Document:

Where Food Comes From, Inc. - 10-K

Exhibit 10.13

 

LEASE AGREEMENT

 

thE movE

 

202 SIXTH STREET 

CASTLE ROCK, CO 80104

 

THE MOVE, LLC, A COLORADO LIMITED LIABILITY
COMPANY

LANDLORD

 

AND

 

WHERE FOOD COMES FROM INC., A COLORADO CORPORATION.

TENANT

 

    

     

    

 

LEASE AGREEMENT

 

thE movE

202 SIXTH STREET, CASTLE ROCK, CO 80104

 

THE MOVE, LLC, LANDLORD, AND

WHERE FOOD COMES FROM INC, TENANT

 

TABLE OF CONTENTS

	 	 	 	 	Page	 
	 	 	 	 	 
	Article	1	-	Fundamental Lease Provisions	1
	 	 	 	 	 
	Article	2	-	Construction of the Premises	2
	 	 	 	 	 
	Article	3	-	Lease Term	2
	 	 	 	 	 
	Article	4	-	Rent	2
	 	 	 	 	 
	Article	5	-	Taxes	3
	 	 	 	 	 
	Article	6	-	Indemnification of Landlord - Insurance	3
	 	 	 	 	 
	Article	7	-	Utilities	4
	 	 	 	 	 
	Article	8	-	Common Areas	5
	 	 	 	 	 
	Article	9	-	Use of Premises	6
	 	 	 	 	 
	Article	10	-	Good Merchandising Standards	6
	 	 	 	 	 
	Article	11	-	Rules and Regulations	7
	 	 	 	 	 
	Article	12	-	Advertising and Signs	7
	 	 	 	 	 
	Article	13	-	Mechanic’s Liens	7
	 	 	 	 	 
	Article	14	-	Maintenance and Alterations	7
	 	 	 	 	 
	Article	15	-	Assigning or Subleasing	8
	 	 	 	 	 
	Article	16	-	Condemnation	9
	 	 	 	 	 
	Article	17	-	Casualty to Premises	10
	 	 	 	 	 
	Article	18	-	Defaults	10
	 	 	 	 	 
	Article	19	-	Bankruptcy	11
	 	 	 	 	 
	Article	20	-	Landlord’s Lien	11
	 	 	 	 	 
	Article	21	-	Notices	12
	 	 	 	 	 
	Article	22	-	Security Deposit	12
	 	 	 	 	 
	Article	23	-	Mandatory Execution of Documents by Tenant	12
	 	 	 	 	 
	Article	24	-	Construction and Effect	13
	 	 	 	 	 
	Article	25	-	Miscellaneous Provisions	13

 

EXHIBITS AND ADDENDUM

	 	 	Page	 
	 	 	 
	Exhibit A	Site Plan	A-1
	Exhibit B	Description of Premises	B-1
	Exhibit C	Provisions Relating to the Construction of Premises	C-1-4
	Exhibit D	Tenant’s Estoppel Certificate	D-1
	Exhibit E	Mechanic’s Lien Notice	E-1
	Exhibit F	Rules and Regulations	F-1-4
	Exhibit G	Hazardous and/or Toxic Wastes, Substances and Materials	G-1
	Exhibit H	Commencement Date Certificate	H-1
	Addendum	Option to Renew	A-1A-2A

 

    

     

    

 

LEASE AGREEMENT

 

In consideration of the rents
and covenants hereinafter set forth, Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, upon the terms and
conditions set forth herein, the commercial space referred to herein as the Premises.

 

ARTICLE 1 - FUNDAMENTAL LEASE PROVISIONS

 

		1.01	Landlord. THE MOVE, LLC, a Colorado Limited Liability
Company with its principle place of business at 18 South Wilcox Street, Suite 100, Castle Rock, CO 80104

 

		1.02	Tenant. WHERE FOOD COMES FROM, INC, a Colorado
Corporation authorized to conduct business in the State of Colorado, with its principal place of business at 221 Wilcox St., Castle
Rock, CO, 80104 prior to possession, then 202 Sixth Street, Castle Rock, CO, 80104. .

 

		1.03	Premises. Approximately 8,127 rentable square feet
on the fourth (4th) floor identified as Unit TBD as generally shown on the Site Plan attached hereto as Exhibit
A and as described on Exhibit B. The precise square footage will be specified in the Commencement Date Certificate, Exhibit H,
upon completion of the construction in accordance to BOMA standards.

 

		1.04	Building: thE movE, 202 Sixth Street, Castle Rock,
CO 80104

 

		1.05	Lease Term. Sixty (60) Months following the Commencement
Date.

 

		1.06	Renewal Option: Two (2) options to extend the Lease
Term for an additional Five (5) years each. Such Renewal Option shall be governed as per the terms of the attached Addendum.

 

		1.07	Possession Date: Estimated to be November 1, 2015,
which actual date shall be confirmed in the Commencement Date Certificate attached hereto as Exhibit H. For the purpose of determining
the Commencement Date, possession of the Premises shall be deemed to be the date in which Landlord provides Tenant with access
to the Premises for the purpose of constructing Tenant improvements within the Premises.

 

		1.08	Commencement Date: The Lease shall commence one
hundred and fifty days (150) days following the Possession Date, or when Tenant opens for business, whichever occurs first. Tenant
shall have no obligation to pay Rent during the period between Possession Date and open for business date or 150 days after commencement,
whichever occurs first.

 

		1.09	Security Deposit: The security deposit shall be
equal to the first month’s Minimum Rent.

 

		1.10	Rent: The term “Rent” shall include
the following:

 

		(a)	Minimum Rent Schedule: $20.00/rentable square
feet with three percent (3%) annual increases, as further defined in Exhibit H, Commencement Date Certificate.

 

		(b)	Additional Rent. Common Area Expenses, association
dues, taxes, and insurance estimated to be an additional $8.00 per square foot for 2015

		i.	Taxes are estimated to be $4.00 per square foot

		ii.	Common Area Expenses and Insurance are estimated to
be $4.00 per square foot

		iii.	On Commencement Date, or when Tenant opens for business,
whichever occurs first, Tenant will make first monthly installment of the estimated Additional Rent.

 

		1.11	Tenant’s Use. Tenant may use the Premises
for any use reasonably related to general office purposes for the conduct of generally acceptable office of work including all
purposes consistent with the zoning of the Premises, the design of the Premises, and all applicable state and federal laws and
regulations.

 

		1.12	Construction Allowance: Landlord shall provide
Tenant a Tenant Improvement allowance equal to $20.00 per rentable square foot in the Premises. Such allowance shall be paid to
Tenant by Landlord as described in Exhibit C, this allowance is offered as an incentive to take possession of the Premises not
as a loan or to be in anyway repaid except in the event of default of the Lease during the initial Lease Term.

 

		1.13	Notice Addresses.

 

		(a)	Landlord’s Notice Address: P.O. Box 97, Castle
Rock, CO 80104 or such other address that Landlord determines and provides written notice to Tenant of such change.

 

		(c)	Tenant’s Notice Address: Prior to Commencement
Date at 221 Wilcox St., Castle Rock, CO 80104, and at the Premises after Commencement Date, unless otherwise changed via written
notice by Tenant to Landlord.

 

		1.14	Maintenance: Landlord shall be responsible for
the maintenance of the structural components and all Common Areas. Tenant shall maintain all other components that serve exclusively
Tenants leased office space which may include, without limitation, HVAC, plumbing, electrical, interior walls, doors, floor covering,
wall coverings, store front, windows, etc

 

		1.15	Signage: Tenant, at its sole cost and expense,
shall have the right to install signage above Tenant’s Premises and to install or place interior window signs on the Premises
in accordance with all local codes and ARTICLE 12 and Exhibit F of this agreement.

 

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		1.16	Continuous Use: If, at any time during this Lease,
Tenant vacates, abandons, or closes its business operation at the Premises for more than ten (10) days (except as a result of
casualty, condemnation or remodeling) and Tenant has not entered into an assignment or sublease for the Premises with an assignee
or subtenant who will be reoccupying the Premises, this shall constitute a default and the Landlord shall have all of the remedies
for default provided for herein.

 

		1.17	Pro Rata Share: Tenant’s Pro Rata Share shall
be determined by dividing the rentable square footage of the Premises by the actual rentable square footage of the Building and
multiplying the quotient by 100. Tenant’s pro rata share shall be confirmed in the Commencement Date Certificate, Exhibit
H, following approval of the final space plan for the Premises.

 

ARTICLE 2 - CONSTRUCTION OF THE PREMISES

 

Landlord shall construct the
Building in accordance with the general site plan attached hereto as Exhibit A (the “Site Plan”), as it may be amended
by the Landlord in its discretion from time to time provided that, in its amendment of the Site Plan, Landlord uses reasonable
efforts to minimize any interference with Tenant’s use and occupancy of, visibility of, or access to the Premises. The Premises
are to be generally constructed in accordance with the specifications entitled “Description of Landlord’s Work” in Provisions
Relating to the Construction of Premises set forth in Exhibit C, attached hereto. Following the walk-through inspection and the
creation of a punch list as described in Exhibit C paragraph 3, the Premises will be considered Substantially Completed on the
date Landlord’s Work as described in Exhibit C, Schedule 1, is substantially completed enabling Tenant at Tenant’s
reasonable discretion to accept delivery of the Premises in a condition to allow Tenant to immediately begin Tenant Improvements.
Tenant shall take possession of the Premises as soon as possible after Landlord’s Work is complete, shall commence the construction
of Tenant’s Improvements, shall diligently prosecute such construction to completion, and shall open the Premises for business
as soon as reasonably possible thereafter. If the Possession Date has not occurred by April 1, 2016, then Tenant may terminate
this Lease upon delivery of notice to Landlord and shall have no remaining liability with respect to this Lease. Upon receipt of
Tenant’s notice of termination, Landlord shall immediately return Tenant’s Security Deposit and prepaid rent.

 

Landlord and Tenant shall execute
a Commencement Date Certificate, substantially in the form attached to this Lease as Exhibit H, within fifteen (15) days after
the Commencement Date. The Commencement Date Certificate shall amend the terms of this Lease as specified therein and shall be
binding throughout the Term, unless subsequently amended in writing by Landlord and Tenant.

 

ARTICLE 3 - LEASE TERM

 

The term of this Lease shall
commence on the Commencement Date. The Term shall continue for the period designated as the Lease Term in Article 1 hereof. Except
as provided below, the term “Lease Year,” whenever used herein, shall mean a period of twelve (12) consecutive full calendar
months. The first Lease Year shall commence on the Commencement Date. If the Commencement Date is other than the first day of a
calendar month, the first Lease Year shall consist of the remaining part of such month, and the next consecutive twelve (12) calendar
months. Each succeeding Lease Year shall commence on the day after the conclusion of the previous Lease Year. The parties hereto
acknowledge that certain obligations under various Articles hereof may commence prior to the Lease Term (i.e. construction, hold
harmless, liability insurance, etc.), and the parties agree to be bound by these Articles prior to commencement of the Lease Term.

 

Pursuant to Section 1.06 and
as modified by the Addendum signed simultaneously with this agreement Tenant shall have two (2) options to renew for a term of
five (5) years each.

 

Tenant shall not have the right
to holdover possession of the Premises after the expiration or termination of this Lease without Landlord’s prior written
consent, which consent may be withhold in Landlord’s sole and absolute discretion. If Tenant retains possession of any part
of the Premises after the expiration or termination of this Lease without Landlord’s prior written consent, Tenant shall
become a month-to-month tenant (for the part of the Premises then leased by Tenant) in accordance with all of the terms of this
Lease as might be applicable to such month-to-month tenancy, except that Tenant shall pay Base Rent at the greater of (a) one hundred
twenty-five percent (125%) of the rate in effect for the month immediately prior to such holdover, or (b) fair market rent, as
reasonably determined by Landlord. Tenant shall pay its Proportionate Share of Operating Cost Share Rent and Tax Share Rent during
any holdover period in accordance with the terms of this Lease, and shall be responsible for its Proportionate Share of any increases
thereto. No acceptance of Rent or other payments by Landlord under these holdover provisions shall operate as a waiver of Landlord’s
right to regain possession based on breach of lease or any other Landlord remedy.

 

ARTICLE 4 - RENT

 

The Tenant agrees to pay as
rent for the use and occupancy of the Premises, at the times and in the manner hereinafter provided.:

 

4.01         Minimum
Rent. The Minimum Rent specified in Article 1, Section 1.10(a) and Exhibit H, hereof shall be payable in twelve (12) equal
monthly installments during each year, in advance, on the first day of each calendar month (the “Due Date”), without
setoff or deduction. If the Commencement Date is other than the first day of a month, then the rental for the first fractional
month shall be computed on a daily basis for the period from the Lease Commencement Date to the end of such calendar month and
at an amount equal to one three hundred sixty-fifth (1/365) of the Minimum Rent for each such day, and thereafter shall be computed
and paid as aforesaid.

 

4.02         Additional
Rent. Tenant shall pay its pro rata share of the Common Area Expenses which shall include the costs of insurance, association
dues, and real estate taxes of thE movE as set forth in Articles 5, 6, and 8.

 

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4.03       Payment
of Rent. All Minimum Rent and Additional Rent payable under this Lease shall be paid by Tenant without notice or demand at
such place as designated by Landlord in writing. If Tenant shall fail to pay any Minimum Rent and/or Additional Rent within five
(5) days after the same is due and payable, a late charge of ten percent (10%) of such delinquent amount shall be due and payable
to Landlord immediately, together with reimbursement to Landlord for any returned check charges incurred by Landlord in connection
with the delinquency. In the event Tenant tenders any payment of Rent or Additional Rent to Landlord, and said payment check is
returned to Landlord due to insufficient funds in Tenant’s account, then Landlord may thereafter request any or all such future
payments to be remitted by Tenant to be in “Certified Funds.” Acceptance of such late charges by the Landlord shall in
no event constitute a waiver of Tenant’s default with respect to such overdue amount, nor prevent Landlord from exercising any
of the other rights and remedies granted hereunder. Landlord’s acceptance of any late payment(s) without opting to assess a late
charge in no way shall constitute a waiver of Landlord’s rights, including the right to assess such charges in the future nor Tenant’s
obligations hereunder.

 

ARTICLE 5 - TAXES

 

5.01       Real Property Taxes.

 

(a)            Upon
the Commencement Date, Tenant will pay to Landlord, in accordance with ARTICLE 1, Section 1.10(b), Tenant’s estimated pro
rata share the taxes and assessments levied and assessed for that year. Subsequently, Tenant will pay Tenant’s pro rata share
of the estimated taxes as defined as Additional Rent to thE movE, including the cost of any mutually agreed additional professional
services rendered to Landlord (or any other expenses incurred by Landlord) in connection with any action to reduce the assessed
valuation of thE movE or any portion thereof. If the Premises and underlying realty are not separately assessed, Tenant’s share
of such taxes and assessments shall be determined by multiplying the total amount due by a fraction, the numerator of which is
the floor area of the Premises and the denominator of which is the total floor area of the improvements covered by the tax bill.
For the purposes of this Lease, floor area shall be measured from the exterior surface of exterior walls (and from the extensions
thereof, in the case of openings) and from the center of interior demising partitions, including mezzanines, warehousing or storage
areas, clerical or office areas and employee areas. Such taxes shall be paid in equal monthly installments as determined in subpart
5.01(b) below.

 

(b)            The
amount of each such installment shall be determined by Landlord in accordance with the provisions of subparagraph (a) above on
the basis of Landlord’s good faith estimate of the total taxes and assessments which will be due and payable in regard to thE movE
for the calendar year concerned. Such estimate may be revised by Landlord from time to time as additional information becomes available,
and the amount of the monthly installment due from Tenant hereunder shall be increased or decreased accordingly. Notwithstanding
the foregoing, Tenant is obligated to pay Tenant’s Pro Rata Share as determined in accordance with subparagraph (a) above. Any
deficiency between the amount of Tenant’s actual share of such taxes and assessments for any calendar year and the total amount
paid by Tenant in installments during such year shall be paid to Landlord by Tenant within fifteen (15) days after receipt by Tenant
of notice of such deficiency which notice may be given by Landlord at any time prior to June 1 of the subsequent year (or later
in the event Landlord is delayed by the taxing authorities, or is pending information from tax assessment appeal, etc.). Any surplus
of installments paid over amount due shall be credited by Landlord to the first installment of Rent coming due from Tenant after
the date of such accounting recognizing the credit or shall be refunded to Tenant if the Lease Term has ended.

 

(c)            If
at any time during the Lease Term under the Laws of the United States government, state, county, city, or any political subdivision
or owners association thereof in which the Premises are situated, a tax or excise on rent or any other tax or assessment described
is levied or assessed against Landlord on account of rentals payable to Landlord hereunder, such tax, excise or assessment shall
be considered “taxes” for the purposes of this Article, excluding, however, from such tax or excise all general income
taxes, gift taxes, inheritance taxes estate taxes, transfer tax, gains tax, and any charges, penalties, or interest imposed as
the result of Landlord’s failure to comply with the law.

 

5.02       Personal
Property Taxes. Tenant shall pay all taxes on its personal property and trade fixtures located in the Premises. In the event
any or all of the Tenant’s leasehold improvements, equipment, furniture, fixtures and other personal property shall be assessed
and taxed with the real property, Tenant shall pay to Landlord its share of such taxes within thirty (30) days after delivery to
Tenant by Landlord of a statement in writing setting forth the amount of such taxes applicable to Tenant’s property.

 

ARTICLE 6 - INDEMNIFICATION –AND INSURANCE

 

6.01       Indemnification.

 

(a)            Tenant shall indemnify and hold Landlord harmless from and against all costs, claims, expenses, penalties, liens and liabilities
of whatsoever nature arising from any act, omission or gross negligence of Tenant and its employees, agents, guests and invitees,
in connection with Tenant’s use or occupancy of the Premises, or arising from any accident, injury or damage to person or property
during the term hereof in or about except as provided in this Lease. Such indemnification shall only extend to the limits of Tenants
insurance. Such indemnification shall not extend to any damages that are the result of the gross negligence or willful misconduct
of Landlord or its employee or agents. Landlord shall not be responsible or liable to Tenant or to those claiming by, through or
under Tenant for any loss or damage occasioned by or through the acts, omissions or gross negligence of the occupants of adjoining
premises or any part of thE movE.

 

(b)           Landlord shall indemnify and hold Tenant harmless from and against all costs, claims, expenses, penalties, liens and liabilities
of whatsoever nature arising from any act, omission or gross negligence of Landlord and its employees, agents, guests and invitees,
or arising from any accident, injury or damage to person or property during the term hereof in or about except as provided in this
Lease. Such indemnification shall only extend to the limits of Landlord’s insurance. Such indemnification shall not extend
to any damages that are the result of the gross negligence or willful misconduct of Tenant or its employee or agents. Tenant shall
not be responsible or liable to Landlord or to those claiming by, through or under Landlord for any loss or damage occasioned by
or through the acts, omissions or gross negligence of the occupants of adjoining premises or any part of thE movE.

 

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6.02       Tenant’s
Insurance. Tenant will, from and after the earlier of Tenant entering into the Premises or Commencement Date and until the
expiration or earlier termination of the Term, at Tenant’s sole expense, keep any Leasehold Improvements and other alterations
or improvements to the Premises made by Tenant and all of Tenant’s machinery, equipment, furniture, fixtures, personal property
(including also property under the care, custody, or control of Tenant) and business interests which may be located in, upon or
about the Premises insured for the benefit of Tenant in an amount equivalent to the full replacement value or insurable value thereof
against:

 

(a)            loss
or damage by fire; and

 

(b)           such
other risk or risks of a similar or dissimilar nature as are now, or may in the future be, customarily covered with respect to
a tenant’s machinery, equipment, furniture, fixtures, personal property and business located in a building similar in connection,
general location, use, occupancy and design to the Building, including, but without limiting the generality of the foregoing, windstorms,
hail, explosions, vandalism, theft, malicious mischief, civil commotion and such other coverage as Tenant may deem appropriate
or necessary.

 

(c)            Tenant
covenants and agrees to maintain throughout the Lease Term, a policy or policies of insurance providing insurance coverage for
Tenant’s liability for damage to the Building and its indemnification requirement under this Lease to be insured under standard
hazard, fire, and extended coverage, plate glass insurance, comprehensive general liability insurance, and including coverage for
bodily injury and death, property damage, personal injury (employee and contractual liability exclusions deleted), and broad form
property damage insurance, with a replacement coverage of not less than ninety percent (90%), and with regard to liability insurance,
insuring both Landlord and Tenant against all claims, demands, or actions arising out of or in connection with Tenant’s use or
occupancy of the Premises, or by the condition of the Premises, fire legal liability, and medical payment coverage issued by an
insurance company qualified to do business in the state of Colorado. Coverage shall be written on an occurrence basis., and such
insurance will be on a commercial general liability form including, without limitation, personal injury and contractual liability
for the performance by Tenant of the indemnity agreements set forth in this Lease and shall contain the following minimum limits
of liability: One Million and 00/100 Dollars ($1,000,000.00) for injury (or death) to any person, One Million and 00/100
Dollars ($1,000,000.00) for injury (or death) to any two or more persons, and Five Hundred Thousand and 00/100 Dollars ($500,000.00)
with respect to property damage. All such policies shall name Landlord and the property manager (if any) as additional insureds,
and shall provide that the same may not be canceled or altered except upon thirty (30) days prior written notice to Landlord. All
insurance maintained by Tenant shall be primary to any insurance provided by Landlord. Tenant shall provide copies of such policies,
or duly executed certificate(s) of such insurance, along with all corresponding endorsements, to Landlord upon the Commencement
Date of the Lease term and at least thirty (30) days prior to any annual renewal date thereof. Such One Million Dollar ($1,000,000.00)
limit may be increased from time to time in the reasonable discretion of Landlord. If Tenant should fail to comply with the foregoing
requirement relating to insurance, Landlord may obtain such insurance and Tenant shall pay to Landlord on demand as Additional
Rent hereunder the premium cost thereof plus interest at the maximum contractual rate (but in no event to exceed 11⁄2% per
month) from the date of payment by Landlord until repaid by Tenant.

 

(d)            Each
party shall include in each of its policies insuring against loss, damage, or destruction by fire or other casualty a waiver of
the insurer’s right of subrogation against the other party.

 

6.03       Fire
and Casualty Insurance. Landlord shall keep the building of which the Premises are part and thE movE insured against loss or
damage by fire or other casualty to the extent of at least eighty percent (80%) of the full insurable value thereof, including
all improvements, alterations, additions and changes made by the Landlord. All proceeds of such insurance shall belong solely to
the Landlord. Tenant shall not be named as an insured party in any such insurance policies procured by Landlord; however, Landlord
shall cause its insurance policy or policies pursuant hereto to be written in a manner so as to provide that the insurance company
waives all rights of recovery by way of subrogation against Tenant in connection with any loss or damage covered by the policy
unless caused by Tenant, its licenses, agents, invitees, servants or employees. Tenant shall not be liable to Landlord for any
loss or damage covered by such insurance unless caused by Tenant, its licenses, agents, invitees, servants or employees. Landlord
and Tenant agree that in the event the building of which the Premises are part, thE movE, the Premises or its contents are damaged
or destroyed by fire or other insured casualty, the right, if any, of either party against the other (including its officers, directors,
shareholders, partners, employees and agents) with respect to such damage or destruction are hereby waived so long as such party
maintained the insurance required in this Lease. All policies of fire and/or extended coverage or other insurance covering the
Premises or its contents shall contain a clause or endorsement providing in substance that the insurance shall not be prejudiced
if the insureds have waived right of recovery from any person or persons prior to the date and time of loss or damage, if any.

 

ARTICLE 7 - UTILITIES

 

Landlord, at Landlord’s
expense, shall deliver the Premises with 1 ton of HVAC for every 300 rentable square feet within the Premises and 3-Phase, 200
amp electrical service stubbed to the Premises. Tenant shall pay for all electricity, gas, water, telephone or any other utilities
used by it in connection with the Premises effective as of the Possession Date and shall not permit any utilities to be discontinued
or disconnected without the prior written consent of Landlord. Landlord may install re-registering or allocation meters and collect
any and all charges aforesaid from Tenant, making returns to the proper public utility companies, governmental units or other suppliers
of such public utilities. For all such services that are separately metered to Tenant, Landlord shall ensure that such payments
and costs are excluded from the calculations of Common Area expenses charged to Tenant.

 

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ARTICLE 8 - COMMON AREAS

 

8.01       Definition
of Common Areas. The term “Common Areas” applies to all areas which are now or hereafter made available for general
use, convenience and benefit of Landlord and all tenants of thE movE, including, without limiting the generality of the foregoing,
automobile parking areas, driveways, sidewalks, open and enclosed courts, restrooms, roofs and canopy areas and landscaped and
planted areas. The Common Areas may be altered, reduced or added to by Landlord at any time in its sole discretion, provided that
Landlord uses reasonable efforts to minimize any interference with Tenant’s use and occupancy of, visibility of or access to the
Premises. Landlord grants Tenant, its employees, invitees, licensees and other visitors a nonexclusive license for the Lease Term
to use the Common Areas in common with others entitled to use the Common Areas, subject to the terms and conditions of this Lease.

 

8.02       Use
of Common Areas. Tenant and its employees and invitees are, except as otherwise specifically provided in this Lease, authorized,
empowered and privileged to use the Common Areas in common with other persons during the term of this Lease. Landlord shall maintain
and operate, or cause to be maintained and operated, the Common Areas at all times following completion thereof for the benefit
and use of the customers and patrons of the Tenant, and of other tenants, owners and occupants of thE movE.

