Exchange 2016 fails at Step 10 of 14; Mailbox Role

I am trying to install Exchange 2016 on a Windows 2016 VM Server but the installation fails at step 10 of 14 with the error shown below:

My domain functional level is Server 2008 R2 and I have an Exchange 2010 server. I have performed all the pre-install steps and and prepared the Schema and AD. I tried creating a new VM and starting the installation again but got the same result. I have attached the ExchangeSetup log



Error:
The following error was generated when "$error.Clear();
          if (($RoleIsDatacenter -ne $true) -and ($RoleIsDatacenterDedicated -ne $true))
          {
          if (test-ExchangeServersWriteAccess -DomainController $RoleDomainController -ErrorAction SilentlyContinue)
          {
          $sysMbx = $null;
          $name = "SystemMailbox{e0dc1c29-89c3-4034-b678-e6c29d823ed9}";
          $dispname = "Microsoft Exchange";
          $mbxs = @( get-mailbox -arbitration -Filter {name -eq $name} -IgnoreDefaultScope -resultSize 1 );
          if ( $mbxs.length -eq 0)
          {
          $dbs = @(get-MailboxDatabase -Server:$RoleFqdnOrName -DomainController $RoleDomainController);
          if ($dbs.Length -ne 0)
          {
          $arbUsers = @(get-user -Filter {name -eq $name} -IgnoreDefaultScope -ResultSize 1);
          if ($arbUsers.Length -ne 0)
          {
          $sysMbx = enable-mailbox -Arbitration -identity $arbUsers[0] -DisplayName $dispname -database $dbs[0].Identity;
          }
          }
          }
          else
          {
          if ($mbxs[0].DisplayName -ne $dispname )
          {
          set-mailbox -Arbitration -identity $mbxs[0] -DisplayName $dispname -Force;
          }
          $sysMbx = $mbxs[0];
          }

          # Set the Organization Capabilities needed for this mailbox
          if ($sysMbx -ne $null)
          {
          Write-ExchangeSetupLog -Info ("Setting mailbox properties.");
          set-mailbox -Arbitration -identity $sysMbx -UMDataStorage:$true -Force;

          # No RetentionPolicy assigned to E-Discovery arbitration mailbox currently, we need to set it here.
          # This can be remove after BUG(O15#2555914) is fixed.
          if ($sysMbx.RetentionPolicy -eq $null )
          {
          $arbitrationRetentionPolicy = @(Get-RetentionPolicy -DomainController $RoleDomainController | where {$_.Name -eq 'ArbitrationMailbox'});
          set-mailbox -Arbitration -identity $sysMbx -RetentionPolicy $arbitrationRetentionPolicy[0].Identity -Force;
          }
          }
          else
          {
          Write-ExchangeSetupLog -Info ("Cannot find E-discovery arbitration mailbox with name=$name.");
          }
          }
          else
          {
          write-exchangesetuplog -info "Skipping creating Discovery Arbitration Mailbox because of insufficient permission."
          }
          }
        " was run: "Microsoft.Exchange.Data.DataValidationException: Database is mandatory on UserMailbox.".

Error:
The following error was generated when "$error.Clear();
          if (($RoleIsDatacenter -ne $true) -and ($RoleIsDatacenterDedicated -ne $true))
          {
          if (test-ExchangeServersWriteAccess -DomainController $RoleDomainController -ErrorAction SilentlyContinue)
          {
          $sysMbx = $null;
          $name = "SystemMailbox{e0dc1c29-89c3-4034-b678-e6c29d823ed9}";
          $dispname = "Microsoft Exchange";
          $mbxs = @( get-mailbox -arbitration -Filter {name -eq $name} -IgnoreDefaultScope -resultSize 1 );
          if ( $mbxs.length -eq 0)
          {
          $dbs = @(get-MailboxDatabase -Server:$RoleFqdnOrName -DomainController $RoleDomainController);
          if ($dbs.Length -ne 0)
          {
          $arbUsers = @(get-user -Filter {name -eq $name} -IgnoreDefaultScope -ResultSize 1);
          if ($arbUsers.Length -ne 0)
          {
          $sysMbx = enable-mailbox -Arbitration -identity $arbUsers[0] -DisplayName $dispname -database $dbs[0].Identity;
          }
          }
          }
          else
          {
          if ($mbxs[0].DisplayName -ne $dispname )
          {
          set-mailbox -Arbitration -identity $mbxs[0] -DisplayName $dispname -Force;
          }
          $sysMbx = $mbxs[0];
          }

