law, all of Licensee’s right,
title and interest, including, but not limited to, all rights of copyright, trademark (including goodwill associated therewith),
trade secret and any other rights in and to all aspects of the Products created by Licensee under or in connection with this Agreement
so that Licensor shall be the sole owner of all such rights therein. Licensee shall, upon the reasonable request of Licensor, either
during the Term or at any time thereafter, execute and deliver to Licensor whatever documentation Licensor may request to effect
such assignment, transfer or conveyance. Licensee shall not have any rights to use any of the elements uniquely developed by Licensee
for the Products itself or in connection with any third party following expiration or termination of the Agreement. In the event
Licensee engages, employs or utilizes artists, designers or other third parties (collectively, the “Designers”) to
develop Products and/or Materials, Licensee shall obtain a written assignment, and shall supply Licensor with an original copy
of each such assignment (if an original copy is not available, a copy affixed with the company chop of Licensee shall be furnished
by Licensee to Licensor), from any Designer in favor of Licensor under which all of such Designer’s right, title and interest,
including, but not limited to, all rights of copyright, trademark, and all rights in and to all aspects of the Products (including
trade secret protection), in and to such Designer’s work product is transferred and conveyed to Licensor to the maximum extent
permitted by applicable law so that Licensor will be the sole owner of all rights therein.

 

(v)Licensee
shall not during the Term of this Agreement enter into any retail business or business arrangement involving retail identified
with or by the names or trademarks of any men’s lifestyle publications, products or services, including but not limited to
FHM or Maxim. In the event Licensee commences any such dealing with any such publications, whether directly or indirectly,
or in the event the publishers or any substantial holder of the interest in any such publication or in any men’s sophisticate
publication such as Maxim, FHM, CKM, Hustler or Penthouse acquires or otherwise comes to hold
any financial or equity interest in Licensee, such event shall be deemed as a default.

 

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		n.	Indemnification and Product Liability Insurance:

 

Licensee shall:

 

(i)indemnify,
defend and hold harmless Licensor, its subsidiaries and affiliates, their respective shareholders, licensees and franchisees and
the agents, officers, directors and employees of each and Licensor’s Agent (hereinafter collectively referred to as “Indemnitees”)
from all costs, claims, suits, losses, damages and expenses (including without limitation attorneys’ fees and litigation
or other expenses) arising out of or in connection with: (a) the design, manufacture, labeling, packaging, advertising, promotion,
sale or distribution of or any other dealing whatsoever with the Products or Materials (including, but not limited to, any breach
of Licensee’s obligations under Paragraph S.6. of the Schedule); (b) any alleged action or failure to act whatsoever
by Licensee; (c) any alleged defect in any or all of the Products; (d) any alleged non-conformity to or non-compliance with any
law pertaining to the design, quality, safety, advertising, promotion or marketing of any or all of the Products and the Materials;
(e) any sales or distribution by Licensee of the Products to a country where a third party owns the registrations for trademarks
that are confusingly similar to the Trademarks; (f) any breach by Licensee of any of its representations, warranties or undertakings
hereunder; (g) any alleged non-conformity to or non-compliance with any Laws; (h) the prior agreements between Licensor and [***]
and the prior agreements between Licensor and [***], and the termination thereof; (i) any activities of Licensee, [***], and/or
their affiliates; or (j) Licensee’s performance hereunder;

 

(ii)obtain
and maintain, at Licensee’s own expense, product liability insurance satisfactory to Licensor in the minimum amount of One
Million U.S. Dollars (U.S.$1,000,000) per occurrence and Five Million U.S. Dollars (U.S.$5,000,000) of primary and umbrella coverage
from one or more insurance companies, each with a Best’s rating of “A” (or better), and qualified to transact
business in the Territory (each such insurance policy shall name each of the Indemnitees as additional insureds and/or loss payees
as their interests may appear and by reason of the indemnity contained in Paragraph 2.n.(i) above and shall evidence the
insurer’s agreement that such insurance shall not be amended, canceled, terminated or permitted to lapse without thirty (30)
days’ prior written notice to Licensor), and provide Licensor with a certificate of such insurance upon execution of this
Agreement by Licensee and on each anniversary date of the grant or issuance of each such policy during the Term and the Sell-Off
Period evidencing that each such policy has not been altered with respect to the Indemnitees in any way whatsoever nor permitted
to lapse for any reason, and evidencing the payment of premium of each such policy; and

 

(iii)cause
each such policy to be in full force and effect prior to the commencement of any design, manufacture, advertising, promotion, sale,
distribution or dealing with any or all of the Products whatsoever. Failure by Licensee to obtain the required insurance prior
to such commencement or failure by Licensee to adequately maintain such insurance during the Term and the Sell-Off Period shall
be a default by Licensee under this Agreement.

 

		o.	Marketing Spend, Advertising Plans and Public Relations:

 

(i)In
addition to any other amounts or payments to be made by Licensee under this Agreement, and not to be credited to or offset against
any Guaranteed Royalties or Earned Royalties payable hereunder, Licensee agrees to expend within each License Year for advertising
and promoting the Products in media directed to the consumer (including without limitation point-of-sale materials, newspapers,
magazines, television and radio, but specifically excluding all marketing trade shows and trade promotions, and travel and expenditure
costs associated with trade shows and/or trade promotions, all fixtures and displays, and any expenses and costs on online platforms,
except those specifically provided by Licensor) not less than the Marketing Spend, as set forth in Paragraph S.16 of the schedule
to this Agreement. If the Statement for the last License Quarter of a License Year shows that such amount has not been spent as
set forth herein, the difference between the amount actually spent and the amount required to be spent must be remitted to Licensor
along with such Statement for use in Licensor’s advertising and promotion pool.