 

8.03       Maintenance
of Common Areas. The Landlord shall keep, or cause to be kept, the common areas owned by Landlord in a neat, clean, and orderly
condition, properly lighted and landscaped, and shall repair any damage to the facilities thereof. Such maintenance may include,
by way of example but not as a limitation or obligation: (i) general maintenance and repairs; (ii) maintenance, resurfacing, painting
and restriping of parking areas, drive lanes and driveways; (iii) cleaning, steam cleaning, sweeping and janitorial services; (iv)
maintenance, repair and replacement of sidewalks, curbs, and fascia of the shops and buildings constituting thE movE; (v) maintenance
and repair of sprinkler systems, planting, pruning and landscaping; (vi) maintenance, repair and restoration of lighting and utilities;
(vii) maintenance and improvement of signs, directional signs and other markers and bumpers; (viii) snow removal; (ix) maintenance
and repair of any roofs, roof drain systems, fire protection systems (if applicable), lighting systems, storm drainage systems
and any other utility systems; (x) employment of personnel to implement such services, including, if Landlord deems necessary,
the cost of security guards; (xi) timely payment of real and personal property taxes and assessments or surcharges relating to
the Common Areas; (xii) installation and maintenance of a security alarm system for the tenants in the Building (if Landlord deems
necessary); (xiii) maintenance of adequate public liability and property damage insurance on the Common Areas; and (xiv) reasonable
improvement of the Common Areas undertaken from time to time by Landlord all of the above in its sole discretion. Landlord may
cause any or all of said services to be provided by an independent contractor or contractors. Landlord may also perform such maintenance
and services in relation to any part of the Common Areas not owned by Landlord. Landlord is not required to perform any particular
maintenance or service in regard to all or any part of the Common Areas if in its judgment such service is inappropriate, not sufficiently
beneficial or unnecessary.

 

8.04       Payment
of Common Area Expenses. Pursuant to Article 4, Tenant shall pay to Landlord Tenant’s Pro Rata Share of all expenses
incurred by Landlord in connection with the maintenance and operation of the Common Areas together with Tenant’s Pro Rata
Share of the reasonable management fees Landlord pays to the manager of thE movE, and a reasonable allowance for Landlord’s
overhead costs not to exceed two and one-half percent (2.5%) of the costs described in this Section 8.04 (collectively “Common
Area Expenses” or “CAM”). Payment of Common Area Expenses shall be made in accordance with the provisions of
this paragraph (and following applicable paragraphs). Notwithstanding the foregoing, Operating Costs shall not include:
costs of a capital nature except as provided in Section 8.04(e); costs resulting from the gross negligence or willful misconduct
of Landlord, its employees, agents and/or contractors; penalties or costs for late payment or violations of leases, agreements,
tax obligations, or other legal obligations of Landlord costs related to validated parking programs; legal, auditing, consulting,
brokerage or other professional fees paid or incurred in connection with negotiations or disputes related to financings, refinancing,
development, construction, leasing or sales of thE movE or any portion thereof; services, items and benefits for which Tenant
or any other tenant or occupant of thE movE specifically reimburses Landlord or for which Tenant or any other tenant or occupant
of thE movE pays third persons; tenant allowance or concessions incurred in completing, fixturing, furnishing, renovating or otherwise
improving, decorating or redecorating space for tenants or other occupants of thE movE, or vacant, leasable space in thE movE;
cost of work performed exclusively for any other tenant in thE movE; work performed on other properties by employees of Landlord
or Landlord’s agents; any other costs incurred by Landlord its employees or agents to the extent not for the benefit of
thE movE or otherwise not fairly and equitably allocable to thE movE in accordance with generally accepted accounting principles
and sound property management practices. Landlord agrees to limit Tenant’s controllable Common Area Expense increases to
no more than one hundred five percent (105%) of the Common Area Expenses of the prior calendar year (calculated on a cumulative
basis). Controllable Common Area Expenses are all costs included in Additional Rent with the exception of costs of snow and ice
removal from Building Common Areas such as Building sidewalks, entry ways and other adjacent areas, costs of water, sewer, electricity,
natural gas and other Building utilities, taxes, to include any association fees, charges and assessments and insurance.

 

(a)            Tenant’s
pro rata share of CAM (“Tenant’s Common Area Share”) shall be that portion of all of such estimated expenses that is
equal to the proportion thereof which the Floor Area of the Premises bears to the Floor Area of the Building.

 

(b)           
From and after the Lease Commencement Date, but subject to adjustment as provided in subsection 8.04(c), Tenant shall pay
to Landlord concurrently with the monthly installments of Minimum Rent payable pursuant to paragraph 4.01 above, an amount estimated
by Landlord to be Tenant’s Common Area Share for such month.

 

(c)            Within
thirty (30) days following the end of each calendar quarter, Landlord shall furnish Tenant a statement covering the calendar quarter,
certified as correct by an authorized representative of Landlord, showing the actual amount of Tenant’s Common Area Share for such
calendar quarter and the payments made by Tenant with respect to such period pursuant to subsection 8.04(b). If Tenant’s Common
Area Share exceeds Tenant’s payments during such calendar quarter, Tenant shall pay Landlord the deficiency within thirty (30)
days after receipt of such statement. If said payments exceed Tenant’s Common Area Share, the excess shall be credited against
the next due Additional Rent payment or paid to Tenant if the Lease Term has then ended.

 

    5

     

    

 

(d)            If Tenant disputes an adjustment submitted by Landlord or a proposed increase or decrease in the Common Area Expenses, Tenant
shall give Landlord notice of such dispute within thirty (30) days after Tenant’s receipt of the adjustment. If Tenant does not
give Landlord timely notice, Tenant waives its right to dispute the particular adjustment. If Tenant timely objects, Tenant may
engage its own certified public accountants (“Tenant’s Accountants”) to verify the accuracy of the statement complained
of or the reasonableness of the estimated increase or decrease. Tenant’s Accountants shall be required to enter into a reasonable
confidentiality agreement satisfactory to Landlord. If Tenant’s Accountants determine that an error has been made, Landlord’s Accountants
and Tenant’s Accountants shall endeavor to agree upon the corrective measures for same, failing which, such matter shall be submitted
to an independent certified public accountant selected by Landlord and Tenant for a determination which will be conclusive and
binding upon Landlord and Tenant. Notwithstanding the foregoing, should Tenant be successful in disputing Landlord’s proposed
Common Area Expense charges Landlord shall be responsible for Tenant’s costs incurred in the action in an amount that is
equal to the lesser of the amount found to be in error in the most recent year or $750 and should Tenant’s claim fail Tenant
shall be responsible to Landlord to Landlord’s costs associated with defending the action in an amount not to exceed $750.
Such costs shall be refunded to Tenant should it be determined that Landlord’s proposed increase or decrease was in error.
Notwithstanding the pendency of any dispute, Tenant shall continue to pay Landlord the amount of the Estimated Payment or adjustment
determined by Landlord’s Accountants until the adjustment has been determined to be incorrect. If it is determined that any portion
of the Common Area Expenses were not properly chargeable to Tenant, Landlord shall credit the overage against the next due Additional
Rent or refund the appropriate sum to Tenant.

 

(e)            Operating Costs may not include capital improvements and structural repairs and replacements to the Building and the Common
Areas to conform to changes subsequent to the date of issuance of the shell and core certificate of occupancy for the Building
in any Applicable Laws (herein “Required Capital Improvements”); and the costs of any capital improvements and structural
repairs and replacements designed primarily to reduce Operating Expenses (herein “Cost Savings Improvements”).

 

8.05       Landlord
Liability. Nothing contained in this article shall be deemed to create any liability upon Landlord for any damage to motor
vehicles of customers or employees or for loss of property from within such motor vehicles while located on the Common Areas, unless
caused by the gross negligence of the Landlord, its agents, servants or employees.

 

ARTICLE 9 - USE OF PREMISES

 

9.01       Tenant
shall use the Premises solely for Tenant’s Use under the name specified in Article 1. Tenant shall not use or permit the Premises
to be used for any other purpose or purposes or under any other name whatsoever without the written consent of the Landlord being
first obtained. The Tenant further covenants and agrees that it will not suffer or permit any use of the Premises or any part thereof
for any use or purpose in violation of the laws of the United States of America, or the laws, ordinances, regulations and requirements
of the state, county and city or owners association where thE movE is situated, or other lawful authorities, and that the Premises,
and every part thereof, shall be kept by Tenant in a clean and wholesome condition, free of any objectionable noises, odors or
nuisances at all times during the Lease Term. Tenant shall bear sole responsibility to ensure that music/sound will not objectionably
permeate into adjacent tenants premises or Common Areas, and in such event agrees to remedy and rectify such “permeation”
to the satisfaction of said adjacent tenant(s) by any means necessary including if necessary installing additional insulation/wall/sound
barriers. All trash shall be contained within the Premises or in an appropriate outside receptacle as directed by Landlord, and
unless contracted for by Landlord and reimbursed to Landlord as part of CAM, shall be collected regularly at Tenant’s expense.
All health, safety and police regulations shall, in all respects and at all times be fully complied with by Tenant, and Tenant
shall defend Landlord from all charges for such.

 

9.02       Reserved
Rights. Landlord reserves (i) subject to the terms and provisions of this Lease, the use of the exterior rear and side walls
and roof of the Premises and the exclusive use of any space between the ceiling of the Premises and the floor above or the roof
of the Building; (ii) the right to install, maintain, use, repair and replace pipes, ducts, conduits and wires leading into or
running through the Premises (in locations which will not materially interfere with Tenant’s use of the Premises); (iii)
the right to cause or permit the Building to be expanded, enlarged or altered, (so long as such does not materially or substantively
adversely impact or inconvenience Tenant’s use of the Building or the Premises); (iv) the right to name the Building and
to change the name or street address of the Building; (v) the right to install and maintain a sign or signs on the exterior or
interior of the Building; (vi) the right to designate all sources furnishing sign painting, and lettering, ice, drinking water,
towels, toilet supplies, shoe shining, vending machines, mobile vending service, catering, and like services used on the Premises;
(vii) the right during the last 90 days of the Term, if during or prior to that time Tenant vacates the Premises, to decorate,
remodel, repair, alter or otherwise prepare the premises for reoccupancy, without affecting Tenant’s obligation to pay rental
for the Premises;); (viii) the right to constantly have pass keys to the Premises (so long as such does not materially or substantively
adversely impact or inconvenience Tenant’s use of the Building or the Premises; (ix) the right at any time in the event of
an emergency, or otherwise at reasonable time, to take any and all measures, including inspections, repairs, alterations, additions
and improvements to the Premises, as may be necessary or desirable for the safety, protection or preservation of the Premises,
, or as may be necessary or in order to comply with all Laws; (x) the right to show the Building to prospective purchasers, lenders
or tenants.

 

ARTICLE 10 - GOOD MERCHANDISING STANDARDS

 

During the term of this Lease,
Tenant agrees to take all means necessary to prevent any manner of operation or use of the Premises not in accordance with good
merchandising standards, including, but without limitation, the use thereof for solicitation, demonstrations, itinerant vending,
or any other activity inconsistent with such standard or any operation or use thereof or activity therein that would interfere
with the performance or observance of this Lease or the rights referred to herein or the rights and easements of other tenants
in thE movE. Without limitation, Tenant expressly covenants and agrees that Tenant will not use or suffer or permit any person
to use in any manner whatsoever, the Premises or thE movE or any parts thereof, for any purpose calculated to injure the reputation
of the Premises or of thE movE or of adjoining property, or for any immoral or unlawful purposes whatsoever, or for any use, trade,
business, occupation or vocation whatsoever that may in any way be illegal, disreputable or immoral.

 

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ARTICLE 11 - RULES AND REGULATIONS

 

The Rules and regulations attached
hereto as Exhibit F, as well as such reasonable rules and regulations as may be hereafter adopted by Landlord or Owner upon at
least ten (10) days prior notice to Tenant relating to the Common Areas and the operation of thE movE (generally the “Rules
and Regulations”), are hereby expressly made a part hereof. Tenant shall abide by the Rules and Regulations and shall use
its best efforts to assure that the Rules and Regulations are observed by its employees, patrons and invitees; however, in the
event of a conflict between this Lease and any of the Rules and Regulations, the terms of the Lease shall control.

 

ARTICLE 12 - ADVERTISING AND SIGNS

 

Tenant shall not erect any
signs on or about the Premises beyond those permitted in Section 1.16, nor utilize any form of advertising, without the prior written
consent of Landlord and in accordance with Exhibit F, Rules and Regulations.

 

Tenant, upon Lease signature
shall immediately hire a reputable sign company to design Tenant’s illuminated neon storefront sign in compliance with paragraphs
11 and 12 of the Rules and Regulations. Two (2) sign drawings shall be submitted for Landlord’s written approval, prior to construction.
Signs must be completed and installed within forty five (45) days following the Commencement Date. Unauthorized signs, banners,
window placards, A-frames and sidewalk signs and other advertising media installed without the prior written consent of Landlord,
shall be subject to removal by Landlord at Tenant’s sole cost and expense, plus an additional twenty percent (20%) administration
charge.

 

ARTICLE 13 - MECHANIC’S LIENS

 

Tenant shall keep the Premises
at all times during the Lease Term free of mechanic’s and materialmen’s liens and other liens of like nature, other
than liens created and claimed by reason of any work done by or at the instance of Landlord, and at all times shall fully protect
and indemnify Landlord against all such liens or claims and against all attorneys’ fees and other costs and expenses growing
out of or incurred by reason or on account of any such liens or claims. Should any lien be attached to the Premises claiming any
debt by Tenant, Tenant shall cause such lien to be released within ten (10) days from the filing thereof. Tenant shall have the
right to contest in good faith the validity of any such lien, provided, at Landlord’s option, (a) Tenant shall give Landlord
such security as may be reasonably requested to insure the payment of the amount claimed and to prevent the sale, foreclosure,
or forfeiture of any interest in the Premises on account of such lien, or (b) Tenant shall cause any such lien to be replaced
by a bond in the amount equal to one hundred fifty (150%) percent of the amount of the lien or such greater amount as may be required
by Colorado Statutes to release such lien, and provided that in any event on final determination of the lien Tenant shall immediately
pay any judgment rendered and will cause the lien to be released. 

During the continuance of any construction of the
Premises, Tenant shall permit Landlord to post such notices as Landlord elects to prevent the attachment of mechanic’s liens to
the Premises, including, but not limited to, the notice attached hereto as Exhibit E.

 

ARTICLE 14 - MAINTENANCE AND ALTERATIONS

 

14.01       Maintenance
by Tenant. Tenant shall at all times from and after the Commencement Date and at its own cost and expense, repair, replace,
maintain, and clean in good and tenantable condition all components of the Premises that serve exclusively the Premises including,
without limitation, floor covering, all fixtures, air conditioning and heating equipment serving the Premises, and other equipment
therein the Premises, all Tenant’s signs, locks and closing devices, and all window sash, casement or frames, door and door frames,
security grills or similar enclosures, and all such items of repair, maintenance and improvement or reconstruction as may at any
time or from time to time be required by a governmental agency having jurisdiction thereof. Glass within the entry door to the
Premises and any glass sidelights at the entry to the Premises shall exist at the sole risk of Tenant and shall be regularly cleaned
inside and outside by Tenant, and any glass broken or damaged shall be promptly replaced by Tenant with glass of the same kind,
size and quality. Tenant shall also repair any damage in connection with any burglary or forcible entry into the Premises at the
Tenant’s sole expense. If Tenant refuses or neglects to make repairs and/or maintain the Premises, or any part thereof, in a manner
reasonably satisfactory to Landlord, Landlord shall have the right, after giving Tenant fifteen (15) days written notice of its
election to do so, to make or cause to be made such repairs or perform such maintenance/replacement/repair(s) on behalf of and
for the account of Tenant. In such event, such work shall be paid for by Tenant immediately upon receipt of a bill therefore, plus
an additional twenty percent (20%) administration charge payable by Tenant to Landlord. Any damage to adjacent premises or the
Common Areas caused by Tenant’s use of the Premises shall be repaired at the sole cost and expense of Tenant.

 

14.02       Maintenance
by Landlord.  Landlord shall keep and maintain in clean and good tenantable condition and repair the roof, exterior walls,
windows, pipes and conduits outside the Premises for the furnishing to the Premises of various utilities (except to the extent
that the same are the obligation of the appropriate utility company or Tenant); provided, however, that Landlord shall not be required
to make repairs necessitated by reason of the negligence of Tenant or anyone claiming under Tenant or by reason of the failure
of Tenant to perform or observe any conditions or agreements in this Lease contained, or caused by alterations, additions or improvements
made by Tenant or anyone claiming under Tenant, and shall maintain in good condition and repair the Common Areas as well as all
other structural components of the building in which the Premises is located. Except as provided in Article 16 hereof, there shall
be no abatement of rent and no liability of Landlord by reason of any injury to or interference with Tenant’s business arising
from the making of any repairs, alterations or improvements in or to any portion of the Building, the Common Areas or the Premises
or in or to fixtures, appurtenances and equipment therein. Notwithstanding anything to the contrary contained in this Lease, Landlord
shall not in any way be liable to Tenant for failure to make repairs as herein specifically required of it unless Tenant has previously
notified Landlord, in writing, of the need for such repairs and Landlord has failed to commence and complete said repairs within
fifteen (15) days following receipt of the Tenant’s written notification, or in the case of force majeure.

 

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It is understood and agreed
that the Landlord shall be under no obligation to make any repairs, alterations, renewals, replacements or improvements to and
upon the Premises or the mechanical equipment exclusively serving the Premises at any time except as expressly provided in this
Lease.

 

14.03      Access
to Premises. Landlord or Landlord’s agents may enter the Premises at any time for emergency purposes or following at least
one (1) business day advance notice to Tenant (which may be verbal) for examination and inspection, or to perform, if Landlord
elects, any obligations of Tenant that Tenant fails to perform or such cleaning, maintenance, janitorial services, repairs, replacements,
additions, or alterations as Landlord deems necessary for the safety, improvement, or preservation of the Premises or thE movE
or other portions of the Building or as required by Applicable Laws. Landlord or Landlord’s agents may also show the Premises to
prospective tenants, purchasers and mortgagees. Any such reentry does not constitute an eviction or entitle Tenant to abatement
of Rent. Notwithstanding anything to the contrary herein, upon any entry into the Premises, Landlord shall take all commercially
reasonable efforts to minimize disruption to the business in the Premises and not to interfere with the Tenant’s permitted
use therein.

 

14.04      Alterations.
Tenant shall not make any alterations, additions or improvements in the Premises without the prior written consent of Landlord.

 

14.05      Surrender
of Premises. Upon any surrender of the Premises, the Tenant shall redeliver the Premises to the Landlord in good order, condition
and state of repair, ordinary wear and tear excepted, and excepting such items of repair as may be the Landlord’s obligation hereunder.
All permanent alterations, additions or improvements, including but not limited to all fixtures, (except for trade fixtures) partitions,
counters, venetian blinds, linoleum and carpet made or installed by either of the parties hereto (or by previous Tenant or Assignor,
etc.) upon the Premises shall be the property of the Landlord and shall remain upon and be surrendered with the Premises as a part
thereof, at the termination of this Lease, without disturbance, molestation or injury, provided that if Landlord so elects, Landlord
may, after no less than thirty (30) days notice prior to the expiration of the then-current Lease Term, require Tenant to remove
any or all such items at Tenant’s sole cost and expense, without damage to the Premises. In the event the Premises are damaged
from said removal, and/or Tenant surrenders the Premises in poor condition and/or in need of repairs which are the obligation of
Tenant, Landlord’s costs in causing said repairs/restoration shall be first paid by Tenant through its Security Deposit funds (unless
already applied by Landlord against other sums, rents, etc. due hereunder) pursuant to Article 22, and any deficiency due by Tenant
shall be paid to Landlord by Tenant within ten (10) days following Tenant’s receipt of Landlord’s statement of amounts due. In
addition, Tenant acknowledges that during the time in which Landlord or Landlord’s contractor performs such repairs, replacement/restoration
on behalf of Tenant, Landlord may be delayed in delivering the Premises to a replacement tenant, and therefore delayed in receiving
the replacement tenant’s rents. Therefore, Tenant agrees to pay within ten (10) days from receipt of same notice, Landlord an amount
equal to Tenant’s then current Minimum and Additional Renton a per diem basis, for the time it takes Landlord/Landlord’s contractor
to restore the Premises on behalf of Tenant.

 

ARTICLE 15 - ASSIGNING OR SUBLEASING

 

(a)            Tenant
covenants and agrees not to make or permit a Transfer by Tenant, as hereinafter defined, without Landlord’s prior written
consent, which consent shall not be unreasonably withheld. A “Transfer” by Tenant shall include an assignment of this
Lease, a sublease of all or any part of the Premises or any assignment, sublease, transfer, mortgage, pledge or encumbrance of
all or any part of the Premises or of Tenant’s interest under this Lease or in the Premises, by operation of law or otherwise,
or the use or occupancy of all or any part of the Premises by anyone other than Tenant. Any such Transfer by Tenant without Landlord’s
written consent shall be void and shall constitute a Default by Tenant under this Lease. Notwithstanding any Transfer by Tenant,
Tenant shall not be relieved of its obligations under this Lease and Tenant shall remain liable, jointly and severally, and as
a principal, not as a guarantor or surety, under this Lease, to the same extent as though no Transfer by Tenant had been made,
unless specifically provided to the contrary in Landlord’s prior written consent. The acceptance of rent by Landlord from
any person other than Tenant shall not be deemed to be a waiver by Landlord of the provisions of this Section or of any other provision
of this Lease and any consent by Landlord to a Transfer by Tenant shall not be deemed a consent to any subsequent Transfer by Tenant.

 

(b)            If
Tenant requests Landlord’s consent to a Transfer, Tenant shall submit to Landlord in writing the name of the proposed transferee,
the effective date of the Transfer, the terms of the proposed Transfer, a copy of the proposed form of sublease or assignment,
and such information as to the business, reputation, responsibility, and financial capacity of the transferee as Landlord shall
reasonably require to evaluate the request. It shall be reasonable for Landlord to withhold its consent to any Transfer where:
(i) in the case of a sublease, the subtenant has not acknowledged that the provisions of this Lease control over any inconsistent
provision in the sublease; or (ii) in Landlord’s opinion, the proposed transferee does not have the ability to perform
its obligations under the assignment or sublease; or (iii) the intended use by the transferee would damage the goodwill or
reputation of the Building; or (iv) the intended use is not compatible with other uses of the Building, conflicts with another
tenant’s right to exclusive use, or is not permitted by applicable law or covenant. The foregoing criteria are not exhaustive,
and Landlord may withhold consent to a Transfer on any other reasonable grounds. Tenant shall reimburse Landlord for all of Landlord’s
costs incurred in connection with any request for consent to a Transfer, including, without limitation, a reasonable sum for attorneys’
fees.

 

(c)            Notwithstanding
the foregoing, Landlord shall, at Landlord’s option, have the right in lieu of consenting to a Transfer by Tenant, to terminate
this Lease as to the portion of the Premises that is the subject of the proposed Transfer, and to enter into a new lease with the
proposed transferee and receive directly from the proposed transferee the consideration agreed to be given by such transferee to
Tenant for the Transfer by Tenant. Alternatively, at the request of Landlord, Tenant shall pay over to Landlord all sums received
by Tenant in excess of the rent payable by Tenant hereunder which is attributable on an equally allocable Floor Area basis, to
any subletting of all or any portion of the Premises so subleased, and all consideration received on account of or attributable
to any assignment of this Lease.

 

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(d)            In
the event of a Transfer by Tenant, then any option to renew this Lease, right to extend the Lease Term, or option or right of refusal
to expand the Premises shall automatically terminate.

 

(e)            Tenant
covenants and agrees to pay to Landlord the amount of $250.00 as an administrative charge to compensate Landlord for processing
such request and any other reasonable costs and expenses incurred by Landlord in connection with such request (including, without
limitation, reasonable attorneys’ fees), whether or not the consent of Landlord is given to the Transfer requested by Tenant.
Tenant shall pay such $250.00 administrative charge and an estimated amount of the other costs and expenses, as determined by Landlord,
which shall be due and payable to Landlord at the time that Tenant submits such request for consent to the Transfer to Landlord;
provided, however, that upon request from Tenant, Landlord shall provide Tenant with the estimated amount of such other costs and
expenses. When the actual amount of such costs and expenses are known by Landlord, then if such estimated amount paid by Tenant
is greater than the actual amount of such costs and expenses, Landlord shall refund any such excess to Tenant. If such estimated
amount paid by Tenant is less than the actual amount of such costs and expenses, Tenant shall pay to Landlord, within ten (10)
days after demand by Landlord, any such additional actual costs and expenses. The payment of such administrative charge and other
costs and expenses by Tenant shall be a condition precedent to the effectiveness of any consent by Landlord to such Transfer.

 

(f)             Notwithstanding
anything to the contrary, Tenant shall not be entitled to make a Transfer to an existing tenant of Landlord or its Related Parties
(as herein defined), or any subtenant or assignee thereof, or any person or entity with whom Landlord or its Related Parties negotiated
or had contact or to whom Landlord has given, or received therefrom, any written or oral proposal regarding a lease of space in
the Building or the Project within the six (6) month period preceding Tenant’s request for such Transfer. Tenant shall not
publicly advertise the rate or other terms upon which Tenant is willing to Transfer the Premises, and all other public advertisements
of a Transfer shall be subject to the prior written approval of Landlord, which approval shall not be unreasonably withheld. Public
advertisement shall include, without limitation, the placement or displays of any signs or lettering on or above the Premises.
If at the time of the proposed Transfer there is any vacant or unoccupied space in the Building or the Project, Tenant shall not
be entitled to Transfer or offer to Transfer the Premises at a rental rate less than the prevailing fair market rental then offered
by Landlord, in its sole and absolute discretion, for such other space.

