Document:

Exhibit

May 15, 2020

Mr. Corii D. Berg
2700 Colorado Ave., Suite 200
Santa Monica, California 90404

RE:  Employment Agreement

Dear Mr. Berg:
On behalf of Lions Gate Entertainment Corp. (the “Company” or “Lions Gate”), this agreement (“Agreement”) shall confirm the terms of your employment by the Company. We refer to you herein as “Employee.”  The terms of Employee’s employment are as follows:
1.    TERM
(a)  The term of this Agreement will begin March 1, 2020 and end July 11, 2023, subject to earlier termination as provided for in Section 8 below (the “Term”).  Prior to March 1, 2020, the employment agreement dated as of May 16, 2018 between the Company and Employee (the “Prior Agreement”) governed the terms and conditions of Employee’s employment.  During the Term of this Agreement, Employee will serve as the Company’s Executive Vice President and General Counsel, reporting to the Company’s Chief Executive Officer (the “CEO”), currently Jon Feltheimer, or the Company’s designee.  Employee shall render such services as are customarily rendered by persons in Employee’s capacity in the entertainment industry and as may be reasonably requested by the Company.
(b)  So long as this Agreement shall continue in effect, Employee shall devote Employee’s full business time, energy and ability exclusively to the business, affairs and interests of the Company and matters related thereto, shall use Employee’s best efforts and abilities to promote the Company’s interests, and shall perform the services contemplated by this Agreement in accordance with policies established by the Company.  As long as Employee’s meaningful business time is devoted to the Company, Employee may devote a reasonable amount of time to management of personal investments and charitable, political and civic activities, so long as these activities do not conflict with the Company’s interests or otherwise interfere with Employee’s performance under this Agreement.
(c)  Subject to travel required by Employee’s position and consistent with the reasonable business of the Company, Employee will be based in the Los Angeles, California area.
(d)  During the Term, the Company shall pay for the services of an assistant to the extent available in keeping with the Company’s policy and practice for the Company’s Chief Operating Officer and division heads.

2.    COMPENSATION
(a)  Salary.  During the Term, Employee will be paid a base salary at the rate of One Million Dollars ($1,000,000) per year (“Base Salary”), payable in accordance with the Company’s normal payroll practices in effect.  
(b)  Payroll.  Nothing in this Agreement shall limit the Company’s right to modify its payroll practices, as it deems necessary.
(c)  Bonuses.  During the Term, Employee shall be eligible to receive annual performance bonuses with an annual target opportunity of seventy-five percent (75%) of Employee’s Base Salary based upon such Company and/or individual performance criteria as determined by the Compensation Committee of the Board of Directors of Lions Gate (the “CCLG”), in consultation with the Company’s CEO, or the Company’s designee. Such annual performance bonuses shall be subject to performance metrics that shall be established by the CCLG.  Except as expressly set forth herein, Employee must be employed with the Company through the end of the applicable fiscal year to be eligible to receive a bonus for that fiscal year.  Any such bonus will be paid as soon as practicable after the end of the applicable fiscal year and in all events within the “short-term deferral” period provided under Treasury Regulation Section 1.409A-1(a)(4).  The actual bonus, if any, shall be payable in cash and/or in the form of shares or share-based awards, in the sole discretion of the CCLG, in consultation with the CEO, or the Company’s designee, but in no event, shall more than one-third (1/3) of of the actual bonus awarded be payable in shares or share-based awards (it being understood that payment shall be consistent in form with that payable to other Company executives at the division-head level, so long as no more than one-third (1/3) of the actual bonus awarded is payable in shares or share-based awards).  Notwithstanding the foregoing, in the event that Employee’s employment with Company ends on the last day of the Term or Employee’s employment terminates during the Term pursuant to Sections 8(a)(ii), 8(a)(iii), 8(a)(v), 8(a)(vi) or 8(a)(viii) of the Agreement, Employee shall remain eligible for a prorated bonus based upon the amount of time worked during the fiscal year in which the termination occurs and the CCLG’s assessment of the applicable performance criteria, paid at the same time that such bonuses are paid to employees of the Company, but in any event no later than when bonuses are paid to other senior-level executives. 
(d)    Tax Withholding.  Notwithstanding anything else herein to the contrary, the Company may withhold (or cause there to be withheld, as the case may be) from any amounts otherwise due or payable under or pursuant to this Agreement such federal, state and local income, employment, or other taxes as may be required to be withheld pursuant to any applicable law or regulation.
3.    BENEFITS
As an employee of the Company, Employee will continue to be eligible to participate in all benefit plans to the same extent as other similarly situated salaried employees of the Company (including the Company’s Chief Operating Officer and division heads) and in all 

events subject to the terms of such plans as in effect from time to time.  For the sake of clarity, such plans do not include compensation and/or any bonus plans.

4.    VACATION AND TRAVEL
(a)  Employee shall be entitled to take paid time off without a reduction in salary, subject to: (i) the approval of Employee’s supervisor; and, (ii) the demands and requirements of Employee’s duties and responsibilities under this Agreement.  Employee shall accrue no paid vacation.  
(b)  Employee will be eligible to be reimbursed for any business expenses in accordance with the Company’s current Travel and Entertainment policy.
(c)  In addition, to the extent the following are within the Company’s policy and practice then in effect for similarly situated employees (including the Company’s Chief Operating Officer and division heads), Employee shall be entitled to (i) business class travel in accordance with the Company’s travel and expense policy; (ii) all customary “perqs” of division heads and the Chief Operating Officer of the Company; (iii) a cell phone, which may be expensed; (iv) a reserved parking space; and (v) reimbursement for all expenses reasonably incurred in connection with Employee’s employment.
(d)  The Company reserves the right to modify, suspend or discontinue any and all of the above referenced benefits, plans, practices, policies and programs (including those in Section 3) at any time (whether before or after termination of employment) without notice to or recourse by Employee so long as action is taken in general with respect to other similarly situated persons (including the Company’s Chief Operating Officer and division heads) and does not single out Employee.
5.      EQUITY GRANTS
(a)Signing Equity Awards.  On May 15, 2020 (the “Signing Award Date”) the CCLG approved the equity awards set forth in this Section 5(a) to Employee (collectively, the “Signing Equity Awards”):
		
	(i)
	An award of time-based restricted stock units (“RSUs”) with respect to Lions Gate’s Class B common shares (the “Class B Shares”), such award to have a value as determined under Section 5(b) equal to Eighty-Two Thousand Five Hundred Dollars ($82,500) (the “Signing Time-Based RSU Award”);

		
	(ii)
	An award of time-based share appreciation rights with respect to the Class B Shares, such award to have a value as determined under Section 5(b) equal to Eighty-Five Thousand Dollars ($85,000) (the “Signing Time-Based SAR Award”); and,

		
	(iii)
	An additional award of performance-based RSUs with respect to the Class B Shares, such award to have a value as determined under Section 5(b) equal to Eighty-Two Thousand Five Hundred Dollars ($82,500) (the “Signing Performance-Based RSU Award”).

(b)Determination of Signing Equity Awards.  Unless otherwise provided by the CCLG in approving the particular grant, the number of Class B Shares subject to such Signing Equity Awards shall be determined as follows:
		
	(i)
	The number of Class B Shares subject to the Signing Time-Based RSU Award and Signing Performance-Based RSU Award shall be determined by dividing the applicable dollar amount for such award set forth above by the closing price (in regular trading) of a Class B Share on the New York Stock Exchange (the “NYSE,” or such other exchange on which the Company’s shares are then principally traded) on the Signing Award Date (the “Signing Award Closing Price”); and,

		
	(ii)
	The number of Class B Shares subject to the Signing Time-Based SAR Award shall be determined by dividing the applicable dollar amount for such award set forth above by the per-share fair value of the award on the Signing Award Date (such per‐share value to be based upon the Black – Scholes or similar valuation method and assumptions then generally used by Lions Gate in valuing its options and share appreciation rights awards for financial statement purposes).  The base price per share for the Signing Time-Based SAR Award shall be the Signing Award Closing Price.

(c)Vesting and Payment of Signing Equity Awards.  Unless otherwise provided by the CCLG in approving the particular grant and subject to Section 5(i) below, such Signing Equity Awards shall vest (or be eligible to vest) as follows:
		
	(i)
	The Signing Time-Based RSU Award and Signing Time-Based SAR Award shall vest as to one-third of the shares subject to the applicable award on each of the first, second, and third anniversaries of the Signing Award Date. Each RSU subject to the Signing Time-Based RSU Award shall be payable upon vesting of the RSU, as determined by the CCLG in its sole discretion, in the form of either Class B Shares, Class A Shares, cash or any combination of the foregoing, with such payment in any case to have an aggregate value (for each RSU so vested) equal to the fair market value (as determined under the Lions Gate 2019 Performance Incentive Plan (the “Plan”)), of a Class B Share on the vesting date.  Each right subject to the Signing Time-Based SAR Award shall be payable upon exercise of the right, as determined by the CCLG in its sole discretion, in the form of either Class B Shares, Class A Shares, cash or any combination of the 

foregoing, with such payment in any case to have an aggregate value (for each right so exercised) equal to the amount by which the fair market value (as determined under the Plan) of a Class B Share on the date of such exercise of the Signing Time-Based SAR Award exceeds the per-share base price of such Signing Time-Based SAR Award.  Each Signing Time-Based SAR Award may be exercised only if and to the extent vested. 
		
	(ii)
	The Signing Performance-Based RSU Award shall be eligible to vest as to one-third of the shares subject to the award on each of the first, second, and third anniversaries of the Signing Award Date (each, a “Signing Performance Vesting Date”).  The vesting of such award shall be subject to an assessment of Employee’s performance over the twelve (12) month period ending on the applicable Signing Performance Vesting Date, based in part on metrics established annually by the CCLG in its discretion, in consultation with the Company’s CEO or the Company’s designee. Determination of the vesting of the Signing Performance-Based RSU Award on each respective Signing Performance Vesting Date, shall be made by the CCLG in its discretion, in consultation with the Company’s CEO or the Company’s designee.  Each RSU subject to the Signing Performance-Based RSU Award shall be payable upon vesting of the RSU, as determined by the CCLG in its sole discretion, in the form of either Class B Shares, Class A Shares, cash or any combination of the foregoing, with such payment in any case to have an aggregate value (for each RSU so vested) equal to the fair market value (as determined under the Plan) of a Class B Share on the vesting date.  Any portion of any such award that is eligible to vest on a particular Signing Performance Vesting Date and does not vest on that date shall expire on that date with no possibility of further vesting.  Notwithstanding the foregoing, the CCLG may, in its sole discretion, provide that any portion of the Signing Performance-Based RSU Award eligible to vest on any such Signing Performance Vesting Date that does not vest on that date may vest on any future Signing Performance Vesting Date (but in no event shall the award vest as to more than 100% of the shares subject to such award).

(d)Annual Equity Awards.  The Company shall request that, at the first CCLG meeting to be held following each of July 1, 2020, July 1, 2021, July 1, 2022 and July 1, 2023 (the date of each such meeting, an “Annual Award Date”) and subject to Employee’s continued employment with the Company through the applicable Annual Award Date, the CCLG grant Employee an annual equity award (each, an “Annual Equity Award,” 

and collectively, the “Annual Equity Awards”).  The aggregate value of each Annual Equity Award (each, the “Annual Equity Award Value”) shall be One Million Dollars ($1,000,000).
(e)Allocation of Annual Equity Awards.  For each Annual Equity Award, the types of awards granted and the allocation of the applicable Annual Equity Award Value to those awards shall be as follows:
		
	(i)
	An award of time-based RSUs with respect the Class B Shares, such award to have a value as determined under Section 5(f) equal to Thirty-Three (33%) of the applicable Annual Equity Award Value (the “Annual Time-Based RSU Award”);

		
	(ii)
	An award of time-based share appreciation rights with respect to the Class B Shares, such award to have a value as determined under Section 5(f) equal to Thirty-Four Percent (34%) of the applicable Annual Equity Award Value (the “Annual Time-Based SAR Award”); and,

		
	(iii)
	An additional award of performance-based RSUs with respect to the Class B Shares, such award to have a value as determined under Section 5(f) equal to Thirty-Three Percent (33%) of the applicable Annual Equity Award Value (the “Annual Performance-Based RSU Award”).