 

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(ii)Licensee
must submit to Licensor, for Licensor’s approval, its advertising/promotional plan and marketing plan in the format provided
by Licensor for the Products for each ensuing calendar year. Such plans must be submitted not later than March 15th of each calendar
year. In the event Licensor, in its reasonable discretion, does not approve of any such plan, Licensee must submit a revised plan
or plans to Licensor, for its approval, within not more than fifteen (15) days following Licensee’s receipt of Licensor’s
notice of disapproval and Licensee must incorporate revisions into the plan or plans that address Licensor’s concerns or
reasons for disapproval.

 

(iii)Within
ten (10) days following the end of each calendar month during the Term, Licensee will submit to Licensor, a list of all upcoming
public relations efforts regarding the Products (the “PR”), which may include, but will not be limited to, interviews,
press releases and press events. In the event Licensee wishes to sanction or schedule any PR after the submission to Licensor of
such monthly list, Licensee will immediately notify Licensor of such additional PR. Licensee must obtain Licensor’s prior
written approval prior to any PR effort taking place. In the event any PR consists of interviews, all talking points for same must
be approved in advance in writing by Licensor. In the event Licensor, in its sole discretion, wishes to participate in any PR Licensor
will so notify Licensee. In the event Licensor fails to provide its approval or disapproval of any or all things submitted to Licensor
pursuant to this Paragraph 2.o.(iii) within fourteen (14) days of Licensor’s receipt thereof, Licensor shall be deemed
to have disapproved of such things. In the event Licensor disapproves any PR, Licensee will cancel such disapproved PR. Failure
by Licensee to cancel any disapproved PR or engaging in any PR that has not been submitted to Licensor in advance for approval
shall be a default by Licensee under this Agreement.

 

		3.	ADDITIONAL COVENANTS
OF THE PARTIES.

 

a.Reservation
of Rights: All rights not expressly and specifically granted herein to Licensee are reserved by Licensor.

 

b.Certain
Sales:

 

(i)In
the event Licensor, its subsidiaries, parent, affiliates or third-party licensees wish, during the Term, to purchase any of the
Products for any purpose, including but not limited to, promotional and advertising purposes, as product placement in feature films,
television and related platforms, direct marketing sales, premium sales and incentive sales, Licensee, if requested to do so by
Licensor, will sell to Licensor and its licensee(s) or either thereof any or all of the Products at the best prices and terms given
to other customers of the Products ordering substantially the same quantities of similar merchandise from Licensee.

 

(ii)In
the event of any such sale of the Products by Licensee to Licensor, Licensee shall ship or deliver such Products either directly
to Licensor or, as Licensor may direct, to any other individual(s), entity or entities. Any or all such sales of the Products by
Licensee to Licensor shall be at the prices described in Paragraph 3.b.(i) above. Licensee will include such sale(s) in
the computation of Net Sales. Licensee shall bill Licensor and its licensee(s) or either thereof in accordance with Licensee’s
normal billing procedures for all such Products shipped or delivered.

 

c.Investment
Opportunity. During the Term hereof, if Licensee (or, if Licensee is owned or controlled by, or owns and controls, another
entity, such Licensee affiliate) offers to sell or to issue equity or debt to any third party or enters into any transaction for
such offering or sale, Licensee shall provide written notice of the same to Licensor, and Licensor will be entitled to participate
in such offering, sale or issuance on terms and conditions that are at least as favorable as those granted to any other investor
in such transaction. Participation in any such transaction shall be at Licensor’s sole discretion, and nothing herein shall
obligate Licensor to so participate.

 

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		4.	TITLE AND PROTECTION.

 

a.Indemnification
by Licensor: Subject to the provisions of Paragraph 16. hereof Licensor shall indemnify, defend and hold harmless Licensee,
its subsidiaries and affiliates, their respective shareholders and the agents, officers, directors and employees of each against
and from all claims or suits (provided prompt notice of each such claim or suit which comes to the attention of Licensee is given
to Licensor by Licensee) arising solely and directly out of the authorized use of the Playboy Properties on or in connection with
the Products by Licensee in the Territory, but in no event shall such indemnification include incidental or consequential damages,
including, but not limited to compensation or reimbursement for loss of prospective profits, anticipated sales or other losses
occasioned by termination of this Agreement or any other reason(s). Licensor shall have the option to settle or to undertake and
conduct the defense of any such claim or suit, but Licensee shall, upon receipt of notice from Licensor and pursuant to Licensor’s
instructions, handle, undertake and conduct the defense of any such claim or suit at Licensor’s expense. If Licensor does
not provide such notice to Licensee, Licensee may, through counsel of Licensee’s own choice and at its own expense, participate
in any such claim or suit, but in such event Licensor shall have sole and exclusive control over such defense, and Licensor’s
decisions with respect thereto shall govern and control. Licensee expressly covenants that no discussions by Licensee whatsoever
with claimant or litigant, no compromise or settlement by Licensee of any claim or suit and no negotiations by Licensee with respect
to any compromise or settlement shall be had, made or entered into without the prior written approval of Licensor.

