Document:

Exhibit 10.5

 

CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS DOCUMENT BASED
UPON A REQUEST FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934 AND HAVE BEEN SEPARATELY
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THE LOCATION OF OMITTED TEXT IS INDICATED BY AN ASTERISK (*) 

MO
PUB, INC. 

MARKETPLACE
FOR PREMIER PUBLISHERS 

This
MoPub, inc. Marketplace for Premier Publishers Agreement consists of this Cover Page, the attached Terms and Conditions, and any
additional Exhibits (collectively, this "Agreement") between MoPub, Inc. ("MoPub") and the customer identified
below ("Customer").

Cover
Page

	Effective
    Date: February 20, 2013	Customer
    Description: Zedge Holdings Inc. is a provider of mobile personalization content (ringtones, wallpaper, games, etc.).
	Customer:
    Zedge Holdings Inc.	Address:
    22 Cortland Street (12th floor) New York, NY 10007
	Business
    Contact Name: Jonathan Reich	Phone
    Number: (330) 577-3424
	Business
    Contact Email: jonathan@zedge.net	 

Term: Initial
term of 1 year beginning on the Effective Date. Thereafter, the term will continue until either party gives 30 days
prior written notice of its election to terminate for convenience, to the other party.

The
MoPub Services provided under this Agreement: 

1.      MoPub
Marketplace for Premier Publishers, the MoPub Marketplace service that provides automated real-time bidding services
for publishers selling their available inventory to demand advertisers in the MoPub Marketplace. MoPub will pay Customer the Revenue
Share Fee as follows: 

"Revenue
Share Fee" means * of Net Marketplace Revenue in the first partial and first full calendar month. Thereafter, the
percentage may decrease or stay the same, for the subsequent calendar month, based on the number of RTB requests sent by
Customer to the MoPub Marketplace in the immediately preceding month, as follows:

	 	(a)	If
    during any calendar month during the Term, Customer sends more than * million RTB requests to the MoPub Marketplace,
    the Revenue Share Fee shall be * of Net Marketplace Revenue, effective for all RTB requests sent to the MoPub
    Marketplace     in the following calendar month.
	 	(b)	If
    during any calendar month during the Term, Customer sends * million or less-RTB requests, but more than *  million
    RTB requests to the MoPub Marketplace, the Revenue Share Fee shall decrease to * of Net Marketplace Revenue, effective
    for all RTB requests sent to the MoPub Marketplace in the following calendar month.
	 	(c)	If
    during any calendar month during the Term, Customer sends 90 million RTB requests or less to the MoPub Marketplace,
    the Revenue Share Fee shall decrease to the then current Net Marketplace Revenue as set forth in the online terms and
    conditions located at http://www.mopub.com/legal/terms,effective for all RTB requests sent to the MoPub Marketplace in the following calendar month, and so forth. For the purpose
    of clarity, Ad Serving Fees do not apply to ads served via the MoPub Marketplace.

 "Net
Marketplace Revenue" means fees actually collected from third party advertisers whose Ads were served to Customer's Inventory,
less any (a) media buying fees, bid reductions or CPM serving costs; (b) operating fees, fraud, charge backs, refunds, uncollected
amounts, credit card processing fees and other reasonable deductions which will not exceed 10% of the gross fee amounts; and (c)
if applicable, any wire or international transaction fees. For the purpose of clarity, Ad Serving Fees do not apply to ads served
via the MoPub Marketplace.

Payment:
MoPub will pay Customer the Revenue Share Fee within 45 days after the last day of the calendar month in which MoPub received
the applicable Net Marketplace Revenue, provided that no payment will be issued for any amount less than $100 U.S and any unpaid
earnings will rollover and accrue to the next pay period. If Customer is both a MoPub Premier and MoPub Marketplace Publisher
customer, then at MoPub's election, MoPub may offset the Net Marketplace Revenue owed to Customer by the amount of Ad Serving
Fees owed to MoPub. 

Please
see Exhibit B for further explanation of Net Marketplace Revenue. 

2.      MoPub
Premier Ad Serving, the premium MoPub Platform service that provides mobile direct ad serving, tracking and monetization services
for premium publishers. Customer wileay MoPub the following collective fees ("Ad Serving Fees"): 

Guaranteed
Campaigns Fee: * CPM for Ads directly served on Customer Network via the MoPub Platform that Customer lists as
'Guaranteed Campaigns' In the floPub UI.

Promotional
Campaigns Fee: * CPM for internal or external Ads served via the MoPub Platform that Customer lists as "Promotional
Campaigns" in the MoPub UI.      

Backfill
Promotional Campaigns Fee: * CPM for internal cross promotion, house ad, and backfill capabilities Ads served via the
MoPub Platform that Customer lists as “Backfill Promotional” in the MoPub UI.

Network
Mediation Fee: * for network mediated Ads served via MoPub Platform that Customer requests under the "Network"
section of the MoPub UI.

Payment:
MoPub will invoice Customer monthly. Customer will pay all amounts within * lays of the invoice date.

Please
see Exhibit C for conditions pertaining to timing of invoice.

    	 

     

    

 

CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS DOCUMENT BASED
UPON A REQUEST FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934 AND HAVE BEEN SEPARATELY
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THE LOCATION OF OMITTED TEXT IS INDICATED BY AN ASTERISK (*) 

 

IN
WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives.

 

	MoPub,
    Inc.:	 	 	Customer:	 
	 	 	 	 	 
	Signature:	/s/
    Kevin Weatherman	 	Signature:	/s/
    Jonathan Reich
	 	Kevin
    Weatherman (Fab 21, 201.3)	 	 	 
	 	 	 	 	 
	Printed
    Name:	Kevin
    Weatherman	 	Printed
    Name:	JONATHAN
    REICH
	 	 	 	 	 
	Title:	VP
    of Business Development	 	Title: 	COO

 

Address:
501 Folsom St 4th Floor San Francisco, California 94105

 

    	 

     

    

 

CONFIDENTIAL PORTIONS HAVE
BEEN OMITTED FROM THIS DOCUMENT BASED UPON A REQUEST FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934 AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THE LOCATION OF OMITTED TEXT IS INDICATED
BY AN ASTERISK (*) 

MOPUB,
INC.

MoPub,
Inc. Standard Terms and Conditions

Platform and Marketplace For Publishers

These
MoPub, Inc. standard terms and conditions (the "Terms and Conditions") are incorporated by reference into each
order form (the "Order Form") between MoPub, Inc. ("MoPub") and the customer identified thereon ("Customer").
The Terms and Conditions and the applicable Order Forms are collectively 'Agreement." Ali capitalized terms not
defined in these Terms and Conditions shall have the meanings given on the Order Form.

	1.    
                                         DEFINITIONS.

                                                                                                 1.1      "Ads"
                                         means any material that promotes a brand or products or services, and shall include,
                                         without limitation, video ads, interstitial ads, ad banners, badges, buttons and text
                                         finks.

        1.2      "Advertiser
        means an advertiser, media buyer, ad-agency or other provider of Ads.

        1.3      "CPM"
        means the cost per thousand Ads requests or impressions.

        1,4      "Customer
        Service" means the web or mobile sites and applications owned or controlled by Customer as set forth on the Order
        Form.

        1.5      "Demand
        Advertiser" means a participant in the MoPub Marketplace who bids to buy Inventory listed by publishers that are
        also participating in the MoPub Marketplace.

        1.6      'End
        User" means any web or mobile end user that views, is able to view, or interacts with an Ad in connection with the
        MoPub Services.

        1.7     
        "Intellectual Property Rights" means copyright, trademark, patent, trade secret, moral right, privacy right,
        right of publicity, or any other intellectual property or proprietary right.

        1.8      "Inventory"
        means elements of a website or application that a publisher designates for placement of advertising.

        1.9      "MoPub
        Code" means the MoPub's open source SDK and code for integrating the Customer Service with the MoPub Services, made
        available at http://www.mopub.com/in-depth/open-source-sdk/. 

        1.10    "MoPub
        Marketplace" means the MoPub platform and service for automated, real-time bidding to match Ads with Inventory.

        1.11    "MoPub
        Platform" means the MoPub platform and service that allows for the targeted delivery of Ads on mobile sites and applications.

        1.12    "MoPub
        Policies' means all of MoPub's specifications and policies make conspicuously available by MoPub, including the MoPub
        Program Policies available at http://www.mopub.com/legal/policies/, and any other content/editorial limitations,
        technical specifications, privacy policies, and user experience policies.

        1.13    "MoPub
        Services" means collectively, the MoPub Marketplace and MoPub Platform, and all related user portals, technology
        and software, but specifically excluding the MoPub Code.

        1.14    “User
        Data" means any data that MoPub collects during delivery of Ads or performance of its obligations under this Agreement,
        including the End User device information, End User's session-based browsing behavior, number of impressions, http header
        information, and any other data that Customer elects to provide to MoPub.

        1.15    "User
        Volunteered Data" means any personally identifiable information of End Users collected by Customer or its Advertiser
        via any Ad.

2.    
LICENSES.

2.1      License
to MoPub Service. Subject to the terms and conditions of this Agreement, Customer shall have the right during the Term to
access and use the MoPub Platform solely for purposes of: (a) performing projections of
	 	advertising
                                         impression inventories that might be available through the MoPub Platform, (b) uploading
                                         and storing Ads for delivery through the MoPub Platform, (c) selecting targeting and
                                         delivery criteria for the delivery of Ads, and (d) receiving reports of Ads requests,
                                         impressions and other data related to the delivery of Ads through the MoPub Platform.

                                                                                                 2.2      License
                                         to Ads. During the Term, Customer grantsMoPub a license under all of Customer's applicable
                                         rights to host, serve, route and place Ads via the MoPub Platform.

        2.3      License
        to MoPub Service. Subject to the terms and conditions of this Agreement, Customer shall have the right during the
        Term to access and use the MoPub Marketplace solely for purposes of: (a) listing Inventory available on the Customer Service
        for sale, on the MoPub Marketplace, and (b) receiving reports of Ads requests, impressions and other data related to the
        delivery of Ads through the MoPub Marketplace.