(f)Determination of Annual Equity Awards.  Unless otherwise provided by the CCLG in approving the particular grant, the number of Class B Shares subject to such Annual Equity Awards shall be determined as follows:
		
	(i)
	The number of Class B Shares subject to each Annual Time-Based RSU Award and Annual Performance-Based RSU Award shall be determined by dividing the applicable dollar amount for such award set forth above by the closing price (in regular trading) of a Class B Share on the NYSE (or such other exchange on which the Company’s shares are then principally traded) on the applicable Annual Award Date (the “Annual Closing Price”); and

		
	(ii)
	The number of Class B Shares subject to each Annual Time-Based SAR Award shall be determined by dividing the applicable dollar amount for such award set forth above by the per-share fair value of the award on the Annual Award Date for the award (such per‐share value to be based upon the Black – Scholes or similar valuation method and assumptions then generally used by Lions Gate in valuing its options and share appreciation rights awards for financial statement purposes).  The base price per share for each Annual Time-Based SAR Award shall be the applicable Annual Closing Price.

(g)Vesting and Payment of Annual Equity Awards.  Unless otherwise provided by the CCLG in approving the particular grant and subject to Section 5(i) below, such Annual Equity Awards shall vest (or be eligible to vest) as follows:
		
	(i)
	Each Annual Time-Based RSU Award and Annual Time-Based SAR Award shall vest as to one-third of the shares subject to the applicable award on each of the first, second, and third anniversaries of the applicable Annual Award Date. Each RSU subject to an Annual Time-Based RSU Award shall be payable upon vesting of the RSU, as determined by the CCLG in its sole discretion, in the form of either Class B Shares, Class A Shares, cash or any combination of the foregoing, with such payment in any case to have an aggregate value (for each RSU so vested) equal to the fair market value (as determined under the Plan) of a Class B Share on the vesting date.  Each right subject to an Annual Time-Based SAR Award shall be payable upon exercise of the right, as determined by the CCLG in its sole discretion, in the form of either Class B Shares, Class A Shares, cash or any combination of the foregoing, with such payment in any case to have an aggregate value (for each right so exercised) equal to the amount by which the fair market value (as determined under the Plan) of a Class B Share on the date of such exercise of the Annual Time-Based SAR Award exceeds the per-share base price of such Annual Time-Based SAR Award.  Each Annual Time-Based SAR Award may be exercised only if and to the extent vested. 

		
	(ii)
	Each Annual Performance-Based RSU Award shall be eligible to vest as to one-third of the shares subject to the applicable award on each of the first, second, and third anniversaries of the applicable Annual Award Date (each, an “Annual Performance Vesting Date”).  The vesting of each such award shall be subject to an assessment of Employee’s performance over the twelve (12) month period ending on the applicable Annual Performance Vesting Date, based in part on metrics established annually by the CCLG in its discretion, in consultation with the Company’s CEO or the Company’s designee. Determination of the vesting of each Annual Performance-Based RSU Award on each respective Annual Performance Vesting Date, if any, shall be made by the CCLG in its discretion, in consultation with the Company’s CEO or the Company’s designee.  Each RSU subject to an Annual Performance-Based RSU Award shall be payable upon vesting of the RSU, as determined by the CCLG in its sole discretion, in the form of either Class B Shares, Class A Shares, cash or any combination of the foregoing, with such payment in any case to have an aggregate value (for each RSU so vested) equal to the fair market value (as determined under the Plan) of a Class B Share on the vesting date.  Any portion of any such award that is eligible to vest on a particular Annual Performance 

Vesting Date and does not vest on that date shall expire on that date with no possibility of further vesting.  Notwithstanding the foregoing, the CCLG may, in its sole discretion, provide that any portion of an Annual Performance-Based RSU Award eligible to vest on any such Annual Performance Vesting Date that does not vest on that date may vest on any future Annual Performance Vesting Date (but in no event shall any such award vest as to more than 100% of the shares subject to such award).
(h)Terms of Awards in General.  Each of the awards set forth above in this Section 5 (if granted, in the case of Annual Equity Awards) shall be granted in accordance with the terms and conditions of the Plan or a successor plan thereto.  Each of such awards (if granted) shall be evidenced by and subject to the terms of an award agreement in the form generally then used by Lions Gate to evidence grants of the applicable type of award under the Plan (or a successor plan).
(i)Continuance of Employment.  Subject to the exceptions in Section 5(j) below, the vesting schedules in Sections 5(c) and 5(g) above require Employee’s continued employment with the Company through each applicable vesting date as a condition to the vesting of the applicable installment of the equity awards and the rights and benefits thereto.  Except as expressly provided herein, Employee’s then-unvested awards will terminate on any termination of Employee’s employment with the Company, and Employee will have no further rights with respect thereto.
(j)Acceleration of Equity Awards.
		
	(i)
	In the event that Employee’s employment terminates due to: (A) his death pursuant to Section 8(a)(ii) or (B) his disability pursuant to Section 8(a)(iii), the portions of the Signing Equity Awards and the Annual Equity Awards (if any) that have been granted prior to Employee’s termination date, are then outstanding and not yet vested, and are scheduled to vest within the period of twenty-four (24) months following the date of such termination of Employee’s employment, shall accelerate and become fully vested on the termination date (subject to Employee’s satisfying the requirement to provide a general release of claims in accordance with Section 8(a)(v) in the event of a termination pursuant to Section 8(a)(iii)).  Any portion of each such award that is not vested after giving effect to such acceleration provision shall terminate on Employee’s termination date.

		
	(ii)
	In the event that during the Term of this Agreement: (A) Employee’s employment is terminated by the Company “without cause” (and other than a termination described in paragraph (iii) of this Section 5(g)) pursuant to Section 8(a)(v); or (B) the employment of both Jon Feltheimer and Michael Burns with the Company terminates (the 

second such termination to occur, a “Change in Management”) and on or within twelve (12) months following such Change in Management, Employee’s employment is terminated by Employee for “Good Reason” as defined in Section 8(a)(vi) below; or (C) a Change of Control (as defined herein) occurs during the Term of this Agreement and on or within twelve (12) months following such Change of Control Employee’s employment is terminated by Employee for “Good Reason”: (x) the portions of the Signing Equity Awards and the Annual Equity Awards (if any) that have been granted prior to Employee’s termination date, are then outstanding and not yet vested, and are scheduled to vest within the period of twelve (12) months following the date of such termination of Employee’s employment, shall accelerate and become fully vested as of the termination date; and (y) fifty percent (50%) of the portions of the Signing Equity Awards and the Annual Equity Awards (if any) that have been granted prior to Employee’s termination date, are then outstanding and not yet vested, and are scheduled to vest within the period commencing twelve (12) months following such termination of employment and ending twenty-four (24) months following such termination of employment, shall accelerate and become fully vested on the termination date (subject, however, in each case to Employee’s satisfying the requirement to provide a general release of claims in accordance with Section 8(a)(v)). Any portion of each such award that is not vested after giving effect to such acceleration provision shall terminate on Employee’s termination date.
		
	(iii)
	In the event that a Change of Control (as defined herein) occurs during the Term of this Agreement and on or within twelve (12) months following such Change of Control, Employee’s employment is terminated by the Company “without cause” (as such term is defined in Section 8(a)(v) below) the following provisions shall apply:

		
	(A)
	the portions of the Signing Equity Awards and the Annual Equity Awards (if any) that have been granted prior to Employee’s termination date and are then outstanding and not yet vested shall immediately accelerate and become fully vested (subject to Employee’s satisfying the requirement to provide a general release of claims in accordance with Section 8(a)(v)); and

		
	(B)
	with respect to the portions of each of the Annual Equity Award(s) (if any) that: (I) are contemplated by Section 5(d) above; and (II) have not been granted and are scheduled to be granted pursuant to Section 5(d) above after the date of Employee’s termination (each, an “Ungranted Annual Equity 

Award”), Employee shall be entitled to a lump sum payment (subject to Employee’s provision of a general release of claims in accordance with Section 8(a)(v)), to be made not later than sixty (60) days after Employee’s termination date (provided, that if such 60-day period spans two calendar years, such payment will be made in the second year), in an amount equal to fifty percent (50%) of the aggregate dollar value of all such Ungranted Annual Equity Awards as set forth in Section 5(d) above.  Such payment shall be made in cash, provided that the Company may, at its election, provide for Lions Gate to make all or a portion of such payment in the form of a number of Class B Shares determined by dividing the dollar amount of such payment by the closing price (in regular trading) of the Class B Shares on the payment date.
		
	(iv)
	In the event that Employee’s services pursuant to this Agreement are set to expire in due course on July 11, 2023, and no less than six (6) months before the conclusion of the Term, the Company either (x) does not offer Employee a renewal or extension of this Agreement or (y) offers Employee a renewal or extension of this Agreement but the terms of such offer are different from those provided herein and such different terms would constitute Good Reason (as defined in Section 8(a)(vi), except that solely for these purposes, clause (z) of such definition shall not apply and instead, a material reduction in the rate of Employee’s Base Salary as set forth in Section 2(a) shall constitute Good Reason), Employee’s services to the Company shall terminate on July 11, 2023 and the portions of the Signing Equity Awards and the Annual Equity Awards (if any), that have been granted prior to Employee’s termination date, that are then outstanding and not yet vested, and are scheduled to vest within the period of twelve (12) months following the date of such termination of Employee’s employment, shall immediately accelerate and become fully vested on July 11, 2023 (subject, however, to Employee’s continued employment with the Company through July 11, 2023 and Employee’s satisfying the requirement to provide a general release of claims in accordance with Section 8(a)(v)). Any portion of each such award that is not vested after giving effect to such acceleration provision shall terminate on Employee’s termination date. If, more than six (6) months before the conclusion of the Term, the Company offers Employee a renewal or extension of this Agreement on terms Employee believes would constitute Good Reason, Employee shall comply with the notice, cure and termination provisions set forth in the definition of Good Reason in Section 8(a)(vi).

		
	(v)
	For any other equity-based awards granted during the Term at any time after the date of this Agreement (unless otherwise expressly provided by the CCLG at the time it approves the applicable grant), the provisions for accelerated vesting of equity awards in this Section 5(j) (other than the cash payment provided in Section 5(j)(iii)(B)) shall apply to such awards.