 

b.Enforcement:
Licensee shall promptly notify Licensor in writing of each actual, suspected or apparent infringement or imitation of the Playboy
Properties or the Materials that comes to the attention of Licensee. Licensor may take such action in regard to such infringement
or imitation as Licensor, in its sole and absolute judgment, deems to be appropriate, including without limitation, no action.
Licensor may, in its sole and absolute discretion, decide whether to assert any claim or undertake or conduct any suit with respect
to such infringement or imitation, and Licensee agrees to cooperate fully with Licensor in the prosecution of any such claim. Licensee
shall, upon receipt of notice from Licensor and pursuant to Licensor’s instructions, on behalf of Licensor, assert any such
claim or handle, undertake and conduct any such suit at Licensor’s expense in the name of Licensor or Licensee or in both
names as Licensor may direct. Licensee expressly covenants that no discussions whatsoever with the infringing or imitating party
or parties, no compromise or settlement of any such claim or suit and no negotiations with respect to any compromise or settlement
of any such claim or suit shall be had, made or entered into without the prior written approval of Licensor. In no event shall
Licensor be responsible to Licensee for consequential or incidental damages that result from any infringement or imitation. Under
no circumstances may Licensee enforce Licensor’s rights to the Playboy Properties without Licensor’s prior written
approval and in no event may Licensee take any action on account of any such infringements without Licensor’s prior written
approval.

 

		5.	RELATIONSHIP BETWEEN
THE PARTIES.

 

a.No
Joint Venture: Nothing herein contained shall be construed to place the parties hereto in the relationship of partners or joint
venturers, and Licensee shall have no power to obligate or bind Licensor or its subsidiaries or affiliates in any manner whatsoever.
Licensor will have no fiduciary duty or fiduciary obligation to Licensee under this Agreement.

 

b.Assignment:

 

(i)Licensor,
in entering into this Agreement, is relying entirely upon Licensee’s skills, reputation and personnel, including without
limitation its officers, managers, directors, owners and/or shareholders. This Agreement and all rights, duties and obligations
hereunder are personal to Licensee and shall not, without the prior written consent of Licensor (which may be given or withheld
in the sole discretion of Licensor), be assigned, delegated, sold, transferred, leased, mortgaged or otherwise encumbered by Licensee
or by operation of law. Any attempt to do so without such consent shall be void and shall constitute a default under this Agreement.
If Licensor in its sole discretion believes that any change in any or all of the officers, managers, directors, owners and/or shareholders
of Licensee has, will or could materially interfere with or materially and adversely affect Licensee’s performance hereunder
or the relationship between the parties hereto, such change shall constitute a default under this Agreement and Licensor shall
so notify Licensee and Licensee shall take whatever steps or actions are necessary to remedy Licensor’s concerns; failing
which Licensor shall have the right to terminate this Agreement. The consent of Licensor to any such assignment, delegation, sale,
transfer, lease, mortgage, other encumbrance or change shall not be deemed to be consent to any subsequent assignment, delegation,
sale, transfer, lease, mortgage, other encumbrance or change.

 

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(ii)Licensor
may assign this Agreement or assign or delegate any or all of its rights, duties and obligations under this Agreement to any of
its parents, subsidiaries or affiliates or to any other individual or entity, including without limitation, a third-party.

 

c.Change
of Control:

 

(i) Licensee must obtain Licensor’s prior written approval, which may be granted or withheld in Licensor’s sole discretion,
for any and all transfers in ownership interest in Licensee such that one (1) or more transferees directly or indirectly controls
twenty-five percent (25%) or more of Licensee’s voting power (each a “Change of Control”). For the avoidance
of doubt, any Change of Control of Licensor shall not require Licensee’s prior approval and, furthermore, the terms and conditions
of this Agreement shall remain in full force and effect in the event of any Change of Control of Licensor.

 

(ii) [***]

 

6.          SUBLICENSING.
Licensee may not, without the prior written approval of Licensor, whose discretion shall be final and absolute, enter into any
sublicense agreement or grant any sublicense for any or all of the rights or obligations of Licensee under the License or this
Agreement. The consent of Licensor to any sublicense agreement or sublicense shall not be deemed to be a consent to any subsequent
sublicense agreement or sublicense. Any commercialization of the rights granted herein between Licensee and a third party, other
than approved third party sub-contracted manufacturers (valid only with a signed agreement as set forth on Exhibit C herein) or
approved third-party distributors (valid only with a signed agreement as set forth on Exhibit E), shall be considered an invalid
sublicense agreement hereunder and will constitute a material breach of this Agreement. Under no circumstances, may a manufacturer
or any of its affiliates also be a distributor, wholesaler or retailer of the Products and vice versa. Furthermore, Licensee will,
on demand by Licensor, disclose the full and comprehensive commercial conditions, including original copies of any agreements,
sub-manufacturing or distribution agreements or similar arrangements it makes with any third party, if original copies are not
available, copies affixed with the company chop of Licensee shall be furnished by Licensee to Licensor.

 

		7.	DEFAULTS AND RIGHTS
OF TERMINATION.

 

a.Defaults
and Right to Cure:

 

(i)Except
as otherwise provided in this Agreement, if Licensee shall violate any of the terms or conditions hereof or default on any of its
duties, obligations or warranties hereunder, Licensor shall have the right and option, but not the duty, to terminate the License
and this Agreement upon not less than thirty (30) days’ prior written notice, but no neglect or failure to serve such notice
shall be deemed to be a waiver of any such violation or default. Such termination shall become effective unless such violation
or default described in such notice shall be completely remedied to the satisfaction of Licensor within such thirty (30) day period.

 

(ii)Notwithstanding
the provisions of Paragraph 7.a.(i) above, if such violation or default: (a) is of a kind that a remedy or cure cannot effectively
cure; or (b) is described in this Agreement as an incurable default, then the License and this Agreement shall terminate upon receipt
by Licensee of written notice thereof without any period of remedy or cure whatsoever. The termination of the License and this
Agreement shall be without prejudice to any rights that Licensor otherwise has against Licensee under this Agreement or under law.