        2.4      License
        to Serve Ads. During the Term, Customer grants MoPub a license under all of Customer's applicable rights to serve,
        route and place Ads via the MoPub Marketplace.

        2.5      MoPub
        Code. Customer will implement the MoPub Code on the Customer Service in an agreed upon manner.

        3. IMPLEMENTATION. 

        3.1      MoPub
        Code. Customer will implement the MoPub Code on the Customer Service in order to integrate with the MoPub Services,
        in an agreed upon manner.

        3.2      Service
        Modification. MoPub reserves the right to modify the MoPub Services in whole or in part at any time if MoPub believes
        such modification is reasonably necessary in order to: (a) comply with applicable law or industry regulation, including
        the requirements of any self regulatory program or framework; (b) to avoid or limit liability; (c) prevent errors or any
        other harm with respect to the MoPub Services or other properties, services, web sites and applications serviced by the
        MoPub Services; or (d) respond to Customer's breach of this Agreement. MoPub shall notify Customer following any such
        suspension.

        3.3      Ad
        Removal. Customer agrees that MoPub has no obligation to monitor or edit the content of any Ads. MoPub may remove
        or refuse to distribute any Ads through the MoPub Service if MoPub reasonably determines that such action is appropriate
        to prevent errors or any other harm with respect to the MoPub Service, or avoid or limit MoPub's liability.

        3.4      Availability.
        Customer understands and agrees that from time to time the MoPub Services hereunder may be inaccessible, unavailable
        or inoperable for any reason, including, without limitation: (a) equipment malfunctions; (b) periodic maintenance procedures
        or repairs which MoPub may undertake from time to time; or (c) causes beyond the control of MoPub or which are not reasonably
        foreseeable by MoPub, including, without limitation, interruption or failure of telecommunication or digital transmission
        links, hostile network attacks, the unavailability, operation, or inaccessibility of websites or interfaces, network congestion
        or other failures. MoPub will make commercially reasonable efforts to provide the services on a continuous basis; however,
        availability is not guaranteed and may be affected by the circumstances set forth above.

    	 

     

    

 

CONFIDENTIAL
PORTIONS HAVE BEEN OMITTED FROM THIS DOCUMENT BASED UPON A REQUEST FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24b-2 OF THE SECURITIES
EXCHANGE ACT OF 1934 AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THE LOCATION OF OMITTED TEXT
IS INDICATED BY AN ASTERISK (*) 

 

	

                           3.5      Tracking.
                           MoPub will determine how to measure the number of impressions, inquiries, conversions, clicks,
                           offers, installations, or other actions taken by third parties in connection with Ads, and all payment
                           will be based on such measurements.

                           4.
                           OBLIGATIONS. 

                           4.1
                           Customer Responsibility. 

(i)      With
respect to its use of the MoPub Platform, Customer shall be solely responsible for all aspects of dealing with its Advertisers
(e.g., selling, collection of payment, client service), content and placement of Ads, arid handling all inquiries of any type
or nature.

(ii)    
With respect to its use of the MoPub Marketplace, Customer is solely responsible for all aspects of the Customer Service and its
Inventory, including handling all inquiries of any type or nature. 

4.2      Privacy
Policy. Customer must post a conspicuous privacy policy on each Customer Service that discloses the collection of End User
Data by third parties. 

4.3      Restrictions.
Customer shall have no rights or licenseswith respect to the MoPub Services except as expressly provided in this Agreement
and MoPub reserves all rights not explicitly granted herein. Customer may not (a) copy, distribute, rent, lease, lend. sublicense.
transfer or make the MoPub Services available to any third party, (b) decompile, reverse engineer, or disassemble the MoPub Services,
(c) create derivative works based on the MoPub Services; or (d) modify, remove, or obscure any proprietary notices or legends
that appear on the MoPub Services or during the use and operation thereof. 

4.4      Prohibited
Actions. Customer will not, and will not allow any third party to: (a) generate queries, or impressions of or clicks on Ads
through any automated, deceptive, fraudulent or other invalid means (including, click spam, robots, macro programs, and Internet
agents); (b) encourage or require end users to click on Ads through offering incentives or any other methods that are manipulative,
deceptive, malicious or fraudulent; or (c) create or attempt to create a substitute or similar service or product through use
of or access to any of the MoPub Services or proprietary information related thereto.

4.5      Accounts.
The parties shall agree on the number of authorized accounts to be furnished to Customer. Customer is solely responsible for
the security of such accounts and shall be responsible for the activities of any person accessing the MoPub Services using an
authorized account, whether authorized by Customer or not. 

5.    
DATA 

5.1      User
Data. In connection with the operation of the MoPub Services, MoPub collects and receives User Data with regard to Customer's
use of the MoPub Services. Customer agrees that MoPub may: (a) use such information for MoPub's internal business purposes; (b)
disclose such information as may be required by law or legal process; and (c) use and disclose such information when it is aggregated
with similar information relating to other MoPub customers or End Users, or when it does not specifically identify the Customer
or End User. Customer may use User Data for Customer's internal business purposes so long as such use is in compliance with all
applicable privacy policies, laws, rules, regulations and industry self-regulatory regimes relating to the collection, use and
disclosure of User Data, and that it obtains any consents, authorizations and clearances from End Users that may be required in
connection therewith. 

5.2      User
Volunteered Data. If Customer enables the collection of any User Volunteered Data via Ads, Customer must expressly disclose
to such individual End User that such collection is solely on behalf of Customer (and not MoPub). As between MoPub and Customer,
User Volunteered Data shall be the sole property and Confidential Information of Customer or its Advertiser, and shall be subject
to its Advertiser's privacy policy, if any. 

	 	5.3      No
                           Legal Advice. Customer agrees that nothing in this Agreement or any suggestions, edits or proposed
                           language provided by MoPub relating to end user notices, consents, terms or otherwise shall constitute
                           legal advice. Customer shall obtain the independent advice of counsel in connection therewith. 

6.    
FEES; PAYMENT. Each party will pay the amounts stated on the Order Form. Each party shall pay the undisputed amounts due under
each invoice without deducting any taxes that may be applicable to such payments. Each party is responsible for fulfilling its
respective tax obligation.

7.    
TERM; TERMINATION.

7.1      Term.
The term of this Agreement shalt be as described in the Order Form. If no term is described in the Order Form, this Agreement
shall start on the Effective Date and continue for a period of one year following the Effective Date unless earlier terminated,
and shall automatically renew for successive 1 year terms unless either party gives written notice of such party's intent not
to renew at least 60 days prior to the start of the initial 1 year term or any renewal term (the 'Term"). 

7.2      Termination.
Either party may terminate this Agreement effective immediately if the other party is in material breach of any obligation,
representation or warranty hereunder and fails to cure such material breach (if capable of cure) within 30 days after receiving
notice of the breach from the non-breaching party. Either party may terminate immediately upon notice at any time if: (a) the
other party files a petition for bankruptcy or is adjudicated as bankrupt; (b) a petition in bankruptcy is filed against the other
party and such petition is not removed or resolved within 60 calendar days; (c) the other party makes an assignment for the benefit
of its creditors or an arrangement for its creditors pursuant to bankruptcy law; (d) the other party discontinues
its business; (e) a receiver is appointed over all or substantially all of the other party's assets or business; or (f) the other
party is dissolved or liquidated. 

7.3      Effect
of Termination. The Sections of this Agreement that by their natures are intended to survive the expiration or termination
of this Agreement, shall so survive. Upon termination or expiration of this Agreement for any reason, all licenses granted herein
shall terminate and Customer shall discontinue all use of the MoPub Services, 

8.    
OWNERSHIP. As between the parties, MoPub retains all right, title and interest in and to the MoPub Services and any materials
created, developed or provided by MoPub in connection with this Agreement, including all intellectual property rights related
to each of the foregoing. As between the parties, Customer retains all right, title and interest in and to the Customers Services
and any materials created, developed or provided by Customer in connection with this Agreement, including all intellectual property
rights related to each of the foregoing. Customer is not required to provide any feedback or suggestions to MoPub (collectively
"Feedback"). To the extent Customer does provide any such Feedback, Customer agrees to assign and hereby does
assign all right, title and interest in and to such Feedback to MoPub. 

9.    
REPRESENTATIONS AND WARRANTIES.Each party represents, warrants and covenants to the other party that: (a) it has the full
power and authority to enter into this Agreement; (b) the execution of this Agreement and performance of its obligations under
this Agreement does not violate any other agreement to which it is a party; and (c) this Agreement constitutes a legal, valid
and binding obligation when executed and delivered.

    	 

     

    

 

CONFIDENTIAL
PORTIONS HAVE BEEN OMITTED FROM THIS DOCUMENT BASED UPON A REQUEST FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24b-2 OF THE SECURITIES
EXCHANGE ACT OF 1934 AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THE LOCATION OF OMITTED TEXT
IS INDICATED BY AN ASTERISK (*) 

 

	

        10.      DISCLAIMERS. EXCEPT
        AS EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES ANY WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE
        SUBJECT MATTER OF THIS AGREEMENT, AND EACH PARTY EXPRESSLY DISCLAIMS THE IMPLIED WARRANTIES OF MERCHANTABILITY, NONINFRINGEMENT,
        FITNESS FOR A PARTICULAR PURPOSE, AND IMPLIED WARRANTIES ARISING FROM COURSE OF DEALING OR PERFORMANCE. MOPUB AND ITS
        SUPPLIERS, LICENSORS, AND PARTNERS DO NOT WARRANT THAT THE FUNCTIONS CONTAINED IN THE MOPUB SERVICES OR MOPUB CODE WILL
        BE CORRECT, UNINTERRUPTED OR ERROR-FREE, THAT DEFECTS WILL BE CORRECTED, OR THEY ARE FREE OF VIRUSES OR OTHER HARMFUL
        COMPONENTS. MOPUB DOES NOT WARRANT THE RESULTS OF USE OF THE MOPUB SERVICES OR MOPUB CODE.