 (k)    Definition of Change in Control.  For the purposes of this Agreement, “Change of Control” shall mean: 
		
	(i)
	if any person, other than (A) any person who holds or controls entities that, in the aggregate (including the holdings of such person), hold or control thirty-three percent (33%) or more of the outstanding shares of Lions Gate on the date of execution of this Agreement by each party hereto (collectively, a “Thirty-Three Percent Holder”) or (B) a trustee or other fiduciary holding securities of Lions Gate under an employee benefit plan of Lions Gate, becomes the beneficial owner, directly or indirectly, of securities of Lions Gate representing thirty-three percent (33%) or more of the outstanding shares as a result of one or more related transactions in the context of a merger, consolidation, sale or other disposition of equity interests or assets of Lions Gate, excluding any transactions or series of transactions involving a sale or other disposition of securities of Lions Gate by a Thirty-Three Percent Holder; 

		
	(ii)
	if, as a result of one or more related transactions in the context of a merger, consolidation, sale or other disposition of equity interests or assets of Lions Gate, there is a sale or disposition of thirty-three percent (33%) or more of Lions Gate's assets (or consummation of any transaction, or series of related transactions, having similar effect), with the exceptions of a sale of Starz, LLC or a sale of a portion thereof;;

		
	(iii)
	if, as a result of one or more related transactions in the context of a merger, consolidation, sale or other disposition of equity interests or assets of Lions Gate, there occurs a change or series of changes in the composition of the Board as a result of which half or less than half of the directors are incumbent directors;

		
	(iv)
	if, as a result of one or more related transactions in the context of a merger, consolidation, sale or other disposition of equity interests or assets of Lions Gate (excluding any sale or other disposition of securities of Lions Gate by a Thirty-Three Percent Holder in a single transaction or a series of transactions), a shareholder or group of shareholders acting in concert, other than a Thirty-Three Percent 

Holder in a single transaction or a series of transactions, obtain control of thirty-three percent (33%) or more of the outstanding shares of Lions Gate; 
		
	(v)
	if, as a result of one or more related transactions in the context of a merger, consolidation, sale or other disposition of equity interests or assets of Lions Gate, a shareholder or group of shareholders acting in concert obtain control of at least half of the Board, excluding any transactions or series of transactions involving a sale or other disposition of securities of Lions Gate by a Thirty-Three Percent Holder;

		
	(vi)
	if there is a dissolution or liquidation of Lions Gate; or

		
	(vii)
	if there is any transaction or series of related transactions that has the substantial effect of any one or more of the foregoing, excluding any transaction or series of transactions involving a Thirty-Three Percent Holder.

6.    HANDBOOK
Employee agrees that the Company Employee Handbook (the “Handbook”) outlines other policies in addition to the terms set forth in this Agreement, which will apply to Employee’s employment with the Company, and Employee acknowledges receipt of the Handbook.  Employee acknowledges and agrees that it is Employee’s obligation to read, understand and adhere to the rules and policies set forth in the Handbook.  Employee acknowledges and agrees that the Company retains the right to revise, modify or delete any such policy or any employee benefit plan it deems appropriate and in its sole discretion.  Please be advised, Employee shall also be obligated to abide by the policies on the Company’s intranet site as not all Company policies are included in the Handbook.
7.    PUBLIC MORALS
Employee shall act at all times with due regard to public morals, conventions and Company policies.  If at any time, in the opinion of the Company, Employee shall have committed or does commit any act, or if Employee shall have conducted or does conduct Employee’s behavior in a manner, which shall be an offense involving moral turpitude under federal, state or local laws, or which might tend to bring Employee to public disrepute, contempt, scandal or ridicule, or which is widely deemed by members of the general public to embarrass, offend, insult, or denigrate individuals or groups, or which might tend to reflect unfavorably upon the Company, its image or goodwill, the Company shall have the right to terminate this Agreement upon notice to Employee given at any time following the date on which the commission of such act, or such conduct, shall have become known to the Company pursuant to Section 8(a)(iv)(D) of this Agreement.  For clarity and by way of example, the Company shall have the right to terminate Employee’s employment under this Section in situations including, without limitation, Employee engaging in: harassing 

conduct, including without limitation sexual harassment, to any individual or group; discriminatory conduct toward any individual or group; dishonesty (such as fraud); base, vile, or depraved conduct that is shocking to a reasonable person; assault, including without limitation sexual assault, physical assault, and rape; sexual misconduct; arson; burglary; abuse, including without limitation child or domestic abuse; hit and run; theft or robbery; manslaughter, murder, or attempted murder; perjury; possession for sale of controlled substances.

8.    TERMINATION
(a) This Agreement and the Term shall terminate upon the happening of any one or more of the following events:
		
	(i)
	The mutual written agreement between the Company and Employee;

		
	(ii)
	The death of Employee; 

		
	(iii)
	Employee’s having become so physically or mentally disabled as to be incapable, even with a reasonable accommodation, of satisfactorily performing Employee’s duties hereunder for a period of ninety (90) days or more within a one hundred twenty (120) day period, provided that Employee has not cured disability within fifteen (15) days of written notice, and such termination is legally permissible at such time; 

		
	(iv)
	The determination on the part of the Company that “cause” exists for termination of this Agreement (provided that the Company acknowledges and agrees that such determination shall not preclude Employee from disputing such determination).  As used herein, “cause” is defined as the occurrence of any of the following:  

		
	(A)
	Employee’s conviction of a felony or plea of nolo contendere to a felony (other than a traffic violation); 

		
	(B)
	commission, by act or omission, of any material act of dishonesty in the performance of Employee’s duties hereunder;

		
	(C)
	material breach of this Agreement by Employee; or 

		
	(D)
	any offense: (i) involving moral turpitude under federal, state or local laws, or which brings Employee to public disrepute, contempt, scandal or ridicule; and, (ii) which has a substantial adverse effect on the business or reputation of the Company, including but not limited to, a termination pursuant to Section 7 above;

Prior to terminating Employee’s employment for “cause,” the Company shall provide Employee with written notice of the grounds for the proposed termination. If the grounds for termination are capable of cure, the Employee shall have fifteen (15) days after receiving such notice in which to cure such grounds to the extent such cure is possible. If cure is not possible or Employee has failed to cure, Employee’s employment shall terminate upon the  fifteenth (15th) day following notice of termination.
		
	(v)
	Employee’s employment is terminated “without cause.”  Termination “without cause” shall be defined as Employee being terminated by the Company for any reason other than as set forth in Sections 8(a)(i)-(iv) above.  In the event of a termination “without cause” (other than in the circumstances described in Section 8(a)(vi) below), subject to Employee’s execution and delivery to the Company of a general release of claims in a form acceptable to the Company not more than twenty-one (21) days (or forty-five (45) days, as required by law) after the date the Company provides such release (and Employee’s not revoking such release within any revocation period provided under applicable law), Employee shall be entitled to receive a severance payment equal to the greater of: (A) fifty percent (50%) of the aggregate amount of the Base Salary that Employee would have been entitled to receive pursuant to Section 2(a) hereof for the period commencing on the date of such termination and ending on the last day of the scheduled Term then in effect had Employee continued to be employed with the Company through the last day of the scheduled Term; or (B) eighteen (18) months’ Base Salary at the rate then in effect.  Subject to the release provision set forth above, such payment shall be made in cash in a lump sum as soon as practicable after (and in all events within sixty (60) days after) the date of Employee’s “separation from service” (within the meaning of Treasury Regulation Section 1.409A-1(h)) with the Company; provided, however, that if the 60-day period following Employee’s separation from service spans two calendar years, such lump sum payment shall be made within such 60-day period but in the second of the two calendar years.  The Company shall provide the final form of release agreement to Employee not later than seven (7) days following the termination date.  The Company’s provision of the payment and benefits referred to in this Section 8(a)(v), in addition to the Company’s payment of the amounts described in Section 5, Section 8(a)(vii) and the accrued obligations described in Section 8(b) below, shall relieve the Company of any and all obligations to Employee.

		
	(vi)
	The foregoing notwithstanding, if either (x) Employee’s employment with the Company is terminated by the Company without cause (as defined in Section 8(a)(v)) on or within twelve (12) months following a Change of Control, or (y) Employee’s employment with the Company is terminated by Employee for “Good Reason” (as defined below) on or within twelve (12) months following a Change of Control or a Change in Management, then in lieu of the severance provided in Section 8(a)(v) above, Employee shall be entitled to receive: a severance payment equal to the greater of (A) one hundred percent (100%) of the aggregate amount of the Base Salary that Employee would have been entitled to receive pursuant to Section 2(a) hereof for the period commencing on the date of such termination and ending on the last day of the scheduled Term then in effect had Employee continued to be employed with the Company through the last day of the scheduled Term; or (B) eighteen (18) months’ Base Salary at the rate then in effect; provided, however, that Employee’s right to receive such payment shall be subject to satisfaction of the requirement to provide a general release of claims in accordance with Section 8(a)(v).  Subject to such release requirement, such payment shall be made in cash in a lump sum as soon as practicable after (and in all events within sixty (60) days after) the date of Employee’s “separation from service” (within the meaning of Treasury Regulation Section 1.409A-1(h)) with the Company; provided, however, that if the 60-day period following Employee’s separation from service spans two calendar years, such lump sum payment shall be made within such 60-day period but in the second of the two calendar years.  The Company shall provide the final form of release agreement to Employee not later than seven (7) days following the termination date.  The Company’s provision of the payment and benefits referred to in this Section 8(a)(vi), in addition to the Company’s payment of the amounts described in Section 5, Section 8(a)(vii) and the accrued obligations described in Section 8(b) below, shall relieve the Company of any and all obligations to Employee.

For purposes of this Agreement, “Good Reason” shall mean (without Employee’s consent): (w) any material diminution by the Company in Employee’s duties, responsibilities or authority as measured against Employee’s responsibilities prior to the Change of Control or Change in Management, as applicable, (x) any change in the positions to which Employee reports which results in Employee reporting to individuals with a materially lower level of authority than the individuals to whom Employee reports as of the date hereof; (y) a requirement that Employee be based in a location that is located twenty-five (25) miles or more outside of the greater Los Angeles, California area (other than as contemplated by Section 1(c) above); 

or, (z) a material breach of the Agreement by the Company; provided, however, that any such condition shall not constitute “Good Reason” unless both: (x) Employee provides written notice to the Company of the condition claimed to constitute Good Reason within ninety (90) days of the initial existence of such condition; and, (y) the Company fails to remedy such condition within thirty (30) days of receiving such written notice thereof; and provided, further, that in all events the termination of Employee’s employment with the Company shall not be treated as a termination for “Good Reason” unless such termination occurs not more than one (1) year following the initial existence of the condition claimed to constitute “Good Reason.”  For these purposes, if the Company is purchased by another entity, it shall not be considered a material diminution in responsibility if Employee is made General Counsel  (or similar role) at that other entity.  
		
	(vii)
	In addition, if Employee becomes entitled to receive the severance benefits provided in either Section 8(a)(v), 8(a)(vi) or 8(a)(viii) and subject to the release requirement set forth therein, Employee shall also be entitled to the following: (A) remaining eligible for payment by the Company of any bonus payable pursuant to Section 2(c) on a prorated basis for the fiscal year in which such termination of employment occurs based on the amount of such fiscal year worked by Employee (any such bonus to be paid at the time provided in Section 2(c) above and no such bonus to be payable for any fiscal year subsequent to the year of termination of employment); (B) any amounts  or benefits due under Section 5 above; and (C) if Employee opts to convert and continue Employee’s health insurance after the termination date, as may be required or authorized by law under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), as amended, Company shall pay Employee’s COBRA premiums for eighteen (18) months following his date of termination (or, if earlier, the date he becomes eligible for coverage under the health plan of a future employer or the Company is otherwise no longer required to offer COBRA coverage to Employee). The Company’s payment of the amounts referred to herein and in Sections 8(a)(v),(vi) or (viii), as applicable, in addition to the Company’s payment of the accrued obligations described in Section 8(b) below, shall relieve the Company of any and all obligations to Employee.