 

b.Bankruptcy
or Assignment for Creditors, Business Discontinuance: If: (i) Licensee files a petition in bankruptcy or is adjudicated a bankrupt;
(ii) a petition in bankruptcy is filed against Licensee; (iii) Licensee shall become insolvent or shall make or agree to make an
assignment for the benefit of creditors or an arrangement pursuant to any bankruptcy law; (iv) Licensee discontinues business;
(v) Licensee receives a qualified opinion from its independent auditor regarding Licensee’s financial statements or an opinion
stating that Licensee’s financial situation raises substantial doubt about Licensee’s ability to continue as a going
concern (or the equivalent of such an opinion); or (vi) a receiver shall be appointed for Licensee, the License and this Agreement
shall automatically terminate without the necessity of any notice whatsoever. If the License and this Agreement are so terminated,
any and all of Licensee and its receivers, representatives, trustees, agents, administrators, successors and assigns shall have
no right to sell or in any way deal with any of the Playboy Properties, Products or the Materials, except with the special prior
written consent and under the instructions of Licensor that it or they shall be obligated to follow. Termination of this Agreement
as a result of any of the occurrences set forth in this Paragraph 7.b. will be deemed a default and Licensee will be required
to remit to Licensor the termination fee set forth in Paragraph 8.f. hereof.

 

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c.Loss
of Trademark Rights: If Licensee’s right to use any or all of the Trademarks is adjudged illegal, invalid or restricted
and either (i) such adjudication has become final and non-appealable; (ii) Licensor in its sole discretion chooses not to appeal
therefrom; or (iii) if a settlement agreement is entered into by Licensor that prohibits or restricts Licensor’s or Licensee’s
right(s) to use the Trademarks, the License and this Agreement shall automatically terminate without the necessity of any notice
whatsoever as of the date (x) such adjudication becomes final and non-appealable; (y) Licensor makes such choice; or (z) of the
execution and delivery of such settlement agreement. Notwithstanding anything to the contrary in this Agreement, Licensee shall
have no claim of any nature against Licensor for the loss of any or all rights to use the Trademarks.

 

d.Qualified
Auditor’s Report: If Licensee receives a qualified opinion from its independent auditor regarding Licensee’s financial
statements or an opinion stating that the Licensee’s financial situation raises substantial doubt about Licensee’s
ability to continue as a going concern (or the equivalent of such an opinion), the receipt of such opinion shall be considered
a default.

 

e.Cross-Default:
In addition to, and without derogating from any other rights Licensor may have hereunder or under any other agreement between Licensor
and Licensee, or otherwise, any breach or default by Licensee (or its successors or assigns) of any other agreement (collectively,
the “Other Agreements”), between Licensor (or any affiliate or assignee of Licensor) and Licensee (or its successors
or assigns) may also be deemed by Licensor to be a breach or default by Licensee under this Agreement, and any breach or default
by Licensee (or its successors or assigns) under this Agreement may also be deemed to be a breach or default by Licensee (or its
successors or assigns) of any or all Other Agreements, and Licensor (or the applicable affiliate or assignee of Licensor) shall
be entitled to exercise any and all of its rights and remedies under the applicable agreements with respect thereto as if such
breach or default occurred under such agreements.

 

		8.	EXPIRATION OR TERMINATION.

 

a.Effect
of Expiration or Termination: Upon and after the expiration or termination of the License and this Agreement, all rights granted
to Licensee under this Agreement shall immediately revert to Licensor. Licensee will refrain from any further use of the Playboy
Properties or any further reference to anything similar to the Playboy Properties (including, but not limited to, words, devices,
designs and symbols) or in any way associated with any or all of the Products, Licensor and its subsidiaries or affiliates, except
with the prior written consent of Licensor or as expressly provided in Paragraph 8.c. hereof.

 

b.Reserved
Rights: The expiration or termination of the License and this Agreement shall not: (i) relieve Licensor or Licensee, respectively,
of any obligations incurred prior or subsequent to such expiration or termination; or (ii) impair or prejudice any of the rights
of Licensor or Licensee, respectively, accruing prior or subsequent thereto as provided in this Agreement. Upon termination of
the License and this Agreement pursuant to Paragraph 7.c. hereof, Guaranteed Royalties for the then current License Year
shall be prorated based on the ratio that the number of days in such License Year prior to termination bears to the number of days
in the License Year had the License and this Agreement not been terminated. Earned Royalties due for such License Year shall be
the excess of Earned Royalties over such prorated Guaranteed Royalties. Any overpayment or underpayment of Guaranteed Royalties
or Earned Royalties based on such proration shall be immediately adjusted by the parties hereto.

 

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c.Continued
Sales After Expiration or Termination: Provided that Licensee is not in arrears in the payment of any amounts due to Licensor
and that Licensee is in compliance with all of the terms and conditions of this Agreement, and further provided that no new Products
were manufactured without Licensor's prior written approval during the ninety (90) day period immediately preceding expiration,
then upon the expiration of the License and this Agreement, or if this Agreement is terminated pursuant to any paragraph of this
Agreement prior to the Expiration Date and then only upon Licensor’s prior written approval (which may be withheld at Licensor’s
discretion), and except as provided in Paragraph 8.d. hereof, Licensee may, during the Sell-Off Period, sell through Licensee’s
existing, recognized network of distributors or accounts all of the Products that have been approved by Licensor and that are in
process or on hand on the Expiration Date or at the time such notice of termination together with Licensor’s approval of
such Sell-Off Period is received. In such event, Licensee shall pay Earned Royalties and furnish Statements with respect to the
Sell-Off Period in accordance with the terms and conditions of this Agreement as though the License and this Agreement were still
in effect. It is expressly understood and agreed by Licensee that the Sell-Off Period shall be: (i) non-exclusive; and (ii) considered
a separate accounting period for the purpose of computing Earned Royalties due to Licensor for sales during such period. Sales
during the Sell-Off Period shall not be applied against any Guaranteed Royalties due or payable prior to the Sell-Off Period.