         

        11.      INDEMNIFICATION.
         

        

        11.1      MoPub
        Indemnification. MoPub agrees to indemnify, defend, and hold Customer and its directors, officers and employees harmless
        from and against any third party liabilities, damages or expenses (including reasonable attorneys' fees) arising out of
        any claim, demand, action, or proceeding initiated by a third party: (a) to the extent alleging that the technology underlying
        the MoPub Services, or any portion thereof, infringes any third party United States patent or copyright or misappropriates
        any third party trade secret; or (b) attributable to the alleged or actual breach of MoPub's representations and warranties
        set forth in Section 9.  

        11.2      Customer
        Indemnification. Customer agrees to indemnify, defend, and hold MoPub and its directors, officers and employees harmless
        from and against any liabilities, damages or expenses (including reasonable attorneys' fees) arising out of any claim,
        demand, action, or proceeding initiated by a third party to the extent attributable to:

        

        (i)   the alleged
        or actual breach of MoPub's representations and warranties set forth in Section 9; or  

        (ii)   with respect
        to Customer's use of the MoPub Platform, Customer's failure lo secure has all rights, title, and interest necessary to
        display the Ads; and (b) an allegation that the Ads, including the content and services, products or goods being advertised,
        infringe upon, violate, or misappropriate any Intellectual Property Rights, or slander, defame, or libel any person;  

        

        (iii)  with respect
        to Customer's use of the MoPub Marketplace, Customer's failure to secure has all rights, title, and interest
        necessary to sell the Customer Inventory and serve the Ads onto the Customer Service; or Customer's failure to comply
        with the MoPub Policies.  

        11.3      Procedure:
        As a precondition to indemnity coverage, the party seeking indemnification (the "Indemnified Party") must
        comply with the following indemnification procedures: (a) Indemnified Party promptly notifies indemnifying party (the
        "Indemnifying Party') in writing of the claim, except that any failure to provide this notice promptly only relieves
        Indemnifying Party of its indemnification responsibility to the extent its defense is materially prejudiced by the delay;
        (b) grants Indemnifying Party sole control of the defense and/or settlement of the claim; and (c) provides Indemnifying
        Party, at Indemnifying Party's expense, with all assistance, information and authority reasonably required for the defense
        and/or settlement of the claim, but in a manner consistent with Indemnified Party's confidentiality obligations and preservation
        of attorney/client and work product privileges.
	 	11.4      Exclusions.
        MoPub assumes no indemnity liability for the following: (a) any infringement claims (including without limitation
        combination or process patents) arising out of the combination of the MoPub Service or use with other hardware, software
        or other items not provided by MoPub to the extent such infringement would not have occurred absent such combination or
        use; (b) any unauthorized modification of the MoPub Services; or (c) any claims arising out of MoPub's compliance with
        Customer's specifications or designs. Customer assumes no indemnity liability for any infringement claims (including without
        limitation combination or process patents) arising out of any claims arising out of its compliance with MoPub's specifications
        for integration between the Customer Service and the MoPub Marketplace. In the event of a claim, demand, action or proceeding
        that the technology underlying the MoPub Services, or any portion thereof, infringes or misappropriates any third party
        intellectual property or other right or, if in MoPub's reasonable opinion, such claim, demand, action or proceeding is
        likely to occur, MoPub shall have the right, at MoPub's sole cost and expense, to either: (i) obtain the right to continued
        use of the affected portion of the MoPub Services, or (ii) modify or replace, in whole or in part, the affected portion
        of the MoPub Services to eliminate the infringement or misappropriation. If MoPub is unable to achieve the foregoing (i)
        or (ii) in a commercially reasonable manner, either party shall have the right to immediately terminate this Agreement
        upon written notice to the other without liability for terminating the Agreement.

        12.      LIMITATION
        OF LIABILITY. EXCEPT WITH RESPECT TO LIABILITIES ARISING OUT OF A PARTY'S INDEMNIFICATION OBLIGATIONS, CUSTOMER'S BREACH
        OF THE LICENSES GRANTED TO CUSTOMER, OR EITHER PARTY'S BREACH OF ITS CONFIDENTIALITY OBLIGATIONS HEREIN, (A) NEITHER PARTY
        IS LIABLE TO THE OTHER PARTY HEREUNDER FOR ANY PUNITIVE, INCIDENTAL, INDIRECT, SPECIAL, RELIANCE OR CONSEQUENTIAL DAMAGES,
        INCLUDING LOST BUSINESS, REVENUE, OR ANTICIPATED PROFITS, WHETHER BASED ON BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE),
        OR OTHERWISE, AND WHETHER OR NOT THE PARTY WAS ADVISED OF THE POSSIBILITY OF SUCH LOSS OR DAMAGES. EXCEPT WITH RESPECT
        TO LIABILITIES ARISING OUT OF A PARTY'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, OR OUT OF CUSTOMER'S BREACH OF THE LICENSES
        GRANTED TO CUSTOMER, OR EITHER PARTY'S BREACH OF ITS CONFIDENTIALITY OBLIGATIONS HEREIN, IN NO EVENT WILL EITHER PARTY'S
        LIABILITYAND DAMAGES UNDER THIS AGREEMENT EXCEED THE GREATER OF (A) $1 MILLION OR (B) THE SUM OF THE TOTAL NET REVENUE
        EARNED BY MOPUB UNDER THIS AGREEMENT DURING THE 12 MONTHS IMMEDIATELY PRECEDING THE DATE THE CLAIM FIRST AROSE. THE PARTIES
        AGREE THAT THE EXISTENCE OF MORE THAN ONE CLAIM SHALL NOT INCREASE THE FOREGOING LIMIT, AND THAT THE !IMITATIONS OF LIABILITY
        SET FORTH IN THIS SECTION WILL APPLY EVEN IF ANY LIMITED REMEDY SPECIFIED IN THIS AGREEMENT IS FOUND TO HAVE FAILED OF
        ITS ESSENTIAL PURPOSE.

    	 

     

    

 

CONFIDENTIAL
PORTIONS HAVE BEEN OMITTED FROM THIS DOCUMENT BASED UPON A REQUEST FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24b-2 OF THE SECURITIES
EXCHANGE ACT OF 1934 AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THE LOCATION OF OMITTED TEXT
IS INDICATED BY AN ASTERISK (*) 

 

	

13.      CONFIDENTIALITY.
 

13.1      “Confidential
Information” means any and all information that is disclosed by either party to the other party, either directly or
indirectly, in writing, orally or by inspection of tangible objects, which if disclosed in writing or tangible form is marked
as "Confidential," or with some similar designation, or if disclosed orally, is identified as being proprietary and/or
confidential at the time of disclosure, or under the circumstances and nature of the information would be reasonably deemed to
be confidential. In the case of MoPub, Confidential Information includes the features and functionality of the MoPub Services.
Confidential Information does not include information that: (a) is or becomes generally known to the public through no fault of
or breach of this Agreement by the receiving party; (b) is rightfully known by the receiving party at the time of disclosure without
an obligation of confidentiality; (c) is independently developed by the receiving party without use of the disclosing party's
Confidential Information; or (d) the receiving party rightfully obtains from a third party without restriction on use or disclosure.

 

13.2      Use
and Disclosure Restrictions. Each party shall not use the other party's Confidential Information except as necessary to exercise
its rights or perform its obligations under this Agreement. Each party shall not disclose the other party's Confidential Information
to any third party except to those of its employees, subcontractors, and advisers that need to know such Confidential Information
for the purposes of this Agreement, provided that each such employee and subcontractor is subject to a written agreement that
includes binding use and disclosure restrictions that are at least as protective of Confidential Information as those set forth
herein. Each party will use all reasonable efforts to maintain the confidentiality of all Confidential Information of the other
party in its possession or control, but in no event less than the efforts that party ordinarily uses with respect to its own proprietary
information of similar nature and importance. The foregoing obligations will not restrict either party from disclosing Confidential
Information of the other party: (a) pursuant to the order or requirement of a court, administrative agency, or other governmental
body, provided that the party required to make such a disclosure gives reasonable notice to the other party to contest such order
or requirement or (h) on an as-needed, confidential basis to its legal or financial advisors. In addition, each party may disclose
the terms and conditions of this Agreement as required under applicable securities regulations and on a confidential basis to
current or prospective investors or acquirers of such party.

         

        14.   MISCELLANEOUS.

         

        14.1      Export
        Laws. Customer will comply with all applicable U.S. and foreign government laws and regulations related to the export
        and re-export of Customer Services.

         

        14.2      Relationship
        of the Parties. The parties are independent contractors with respect to each other. This Agreement does not constitute
        and shall not be construed as constituting a partnership or joint venture among the parties hereto, or an employee-employer
        relationship. No party shall have any right to obligate or bind any other party in any manner whatsoever, and nothing
        herein contained shall give, or is intended to give, any rights of any kind to any third parties.

         

        14.3     Assignment.
        Neither party may assign any of its rights or obligations under this Agreement without the prior written consent of the
        other party, except that either party may assign its rights and obligations under this Agreement without the consent of
        the other party in connection with any merger (by operation of law or otherwise), consolidation, reorganization, change
        in control or sale of all or substantially all of its assets related to this Agreement or similar transaction, to be effective
        upon notice to the other party. This Agreement inures to the benefit of and shall be binding on the parties' permitted
        assignees, transferees and successors.  
	 	14.4      Force
                                         Majeure. Except for payment obligations, neither party will be responsible for any failure
                                         or delay in its performance under this Agreement due to causes beyond its reasonable
                                         control, including, but not limited to, labor disputes, strikes, lockouts, intemel or
                                         telecommunications failures, shortages of or inability to obtain labor, energy, or supplies,
                                         war, terrorism, riot, acts of God or governmental action, acts by hackers or other malicious
                                         third parties and problems with the Internet generally, and such performance shall be
                                         excused to the extent that it is prevented or delayed by reason of any of the foregoing.
                                          

 

14.5      Headings
and Wording. The words Include" and Including" shall not be construed or interpreted as terms of limitation. Section
headings are for reference purposes only, and should not be used in the interpretation hereof. No provision of this Agreement
will be construed against either party as the drafter thereof.  

 

14.6      Notices.
All notices under the terms of this Agreement shall be given in writing and sent by registered mail, internationally recognized
carrier, or confirmed fax transmission, or delivered by hand to the address set forth in the signature line of the Order Form.
All notices are deemed to have been received when they are hand delivered, or five business days of their mailing, or on the business
day following the day of a confirmed facsimile transmission.