		
	(viii)
	In the event that Employee’s services pursuant to this Agreement are set to expire in due course on July 11, 2023, and no less than six (6) months before the conclusion of the Term, the Company either (x) does not offer Employee a renewal or extension of this Agreement or (y) offers Employee a renewal or extension of this Agreement but the terms of such offer are different from those provided herein and 

such different terms would constitute Good Reason (as defined in Section 8(a)(vi), except that solely for these purposes, clause (z) of such definition shall not apply and instead, a material reduction in the rate of Employee’s Base Salary as set forth in Section 2(a) shall constitute Good Reason), Employee’s services to the Company shall terminate on July 11, 2023 and Employee shall be entitled to receive a severance payment equal to twelve (12) months’ Base Salary at the rate then in effect, subject to Employee’s continued employment with the Company through July 11, 2023 and Employee’s satisfying the requirement to provide a general release of claims in accordance with Section 8(a)(v)). Such payment shall be made in cash in a lump sum as soon as practicable after (and in all events within sixty (60) days after) the date of Employee’s “separation from service” (within the meaning of Treasury Regulation Section 1.409A-1(h)) with the Company; provided, however, that if the 60-day period following Employee’s separation from service spans two calendar years, such lump sum payment shall be made within such 60-day period but in the second of the two calendar years.  The Company shall provide the final form of release agreement to Employee not later than seven (7) days following the termination date. The Company’s provision of the payment referred to in this Section 8(a)(viii), in addition to the Company’s payment of the amounts described in Section 5, Section 8(a)(vii) and the accrued obligations described in Section 8(b) below, shall relieve the Company of any and all obligations to Employee.  
 (b)  In the event that this Agreement is terminated pursuant to Sections 8(a)(i)-(iv) above, neither the Company nor Employee shall have any remaining duties or obligations hereunder, except that: (i) the Company shall pay to Employee any base salary that had accrued but had not been paid as of the date of termination; (ii) Employee shall be reimbursed for any approved, unreimbursed business expenses so long as appropriate receipts and/or documentation have been provided to the Company; (iii) the Company shall pay to Employee any vested amounts due as of the termination date under Company benefit plans and/or programs; and (iv) in the event of a termination pursuant to Sections 8(a)(ii) or 8(a)(iii), Employee shall both remain eligible for any amounts due under Sections 2(c) and 5(g) above applicable to such termination and the Company shall pay Employee’s COBRA premiums for eighteen (18) months following his date of termination if Employee or his dependents so elect (or, if earlier, the date he becomes eligible for coverage under the health plan of a future employer or the Company is otherwise no longer required to offer COBRA coverage to Employee).  Following the termination of the Term and/or this Agreement for any reason, Sections 10-18 shall, notwithstanding anything else herein to the contrary, survive and continue to be binding upon the parties following such termination.

9.    EXCLUSIVITY AND SERVICE
Employee’s services shall be exclusive to the Company during the Term.  Employee shall render such services as are customarily rendered by persons in Employee’s capacity in the entertainment industry and as may be reasonably requested by the Company.  Employee hereby agrees to comply with all reasonable requirements, directions and requests, and with all reasonable rules and regulations made by the Company in connection with the regular conduct of its business.  Employee further agrees to render services during Employee’s employment hereunder whenever, wherever and as often as the Company may reasonably require in a competent, conscientious and professional manner, and as instructed by the Company in all matters, including those involving artistic taste and judgment, but there shall be no obligation on the Company to cause or allow Employee to render any services, or to include all or any of Employee’s work or services in any motion picture or other property or production.
10.    INTELLECTUAL PROPERTY
(a)  Employee agrees that the Company shall be the sole and exclusive owner throughout the universe in perpetuity of all of the results and proceeds of Employee’s services, work and labor in connection with Employee’s employment by the Company, during the Term and any other period of employment with the Company, free and clear of any claims, liens or encumbrances.  Employee shall promptly and fully disclose to the Company, with all necessary detail for a complete understanding of the same, any and all work product, developments, clients and potential client lists, discoveries, inventions, improvements, conceptions, ideas, writings, processes, information, logos, marketing plans, software, formulae, designs, schematics, discoveries, inventions, algorithms, contracts, methods, works, improvements on existing processes, and devices, whether or not patentable or copyrightable, which are conceived, created, reduced to practice, made, acquired, or written by Employee, solely or jointly with another, while employed by the Company (whether or not at the request or upon the suggestion of the Company and whether or not during normal business hours) and which (a) are conceived, created or reduced to practice through any use of Company facilities, resources, information or equipment; (b) relate to the work or services Employee performs or performed for the Company; or (c) relate to the Company’s business  or actual or demonstrably anticipated research and development (or that of the Company’s parent, affiliates, or subsidiaries)  (collectively, “Proprietary Rights”). 
(b)  All copyrightable works that Employee conceives, creates or reduces to practice in connection with Employee’s obligations under this Agreement and any other period of employment with the Company, its parent, affiliates, or subsidiaries, whether or not during normal business hours, shall be considered “work made for hire” and therefore the sole and exclusive property of the Company.  To the extent any work so produced or other intellectual property so generated by Employee is not deemed to be a “work made for hire,” Employee hereby assigns and transfers and agrees to assign and transfer to the Company (or as otherwise directed by the Company) Employee's full rights, title and interests in the Proprietary Rights to the Company or its designee.  In addition, Employee shall deliver to the Company any 

and all drawings, notes, specifications and data relating to the Proprietary Rights.  Whenever requested to do so by the Company, Employee shall execute and deliver to the Company any and all applications, assignments and other instruments and do such other acts that the Company shall reasonably request to apply for and obtain patents and/or copyrights in any and all countries or to otherwise protect the Company’s interest in the Proprietary Rights and/or to vest title thereto to the Company.  Employee further agrees not to charge the Company for time spent in complying with these obligations.  This Section 10 shall apply only to that intellectual property if: (a) it was conceived, created or reduced to practice through any use of Company facilities, resources, information or equipment; (b) it relates to the work or services Employee performs or performed for the Company; or (c) it relates to the Company’s business or actual or demonstrably anticipated research and development (or that of the Company’s parent, affiliates, or subsidiaries).  Employee hereby acknowledges receipt of written notice from the Company pursuant to California Labor Code Section 2872 that this Agreement (to the extent it requires an assignment or offer to assign rights to any invention of Employee) does not apply to an invention which qualifies fully under California Labor Code Section 2870. Without limiting the foregoing, Employee agrees to abide by the provisions contained in the Handbook with respect to intellectual property.  
11.    ASSIGNMENT AND DELEGATION
Employee shall not assign any of Employee’s rights or delegate any of Employee’s duties granted under this Agreement.  Any such assignment or delegation shall be deemed void ab initio.
12.    TRADE SECRETS
(a)  Employee agrees that during and after Employee’s employment with the Company, Employee will hold in the strictest confidence, and will not use (except for the benefit of the Company during Employee’s employment) or disclose to any person, firm, or corporation (without written authorization of the CEO of the Company) any Company Confidential Information.  Employee understands that his unauthorized use or disclosure of Company Confidential Information during Employee’s employment may lead to disciplinary action, up to and including immediate termination and legal action by the Company.  Employee understands that “Company Confidential Information” means information that is not generally known to the public and that is used, developed or obtained by the Company in connection with its business, including, but not limited to, information, observations and data obtained by Employee or to which Employee gained access while employed by the Company concerning (i) the business or affairs of the Company, (ii) products or services, (iii) revenues, costs and pricing structures, (iv) designs, (v) analyses, (vi) drawings, photographs and reports, (vii) computer software, including operating systems, applications and program listings, (viii) flow charts, manuals and documentation, (ix) data bases, (x) accounting and business methods, (xi) inventions, devices, new developments, methods and processes, whether patentable or unpatentable and whether or not reduced to practice, (xii) customers and clients (and customer or client lists), (xiii) customer preferences and contact information, (xiv) the personnel information of other employees (including, but 

not limited to, skills, performance, discipline, and compensation), (xv) other copyrightable works, (xvi) all production methods, processes, technology and trade secrets, and (xvii) all similar and related information in whatever form.  Confidential Information will not be deemed to have been published merely because individual portions of the information have been separately published, but only if all material features comprising such information have been published in combination.  Employee further understands that Confidential Information does not include any of the foregoing items that have become publicly known and made generally available through no wrongful act (or failure to act) of Employee or of others who were under confidentiality obligations as to the item or items involved or improvements or new versions thereof.  Employee acknowledges that, as between the Company and Employee, all Confidential Information shall be the sole and exclusive property of the Company and its assigns.
(b)  Employee agrees that Employee will not, during Employee’s employment with the Company, improperly use or disclose any proprietary information (including, but not limited to, software, source and object code, developments, techniques, inventions, processes, technology, designs and drawings) or trade secrets of any former or concurrent employer or other person or entity and that Employee will not bring onto the premises of the Company any unpublished document or proprietary information belonging to any such employer, person or entity unless consented to in writing by such employer, person or entity. 
(c)  Employee recognizes that the Company has received and in the future will receive from third parties their confidential or proprietary information subject to a duty on the Company’s part to maintain the confidentiality of such information and to use it only for certain limited purposes.  Employee agrees to hold all such confidential or proprietary information in the strictest confidence and not to disclose it to any person, firm or corporation or to use it except as necessary in carrying out Employee’s work for the Company consistent with the Company’s agreement with such third party.
(d)  Employee agrees that for a period of twelve (12) months immediately following the termination of Employee’s relationship with the Company for any reason, whether voluntary or involuntary, with or without cause,  Employee shall not either directly or indirectly solicit, encourage or recruit any of the Company’s employees or consultants to become employed or engaged by any third party or Employee, solicit, encourage or recruit any of the Company’s employees or consultants to terminate their employment or consulting relationship with the Company.  Employee acknowledges that the covenants in this Section 12(d) are reasonable and necessary to protect the Company’s trade secrets and stable workforce.
(e)  Employee understands that nothing in this Agreement is intended to (i) limit or restrict Employee’s rights as an employee to discuss the terms, wages, and working conditions of Employee’s employment as protected by applicable labor laws; and (ii) limit or restrict in any way Employee’s immunity from liability for disclosing the Company’s trade secrets as specifically permitted by 18 U.S. Code Section 1833, which provides, in pertinent part, as follows:

“(b) Immunity From Liability For Confidential Disclosure Of A Trade Secret To The Government Or In A Court Filing. 
(1) Immunity. An individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that (A) is made (i) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.
(2) Use of Trade Secret Information in Anti-Retaliation Lawsuit. An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual (A) files any document containing the trade secret under seal; and (B) does not disclose the trade secret, except pursuant to court order.