 

(i)Licensee
acknowledges that during the Sell-Off Period the Products may be sold only in the normal course of business via the approved Distribution
Channels and at regular selling prices (unless otherwise agreed by the Licensor in writing). All labels and hang tags must remain
intact, and the Trademarks may not be removed, hidden or altered in any way. Any Product returned during the Sell-Off Period may
be re-sold solely in the same manner as other Products during the Sell-Off Period.

 

(ii)Licensee
fully understands and acknowledges that Sell-Off Period sales should, through diligent sales and stock control by Licensee, be
planned to be minimal. Licensee will refrain from "dumping" Products. “Dumping” means selling at a volume
level that is inconsistent with (and greater than) the volume immediately prior to the beginning of the Sell-Off Period and at
sales prices that are inconsistent with (and lower) than the sales prices that were in place immediately prior to the commencement
of the Sell-Off Period. If, on the basis of prior sales patterns during the Term (for example unit volume sales for comparable
periods), Licensor has, at its sole discretion, reasonable cause to believe that Licensee is not exercising its requirements for
the expiration or termination of the license (and related sell-off activities) in good faith then Licensor may in its sole discretion
end the Sell-Off Period or take other measures (such as for example not authorizing Product approvals or fulfillment of Hologram
orders) to ensure that the end of Term obligations and Sell-Off Period are being realized according to the letter and spirit of
this Agreement.

 

d.Inventory
After Expiration or Termination:

 

(i)Licensee
shall furnish to Licensor an Inventory Statement:

 

(a)not
more than thirty (30) days after the expiration of this Agreement;

 

(b)not
more than thirty (30) days after the expiration of the Sell-Off Period (if any); and

 

(c)not
more than ten (10) days after: (i) receipt by Licensee of notice of termination of this Agreement or the Sell-Off Period (if any);
or (ii) the happening of any event that terminates the License and this Agreement where no such notice is required.

 

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(ii)Not
more than ten (10) days after the expiration or termination of this Agreement or the Sell-Off Period (if any), Licensee must supply
Licensor with a certificate of destruction for all Materials, including, but not limited to, Holograms, labels, hang tags, buttons,
boxes, zippers, decals, advertising material and equipment capable of recreating the Playboy Properties, including, but not limited
to: molds, tools, dies and printing screens.

 

(iii)Upon
the expiration or termination (for any reason) of this Agreement during the Term or the Sell-Off Period (if any), Licensor reserves
the right to purchase all remaining inventory at Licensee’s direct variable manufacturing cost, however, if Licensor chooses
not to purchase such inventory, it shall be promptly destroyed by Licensee unless otherwise agreed between Licensee and Licensor.
Licensor shall inform Licensee of its decision within fifteen (15) days after Licensor’s receipt of the Inventory Statement
from Licensee.

 

(iv)Should
Licensor choose not to purchase Licensee’s inventory as provided under Paragraph 8.d.(iii) above, Licensee, within
ten (10) days of the date of Licensor’s notice, shall destroy such inventory and provide Licensor with a certificate of destruction
for all inventory of the Product on hand or in process.

 

(v)Licensor
and its agents shall have the right to conduct physical inspections of any and all locations where the Products may be designed,
manufactured and/or held to ascertain Licensee’s compliance with this Paragraph 8.d. and, in order to enable Licensor
to conduct such inspections, Licensee will provide to Licensor within not more than ten (10) days of the date of Licensor’s
written request a listing of the places and addresses at which the Products are designed, manufactured and/or held. Any refusal
by Licensee to submit to such inspection shall forfeit Licensee’s right to a Sell-Off Period, and Licensor shall retain all
other legal equitable rights it has in the circumstances, which rights are hereby specifically reserved.

 

(vi)Licensee
understands and acknowledges that it is essential for Licensor to have accurate, complete and timely information with regard to
existing inventory of the Products and the inventory of the Products that is destroyed. Failure to provide Licensor with timely
and accurate Inventory Statements is a material default under the Agreement and, in such event, Licensor will have the right to
revoke Licensee’s right to the Sell-Off Period. Further, Licensee will, prior to any destruction of the Products pursuant
to the provisions of Paragraphs 8.d.(ii) and 8.d.(iii) above, provide Licensor with the date, time and location of
such destruction and allow Licensor or its nominee to witness such destruction if Licensor so wishes. Licensee’s failure
to submit to Licensor any Inventory Statement within the required time frames is a material violation of the provisions of the
Agreement and Licensor hereby reserves its rights under the Agreement and under law.

 

e.Equitable
Relief and Legal Fees:

 

(i)Subject
to Paragraph 8.c. hereof, Licensee hereby acknowledges that its failure to cease the design, manufacture, advertising, promotion,
sale or distribution of the Products and the Materials upon the expiration or termination of this Agreement will result in irreparable
harm to Licensor and its business interests for which there is no adequate remedy at law. Accordingly, in the event of such failure
or in the event of any violation or default by Licensee under this Agreement (after giving effect to the provisions of Paragraph
7.a.(i) hereof), Licensor shall be entitled to equitable relief without the necessity of posting bond by way of any temporary
and permanent injunctions and such other relief as any court of competent jurisdiction may deem just and proper. In this regard,
Licensee hereby consents to the judgment of temporary and permanent injunctions in favor of Licensor in order to give effect to
this Paragraph 8.e.(i).