 

14.7      Waiver.
A waiver of any provision of this Agreement will only be valid if provided in writing and will only be applicable to the specific
incident and occurrence so waived. The failure by either party to insist upon the strict performance of this Agreement, or to
exercise any term hereof, will not act as a waiver of any right, promise or term herein.  

         

        14.8      Construction.
        This Agreement shall be fairly interpreted and construed in accordance with its terms and without strict interpretation
        or construction in favor of or against either party. Each party has had the opportunity to consult with counsel in the
        negotiation of this Agreement.  

         

        14.9      Severability.
        If any provision of this Agreement is determined by a court of competent jurisdiction to be invalid, illegal or unenforceable,
        such determination will not impair or affect the validity, legality, or enforceability of the remaining provisions of
        this Agreement, and each provision is hereby declared to be separate, severable, and distinct  

         

        14.10      Governing
        Law; Venue. This Agreement shall be governed by, and construed in accordance with, the laws of the State of California,
        without reference to conflicts of laws principles. The parties agree that the federal and state courts in Los Angeles
        County, California will have exclusive jurisdiction and venue under this Agreement, and the parties hereby agree to submit
        to such jurisdiction exclusively.  

         

        14.11      Entire
        Agreement. This Agreement constitutes the complete, final and exclusive agreement between the parties with respect to
        the subject matter hereof, and supersedes any and all prior or contemporaneous oral or written representations, understandings,
        agreements or communications between them concerning the subject matter hereof. Any amendment to this Agreement must be
        in a writing executed by both parties. This Agreement may be signed in counterparts. Each of them is an original, and
        all of them constitute one agreement.

    	 

     

    

 

CONFIDENTIAL
PORTIONS HAVE BEEN OMITTED FROM THIS DOCUMENT BASED UPON A REQUEST FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24b-2 OF THE SECURITIES
EXCHANGE ACT OF 1934 AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THE LOCATION OF OMITTED TEXT
IS INDICATED BY AN ASTERISK (*)

 

 Exhibit
A

 

Service
Level Agreement

 

	 	1.	Support Hours and Methods. MoPub shall provide the following support for the MoPub Platform: answering of telephone calls at a customer support telephone number and e-mail support at support@mopub.com, MoPub shall use commercially reasonable efforts to provide such support 10a.m. to 6p.m. Pacific Time. Problems may be reported any time, however, MoPub will not be obligated to assign work after business hours (10a.m. to 6p.m. Pacific Time) for problems that are not classified as Priority 0. Customers MoPub support representative shall be Bryan Atwood.
	 	2.	Customer Liaison. Customer's technical liaison to solve technical problems is <Jonathan Reich, 330-577-3424, jonalhan@zedge.net>. Customer may change such liaison upon written notice to MoPub from time to time at reasonable intervals. MoPub will not be obligated to provide support to any person other than the designated liaison,
	 	3.	Escalation and Priority. Upon receiving a call or request that the MoPub Service is not performing in accordance with its specifications or documentation, MoPub will evaluate and classify the problem according to the following criteria:

 

	 	Priority	 	Description	 	Response
    Time	 	Target
    Resolution Time
	 	Priority
    0	 	Process cannot complete, there is no
    workaround and the solution is business critical. Example: persistent outage of ads.mopub.com that causes inability to serve
    Customer Ads through the MoPub Platform resulting in material loss of revenue by Customer from its Advertisers.	 	2 hours	 	6 hours
	 	Priority
    1	 	Process cannot complete and there is
    no workaround, but the condition is NOT business critical, however, must be resolved by the next scheduled or period end processing.
    Example: intermittent ad serving failures not materially impacting revenues.	 	1 business day	 	10 business days
	 	Priority
    2	 	Process cannot complete, but there is
    a workaround that allows processing to continue. Example: temporary dashboard or campaign management website unavailability.	 	1 business day	 	15 business days
	 	Priority
    3	 	This priority addresses 'cosmetic" type
    calls with no financial or processing impact.	 	5 business days	 	One month

 

ESCALATION
PROCEDURE FOR PRIORITY 0

 

	 	●	When it is determined that this priority level problem exists, the Client Services Manager will contact the on call programmer and will begin resolution.
	 	●	If the problem is not resolved within ONE HOUR, the managers of both Development and Client Services will be notified that the problem has been reported and of the action that is in process.
	 	●	If the problem is not resolved within the first TWO HOURS, then the Vice Presidents of both Development and Client Services will be notified of the reported problem, the action taken and the status. At this time evaluation of additional resources will be made to ensure that resolution stays on track.
	 	●	If the problem is not resolved within FOUR HOURS, then the President/CEO will be notified, especially if there is potential that the system(s) availability is in jeopardy for the next day's business.

 

CUSTOMER
INTEGRATION

 

The
parties acknowledge that if Customer will be implementing a Customer-specification implementation using a version of the MoPub
Code that is not made generally available to external parties ("Customer Specific Implementation"). Customer agrees
that if any problem is determined to be wholly or partially caused by its Customer Specific Implementation, MoPub may reasonably
reclassify the priority level of the problem, or determine that such problem is not covered by the MoPub support services hereunder.
In the case of reclassification of priority level, the applicable response and resolution times of the resulting reclassified
priority level will retroactively apply.'

 

Service
Outages

 

Service
Outages are defined as a combination of Error Rate and MoPub Service Latency.

 

"Error
Rate" means the total number of measured errors returned by the MoPub divided by the total number of requests during that
five-minute period. Errors contributing to the Service Outage calculation include any incorrect responses returned by MoPub (e.g.,
non-successful 5xx HTTP responses) or returned data not conforming to the specifications of this Agreement) based on a correct
request from Customer as implemented by MoPub SDK.

 

"MoPub
Service Latency" means responses longer than 250 milliseconds within the MoPub platform (the time period between the first
byte of customer request—Read Call or Write Call—arriving at MoPub's server and the final byte leaving MoPub's server).
For incented actions, MoPub Service Latency is defined as firing a tracking pixel and device id >1s from the time of the user's
redemption. For JSON logs, MoPub Service Latency means logs sent within a mutually agreed upon timeframe by Customer and MoPub

    	 

     

    

 

CONFIDENTIAL
PORTIONS HAVE BEEN OMITTED FROM THIS DOCUMENT BASED UPON A REQUEST FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24b-2 OF THE SECURITIES
EXCHANGE ACT OF 1934 AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THE LOCATION OF OMITTED TEXT
IS INDICATED BY AN ASTERISK (*) 

 

Error
Rate will be calculated as a percentage for each five-minute period in the calendar month. As an example, if there were 1,000
Read and Write Call requests over a 5 minute increment with 3 HTTP errors and 1 call returned with a server response time >
250 ms within each such increment, that would create an averaged Service Outage rate of 0.4%, which would yield a Monthly Uptime
Percentage of 99.6%, thus falling within the Service Uptime guarantee. MoPub shall use commercially reasonable efforts notify
Customer of any Service Outage via email to Customer's technical operations group within 30 minutes of such occurrence taking
place.

 

Credit
In the event of Service Outage

 

In
the event Customer cannot negotiate a made good arrangement pursuant to Section 4.2, for each 5-minute increment of Service Outage
in a specific month, MoPub shall credit Customer based on the rolling average Customer net ad revenue generated through the MoPub
Platform and MoPub Marketplace during the period of outage in the previous five calendar days. For example:

 

Outage
time: 4.03pm- 4.07pm on 9/16/11

 

Service
credit equation:

 

	●	Average Customer ad revenue generated from the MoPub
Platform between 4.03 pm and 4.07 pm on 9/9/11, 9/10/11, 9/12/11, 9/13/11, 9/14/11 and 9/15/11 — MoPub Ad Serving Fees.

 

For
the avoidance of doubt, credit issued in a given month due to Service Outage may be applied towards Fees (including MoPub Marketplace
fees owed to Customer) accrued in future months for the duration of the Term. The Service Credits are Customer's sole remedy for
any breach of this Exhibit.

 

    	 

     

    

 

CONFIDENTIAL
PORTIONS HAVE BEEN OMITTED FROM THIS DOCUMENT BASED UPON A REQUEST FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24b-2 OF THE SECURITIES
EXCHANGE ACT OF 1934 AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THE LOCATION OF OMITTED TEXT
IS INDICATED BY AN ASTERISK (*) 

 

Exhibit B

MoPub
Marketplace will fill publisher requests when winning RIB bids exceed CPMs, as listed in the MoPub dashboard, of network partners
with fill for the request. Revenue Share Fee shall be based on the delta between the winning RTB bid and the highest network CPM.
The table below explains various scenarios:

 

		 	Volume (million	 	 	MoPub	 	 	Winning	 	Highest	 	 	Winning	 	 	*MoPub	 	 	Publisher	 
	 	 	monthly	 	 	Max Rev	 	 	Gross RTB	 	Network	 	 	Demand	 	 	Actual Rev	 	 	Payout	 
	Scenario 	 	impressions)	 	 	Share (%)	 	 	Bld (CPM)	 	CPM	 	 	Source	 	 	Share
    (%)	 	 	(CPM)	 
	1	 		*	 	 		*	 	 	* 	 	 	*	 	 	 	*	 	 	 	*	 	 	 	*	 
	2	 		*	 	 		  *
	 	 	*	 	 	*	 	 	 	*	 	 	 	*	 	 	 	*	 
	3	 		*	 	 		*	 	 	*	 	 	*	 	 	 	*	 	 	 	*	 	 	 	*	 
	4	 		*	 	 		*	 	 	*	 	 	*	 	 	 	*	 	 	 	*	 	 	 	*	 

 

*MoPub
Actual Rev Share is based on the delta between the Winning Gross RTB Bid and the Highest Network CPM. When the delta between the
Winning Gross RTB Bid and the Highest Network CPM provides enough room for MoPub to charge the MoPub Max Rev Share (aa of the
Winning Gross RTB Bid) and still allow the publisher to net a CPM at least as high as the Highest Network CPM, MoPub will charge
the MoPub Max Rev Share. When the delta between the Winning Gross RTB Bid and the Highest Network CPM does not provide enough
room for MoPub to charge the MoPub Max Rev Share (% of the Winning Gross RTB Bid) and still allow the publisher to net a CPM at
least as high as the Highest Network CPM, MoPub will decrease the MoPub Actual Rev Share to a D/* that ensures that the Publisher
Payout is at least as high as the Highest Network CPM.