13.    CONFLICTING EMPLOYMENT
(a)  Employee agrees that during the term of Employee’s employment with the Company, Employee will not engage in or undertake any other employment, occupation, consulting relationship, or commitment that is directly related to the business in which the Company is now involved or becomes involved or has plans to become involved, nor will Employee engage in any other activities that conflict with Employee’s obligations to the Company.
(b)  Without limiting Section 13(a), Employee represents that Employee has no other agreements, relationships, or commitments to any other person or entity that conflict with Employee’s obligations to the Company under this Agreement or Employee’s ability to become employed and perform the services for which Employee is being hired by the Company.  Employee further agrees that if Employee has signed a confidentiality agreement or similar type of agreement with any former employer or other entity, Employee will comply with the terms of any such agreement to the extent that its terms are lawful under applicable law.  Employee represents and warrants that after undertaking a careful search (including searches of Employee’s computers, cell phones, electronic devices, and documents), Employee has returned all property and confidential information belonging to all prior employers.  Moreover, Employee agrees to fully indemnify the Company, its directors, officers, agents, employees, investors, shareholders, administrators, affiliates, divisions, subsidiaries, predecessor and successor corporations, and assigns for all verdicts, judgments, settlements, and other losses incurred by any of them resulting from Employee’s breach of Employee’s obligations under any agreement to which Employee is a party or obligation to 

which Employee is bound, as well as any reasonable attorneys’ fees and costs if the plaintiff is the prevailing party in such an action, except as prohibited by law.
14.      ARBITRATION
Any and all non-time barred, legally actionable dispute, controversy or claim arising under or in connection with this Agreement, the inception or termination of the Employee’s employment, or any alleged discrimination or tort claim related to such employment, including issues raised regarding the Agreement’s enforcement, arbitrability, validity, interpretation or breach, default, or misrepresentation in connection with any of the provisions shall be settled exclusively by individual, final and binding arbitration pursuant to the Federal Arbitration Act (“FAA”), to be held in Los Angeles County, before a single arbitrator selected from Judicial Arbitration and Mediation Services, Inc. (“JAMS”), in accordance with the then-current JAMS Arbitration Rules and Procedures for employment disputes, as modified by the terms and conditions of this Section (which may be found at www.jamsadr.com under the Rules/Clauses tab).  The parties will select the arbitrator by mutual agreement or, if the parties cannot agree, then by striking from a list of qualified arbitrators supplied by JAMS from their labor and employment panel.  Final resolution of any dispute through arbitration may include any remedy or relief that is provided for through any applicable state or federal statutes, or common law.  Statutes of limitations shall be the same as would be applicable were the action to be brought in court.  The arbitrator selected pursuant to this Agreement may order such discovery as is necessary for a full and fair exploration of the issues and dispute, consistent with the expedited nature of arbitration.  At the conclusion of the arbitration, the arbitrator shall issue a written decision that sets forth the essential findings and conclusions upon which the arbitrator’s award or decision is based.  Any award or relief granted by the arbitrator under this Agreement shall be final and binding on the parties to this Agreement and may be enforced by any court of competent jurisdiction.  The Company will pay those arbitration costs that are unique to arbitration, including the arbitrator’s fee (recognizing that each side bears its own deposition, witness, expert and attorneys’ fees and other expenses to the same extent as if the matter were being heard in court).  If, however, any party prevails on a statutory claim, which affords the prevailing party attorneys’ fees and costs, then the arbitrator may award reasonable fees and costs to the prevailing party.  The arbitrator may not award attorneys’ fees to a party that would not otherwise be entitled to such an award under the applicable statute.  The arbitrator shall resolve any dispute as to the reasonableness of any fee or cost.   The parties acknowledge and agree that they are hereby waiving any rights to trial by jury or a court in any action or proceeding brought by either of the parties against the other in connection with any matter whatsoever arising out of or in any way connected with this Agreement or Employee’s employment.
15.    INDEMNIFICATION
Except with respect to claims resulting from Employee’s willful misconduct or acts outside the scope of his employment hereunder, Employee shall continue to be defended, indemnified and held harmless by Company in respect of all claims arising from or in 

connection with his position or services as an Employee of the Company to the maximum extent permitted in accordance with Lions Gate’s Articles of Incorporation, Bylaws, Board Resolutions and under applicable California and British Columbia law (including, without limitation and as applicable, attorney’s fees), and shall be covered by the Company’s applicable directors and officers insurance policy. 
16.    INTEGRATION, AMENDMENT, NOTICE, SEVERABILITY, AND FORUM
(a)  This Agreement expresses the binding and entire agreement between Employee and the Company and shall replace and supersede all prior arrangements and representations, either oral or written, as to the subject matter hereof (including, without limitation, the Prior Agreement, with the sole exception of Section 5 therein, which shall remain in full force and effect).
(b)  All modifications or amendments to this Agreement must be made in writing and signed by both parties. 
(c)  Any notice required herein shall be in writing and shall be deemed to have been duly given when delivered by hand, received via electronic mail or on the depositing of said notice in any U.S. Postal Service mail receptacle with postage prepaid, addressed to the Company at 2700 Colorado Avenue, Suite 200, Santa Monica, California 90404 and to Employee at the address set forth above, or to such address as either party may have furnished to the other in writing in accordance herewith.
(d)  If any portion of this Agreement is held unenforceable under any applicable statute or rule of law then such portion only shall be deemed omitted and shall not affect the validity of enforceability of any other provision of this Agreement.
(e) Except for Section 14, which shall be governed by the FAA (both substantively and procedurally), this Agreement shall be governed by the laws of the State of California.  The state and federal courts (or arbitrators appointed as described herein) located in Los Angeles, California shall, subject to the arbitration agreement set forth in Section 14 above, be the sole forum for any action for relief arising out of or pursuant to the enforcement or interpretation of this Agreement.  Each party to this Agreement consents to the personal jurisdiction and arbitration in such forum and courts and each party hereto covenants not to, and waives any right to, seek a transfer of venue from such jurisdiction on any grounds.
17.    LIMIT ON BENEFITS
(a)    Notwithstanding anything contained in this Agreement to the contrary, to the extent that the payments and benefits provided under this Agreement and benefits provided to, or for the benefit of, Employee under any other Company plan or agreement (such payments or benefits are collectively referred to as the “Benefits” for purposes of this Section 16) would be subject to the excise tax (the “Excise Tax”) imposed under Section 4999 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), the 

Benefits shall be reduced (but not below zero) if and to the extent that a reduction in the Benefits would result in Employee retaining a larger amount, on an after-tax basis (taking into account federal, state and local income taxes and the Excise Tax), than if Employee received all of the Benefits (such reduced amount is referred to hereinafter as the “Limited Benefit Amount”). In such case, unless Employee has given prior written notice to the Company specifying a different order to effectuate the reduction of the Benefits (any such notice consistent with the requirements of Section 409A of the Code to avoid the imputation of any tax, penalty or interest thereunder), the Benefits shall be reduced or eliminated by first reducing or eliminating cash severance payments, then by reducing or eliminating other cash payments, then by reducing or eliminating those payments or benefits which are not payable in cash, in each case in reverse order beginning with payments or benefits which are to be paid the farthest in time from the Determination (as hereinafter defined). Any notice given by Employee pursuant to the preceding sentence shall take precedence over the provisions of any other plan, arrangement or agreement governing Employee’s rights and entitlements to any benefits or compensation.
(b)    A determination as to whether the Benefits shall be reduced to the Limited Benefit Amount pursuant to this Agreement and the amount of such Limited Benefit Amount shall be made by Company’s independent public accountants or another certified public accounting firm of national reputation designated by Lions Gate (the “Accounting Firm”). Company and Employee shall use their reasonable efforts to cause the Accounting Firm to provide its determination (the “Determination”), together with detailed supporting calculations and documentation to Company and Employee within five (5) days of the date of termination of Employee’s employment, if applicable, or such other time as requested by Company or Employee (provided Employee reasonably believes that any of the Benefits may be subject to the Excise Tax), and if the Accounting Firm determines that no Excise Tax is payable by Employee with respect to any Benefits, Company and Employee shall use their reasonable efforts to cause the Accounting Firm to furnish Employee with an opinion reasonably acceptable to Employee that no Excise Tax will be imposed with respect to any such Benefits. Unless Employee provides written notice to Company within ten (10) days of the delivery of the Determination to Employee that he disputes such Determination, the Determination shall be binding, final and conclusive upon Company and Employee.
18.    SECTION 409A
(a)    It is intended that any amounts payable under this Agreement shall either be exempt from or comply with Section 409A of the U.S. Internal Revenue Code (including the Treasury regulations and other published guidance relating thereto) (“Code Section 409A”) so as not to subject Employee to payment of any additional tax, penalty or interest imposed under Code Section 409A.  The provisions of this Agreement shall be construed and interpreted to avoid the imputation of any such additional tax, penalty or interest under Code Section 409A yet preserve (to the nearest extent reasonably possible) the intended benefit payable to Employee. 

(b)Notwithstanding any provision of this Agreement to the contrary, if Employee is a “specified employee” within the meaning of Treasury Regulation Section 1.409A-1(i) as of the date of Employee’s separation from service (as defined above), Employee shall not be entitled to any payment or benefits pursuant to Sections 2, 5 and 8(a)(v)-8(a)(viii) until the earlier of (i) the date which is six (6) months after Employee’s separation from service for any reason other than death, or (ii) the date of Employee’s death.  Any amounts otherwise payable to Employee upon or in the six (6) month period following Employee’s separation from service that are not so paid by reason of this paragraph shall be paid (without interest) as soon as practicable (and in all events within thirty (30) days) after the date that is six (6) months after Employee’s separation from service (or, if earlier, as soon as practicable, and in all events within thirty (30) days, after the date of Employee’s death).  The provisions of this paragraph shall only apply if, and to the extent, required to avoid the imputation of any tax, penalty or interest pursuant to Code Section 409A. 
(c)To the extent that any reimbursements pursuant to the provisions of this Agreement are taxable to Employee, any such reimbursement payment shall be paid to Employee on or before the last day of Employee’s taxable year following the taxable year in which the related expense was incurred.  The benefits and reimbursements pursuant to such provisions are not subject to liquidation or exchange for another benefit and the amount of such benefits and reimbursements that Employee receives in one taxable year shall not affect the amount of such benefits or reimbursements that Employee receives in any other taxable year.
(d)Each payment made pursuant to any provision of this Agreement shall be considered a separate payment and not one of a series of payments for purposes of Code Section 409A.  While it is intended that all payments and benefits provided under this Agreement to Employee will be exempt from or comply with Code Section 409A, the Company makes no representation or covenant to ensure that the payments under this Agreement are exempt from or compliant with Code Section 409A.  The Company will have no liability to Employee or any other person or entity if a payment or benefit under this Agreement is challenged by any taxing authority or is ultimately determined not to be exempt or compliant.  Employee further understands and agrees that he will be entirely responsible for any and all taxes on any benefits payable to him as a result of this Agreement.
Please acknowledge your confirmation of the above terms by signing below where indicated.
Very truly yours,

LIONS GATE ENTERTAINMENT CORP.
                        

/s Jon Feltehimer

Jon Feltheimer
Chief Executive Officer, Lions Gate Entertainment Corp.
   
AGREED AND ACCEPTED
This ___ day of __________, 2020

/s/ Corii D. Berg 
CORII D. BERGExhibit 10.5

 

AMENDED
AND RESTATED EXCLUSIVE DISTRIBUTION AGREEMENT

THIS
AMENDED AND RESTATED EXCLUSIVE DISTRIBUTION AGREEMENT (this “Agreement”) is entered into as of the 21ST
of May, 2020, and is effective as of the 9TH day of March, 2020 (the “Effective Date”) by
and between BIDI VAPOR, LLC, a Florida limited liability company (“Manufacturer”),
and KAIVAL BRANDS INNOVATONS GROUP, INC., a Delaware corporation (“Distributor”). Manufacturer and Distributor
are each referred to herein as a “Party” and collectively, the “Parties.”

RECITALS

WHEREAS,
Manufacturer is in the business of developing electronic nicotine delivery systems and related components (all such products whether
now or hereafter made available for sale by Manufacturer being hereinafter referred to as the “Products”).

WHEREAS,
Distributor wishes to obtain, and Manufacturer is willing to grant Distributor, an exclusive worldwide right to distribute the
Products for sale and resale to both retail level customers (“Retail Customers”) and non-retail level customers,
including without limitation, to wholesale customers and sub-distributors (“Non-Retail Customers”).

WHEREAS,
Manufacturer and Distributor previously entered into that certain Exclusive Distribution Agreement, effective as of March 9, 2020
(the “Prior Agreement”).

WHEREAS,
the Parties wish to amend and restate the Prior Agreement for purposes of clarifying certain terms therein to more accurately
reflect the Parties’ intentions and desire for this Agreement to be effective as of the date the Prior Agreement was entered
into.