          # Set the Organization Capabilities needed for this mailbox
          if ($sysMbx -ne $null)
          {
          Write-ExchangeSetupLog -Info ("Setting mailbox properties.");
          set-mailbox -Arbitration -identity $sysMbx -UMDataStorage:$true -Force;

          # No RetentionPolicy assigned to E-Discovery arbitration mailbox currently, we need to set it here.
          # This can be remove after BUG(O15#2555914) is fixed.
          if ($sysMbx.RetentionPolicy -eq $null )
          {
          $arbitrationRetentionPolicy = @(Get-RetentionPolicy -DomainController $RoleDomainController | where {$_.Name -eq 'ArbitrationMailbox'});
          set-mailbox -Arbitration -identity $sysMbx -RetentionPolicy $arbitrationRetentionPolicy[0].Identity -Force;
          }
          }
          else
          {
          Write-ExchangeSetupLog -Info ("Cannot find E-discovery arbitration mailbox with name=$name.");
          }
          }
          else
          {
          write-exchangesetuplog -info "Skipping creating Discovery Arbitration Mailbox because of insufficient permission."
          }
          }
        " was run: "Microsoft.Exchange.Data.DataValidationException: Database is mandatory on UserMailbox.
   at Microsoft.Exchange.Configuration.Tasks.Task.ThrowError(Exception exception, ErrorCategory errorCategory, Object target, String helpUrl)
   at Microsoft.Exchange.Configuration.Tasks.Task.WriteError(Exception exception, ErrorCategory category, Object target, Boolean reThrow)
   at Microsoft.Exchange.Configuration.Tasks.DataAccessTask`1.Validate(TDataObject dataObject)
   at Microsoft.Exchange.Configuration.Tasks.SetTaskBase`1.InternalValidate()
   at Microsoft.Exchange.Configuration.Tasks.SetRecipientObjectTask`3.InternalValidate()
   at Microsoft.Exchange.Management.Common.SetMailEnabledRecipientObjectTask`3.InternalValidate()
   at Microsoft.Exchange.Management.RecipientTasks.SetUserBase`3.InternalValidate()
   at Microsoft.Exchange.Management.RecipientTasks.SetMailboxBase`3.InternalValidate()
   at Microsoft.Exchange.Management.RecipientTasks.SetMailbox.InternalValidate()
   at Microsoft.Exchange.Configuration.Tasks.Task.<ProcessRecord>b__c()
   at Microsoft.Exchange.Configuration.Tasks.Task.InvokeRetryableFunc(String funcName, Action func, Boolean terminatePipelineIfFailed)".

Error:
The following error was generated when "$error.Clear();
          if (($RoleIsDatacenter -ne $true) -and ($RoleIsDatacenterDedicated -ne $true))
          {
          if (test-ExchangeServersWriteAccess -DomainController $RoleDomainController -ErrorAction SilentlyContinue)
          {
          $sysMbx = $null;
          $name = "SystemMailbox{e0dc1c29-89c3-4034-b678-e6c29d823ed9}";
          $dispname = "Microsoft Exchange";
          $mbxs = @( get-mailbox -arbitration -Filter {name -eq $name} -IgnoreDefaultScope -resultSize 1 );
          if ( $mbxs.length -eq 0)
          {
          $dbs = @(get-MailboxDatabase -Server:$RoleFqdnOrName -DomainController $RoleDomainController);
          if ($dbs.Length -ne 0)
          {
          $arbUsers = @(get-user -Filter {name -eq $name} -IgnoreDefaultScope -ResultSize 1);
          if ($arbUsers.Length -ne 0)
          {
          $sysMbx = enable-mailbox -Arbitration -identity $arbUsers[0] -DisplayName $dispname -database $dbs[0].Identity;
          }
          }
          }
          else
          {
          if ($mbxs[0].DisplayName -ne $dispname )
          {
          set-mailbox -Arbitration -identity $mbxs[0] -DisplayName $dispname -Force;
          }
          $sysMbx = $mbxs[0];
          }

          # Set the Organization Capabilities needed for this mailbox
          if ($sysMbx -ne $null)
          {
          Write-ExchangeSetupLog -Info ("Setting mailbox properties.");
          set-mailbox -Arbitration -identity $sysMbx -UMDataStorage:$true -Force;

          # No RetentionPolicy assigned to E-Discovery arbitration mailbox currently, we need to set it here.
          # This can be remove after BUG(O15#2555914) is fixed.
          if ($sysMbx.RetentionPolicy -eq $null )
          {
          $arbitrationRetentionPolicy = @(Get-RetentionPolicy -DomainController $RoleDomainController | where {$_.Name -eq 'ArbitrationMailbox'});
          set-mailbox -Arbitration -identity $sysMbx -RetentionPolicy $arbitrationRetentionPolicy[0].Identity -Force;
          }
          }
          else
          {
          Write-ExchangeSetupLog -Info ("Cannot find E-discovery arbitration mailbox with name=$name.");
          }
          }
          else
          {
          write-exchangesetuplog -info "Skipping creating Discovery Arbitration Mailbox because of insufficient permission."
          }
          }
        " was run: "Microsoft.Exchange.Data.DataValidationException: Database is mandatory on UserMailbox.".