 

    	 

     

    

 

Exhibit
C

 

MoPub
will invoice Customer within 60 days of the last day of the calendar month for which invoice applies. If MoPub sends invoice
after this 60-day period, Customer we receive a * discount on owed ad serving fees. Customer will need to notify MoPub if
invoice is not received within this 60-day period.Exhibit

Exhibit 4.1

ADVANCED CANNABIS SOLUTIONS, INC.

2014 EQUITY INCENTIVE PLAN

	
	  

 

THIS ADVANCED CANNABIS SOLUTIONS, INC. 2014 EQUITY INCENTIVE PLAN (the "Plan") is designed to retain directors, executives and selected employees and consultants and reward them for making contributions to the success of the Company.  These objectives are accomplished by making long-term incentive awards under the Plan thereby providing Participants (as defined below) with a proprietary interest in the growth and performance of the Company.

		
	1.

	Definitions.

			
	 
	(a)

	"Board" - The Board of Directors of the Company.

	 
	 
	 

	 
	(b)

	"Change in Control" - Means, and shall be deemed to have occurred upon the occurrence of, any one of the following events:

			
	  

	(i)

	The acquisition in one transaction by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a "Person") of beneficial ownership (within the meaning of Rule l3d-3 promulgated under the Exchange Act) of shares or other securities (as defined in Section 3(a)(10) of the Exchange Act) representing 51% or more of outstanding Stock (as defined below) of the Company; provided, however, that a Change in Control as defined in this clause (1) shall not be deemed to occur in connection with any acquisition by the Company, an employee benefit plan of the Company or any Person who immediately prior to the effective date of this Plan is a holder of Stock (a "Current Stockholder") so long as such acquisition does not result in any Person other than the Company, such employee benefit plan or such Current Stockholder beneficially owning shares or securities representing 51% or more of the outstanding; or

	 
	 
	 

	  

	(ii)

	Any election has occurred of persons as directors of the Company that causes two-thirds or more of the Board to consist of persons other than (i) persons who were members of the Board on the effective date of this Plan and (ii) persons who were nominated by the Board for election as members of the Board at a time when at least two-thirds of the Board consisted of persons who were members of the Board on the effective date of this Plan; provided, however, that any person nominated for election by the Board when at least two-thirds of the members of the Board are persons described in subclause (i) or (ii) and persons who were themselves previously nominated in accordance with this clause (2) shall, for this purpose, be deemed to have been nominated by a Board composed of persons described in subclause (ii); or

	 
	 
	 

	  

	(iii)

	Approval by the stockholders of the Company of a reorganization, merger, consolidation or similar transaction (a "Reorganization Transaction"), in each case, unless, immediately following such Reorganization Transaction, more than 50% of, respectively, the outstanding shares of common stock (or similar equity security) of the corporation or other entity resulting from or surviving such Reorganization Transaction and the combined voting power of the securities of such corporation or other entity entitled to vote generally in the election of directors, is then beneficially owned, directly or indirectly, by the individuals and entities who were the respective beneficial owners of the outstanding Stock immediately prior to such Reorganization Transaction in substantially the same proportions as their ownership of the outstanding Stock immediately prior to such Reorganization Transaction; or

	 
	 
	 

	 
	(iv)

	Approval by the stockholders of the Company of (i) a complete liquidation or dissolution of the Company or (ii) the sale or other disposition of all or substantially all of the assets of the Company to a corporation or other entity, unless, with respect to such corporation or other entity, immediately following such sale or other disposition more than 50% of, respectively, the outstanding shares of common stock (or similar equity security) of such corporation or other entity and the combined voting power of the securities of such corporation or other entity entitled to vote generally in the election of directors, is then beneficially owned, directly or indirectly, by the individuals and entities who were the respective beneficial owners of the outstanding Stock immediately prior to such sale or disposition in substantially the same proportions as their ownership of the outstanding Stock immediately prior to such sale or disposition.

				
	 
	(c)

	"Code" - The Internal Revenue Code of 1986, as amended from time to time.

	 
	 
	 

	 
	(d)

	"Committee" - The Compensation Committee of the Company's Board, or such other committee of the Board that is designated by the Board to administer the Plan. 

1

			
	 
	(e)

	"Company" – Advanced Cannabis Solutions, Inc. and its subsidiaries including subsidiaries of subsidiaries.

	 
	 
	 

	 
	(f)

	"Exchange Act" - The Securities Exchange Act of 1934, as amended from time to time.

	 
	 
	 

	 
	(g)

	"Fair Market Value" - The fair market value of the Company's issued and outstanding Stock as determined in good faith by the Board or Committee.  If the Stock is then quoted on a securities exchange or automated quotation system, the fair market values of the Company's issued and outstanding Stock shall be the closing bid price of the Stock on the day preceding the Grant.

	 
	 
	 

	 
	(h)

	"Grant" - The grant of any form of stock option, stock award, or stock purchase offer, whether granted singly, in combination, or in tandem, to a Participant pursuant to such terms, conditions and limitations as the Committee may establish in order to fulfill the objectives of the Plan.

	 
	 
	 

	 
	(i)

	"Grant Agreement" - An agreement between the Company and a Participant that sets forth the terms, conditions and limitations applicable to a Grant.

	 
	 
	 

	 
	(j)

	"Option" - Either an Incentive Stock Option, in accordance with Section 422 of Code, or a Nonstatutory Option, to purchase the Company's Stock that may be awarded to a Participant under the Plan. A Participant who receives an award of an Option shall be referred to as an "Optionee."

	 
	 
	 

	 
	(k)

	"Participant" - A director, officer, employee or consultant of the Company to whom an Award has been made under the Plan.

	 
	 
	 

	 
	(l)

	"Restricted Stock Purchase Offer" - A Grant of the right to purchase a specified number of shares of Stock pursuant to a written agreement issued under the Plan.

	 
	 
	 

	 
	(m)

	"Securities Act" - The Securities Act of 1933, as amended from time to time.

	 
	 
	 

	 
	(n)

	"Stock" - Authorized and issued or unissued shares of the no par value common stock of the Company.

	 
	 
	 

	 
	(o)

	"Stock Award" - A Grant made under the Plan in stock or denominated in units of stock for which the Participant is not obligated to pay additional consideration.

		
	2.

	Administration. The Plan shall be administered by the Board, provided, however, that the Board may delegate such administration to the Committee. Subject to the provisions of the Plan, the Board and/or the Committee shall have authority to (a) grant, in its discretion, Incentive Stock Options in accordance with Section 422 of the Code, or Nonstatutory Options, Stock Awards or Restricted Stock Purchase Offers; (b) determine in good faith the fair market value of the Stock covered by any Grant; (c) determine which eligible persons shall receive Grants and the number of shares, restrictions, terms and conditions to be included in such Grants; (d) construe and interpret the Plan; (e) promulgate, amend and rescind rules and regulations relating to its administration, and correct defects, omissions and inconsistencies in the Plan or any Grant; (f) consistent with the Plan and with the consent of the Participant, as appropriate, amend any outstanding Grant or amend the exercise date or dates thereof; (g) determine the duration and purpose of leaves of absence which may be granted to Participants without constituting termination of their employment for the purpose of the Plan or any Grant; and (h) make all other determinations necessary or advisable for the Plan's administration. The interpretation and construction by the Board of any provisions of the Plan or selection of Participants shall be conclusive and final. No member of the Board or the Committee shall be liable for any action or determination made in good faith with respect to the Plan or any Grant made thereunder.

	 
	 

	3.

	Eligibility.

			
	 
	(a)

	General:  The persons who shall be eligible to receive Grants shall be directors, officers, employees or consultants to the Company. The term consultant shall mean any person, other than an employee, who is engaged by the Company to render services and is compensated for such services. An Optionee may hold more than one Option. Any issuance of a Grant to an officer or director of the Company subsequent to the first registration of any of the securities of the Company under the Securities Exchange Act of 1934, as amended (the "Exchange Act") shall comply with the requirements of Rule 16b-3, as promulgated under the Exchange Act.

	 
	 
	 

	 
	(b)

	Incentive Stock Options:  Incentive Stock Options may only be issued to employees of the Company. Incentive Stock Options may be granted to officers or directors, provided they are also employees of the Company. Payment of a director's fee shall not be sufficient to constitute employment by the Company.

2

The Company shall not grant an Incentive Stock Option under the Plan to any employee if such Grant would result in such employee holding the right to exercise for the first time in any one calendar year, under all Incentive Stock Options granted under the Plan or any other plan maintained by the Company, with respect to shares of Stock having an aggregate fair market value, determined as of the date the Option is granted, in excess of $100,000. Should it be determined that an Incentive Stock Option granted under the Plan exceeds such maximum for any reason other than a failure in good faith to value the Stock subject to such option, the excess portion of such option shall be considered a Nonstatutory Option. To the extent the employee holds two (2) or more such Options which become exercisable for the first time in the same calendar year, the foregoing limitation on the exercisability of such Option as Incentive Stock Options under the Federal tax laws shall be applied on the basis of the order in which such Options are granted. If, for any reason, an entire Option does not qualify as an Incentive Stock Option by reason of exceeding such maximum, such Option shall be considered a Nonstatutory Option.

			
	 
	(c)

	Nonstatutory Option:  The provisions of the foregoing Section 3(b) shall not apply to any Option designated as a "Nonstatutory Option" or which sets forth the intention of the parties that the Option be a Nonstatutory Option.

	 
	 
	 

	 
	(d)

	Stock Awards and Restricted Stock Purchase Offers:  The provisions of this Section 3 shall not apply to any Stock Award or Restricted Stock Purchase Offer under the Plan.

		
	4.

	Stock.

			
	 
	(a)

	Authorized Stock: Stock subject to Grants may be either unissued or reacquired Stock.