NOW,
THEREFORE, in consideration of the foregoing premises and the mutual representations and agreements set forth herein, and
other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Manufacturer and Distributor,
intending to be legally bound, hereby agree as follows:

1.                 
APPOINTMENT; EXCLUSIVITY; MARKETING AND SUPPORT.

A.               
Appointment and Exclusivity. Subject to the terms and conditions set forth in this Agreement, Manufacturer hereby appoints
Distributor as its exclusive worldwide distributor of the Products. Distributor accepts the appointment as Manufacturer’s
exclusive worldwide distributor of the Products and agrees to buy for resale, upon the terms and conditions set forth herein,
the Products in such quantities as Distributor shall need to properly service the market. Manufacturer represents and warrants
that the appointment of and sale of the Products to Distributor under this Agreement does not violate any obligations or contracts
of Manufacturer. As a condition of exclusivity, Distributor agrees not to represent or sell other products, which Manufacturer
may reasonably determine to be competitive with the Products, without written approval from Manufacturer. For purposes of clarification,
during the term of this Agreement, Manufacturer will not directly sell any Products to any person (Retail Customer or Non-Retail
Customer) other than to Distributor.

    	 	1	 

     

    

 

B.                
Marketing and Support. Manufacturer will be solely responsible to provide Distributor with all branding, logos, and marketing
materials to be utilized by Distributor in connection with Distributor’s marketing and promotion of the Products; provided,
however, Distributor shall bear all expenses related to reproduction and distribution of the same. Distributor agrees to use its
best efforts to promote, develop a market, sell, and distribute the Products worldwide. Among such other actions as may be necessary
to generate sales of the Products, Distributor will perform at its expense and to the reasonable satisfaction of Manufacturer
the following duties:

		i.	Distributor
                                         will engage in sales promotion activities in which the Products shall be designated by
                                         their correct names and identified as the Products of Manufacturer being marketed by
                                         Distributor as an independent distributor.

		ii.	Distributor
                                         will provide all customer service and support (both to its Retail Customers and Non-Retail
                                         Customers and to all end consumers of the Products).

		iii.	Distributor
                                         will process all sales by Distributor to Retail Customers and Non-Retail Customers. All
                                         sales by Distributor to Retail Customers will be made through the domain www.bidivapor.com.

		iv.	Distributor
                                         shall maintain adequate inventory levels of the Product on-hand to meet Retail Customer
                                         demand.

		v.	Distributor
                                         shall at all times conduct its business in a manner that will reflect favorably on Manufacturer
                                         and the Products and will not engage in any deceptive, misleading, illegal, or unethical
                                         business practice. In performing its obligations hereunder, Distributor agrees not to
                                         make any representations or give any warranties or guarantees to any person with respect
                                         to the Products, other than in compliance with Section 7.A. hereof or otherwise expressly
                                         authorized in writing by Manufacturer.

		vi.	Distributor
                                         shall provide to Manufacturer prior to the time of first use five (5) copies of all of
                                         Distributor's advertising and sales promotion materials in which any Products are mentioned
                                         and five (5) copies of any translations of any manuals or other materials provided or
                                         sold to Distributor by Manufacturer.

		vii.	Distributor,
                                         not more often than every three (3) months, shall make reports to Manufacturer, as reasonably
                                         requested by Manufacturer, with respect to sales and potential sales of the Products.
                                         Distributor also shall report to Manufacturer such information as is necessary to enable
                                         Manufacturer to manufacture or supply the Products in compliance with applicable laws
                                         and regulations throughout the world.

		viii.	Distributor
                                         will prepare and deliver to Manufacturer quarterly forecasts of Distributor's anticipated
                                         sales by Product during each month of the six-month period following the date of the
                                         forecast. It is understood that said forecasts will be used for planning purposes only
                                         and will not constitute a commitment by either Party.

		ix.	Distributor
                                         will comply with all applicable laws and regulations and will not assist or participate
                                         in any violation of laws or regulations applicable to Manufacturer or Distributor.

    	 	2	 

     

    

 

Distributor
shall be responsible for all expenses incurred by it in connection with the implementation and performance of its duties and obligations
under this Agreement, including, without limitation: (i) salaries or compensation for its personnel; (ii) costs and expenses associated
with establishing and maintain its sales organization and offices; and (iii) marketing, advertising, and promotion expenses.

2.                 
PURCHASE ORDERS; PRICING.

A.               
Purchase Orders. Distributor shall order the Products in accordance with the terms and conditions of this Agreement. Each
order for the purchase of the Products (a “Purchase Order”) must be submitted to Manufacturer by Distributor
by email or Manufacturer’s electronic data interchange (EDI) system. Each Purchase Order shall specify (i) whether the order
is being made in connection with the sale by Distributor to Retail Customers or to Non-Retail Customers, (ii) the quantity of
the Products being ordered, (iii) the applicable Retail Minimum Price and/or Wholesale Minimum Price for the Products ordered,
(iv) the price to be paid by Distributor to Manufacturer for the Products ordered, (v) payment terms granted by Manufacturer,
and (vi) the requested receipt date and delivery instructions for the applicable Products ordered. Receipt dates must be during
the term of this Agreement, except Distributor may request, subject to Manufacturer’s acceptance in Manufacturer’s
sole and absolute discretion, a Purchase Order with a requested receipt date after the expiration or termination of this Agreement,
in which case, if accepted by Manufacturer, the terms and conditions of this Agreement shall apply to such purchase, but under
no circumstances should such purchase be deemed to be or construed as being a renewal or extension of this Agreement or the exclusivity
rights granted to Distributor herein. The Parties agree that to the extent that any of the terms and conditions of this Agreement
conflict or are inconsistent with the terms or conditions of any Purchase Order submitted by Distributor, the terms and conditions
of this Agreement shall prevail and control to the extent of any such conflict or inconsistency, unless the Purchase Order containing
such conflicting or inconsistent terms and conditions is countersigned by Manufacturer, in which case the terms and conditions
set forth in such Purchase Order shall prevail and control to the extent of any such conflict or inconsistency.

B.                
Acceptance of Purchase Order. A Purchase Order submitted by Distributor shall be deemed to have been accepted by, and shall
be binding upon, Manufacturer when it is countersigned by Manufacturer or if it is not rejected by Manufacturer, in whole or in
part, by written notice to Distributor sent within five (5) business days of its receipt by Manufacturer. Notwithstanding anything
contained herein to the contrary, Manufacturer may only reject, cancel, or delay any Purchase Order placed by Distributor, whether
or not such Purchase Order has been previously accepted by Manufacturer, pursuant to Section 3.B. below. In the event Manufacturer
is unable to fill all of a Purchase Order for any reason, it shall promptly notify Distributor and Distributor shall have the
right, in its discretion, to cancel the subject Purchase Order. Distributor may change or cancel any of its Purchase Orders without
penalty so long as Distributor provides written notice to Manufacturer and the Products have not yet been shipped, or otherwise
delivered to Distributor; provided, that Distributor shall pay to Manufacturer a fee of twenty-five percent (25%) of the aggregate
purchase price of the Products of which manufacturing has commenced that are subject to any Purchase Order, which has been materially
changed or canceled by Distributor.

    	 	3	 

     

    

C.               
Invoices and Payment Terms. Manufacturer shall send Distributor invoices via mail or email for each Purchase Order, once the
Products are shipped or otherwise delivered. Distributor shall notify Manufacturer in writing if Distributor disputes any charges
set forth on an invoice within five (5) calendar days after receipt of such invoice, specifying in reasonable detail the items
disputed and basis for the dispute. Thereafter, the Parties will work in good faith to resolve such dispute as quickly as is reasonably
possible. If any such dispute is not resolved within thirty (30) calendar days after Distributor’s receipt of the applicable
invoice, then Manufacturer may suspend any further shipments of the Products under this Agreement until such time as the dispute
is resolved and all amounts agreed upon by the Parties to be due are paid in full. All undisputed amounts on each invoice are
due and payable within thirty (30) calendar days from the date of Distributor’s receipt of the invoice. Payments due hereunder
must be made, at Distributor’s option, by ACH, wire transfer, certified check, or such other method as may be agreed to
by the Parties. Manufacturer reserves the right to change or modify payment terms upon sixty (60) calendar days’ written
notice to Distributor at any time following a default by Distributor of its payment obligations under this Agreement with such
changes or modifications to be effective for Purchase Orders submitted after such sixty (60) calendar day period. Invoices will
be issued upon the earlier of: (i) shipment of the Products from Manufacturer’s warehouse or production facility to Distributor
or to Distributor’s customer via direct shipment or (ii) the delivery of the Products to Distributor.

D.               
Prices; Price Reductions. Manufacturer has a legitimate interest in ensuring that a minimum price be maintained for all sales
by Distributor of its Products to Retail Customers and to Non-Retail Customers. Accordingly, Manufacturer will establish minimum
pricing for all sales by Distributor of its Products to Non-Retail Customers (“Wholesale Minimum Price”) and
minimum pricing for all sales by Distributor of its Products to Retail Customers (“Retail Minimum Price”) and
Distributor will not sell any Products to Non-Retail Customers below the applicable Wholesale Minimum Price or sell any Products
to Retail Customers below the applicable Retail Minimum Price. The initial Wholesale Minimum Price and Retail Minimum Price for
the Products are included as Exhibit A attached hereto. Distributor agrees to pay Manufacturer the price per Product identified
in Exhibit A attached hereto. Manufacturer retains the right to make changes to Wholesale Minimum Pricing, Retail Minimum
Pricing, and Distributor pricing upon providing not less than three (3) days’ prior written notice to Distributor. Any price
reduction to the Wholesale Minimum Pricing, Retail Minimum Pricing, or Distributor pricing with respect to affected Products shall
apply to Purchase Orders that have not yet been accepted or deemed accepted by Manufacturer and Purchase Orders thereafter submitted
by Distributor. Any price increase to the Wholesale Minimum Pricing, Retail Minimum Pricing, or Distributor pricing with respect
to affected Products shall apply to Purchase Orders thereafter submitted by Distributor; provided, that Distributor shall have
the right, at its option, to cancel, in whole or in part, any outstanding Purchase Orders for affected Products not yet accepted
by Manufacturer. Prices do not include, and Manufacturer shall not be responsible for, any required federal, state, or local sales
or other taxes, duties, export or custom charges, VAT charges, brokerage, or other fees.

E.                
Past Due Amounts. If any undisputed amount due Manufacturer by Distributor, for any reason, becomes past due, Manufacturer
shall provide written notice to Distributor and, if such amounts remain outstanding for fifteen (15) calendar days following receipt
of such notice, Manufacturer may at its option and without further notice withhold further shipments or deliveries of the Products
under this Agreement until such past due invoices are paid in full.

    	 	4	 

     

    

F.                
Taxes. Distributor shall be responsible for any national, state, or local sales, use, value added, or other tax, tariff, duty,
or assessment levied or imposed by the United States or any foreign governmental authority arising out of or related to any of
the transactions contemplated by this Agreement, including sales of the Products to Distributor, other than taxes based upon Manufacturer’s
income. Distributor must pay directly, or reimburse Manufacturer for, the amount of such sales, use, value added or other tax,
tariff, duty, or assessment that Manufacturer is at any time obligated to pay or collect with respect to or arising out of the
sale of the Products under this Agreement.

		3.	SHIPMENTS;
                                         PRODUCTS.

A.       Shipment
Terms; Title and Risk of Loss. All of the Products purchased by Distributor under this Agreement will be packaged for shipment
in Manufacturer’s standard containers, marked for shipment or delivery to Distributor at the address specified by Distributor
in the Purchase Order (the applicable destination being hereinafter referred to as the “Destination”). All
costs of shipment shall be paid by Manufacturer for any purchase by Distributor of the Products from Manufacturer for sale to
Retail and Non-Retail Customers. Title and risk of loss will pass to Distributor upon the earlier of: (i) the delivery of the
Products at the Destination or (ii) the tender of the Products by Manufacturer to the first shipping carrier. Distributor shall
be solely responsible for all costs of shipment for the subsequent sale by Distributor to Retail Customers and Non-Retail Customers.
Manufacturer shall ship or otherwise deliver the Products on or before the requested receipt date designated in a Purchase Order
(provided, that such receipt date is not less than twenty (20) business days after the Purchase Order is received by Manufacturer)
and shall promptly notify Distributor when Manufacturer knows or has reason to believe that a shipment will not be delivered by
the requested receipt date. Any expense for any special packaging or any special delivery requested by Distributor shall be borne
by Distributor.