 

(g)            For
the purposes of this Lease, the term “Transfer” shall also include: the transfer or change, whether voluntary, involuntary
or by operation of law, of twenty-five percent (25%) or more of the control or ownership, whether legal or beneficial, in Tenant
within a twelve (12) month period; the dissolution, merger, consolidation or other reorganization of Tenant; or the withdrawal,
resignation or termination of the majority of any general partners, managers or board of directors of Tenant.

 

(h)           As
a condition to any Transfer by Tenant, Tenant shall acknowledge in writing to Landlord that Tenant shall remain obligated and liable
under this Lease, any assignee or other transferee (other than a subtenant) shall expressly assume all the obligations of Tenant
under this Lease, and any subtenant shall covenant to Landlord to comply with all obligations of Tenant under this Lease as applied
to the portion of the Premises so sublet and to attorn to Landlord, at Landlord’s written election, in the event of any termination
of this Lease prior to the expiration date of the Lease Term; all of which shall be in a written instrument satisfactory to Landlord
and furnished to Landlord not later than fifteen (15) days prior to the effective date of such Transfer.

 

ARTICLE 16 - CONDEMNATION

 

16.01      Taking
of Entire Premises. If the whole or a material portion (as determined by Tenant) of the Premises shall be taken by condemnation
or eminent domain, then the term hereof shall cease as of the day of the vesting of title or as of the day possession shall be
so taken, whichever is earlier. If this Lease is so terminated, all rent or other charges payable by Tenant shall be prorated to
the date of termination.

 

16.02      Partial
Taking. If only a non-material portion of the Premises, the Building of which they are a part or thE movE shall be taken by
condemnation or eminent domain, Landlord shall be entitled to terminate this Lease as of the day of the vesting of title or as
of the day possession shall be so taken, whichever is earlier, upon giving notice thereof to Tenant not later than ninety (90)
days prior to such taking.

 

If Landlord does not elect
to so terminate this Lease, it shall restore the Premises to as nearly like its condition prior to such taking as shall be practicable;
but such work shall not exceed the scope of the work done by Landlord in originally constructing the Premises. Tenant shall, upon
the completion by Landlord of the restoration of the Premises, do all work required of Tenant in accordance with Exhibit C, including
the restoration or replacement of all trade equipment, furniture, furnishings and other installations theretofore installed by
Tenant and necessary for Tenant’s business. Minimum Rent, or a fair and just proportion thereof, according to the nature and extent
of the damage to the Premises, shall be suspended or abated during any such construction.

 

16.03      Ownership
of Damages. As between the parties to this Lease, Landlord will be entitled to receive, and Tenant assigns to Landlord, all
of the compensation awarded upon taking of any part or all of the Building or Premises, including any award for the value of the
unexpired Term. However, Tenant may assert a claim in a separate proceeding against the condemning authority for any damages resulting
from the taking of Tenant’s trade fixtures or personal property, or for moving expenses, business relocation expenses or
damages to Tenant’s business incurred as a result of such condemnation providing such award does not have the effect or impact
to reduce Landlord’s award.

 

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ARTICLE 17 - CASUALTY TO PREMISES

 

17.01      Major
Damage to Premises. If during the last two (2) years of the original or any extension thereof the Premises shall be so damaged
by fire or casualty as to be untenantable as to fifty percent (50%) or more of the Premises floor space, Landlord or Tenant may
cancel this Lease by written notice of cancellation given to the other within thirty (30) days after such damage, and rent and
other charges shall be prorated to the date of such damage. In any other cases of damage to the Premises, Landlord shall, within
thirty (30) days of any casualty affecting the Premises, consult an architect and general contractor regarding the rebuilding or
repair of the Premises to return it to substantially the same condition as on the Lease Commencement Date and the time such it
will take for such rebuilding or repair, and Landlord shall provide Tenant with notice of the plans for rebuilding (the “Rebuild
Notice”). If the Rebuild Notice reveals that the Premises cannot be restored to substantially the same condition within one
hundred eighty (180) days from the date of the casualty, Tenant shall have the right to terminate this Lease by providing a written
termination notice to Landlord within thirty (30) days following Tenant’s receipt of the Rebuild Notice and the Minimum Rent
and Additional Rent owing hereunder shall be abated for the unexpired portion of the Lease.

 

17.02      Damage
to thE movE. If any or all of the Buildings, parking facilities, Common Areas, or common or public facilities comprising thE
movE are damaged by fire or other casualty to such an extent that thE movE cannot, based on a reasonable business decision, be
operated as an office building, then Landlord may cancel this Lease (even though the Premises may not themselves be damaged) on
at least thirty (30) days written notice of cancellation given to Tenant within thirty (30) days after such damage, and thereupon
this Lease shall cease and terminate and the rent and other charges payable by Tenant shall be prorated to the date of such termination.

 

17.03      Other
Casualty. In all cases of destruction or casualty to the Premises which do not result in termination of this Lease pursuant
to the foregoing paragraphs, Landlord shall restore the Premises at its expense. The obligation of the Landlord hereunder shall
be limited to reconstruction of the building and completion of Landlord’s Work. Tenant shall, upon completion of restoration or
rebuilding by Landlord, perform Tenant’s Work and shall replace or restore forthwith any trade fixtures, equipment or other installation
theretofore installed by Tenant. Tenant agrees during any period of reconstruction or repair of the Premises and/or said building
to continue the operation of its business in the Premises to the extent reasonably practicable. Minimum Rent shall be abated or
reduced proportionately during any period in which, by reason of any such damage or destruction, there is a substantial interference
with the operation of Tenant’s business.

 

ARTICLE 18 - DEFAULTS

 

18.01      Events
of Default. The following occurrences shall constitute default under this Lease:

 

(a)            Tenant
fails to pay Minimum Rent, Additional Rent or any other sums payable by Tenant under the terms of this Lease when due, and such
failure continues for three days after notice from Landlord to Tenant of such failure; provided that with respect to monthly installments
of Minimum Rent and Additional Rent, Tenant will be entitled to only two notices of such failure during any Lease Year and if,
after two such notices are given in any Lease Year, Tenant fails, during such Lease Year, to pay any such amounts when due, such
failure will constitute an Event of Default without further notice by Landlord or additional cure period.

 

(b)            Tenant
shall violate or fail to perform any provision of this Lease and shall fail to correct or perform the same within five (5) days
after notice from Landlord;

 

(c)           Tenant
vacates, abandons, or closes its business operation at the Premises for more than ten (10) consecutive days (except as a result
of casualty, condemnation or remodeling) and;

 

(d)            Tenant
has not entered into an assignment or sublease for the Premises with an assignee or subtenant who will be reoccupying the Premises,
and Landlord has provided Tenant 14 days written notice of its intent to terminate the Lease and provided Tenant the opportunity
to cure.

 

(e)            Tenant’s
interest under this Lease or in the Premises is taken upon execution or by other process of law directed against Tenant, or is
subject to any attachment by any creditor or claimant against Tenant and such attachment is not discharged or disposed of within
15 days after levy or Landlord shall determine, on the basis of all reasonable evidence available to it, that Tenant is at the
time of such determination unable to pay its debts as they become due.

 

(f)             Tenant’s
interest under this Lease or in the Premises is transferred or passes to, or devolves upon, any other party in violation of this
Lease or Tenant attempts to transfer its interest under this Lease or in the Premises in violation of the terms of this Lease.

 

18.02       Remedies
on Default. Upon the occurrence of an event of default and at any time thereafter, Landlord, subject to all applicable laws,
may take any or all of the following actions:

 

(a)            In
the case of abandonment, Landlord may at its option re-enter, take possession of the Premises and remove all persons and property
therefrom (such property as may be removed may be stored in a public warehouse or elsewhere at the cost of, and for the account
of Tenant). Landlord shall not be deemed guilty of trespass or liable for the loss or damage occasioned thereby.

 

(b)           Should
Landlord elect to re-enter the Premises, or should it take possession pursuant to legal proceedings or pursuant to any notice provided
for by law, Landlord may, without terminating this Lease make such alterations and repairs as may be necessary in order to relet
the Premises, and relet the Premises or any part thereof upon such terms and conditions as Landlord in its sole discretion may
deem advisable. The rentals resulting from such reletting shall be applied first, to the payment of any costs and expenses of reletting,
including brokerage fees and attorneys’ fees, and of costs of such alterations and repairs; second, to the payment of Minimum Rent
and Additional Rent, together with interest thereon at twelve percent (12%) per annum, due and unpaid hereunder; and the residual,
if any, shall be held by Landlord and applied in payment of future rent or damage as the same may become due and payable hereunder.
If rentals received from such reletting during any month are less than that to be paid during that month by Tenant hereunder, Tenant
shall forthwith pay any such deficiency to Landlord. No such re-entry or taking possession of said premises by Landlord shall be
construed as an election on its part to terminate this Lease unless a written notice of such intention be given to Tenant or unless
the termination thereof be decreed by a court of competent jurisdiction. If Tenant shall, after default, voluntarily give up possession
to Landlord, deliver to Landlord the keys to the Premises, or both, such actions shall be deemed to be in compliance with Landlord’s
rights and the acceptance thereof by Landlord shall not constitute a surrender of the Premises or a termination of this Lease.

 

    10

     

    

 

(c)           Landlord
may at any time after default elect to terminate this Lease. Upon such termination, Landlord may recover from Tenant all damages
it may incur by reason of such breach, including the cost of recovering the Premises, reletting commissions and expenses, costs
of repair to the Premises, reasonable attorneys’ fees, and including the worth at the time of such termination of the excess, if
any, of the amount of Minimum Rent and Additional Rent reserved in this Lease for the remainder of the Lease Term over the then
reasonable rental value of the Premises for the remainder of the Lease Term, all of which amounts shall be immediately due and
payable from Tenant to Landlord. In determining the amount which would be payable pursuant to this subparagraph, the annual rent
for each year remaining in the Lease Term shall be equal to the average of the total annual Minimum Rent and Additional Rent paid
by Tenant from the Lease Commencement Date to the time of default, or during the preceding three (3) full calendar years, whichever
period is shorter.

 

(d)           Nothing
contained in this Lease will limit or prejudice Landlord’s right to prove and obtain as liquidated damages in any bankruptcy,
insolvency, receivership, reorganization, or dissolution proceeding, an amount equal to the maximum allowable by any Laws governing
such proceeding in effect at the time when such damages are to be proved, whether or not such amount be greater, equal or less
than the amounts recoverable, either as damages or Rent, under this Lease.

 

18.03      Recovery
of Attorneys’ Fees and Costs. In the case: suit shall be brought for recovery of possession of the Premises, for the recovery
of Rent or any other amount due under the provisions of this Lease, or because of any breach of any other covenant herein contained
on the part of the Tenant to be kept or performed, and a breach shall be established; then the prevailing party shall be responsible
for and shall pay to the other party all expenses incurred therefore, including all reasonable attorneys’ fees and costs, subject
to the limitations contained in section 8.4(d) as such is applied to that section.

 

18.04      No
Waiver. No waiver of any covenant or condition of this Lease by Landlord shall be deemed to imply or constitute a further waiver
of the same covenant or condition or of any other covenant or condition of this Lease. Whenever in this Lease Landlord reserves
or is given the right and power to give or withhold its consent to any action on the part of Tenant, such right and power shall
not be exhausted by the exercise on one or more occasions, but shall be continuing right and power for the entire term of this
Lease. The acceptance of any sums of money from Tenant following an event of default shall be taken to be a payment on account
by Tenant and shall not constitute a waiver by Landlord of any rights, nor shall it reinstate this Lease or cure a default on the
part of Tenant.

 

18.05      Liability
of Landlord on Default. If, during the Term, Landlord defaults in fulfilling any of its covenants, obligations or agreements
set forth in this Lease, Tenant shall give Landlord (and any mortgagees and/or trust deed holders, provided that prior to such
notice, Tenant has been notified in writing of the address of such mortgagees and/or trust deed holders) notice of such default
and, if at the expiration of 30 days after delivery of such notice, such default will continue to exist, or in the event of a default
which cannot with due diligence be cured within a period of 30 days, if Landlord fails to proceed promptly after the delivery of
such notice and with all due diligence to commence to cure the same and thereafter to prosecute the curing of such default with
all due diligence to completion as soon as reasonably possible, then the mortgagees and/or trust deed holders shall have an additional
thirty (30) days after the expiration of such thirty (30) days within which to cure such default. If such default cannot reasonably
be cured within that time, then such mortgagees and/or trust deed holders shall have such additional time as may be necessary to
cure such default, including, but not limited to, commencement of foreclosure proceedings, if necessary to effect such cure. If
such default is not cured as provided for, then Tenant will be entitled to terminate the Lease and the remaining obligations of
Tenant and Landlord under the Lease thereafter. In no event will Tenant have the right to any right to offset against, or any abatement
of, any monies owing by Tenant hereunder, as a result of Landlord’s default, and Tenant’s remedies will, subject to
the terms of this Lease, be limited to termination of the Lease. Such exculpation and limitation of liability and tenant’s
remedies shall be absolute and without any exception whatsoever.

 

ARTICLE 19 - BANKRUPTCY

 

Landlord may, at its option,
terminate this Lease upon the filing of any petition in bankruptcy or insolvency or for reorganization under the Bankruptcy Act
by or against Tenant, or the making of a voluntary assignment by Tenant for the benefit of its general creditors, or the filing
by Tenant of any petition for an arrangement or composition under the Bankruptcy Act, or the appointment of a receiver or trustee
after notice and hearing to take charge of Tenant’s business, or of any other petition or application seeking relief under any
other federal or state laws now or hereafter providing for the relief of debtors. If such petition be filed by a third party against
Tenant, who desires in good faith to defend against the same, and Tenant is not in any way in default of any obligation hereunder
at the time of the filing of such petition, and Tenant within ninety (90) days thereafter procures a final adjudication that it
is solvent and a judgment dismissing such petition, this Lease shall be fully reinstated as though such petition had never been
filed. In the event of termination as provided for in this Article, Tenant shall pay forthwith to Landlord as damages the amount
provided in paragraph 18.02 (c).

 

ARTICLE 20 – LANDLORD’S LIEN

 

Landlord is hereby granted a subordinated security
interest in all goods, wares, equipment, fixtures, furniture and other personal property of Tenant situated on the Premises (the
“Collateral”) to secure all rentals and other sums of money becoming due hereunder from Tenant, subject to any superior
third party creditors, including but not limited to Heritage Bank. The Collateral shall not be removed from the Premises without
the consent of Landlord until all Minimum and Additional Rent have been paid. Upon the occurrence of any event of default by Tenant,
Landlord may, in addition to any other remedies provided herein or by law, enter the Premises and take possession of the Collateral
without liability for trespass or conversion, and sell the same in accordance with the provisions of Article 9 (or other successor
and/or applicable Articles) of the Uniform Commercial Code as it is then in effect in Colorado. Tenant shall execute from time
to time such financing statements or such other instruments evidencing Landlord’s subordinated security interest in the Collateral
as Landlord may request.

 

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ARTICLE 21 - NOTICES

 

All notices under this Lease shall be given in
writing and shall be deemed to be properly served only if sent, postage prepaid, by certified mail with return receipt requested,
or by Fed Ex, UPS or similar courier overnight mail, to Landlord at Landlord’s Notice Address, or to Tenant at the Premises or
at Tenant’s Notice Address. Such notice shall be deemed to have been given three (3) days after the date upon which the same is
deposited in the United States mail with postage prepaid. Either party may, by written notice to the other, change its Notice Address.

 

ARTICLE 22 - SECURITY DEPOSIT

 

Upon execution of the Lease,
Tenant shall deposited with Landlord the sum specified in Article 1 hereof as the “Security Deposit,” which shall be
held by Landlord without liability for interest as security for the faithful performance by Tenant of all of the terms of this
Lease. Landlord may co-mingle the Security Deposit with Landlord’s other funds and may be used for the day-to-day operations
of the Building. Upon the occurrence of an event of default, the Security Deposit shall be applied against the amounts which Landlord
is entitled to recover from Tenant pursuant to Article 18 (and as otherwise provided in Article 14 and other applicable Articles
herein) unless earlier applied in accordance with the foregoing sentence, the Security Deposit (or so much thereof as is not necessary
to restore the Premises to the condition required by Article 14) shall be returned to Tenant within sixty (60) days after the end
of the Lease Term. In the event of the termination of this Lease pursuant to Article 18 above, such Security Deposit shall be deemed
to be applied first to the payment of rent and other charges due to Landlord for all periods prior to filing of such proceedings.

 

The Security Deposit shall
not be mortgaged, assigned, transferred or encumbered by Tenant without the written consent of Landlord. Landlord shall deliver
the Security Deposit to any purchaser of Landlord’s interest in the Premises, and, upon receipt of a written receipt by Landlord’s
successor in interest, Landlord shall thereupon be discharged from any further liability with respect to the Security Deposit.
If any portion of said deposit is so used or applied in accordance with the foregoing paragraph, Tenant shall, within five (5)
days after written demand therefore, deposit with Landlord an amount sufficient to restore the Security Deposit to its original
amount and Tenant’s failure to do so shall be a default under this Lease.

 

ARTICLE 23 - MANDATORY EXECUTION OF DOCUMENTS
BY TENANT

 

23.01      Subordination.
This Lease is subordinate, junior and inferior to first mortgages and deeds of trust which may now or hereafter affect the Premises
and to any and all advancements to be made thereunder and to all renewals modifications, consolidations, replacements and extensions
thereof; provided that the holder of any such mortgage or deed of trust shall agree in writing that this Lease shall not be terminated
or otherwise affected by the enforcement of any such mortgage, deed of trust, or other encumbrance if at the time thereof Tenant
is not in default under this Lease. Tenant, if requested by Landlord, shall execute and return to Landlord within ten (10) days
such instruments evidencing such agreements regarding subordination, non-disturbance and attornment as Landlord may from time
to time submit to Tenant for signature and if not returned within the ten (10) days, it shall be conclusively deemed that Tenant
consented to the terms of the instrument provided to Tenant. 

 

23.02      Lender’s
Requirements. Anything in this Lease to the contrary notwithstanding, it is agreed that in the event the lender or lenders
which Landlord selects to provide construction or permanent loan financing (or both ) in connection with the construction and permanent
loan financing of thE movE request non-material modifications of any of the provisions of this Lease (except concerning the size
and location of the Premises, the term hereof, the provisions of Exhibit C, and the rental and other charges payable by Tenant
under this Lease or those that increase Tenant’s obligations or decrease its rights), Tenant shall agree to any such modification
in writing within ten (10) days after Landlord’s request therefore.

 

23.03      Estoppel
Certificates. Tenant shall, without charge, at any time and from time to time, execute and deliver to Landlord, or any other
person, firm or corporation specified by Landlord, within ten (10) days after receipt, a certificate substantially in the form
of Exhibit D or such other form provided by Landlord relating to the status of this Lease certifying, among other things, that
this Lease is unmodified and in full force and effect, or if there has been any modification, that the same is in full force and
effect as so modified, and identifying any such modifications; whether or not there are then existing any set-offs or defenses
in favor of Tenant against the enforcement of any of the terms, covenants and conditions of this Lease by Landlord, and if so,
specifying the same, and also whether or not Landlord has observed and performed all of the terms, covenants and conditions on
the part of Landlord to be observed and performed, and if not, specifying the same; and the dates to which Minimum Rent and all
other charges hereunder have been paid; and if not returned within the ten (10) days, it shall be conclusively deemed that Tenant
consented to the terms of the estoppel certificate provided to Tenant.

 

23.04      Property
Covenants. This Lease will be subject to all easements, restrictions and covenants presently existing or hereafter created
for thE movE. Tenant has no right of enforcement of any real property covenants and restrictions affecting the use of thE movE.
If requested by Landlord, Tenant will consent in writing to any modification, repeal or amendment of any covenant or restriction
by Landlord. Landlord shall comply with any real property covenants and restrictions affecting the use of thE movE, and Landlord
agrees to cooperate with Tenant to represent Tenant’s interests regarding any covenants or restrictions affecting the use
of the Premises.

 

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ARTICLE 24 - CONSTRUCTION AND EFFECT

 

24.01        Integrated
Agreement. It is understood that there are no oral agreements between the parties hereto affecting this Lease. This Lease supersedes
and cancels any and all previous negotiations, arrangement, brochures, agreements and understandings, if any, between the parties
hereto or displayed by Landlord to Tenant with respect to the Premises and thE movE and none thereof shall be used to interpret
or construe this Lease. No provision of this Lease may be amended or added to except by an agreement in writing signed by the parties
hereto or their respective successors in interest. This Lease shall not be effective or binding on any party until fully executed
by both parties hereto.

 

24.02        Severability.
Each covenant, agreement and provision of this Lease shall be construed to be a separate covenant, agreement and provision. If
any covenant, agreement or provision of this Lease or the application thereof to any person or circumstance shall to any extent
be invalid or unenforceable, the remainder of this Lease, or the application of such covenant, agreement or provision to any person
or circumstance other than those as to which such covenant, agreement or provision is invalid or unenforceable, shall not be affected
thereby and each covenant, agreement and provision of this Lease shall be valid and enforceable to the extent permitted by law.

 

24.03       Governing
Law. The laws of the State of Colorado shall govern the validity, performance and enforcement of this Lease.

 

24.04       Relationship
of the Parties. Nothing herein contained shall be deemed or construed by the parties hereto, nor by any third party, as creating
the relationship of principal and agent or of partnership or of joint venture between the parties hereto, it being understood and
agreed that neither the method of computation of rent, nor any other provision contained herein, nor any acts of the parties hereto,
shall be deemed to create any relationship between the parties hereto other than the relationship of Landlord and Tenant. No party
other than Landlord and Tenant is intended to be a direct beneficiary of any provision contained in this Lease, and no right of
action shall accrue hereunder to any such third party.

 

24.05       Binding
Effect. The covenants and agreements hereof shall be binding upon the parties and their respective heirs, executors, administrators,
successors and permitted assigns.

 

24.06       Counterparts.
This Lease may be executed in a number of identical counterparts which, taken together, shall constitute collectively one agreement.
In making proof of this Lease Agreement, it shall not be necessary to produce or account for more than one such counterpart with
each party’s signature.

 

ARTICLE 25 - MISCELLANEOUS PROVISIONS

 

25.01       Authority
and Corporate Standing. In the event Tenant is a corporation, the persons executing this Lease on behalf of Tenant hereby covenant
and warrant that they are duly authorized to execute and deliver this Lease on behalf of Tenant; Tenant is a duly qualified corporation
and all steps have been taken prior to the date hereof to qualify Tenant to do business in the state where the Building is situated;
all franchise and corporate taxes have been paid to date; and all future forms, reports, fees and other documents necessary to
comply with applicable laws will be filed when due.

 

25.02       No
Warranties. Tenant does not rely on the fact, nor does Landlord represent, that any specific tenant or number or tenants shall
during the term of this Lease occupy any space in thE movE; Landlord, subject to Tenant’s Exclusive Use, reserves the absolute
right to effect such other tenancies in thE movE as Landlord, in the exercise of its sole business judgment, shall determine to
best promote the interests of thE movE. There are no other representations or warranties between the parties except, and all reliance
with respect to representations is solely upon, the representations and agreements contained in this Lease.

 

25.03       Waiver
of Redemption. The rights given to Landlord herein are in addition to any rights that may be given to Landlord by any statute
or otherwise.

 

25.04       Tenant’s
Hours of Operation. Tenant shall keep the Premises open for business during those days and hours as are customary and usual
for Tenant Use, which may include, but is not limited to, closures for vacations, holidays, and continuing education and may include
operation during early mornings, late evenings, weekends and holidays as determined necessary and appropriate by Tenant.

 

25.05       Exhibits.
All exhibits and addenda attached hereto are incorporated herein. Any capitalized term not otherwise defined in such exhibits or
addenda shall have the meaning set forth in this Lease.

 

25.06       Marijuana
and Adult-Oriented Business Prohibition. Landlord shall prohibit the cultivation, processing or use of marijuana, as well as
the sale of marijuana, products containing marijuana or products designed for the facilitation of the use of marijuana in thE movE.
Furthermore, Landlord shall not lease any space in the building where the Premises is located to any businesses involved with the
sale or cultivation of adult-oriented products or services, tobacco or any other product or services restricted from persons under
the age of 18.

 

25.07       Telecommunication
Services and Satellites. Tenant shall have the right to select its own providers for telephone, internet and cable services
and to erect on the roof of the Building aerials, antenna or a satellite dish, subject to Landlord’s approval of the location
for such devices, which shall not be unreasonably withheld, conditioned or delayed.

 

25.08       Brokers.
Landlord and Tenant represent and warrant that no broker or agent negotiated or was instrumental in negotiating or consummating
this Lease. Neither party knows of any other real estate broker or agent who is or might be entitled to a commission or compensation
in connection with this Lease. Tenant and Landlord will indemnify and hold each other harmless from all damages paid or incurred
by the other resulting from any claims asserted against either party by brokers or agents claiming through the other party.

 

    13

     

    

 

25.09       Waiver
of Jury Trial. LANDLORD AND TENANT WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY LANDLORD OR TENANT
AGAINST THE OTHER WITH RESPECT TO ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS LEASE, TENANT’S USE AND OCCUPANCY
OF THE PREMISES, OR THE RELATIONSHIP OF LANDLORD AND TENANT.

 

25.10       Recording;
Confidentiality. Tenant will not record this Lease or a short form memorandum of this Lease. Tenant agrees to keep the Lease
terms, provisions and conditions confidential and will not disclose them to any other person without Landlord’s prior written
consent. However, Tenant may disclose Lease terms, provisions and conditions to Tenant’s accountants, attorneys, managing
employees and others in contractual privity with Tenant (“Permitted Recipients”), as reasonably necessary for Tenant’s
business purposes, without such prior consent; provided, that Tenant agrees to inform such Permitted Recipients of the confidential
nature of this Lease and the confidentiality agreements of Tenant set forth herein will apply to and bind such parties. Tenant
acknowledges that any breach by Tenant or any Permitted Recipient of the agreements set forth in this Section will cause Landlord
irreparable harm and Landlord will have the right to seek equitable remedies to stop any breach of this section. The terms and
provisions of this section will survive the expiration or earlier termination of this Lease.