	 
	 
	 

	 
	(b)

	Number of Shares:  Subject to adjustment as provided in Section 5(i) of the Plan, the total number of shares of Stock which may be purchased or granted directly by Options, Stock Awards or Restricted Stock Purchase Offers, or purchased indirectly through exercise of Options granted under the Plan shall not exceed ten million (10,000,000) shares.  If any Grant shall for any reason terminate or expire, any shares allocated thereto but remaining unpurchased upon such expiration or termination shall again be available for Grants with respect thereto under the Plan as though no Grant had previously occurred with respect to such shares. Any shares of Stock issued pursuant to a Grant and repurchased pursuant to the terms thereof shall be available for future Grants as though not previously covered by a Grant.

	 
	 
	 

	 
	(c)

	Reservation of Shares:  The Company shall reserve and keep available at all times during the term of the Plan such number of shares as shall be sufficient to satisfy the requirements of the Plan. If, after reasonable efforts, which efforts shall not include the registration of the Plan or Grants under the Securities Act, the Company is unable to obtain authority from any applicable regulatory body, which authorization is deemed necessary by legal counsel for the Company for the lawful issuance of shares hereunder, the Company shall be relieved of any liability with respect to its failure to issue and sell the shares for which such requisite authority was so deemed necessary unless and until such authority is obtained.

	 
	 
	 

	 
	(d)

	Application of Funds: The proceeds received by the Company from the sale of Stock pursuant to the exercise of Options or rights under Stock Purchase Agreements will be used for general corporate purposes.

	 
	 
	 

	 
	(e)

	No Obligation to Exercise:  The issuance of a Grant shall impose no obligation upon the Participant to exercise any rights under such Grant.

		
	5.

	Terms and Conditions of Options.

Options granted hereunder shall be evidenced by agreements between the Company and the respective Optionees, in such form and substance as the Board or Committee shall from time to time approve. Option agreements need not be identical, and in each case may include such provisions as the Board or Committee may determine, but all such agreements shall be subject to and limited by the following terms and conditions:

				
	 
	(a)

	Number of Shares: Each Option shall state the number of shares to which it pertains.

	 
	 
	 

	 
	(b)

	Exercise Price: Each Incentive Stock Option shall state the exercise price, which shall be determined as follows:

			
	  

	(i)

	Any Incentive Stock Option granted to a person who at the time the Option is granted owns (or is deemed to own pursuant to Section 424(d) of the Code) stock possessing more than ten percent (10%) of the total combined voting power or value of all classes of stock of the Company ("Ten Percent Holder") shall have an exercise price of no less than 110% of the Fair Market Value of the Stock as of the date of grant; and

	 
	 
	 

	  

	(ii)

	Incentive Stock Options granted to a person who at the time the Option is granted is not a Ten Percent Holder shall have an exercise price of no less than 100% of the Fair Market Value of the Stock as of the date of grant.

3

For the purposes of this Section 5(b), the Fair Market Value shall be as determined by the Board in good faith, which determination shall be conclusive and binding; provided however, that if there is a public market for such Stock, the Fair Market Value per share shall be the average of the bid and asked prices (or the closing price if such stock is listed on the NASDAQ National Market System or Small Cap Issue Market) on the date of grant of the Option, or if listed on a stock exchange, the closing price on such exchange on such date of grant.

The exercise price of each Nonstatutory Stock Option shall be determined at the discretion of the Board of Directors of the Corporation.

			
	 
	(c)

	Medium and Time of Payment:  The exercise price shall become immediately due upon exercise of the Option and shall be paid in cash or check made payable to the Company. Should the Company's outstanding Stock be registered under Section 12(g) of the Exchange Act at the time the Option is exercised, then the exercise price may also be paid as follows:

			
	  

	(i)

	in shares of Stock held by the Optionee for the requisite period necessary to avoid a charge to the Company's earnings for financial reporting purposes and valued at Fair Market Value on the exercise date, or

	 
	 
	 

	  

	(ii)

	through a special sale and remittance procedure pursuant to which the Optionee shall concurrently provide irrevocable written instructions (a) to a Company-designated brokerage firm to effect the immediate sale of the purchased shares and remit to the Company, out of the sale proceeds available on the settlement date, sufficient funds to cover the aggregate exercise price payable for the purchased shares plus all applicable Federal, state and local income and employment taxes required to be withheld by the Company by reason of such purchase and (b) to the Company to deliver the certificates for the purchased shares directly to such brokerage firm in order to complete the sale transaction.

At the discretion of the Board, exercisable either at the time of Option grant or of Option exercise, the exercise price may also be paid (i) by Optionee's delivery of a promissory note in form and substance satisfactory to the Company and permissible under applicable securities rules and bearing interest at a rate determined by the Board in its sole discretion, but in no event less than the minimum rate of interest required to avoid the imputation of compensation income to the Optionee under the Federal tax laws, or (ii) in such other form of consideration permitted by the corporations law of the State of Colorado as may be acceptable to the Board.

			
	 
	(d)

	Term and Exercise of Options:  Any Option granted to an employee of the Company shall become exercisable over a period of no longer than five (5) years. In no event shall any Option be exercisable after the expiration of ten (10) years from the date it is granted, and no Incentive Stock Option granted to a Ten Percent Holder shall, by its terms, be exercisable after the expiration of five (5) years from the date of the Option. Unless otherwise specified by the Board or the Committee in the resolution authorizing such Option, the date of grant of an Option shall be deemed to be the date upon which the Board or the Committee authorizes the granting of such Option.

Each Option shall be exercisable to the nearest whole share, in installments or otherwise, as the respective Option agreements may provide. During the lifetime of an Optionee, the Option shall be exercisable only by the Optionee and shall not be assignable or transferable by the Optionee, and no other person shall acquire any rights therein. To the extent not exercised, installments (if more than one) shall accumulate, but shall be exercisable, in whole or in part, only during the period for exercise as stated in the Option agreement, whether or not other installments are then exercisable.

 

			
	 
	(e)

	Termination of Status as Employee, Consultant or Director:  If Optionee's status as an employee shall terminate for any reason other than Optionee's disability or death, then Optionee (or if the Optionee shall die after such termination, but prior to exercise, Optionee's personal representative or the person entitled to succeed to the Option) shall have the right to exercise the portions of any of Optionee's Incentive Stock Options which were exercisable as of the date of such termination, in whole or in part, within 90 days after such termination (or, in the event of "termination for good cause" as that term is defined in case law related thereto, or by the terms of the Plan or the Option Agreement or an employment agreement, the Option shall automatically terminate as of the termination of employment as to all shares covered by the Option).

With respect to Nonstatutory Options granted to employees, directors or consultants, the Board may specify such period for exercise, not less than 90 days (except that in the case of "termination for cause" or removal of a director), the Option shall automatically terminate as of the termination of employment or services as to shares covered by the Option, following termination of employment or services as the Board deems reasonable and appropriate. The Option may be exercised only with respect to installments that the Optionee could have exercised at the date of termination of employment or services. Nothing contained herein or in any Option granted pursuant hereto shall be construed to affect or restrict in any way the right of the Company to terminate the employment or services of an Optionee with or without cause.

			
	 
	(f)

	Disability of Optionee:  If an Optionee is disabled (within the meaning of Section 22(e)(3) of the Code) at the time of termination, the ninety (90) day period set forth in Section 5(e) shall be a period, as determined by the Board and set forth in the Option, of not less than six months nor more than one year after such termination.

4

			
	 
	(g)

	Death of Optionee:  If an Optionee dies while employed by, engaged as a consultant to, or serving as a Director of the Company, the portion of such Optionee's Option which was exercisable at the date of death may be exercised, in whole or in part, by the estate of the decedent or by a person succeeding to the right to exercise such Option at any time within (i) a period, as determined by the Board and set forth in the Option, of not less than six (6) months nor more than one (1) year after Optionee's death, which period shall not be more, in the case of a Nonstatutory Option, than the period for exercise following termination of employment or services, or (ii) during the remaining term of the Option, whichever is the lesser. The Option may be so exercised only with respect to installments exercisable at the time of Optionee's death and not previously exercised by the Optionee.

	 
	 
	 

	 
	(h)

	Nontransferability of Option:  No Option shall be transferable by the Optionee, except by will or by the laws of descent and distribution.

	 
	 
	 

	 
	(i)

	Recapitalization:  Subject to any required action of shareholders, the number of shares of Stock covered by each outstanding Option, and the exercise price per share thereof set forth in each such Option, shall be proportionately adjusted for any increase or decrease in the number of issued shares of Stock of the Company resulting from a stock split, stock dividend, combination, subdivision or reclassification of shares, or the payment of a stock dividend, or any other increase or decrease in the number of such shares affected without receipt of consideration by the Company; provided, however, the conversion of any convertible securities of the Company shall not be deemed to have been "effected without receipt of consideration" by the Company.

In the event of a proposed dissolution or liquidation of the Company, a merger or consolidation in which the Company is not the surviving entity, or a sale of all or substantially all of the assets or capital stock of the Company (collectively, a "Reorganization"), unless otherwise provided by the Board, this Option shall terminate immediately prior to such date as is determined by the Board, which date shall be no later than the consummation of such Reorganization.  In such event, if the entity which shall be the surviving entity does not tender to Optionee an offer, for which it has no obligation to do so, to substitute for any unexercised Option a stock option or capital stock of such surviving entity, as applicable, which on an equitable basis shall provide the Optionee with substantially the same economic benefit as such unexercised Option, then the Board may grant to such Optionee, in its sole and absolute discretion and without obligation, the right for a period commencing thirty (30) days prior to and ending immediately prior to the date determined by the Board pursuant hereto for termination of the Option or during the remaining term of the Option, whichever is the lesser, to exercise any unexpired Option or Options without regard to the installment provisions of Paragraph 5(d) of the Plan; provided, that any such right granted shall be granted to all Optionees not receiving an offer to receive substitute options on a consistent basis, and provided further, that any such exercise shall be subject to the consummation of such Reorganization.

Subject to any required action of shareholders, if the Company shall be the surviving entity in any merger or consolidation, each outstanding Option thereafter shall pertain to and apply to the securities to which a holder of shares of Stock equal to the shares subject to the Option would have been entitled by reason of such merger or consolidation.