B.       Manufacturer’s
Right to Delay or Cancel. Notwithstanding Manufacturer’s obligations in this Agreement, Manufacturer may refuse, cancel,
or delay any shipment of the Products when Distributor is delinquent in any payment for more than (30) calendar days, or when
Distributor is in material breach of its obligations under this Agreement, which has not been cured pursuant to Section 11.A.

C.       Acceptance
of Shipments or Deliveries. Distributor shall have ten (10) business days from the date of arrival of the shipment or delivery
of the Products at the applicable Destination or other shipping or delivery location agreed upon by the Parties to inspect the
Products and notify Manufacturer in writing of any discrepancies with respect to such Products, including but not limited to any
discrepancies in the quantity or quality of the Products. The Products with respect to which Distributor does not notify Manufacturer
of any discrepancies in writing shall be deemed accepted by Distributor.

D.
       Adding or Deleting the Products; Manufacturing Changes to the Products.  Manufacturer
shall have the right at any time upon ninety (90) calendar days’ prior written notice to Distributor to add or delete the
Products. Should Manufacturer want to make any changes to the Products, it shall first notify the Distributor at least ninety
(90) calendar days before the change is implemented, and such changes shall be agreed to by the Parties in writing before shipment
or delivery of any Products that include any such changes. Notwithstanding the foregoing, for changes required by regulatory or
certification authorities or otherwise deemed necessary by Manufacturer for any reason, including health, safety, welfare, technology,
intellectual property, trade secret, competitive, materials sourcing, or other matters, Manufacturer will notify Distributor at
least thirty (30) calendar days before the change is implemented, but Distributor’s approval of such changes shall not be
required.

    	 	5	 

     

    

 

		4.	INTELLECTUAL
                                         PROPERTY RIGHTS.

A.       Manufacturer’s
Marks. Subject to the terms and conditions of this Agreement, during the term of this Agreement, Manufacturer hereby grants
to Distributor a revocable, sublicensable, non-transferable, non-exclusive, limited license to use Manufacturer’s logos,
trademarks, and trade names, together with all branding and marketing materials created by or on behalf of Manufacturer in connection
with the Products, and the domain www.bidivapor.com (collectively the “Manufacturer IP”), solely in connection
with the marketing, advertisement, and sale of the Products. Such license shall immediately terminate upon the expiration or termination
of this Agreement. Distributor shall strictly comply with all standards of use for the Manufacturer IP and must at all times display
appropriate trademark and copyright notices as instructed by Manufacturer. Distributor acknowledges and agrees that the Manufacturer
IP and other intellectual property provided to Distributor by Manufacturer, if any, are the sole and exclusive property of Manufacturer.
Distributor shall not acquire any right, title, or interest under this Agreement in any patent, copyright, Manufacturer IP, or
other intellectual property right of any kind of Manufacturer. No implied license, patent, copyright, or other intellectual property
right of Manufacturer is granted under this Agreement or otherwise. During the term of this Agreement and thereafter, Distributor
shall not do anything that will in any manner infringe, impeach, dilute, or lessen the value of the Manufacturer IP, patents,
copyrights, or other intellectual property of Manufacturer or the goodwill associated therewith or that will tend to prejudice
the reputation of the Manufacturer or the sale of any Products.

B.       Distributor
Marks.  Subject to the terms and conditions of this Agreement, during the term of this Agreement, Distributor hereby grants
Manufacturer a non-exclusive, royalty free license to use Distributor’s logos, trademarks, and trade names (the “Distributor
Marks”) on Manufacturer’s web sites and marketing materials. Such license shall immediately terminate upon the
expiration or termination of this Agreement. Manufacturer shall strictly comply with all standards of use for the Distributor
Marks and must at all times display appropriate trademark and copyright notices as instructed by Distributor. Manufacturer acknowledges
and agrees that the Distributor Marks and other intellectual property provided to Manufacturer by Distributor, if any, are the
sole and exclusive property of Distributor. Manufacturer shall not acquire any right, title, or interest under this Agreement
in any patent, copyright, Distributor Marks, or other intellectual property right of any kind of Distributor. No implied license,
patent, copyright, or other intellectual property right of Distributor is granted under this Agreement or otherwise. During the
term of this Agreement and thereafter, Manufacturer shall not do anything that will in any manner infringe, impeach, dilute, or
lessen the value of the Distributor Marks, patents, copyrights, or other intellectual property of Distributor or the goodwill
associated therewith or that will tend to prejudice the reputation of the Distributor.

    	 	6	 

     

    

 

		5.	CONFIDENTIAL
                                         INFORMATION.

A.               
Confidential Information. The Parties acknowledge and agree that during the term of this Agreement, each may receive confidential
information from the other Party. “Confidential Information” shall mean (i) information relating to a Party’s
and its affiliates’ products or business including, but not limited to, the business plans, financial records, customers,
suppliers, products, product samples, strategies, inventions, procedures, sales aids or literature, technical data, advice or
knowledge, contractual agreements, pricing, price lists, product white papers, plans, designs, specifications, and know-how or
other intellectual property, that may be at any time furnished, communicated, or delivered by either Party to the other Party
whether in oral, tangible, electronic, or other form and (ii) all other non-public information provided by one Party to the other
including, but not limited, to financial, technical, and business information, and all non-promotional materials furnished by
one Party to another.

B.                
Exceptions. The “Receiving Party” shall not have any obligations to preserve the confidential nature of
any Confidential Information that (i) Receiving Party can demonstrate by competent evidence was rightfully in the Receiving Party’s
possession before receipt from the “Disclosing Party”; (ii) is or becomes a matter of public knowledge through
no fault of the Receiving Party; (iii) is rightfully received by Receiving Party from a third party without, to the best of Receiving
Party’s knowledge, a duty of confidentiality; (iv) is independently developed by Receiving Party without use of the Confidential
Information; or (v) is disclosed by Receiving Party with Disclosing Party’s prior written approval.

C.               
Use of Confidential Information; Standard of Care. The Receiving Party shall maintain the Confidential Information in confidence
and disclose the Confidential Information only to its employees, subcontractors, and consultants who have a need to know such
Confidential Information in order to fulfill the business affairs and transactions between the Parties contemplated by this Agreement
and who are under confidentiality obligations no less restrictive as, or who have been advised of the confidentiality obligations
set forth in, this Agreement. The Receiving Party shall remain responsible for breaches of this Agreement arising from the acts
of its employees, subcontractors, and consultants to whom it provides the Disclosing Party’s Confidential information. The
Receiving Party shall protect Confidential Information by using the same degree of care as Receiving Party uses to protect its
own information of a like nature, but no less than a reasonable degree of care, to prevent the unauthorized use, disclosure, dissemination,
or publication of the Confidential Information. The Receiving Party agrees not to use the Disclosing Party’s Confidential
Information for its own purpose other than in connection with the transactions contemplated by this Agreement or for the benefit
of any third party, without the prior written approval of the Disclosing Party. The Receiving Party shall promptly return or certify
destruction of all copies of Confidential Information upon request by the Disclosing Party or upon the expiration or earlier termination
of this Agreement.

D.               
Equitable Relief. The Receiving Party hereby agrees and acknowledges that any breach or threatened breach of this Agreement
regarding the treatment of the Confidential Information may result in irreparable harm to the Disclosing Party for which there
may be no adequate remedy at law. In addition to other remedies provided by law or at equity, in such event the Disclosing Party
shall be entitled to seek an injunction, without bond, preventing any further breach of this Agreement by the Receiving Party.

    	 	7	 

     

    

6.                 
INSURANCE. Manufacturer shall maintain, during the term of this Agreement, Commercial General Liability Insurance with minimum
limits, including under any General Liability Umbrella Policies, of not less than $2,000,000 combined single limit for bodily
injury and property damage on the Products purchased by Distributor for resale. Manufacturer shall use commercially reasonable
efforts to provide Distributor with thirty (30) calendar days’ prior written notice of any change or cancellation in any
applicable insurance policies.

Distributor
shall maintain, during the term of this Agreement, Commercial General Liability Insurance with minimum limits, including under
any General Liability Umbrella Policies, of not less than $2,000,000 combined single limit for bodily injury and property damage.
Distributor shall use commercially reasonable efforts to provide Manufacturer with thirty (30) calendar days’ prior written
notice of any change or cancellation in any applicable insurance policies.

7.                 
WARRANTY; RECALL.

A.               
Warranty. Manufacturer warrants to Distributor, for a period of one year from the date of delivery by Manufacturer to the
intended recipient thereof, that any Products delivered by Manufacturer pursuant to this Agreement shall conform in all material
respects to Manufacturer’s written specifications for such Products, a copy of which is attached hereto as Exhibit B,
and shall be free of defects in materials and workmanship. Manufacturer further warrants to Distributor that it has title
to the Products to be conveyed hereunder and has the right to sell the same and that at the time of delivery, such Products shall
be free of any security interest or other lien or any other encumbrances whatsoever (the warranties provided in the preceding
two sentences being hereinafter referred to as the “Limited Warranty”). Except for the Limited Warranty, Manufacturer
makes no warranties or representations to Distributor or any other person with respect to the Products or any services provided
to Distributor or any other person. Manufacturer may not change any of the terms of the Limited Warranty at any time, without
written consent from Distributor unless Manufacturer notifies Distributor in writing at least one hundred and twenty (120) calendar
days prior to any such change. Any such change shall not apply to any Products sold to or ordered by Distributor prior to the
change. Distributor will not alter the Limited Warranty, warranty disclaimers, and limitation of liability without the prior written
authorization of Manufacturer, nor extend or make any additional warranty or representation regarding the Products unless expressly
authorized by Manufacturer.

THE
LIMITED WARRANTY REFERRED TO IN THIS SECTION IS THE ONLY WARRANTY, EXPRESS OR IMPLIED, THAT MANUFACTURER MAKES WITH RESPECT TO
THE PRODUCTS. MANUFACTURER SPECIFICALLY DISCLAIMS ALL OTHER IMPLIED WARRANTIES INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES
OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NON-INFRINGEMENT.

B.                
Warranty Claims. The Limited Warranty is effective only if Distributor gives prompt written notice to Manufacturer of any
alleged breach of the Limited Warranty, which notice shall specifically describe the problem and shall state the date of sale
and name and location of the recipient of the Product originally shipped by Manufacturer. Notwithstanding anything to the contrary
contained herein, Manufacturer shall have no obligation under the Limited Warranty unless it receives such notice within thirty
(30) days following the expiration of the warranty period. In the event of any breach of the Limited Warranty Manufacturer’s
sole obligation is to replace each non-conforming Product within a reasonable period of time and to pay for the costs of shipment
to the original recipient of the Product or as otherwise specified by Distributor.

 

    	 	8	 

     

    

C.               
Recall. In the event that: (i) any applicable federal, state or foreign regulatory authority should issue a request, directive
or order that a Product be recalled; (ii) a court of competent jurisdiction orders such a recall; or (iii) Manufacturer determines
that the Product represents a risk of injury or customer deception or is otherwise defective and that the recall of a Product
is appropriate (“Recall”), Manufacturer shall have sole right and responsibility for implementing the Recall.
Distributor will provide cooperation and assistance to Manufacturer in connection therewith, as may be reasonably requested by
Manufacturer. Manufacturer shall be solely responsible for all expenses affecting such Recall (including any reasonable out-of-pocket
expenses incurred by Distributor in connection with such cooperation, as directed in writing by Manufacturer).