 

(ii)In
the event either party hereto files any action against the other to enforce any of the provisions of this Agreement or to secure
or protect such party’s rights under this Agreement, such party shall be entitled to recover, in any judgment in its favor
entered therein, the attorneys’ fees and litigation expenses of such party, together with such court costs and damages as
are provided by law.

 

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f.Termination
Fee: Notwithstanding anything to the contrary in this Agreement, if Licensor terminates this Agreement as a result of a default
by Licensee or a default that is not cured by Licensee within the time frame set forth in Paragraph 7.a.(i) hereof, the
payment of all Guaranteed Royalties payable through the Expiration Date will be accelerated and Licensee shall pay to Licensor
as a termination fee no later than ten (10) days after the date of such termination all outstanding Guaranteed Royalties required
to be paid during the Term of this Agreement in addition to all Earned Royalties due through the effective date of termination,
and Licensor may immediately draw down on any outstanding Cash Guarantee required under Paragraph 2.d.(iv) hereof, which
such drawing shall not preclude Licensor from seeking from Licensee any deficiency that remains after such drawing. The receipt
by Licensor of, or the right by Licensor to receive such termination fee, shall be without prejudice to any other rights Licensor
has under this Agreement and under law. Further, such termination fee shall not be deemed to constitute the only damages to which
Licensor may be entitled under the Agreement or under law.

 

		9.	NOTICES.

 

a.Effectiveness:
Unless otherwise expressly indicated in this Agreement, each notice, request, approval, consent, payment and Statement (hereinafter
referred to as a “Submission”) specifically provided for in this Agreement shall be in writing and shall be considered
effective or received the earliest of: (i) five (5) days after the date when such Submission is mailed by certified or registered
mail with postage prepaid to the party hereto at the address set forth below; (ii) two (2) business days after the date when such
Submission is sent by overnight courier service addressed to such party at such address or the date indicated as received on the
overnight courier service confirmation receipt, whichever is earlier; (iii) except for payments, when such Submission is sent by
facsimile addressed to such party at such address and the sender thereof requests and receives written confirmation from such party
that such Submission has been received and is legible; or (iv) when such Submission is actually received by such party at such
address:

 

	To Licensor:	Address:	10960 Wilshire Blvd., Suite 2200, Suite 200
	 	 	Los Angeles, CA 90024
	 	Attention:	VP, Global Licensing
	 	Facsimile:	310-424-1804
	 	Telephone:	310-424-1800
	 	 	 
	With a copy to:	Attention:	General Counsel
	 	Email:	[EMAIL ADDRESS]
	 	 	 
	And to Agent:	The address specified in Paragraph S.3.1 of the Schedule.
	 	 	 
	To Licensee:	The address specified in Paragraph S.2. of the Schedule

 

b.Address
Change: Notwithstanding the provisions of Paragraph 9.a. hereof, each party hereto shall promptly give written notice
to the other party of some other address to which Submissions shall be sent, in which event such Submissions to such party subsequently
shall be sent to such address.

 

10.       CONFIDENTIAL
INFORMATION. Licensor shall from time to time during the Term of this Agreement, make available
to Licensee materials, including, but not limited to, style guides and licensing manuals, and other information, all of which is
non-public, confidential or proprietary to Licensor. Such materials, information and the terms and conditions of the License and
this Agreement, which is confidential between Licensee and Licensor, will be collectively referred to herein as the “Proprietary
Material.” Licensee shall not disclose the Proprietary Material to third-parties or use the Proprietary Material for any
purpose other than in connection with its duties and obligations as set forth in this Agreement. Licensee will ensure that the
Proprietary Material will be kept confidential by Licensee and its directors, officers, employees, agents, distributors, designers
and supplier/subcontractors (collectively “Representatives”), and that all such Representatives shall be made aware
of the confidential nature of the Proprietary Material. In the event Licensee is requested or required (by oral question, interrogatories,
subpoena, civil investigative demand or similar process) to disclose any of the Proprietary Material, Licensee will promptly notify
Licensor of such request or requirement and cooperate with Licensor so that Licensor may seek an appropriate protective order or
otherwise seek appropriate protection of the Proprietary Material. In the event that such protection is not obtained or that Licensor
waives compliance, Licensee shall furnish only that portion of the Proprietary Material which Licensee is advised by written opinion
of counsel is legally required to be furnished. Immediately upon the expiration or termination of this Agreement, or within ten
(10) days from the date of the Licensor’s prior written request, Licensee will return to Licensor, or destroy at Licensor’s
request, all Proprietary Material and all copies of the Proprietary Material produced by Licensee or its Representatives or any
notes, analysis or other materials prepared or produced by Licensee or its Representatives. 

 

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Anything
in this Agreement to the contrary notwithstanding, unless mandated by law or a governmental agency, Licensee will keep all terms
and conditions of this Agreement confidential both during and after the Term of the Agreement.

 

11.       SEVERABILITY.
Each provision of this Agreement shall be severable. If, for any reason, any provision herein
is finally determined to be invalid and contrary to, or in conflict with, any existing or future law or regulation by a court or
agency having valid jurisdiction, such determination shall not impair the operation or affect the remaining provisions of this
Agreement, and such remaining provisions will continue to be given full force and effect and bind the parties hereto. Each invalid
provision shall be curtailed only to the extent necessary to bring it within the requirements of such law or regulation.