In the event of a change in the Stock of the Company as presently constituted, which is limited to a change of all of its authorized shares without par value into the same number of shares with a par value, the shares resulting from any such change shall be deemed to be the Stock within the meaning of the Plan.

To the extent that the foregoing adjustments relate to stock or securities of the Company, such adjustments shall be made by the Board, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided in this Section 5(i), the Optionee shall have no rights by reason of any subdivision or consolidation of shares of stock of any class or the payment of any stock dividend or any other increase or decrease in the number of shares of stock of any class, and the number or price of shares of Stock subject to any Option shall not be affected by, and no adjustment shall be made by reason of, any dissolution, liquidation, merger, consolidation or sale of assets or capital stock, or any issue by the Company of shares of stock of any class or securities convertible into shares of stock of any class.

The Grant of an Option pursuant to the Plan shall not affect in any way the right or power of the Company to make any adjustments, reclassifications, reorganizations or changes in its capital or business structure or to merge, consolidate, dissolve, or liquidate or to sell or transfer all or any part of its business or assets.

			
	 
	(j)

	Rights as a Shareholder:  An Optionee shall have no rights as a shareholder with respect to any shares covered by an Option until the effective date of the issuance of the shares following exercise of such Option by Optionee. No adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities or other property) or distributions or other rights for which the record date is prior to the date such stock certificate is issued, except as expressly provided in Section 5(i) hereof.

5

			
	 
	(k)

	Modification, Acceleration, Extension, and Renewal of Options:  Subject to the terms and conditions and within the limitations of the Plan, the Board may modify an Option, or, once an Option is exercisable, accelerate the rate at which it may be exercised, and may extend or renew outstanding Options granted under the Plan or accept the surrender of outstanding Options (to the extent not theretofore exercised) and authorize the granting of new Options in substitution for such Options, provided such action is permissible under Section 422 of the Code and applicable state securities laws. Notwithstanding the provisions of this Section 5(k), however, no modification of an Option shall, without the consent of the Optionee, alter to the Optionee's detriment or impair any rights or obligations under any Option theretofore granted under the Plan.

	 
	 
	 

	 
	(l)

	Exercise Before Exercise Date:  At the discretion of the Board, the Option may, but need not, include a provision whereby the Optionee may elect to exercise all or any portion of the Option prior to the stated exercise date of the Option or any installment thereof. Any shares so purchased prior to the stated exercise date shall be subject to repurchase by the Company upon termination of Optionee's employment as contemplated by Section 5(n) hereof prior to the exercise date stated in the Option and such other restrictions and conditions as the Board or Committee may deem advisable.

	 
	 
	 

	 
	(m)

	Other Provisions:  The Option agreements authorized under the Plan shall contain such other provisions, including, without limitation, restrictions upon the exercise of the Options, as the Board or the Committee shall deem advisable. Shares shall not be issued pursuant to the exercise of an Option, if the exercise of such Option or the issuance of shares thereunder would violate, in the opinion of legal counsel for the Company, the provisions of any applicable law or the rules or regulations of any applicable governmental or administrative agency or body, such as the Code, the Securities Act, the Exchange Act, applicable state securities laws, Colorado corporation law, and the rules promulgated under the foregoing or the rules and regulations of any exchange upon which the shares of the Company are listed. Without limiting the generality of the foregoing, the exercise of each Option shall be subject to the condition that if at any time the Company shall determine that (i) the satisfaction of withholding tax or other similar liabilities, or (ii) the listing, registration or qualification of any shares covered by such exercise upon any securities exchange or under any state or federal law, or (iii) the consent or approval of any regulatory body, or (iv) the perfection of any exemption from any such withholding, listing, registration, qualification, consent or approval is necessary or desirable in connection with such exercise or the issuance of shares thereunder, then in any such event, such exercise shall not be effective unless such withholding, listing registration, qualification, consent, approval or exemption shall have been effected, obtained or perfected free of any conditions not acceptable to the Company.

	 
	 
	 

	 
	(n)

	Repurchase Agreement:  The Board may, in its discretion, require as a condition to the Grant of an Option hereunder, that an Optionee execute an agreement with the Company, in form and substance satisfactory to the Board in its discretion ("Repurchase Agreement"), (i) restricting the Optionee's right to transfer shares purchased under such Option without first offering such shares to the Company or another shareholder of the Company upon the same terms and conditions as provided therein; and (ii) providing that upon termination of Optionee's employment with the Company, for any reason, the Company (or another shareholder of the Company, as provided in the Repurchase Agreement) shall have the right at its discretion (or the discretion of such other shareholders) to purchase and/or redeem all such shares owned by the Optionee on the date of termination of his or her employment at a price equal to: (A) the fair value of such shares as of such date of termination; or (B) if such repurchase right lapses at 20% of the number of shares per year, the original purchase price of such shares, and upon terms of payment permissible under the applicable state securities laws; provided that in the case of Options or Stock Awards granted to officers, directors, consultants or affiliates of the Company, such repurchase provisions may be subject to additional or greater restrictions as determined by the Board or Committee.

		
	6.

	Stock Awards and Restricted Stock Purchase Offers.

			
	 
	(a)

	Types of Grants.

			
	  

	(i)

	Stock Award.  All or part of any Stock Award under the Plan may be subject to conditions established by the Board or the Committee, and set forth in the Stock Award Agreement, which may include, but are not limited to, continuous service with the Company, achievement of specific business objectives, increases in specified indices, attaining growth rates and other comparable measurements of Company performance. Such Awards may be based on Fair Market Value or other specified valuation.

	 
	 
	 

	  

	(ii)

	Restricted Stock Purchase Offer.  A Grant of a Restricted Stock Purchase Offer under the Plan shall be subject to such (i) vesting contingencies related to the Participant's continued association with the Company for a specified time and (ii) other specified conditions as the Board or Committee shall determine, in their sole discretion, consistent with the provisions of the Plan.

6

			
	 
	(b)

	Conditions and Restrictions.  Shares of Stock which Participants may receive as a Stock Award under a Stock Award Agreement or Restricted Stock Purchase Offer under a Restricted Stock Purchase Offer may include such restrictions as the Board or Committee, as applicable, shall determine, including restrictions on transfer, repurchase rights, right of first refusal, and forfeiture provisions. When transfer of Stock is so restricted or subject to forfeiture provisions it is referred to as "Restricted Stock". Further, with Board or Committee approval, Stock Awards or Restricted Stock Purchase Offers may be deferred, either in the form of installments or a future lump sum distribution. The Board or Committee may permit selected Participants to elect to defer distributions of Stock Awards or Restricted Stock Purchase Offers in accordance with procedures established by the Board or Committee to assure that such deferrals comply with applicable requirements of the Code including, at the choice of Participants, the capability to make further deferrals for distribution after retirement. Any deferred distribution, whether elected by the Participant or specified by the Stock Award Agreement, Restricted Stock Purchase Offers or by the Board or Committee, may require the payment be forfeited in accordance with the provisions of Section 6(c). Dividends or dividend equivalent rights may be extended to and made part of any Stock Award or Restricted Stock Purchase Offers denominated in Stock or units of Stock, subject to such terms, conditions and restrictions as the Board or Committee may establish.

	 
	 
	 

	 
	(c)

	Cancellation and Rescission of Grants.  Unless the Stock Award Agreement or Restricted Stock Purchase Offer specifies otherwise, the Board or Committee, as applicable, may cancel any unexpired, unpaid, or deferred Grants at any time if the Participant is not in compliance with all other applicable provisions of the Stock Award Agreement or Restricted Stock Purchase Offer, the Plan and with the following conditions:

			
	  

	(i)

	A Participant shall not render services for any organization or engage directly or indirectly in any business which, in the judgment of the chief executive officer of the Company or other senior officer designated by the Board or Committee, is or becomes competitive with the Company, or which organization or business, or the rendering of services to such organization or business, is or becomes otherwise prejudicial to or in conflict with the interests of the Company. For Participants whose employment has terminated, the judgment of the chief executive officer shall be based on the Participant's position and responsibilities while employed by the Company, the Participant's post-employment responsibilities and position with the other organization or business, the extent of past, current and potential competition or conflict between the Company and the other organization or business, the effect on the Company's customers, suppliers and competitors and such other considerations as are deemed relevant given the applicable facts and circumstances.  A Participant who has retired shall be free, however, to purchase as an investment or otherwise, stock or other securities of such organization or business so long as they are listed upon a recognized securities exchange or traded over-the-counter, and such investment does not represent a substantial investment to the Participant or a greater than ten percent (10%) equity interest in the organization or business.

	 
	 
	 

	  

	(ii)

	A Participant shall not, without prior written authorization from the Company, disclose to anyone outside the Company, or use in other than the Company's business, any confidential information or material, as defined in the Company's Proprietary Information and Invention Agreement or similar agreement regarding confidential information and intellectual property, relating to the business of the Company, acquired by the Participant either during or after employment with the Company.

	 
	 
	 

	  

	(iii)

	A Participant shall disclose promptly and assign to the Company all right, title and interest in any invention or idea, patentable or not, made or conceived by the Participant during employment by the Company, relating in any manner to the actual or anticipated business, research or development work of the Company and shall do anything reasonably necessary to enable the Company to secure a patent where appropriate in the United States and in foreign countries.

	 
	 
	 

	  

	(iv)

	Upon exercise, payment or delivery pursuant to a Grant, the Participant shall certify on a form acceptable to the Committee that he or she is in compliance with the terms and conditions of the Plan. Failure to comply with all of the provisions of this Section 6(c) prior to, or during the six months after, any exercise, payment or delivery pursuant to a Grant shall cause such exercise, payment or delivery to be rescinded. The Company shall notify the Participant in writing of any such rescission within two years after such exercise, payment or delivery. Within ten days after receiving such a notice from the Company, the Participant shall pay to the Company the amount of any gain realized or payment received as a result of the rescinded exercise, payment or delivery pursuant to a Grant. Such payment shall be made either in cash or by returning to the Company the number of shares of Stock that the Participant received in connection with the rescinded exercise, payment or delivery.

7

			
	 
	(d)

	Nonassignability.

			
	  

	(i)

	Except pursuant to Section 6(e)(iii) and except as set forth in Section 6(d)(ii), no Grant or any other benefit under the Plan shall be assignable or transferable, or payable to or exercisable by, anyone other than the Participant to whom it was granted.