 

25.11       Covenant
of Quiet Enjoyment. Landlord covenants and agrees that, provided a breach by Tenant has not occurred, and provided that Tenant
keeps, observes and performs its covenants and agreements contained in this Lease, Tenant shall have quiet possession of the Premises
and such possession shall not be disturbed or interfered with by Landlord. Landlord will use reasonable efforts to minimize any
such restriction or disruption in connection with any entry or work by Landlord in the Premises to the extent practical under the
circumstances.

 

25.12       Parking.
Landlord agrees to grant Tenant and its employees and invitees, at no additional cost, a parking license for use of the attached
parking garage.  The parking license is a non-exclusive license for the use of the number of parking spaces as designated
in Exhibit B, which represents a proportional amount of the total parking spaces equal to the proportional amount for the leased
square footage versus the total rentable square footage of the building as defined in Exhibit B and H.  Landlord shall designate
specific spaces for the use of Tenant and Tenant’s employees and invitees.

 

IN WITNESS WHEREOF, the Landlord and Tenant have
duly executed this Lease this ______ day of ______________________, 2015.

 

	 	LANDLORD:
	 	THE MOVE, LLC, a Colorado Limited Liability Company
	 	 
	 	By:	 
	 	 
	 	(Print Name and Title)
	 	 
	 	TENANT:
	 	WHERE FOOD COMES FROM INC,
	 	a Colorado Corporation
	 	 
	 	By:	 
	 	 
	 	(Print Name and Title)

 

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EXHIBIT A

 

SITE PLAN

 

 

 

This exhibit is for informational and premises/site
locational purposes only. No tenant, traffic, parking, egress or ingress, improvement or configurational representations are expressed
or implied.

 

	 	INITIALS
	 	 
	 	 
	 	 

 

     A-1

     

    

 

EXHIBIT B

 

DESCRIPTION OF THE PREMISES

 

Approximately 8,127
square foot fourth (4th) floor space located at the southeast corner of Jerry Street and Sixth Street in Castle Rock,
Colorado as marked on the attached Site Plan (Exhibit A). As well as ____ dedicated parking spaces located in the parking garage
of the building.

 

	 	INITIALS
	 	 
	 	 
	 	 

 

     B-1

     

    

  

EXHIBIT C

 

Provisions
Relating to Construction of the PREMISES

(the “WORK LETTER”)

 

This Work Letter is dated ___________________,
20___, between THE MOVE, LLC, a Colorado Limited Liability Company (“Landlord”), and WHERE FOOD COMES FROM INC, a Colorado
Corporation, authorized to conduct business in the State of Colorado (“Tenant”).

 

RECITALS:

 

A.          This
Work Letter is part of the Lease Agreement Lease dated ____________, 2015 (the “Lease”), pursuant to which Landlord
has leased to Tenant office space in thE movE. Any capitalized term not defined herein shall have the meaning set forth in the
Lease.

 

B.          Tenant
desires to make improvements to the Premises, and Landlord desires to have Tenant make such improvements according to this Work
Letter.

 

		1.	Definitions. 

 

In this Work Letter, these defined
terms are:

 

(a)         Base Building: Those elements of the core and shell construction that are completed in preparation for the Improvements
to the Premises. This includes Building structure, envelope, and systems as indicated on Schedule 1. This defines the existing
conditions to which Improvements are added.

 

		(b)	Improvements:

 

		i.	The development of plans and documents, including supporting engineering studies, structural design
or analysis, lighting or acoustical evaluations, or others as determined by Tenant’s architect or consultants.

 

		ii.	All construction work necessary to augment the Base Building, creating the details and partitioning
shown on the plans. The work will create finished ceilings, walls, and floor surfaces.

 

		iii.	The Improvements will NOT include personal property items, such as decorator items or services,
art work, plants, furniture, equipment, or other fixtures not permanently affixed to the Premises.

 

		(c)	Landlord’s Representative: Doug Decker

 

(d)        
Tenant Construction Allowance: Of up to Twenty and 00/100 Dollars ($20.00) per rentable square foot, which equals
approximately $241,900.00 and is to be applied by Tenant to the cost of the Improvements. Tenant will not be entitled to cash payment,
credit against Rent, or any other consideration if the Tenant Construction Allowance is not completely used.

 

(e)         
Tenant’s Contractor: An experienced, licensed general contractor that is hired to construct and manage the
Tenant’s Improvements at the Premises.

 

(f)         
Tenant’s Representative: _______________, unless Landlord is notified in writing by Tenant that another person
should serve as Tenant’s Representative.

 

		2.	Representatives. 

 

Landlord appoints Landlord’s Representative
to act for Landlord in all matters associated with this Work Letter. Tenant appoints Tenant’s Representative to act for Tenant
in all matters associated with this Work Letter. All inquiries, requests, instructions, authorizations, and other communications
with respect to the matters covered by this Work Letter will be made to Landlord’s Representative or Tenant’s Representative,
as the case may be. Tenant will not make any inquiries of or requests to, and will not give any instructions or authorizations
to, any employee or agent of Landlord, including, without limitation, Landlord’s architect, engineers, and contractors or
any of their agents or employees, with regard to matters associated with this Work Letter. Either party may change its Representative
at any time by providing three (3) days prior written notice to the other party.

 

		3.	DESCRIPTION OF LANDLORD’S WORK

 

(a)         
Landlord will deliver the Premises to Tenant improved to the conditions listed on Schedule 1 attached hereto prior to the
Commencement Date. Within ten (10) days following Landlord’s request, Tenant will conduct a walk-through inspection of the
Premises with Landlord and prepare a punch list of items needing additional work by Landlord. Other than the items specified in
the punch list and “latent defects” (as defined in this paragraph), by taking possession of the Premises, Tenant will
be deemed to have accepted the Premises in their condition on the date of delivery of possession, and to have acknowledged that
Landlord has installed the Improvements as required by this Work Letter and that there are no items needing additional work or
repair. The punch list will not include any damage to the Premises caused by Tenant’s move-in or early access, if permitted.
The damage caused by Tenant will be repaired or corrected by Landlord at Tenant’s expense. Landlord’s contractor will
complete all reasonable punch list items within fifteen (15) days after the walk-through inspection or as soon as practicable after
such walk-through. Landlord’s work will be “substantially complete” when the conditions listed on Schedule 1
attached hereto remain subject to only minor punch list items.

 

     C-1

     

    

 

(b)          
A “latent defect” is a defect in the condition of the Premises caused by Landlord’s failure to construct
the Improvements in a good and workmanlike manner and in accordance with the Construction Documents, which defect may not ordinarily
be observed during a walk-through inspection. If Tenant notifies Landlord of a latent defect within one (1) year following the
Commencement Date, then Landlord, at its expense, will repair such latent defect as soon as practicable.

 

		4.	DESCRIPTION OF TENANT’S WORK

 

All items of work not provided in the Lease
or this Work Letter as the responsibility of Landlord shall be done by Tenant at Tenant’s expense. This work shall include, but
not be limited to the following:

 

(a)           Tenant shall construct the Tenant Improvements in accordance with the plans approved by Landlord pursuant to Section 7 below.

 

(b)           Tenant will furnish and install all fixtures, equipment, furnishings, items of interior decor, and personal property.

 

		5.	Tenant’s CONTRACTOR

 

Tenant is responsible for identifying Tenant’s
Contractor to be approved by Landlord, which approval shall not be unreasonably withheld. Upon selection of the contractor, Tenant
shall develop a written schedule to guide the Tenant Improvement construction process, and shall provide a copy to Landlord.

 

		6.	TENANT’S CONSTRUCTION ALLOWANCE

 

Landlord shall reimburse
Tenant up to the Tenant’s Construction Allowance for Tenant’s actual out-of-pocket expenses incurred to third parties in
the construction of Tenant’s Improvements to the Premises according to this Work Letter. Landlord shall reimburse Tenant
through progress payments made on a monthly basis, to the extent of the amounts billed by the Tenant’s Contractor for construction/installation
of the Tenant Improvements, up to the maximum amount of the Tenant’s Construction Allowance. Each month, Tenant shall deliver to
Landlord, or its representative, for approval an application for payment (“Application”) for the work completed as
of the end of the prior month, reflecting the amounts properly billed by Tenant’s Contractor for that purpose. With each
Application Tenant shall present to Landlord: (i) written approval that the work for which payment has been requested and has been
completed in a satisfactory manner; (ii) copies of all invoices, purchase agreements, work agreements or related documents evidencing
the services rendered; and (iii) conditional lien waivers from any contractor or supplier who has constructed or supplied materials
for the Tenant Improvements during the period. Within ten (10) business days following receipt of each Application, Landlord shall
pay directly to Tenant’s Contractor, Landlord’s pro-rata share of the entire amount of the payment requested by the
Tenant’s Contractor until the Tenant’s Construction Allowance is paid in full. Landlord’s pro-rata share of the progress
payments paid to the Tenant’s Contractor shall be the percentage that is equal to the Tenant Finish Allowance divided by
the total cost estimate to construct Tenant’s Improvements (“Total Cost”). The resulting percentage is Landlord’s
pro-rata share and shall be multiplied by the total Application amount to determine the Landlord’s then-current progress
payment amount. Tenant shall pay all such costs in excess of the Allowance and Landlord’s pro-rata share, and Tenant agrees
to keep the Premises and the real property free and clear of any liens arising out of the non-payment of such costs. In no event
shall Landlord be obligated to make a disbursement pursuant to this Exhibit for Tenant Improvements in a total amount that exceeds
the Tenant’s Construction Allowance. Any additional costs or expenses which arise in connection with the construction or development
of the Tenant Improvements shall be solely the responsibility of Tenant.

 

		7.	DESIGN AND CONSTRUCTION TIMETABLE

 

		(a)	PLAN SUBMISSION AND REVIEW:

 

		i.	After notification of Tenant’s anticipated Possession date and thirty (30) days prior to
that anticipated Possession Date, Tenant shall notify Landlord of the identity (and the appropriate contact information) of the
individual or firm hired by Tenant to prepare Tenant’s plans.

 

		ii.	After notification of Tenant’s anticipated Possession date and thirty (30) days prior to
that anticipated Possession Date or within thirty (30) days after Landlord’s delivery of the schematic building shell drawings
to Tenant, whichever occurs later, Tenant, at its sole cost and expense, shall cause delivery to Landlord, for Landlord’s review
and approval, two (2) sets of blueline prints and one (1) set of electronic drawings describing Tenant’s proposed Improvements.

 

		iii.	Within ten (10) days after receipt of Tenant’s plans, Landlord will review the plans and reply,
either “approving”, “approving with notations” or “disapproving” the proposed plans for Tenant Improvements,
such refusal to approve plans shall not be unreasonable and any denial requires an accompanying reasoning. If Tenant’s plans (or
portions of them) are not approved by Landlord for any reason, the plans must be corrected and re-submitted for approval by Landlord,
but Tenant’s changes shall only be required to address Landlord’s notations or aspects where Tenant failed to comply
with Landlord’s earlier requests. If Landlord does not respond to Tenant’s submission within such ten (10) day period,
the plans shall be deemed accepted by Landlord.

 

		(b)	CONSTRUCTION

 

		i.	Once Possession has been delivered to Tenant at the completion of Landlord’s work as described
in para 3 above, Tenant shall begin and diligently pursue completion of construction of the Tenant Improvements described by Tenant’s
plans, as approved by Landlord.

 

     C-2

     

    

 

		ii.	Throughout the construction of the Tenant’s Improvements, Tenant shall be responsible for the following:

 

		1.	Obtaining all permits and licenses necessary for the construction of Tenant’s Improvements.

 

		2.	Compliance with all codes and ordinances which govern the construction of the Tenant’s Improvements.

 

		3.	Compliance by Tenant’s Contractor with all construction regulations which may be imposed by Landlord
or its agents.

 

		4.	Submission of an acceptable waiver of liens by Tenant’s Contractor not less frequently than monthly,
along with an acceptable final waiver of lien by Tenant’s Contractor at the completion of his work.

 

     C-3

     

    

 

SCHEDULE 1 

Base Building

 

FLOOR – 4” concrete slab on metal deck –
floor flatness and levelness to comply with standard tolerances outlined in ACI 117.

 

EXTERIOR WALLS – all exterior walls will be delivered
ready to receive drywall – drywall to be installed, taped and finished by Tenant.

 

CORE & DEMISING WALLS – all structural core
walls will be delivered ready to receive framing / furring and drywall – framing / furring and drywall to be installed by
Tenant – all non-structural core walls and demising walls will be delivered ready to receive primer and paint – non-structural
walls will be taped and finished by Tenant.

 

RESTROOMS – ADA compliant restrooms provided on
the second, third and fourth floor by Landlord.

 

ELEVATOR LOBBIES – Landlord will install one pair
of doors and door hardware at the entrance to elevator lobby on 1st floor – all mechanical, electrical, and lighting and
finishes in elevator lobby are by Landlord.

 

VERTICAL TRANSPORTATION – 1-ea traction elevators
with 3,500-lb per cab capacity

 

MECHANICAL – The mechanical system will be a Variable
Refrigerant Flow (VRF) with an Energy Recovery Ventilator (ERV) to supply fresh air for the building. Each tenant space will be
provided with a controller all distribution lines/ ducting, and control boxes will be provided by the tenant. All equipment provided
by the tenant will need to be by the same manufacturer as the building equipment.

 

ELECTRICAL – Landlord to provide 1-ea 100 amp 3
phase 120/208 volts panel for each tenant. All sub metering will be provided by the tenant.

 

FIRE PROTECTION – the Landlord will provide a wet
pipe fire protection system with sprinkler heads turned up for minimal, code-required coverage in an un-finished space –
all other fire protection work will be designed, furnished and installed by Tenant – all new sprinkler heads must be compatible
with building standards and installed by Landlord approved fire protection subcontractor.

 

FIRE ALARM – Landlord will provide a central fire
alarm control panel (FACP) and any code required horn strobes within the unfinished space – all devices provided by Landlord
will be wired and programmed to the central FACP - any modifications to the fire alarm system necessary to accommodate the Tenant’s
improvements must be designed, furnished and installed by the Landlord’s approved fire alarm subcontractor (TBD) at Tenant’s
expense.

 

CEILING – clearance from the surface of the concrete
floor slab to bottom of steel roof deck above will be approximately 12’-6”’. All ductwork will be installed below
the bottom of the steel beams near the core of the building – no ceiling will be provided by Landlord – all ceiling
components will be designed, furnished and installed by Tenant.

 

TELE / DATA / CATV – provided by Tenant.

 

	 	INITIALS
	 	 
	 	 
	 	 

 

     C-4

     

    

 

EXHIBIT D

 

TENANT’S ESTOPPEL CERTIFICATE

 

REFERENCE IS MADE to
that certain Lease or Lease Agreement between THE MOVE, LLC, a Colorado limited liability company, as Landlord, and the undersigned,
WHERE FOOD COMES FROM INC, a Colorado Corporation, as Tenant, as the same was amended and/or supplemented by ____________________________________
(said Lease or Lease Agreement, as affected by said other instrument(s), being hereinafter referred to merely as the “Lease”),
covering space in thE movE located at approximately:

 

The undersigned hereby
certifies and declares as follows:

 

1.             The
undersigned has accepted the Premises covered by the Lease and currently is in occupancy thereof and is conducting its business
therein.

 

2.             The
Lease is in full force and effect and has not been modified, supplemented, or amended except as is indicated below. Except for
what is stated below, there are no agreements between the undersigned Tenant and the Landlord under the Lease in any way concerning
the subject matter of the Lease or the Premises covered by the Lease. The interests of the Tenant under the Lease have not been
assigned, and no part of the Premises covered by the Lease has been sublet except as is indicated below.

 

[If none, state so on the following lines.]
______________________________________________________________________________________________

__________________________________________________________________________________________________________________________________

 

3.             As
of the date hereof all conditions or obligations under the Lease to be satisfied or performed by the undersigned have been satisfied
or performed, except as follows:

 

[If none, state so on the following lines.]
______________________________________________________________________________________________

__________________________________________________________________________________________________________________________________

 

4.    
        To the best of the undersigned’s knowledge, as of the date hereof all conditions or obligations under the
Lease to be satisfied or performed by the Landlord have been satisfied or performed, except as set forth below, and except as
set forth below, as of the date hereof the undersigned does not assert, and to the best of the undersigned’s knowledge is not
entitled to assert, any claim against the Landlord or any defense to or offset against the enforcement of the Lease or any of
the provisions thereof against the undersigned.

 

[If none, state so on the following lines.]
______________________________________________________________________________________________

__________________________________________________________________________________________________________________________________

 

5.             The
term of the Lease (ignoring any options to renew or extend which have not yet been exercised) commenced on ___________________,
20__, and is scheduled to expire on _______________, 20____.

 

6.             (Strike
whichever of the following statements is not the case):

 

		(a)	Full rental is currently accruing and payable
under the Lease.

 

		(b)	Full rental is not currently accruing and payable
under the Lease, for the reason that an initial period of abated rent has not yet expired. Full rental will begin to accrue and
be payable under the Lease as of ___________________, 20____.

 

		The monthly fixed Minimum Rent currently payable by the undersigned under the Lease is
                                                                             $______________________. No rent under the Lease beyond the current month has been paid in advance by the undersigned.

 

7.    
        The amount of the Security Deposit given by the undersigned and held by the Landlord under the Lease is the
sum of $________________.

 

8.             Any
notice, demand, request, or other instrument given by the Landlord under the Lease to the undersigned may be addressed to the undersigned
at the Premises covered by the Lease, at the address specified in the Lease, or at the following address:

 

The undersigned disclaims
all right, title or interest in the Premises except the rights granted by the Lease.

 

IN WITNESS WHEREOF,
the undersigned has executed this Estoppel Certificate on this ______ day of ________________________, 20_____. 

	 	 	 
	 	WHERE FOOD COMES FROM INC,
	 	a Colorado Corporation
	 	 	 
	 	By:	
	 	 
	 	(Print Name and Title)

 

	 	INITIALS
	 	 
	 	 
	 	 

 

FOR INFORMATIONAL PURPOSES ONLY; TO BE
SIGNED AT A LATER DATE

 

     D-1

     

    

 

EXHIBIT E

 

MECHANIC’S LIEN NOTICE

 

NOTICE TO ALL PERSONS PROVIDING

LABOR, SERVICES, MACHINERY, TOOLS,

EQUIPMENT AND MATERIALS FOR THE

ERECTION, CONSTRUCTION, ALTERATION,

REMOVAL, ADDITION, REPAIR, OR OTHER

IMPROVEMENT OF THIS PROPERTY

 

BE ADVISED that the
interest of ___________________________________________________the owner of this property, shall not be subject to a mechanic’s
lien by any person who provides labor, services, machinery, tools, equipment and materials for the erection, construction, alteration,
removal, addition, repair or other improvements to this property known as Unit_______ at _________________________________________,
City of _________________________, State of Colorado.

 

	 	By:	
	 	 	 
	 	 	Owner

 

CERTIFICATE OF SERVICE

 

I hereby certify that
a true and correct copy of this notice was posted in a conspicuous place in Unit ______, at__________________________________________,
City of ____________________, State of Colorado, on the _____day of _________________________, 20______.

 

	 	By:	
	 	 	Agent for Owner

 

Subscribed and Sworn to before me this
______ day of _______________________, 20_____.

 

	 	
	 	Notary Public

 

My Commission Expires_______________________

 

	 	INITIALS
	 	 
	 	 
	 	 

 

FOR INFORMATIONAL PURPOSES ONLY; TO BE
SIGNED AT A LATER DATE

 

     E-1

     

    

 

EXHIBIT F

 

RULES AND REGULATIONS

OF thE movE

 

THESE RULES AND REGULATIONS
(the “Rules”) have been established by THE MOVE, LLC, a Colorado Limited Liability Company, as Landlord under the leases
relating to thE movE (the “Leases”). Under the terms of the Leases, the Landlord is authorized to establish these Rules
and such additional rules and regulations as are necessary or advisable in its judgment for the proper and efficient operation
and maintenance of the buildings and common areas which make up 202 Sixth Street (such buildings and common areas are herein collectively
referred to as “thE movE”). These rules may be changed, altered or amended by Landlord at any time in its sole discretion.

 

1.       Tenant
shall not obstruct the sidewalks, entries, passages, corridors, stairways, and elevators of thE movE or interfere with the rights
of other tenants of thE movE, or of persons having business in thE movE or in any way injure or annoy such tenants or personal.
Tenant shall not disturb the other occupants of thE movE or adjoining buildings or premises by the use of any radio, sound equipment,
or musical instrument or by making of loud or improper noise.

 

2.       Tenant
shall not commit any act or permit anything in or about thE movE which shall or might subject Landlord to any liability or responsibility
for injury to any person or property by reason of any business or operation being carried on in or about thE movE or for any other
reason.

 

3.       Tenant
shall not use the Building for lodging, sleeping, or for any illegal purposes or for any purpose that will damage thE movE, or
the reputation thereof, or for any purposes other than those specified in the Lease.

 

4.        Tenant
shall not bring or keep within the Building or in any Common Area any animal except helping animals allowed by law.

 

5.       Tenant
shall move all freight, supplies, furniture, fixtures, and other personal property into, within and out of thE movE only at such
times and through such entrances as may be reasonably designated by Landlord. Tenant shall not move or install such objects in
or about thE movE in such a fashion as to unreasonably obstruct the activities of other tenants, and all such moving shall be at
the sole expense, risk and responsibility of Tenant. In the event Tenant or Tenant’s movers damage the elevator or any part
of thE movE, Tenant shall forthwith pay to Landlord the amount required to repair said damage. Any moving contractor of Tenant
must carry insurance in amounts reasonably approved by Landlord. Each Tenant shall use its best efforts to complete, or cause to
be completed, all deliveries, loading, unloading and services to the Premises prior to 10:00 a.m. of each day. Each Tenant shall
attempt to cause no delivery trucks or other vehicles servicing thE movE to park or stand in front of thE movE from 10:00 a.m.
to 9:00 p.m. of each day.

 

6.       Tenant
shall not deposit any trash, refuse, cigarettes, or other substances of any kind within or out about thE movE except in refuse
containers. Tenant shall exercise its best efforts to keep the sidewalks, entrances, passages, courts, lobby areas, parking areas,
vestibules, restrooms, public corridors and halls in and about thE movE (“Common Areas”) clean and free from Tenant’s
rubbish. Tenant shall not allow anything to be placed on or outside the Building, nor shall anything be thrown by Tenant out of
the windows or doors or down the corridors, elevator shafts or ventilation ducts or shafts of the Building.

 

7.       Landlord
reserves the right to exclude or expel from thE movE any person who, in the reasonable judgment of Landlord, is intoxicated or
under the influence of liquor or drugs or who shall in any manner act in violation of the rules and regulations of thE movE.

 

8.       Tenant
shall not use the washrooms, restrooms and plumbing fixtures of the Building, appurtenances thereto, for any other purposes than
the purposes for which they were construed, and Tenant shall not deposit any sweepings, rubbish, rags or improper substances therein.
Tenant shall not waste water by interfering or tampering with the faucets or otherwise. If Tenant or Tenant’s employees,
contractors, jobbers, agents, licensees, invitees, guests or visitors, cause any damage to such washroom, restrooms, plumbing fixtures
or appurtenances, such damage shall be repaired at Tenant’s expense, and Landlord shall not be responsible therefore.

 

9.       Subject
to applicable fire or other safety regulations, all doors opening into Common Ares and all doors upon the perimeter of the Premises
shall be kept closed and, during non-business hours, locked, except when in use for ingress or egress. If Tenant uses the Premises
after regular business hours or non-business days, Tenant shall lock any entrance doors to the Building or to the Premises used
by Tenant immediately after using such doors.

 

10.       All
keys to the exterior doors of the Premises shall be obtained by Tenant from Landlord, and Tenant shall pay to Landlord a reasonable
deposit determined by Landlord from time to time for such keys. Tenant shall not make duplicate copies of such keys. Except for
Tenant’s security systems, Tenant shall not install additional locks or bolts of any kind upon any of the doors or windows
of, or within the Building, nor shall Tenant make any changes in existing locks or the mechanisms thereof, without Landlord’s
prior consent. Tenant shall, upon the termination of its tenancy, provide Landlord with the combinations to all combination locks
on safes, safe cabinets, and vaults which are not removed from the Premises by Tenant and deliver interior doors, cabinets, and
other key-controlled mechanisms therein, whether or not such keys were furnished to Tenant by Landlord. In the event of the loss
of any key furnished to Tenant by Landlord, Tenant shall pay to Landlord the cost of replacing the same or of changing the lock
or locks opened by such lost key if Landlord shall deem it necessary to make such a change. Landlord and/or Landlord’s agent
shall at all times keep a passkey to the Premises.

 

     F-1

     

    

 

11.       Landlord
shall provide Tenant access to the Premises, the Building and the parking facilities, subject to such security card system as Landlord
may establish from time to time, twenty-four (24) hours per day, seven (7) days per week. Tenant shall be responsible for all persons
from whom Tenant obtains any pass for entry into the Premises, Building or parking facility. In case of invasion, mob, riot, public
excitement, or other commotion, Landlord reserves the right to prevent access to thE movE for the safety of tenants and protection
in thE movE.