 

12.       CONSENTS
AND APPROVALS. If Licensor fails or refuses to grant to Licensee any request, consent or
approval, Licensor may, but shall not be required to, give the reason therefore, but Licensor shall not be liable for any events
or circumstances that arise as a result of such failure or refusal.

 

13.       APPLICABLE
LAW. This Agreement shall be governed by and interpreted under the laws of the People’s
Republic of China without regard to its conflicts of laws provisions. The parties hereto agree that any and all disputes arising
out of, resulting from or in connection with this Agreement, including any question regarding its existence, validity or termination,
shall be submitted to Hong Kong International Arbitration Centre for arbitration in accordance with its rules effective at the
time of application for arbitration. The place and location of arbitration shall be in Hong Kong. In each arbitration, the number
of arbitrators shall be three. The presiding arbitrator shall not be a citizen of the USA, Mainland China, or any other administrative
region of China (including Hong Kong, Taiwan and Macao). The language to be used in the arbitral proceeding shall be both
English and Chinese. The arbitration award shall be final and binding upon the Parties. The cost of arbitration and attorneys’
fees and disbursements shall be borne by the losing party, unless otherwise determined by the arbitration award.

 

14.       NO
BROKER. Licensee warrants and represents that Licensee used no broker in connection with
the execution and delivery of this Agreement. 

 

15.       CONSTRUCTION.
The headings used herein are for convenience only and shall not be deemed to define, limit or
construe the contents of any provision of this Agreement. The wording of this Agreement will be deemed to be the wording chosen
by the parties hereto to express their mutual intent, and no rule of strict construction will be applied against any such party.
Time is the essence of this Agreement. The Schedule, Recitals and all Exhibits attached hereto shall be deemed to be part of this
Agreement. This Agreement may be executed in separate counterparts, each of which is deemed to be an original, and all of which
taken together constitute one and the same agreement. 

 

16.       LIMITATION
OF LIABILITY: LICENSEE WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHT TO OR CLAIM
FOR ANY INCIDENTAL, CONSEQUENTIAL, PUNITIVE OR EXEMPLARY DAMAGES AGAINST LICENSOR AND AGREES THAT, IN THE EVENT OF A DISPUTE BETWEEN
LICENSEE AND LICENSOR, LICENSEE WILL BE LIMITED TO EQUITABLE RELIEF, RECOVERY OF ANY ACTUAL DAMAGES IT SUSTAINS, AND ANY MONETARY
DAMAGES ASSOCIATED WITH INJURY TO GOODWILL OR REPUTATION. LICENSEE IRREVOCABLY WAIVES TRIAL BY JURY IN ANY ACTION, PROCEEDING,
OR COUNTERCLAIM, WHETHER AT LAW OR IN EQUITY, BROUGHT BY EITHER LICENSEE OR LICENSOR.

 

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17.       SURVIVABILITY.
The expiration or termination of the License and this Agreement shall not affect those provisions
hereof that are meant to survive such expiration or termination.

 

18.       RIGHTS
CUMULATIVE. The respective rights and remedies of the parties hereto, whether herein specified
or otherwise, shall be cumulative, and the exercise of one or more of them shall not preclude the exercise of any or all other
rights and remedies each such party has hereunder or by law.

 

19.       ENTIRE
AGREEMENT. This Agreement (with the Recitals, Schedule and all Exhibits attached hereto)
represents the entire understanding of the parties hereto with respect to the subject matter hereof and supersedes any and all
prior agreements and understandings, whether written or oral, pertaining to the subject matter hereof. None of the terms of this
Agreement can be waived or modified except by an express agreement in writing signed by the parties hereto. There are no representations,
promises, warranties, covenants or undertakings other than those contained in this Agreement and Licensee acknowledges that in
entering into this Agreement, it has not relied upon any representations, warranties or promises, whether oral or written, not
expressly contained herein. No custom or practice of the parties hereto at variance with the terms hereof shall constitute a waiver
of Licensor’s right to demand exact compliance with any of the terms herein at any time. The failure of either party hereto
to enforce, or the delay by either party hereto in enforcing, any or all of its rights under this Agreement shall not be deemed
as constituting a waiver or a modification thereof, and either party hereto may, within the time provided by applicable law, commence
appropriate proceedings to enforce any or all of such rights. Except as expressly provided in this Agreement, no individual or
entity other than Licensee and Licensor shall be deemed to have acquired any rights by reason of anything contained in this Agreement.

 

20.       Miscellaneous

 

a.      [***]
are, among others, affiliates of Licensee, and Licensee shall procure its affiliates to meet the following conditions:

 

(i)     [***];

 

(ii)     [***];

 

(iii)     [***].

 

b.      Notwithstanding
anything herein to the contrary, satisfaction of the following conditions shall be conditions precedent to the effectiveness of
this Agreement:

 

(i)all
lawsuits listed in Paragraph 20.a. hereof have been duly withdrawn and such withdrawals have been approved by the applicable courts
in accordance with Paragraph 20.a. hereof;

 

(ii)     [***]
has executed a Release Letter satisfactory to the Licensor at the time of execution of this Agreement;

 

(iii)    [***]
has executed a Release Letter satisfactory to the Licensor at the time of execution of this Agreement;

 

(iv)    [***]
has executed a Release Letter satisfactory to the Licensor at the time of execution of this Agreement; and

 

(v)     any
other conditions set forth in this Agreement.

 

c.       Representation
and Warranty of Licensee. Licensee represents and warrants that there are no other lawsuits
filed by or on behalf of [***], or their affiliates arising out of or in connection with the prior agreements between Licensor
and [***], between Licensor and [***], and/or the terminations thereof except for those listed in Paragraph 20.a.
herein. 