	 
	 
	 

	  

	(ii)

	Where a Participant terminates employment and retains a Grant pursuant to Section 6(e)(ii) in order to assume a position with a governmental, charitable or educational institution, the Board or Committee, in its discretion and to the extent permitted by law, may authorize a third party (including but not limited to the trustee of a "blind" trust), acceptable to the applicable governmental or institutional authorities, the Participant and the Board or Committee, to act on behalf of the Participant with regard to such Awards.

			
	 
	(e)

	Termination of Employment.  If the employment or service to the Company of a Participant terminates, other than pursuant to any of the following provisions under this Section 6(e), all unexercised, deferred and unpaid Stock Awards or Restricted Stock Purchase Offers shall be cancelled immediately, unless the Stock Award Agreement or Restricted Stock Purchase Offer provides otherwise:

			
	  

	(i)

	Retirement Under a Company Retirement Plan.  When a Participant's employment terminates as a result of retirement in accordance with the terms of a Company retirement plan, the Board or Committee may permit Stock Awards or Restricted Stock Purchase Offers to continue in effect beyond the date of retirement in accordance with the applicable Grant Agreement and the exercisability and vesting of any such Grants may be accelerated.

	 
	 
	 

	  

	(ii)

	Rights in the Best Interests of the Company.  When a Participant resigns from the Company and, in the judgment of the Board or Committee, the acceleration and/or continuation of outstanding Stock Awards or Restricted Stock Purchase Offers would be in the best interests of the Company, the Board or Committee may (i) authorize, where appropriate, the acceleration and/or continuation of all or any part of Grants issued prior to such termination and (ii) permit the exercise, vesting and payment of such Grants for such period as may be set forth in the applicable Grant Agreement, subject to earlier cancellation pursuant to Section 9 or at such time as the Board or Committee shall deem the continuation of all or any part of the Participant's Grants are not in the Company's best interest.

			
	  

	(iii)

	Death or Disability of a Participant.

			
	  

	(1)

	In the event of a Participant's death, the Participant's estate or beneficiaries shall have a period up to the expiration date specified in the Grant Agreement within which to receive or exercise any outstanding Grant held by the Participant under such terms as may be specified in the applicable Grant Agreement. Rights to any such outstanding Grants shall pass by will or the laws of descent and distribution in the following order: (a) to beneficiaries so designated by the Participant; if none, then (b) to a legal representative of the Participant; if none, then (c) to the persons entitled thereto as determined by a court of competent jurisdiction. Grants so passing shall be made at such times and in such manner as if the Participant were living.

	 
	 
	 

	  

	(2)

	In the event a Participant is deemed by the Board or Committee to be unable to perform his or her usual duties by reason of mental disorder or medical condition which does not result from facts which would be grounds for termination for cause, Grants and rights to any such Grants may be paid to or exercised by the Participant, if legally competent, or a committee or other legally designated guardian or representative if the Participant is legally incompetent by virtue of such disability.

	 
	 
	 

	  

	(3)

	After the death or disability of a Participant, the Board or Committee may in its sole discretion at any time (1) terminate restrictions in Grant Agreements; (2) accelerate any or all installments and rights; and (3) instruct the Company to pay the total of any accelerated payments in a lump sum to the Participant, the Participant's estate, beneficiaries or representative; notwithstanding that, in the absence of such termination of restrictions or acceleration of payments, any or all of the payments due under the Grant might ultimately have become payable to other beneficiaries.

	 
	 
	 

	 
	(4)

	In the event of uncertainty as to interpretation of or controversies concerning this Section 6, the determinations of the Board or Committee, as applicable, shall be binding and conclusive.

8

		
	7. 

	Change in Control.  Unless otherwise provided in the applicable Grant Agreement, in the event of a Change in Control, 50% of the vesting restrictions applicable to each Participant’s Grant(s) shall terminate fully and the Participant shall immediately have the right to the delivery of share certificates or exercise of Options, i.e. to the extent that a Participant’s Option(s) are unvested, 50% of such unvested portion shall vest.

	 
	 

	8. 

	Investment Intent.  All Grants under the Plan are intended to be exempt from registration under the Securities Act provided by Rule 701 thereunder. Unless and until the granting of Options or sale and issuance of Stock subject to the Plan are registered under the Securities Act or shall be exempt pursuant to the rules promulgated thereunder, each Grant under the Plan shall provide that the purchases or other acquisitions of Stock thereunder shall be for investment purposes and not with a view to, or for resale in connection with, any distribution thereof. Further, unless the issuance and sale of the Stock have been registered under the Securities Act, each Grant shall provide that no shares shall be purchased upon the exercise of the rights under such Grant unless and until (i) all then applicable requirements of state and federal laws and regulatory agencies shall have been fully complied with to the satisfaction of the Company and its counsel, and (ii) if requested to do so by the Company, the person exercising the rights under the Grant shall (A) give written assurances as to knowledge and experience of such person (or a representative employed by such person) in financial and business matters and the ability of such person (or representative) to evaluate the merits and risks of exercising the Option, and (B) execute and deliver to the Company a letter of investment intent and/or such other form related to applicable exemptions from registration, all in such form and substance as the Company may require. If shares are issued upon exercise of any rights under a Grant without registration under the Securities Act, subsequent registration of such shares shall relieve the purchaser thereof of any investment restrictions or representations made upon the exercise of such rights.

	 
	 

	9. 

	Amendment, Modification, Suspension or Discontinuance of the Plan.  The Board may, insofar as permitted by law, from time to time, with respect to any shares at the time not subject to outstanding Grants, suspend or terminate the Plan or revise or amend it in any respect whatsoever, except that without the approval of the shareholders of the Company, no such revision or amendment shall (i) increase the number of shares subject to the Plan, (ii) decrease the price at which Grants may be granted, (iii) materially increase the benefits to Participants, or (iv) change the class of persons eligible to receive Grants under the Plan; provided, however, no such action shall alter or impair the rights and obligations under any Option, or Stock Award, or Restricted Stock Purchase Offer outstanding as of the date thereof without the written consent of the Participant thereunder. No Grant may be issued while the Plan is suspended or after it is terminated, but the rights and obligations under any Grant issued while the Plan is in effect shall not be impaired by suspension or termination of the Plan.

In the event of any change in the outstanding Stock by reason of a stock split, stock dividend, combination or reclassification of shares, recapitalization, merger, or similar event, the Board or the Committee may adjust proportionally (a) the number of shares of Stock (i) reserved under the Plan, (ii) available for Incentive Stock Options and Nonstatutory Options and (iii) covered by outstanding Stock Awards or Restricted Stock Purchase Offers; (b) the Stock prices related to outstanding Grants; and (c) the appropriate Fair Market Value and other price determinations for such Grants. In the event of any other change affecting the Stock or any distribution (other than normal cash dividends) to holders of Stock, such adjustments as may be deemed equitable by the Board or the Committee, including adjustments to avoid fractional shares, shall be made to give proper effect to such event. In the event of a corporate merger, consolidation, acquisition of property or stock, separation, reorganization or liquidation, the Board or the Committee shall be authorized to issue or assume stock options, whether or not in a transaction to which Section 424(a) of the Code applies, and other Grants by means of substitution of new Grant Agreements for previously issued Grants or an assumption of previously issued Grants.

			
	10.

	Tax Withholding. The Company shall have the right to deduct applicable taxes from any Grant payment and withhold, at the time of delivery or exercise of Options, Stock Awards or Restricted Stock Purchase Offers or vesting of shares under such Grants, an appropriate number of shares for payment of taxes required by law or to take such other action as may be necessary in the opinion of the Company to satisfy all obligations for withholding of such taxes. If Stock is used to satisfy tax withholding, such stock shall be valued based on the Fair Market Value when the tax withholding is required to be made.

	 
	 

	11.

	Availability of Information. During the term of the Plan and any additional period during which a Grant granted pursuant to the Plan shall be exercisable, the Company shall make available, not later than one hundred and twenty (120) days following the close of each of its fiscal years, such financial and other information regarding the Company as is required by the bylaws of the Company and applicable law to be furnished in an annual report to the shareholders of the Company.

	 
	 

	12.

	Notice. Any written notice to the Company required by any of the provisions of the Plan shall be addressed to the chief personnel officer or to the chief executive officer of the Company, and shall become effective when it is received by the office of the chief personnel officer or the chief executive officer.

9

		
	13.

	Indemnification of Board. In addition to such other rights or indemnifications as they may have as directors or otherwise, and to the extent allowed by applicable law, the members of the Board and the Committee shall be indemnified by the Company against the reasonable expenses, including attorneys' fees, actually and necessarily incurred in connection with the defense of any claim, action, suit or proceeding, or in connection with any appeal thereof, to which they or any of them may be a party by reason of any action taken, or failure to act, under or in connection with the Plan or any Grant granted thereunder, and against all amounts paid by them in settlement thereof (provided such settlement is approved by independent legal counsel selected by the Company) or paid by them in satisfaction of a judgment in any such claim, action, suit or proceeding, except in any case in relation to matters as to which it shall be adjudged in such claim, action, suit or proceeding that such Board or Committee member is liable for negligence or misconduct in the performance of his or her duties; provided that within sixty (60) days after institution of any such action, suit or Board proceeding the member involved shall offer the Company, in writing, the opportunity, at its own expense, to handle and defend the same.

	 
	 

	14.

	Governing Law. The Plan and all determinations made and actions taken pursuant hereto, to the extent not otherwise governed by the Code or the securities laws of the United States, shall be governed by the law of the State of Colorado and construed accordingly.

	 
	 

	15.

	Termination Dates. The Plan shall terminate ten years later, subject to earlier termination by the Board pursuant to Section 9.

The foregoing Advanced Cannabis Solutions, Inc. 2014 Equity Incentive Plan was duly adopted and approved by the Board of Directors on October 29, 2014.

			
	 
	ADVANCED CANNABIS SOLUTIONS, INC.

	 
	  

	 
	By:

	/s/ Robert L. Frichtel

	 
	 
	Name: Robert L. Frichtel

	 
	 
	Title: Chief Executive Officer

10

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