 

12.       Landlord
shall not be responsible for, and Tenant hereby indemnifies and holds Landlord harmless from any liability in connection with the
loss, theft, misappropriation or the disappearance of furniture, furnishings, fixtures, machine, equipment, money, jewelry or other
items or personal property from the Premises or other parts of the Building regardless of whether the Premises or Building are
locked at the time of such loss, unless caused by the gross negligence or willful misconduct of Landlord, its agents, employees
or contractors.

 

13.       Except
for areas specifically designated by Landlord in its sole discretion, no smoking is permitted by any person, including employees
of Tenant, in on or about thE movE, including lobby, the stairwells, parking areas, landscaped areas and Building entrances.

 

14.       Tenant
shall not, nor shall it permit any of its employees, officers, contractors, jobbers, licensees, invitees, guests, visitors, agents
or independent contractors to keep or bring onto the Premises, the Building or thE movE any deadly weapon, including but not limited
to firearms of any kind.

 

15.       Outside
Sales and Storage. No tenant may display, sell merchandise, allow carts, portable signs, devices or any other objects to be
stored or to remain outside the defined exterior walls or roof and permanent doorways of thE movE, or in hallways.

 

16.       Antenna
and Aerials. No aerial, antenna or satellite dish shall be erected on the roof or exterior walls of thE movE without first
obtaining, in each instance, the written consent of Landlord. Any aerial, antenna or satellite dish so installed without such written
consent shall be subject to removal without notice at any time, plus the Tenant will be charged for Landlord’s cost of said removal
plus a twenty percent (20%) administration fee.

 

17.       Parking
Lot Solicitation. No Tenant may solicit in any manner in any of the automobile parking and sidewalk areas of thE movE.

 

18.       Vending
Machines. No Tenant shall, without the prior consent of Landlord, sell merchandise from vending machines or allow any coin-operated
vending or gaming machines on the Premises.

 

19.       Validated
Parking. Landlord may, if in its opinion the same be advisable, establish a system or systems of validation or other type operation,
including a system of charges against non-validated parking checks of users, and the Tenant must abide by all such rules and regulations
in its use and the use of its customers and patrons with respect to said automobile parking area; provided, however, that all such
rules and regulations and such types of operation or validation of parking checks and other matters affecting the customers and
patrons of the Tenant shall apply equally and without discrimination to all persons entitled to the use of said automobile parking
facilities.

 

20.       Control
of Common Areas. Landlord shall at all times have the sole and exclusive control of the Common Areas, and may at any time and
from time to time during the term hereof, exclude and restrain any person from use or occupancy thereof, excepting, however, bona
fide customers, patrons and service-suppliers of Tenants who make use of Common Areas in accordance with these Rules. It shall
be the duty of each Tenant to keep all Common Areas free and clear of any obstructions created or permitted by such Tenant or resulting
from such Tenant’s operation. Any cost to keep all Common Areas free and clean incurred by Landlord as a result of Tenant’s operation
will be billed back to said Tenant, plus a twenty percent (20%) administration fee.

 

21.       Employee
Parking. Tenant and its employees shall park their cars only in the areas provided behind the Premises, or in those portions
of the Common Areas, if any, designated for the purpose by Landlord, and any such designation may be changed from time to time.
No overnight parking of any vehicles shall be permitted in any of the Common Areas. If requested by Landlord, each Tenant shall
furnish Landlord with its and its employees’ license numbers within fifteen (15) days of such request and shall thereafter notify
Landlord of any changes within five (5) days after such change occurs. Landlord may charge Tenants Twenty Five Dollars ($25.00)
per car for each day or partial day any of such cars are parked in any areas other than those designated, or for each and every
car (per day) which is parked overnight in the Common Areas; provided, however, Landlord agrees to give Tenant written notice of
the first violation of this provision and Tenant shall have two (2) days thereafter within which to cause the violation to be discontinued;
and if not discontinued within said two-day period then the $25.00 per day fine shall commence. After notice of such first violation,
no prior written notice of any subsequent violation shall be required and in addition to the fine levied by Landlord, Landlord
may tow any such vehicle from the Common Areas and charge Tenant for all costs so incurred.

 

22.       Prohibited
Advertising. No Tenant shall affix or maintain upon the glass panes and supports of the show windows, and within twelve (12)
inches of any window, doors and the exterior walls of its Premises, any signs, advertising placards, names, insignia, trademarks,
descriptive material or any other such like item or items, except such as shall have first received the written approval of Landlord.
No Tenant shall affix any sign to any roof of thE movE. In addition, no advertising medium shall be utilized by any Tenant which
can be heard or experienced outside Tenant’s Premises, including, without limiting the generality of the foregoing, flashing lights,
searchlights, loudspeakers, phonographs, radios, balloons or television. No Tenant shall display, paint or place or cause to be
displayed, painted or placed, any handbills, bumper stickers or other advertising devices on any vehicle parked in the parking
area of thE movE, whether belonging to such Tenant or to any other person; nor shall any Tenant distribute, or cause to be distributed,
in thE movE, any handbills or other advertising devices, and such Tenant shall pay to Landlord the cost and expense necessary to
remove any such unauthorized material from thE movE, plus a twenty percent (20%) administration fee.

 

     F-2

     

    

 

23.       Approval
of Signs. Each Tenant shall not less than thirty (30) days prior to fabrication of any sign submit two (2) copies of drawings
of such sign to Landlord for approval. Such drawings must include location, size and style of lettering, color, material, type
of illumination, installation details, color selections and logo design. Approval of such sign by Landlord will not be unreasonably
withheld or delayed, and will be based upon the standards set forth below. In any event, all signs must also be approved, if necessary,
by the appropriate governmental agency prior to fabrication, and all permits for signs and their installation shall be obtained
and paid for by the Tenant.

 

In no event shall any sign be approved by
Landlord if the size, location, design, color, texture, lighting and materials of such sign detracts in any way from the design
of thE movE and the surrounding properties.

 

a.   Signs shall consist of internal illuminated
individual letters (either neon or LED) with flat plastic faces in metal retainers mounted to aluminum or channellume type letters.
Signs shall have no audible, flashing or animated figures.

 

b.   No fascia sign or wall sign shall exceed
30% of the total fascia or signable area (or percentage allowable by county/city zoning, if larger, subject to final sentence limitations
herein below), excluding windows and storefront area. Letter sizes shall be governed by the amount of signable area used. In no
event shall any sign be less than eight feet (8’) above the ground as measured to the lowest edge of the sign. No sign may project
higher than the height of the structure to which it is attached. Notwithstanding, the sign border(s) must stay within eight (8)
inches of the top and bottom edges of the fascia.

 

c.   Logo signs will be considered provided
that they are a nationally registered trademark or identification sign. Landlord shall review all logo designs for final approval
and compliance. The logo sign shall be considered part of the allowable 30% signed area.

 

d.   Vertical copy of signs projecting perpendicular
to any building are not permitted.

 

e. Manufacturer’s decals, hours of business,
telephone number, etc. are limited to a total of 144 square inches per single door entrance. No “sale” signs, special
announcements, etc. shall be permitted on exterior or interior glass; such advertising material must be set back at least twelve
inches (12”) from glass surface and suspended from the ceiling.

 

f.   Advertising devices such as attraction
boards, posters, banners and flags shall not be permitted, unless for a temporary use with the prior written consent of Landlord.

 

g.   Painted, flashing, animated, audible,
revolving or similar signs that create the illusion of animation shall not be permitted.

 

h.   Exposed bulb signs shall not be permitted
without Landlord’s consent in Landlord’s sole discretion.

 

i.   No sign may include the product sold
except as part of the Tenant’s name or insignia.

 

j.   The Tenant’s name and address may be
applied to that Tenant’s non-customer door, if any, for receiving merchandise, as directed by Landlord and in two-inch (2”)
high block letters.

 

k.   If required by the U. S. Postal Service,
the Tenant may install on the storefront the number only for the street address of size, type, color and location determined by
Landlord.

 

24.       Construction
of Signs

 

a.   The Tenant is required to obtain any
and all building and electrical permits.

 

b.   Location of all openings for conduit
or sign panels of building walls shall be indicated on drawings submitted to Landlord for approval.

 

c.   All mounting holes must be sealed off
and touched up after installation, and the Tenant’s Premises, and the Common Areas must be left free of debris.

 

d.   The Tenant is responsible for the actions
of its sign contractor.

 

e.   Letter fastening and clips shall be concealed
and shall be of galvanized, stainless or aluminum metals.

 

f.   Electric service to signs shall be included
in the Tenant’s metered service and shall include an automatic timer to illuminate the sign. Signs must be illuminated from the
hours of sundown, until at least 11:00 p.m. or Tenant shall be subject to a fee of $25.00 per day for each and every day that the
sign is not illuminated after five (5) days from Tenant’s receipt of Landlord’s notice.

 

g.   No exposed raceway, crossovers, transformers
or conduit will be permitted, except for stub out through the wall. All signs shall use P.K. Housings and bear the U.L. Label,
or other similar U.L. approved housings approved by Landlord, and installation of each sign shall comply with all local building
codes and electrical codes.

 

h.   No labels shall be permitted on the exposed
surface of signs, except those required by local ordinance, which shall be placed in an inconspicuous location and manner.

 

     F-3

     

    

 

i.   Design, layout and material for Tenant
signs shall conform in all respects with the design drawings provided by Tenant. The height and dimensions for letters in the body
of the signs shall be pursuant to approved plans and specifications.

 

j.   All penetrations of the building structure
required for sign installation shall be sealed in a watertight condition and shall be patched to match the adjacent finish.

 

k.   Internally illuminated, individual lettered
pan channel, storefront fascia signs of the specifications provided for herein, are required by the Landlord of all Tenants (though
individual tenant’s signs may vary at Landlord’s sole discretion) of thE movE. And all such signs shall be constructed and installed,
including electrical hook-ups, at the Tenant’s expense.

 

l.   This sign criteria may be changed to
reflect the code of governing bodies involved.

 

m.   Upon Surrender of the Premises, unless
otherwise directed by Landlord, Tenant shall remove its illuminated store front fascia sign, and replace damaged fascia wood, caulk,
prime and paint to match the existing fascia, after said removal.

 

	 	INITIALS
	 	 
	 	 
	 	 

 

     F-4

     

    

 

EXHIBIT G

 

HAZARDOUS AND/OR TOXIC WASTES, SUBSTANCES,
AND MATERIALS

 

WHERE FOOD COMES
FROM INC, a Colorado Corporation, Tenant, strictly warrants to THE MOVE, LLC, a Colorado Limited Liability Company,
Landlord, that Tenant shall not, without the express prior written consent of Landlord, bring or allow to be brought onto the Property/Building/Premises,
or store or use upon the Property/Building/Premises, or discard or dump in any drain or trash receptacle, or introduce into ground
water, any hazardous and/or toxic substances, wastes, materials, pollutants or contaminants (including, without limitation, asbestos
and raw materials which include hazardous constituents) or any other substance or materials which are included under or regulated
by any local, state or federal law, rule, regulation or ordinance pertaining to environmental regulation, contamination or clean
up (“Hazardous Substance”) except in small quantities (or approved quantities relative to and consistent with Tenant’s
Use) which are stored in compliance with all applicable environmental laws, including any federal, state or municipal law, decision,
state, rule, ordinance or regulation, in existence or hereinafter enacted or rendered.

 

EXPRESSLY UNDERSTOOD,
ACKNOWLEDGED AND AGREED TO THIS _____ DAY OF ______________________, 2015.

 

	 	TENANT:
	 	 
	 	WHERE FOOD COMES FROM INC,
	 	a Colorado Corporation
	 	 	 
	 	By:	
	 	 
	 	(Print Name and Title)

 

     G-1

     

    

 

EXHIBIT H

 

COMMENCEMENT DATE CERTIFICATE

 

THIS COMMENCEMENT DATE
CERTIFICATE shall set forth, reaffirm and amend certain terms and provisions contained in the Lease Agreement dated April 14,
2015, (“Lease”) by and between THE MOVE, LLC, a Colorado limited liability company (“Landlord”) and WHERE
FOOD COMES FROM INC, a Colorado Corporation (“Tenant”).

 

1.          All capitalized terms not otherwise defined herein shall have the same meaning as set forth in the Lease.

 

2.          By signing the acknowledgement at the end of this memorandum, Landlord and Tenant acknowledge and agree that the
statements set forth in this Commencement Date Certificate are true and accurate.

 

3.          The Possession Date was March 1, 2016. The Commencement Date of the Lease is August 1, 2016, and the
Lease will expire at midnight July 31, 2021, if not extended or renewed or terminated earlier pursuant to the Lease.

 

4.          The Premises consists of 8,127 rentable square feet measured in accordance with Standard Method of Measuring
Floor Areas in Office Buildings (ANSI/BOMA Z-65.1-2010) (“BOMA”) and nine (9) dedicated parking
spaces located in the parking garage of the building.

 

5.          The
Move currently consists of 50,088 rentable square feet measured in accordance BOMA standards.

 

6.          The Minimum Rent shall be as set forth below:

 

	 	 	Price per SF	 	Monthly Minimum Rent	 	Annual Minimum Rent
	 	08/01/2016 – 07/31/2017	 	 	$	20.00	 	 	$	13,545.00	 	 	$	162,540.00	 
	 	08/01/2017 – 07/31/2018	 	 	$	20.60	 	 	$	13,951.35	 	 	$	167,416.20	 
	 	08/01/2018 – 07/31/2019	 	 	$	21.22	 	 	$	14,371.25	 	 	$	172,454.94	 
	 	08/01/2019 – 07/31/2020	 	 	$	21.86	 	 	$	14,804.69	 	 	$	177,656.22	 
	 	08/01/2020 – 07/31/2021	 	 	$	22.52	 	 	$	15,251.67	 	 	$	183,020.04	 

 

7.           Tenant’s
Pro Rata Share shall be 16.2%.

 

8.           Tenant has delivered a Security Deposit in the amount of $13,545.00.

 

9.           The amount of the Tenant’s Construction Allowance shall be $20.00 / RSF = $162,540.00

 

10.         Landlord’s
Work is Substantially Completed, or the following work remains to be completed: ____________________________________________

___________________________________________________________________________________________________________________________________________

 

11.         Except as may be amended herein, all terms and conditions of the Lease shall continue in full force and effect and
are hereby republished, ratified, and reaffirmed in their entirety. This Commencement Certificate shall be binding upon and may
be relied upon by the parties hereto and their respective legal representatives, successors, and assigns.

 

Landlord and Tenant have executed this
Commencement Date Certificate as of the dates set forth below. 

	 	 	 
	 	LANDLORD:
	 	THE MOVE, LLC,
	 	a Colorado Limited Liability Company
	 	 	 
	 	By:	 
	 	 
	 	(Print Name and Title)

	 	 	 
	 	TENANT:
	 	WHERE
FOOD COMES FROM INC,
	 	a Colorado Corporation
	 	 	 
	 	By:	 
	 	 
	 	(Print Name and Title)

 

     H-1

     

    

 

ADDENDUM

 

TO THAT CERTAIN LEASE AGREEMENT DATED ________________________,
2015 

BY AND BETWEEN THE MOVE, LLC, A COLORADO
LIMITED LIABILITY COMPANY, 

AS LANDLORD, 

AND WHERE FOOD COMES FROM INC, A COLORADO
CORPORATION, 

AS TENANT

 

As a supplement to that certain Lease of
Premises at thE movE, Landlord and Tenant further agree as follows:

 

1)       Whenever
the term “Lease” is used in this supplement, unless the context otherwise requires, it shall mean the Lease above referred
to, and any Addendum thereof, including this Addendum.

 

2)       

 

Option to Extend.
Landlord grants to Tenant the right to extend the Lease Term (“Renewal Option”) for two (2) consecutive periods of
five (5) years each (“Option Term”), upon the following terms and conditions:

 

(a)       Tenant
must exercise each Renewal Option, if at all, by providing Landlord with written notice thereof at least six (6) months but not
more than twelve (12) months prior to the expiration date of the then-current Lease Term (“Renewal Notice”); provided,
that Tenant may not exercise such option, or commence occupancy under any extended term if, upon any date any written notice of
election to extend is given, or upon the date any extended term would otherwise commence if Tenant is in default under any of the
provisions of the Lease beyond all applicable notice and cure periods. If Tenant does not provide Landlord with the Renewal Notice
as and when herein specified, the Renewal Option shall terminate and be of no further force or effect. If Tenant exercises a Renewal
Option, the Lease Term shall be extended for an additional period of three (3) years upon the same terms and conditions as set
forth in the Lease, except the Basic Rent and this Renewal Option. The Basic Rent for such Option Term shall be at the then-current
“Market Rate” as defined below. Each of the two Renewal Options may be exercised only once and once exercised, such
Renewal Option shall not be effective during any subsequent Option Term.

 

(b)       The
Renewal Option shall apply to the entire Demised Premises, as amended or expanded as of the commencement date of each Option Term,
and may not be exercised as to only a portion of the Demised Premises. Upon exercise of a Renewal Option, Landlord and Tenant shall
enter into an amendment to the Lease memorializing the Basic Rent Amount and any other changed terms and/or conditions of the Lease
during such Option Term. If there is a Default by Tenant at any time between the date it exercises a Renewal Option and the date
upon which such Option Term is to commence, then Landlord at its option may elect to treat the exercise of such Renewal Option
as ineffective in which case this Lease shall terminate upon expiration of the then-current Lease Term.

 

(c)       The
Renewal Option is personal to Tenant and in the event of any Transfer by Tenant, whether or not with the consent of Landlord, any
Renewal Options which have not been exercised as of the date of such Transfer shall automatically terminate.

 

(d)       The
“Market Rate” is a price a willing tenant would pay to a willing landlord in an arms-length transaction if both had
the same knowledge of the facts and reasonable market exposure. Here, Landlord and Tenant shall, in good faith, negotiate and attempt
to determine a mutually acceptable Market Rate relying on the rental rate for similar properties within the same local area and
taking into account adjustments for the differences in the properties and the value to a prospective tenant as of the commencement
date of such Option Term, taking into consideration the uses permitted under the Lease, the quality, size, design and location
of the Demised Premises.

 

(e)       If,
a mutually agreed upon Market Rate is not determined before Tenant provides Landlord with a written Renewal Notice, Landlord shall
notify Tenant of his Market Rate offer for the Option Term (“Landlord’s Rate”) within twenty (20) days after
receiving the Renewal Notice. If Tenant does not agree that Landlord’s offered Rate is the Market Rate, Tenant shall provide
written notice thereof to Landlord within twenty (20) days of Landlord’s Market Rate offer, rejecting Landlord’s Market
Rate offer and indicating the amount that Tenant asserts is the proper Market Rate for the Option Term (“Tenant’s Rate”).
If Tenant fails to provide written notice within such twenty (20) day period, Tenant shall be deemed to have accepted Landlord’s
Market Rate offer as the agreed upon Market Rate. If Tenant timely provides notice rejecting Landlord’s Market Rate offer,
then each party shall, within ten (10) days after Tenant’s rejection notice, designate by written notice to the other party
one (1) licensed Colorado real estate broker, who is not affiliated with nor has had an economic relationship with the designating
party within the last five (5) years, having at least five (5) years’ experience in the Castle Rock commercial real estate
market (“Broker(s)”). The two Brokers shall each determine the Market Rate for the Demised Premises. Each Broker will
be paid for the Broker’s Price Opinion by the party designating him or her. Landlord and Tenant shall each require the Brokers
to make such determination and report it in writing to Landlord and Tenant within twenty (20) days after such selection. The two
Broker’s price opinions shall be averaged to create a Market Rate which will set the and the Initial Base rate for the first
year of the renewal.

 

     A-1A

     

    

 

EXECUTED THIS ______ DAY OF __________________, 2015

	 	 	 
	 	LANDLORD:
	 	THE MOVE, LLC,
	 	a Colorado Limited Liability Company
	 	 	 
	 	By:	 
	 	 
	 	(Print Name and Title)

	 	 	 
	 	TENANT:
	 	WHERE
FOOD COMES FROM INC,
	 	a Colorado Corporation
	 	 	 
	 	By:	 
	 	 
	 	(Print Name and Title)

 

     A-2AExhibit 10.14

 

ACTIVISION BLIZZARD INC.
 KDE EQUITY INCENTIVE PLAN

 

As Assumed by Activision Blizzard Inc. in Connection with
 the Acquisition of King Digital Entertainment plc.

 

Approved by the Shareholders of King Digital Entertainment plc on 6 March 2014

 

Initial Effective Date: 25 March 2014

 

Amended as of 29 April 2015

 

Acquisition Effective Date:  23 February 2016

 

Amended as of November 1, 2016

 

 

CONTENTS

 

 

	
 
    	
 
    	
 
    	
 
    	
 
    
	
SECTION 1.0   - GENERAL
    	
 
    	
1
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
1.1
    	
Purpose of the Plan
    	
 
    	
1
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
1.2
    	
Types of Awards
    	
 
    	
1
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
1.3
    	
Effective Date
    	
 
    	
1
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
1.4
    	
Capitalized Terms
    	
 
    	
1
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
SECTION 2.0   - SHARES SUBJECT TO THE PLAN
    	
 
    	
2
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
2.1
    	
Number of Shares
    	
 
    	
2
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
2.2
    	
Lapsed, Returned Awards
    	
 
    	
2
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
2.3
    	
Substitute Awards — Acquisition by the Company
    	
 
    	
2
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
2.4
    	
Minimum Share Reserve
    	
 
    	
3
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
2.5
    	
Individual Limit
    	
 
    	
3
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
2.6
    	
Variation in Share Capital
    	
 
    	
3
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
2.7
    	
Source of Shares
    	
 
    	
4
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
2.8
    	
Shares Acquired by the Employee Benefit Trust
    	
 
    	
4
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
SECTION 3.0   - GRANT OF AWARDS
    	
 
    	
4
    
	
 
    	
 
    	
 
    
	
SECTION 4.0   - APPLICABILITY
    	
 
    	
4
    
	
 
    	
 
    	
 
    
	
SECTION 5.0   - ADMINISTRATION
    	
 
    	
4
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.1
    	
Committee
    	
 
    	
4
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.2
    	
Authority of Committee
    	
 
    	
5
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.3
    	
Committee Discretion and Disputes
    	
 
    	
6
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.4
    	
Delivery of Documentation
    	
 
    	
7
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.5
    	
Award Recipients in Various Countries
    	
 
    	
7
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.6
    	
Section 162(m) of the Code
    	
 
    	
8
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
SECTION 6.0   - OPTIONS
    	
 
    	
8
    
	
 
    	
 
    	
 
    
	
 
    	
6.1
    	
General
    	
 
    	
8
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
6.2
    	
Exercise Price
    	
 
    	
9
    
							

 

i

 

	
 
    	
6.3
    	
Performance Factors
    	
 
    	
9
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
6.4
    	
Exercise Period
    	
 
    	
9
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
6.5
    	
Method of Exercise
    	
 
    	
9
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
6.6
    	
Termination of Service
    	
 
    	
10
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
6.7
    	
Limitations on Exercise
    	
 
    	
11
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
6.8
    	
Modification, Extension or Renewal
    	
 
    	
11
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
6.9
    	
Extension of Option Term where Exercise Is   Prohibited
    	
 
    	
12
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
6.10
    	
Potential Termination for Cause
    	
 
    	
12
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
SECTION 7.0   - STOCK APPRECIATION RIGHTS
    	
 
    	
12
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
7.1
    	
General
    	
 
    	
12
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
7.2
    	
Terms of SARs
    	
 
    	
12
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
7.3
    	
Exercise Period and Expiration Date
    	
 
    	
13
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
7.4
    	
Form and Timing of Settlement
    	
 
    	
13
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
7.5
    	
Termination of Service
    	
 
    	
13
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
SECTION 8.0   - RESTRICTED SHARE AWARDS
    	
 
    	
14
    
	
 
    	
 
    	
 
    
	
 
    	
8.1
    	
General
    	
 
    	
14
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
8.2
    	
Restricted Share Award Agreement
    	
 
    	
14
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
8.3
    	
Purchase Price
    	
 
    	
14
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
8.4
    	
Terms of Restricted Share Awards
    	
 
    	
14
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
8.5
    	
Termination of Service
    	
 
    	
15
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
8.6
    	
Issuance or Delivery of Restricted Shares
    	
 
    	
15
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
8.7
    	
Release of Shares upon Vesting
    	
 
    	
15
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
SECTION 9.0   - RESTRICTED STOCK UNIT (RSU) AWARDS
    	
 
    	
15
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
9.1
    	
General
    	
 
    	
15
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
9.2
    	
Terms of RSU Awards
    	
 
    	
16
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
9.3
    	
Purchase Price
    	
 
    	
16
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
9.4
    	
Form and Timing of Settlement
    	
 
    	
16
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
9.5
    	
Termination of Service
    	
 
    	
16
    

 

ii

 

	
SECTION 10.0   - UNRESTRICTED STOCK UNIT AWARDS
    	
 
    	
17
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
SECTION 11.0   - PERFORMANCE AWARDS
    	
 
    	
17
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
11.1
    	
General
    	
 
    	
17
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
11.2
    	
Terms of Performance Awards
    	
 
    	
17
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
11.3
    	
Value, Earning and Timing of Performance Shares
    	
 
    	
18
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
11.4
    	
Termination of Service
    	
 
    	
18
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
SECTION 12.0   - AWARDS TO NON-EMPLOYEE DIRECTORS
    	
 
    	
18
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
12.1
    	
General
    	
 
    	
18
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
12.2
    	
Annual Individual Limit
    	
 
    	
18
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
SECTION 13.0   - DIVIDEND EQUIVALENTS
    	
 
    	
18
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
13.1
    	
Option and SARs
    	
 
    	
18
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
13.2
    	
Other Awards
    	
 
    	
18
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
SECTION 14.0   - PAYMENT FOR SHARES
    	
 
    	
19
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
14.1
    	
General
    	
 
    	
19
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
14.2
    	
Payment Methods
    	
 
    	
19
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
SECTION 15.0   - TAXES
    	
 
    	
20
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
15.1
    	
Withholding/Deduction Generally
    	
 
    	
20
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
15.2
    	
Transfer of Employer Liability to Employee
    	
 
    	
20
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
15.3
    	
Share Withholding
    	
 
    	
20
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
SECTION 16.0   - TRANSFERABILITY
    	
 
    	
21
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
16.1
    	
No Transfer Generally
    	
 
    	
21
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
16.2
    	
Award Transfer Program
    	
 
    	
21
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
SECTION 17.0   - SHARE OWNERSHIP
    	
 
    	
22
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
17.1
    	
Privileges of Share Ownership
    	
 
    	
22
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
17.2
    	
Certificates
    	
 
    	
22
    
									

 

iii

 

	
SECTION 18.0   - RESERVED
    	
 
    	
23
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
SECTION 19.0   - SECURITIES LAW AND OTHER COMPLIANCE
    	
 
    	
23
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
19.1
    	
Compliance with Applicable Laws
    	
 
    	
23
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
19.2
    	
Insider Trading Policy
    	
 
    	
23
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
19.3
    	
Malus and Clawback Policy
    	
 
    	
23
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
19.4
    	
Data Protection
    	
 
    	
24
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
SECTION 20.0   - EMPLOYMENT RELATIONSHIP
    	
 
    	
24
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
20.1
    	
No Obligation to Employ/ Right to Compensation
    	
 
    	
24
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
20.2
    	
No Obligation to Notify or Minimize Taxes
    	
 
    	
25
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
SECTION 21.0   - CORPORATE TRANSACTION
    	
 
    	
25
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
21.1
    	
Treatment of Awards
    	
 
    	
25
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
21.2
    	
Involuntary Termination following Corporate   Transaction
    	
 
    	
27
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
SECTION 22.0   - DISSOLUTION OR LIQUIDATION
    	
 
    	
28
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
SECTION 23.0   - TERM AND AMENDMENT OF PLAN
    	
 
    	
28
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
23.1
    	
Term of Plan
    	
 
    	
28
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
23.2
    	
Amendment or Termination of the Plan
    	
 
    	
28
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
SECTION 24.0   - OTHER PROVISIONS
    	
 
    	
29
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
24.1
    	
Governing Law
    	
 
    	
29
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
24.2
    	
Jurisdiction
    	
 
    	
29
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
24.3
    	
Non-Exclusivity of the Plan
    	
 
    	
29
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
SECTION 25.0   - DEFINITIONS AND INTERPRETATION
    	
 
    	
29
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
25.1
    	
Definitions
    	
 
    	
29
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
25.2
    	
Interpretation
    	
 
    	
39
    
							

 

iv

 

SECTION 1.0 - GENERAL

 

1.1                               Purpose of the Plan

 

King adopted this Plan, before it became a separate publicly traded company, to aid it in attracting, retaining and motivating employees, directors and consultants of King and the Associated Companies who were expected to contribute to the success of such entities by offering them incentives that allowed them to participate in future growth in value of Ordinary Shares. The Plan was assumed by the Company, as of the Acquisition Effective Time, in connection with the Transaction Agreement and is being continued by the Company after the consummation of the transactions contemplated in the Transaction Agreement solely in respect of awards in respect of Ordinary Shares outstanding immediately prior to the Acquisition Effective Time which are assumed by the Company and converted into Awards in respect of the Company’s Common Stock in accordance with the provisions of the Transaction Agreement.  No new awards will be made following the Acquisition Effective Time notwithstanding any other term set forth herein.