 

d.       Any
breach of Paragraphs 20.a., 20.b. and 20.c. shall
be deemed as an incurable default hereunder.

 

    33

     

    

 

e.       Right
of Termination: Without prejudice to any of Licensor’s rights and remedies under this Agreement or otherwise, Licensor
has the right to immediately terminate this Agreement by written notice, if [***] brings a lawsuit against Licensor, CAA-GBG LLP
and/or any of their affiliates arising out of or in connection with the prior agreements between Licensor and [***] and/or the
prior agreements between Licensor and [***]. In the aforementioned event of termination, such termination shall be effective on
the date of delivery of such written notice

 

f.     If [***], any other sublicensees
of [***] (except for those listed in Paragraph 20.g. herein) or any of sublicensees of Licensee brings a lawsuit against Licensor,
CAA-GBG LLP and/or their affiliates, Licensee shall bear all costs, losses, damages and expenses (including without limitation
attorneys’ fees and litigation or other expenses) incurred by Licensor, CAA-GBG LLP and their affiliates arising therefrom.
For the avoidance of doubt, this Paragraph 20.f. shall survive the expiry or termination of this Agreement.

 

g.       [***].

 

[Signature Page Follows]

    34

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Agreement to be executed by the duly authorized representative of each.

 

	NEW HANDONG INVESTMENT (GUANGDONG) CO., LTD. 	 	PLAYBOY ENTERPRISES
	 	 	 	INTERNATIONAL, INC.
	(LICENSEE)	 	(LICENSOR)	 
	 	 	 	 	 
	 	 	 	 	 
	By: 	/s/ Hong Jianqiao	 	By: 	/s/ Jared Dougherty
	 	 	 	 	 
	Name: 	Hong Jianqiao	 	Name: 	Jared Dougherty
	 	 	 	 	 
	Title: 	Chairman	 	Title: 	President
	 	 	 	 	 
	Date: 	December 6, 2019	 	Date: 	December 6, 2019

 

    35

     

    

 

ASSIGNMENT AND ASSUMPTION AGREEMENT

 

THIS ASSIGNMENT AND
ASSUMPTION AGREEMENT (this "Assignment") is made effective as of December 2019 (the “Effective Date”),
by and between PLAYBOY ENTERPRISES INTERNATIONAL, INC., a Delaware corporation ("Assignor"), and CHINA PRODUCTS
LICENSING, LLC, a Delaware limited liability company ("Assignee").

 

WHEREAS, Assignor is
a party to that certain Product License Agreement effective as of December 2019 (the "Agreement"), by and between
Assignor and New Handong Investment (Guangdong) Co., Ltd. (“Licensee”); and

 

WHEREAS, Assignor desires
to assign to Assignee all of Assignor’s rights, obligations, interests and liabilities under the Agreement, and Assignee
is willing to accept assignment of all of such rights, obligations, interests and liabilities under the Agreement.

 

NOW, THEREFORE, for
good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:

 

1.        Assignor
hereby does transfer and assign unto Assignee all of Assignor's rights, obligations, interests and liabilities under the Agreement.

 

2.        For
and in consideration of the assignment hereunder, Assignee hereby assumes all of Assignor's rights, obligations, interests and
liabilities under the Agreement to the same extent as though it had originally been named as a party thereto and agrees to observe,
perform and fulfill all the terms and conditions of the Agreement to the same extent as if it had been originally named as a party
thereto.

 

3.        Assignee
agrees to defend, indemnify and hold harmless Assignor and its affiliates, officers, directors, shareholders, employees, partners,
agents and representatives from and against all claims, demands, obligations, losses, liabilities, damages, recoveries and deficiencies,
including interest, penalties and reasonable attorneys' fees, costs and expenses arising out of, resulting from or related in any
way whatsoever to the obligations under the Agreement assumed by Assignee herein, other than those obligations arising prior to
the date hereof resulting from Assignor's gross negligence or willful misconduct. Assignor agrees to defend, indemnify and hold
harmless Assignee and its affiliates, officers, directors, shareholders, employees, partners, agents and representatives from and
against all claims, demands, obligations, losses, liabilities, damages, recoveries and deficiencies, including interest, penalties
and reasonable attorneys' fees, costs and expenses arising out of, resulting from or related in any way whatsoever to the obligations
under the Agreement assumed by Assignee herein resulting from Assignor's gross negligence or willful misconduct which arose or
accrued prior to and relate to the period prior to the date hereof.

 

4.        This
Assignment shall be binding upon, and inure to the benefit of, Assignor and Assignee, and their respective successors and assigns.
This Assignment shall be governed by the Laws of the State of California, without regard to its conflicts of law provisions. This
Assignment may be executed in one or more counterparts, each of which is an original and all of which constitute this Assignment.

 

[SIGNATURE PAGE FOLLOWS]

 

    36

     

    

 

IN WITNESS WHEREOF,
the parties hereto have executed and delivered this Assignment effective as of the Effective Date.

 

	 	ASSIGNOR:
	 	 	 
	 	PLAYBOY ENTERPRISES INTERNATIONAL, INC.
	 	 	 
	 	By:	/s/ David Israel
	 	 	 
	 	Name:	David Israel
	 	 	 
	 	Title:	COO/CFO
	 	 	 
	 	 	 
	 	 	 
	 	ASSIGNEE:
	 	 	 
	 	CHINA PRODUCTS LICENSING, LLC
	 	 	 
	 	 	 
	 	By:	/s/ David Israel
	 	 	 
	 	Name: 	David Israel
	 	 	 
	 	Title:	COO/CFO

 

    37

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