Error:
The following error was generated when "$error.Clear();
          if (($RoleIsDatacenter -ne $true) -and ($RoleIsDatacenterDedicated -ne $true))
          {
          if (test-ExchangeServersWriteAccess -DomainController $RoleDomainController -ErrorAction SilentlyContinue)
          {
          $sysMbx = $null;
          $name = "SystemMailbox{e0dc1c29-89c3-4034-b678-e6c29d823ed9}";
          $dispname = "Microsoft Exchange";
          $mbxs = @( get-mailbox -arbitration -Filter {name -eq $name} -IgnoreDefaultScope -resultSize 1 );
          if ( $mbxs.length -eq 0)
          {
          $dbs = @(get-MailboxDatabase -Server:$RoleFqdnOrName -DomainController $RoleDomainController);
          if ($dbs.Length -ne 0)
          {
          $arbUsers = @(get-user -Filter {name -eq $name} -IgnoreDefaultScope -ResultSize 1);
          if ($arbUsers.Length -ne 0)
          {
          $sysMbx = enable-mailbox -Arbitration -identity $arbUsers[0] -DisplayName $dispname -database $dbs[0].Identity;
          }
          }
          }
          else
          {
          if ($mbxs[0].DisplayName -ne $dispname )
          {
          set-mailbox -Arbitration -identity $mbxs[0] -DisplayName $dispname -Force;
          }
          $sysMbx = $mbxs[0];
          }

          # Set the Organization Capabilities needed for this mailbox
          if ($sysMbx -ne $null)
          {
          Write-ExchangeSetupLog -Info ("Setting mailbox properties.");
          set-mailbox -Arbitration -identity $sysMbx -UMDataStorage:$true -Force;

          # No RetentionPolicy assigned to E-Discovery arbitration mailbox currently, we need to set it here.
          # This can be remove after BUG(O15#2555914) is fixed.
          if ($sysMbx.RetentionPolicy -eq $null )
          {
          $arbitrationRetentionPolicy = @(Get-RetentionPolicy -DomainController $RoleDomainController | where {$_.Name -eq 'ArbitrationMailbox'});
          set-mailbox -Arbitration -identity $sysMbx -RetentionPolicy $arbitrationRetentionPolicy[0].Identity -Force;
          }
          }
          else
          {
          Write-ExchangeSetupLog -Info ("Cannot find E-discovery arbitration mailbox with name=$name.");
          }
          }
          else
          {
          write-exchangesetuplog -info "Skipping creating Discovery Arbitration Mailbox because of insufficient permission."
          }
          }
        " was run: "Microsoft.Exchange.Data.DataValidationException: Database is mandatory on UserMailbox.
   at Microsoft.Exchange.Configuration.Tasks.Task.ThrowError(Exception exception, ErrorCategory errorCategory, Object target, String helpUrl)
   at Microsoft.Exchange.Configuration.Tasks.Task.WriteError(Exception exception, ErrorCategory category, Object target, Boolean reThrow)
   at Microsoft.Exchange.Configuration.Tasks.DataAccessTask`1.Validate(TDataObject dataObject)
   at Microsoft.Exchange.Configuration.Tasks.SetTaskBase`1.InternalValidate()
   at Microsoft.Exchange.Configuration.Tasks.SetRecipientObjectTask`3.InternalValidate()
   at Microsoft.Exchange.Management.Common.SetMailEnabledRecipientObjectTask`3.InternalValidate()
   at Microsoft.Exchange.Management.RecipientTasks.SetUserBase`3.InternalValidate()
   at Microsoft.Exchange.Management.RecipientTasks.SetMailboxBase`3.InternalValidate()
   at Microsoft.Exchange.Management.RecipientTasks.SetMailbox.InternalValidate()
   at Microsoft.Exchange.Configuration.Tasks.Task.<ProcessRecord>b__c()
   at Microsoft.Exchange.Configuration.Tasks.Task.InvokeRetryableFunc(String funcName, Action func, Boolean terminatePipelineIfFailed)".
ExchangeSetup.txt