 

1.2                               Types of Awards

 

The Plan allowed for the grant of the following Awards: Options, Stock Appreciation Rights (SARs), Restricted Share Awards, Restricted Stock Units (RSU) Awards, Unrestricted Stock Unit Awards and Performance Awards.

 

1.3                               Effective Date

 

The Plan was approved by the board of directors of King and by its shareholders on 6 March 2014 and became effective on the Effective Date.  The Plan was assumed by the Company as of the Acquisition Effective Time.  From and after the Acquisition Effective Time, the Shares available for issuance in respect of Awards granted hereunder (including Substitute Awards) are shares of Common Stock, and sections 3.0.  4.0, and 6.0 through 13.0 of the Plan are retained solely to the extent necessary or appropriate to understand and administer the terms of the Awards related to King awards in respect of Ordinary Shares outstanding immediately prior to the Acquisition Effective Time, which are assumed by the Company pursuant to the terms of the Transaction Agreement.

 

1.4                               Capitalized Terms

 

Capitalized terms not defined elsewhere in the text are defined in Section 25.

 

 

SECTION 2.0 - SHARES SUBJECT TO THE PLAN

 

2.1                               Number of Shares

 

The number of Shares of Common Stock that are available for issuance hereunder from the Acquisition Effective Time is the number of Ordinary Shares that were issuable in respect of awards granted by King prior to, and outstanding immediately prior to, the Acquisition Effective Time which are assumed by the Company and converted into Awards in respect of the Company’s Common Stock in accordance with the provisions of the Transaction Agreement, multiplied by the Exchange Ratio.  Any additional Ordinary Shares that were available for issuance under the Plan immediately prior to the Acquisition Effective Time shall no longer be available for issuance hereunder following the Acquisition Effective Time, and no Shares of Common Stock shall be issuable in respect thereof.  No additional Shares shall become available for issuance hereunder following the Acquisition Effective Time.

 

2.2                               Lapsed, Returned Awards

 

Shares that are subject to Awards that lapse, expire or are forfeited or otherwise cancelled following the Acquisition Effective Time shall not again become available for Awards hereunder.

 

2.3                               Substitute Awards — Acquisition by the Company

 

Pursuant to the Transaction Agreement, any option or other equity award in respect of Ordinary Shares outstanding immediately prior to the Acquisition Effective Time that (i) was granted pursuant to an individual award agreement (and not under the Plan) prior to the Effective Date and (ii) pursuant to the Transaction Agreement, was to be assumed by the Company and converted into an option or another award in respect of Shares of Common Stock, shall be deemed to have been converted into a Substitute Award in respect of the Company’s Common Stock under this Plan.  Any Substitute Award shall have the same terms and conditions as were applicable under the underlying individual award agreement by which King effected the award and in place immediately prior to the Acquisition Effective Time, subject to any amendments which were to come into effect at the Acquisition Effective Time, including such amendments as are necessary or appropriate to reflect the assumption, and the conversion, thereof into a right in respect of the Common Stock and as otherwise may be required to reflect the change of control of King.  The amendments contemplated pursuant to the foregoing sentence include: (i) applying the Exchange Ratio to determine (x) the number of Shares of the Common Stock to which such Substitute Award relates and (y) the exercise price per Share in respect of any Substitute Award that is an option to acquire Shares, (ii) substituting the Company for King in all

 

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respects in regard to any such individual award agreement, including authorizing the Committee or the Board, as the case may be, to perform any action or to exercise any authority or discretion reserved to the King compensation committee or the King board of directors; and (iii) where applicable, any amendments made to individual award agreements pursuant to the AB Executive Service Agreements (as defined in the Transaction Agreement).

 

2.4                               Minimum Share Reserve

 

At all times the Company shall reserve and keep available a sufficient number of Shares as shall reasonably be required to satisfy all outstanding Awards.

 

2.5                               Individual Limit

 

Prior to the Acquisition Effective Time, grants of Awards in respect of Ordinary Shares were subject to individual limits.  Such limits provided that no Participant could be granted Awards in the aggregate in any calendar year in respect of more than 1,250,000 Ordinary Shares, except that a new Employee (including a new Employee who was also hired as an officer or director of King or any Associated Company) could be granted in the aggregate in the calendar year in which he commenced employment Awards in respect of up to 2,500,000 Ordinary Shares.

 

2.6                               Variation in Share Capital

 

In the event that following the Acquisition Effective Time any change is made in the Shares, without consideration, through merger, consolidation, reorganization, recapitalization, reincorporation, share dividend, dividend in property other than cash, large nonrecurring cash dividend, share split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or any similar equity restructuring transaction, including, for the avoidance of doubt, capitalization of profits or reserves, capital distribution, rights issue, the conversion of one class of share to another or reduction of capital or otherwise, then the Committee shall proportionately and appropriately adjust any or all of the following: (a) the number of Shares reserved for issuance under the Plan set forth in Section 2.1; (b) the Exercise Price and/or number and/or class of Shares subject to each outstanding Option and SAR; (c) the Purchase Price and/or number and/or class of Shares subject to other outstanding Awards; and (d) the Purchase Price paid under any Restricted Share Award; subject to any required action by the Board or the shareholders of the Company and in compliance with Applicable Law; provided that (i) in no event shall the Exercise Price or Purchase Price of any share be less than the nominal value of such share, and (ii) a fraction of a Share will not be issued.  The determination of the Committee shall be final, binding and conclusive.

 

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2.7                               Source of Shares

 

The Shares issued or delivered under the Plan shall be authorized but unissued Shares or acquired Shares, including, subject to Applicable Law, Shares acquired by the Company or, subject to Section 2.8, the Employee Benefit Trust, on the open market or otherwise.

 

2.8                               Shares Acquired by the Employee Benefit Trust

 

Shares acquired by the Employee Benefit Trust may not be used to satisfy an Award (i) to the extent that such Shares would be offered or delivered to a person resident in the United States unless the Committee in its sole discretion is satisfied that such offer or delivery would be in compliance with the registration requirements of the Securities Act or an exemption therefrom, and/or (ii) to a Director.

 

SECTION 3.0 - GRANT OF AWARDS

 

Except for grants made in substitution for awards in respect of Ordinary Shares outstanding immediately prior to the Acquisition Effective Time and assumed by the Company and converted to relate to Shares of Common Stock pursuant to the Transaction Agreement, no Awards may be granted at any time or times from and after the Acquisition Effective Time. The date of grant of an Award that was assumed by the Company and converted to an Award in respect of Shares of Common Stock pursuant to the Transaction Agreement shall be the date of grant of the Award by King in respect of Ordinary Shares.

 

SECTION 4.0 - APPLICABILITY

 

Only those Employees, Consultants, Directors and Non-Employee Directors who held awards in respect of Ordinary Shares that were assumed by the Company in accordance with the Transaction Agreement shall have any rights in respect of any Award under this Plan from and after the Acquisition Effective Time.

 

SECTION 5.0 - ADMINISTRATION

 

5.1                               Committee

 

The Committee shall administer the Plan in accordance with its terms, provided that the Board may act in lieu of the Committee on any matter, subject to Applicable Law.  Subject to the general purposes, terms and conditions of the Plan, the Committee will have full power to implement and carry out the Plan.

 

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Without limiting the generality of any other provision of the Plan, except to the extent that so doing would impair the contractual rights afforded under any Award Agreement, any rules adopted or other determinations made by the Compensation Committee of King prior to the Acquisition Effective Time shall no longer apply with respect to Awards from and after the Acquisition Effective Time.

 

5.2                               Authority of Committee

 

The Committee will have the authority to:

 

5.2.1                               construe and interpret the Plan, any Award Agreement and any other agreement or document executed pursuant to the Plan, and in the event of any dispute or disagreement as to the interpretation of any of the same, or as to any question or right arising from or related to the Plan, the decision of the Committee shall be final and binding upon all persons;

 

5.2.2                               prescribe, amend and rescind rules and regulations relating to the Plan or any Award;

 

5.2.3                               determine the terms and conditions, not inconsistent with the terms of the Plan, of any Award, except to the extent that so doing would impair the contractual rights afforded under any Award Agreement. Such terms and conditions include, but are not limited to, the Exercise Price or Purchase Price, if any, the time or times when the Award may vest and/or be exercised (which may be based on performance criteria) and/or settled, any vesting acceleration or waiver of forfeiture or transfer or other restrictions, the method to satisfy tax withholding obligations or any other tax or other liability legally due or agreed to be recovered from the Participant and any restriction or limitation regarding the Award or the Shares subject thereto, based in each case on such factors as the Committee will determine;

 

5.2.4                               determine the Fair Market Value in good faith and interpret the applicable provisions of the Plan and the definition of Fair Market Value in connection with circumstances that impact the Fair Market Value, if necessary;

 

5.2.5                               grant waivers of Plan or Award conditions;

 

5.2.6                               accelerate the time or times at which an Award may be exercised or the time or times at which an Award or any part thereof will vest, notwithstanding the provisions in the Award Agreement setting out the time or times at which it may be exercised or will vest;

 

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5.2.7                               correct any defect, supply any omission or reconcile any inconsistency in or among the Plan, any Award and/or any Award Agreement;

 

5.2.8                               determine whether to institute any Award Transfer Program and the terms and conditions of such program;

 

5.2.9                               reduce or waive any criteria with respect to Performance Factors;

 

5.2.10                        adjust Performance Factors to take into account changes in law, accounting or tax rules as the Committee deems necessary or appropriate to reflect the impact of extraordinary or unusual items, events or circumstances to avoid windfalls or hardships, provided that such adjustments are consistent with the regulations promulgated under Section 162(m) of the Code with respect to persons whose compensation is subject to Section 162(m) of the Code;

 

5.2.11                        adopt rules and/or procedures (including the adoption of any subplan under the Plan) relating to the operation and administration of the Plan to accommodate requirements of local law and procedures;

 

5.2.12                        engage professional advisors and/or experts to advise on any matter that arises under the Plan;

 

5.2.13                        make all other determinations necessary or advisable for the administration of the Plan; and

 

5.2.14                        delegate any of the foregoing, or any discretion reserved to the Committee under the Plan, with respect to some or all Awards, eligible individuals and/or Participants, to a subcommittee consisting of one or more executive officers pursuant to a specific delegation, as permitted by Applicable Law.

 

5.3                               Committee Discretion and Disputes

 

5.3.1                               Any determination made by the Committee with respect to any Award shall be made in its sole discretion at the time of grant of the Award or, unless in contravention of any express term of the Plan or Award, at any later time, and such determination shall be final and binding on the Company and all persons having an interest in the Award.  The Committee’s exercise of any discretionary authority shall not obligate it to exercise such authority in a like manner thereafter.

 

5.3.2                               Any dispute regarding the interpretation of the Plan or any Award Agreement shall be submitted by the Participant or Company to the

 

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Committee for review.  The resolution of such a dispute by the Committee shall be final and binding on the Company and the Participant.  The Committee may delegate to one or more executive officers the authority to review and resolve disputes with respect to Awards, and such resolution shall be final and binding on the Company and the Participant(s) involved, in the same manner and to the same extent as if the action had been taken by the Committee.

 

5.4                               Delivery of Documentation

 

The Award Agreement for a given Award, the Plan and any other documents relating to the Plan or an Award may be delivered to, and accepted by, a Participant or any other person in any manner (including electronic distribution or posting, including through any automated system, such as an interactive website or interactive voice response operated by King, the Company or any third party on their behalf) that meets the requirements of Applicable Law.

 

5.5                               Award Recipients in Various Countries

 

Notwithstanding any provision of the Plan to the contrary, in order to comply with the Applicable Law of any country in which individuals who are eligible for Awards or Participants are resident, the Committee, in its sole discretion, shall have the power and authority to:

 

5.5.1                               determine which Subsidiaries shall be covered by the Plan;

 

5.5.2                               modify the terms and conditions of any Award granted to individuals in any jurisdiction to comply with applicable local laws;

 

5.5.3                               establish subplans and modify exercise procedures and other terms and procedures, to the extent the Committee determines such actions to be necessary or advisable (and such subplans and/or modifications shall be attached to this Plan as appendices); provided, however, that no such subplans and/or modifications shall increase the Share limitations contained in Section 2; and

 

5.5.4                               take any action, before or after an Award is granted, that the Committee determines to be necessary or advisable to obtain approval or comply with any local governmental regulatory exemptions or approvals.  Notwithstanding the foregoing, the Committee may not take any actions hereunder, and no Awards shall be granted, that would violate the Exchange Act or any other applicable United States securities law.

 

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5.6                               Section 162(m) of the Code

 

When necessary or desirable for an Award to qualify as “performance-based compensation” under Section 162(m) of the Code the Committee shall include at least two persons who are “outside directors” (as defined under Section 162(m) of the Code) and at least two (or a majority if more than two then serve on the Committee) such “outside directors” shall approve the grant of such Award and timely determine (as applicable) the Performance Period and any Performance Factors upon which vesting or settlement of any portion of such Award is to be subject.  When required by Section 162(m) of the Code, prior to settlement of any such Award at least two (or a majority if more than two then serve on the Committee) such “outside directors” then serving on the Committee shall determine and certify in writing the extent to which such Performance Factors have been timely achieved and the extent to which the Award has been earned or has vested or become exercisable or the Shares subject to such Award have thereby been earned or vested.  With respect to Participants whose compensation is subject to Section 162(m) of the Code, and provided that such adjustments are consistent with the regulations promulgated under Section 162(m) of the Code, the Committee may adjust the performance goals to account for changes in law and accounting and to make such adjustments as the Committee deems necessary or appropriate to reflect the impact of extraordinary or unusual items, events or circumstances to avoid windfalls or hardships, including without limitation, (a) restructurings, discontinued operations, extraordinary items, and other unusual or non-recurring charges, (b) an event either not directly related to the operations of the Company or not within the reasonable control of the Company’s management, or (c) a change in accounting standards required by generally accepted accounting principles.

 

SECTION 6.0 - OPTIONS

 

6.1                               General

 

An Option is the right to subscribe for up to a specified number of Shares, subject to such conditions as may be determined by the Committee in accordance with the Plan.  The Committee may grant Options to Employees, Consultants and Directors (including Non-Employee Directors) and will determine the number of Shares subject to the Option, the Exercise Price, the period or periods during which the Option may be exercised, and all other terms and conditions of the Option, subject to the following terms of this section.

 

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6.2                               Exercise Price

 

The Exercise Price of an Option will be determined by the Committee when the Option is granted provided that the Exercise Price will be not less than one hundred per cent (100%) of the Fair Market Value of a Share on the date of grant of the Option and in no event will be less than the nominal value of a Share.  Payment of the Exercise Price shall be made in accordance with Section 14, the Award Agreement and any procedures established by the Company.

 

6.3                               Performance Factors

 

Exercisability of an Option may be, but need not be, conditional upon satisfaction of such Performance Factors during any Performance Period as are determined by the Committee and set out in the Award Agreement.  If exercisability of the Option is conditional upon the satisfaction of Performance Factors, then the Committee will: (a) determine the nature, length and starting date of any Performance Period for the Option; and (b) select from among the Performance Factors to be used to measure the performance.  Performance Periods may overlap and Participants may participate simultaneously with respect to Options that are subject to different performance goals and other criteria.

 

6.4                               Exercise Period

 

Subject to the conditions regarding exercise set forth in the Award Agreement governing an Option, the Option may be exercised for all, or from time to time any part, of the Shares for which it is then exercisable; provided, however, that (a) no Option will be exercisable after the expiration of ten (10) years from the date the Option is granted, and (b) no Option may be exercised at a time when such exercise and/or the issuance of Shares pursuant to such exercise would be in breach of the Insider Trading Policy or Applicable Law.  The Committee also may provide for Options to become exercisable at one time or from time to time, periodically or otherwise, in such number of Shares or percentage of Shares as the Committee determines.

 

6.5                               Method of Exercise

 

An Option will be deemed exercised when the Company receives: (a) a notice of exercise (in such form as the Committee may specify from time to time) from the person entitled to exercise the Option, and (b) full payment of the Exercise Price for the Shares with respect to which the Option is exercised.  Shares issued upon exercise of an Option will be issued in the name of the Participant.  Until the Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a shareholder will exist with respect to

 

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the Shares, notwithstanding the exercise of the Option.  The Company will issue (or cause to be issued) such Shares as soon as reasonably practicable after the Option is exercised.

 

6.6                               Termination of Service

 

If the Participant’s Service terminates for any reason except for Cause or the Participant’s death, Disability or retirement, then each Option held by the Participant shall lapse on the date of such termination of Service to the extent such Option is not exercisable by the Participant on such date, unless the Committee determines otherwise.  The Participant may exercise each Option, to the extent the Option is exercisable by the Participant on the date his Service terminates, within the period of three (3) months after the date the Participant’s Service terminates, but in any event no later than the expiration date of the Option, and the Option shall lapse upon the expiration of such period.

 

6.6.1                               Death

 

If the Participant’s Service terminates because of the Participant’s death (or the Participant dies within three (3) months after his Service terminates other than for Cause or because of his Disability or retirement), then each Option held by the Participant shall lapse on the date of such termination of Service to the extent such Option is not exercisable on such date, unless the Committee determines otherwise.  Each Option, to the extent exercisable on the date the Participant’s Service terminates, may be exercised by the Participant’s estate or person who acquired the right to exercise the Option by bequest or inheritance within the period of twelve (12) months after the date the Participant’s Service terminates, but in any event no later than the expiration date of the Option, and the Option shall lapse upon the expiration of such period.

 

6.6.2                               Disability

 

If the Participant’s Service terminates because of the Participant’s Disability, then each Option held by the Participant shall lapse on the date of such termination of Service to the extent such Option is not exercisable on such date, unless the Committee determines otherwise.  The Participant may exercise each Option, to the extent the Option is exercisable by the Participant on the date the Participant’s Service terminates, within the period of twelve (12) months after the date the Participant’s Service terminates, but in any event no later than the expiration date of the Option, and the Option shall lapse upon the expiration of such period.

 

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6.6.3                               Retirement

 

If the Participant’s Service terminates because of the Participant’s retirement in accordance with his contract of Service, then each Option held by the Participant shall lapse on the date of such termination of Service to the extent such Option is not exercisable on such date, unless the Committee determines otherwise.  The Participant may exercise each Option, to the extent the Option is exercisable by the Participant on the date the Participant’s Service terminates, within the period of twelve (12) months after the date the Participant’s Service terminates, but in any event no later than the expiration date of the Option, and the Option shall lapse upon the expiration of such period.

 

6.6.4                               Cause

 

If the Participant’s Service is terminated for Cause, then, unless the Committee determines otherwise, the Participant’s Options shall lapse on such Participant’s date of termination of Service or, if earlier, upon the service of notice of termination of the Participant’s Service, but in any event no later than the expiration date of the Option.  Unless otherwise provided in the Award Agreement, Cause shall have the meaning set forth in Section 25.

 

6.6.5                               Committee Discretion

 

Notwithstanding any other provision of this Section 6.6, the Committee shall have discretion to determine, at the time of grant of an Option or at any time thereafter, where it considers that it is necessary or appropriate, that an Option shall remain exercisable for a period after the termination of a Participant’s Service that is less than or greater than the period specified in this Section 6.6, but in no event later than the expiration date of the Option.

 

6.7                               Limitations on Exercise

 

The Committee may specify a minimum number of Shares that may be purchased on any exercise of an Option, provided that such minimum number will not prevent any Participant from exercising an Option for the full number of Shares for which it is then exercisable.  An Option may not be exercised for a fraction of a Share.

 

6.8                               Modification, Extension or Renewal

 

The Committee may modify or amend the terms of, extend or renew outstanding Options and/or authorize the grant of new Options in substitution therefor, provided that any such action may not, without the written consent of a

 

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Participant, impair any of such Participant’s rights under any Option previously granted.

 

6.9                               Extension of Option Term where Exercise Is Prohibited

 

If the exercise of an Option, the issuance of Shares pursuant to the exercise of an Option, or the immediate sale of such Shares during the post-termination exercise period permitted under Section 6.6 would be in violation of the Insider Trading Policy or Applicable Law, then the period for exercise of the Option shall be extended such that the Option shall lapse on the earlier of (i) the expiration of a total period (that need not be consecutive) equal to the applicable post-termination exercise period under Section 6.6 during which such exercise or issuance or sale would not be in such violation, or (ii) the expiration date of the Option as set forth in the Award Agreement.

 

6.10                        Potential Termination for Cause

 

The exercise of an Option shall not be permitted during any period in which the Participant is subject to an investigation or disciplinary process which, in the Committee’s opinion, could result in a termination for Cause.

 

SECTION 7.0 - STOCK APPRECIATION RIGHTS

 

7.1                               General

 

A Stock Appreciation Right (“SAR”) is an award to an eligible Employee, Consultant, or Director (including a Non-Employee Director) in respect of a specified number of Shares that may be settled, in the discretion of the Committee, in cash or Shares.

 

7.2                               Terms of SARs

 

The Committee will determine the terms of each SAR including, without limitation: (a) the number of Shares subject to the SAR; (b) the Exercise Price and the time or times during which the SAR may be exercised; (c) the consideration to be distributed on settlement of the SAR and the time or times when the SAR will be settled; and (d) the effect of the Participant’s termination of Service on the SAR.  The Exercise Price of the SAR will be determined by the Committee when the SAR is granted, and may not be less than the Fair Market Value on the date of grant.  Exercise of a SAR may, but need not be, conditional upon satisfaction of such Performance Factors during any Performance Period as are determined by the Committee and set out in the individual Award Agreement.  If exercise of the SAR is subject to the satisfaction of Performance Factors, then the Committee

 

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will: (x) determine the nature, length and starting date of any Performance Period; and (y) select from among the Performance Factors to be used to measure the performance.  Performance Periods may overlap and Participants may participate simultaneously with respect to SARs that are subject to different Performance Factors and other criteria.

 

7.3                               Exercise Period and Expiration Date

 

A SAR will be exercisable at the time(s) or during the period(s) or upon the occurrence of events determined by the Committee and set forth in the Award Agreement.  The Award Agreement shall set forth the expiration date; provided that no SAR will be exercisable after the expiration of ten (10) years from the date the SAR is granted.  The Committee may also provide for SARs to become exercisable at one time or from time to time, periodically or otherwise (including, without limitation, upon the attainment during a Performance Period of performance goals based on Performance Factors), in such number of Shares or percentage of the Shares subject to the SAR as the Committee determines.

 

7.4                               Form and Timing of Settlement

 

Upon exercise of a SAR, the Participant will be entitled to receive payment from the Company in the amount equal to the product of (a) the excess of the Fair Market Value on the date of exercise over the Exercise Price of the SAR and (b) the number of Shares with respect to which the SAR is exercised.  At the discretion of the Committee, the payment from the Company for the SAR exercise may be in cash, in Shares of equivalent value (subject to payment by the Participant in cash of the nominal value of any newly issued Shares), or in some combination thereof.  The portion of a SAR being settled may be paid currently or on a deferred basis with such interest or Dividend Equivalent, if any, as the Committee determines, provided that the terms of the SAR and any deferral satisfy the requirements of Section 409A of the Code, if applicable.

 

7.5                               Termination of Service

 

Vesting of a SAR ceases on the date the Participant’s Service terminates.  Unless otherwise stated in the Award Agreement, the provisions of Sections 6.6 to 6.10 will also apply to SARs, as they apply to Options.

 

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SECTION 8.0 - RESTRICTED SHARE AWARDS

 

8.1                               General

 

A Restricted Share Award is an offer by the Company to issue or procure the transfer to an eligible Employee, Consultant or Director (including a Non-Employee Director) of Shares that are subject to restrictions, including restrictions on transfer, (“Restricted Shares”).  The Committee will determine to whom such an offer will be made, the number of Restricted Shares a Participant may acquire, the Purchase Price, the restrictions to which the Shares will be subject and all other terms and conditions of the Restricted Share Award, subject to the Plan.  “Vesting” for purposes of this Section 8.0 shall mean the restrictions applicable to Restricted Shares lapsing in accordance with the Award Agreement and “vested” shall be construed accordingly.

 

8.2                               Restricted Share Award Agreement

 

All purchases under a Restricted Share Award will be evidenced by an Award Agreement.

 

8.3                               Purchase Price

 

The Purchase Price for a Restricted Share Award will be determined by the Committee and may be less than the Fair Market Value of the Restricted Shares on the date the Restricted Share Award is granted, provided that if the Restricted Shares are newly issued Shares, it shall be no less than the nominal value of the Restricted Shares.  Payment of the Purchase Price must be made in accordance with Section 14, the Award Agreement and any procedures established by the Company.

 

8.4                               Terms of Restricted Share Awards

 

Restricted Shares will be subject to such transfer and/or other restrictions as the Committee may impose and/or are required by Applicable Law.  Lapse of restrictions may be based on completion by the Participant of a specified period or periods of Service and/or upon satisfaction of Performance Factors during any Performance Period, as set out in the Award Agreement and/or such other conditions as may be determined by the Committee.  Prior to the grant of a Restricted Share Award, the Committee shall: (a) determine the nature, length and starting date of any Performance Period for the Restricted Share Award; (b) select from among the Performance Factors to be used to measure performance goals, if any; (c) determine the number of Restricted Shares that will cease to be subject to the applicable restrictions and thereby vest and the date(s) on which such vesting will occur; and (d) determine the treatment of Restricted Shares that do not vest

 

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pursuant to the Restricted Share Award, which may include forfeiture or compulsorily transfer by the Participant upon such terms and conditions as the Committee may determine, and the consideration (if any) payable to the Participant for such Restricted Shares.  Performance Periods may overlap and a Participant may participate simultaneously with respect to Restricted Share Awards that are subject to different Performance Periods and having different performance goals and other criteria.

 

8.5                               Termination of Service

 

Except as may be set forth in the Participant’s Award Agreement, vesting ceases on the date the Participant’s Service terminates (unless determined otherwise by the Committee).

 

8.6                               Issuance or Delivery of Restricted Shares

 

The Company shall issue share certificates that evidence Restricted Shares pending the lapse of the applicable restrictions, and that bear a legend making appropriate reference to such restrictions.  To enforce any restrictions on a Participant’s Restricted Shares, the Committee may require the Participant to deposit all certificates representing the Restricted Shares, together with stock powers or other instruments of transfer approved by the Committee, appropriately endorsed in blank, with the Company or an agent designated by the Company to hold in escrow until such restrictions have lapsed or terminated, and the Committee may cause a legend or legends referencing such restrictions to be placed on the certificates.

 

8.7                               Release of Shares upon Vesting

 

As soon as practicable after vesting of a Participant’s Restricted Shares, subject to the Participant’s satisfaction of applicable tax and other withholding requirements, the Company shall release or procure the release to the Participant, free from the applicable restrictions, of his vested Shares, unless the Award Agreement provides otherwise, and deliver the share certificates.

 

SECTION 9.0 - RESTRICTED STOCK UNIT (RSU) AWARDS

 

9.1                               General

 

A Restricted Stock Unit (“RSU”) Award is an award to an eligible Employee, Consultant or Director (including a Non-Employee Director) covering a specified maximum number of RSUs.

 

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9.2                               Terms of RSU Awards

 

The Committee will determine the terms of an RSU Award including, without limitation: (a) the number of RSUs subject to the RSU Award; (b) the time or times when the RSUs will vest, and be settled, (c) the Purchase Price, if any, payable under the RSU Award; (d) the consideration to be distributed on settlement; and (e) the effect of the Participant’s termination of Service on the RSU Award.  Vesting of RSUs may be subject to completion by the Participant of a specified period of Service or the satisfaction of such performance goals based on Performance Factors during any Performance Period as are set out in the Participant’s Award Agreement.  If vesting of RSUs is conditional upon satisfaction of Performance Factors, then the Committee will: (x) determine the nature, length and starting date of any Performance Period for the RSU Award; and (y) select from among the Performance Factors to be used to measure the performance.  Performance Periods may overlap and Participants may participate simultaneously with respect to RSU Awards that are subject to different Performance Periods and different performance goals and other criteria.

 

9.3                               Purchase Price

 

The Committee may determine the Purchase Price, if any, applicable to the RSU Award, provided always that if the Shares to be issued in settlement of RSUs are newly issued Shares, a Purchase Price of no less than the nominal value of the Shares shall be paid by the Participant.  Payment of any Purchase Price must be made in accordance with Section 14 of the Plan, the Award Agreement and any procedures established by the Company.

 

9.4                               Form and Timing of Settlement

 

Settlement of vested RSUs shall be made as soon as practicable after the vesting date(s) determined by the Committee and set forth in the Award Agreement.  The Committee, in its sole discretion, may settle vested RSUs in cash, Shares, or a combination of both.  The Committee may also permit a Participant to defer settlement under an RSU Award to a date or dates after the RSUs vest provided that the terms of the RSU Award and any deferral satisfy the requirements of Section 409A of the Code, if applicable.

 

9.5                               Termination of Service

 

Except as may be set forth in the Award Agreement, vesting of RSUs shall cease on the date the Participant’s Service terminates (unless determined otherwise by the Committee) and the RSU Award shall lapse on such date, to the extent the RSUs have not vested.

 

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SECTION 10.0 - UNRESTRICTED STOCK UNIT AWARDS

 

The Committee may grant Awards covering a specified number of Unrestricted Stock Units.  Each Unrestricted Stock Unit shall entitle the Participant to receive a Share which shall be free of all restrictions and vested in full upon the date of grant or such other date as the Committee may determine or which the Committee may issue pursuant to any program under which one or more Employees, Consultants or Directors elect to pay for such Shares or to receive unrestricted Shares in lieu of cash bonuses that would otherwise be paid.  The Committee shall determine the Purchase Price, if any, payable for Shares pursuant to an Unrestricted Stock Unit Award, which price may be less than the Fair Market Value of the Shares provided always that where such Shares are newly issued Shares, the Participant shall pay the nominal value of such Shares.  Payment of any Purchase Price must be made in accordance with Section 14 of the Plan, the Award Agreement and any procedures established by the Company.

 

SECTION 11.0 - PERFORMANCE AWARDS

 

11.1                        General

 

A Performance Award is an award to an eligible Employee, Consultant or Director (including a Non-Employee Director) of (a) a cash bonus, or (b) an award denominated in Shares (“Performance Shares”) that may be settled, in the discretion of the Committee, in cash, or by issuance or transfer of those Shares (which may consist of Restricted Shares).  Grants of Performance Awards shall be made pursuant to an Award Agreement.

 

11.2                        Terms of Performance Awards

 

The Committee will determine, and each Award Agreement shall set forth, the terms of each Performance Award including, without limitation: (a) the number of Performance Shares; (b) the Performance Factors and Performance Period that shall determine the time and extent to which each Performance Award shall be settled; (c) the consideration to be distributed on settlement of an Award of Performance Shares; and (d) the effect of the Participant’s termination of Service on the Performance Award.  In establishing Performance Factors and the Performance Period the Committee will: (x) determine the nature, length and starting date of any Performance Period; and (y) select from among the Performance Factors to be used.  Prior to settlement the Committee shall determine the extent to which Performance Awards have been earned.  Performance Periods may overlap and Participants may participate simultaneously with respect to Performance Awards that are subject to different Performance Periods and different performance goals and other criteria.

 

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11.3                        Value, Earning and Timing of Performance Shares

 

Each Performance Share will have an initial value equal to the Fair Market Value of a Share on the date of grant.  After the applicable Performance Period has ended, the holder of Performance Shares will be entitled to receive a payout of the number of Performance Shares earned by the Participant over the Performance Period, to be determined as a function of the extent to which the relevant Performance Factors or other vesting conditions have been achieved.  The Committee, in its sole discretion, may pay earned Performance Shares in the form of cash, in Shares (which have an aggregate Fair Market Value equal to the value of the number of earned Performance Shares at the close of the applicable Performance Period, and subject to payment by the Participant of the nominal value of any newly issued Shares) or in a combination thereof.

 

11.4                        Termination of Service

 

Except as may be set forth in the Participant’s Award Agreement, vesting ceases on the date Participant’s Service terminates (unless determined otherwise by the Committee) and the Performance Award lapses to the extent not vested.

 

SECTION 12.0 - AWARDS TO NON-EMPLOYEE DIRECTORS

 

12.1                        General

 

Prior to the Acquisition Effective Time, Non-Employee Directors were eligible to receive any type of Award offered under the Plan.

 

12.2                        Annual Individual Limit

 

Prior to the Acquisition Effective Time, in no event could the aggregate number of Shares subject to all Awards granted to a Non-Employee Director in any calendar year exceed 1,250,000 Ordinary Shares.

 

SECTION 13.0 - DIVIDEND EQUIVALENTS

 

13.1                        Option and SARs

 

No Dividend Equivalents shall be payable with respect to Options or SARs.

 

13.2                        Other Awards

 

To the extent provided under the terms of any Award Agreement in effect immediately prior to the Acquisition Effective Time, the corresponding Award

 

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(other than an Option or a SAR) shall have the right to receive Dividend Equivalents.  Such Dividend Equivalents shall be calculated based on dividends declared on the Shares to be credited as of dividend payment dates during the period between the date the Award is granted and the date such Award vests or is settled, as determined by the Committee.  Such Dividend Equivalents shall be converted to cash and/or Shares by such formula and at such time and subject to such limitations as may be determined by the Committee.  Dividend Equivalents granted in respect of an Award that is subject to vesting conditions that are based on dividends paid prior to the vesting of such Award shall only be paid out to the Participant if and to the extent the vesting conditions are subsequently satisfied and the Award vests.

 

SECTION 14.0 - PAYMENT FOR SHARES

 

14.1                        General

 

Payment by a Participant for Shares issued or transferred pursuant to the Plan may be made, to the extent permitted by Applicable Law and as determined by the Committee in its sole discretion, by any or any combination of the methods of payment set forth below.  The Committee shall have authority to grant Awards that do not permit all of the following methods of payment (or otherwise restrict the ability to use certain methods) and to grant Awards that require the consent of the Company to utilize a particular method of payment.

 

14.2                        Payment Methods

 

The permitted methods of payment are as follows:

 

14.2.1                        cash, cheque, wire transfer, bank draft or money order payable to the Company;

 

14.2.2                        by consideration received by the Company pursuant to a broker-assisted or other form of cashless exercise program implemented by the Company in connection with the Plan;

 

14.2.3                        by surrender to the Company of shares of the Company already owned by the Participant or Shares subject to the Award being settled that have a Fair Market Value on the date of surrender equal to the aggregate Exercise Price or Purchase Price of the Shares as to which the Award will be exercised or settled;

 

14.2.4                        by deduction from salary or other remuneration payable to the Participant, if permitted by Applicable Law; or

 

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14.2.5                        by any other method of payment as is permitted by Applicable Law and acceptable to the Committee, including through the net settlement of any Option.

 

SECTION 15.0 - TAXES

 

15.1                        Withholding/Deduction Generally

 

It shall be a condition of the grant, exercise, vesting, cancellation or surrender of an Award, the issuance or delivery of Shares to a Participant pursuant to an Award, and any other action in relation to an Award that the Participant shall make such arrangements as the Company, King or any Associated Company or the Employee Benefit Trust or the acquirer in any Corporate Transaction or any other party affiliated to or associated with the Company may require for the satisfaction of all and any applicable taxes, social security or insurance contributions and other duties and imposts for which such entity or party is liable to account in any jurisdiction and the Company shall not effect or permit the grant, exercise, vesting, cancellation or other action in relation to an Award, or the issuance or delivery of Shares to the Participant, until it is satisfied that all such obligations are or will be satisfied.  Whenever a payment in satisfaction of an Award is to be made in cash, such payment will be net of an amount determined by the Company, King or the Associated Company employing or engaging the Participant, sufficient to satisfy all applicable tax requirements and any other liability legally due from the Participant.  Without limiting the generality of the foregoing, the Company may withhold or account for taxes contemplated by this Section 15.1 by reference to applicable withholding rates, including minimum or maximum applicable statutory rates.

 

15.2                        Transfer of Employer Liability to Employee

 

To the extent permitted by, and in accordance with, Applicable Law, the Committee may determine in respect of any Award that liability for employer taxes, social security or insurance contributions or other imposts shall be transferred to or borne by the Participant.  In the event of such determination, the terms and conditions for same shall be set out in the Award Agreement.

 

15.3                        Share Withholding

 

The Committee in its sole discretion and pursuant to such procedures as it may specify from time to time and subject to Applicable Law, may require or permit a Participant to satisfy any tax or other liability due from the Participant as

 

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described in Section 15.1, or transferred to or borne by the Participant pursuant to a determination made under Section 15.2, in whole or in part by (without limitation); (a) paying cash, (b) directing the Company to withhold otherwise deliverable cash or Shares having a Fair Market Value equal to the amount required to satisfy the liability, (c) delivering to the Company already-owned Shares having a Fair Market Value equal to the amount required to satisfy the liability, or (d) withholding the amount required to satisfy the liability from the proceeds of the sale of otherwise deliverable Shares acquired pursuant to an Award either through a voluntary sale or through a mandatory sale arranged by the Company.  The Fair Market Value of the Shares to be withheld or delivered will be determined as of the date the tax or other liability arises, unless otherwise determined by the Committee.  For the sake of clarity, if the Company withholds, or the Participant delivers, Shares having a Fair Market Value greater than the amount required to satisfy the liability, the Participatant will receive a refund of any over-withheld amount in cash and will have no entitlement to the equivalent  Shares.

 

SECTION 16.0 - TRANSFERABILITY

 

16.1                        No Transfer Generally

 

Unless determined otherwise by the Committee or pursuant to Section 16.2, an Award may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner, other than by will or by the laws of descent or distribution, and an Award shall lapse to the extent it is purported to be sold, pledged, assigned, hypothecated, transferred or otherwise disposed of.  All Awards shall be exercisable: (a) during the Participant’s lifetime only by (i) the Participant, or (ii) the Participant’s guardian or legal representative; (b) after the Participant’s death, by the Participant’s estate or the person who acquired the right to the Award by bequest or inheritance, and (c) if the Committee has made the Award transferable pursuant to Section 16.2, by the transferee.

 

16.2                        Award Transfer Program

 

Notwithstanding any contrary provision of the Plan, the Committee shall have the discretion and authority to determine and implement the terms and conditions of any Award Transfer Program instituted pursuant to this Section 16 including, without limitation, to make Awards transferable by instrument to a financial institution or other person approved by the Committee, including an inter vivos or testamentary trust in which the Awards are to be passed to beneficiaries upon the death of the trustor (settlor), or by gift or by domestic relations order to a Permitted Transferee.  The Committee shall have the authority to amend the terms of any Award participating, or otherwise eligible to participate in, the Award

 

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Transfer Program, including (but not limited to) the authority to (a) amend (including to extend) the expiration date, post-termination exercise period and/or restrictions on transfer, forfeiture or compulsory transfer conditions of any such Award, (b) amend or remove any provision of the Award relating to the Participant’s continued Service, (c) amend the permissible payment methods with respect to the exercise or settlement of any such Award, (d) amend the adjustments to be implemented in the event of changes in the Company’s capitalization and other similar events with respect to such Award, and (e) include such additional terms and conditions and make such other changes to the terms of such Award or require the transferee to enter into a new Award Agreement as the Committee deems necessary or appropriate in its sole discretion.

 

SECTION 17.0 - SHARE OWNERSHIP

 

17.1                        Privileges of Share Ownership

 

No Participant will have any of the rights of a shareholder with respect to any Shares subject to or comprised in an Award until the Shares are issued or transferred to the Participant, except for any Dividend Equivalents provided in respect of the Award.  After Shares are issued or transferred to the Participant, the Participant will be a shareholder and have all the rights of a shareholder with respect to such Shares, including the right to vote and receive all dividends or other distributions made or paid with respect to such Shares; provided, that if such Shares are Restricted Shares, then any new, additional or different securities the Participant may become entitled to receive with respect to such Shares by virtue of a share dividend, share split or any other change in the corporate or capital structure of the Company will be subject to the same restrictions as the Restricted Shares; provided, further, that the Participant will have no right to retain such share dividends or share distributions with respect to Restricted Shares that do not vest and are compulsorily transferred or forfeited by the Participant in accordance with the Award Agreement.

 

17.2                        Certificates

 

All Shares or other securities, whether or not certificated, delivered under the Plan will be subject to such share transfer orders, legends and other restrictions as the Committee may deem necessary or advisable, including restrictions under any Applicable Law.

 

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SECTION 18.0 - RESERVED

 

SECTION 19.0 - SECURITIES LAW AND OTHER COMPLIANCE

 

19.1                        Compliance with Applicable Laws

 

An Award will not be effective unless such Award is in compliance with all Applicable Laws, as they are in effect on the date of grant of the Award and also on the date of exercise, vesting or settlement.  Notwithstanding any other provision of the Plan, the Company will have no obligation to issue or transfer or deliver certificates for Shares under the Plan prior to: (a) obtaining any approvals from governmental agencies that the Company determines are necessary or advisable; and/or (b) completion of any registration or other qualification of such Shares under any law or ruling of any governmental body that the Company determines to be necessary or advisable.  Except as otherwise required under the Transaction Agreement, the Company will be under no obligation to register the Shares with the SEC or to effect compliance with the registration, qualification or listing requirements of any securities laws, exchange control laws, stock exchange or automated quotation system, and the Company will have no liability for any inability or failure to do so.

 

19.2                        Insider Trading Policy

 

Each Participant shall comply with any policy adopted by the Company from time to time governing transactions in the Company’s securities by employees, officers and/or directors of the Company, King and any Associated Company.

 

19.3                        Malus and Clawback Policy

 

All Awards shall be subject to clawback pursuant to any compensation clawback or recoupment policy adopted by the Board (or a duly appointed committee thereof) or required by Applicable Law during the term of the Participant’s Service that is applicable to executive officers, employees, directors and/or other service providers of or to the Company, King or any Associated Company.  In addition to any other remedies available under Applicable Law, such policy may require, if so determined by the Committee in its sole discretion, the cancellation or forfeiture of outstanding Awards, in full or in part, (whether or not vested), a reduction in the number of Shares subject to an Award that would vest and/or become exercisable in accordance with the terms of the Award Agreement and/or the recoupment by the Company, King or any Associated Company of any economic benefit already realized by a Participant with respect to an Award or Shares delivered pursuant to an Award, if the Participant engages or has engaged

 

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in activity that is inimical, contrary or harmful to the interests of the Company, King or any Associated Company, as described in such policy.

 

19.4                        Data Protection

 

As a condition of the grant of an Award, the Participant consents to the collection, retention, use, processing and transfer of his Personal Data by the Company, King, any Associated Company, the trustees of the Employee Benefit Trust, any administrator of the Plan, the Company’s registrars, transfer agent, brokers and other agents (whether between themselves or to any third party and including transfer to countries outside the European Economic Area) for the purposes of implementing and operating the Plan.

 

SECTION 20.0 - EMPLOYMENT RELATIONSHIP

 

20.1                        No Obligation to Employ/ Right to Compensation

 

20.1.1                        Nothing in the Plan or any Award will confer or be deemed to confer on any Participant any right to continue in the Service of, or to continue any other relationship with, the Company, King or any Associated Company or limit in any way the right of the Company, King or any Associated Company to terminate the Participant’s employment or other relationship with the Company, King or any Associated Company at any time.

 

20.1.2                        All Awards shall be granted entirely at the discretion of the Committee.  Unless expressly so provided in his contract of employment or engagement, no individual employed or engaged by the Company, King or any Associated Company has the right to receive an Award or shall have any claim against the Company, King or any Associated Company arising out of his not being admitted to participation in the Plan.  The grant of an Award to a Participant shall not entitle him to receive any subsequent Awards.

 

20.1.3                        Neither the Plan nor an Award shall form part of any contract of employment or engagement between the Company, King or any Associated Company and any Participant.

 

20.1.4                        A Participant is not entitled to the exercise in his favour of any discretion exercisable by the Committee, the Company, King or any Associated Company under the Plan.

 

20.1.5                        The Plan, or any Award made to a Participant or the loss of any right or entitlement to or under such Award on termination of the Participant’s

 

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Service, for any reason, shall not give to a Participant any right to continued Service or any additional right to compensation or damages in consequence of the termination of his Service, whether for wrongful dismissal or otherwise.

 

20.1.6                        The benefit to a Participant of participation in the Plan (including, in particular but not by way of limitation, any Award held by him) shall not count as his remuneration for any purpose and shall not count as part of his pensionable salary for the purpose of any employer contribution to any pension plan operated by the Company, King or any Associated Company.

 

20.2                        No Obligation to Notify or Minimize Taxes

 

The Company, King and any Associated Company shall have no duty or obligation to any Participant to advise him as to the time or manner of exercising an Award.  Furthermore, the Company, King and any Associated Company shall have no duty or obligation to warn or otherwise advise any Participant of a pending termination or lapse or expiration of an Award or a possible period in which the Award may not be exercised.  The Company, King and any Associated Company shall have no duty or obligation to minimize the tax consequences of an Award to a Participant.

 

SECTION 21.0 - CORPORATE TRANSACTION

 

21.1                        Treatment of Awards

 

21.1.1                        Notwithstanding any other provision of the Plan, in the event that a Corporate Transaction occurs or will occur, the Committee may determine that any one or more of the following actions will be taken with respect to each outstanding Award, without the consent of a Participant (save as required by Applicable Law), contingent upon the Corporate Transaction becoming effective in accordance with its terms:

 

(a)                                 Options, to the extent not fully exercisable, shall become exercisable in full or in part;

 

(b)                                 SARs, to the extent not fully exercisable, shall become exercisable in full or in part and be settled;

 

(c)                                  RSUs to the extent not vested and/or settled in full, shall become vested in full or in part and be settled;

 

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(d)                                 Unrestricted Stock Units, to the extent not settled, shall be settled;

 

(e)                                  Performance Awards shall be settled in full or in part;

 

(f)                                   if exercise or vesting or settlement of an Award is conditional upon the satisfaction of Performance Factors, waive such Performance Factors in full or in part or measure the performance as of the date of the Corporate Transaction or a date prior thereto and/or pro-rate the number of Shares that become exercisable or vested or eligible for settlement based on the period of the Performance Period completed up to the date of the Corporate Transaction or such other measurement date;

 

(g)                                  cancel, without payment to the Participant of consideration, any Award pursuant to which Shares have not been issued or delivered if the Exercise Price or Purchase Price under the Award is equal to or greater than the value of the consideration payable for a Share in the Corporate Transaction;

 

(h)                                 cancel any Award pursuant to which Shares have not been issued in exchange for one or more payments from the Company or acquiring entity or its parent company, in cash and/or securities and/or other consideration, equivalent in value per Share, as determined by the  Committee, to the amount by which value of the consideration payable for a Share in the Corporate Transaction exceeds the Exercise Price or Purchase Price under the Award and on such terms as the Committee determines, subject to deduction of applicable taxes and other required deductions;

 

(i)                                     give Participants an opportunity to exercise any Options and/or SARs within a specified period;

 

(j)                                    determine that any Award shall be assumed by the surviving corporation (or a parent or subsidiary of the surviving corporation or successor) or surrendered by the Participant and converted into or replaced with an equivalent award, as determined by the Committee, in respect of such corporation’s shares;

 

(k)                                 in the case of Shares held by a Participant under an Award that are subject to restrictions, determine that such Shares shall be exchanged for or replaced with substantially similar shares or other property of the surviving corporation (or a parent or

 

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subsidiary of the surviving corporation or successor) subject to restrictions no less favorable to the Participant that will substantially preserve the applicable terms of the Award; or

 

(l)                                     take any other action in relation to an Award that, in the sole discretion of the Committee, is equitable and substantially delivers or preserves the value of the Award having regard to the terms of the Award and the terms of the Corporate Transaction.

 

Any such accelerated vesting, exercise, cancellation, surrender, termination, lapse, settlement, assumption, exchange, replacement or conversion shall take place as of the date the Corporate Transaction becomes effective in accordance with its terms or such other date as the Committee determines.

 

21.1.2                        Notwithstanding the foregoing provisions, however, to the extent that any Award or the Shares subject thereto are not accelerated, cancelled, surrendered, terminated, settled, assumed, exchanged, replaced or converted, as appropriate, pursuant to Section 21.1.1, then (i) if such Award is an Option or SAR, the Committee shall notify the Participant that it may be exercised, to the extent exercisable, during a period of time specified by the Committee, and to the extent not so exercised shall lapse upon the Corporate Transaction becoming effective in accordance with its terms, and (ii) in the case of any other Award, the Award shall lapse upon the Corporate Transaction becoming effective in accordance with its terms.

 

21.1.3                        The Committee may specify how an Award will be treated in the event of a Corporate Transaction either when the Award is granted or at any time thereafter.

 

21.1.4                        The Committee need not take the same action or actions with respect to all Awards or portions thereof or with respect to all Participants.

 

21.1.5                        The Committee shall have full and final authority, which shall be exercised in its sole discretion, to determine conclusively whether a Corporate Transaction has occurred pursuant to the provisions of the Plan, the date the Corporate Transaction becomes effective and any incidental matters relating thereto.

 

21.2                        Involuntary Termination following Corporate Transaction

 

The Committee may provide at the time of grant of an Award or at any time thereafter that in the event the Award continues after the Corporate Transaction,

 

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whether pursuant to replacement, assumption, substitution, exchange or conversion pursuant to Section 21.1, and the Service of the Participant terminates by reason of an Involuntary Termination within eighteen (18) months after the Corporate Transaction, the Award (as so replaced, assumed, substituted, exchanged or converted), to the extent not exercisable or vested in full, shall become exercisable or vest in full or in part on the date of such termination of Service.  Unless otherwise determined by the Committee, Involuntary Termination shall have the meaning set out in Section 25.

 

SECTION 22.0 - DISSOLUTION OR LIQUIDATION

 

Except as otherwise provided in an Award Agreement, in the event of a dissolution or liquidation of the Company, other than one constituting a Corporate Transaction, all outstanding Awards shall terminate immediately prior to the completion of such dissolution or liquidation, and any Restricted Shares subject to the Company’s repurchase rights or subject to a forfeiture condition or compulsory transfer may be repurchased or reacquired by the Company or the Employee Benefit Trust on the terms set out in the Award Agreement; provided, however, that the Committee may, in its sole discretion, cause some or all Awards to become fully vested and exercisable (to the extent such Awards have not previously expired or terminated) and/or Restricted Shares to be no longer subject to repurchase or forfeiture or compulsory transfer or other restrictions, before the dissolution or liquidation is completed but contingent on its completion and on such conditions as the Committee determines.

 

SECTION 23.0 - TERM AND AMENDMENT OF PLAN

 

23.1                        Term of Plan

 

The Plan became effective on the Effective Date, was amended and restated in connection with the acquisition of King by the Company, effective as of the Acquisition Effective Time, and, unless earlier terminated as provided herein, will terminate on 5 March 2024.

 

23.2                        Amendment or Termination of the Plan

 

The Board may at any time suspend, terminate or amend the Plan in any respect, including, without limitation, amendment of any form of Award Agreement or instrument to be executed pursuant to the Plan; provided, however, that the Board will not, without the approval of the shareholders of the Company, amend the Plan in any manner that requires such shareholder approval, whether pursuant to

 

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the rules of any stock exchange on which the Company’s shares are listed for trading or any other Applicable Law.

 

No amendment, suspension or termination of the Plan shall, without the consent of the Participant, alter or impair any rights or obligations under any Award theretofore granted unless the Award itself otherwise expressly so provides.

 

SECTION 24.0 - OTHER PROVISIONS

 

24.1                        Governing Law

 

This Plan and all Awards shall be governed by and construed in accordance with the laws of England and Wales, except that the laws of the State of Delaware shall govern any questions that pertain to the Common Stock of the Company or whether the Company has engaged in a Corporate Transaction.

 

24.2                        Jurisdiction

 

The Courts of England and Wales shall have exclusive jurisdiction over all matters pertaining to Awards granted under the Plan.

 

24.3                        Non-Exclusivity of the Plan

 

Neither the assumption of this Plan by the Company, nor any provision of this Plan will be construed as creating any limitations on the power of the Committee or the Board to adopt such additional compensation arrangements as they may deem desirable, including, without limitation, the granting of share awards and bonuses otherwise than under this Plan, and such arrangements may be either generally applicable or applicable only in specific cases.

 

SECTION 25.0 - DEFINITIONS AND INTERPRETATION

 

25.1                        Definitions

 

As used in the Plan, and except as elsewhere defined herein, the following terms will have the following meanings:

 

25.1.1                        “Acquisition Effective Date” means 23 February 2016;

 

25.1.2                        “Acquisition Effective Time” means the time on the Acquisition Effective Date at which the transactions contemplated under the Transaction Agreement are consummated.

 

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25.1.3                        “Applicable Law” means the laws of England and Wales, any legal requirement relating to the Plan, Awards and/or Shares under applicable U.S. federal law, the law of the State of Delaware and other state laws, the listing rules of NASDAQ or any other applicable stock exchange or automated quotation system rules or regulations, the Code, and the applicable laws, rules, regulations and requirements of any country or jurisdiction where Awards are or are to be granted, exercised, vest or be settled, as such laws, rules, regulations and requirements shall be in place from time to time;

 

25.1.4                        “Associated Company” means any Subsidiary of King or the Company;

 

25.1.5                        “Award” means any award granted under the Plan, including any Option, Stock Appreciation Right (SAR), Restricted Share Award, Restricted Stock Unit (RSU) Award, Unrestricted Stock Unit Award, Performance Award or Substitute Award;

 

25.1.6                        “Award Agreement” means, with respect to each Award, any written or electronic agreement between King or the Company and the Participant setting forth the terms and conditions of the Award, and any country-specific appendix thereto, which shall be in substantially a form (which need not be the same for each Participant) that the Committee has from time to time approved, and will comply with and be subject to the terms and conditions of the Plan;

 

25.1.7                        “Award Transfer Program” means any program instituted by the Committee which would permit one or more Participants the opportunity to transfer Awards pursuant the provisions of Section 16.2;

 

25.1.8                        “Board” means the board of directors of the Company;

 

25.1.9                        “Cause” has the meaning set out in any unexpired employment agreement between the Participant and the Company or, in the absence of such meaning being so set out, means (a) the Participant’s willful failure substantially to perform his duties and responsibilities to the Company, King or any Associated Company or deliberate violation of a Company or King policy; (b) the Participant’s commission of any act of fraud, embezzlement, dishonesty or any other willful misconduct that has caused or is reasonably expected to result in material injury to the Company; (c) unauthorized use or disclosure by the Participant of any proprietary information or trade secrets of the Company or any other party to whom the Participant owes an obligation of nondisclosure as a result of his relationship with the Company; or (d) the Participant’s willful breach of any of his obligations under any written agreement or

 

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covenant with the Company.  The determination as to whether a Participant is being terminated for Cause shall be made in good faith by the Company and shall be final and binding on the Participant.  The foregoing definition does not in any way limit the Company’s ability to terminate a Participant’s employment or consulting or other service relationship at any time as provided in Section 20, and the term “Company” will be interpreted to include King and any Associated Company, as appropriate.  Notwithstanding the foregoing, the foregoing definition of “Cause” may, in part or in whole, be modified or replaced in each individual employment agreement or Award Agreement with any Participant or any country-specific appendix, and any such definition shall supersede the definition provided in this Section 25.1.9;

 

25.1.10                 “Code” means the United States Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder;

 

25.1.11                 “Committee” means the Compensation Committee of the Board or those persons to whom administration of the Plan, or part of the Plan, has been delegated pursuant to Section 5.2;

 

25.1.12                 “Company” means Activision Blizzard Inc. or any successor corporation;

 

25.1.13                 “Consultant” means any person, including an advisor or independent contractor, engaged by the Company, King or an Associated Company to render services to such entity;

 

25.1.14                 “Corporate Transaction” means the consummation, in a single transaction or in a series of related transactions, of any one or more of the following:

 

(a)                                 an acquisition by a person, entity or “group” (within the meaning of Section 13(d) of the Exchange Act or any comparable successor provisions), other than in a merger or consolidation of the type referred to in subsection 25.1.13(c), of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act, or comparable successor rules) of issued or outstanding voting securities of the Company representing more than fifty per cent (50%) of the combined voting power or the Company, whether as a result of making a general offer to acquire the whole of the issued share capital of the Company or all the shares in the Company which are of the same class as the Shares, a court-sanctioned compromise or scheme of arrangement, or otherwise; or

 

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(b)                                 a sale or other disposition of all or substantially all, as determined by the Board in its sole discretion, of the consolidated assets of the Company and its Subsidiaries; or

 

(c)                                  a merger, consolidation, reorganization or business combination with any other corporation (whether directly involving the Company or indirectly involving the Company through one or more intermediaries) in each case other than a transaction:

 

(i)                                     which results in the Company’s voting securities in issue immediately before the transaction continuing to represent (either by remaining in issue or outstanding or by being converted into voting securities of the company or the person that, as a result of the transaction, controls, directly or indirectly, the Company or owns, directly or indirectly, all or substantially all of the Company’s assets or otherwise succeeds to the business of the Company (the Company or such person, the “Successor Entity”)) directly or indirectly, at least 50% of the combined voting power of the Successor Entity’s issued or outstanding voting securities immediately after the transaction, and

 

(ii)                                  after which no person, entity or group beneficially owns voting securities representing 50% or more of the combined voting power of the Successor Entity; provided, however, that no person or group shall be treated for purposes of this Section 25.1.13.(c)(ii) as beneficially owning 50% or more of the combined voting power of the Successor Entity solely as a result of the voting power held in the Company prior to the consummation of the transaction.

 

25.1.15                 “Director” means a member of the board of directors of the Company, King or any Associated Company (it being understood that only persons who were members of the board of directors of King prior to the Acquisition Effective Time were eligible to receive Awards by reason of service as a Director);

 

25.1.16                 “Disability” means that the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months;

 

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25.1.17                 “Dividend Equivalent” means a right to receive the equivalent value of dividends paid on Shares;

 

25.1.18                 “Effective Date” means 25 March 2014;

 

25.1.19                 “Employee” means any person, including any officer or director, employed by the Company, King or any Associated Company.  Neither service as a Director nor payment of a Director’s fee by the Company or King will be sufficient to constitute “employment” by King or any Associated Company;

 

25.1.20                 “Employee Benefit Trust” means the employee benefit trust established by King by way of a Deed of Trust on 24 March 2014, the trustee of which is Computershare Trustees (Jersey) Limited;

 

25.1.21                 “Exchange Act” means the United States Securities Exchange Act of 1934, as amended;

 

25.1.22                 “Exchange Ratio” means the quotient obtained by dividing (A) $18.00, which is the consideration per Ordinary Share paid in connection with the transaction contemplated by the Transaction Agreement by (B) the average closing price of the Common Stock on NASDAQ for the five trading day period ending on the trading day preceding the Acquisition Effective Date or, if the Common Stock was not available for trading on NASDAQ on the day preceding the Acquisition Effective Date, on the last day prior to the day preceding the Acquisition Effective Date that the Common Stock was available for trading on NASDAQ;

 

25.1.23                 “Exercise Price” means, with respect to an Option, the price per Share at which the Participant may subscribe for the Shares issuable upon exercise of the Option and, with respect to a SAR, the price per Share at which the SAR is granted to the Participant;

 

25.1.24                 “Fair Market Value” means, as of any date, the value of a Share determined as follows:

 

(a)                                 if the Shares are publicly traded and listed on a national securities exchange, the closing price on the date of determination on the principal national securities exchange on which the Shares are listed or admitted to trading as reported in The Wall Street Journal or such other source as the Committee deems reliable;

 

(b)                                 if the Shares are publicly traded but are neither listed nor admitted to trading on a national securities exchange, the average

 

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of the closing bid and asked prices on the date of determination as reported in The Wall Street Journal or such other source as the Committee deems reliable;

 

(c)                                  in the case of an Option or SAR grant made on the Effective Date, the price per share at which the Shares are initially offered for sale to the public by the Company’s underwriters in the initial public offering of the Shares pursuant to a registration statement filed with the SEC under the Securities Act; or

 

(d)                                 if none of the foregoing is applicable, by the Board or the Committee in good faith;

 

25.1.25                 “Insider Trading Policy” means any policy adopted by the Company from time to time governing transactions in the Company’s securities by employees, officers and/or directors of the Company, King and any Associated Company;

 

25.1.26                 “Involuntary Termination” means termination of a Participant’s service with the Company, King or an Associated Company or successor thereto in the following circumstances occurring on or after a Corporate Transaction:

 

(a)                                 termination without Cause by the Company, King or an Associated Company or successor thereto, as appropriate; or

 

(b)                                 voluntary termination by the Participant within 90 days following:

 

(i)                                     a material reduction in the Participant’s job responsibilities, provided that neither a mere change in title alone nor reassignment to a substantially similar position shall constitute a material reduction in job responsibilities;

 

(ii)                                  an involuntary relocation of the Participant’s principal work site to a facility or location more than 50 miles from the Participant’s principal work site at the time of the Corporate Transaction; or

 

(iii)                               a material reduction in the Participant’s total compensation other than as part of a reduction by the same percentage amount in the compensation of all other similarly-situated Employees, Directors or Consultants;

 

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25.1.27                 “King” means King Digital Entertainment, a public limited company, incorporated under the laws of Ireland, which promptly following the Acquisition Effective Date will become a private limited company, with registered number 529753;

 

25.1.28                 “NASDAQ” means the NASDAQ Stock Market;

 

25.1.29                 “Non-Employee Director” means a Director who is not an Employee of the Company, King or any Associated Company;

 

25.1.30                 “Option” means an award of an option to subscribe for Shares pursuant to Section 6;

 

25.1.31                 “Ordinary Share” means, prior to the Acquisition Effective Time, an Ordinary Share in the capital of King;

 

25.1.32                 “Participant” means a person who holds an Award, or any permitted transferee pursuant to an Award Transfer Program or the Participant’s guardian or legal personal representative where applicable;

 

25.1.33                 “Performance Award” means an award of cash or Performance Shares granted pursuant to Section 11;

 

25.1.34                 “Performance Factors” means any of the factors selected by the Committee and specified in an Award Agreement from among the following objective measures, either individually, alternatively or in any combination, applied to the Company as a whole or any business unit or Subsidiary, either individually, alternatively, or in any combination, on a GAAP or non-GAAP basis, and measured, to the extent applicable on an absolute basis or relative to a pre-established target, to determine whether the performance goals established by the Committee with respect to the Award have been satisfied:

 

(a)                                 profit before tax;

 

(b)                                 billings;

 

(c)                                  revenue;

 

(d)                                 net revenue;

 

(e)                                  earnings (which may include earnings before interest and taxes, earnings before taxes, and net earnings);

 

(f)                                   operating income;

 

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(g)                                  operating margin;

 

(h)                                 operating profit;

 

(i)                                     controllable operating profit, or net operating profit;

 

(j)                                    net profit;

 

(k)                                 gross margin;

 

(l)                                     operating expenses or operating expenses as a percentage of revenue;

 

(m)                             net income;

 

(n)                                 earnings per share;

 

(o)                                 total shareholder return;

 

(p)                                 market share;

 

(q)                                 return on assets or net assets;

 

(r)                                    the Company’s share price;

 

(s)                                   growth in shareholder value relative to a pre-determined index;

 

(t)                                    return on equity;

 

(u)                                 return on invested capital;

 

(v)                                 cash flow (including free cash flow or operating cash flows);

 

(w)                               cash conversion cycle;

 

(x)                                 economic value added;

 

(y)                                 individual confidential business objectives;

 

(z)                                  contract awards or backlog;

 

(aa)                          overhead or other expense reduction;

 

(bb)                          credit rating;

 

(cc)                            strategic plan development and implementation;

 

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(dd)                          succession plan development and implementation;

 

(ee)                            improvement in workforce diversity;

 

(ff)                              customer indicators;

 

(gg)                            new product invention or innovation;

 

(hh)                          attainment of research and development milestones;

 

(ii)                                  improvements in productivity;

 

(jj)                                bookings;

 

(kk)                          attainment of objective operating goals and employee metrics;

 

(ll)                                  launch of a new game; and

 

(mm)                  any other metric that is capable of measurement as determined by the Committee.

 

The Committee may, in recognition of unusual or non-recurring items such as acquisition-related activities or changes in applicable accounting rules, provide for one or more equitable adjustments (based on objective standards) to the Performance Factors to preserve the Committee’s original intent regarding the Performance Factors at the time of the initial Award grant.  It is within the sole discretion of the Committee to make or not make any such equitable adjustments;

 

25.1.35                 “Performance Period” means the period of service determined by the Committee, not to exceed five (5) years, during which performance is to be measured for an Award;

 

25.1.36                 “Performance Share” means a Performance Share comprised in a Performance Award granted pursuant to Section 11;

 

25.1.37                 “Permitted Transferee” means any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law (including adoptive relationships) of the Participant, any person sharing the Participant’s household (other than a tenant or employee), a trust in which these persons (or the Participant) have more than 50% of the beneficial interest, a foundation in which these persons (or the Participant) control the management of assets, and any other

 

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entity in which these persons (or the Participant) own more than 50% of the voting interests;

 

25.1.38                 “Personal Data” has the meaning assigned to that term in Section 2 of Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data;

 

25.1.39                 “Plan” means this Activision Blizzard Inc. KDE Equity Incentive Plan;

 

25.1.40                 “Purchase Price” means the price to be paid for Shares acquired under the Plan, other than Shares acquired upon exercise of an Option or SAR;

 

25.1.41                 “Restricted Share Award” means an award of Shares pursuant to Section 8;

 

25.1.42                 “Restricted Stock Unit” means a right, subject to conditions, to acquire a Share;

 

25.1.43                 “Restricted Stock Unit Award” means an Award of Restricted Stock Units granted pursuant to Section 9;

 

25.1.44                 “SEC” means the United States Securities and Exchange Commission;

 

25.1.45                 “Securities Act” means the United States Securities Act of 1933, as amended;

 

25.1.46                 “Service” means service as an Employee, Consultant, Director or Non-Employee Director, subject to such further limitations as may be set forth in the Plan or the applicable Award Agreement.  An Employee will not be deemed to have ceased to provide Service in the case of (a) statutory leave, (b) military leave, or (c) any other leave of absence approved by the Company or provided pursuant to a formal policy adopted from time to time by the Company, King or any Associated Company by which the Participant is employed, and issued and promulgated to employees in writing.  In the case of any Employee on a statutory, military or other approved leave of absence or whose normal working hours reduce (for illustrative purposes only, a change in schedule from that of full-time to part-time), the Committee may make such provisions regarding suspension or tolling of or modification to vesting of the Award while on leave from the employ of the Company, King or an Associated Company or during such reduction in working hours as it may deem appropriate, subject to Applicable Law, except that in no event may an Award be exercised after the expiration of the term for exercise set forth in the

 

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applicable Award Agreement.  An Employee shall have terminated employment as of the date he ceases to be employed (regardless of whether the termination is in breach of local employment laws or is later found to be invalid) and, subject to Applicable Law, employment shall not be extended by any notice period or garden leave mandated by local law, provided however, that a change in status from an Employee to a Consultant or Director shall not terminate the service provider’s Service, unless determined by the Committee in its discretion.  The Committee will have sole discretion to determine whether a Participant has ceased to be in Service and the effective date on which the Participant ceased to be in Service;

 

25.1.47                 “Shares” means (i) from the Acquisition Effective Time, the Common Stock of the Company or of any successor entity, and (ii) prior to the Acquisition Effective Time, Ordinary Shares;

 

25.1.48                 “Stock Appreciation Right” means an Award granted pursuant to Section 7;

 

25.1.49                 “Subsidiary” means a company which is a subsidiary within the meaning of Section 7 of the Companies Act, 2014 of Ireland;

 

25.1.50                 “Substitute Award” means an Award granted under Section 2.3 of the Plan;

 

25.1.51                 “Transaction Agreement” means the Transaction Agreement, dated 2 November 2015, by and between King, the Company and ABS Partners CV.;

 

25.1.52                 “Unrestricted Stock Unit”, means a right to acquire a Share; and

 

25.1.53                 “Unrestricted Stock Unit Award”, means an award of Unrestricted Stock Units granted pursuant to Section 10.

 

25.2                        Interpretation

 

In this Plan, where the context permits or requires:

 

25.2.1                        the singular shall include the plural and vice versa and the masculine shall include the feminine;

 

25.2.2                        a reference to a statutory provision includes any statutory modification, amendment or re-enactment;

 

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25.2.3                        the contents and headings are for ease of reference only and shall not affect their interpretation; and

 

25.2.4                        a reference to a Section shall, unless the context otherwise requires, be a reference to a Section of the Plan.

 

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ACTIVISION BLIZZARD INC.

 

KDE EQUITY INCENTIVE PLAN

 

SUB-PLAN GOVERNING AWARDS TO PARTICIPANTS IN ROMANIA

 

1.                                      General

 

1.1                               In accordance with Section 5.6.4 of the Activision Blizzard Inc. KDE Equity Incentive Plan (the “Plan”) the Board has determined to establish this sub-plan (the “Romania Sub-Plan”) for the purposes of Awards made to Employees, Consultants, Directors and Non-Employee Directors of the Associated Company located in Romania.

 

1.2                               All terms that are not otherwise defined herein shall have the same meaning as set forth in the Plan.

 

2.                                      Amendments

 

2.1                               The Plan shall be amended as follows:

 

Section 14.2 (Payment Methods)

 

Section 14.2.4 shall be deleted.

 

Section 20.1 (No Obligation to Employ/ Right to Compensation)

 

The provisions of Section 20.1.2 shall be deleted and replaced by the following:

 

“All Awards shall be granted entirely at the discretion of the Committee.  No individual employed or engaged by the Company, King or any Associated Company has the right to receive an Award or shall have any claim against the Company, King or any Associated Company arising out of his not being admitted to participation in the Plan.  The grant of an Award to a Participant shall not entitle him to receive any subsequent Awards.”

 

Section 25.1.9 (Definitions — “Cause”)

 

In so far as Employees are concerned, “Cause” means any termination of the respective Employee’s individual employment agreement, in accordance with Law No. 53/2003 - Labour Code, as republished and amended, and either effectively initiated by the respective Employee or, as the case may be, triggered by the respective Employee’s fault, including without limitation the Employee’s resignation, the Employee’s disciplinary dismissal, the Employee’s preventive arrest for a period of more than 30 calendar days etc.

 

 

Section 25.1.16 (Definitions — “Disability”)

 

In so far as Employees are concerned, “Disability” means the physical and/or mental impairment, preventing the Employee from duly accomplishing its job attributions, as ascertained by competent medical bodies and triggering the termination of their respective individual employment agreement, for reasons related to the person of the employee, in accordance with Law No. 53/2003 - Labour Code, as republished and amended.

 

2

 

ACTIVISION BLIZZARD INC.

 

KDE EQUITY INCENTIVE PLAN

 

SUB-PLAN GOVERNING AWARDS TO PARTICIPANTS IN THE REPUBLIC OF KOREA

 

1.                                      General

 

1.1                               In accordance with Section 5.6.4 of the Activision Blizzard Inc. KDE Equity Incentive Plan (the “Plan”) the Board has determined to establish this sub-plan (the “Korea Sub-Plan”) for the purposes of Awards made to Employees, Consultants, Directors and Non-Employee Directors of the Company, King or any Associated Company who are resident in the Republic of Korea.

 

1.2                               All terms that are not otherwise defined herein shall have the same meaning as set forth in the Plan.

 

2.                                      Amendments

 

2.1                               The Plan shall be amended as follows:

 

Section 19.0 — Securities Law and Other Compliance

 

The provisions of Section 19.1 shall be deleted and replaced by the following:

 

“19.1 Compliance with Applicable Laws

 

The provisions of Section 19.1 shall be deleted and replaced by the following:

 

An Award will not be effective unless such Award is in compliance with all Applicable Laws, as they are in effect on the date of grant of the Award and also on the date of exercise, vesting or settlement.  Notwithstanding any other provision of the Plan, the Company will have no obligation to issue or transfer or deliver certificates for Shares under the Plan prior to: (a) obtaining any approvals from governmental agencies that the Company determines are necessary or advisable; and/or (b) completion of any registration or other qualification of such Shares under any law or ruling of any governmental body that the Company determines to be necessary or advisable.  The Company will be under no obligation to register the Shares with the SEC or to effect compliance with the registration, qualification or listing requirements of any securities laws, exchange control laws, stock

 

 

exchange or automated quotation system, and the Company will have no liability for any inability or failure to do so.

 

Further, if, under Applicable Law, the Participant must file a report with or receive the approval of the Governor of the Bank of Korea or other supervisory agencies (“Approvals”) in order to acquire the Shares or to receive the Awards, then the Participant’s obtainment of such Approvals shall be a condition precedent to the Participant’s right to acquire the Shares or to receive the Awards.  If the Participant, for any reason, fails to obtain such Approvals, then the Company shall bear no obligation whatsoever to the Participant regarding the Shares or the Awards.”

 

Section 20.0 — Employment Relationship

 

The provisions of Section 20.1.5 shall be deleted and replaced by the following:

 

“20.1.5              The Plan, or any Award made to a Participant or the loss of any right or entitlement to or under such Award on termination of the Participant’s Service, for any reason, shall not give to a Participant any right to continued Service or any additional right to compensation or damages in consequence of the termination of his Service.”

 

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