 

		8.	INDEMNIFICATION.

A.               
Indemnity Obligations for Intellectual Property Infringement. Manufacturer agrees to defend, indemnify, and hold harmless
Distributor from and against any and all claims, losses, damages, suits, expenses (including reasonable attorneys’ fees),
and costs (collectively “Claims”) brought or alleged by a third party that the Manufacturer IP or any Products
sold to Distributor infringe any U.S. patent, trademark, or copyright. Distributor shall reasonably cooperate with Manufacturer,
its insurance company, and its legal counsel in its defense of such Claims. If the use or sale of any Products furnished under
this Agreement is enjoined as a result of a Claim, Manufacturer shall either obtain on behalf of the Distributor the right to
continue to use or sell such Products, substitute an equivalent product reasonably acceptable to Distributor in its place, or
reimburse Distributor the purchase price of the Products, costs incurred by Distributor as a result of such cancellation, and
any and all losses or costs incurred as a result of Distributor’s breach of any purchaser order or other agreement with
its customers. Notwithstanding the foregoing, this indemnity shall not apply or cover any Claims based upon any infringement or
alleged infringement of any patent, trademark, or copyright resulting from the alteration or unauthorized (by Manufacturer) use
of any Manufacturer IP or the Products by Distributor or a Distributor representative or the combination of any Products with
any other products or the combination of any Manufacturer IP with any other mark, if such infringement claim would have been avoided
but for such alteration, combination, or unauthorized use by Distributor or any Distributor representative. Distributor shall
also have the right to participate in the defense of any such action and have the right to hire its own legal counsel at Distributor’s
expense. This indemnity shall not cover any Claims in which Distributor fails to provide Manufacturer with prompt written notice
of the Claim that lack of notice materially prejudices the defense of the Claim.

B.                
Distributor agrees to defend, indemnify, and hold harmless Manufacturer from and against any and all Claims brought or alleged
by a third party based upon any infringement or alleged infringement of any patent, trademark, or copyright resulting from the
alteration or unauthorized (by Manufacturer) use of any Manufacturer IP or the Products by Distributor or a Distributor representative
or the combination of any Products with any other products or the combination of any Manufacturer IP with any other mark, if such
infringement claim would have been avoided but for such alteration, combination, or unauthorized use by Distributor or any Distributor
representative. Manufacturer shall reasonably cooperate with Distributor, its insurance company and its legal counsel in its defense
of such Claims. Manufacturer shall also have the right to participate in the defense of any such action and have the right to
hire its own legal counsel at Distributor’s expense. This indemnity shall not cover any Claims in which Manufacturer fails
to provide Distributor with prompt written notice of the Claim which lack of notice materially prejudices the defense of the Claim.

    	 	9	 

     

    

C.               
Manufacturer’s Additional Indemnity Obligations. Notwithstanding anything herein to the contrary, in addition to all
other rights and remedies available at law or in equity, Manufacturer hereby agrees to defend, indemnify, and hold harmless Distributor
from and against any and all third party Claims (i) arising out of any defects in any Products existing at the time such Products
are sold by Manufacturer to Distributor, or (ii) arising out of the negligent acts or omissions or willful misconduct of Manufacturer,
its employees, agents, or representatives with respect to the Products or its performance of this Agreement. Distributor shall
reasonably cooperate with Manufacturer, its insurance company, and its legal counsel in its defense of such Claims. Distributor
shall also have the right to participate in the defense of any such action and have the right to hire its own legal counsel at
Distributor’s expense. This indemnity shall not cover any Claims in which Distributor fails to provide Manufacturer with
prompt written notice of the Claim which lack of notice materially prejudices the defense of the Claim.

D.               
Distributor’s Indemnity Obligations to Manufacturer. Distributor hereby agrees to defend, indemnify, and hold harmless
Manufacturer, its affiliates, and their respective officers directors, employees, and agents from and against any and all Claims
(i) arising out of the negligent acts or omissions or willful misconduct of Distributor, its employees, agents, or representatives
with respect to its performance of this Agreement, sale of the Products, or otherwise, (ii) arising out of the alteration or modification
of the Products or Manufacturer IP by Distributor or its employees, agents, or representatives, or (iii) alleging that the Distributor
Marks infringe or otherwise violate the intellectual property rights of a third party. This indemnity shall not cover any Claims
in which Manufacturer fails to provide Distributor with prompt written notice which lack of notice prejudices the defense of the
Claim. Manufacturer shall also have the right to participate in the defense of any such action and have the right to hire its
own legal counsel at Manufacturer’s expense.

E.                
Settlement of Claims. In no event shall a party seeking or entitled to indemnification from a Party hereunder settle, compromise,
agree to a judgment, or take any similar action with respect to any Claim without the written consent of the Party from whom indemnification
is sought.

9.                 
LIMITATION OF LIABILITY.

EXCEPT
FOR THE PARTIES’ INDEMNIFICATION OBLIGATIONS UNDER SECTION 8 OF THIS AGREEMENT AND CONFIDENTIALITY OBLIGATIONS UNDER SECTION
5 OF THIS AGREEMENT, IN NO EVENT SHALL EITHER PARTY BY LIABLE UNDER THIS AGREEMENT TO THE OTHER PARTY FOR ANY INCIDENTAL, CONSEQUENTIAL,
INDIRECT, STATUTORY, SPECIAL, OR PUNITIVE DAMAGES, INCLUDING, BUT NOT LIMITED TO, LOST PROFITS, LOSS OF USE, LOSS OF TIME, INCONVENIENCE,
LOSS BUSINESS OPPORTUNITIES, DAMAGE TO GOODWILL OR REPUTATION, OR LOSS OF DATA, REGARDLESS OF WHETHER SUCH LIABILITY IS BASED
ON BREACH OF CONTRACT, TORT, STRICT LIABILITY, OR OTHERWISE, AND EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES OR SUCH DAMAGES
COULD HAVE BEEN REASONABLY FORESEEN.

    	 	10	 

     

    

10.             
TERM. This Agreement shall commence on the Effective Date and shall end on the first anniversary of the Effective Date (the
“Initial Term”) unless earlier terminated pursuant to Section 11 hereof. The Initial Term shall automatically
renew for successive renewal terms of one (1) year each (each, a “Renewal Term”), unless either Party provides
the other Party with written notice of its intention not to renew the Initial Term or any Renewal Term, as applicable, at least
sixty (60) days prior to the expiration of the then current Initial Term or Renewal Term.

11.             
TERMINATION.

A.               
Termination for Breach. Either Party may terminate this Agreement at any time in the event of a material breach by the other
Party that remains uncured after thirty (30) calendar days following written notice thereof. Such termination shall be effective
immediately and automatically upon the expiration of the applicable notice period, without further notice or action by either
Party. Termination shall be in addition to any other remedies that may be available to the non-breaching Party.

B.                
Termination for Financial Insecurity. Either Party may terminate this Agreement and any outstanding Purchase Orders (to the
extent the Products have not already been delivered to the carrier for shipment) immediately at its option upon written notice
if the other Party: (i) becomes or is declared insolvent or bankrupt; (ii) is the subject of a voluntary or involuntary bankruptcy
or other proceeding related to its liquidation or solvency, which proceeding is not dismissed within sixty (60) calendar days
after its filing; (iii) ceases to do business in the normal course; or (iv) makes an assignment for the benefit of creditors.
This Agreement shall terminate immediately and automatically upon any determination by a court of competent jurisdiction that
either Party is excused or prohibited from performing in full all obligations hereunder, including, without limitation, rejection
of this Agreement pursuant to 11 U.S.C. §365.

C.               
Termination for Failure to Meet Minimum Purchase Commitments. Manufacturer may terminate this Agreement at any time upon written
notice to Distributor if Distributor fails to satisfy the Minimum Purchase Threshold (as defined in Exhibit C) for any
applicable period as set forth on Exhibit C attached hereto and incorporated herein by reference. At Manufacturer’s
option, Manufacturer may elect to suspend a decision to terminate this Agreement as permitted under this Section 11.C. for an
indefinite period, but may, in the meantime upon written notice to Distributor, terminate Distributor’s exclusive rights
under Section 1.A. above.

D.               
Obligations upon Termination. Upon termination of this Agreement, Distributor shall cease to be an authorized reseller of
the Products and (i) all unaccepted Purchase Orders may be cancelled by Distributor or Manufacturer without liability, and (ii)
Distributor may, at its option, resell, and deliver to Manufacturer, free and clear of all liens and encumbrances, any or all
of the Products that (A) are subject to Purchase Orders accepted by Manufacturer whether or not the applicable the Products have
been shipped as of the date of termination and (B) were manufactured, shipped, or received as of the date of termination, in each
case that are in new condition and in the original factory packaging at the original purchase price of any such Products that
Distributor elects to resell to Manufacturer less a restocking charge of 50% of such amount payable by Manufacturer upon receipt
of such Products. Restocking is waived in the event the Manufacturer terminates Distributor, other than if termination is a Termination
for Breach as outlined in 11.A. Within ninety (90) calendar days of termination of this Agreement, Distributor shall remove and
not thereafter use any sign, display, or other advertising or marketing means containing Manufacturer Marks, except as provided
in this section. Distributor may continue to use in-store materials containing the Manufacturer IP as reasonably required for
the resale of the Products that may be remaining in Distributor’s possession after termination, which materials Distributor
may continue to utilize until all remaining Products have been sold or one hundred eighty (180) calendar days after termination,
whichever comes first, after which Distributor shall cease the use of any such Manufacturer IP.

    	 	11	 

     

    

12.             
COMPLIANCE WITH LAWS. Distributor acknowledges and understands that the Products may be subject to restrictions upon export
from the United States and upon resale after export. Distributor therefore represents and warrants that it shall comply fully
with all relevant regulations of the U.S. Department of Commerce, with the U.S. Export Administration Act, and with any other
import and/or export control laws or regulations of the United States or any other jurisdiction.

13.             
GENERAL TERMS.

A.               
Independent Contractors. Nothing in this Agreement, and no course of dealing between the Parties, shall be construed to create
or imply an employment or agency relationship or a partnership or joint venture relationship between the Parties or between one
Party and the other Party’s employees or agents. Neither Manufacturer nor Distributor has the authority to bind the other,
to incur any liability, or otherwise act on behalf of the other. Each Party shall be solely responsible for payment of its employees’
salaries (including withholding of income taxes and social security), workers’ compensation, and all other employment benefits.

B.                
Assignment. Neither this Agreement, nor any right or interest herein, may be assigned, in whole or in part, without the express
written consent of the other Party. Any assignment without such consent shall be null and void. Notwithstanding the foregoing,
the Distributor may subcontract its rights or obligations under this Agreement with the prior written consent of Manufacturer.
Either party may assign this Agreement if the assignment is carried out as part of a merger, restructuring, or reorganization,
or sale or transfer of all or substantially all of a Party’s assets. This Agreement shall be binding upon and inure to the
benefit of the Parties hereto, their successors and legal representatives. Except as set forth in Section 8, there are no third-party
beneficiaries to this Agreement.

C.               
Notices. Unless otherwise agreed to by the Parties, all notices shall be deemed effective when received and made in writing
by either (i) certified mail, return receipt requested, (ii) nationally recognized overnight courier, or (iii) fax with confirmation,
addressed to the party to be notified at the following address or to such other address as such Party shall specify by like notice
hereunder:

    	 	12	 

     

    

If
to Manufacturer:

BIDI
VAPOR, LLC

4460
OLD DIXIE HWY

GRANT-VALKARIE,
FL 32949

		Attn:	BIDI
                                         VAPOR - CORPORATE

		Email:	ADMIN@BIDIVAPOR.COM

		Fax:	833-367-2434

 

If
to Distributor:

Kaival
Brands Innovations Group, Inc.

401
N. WICKHAM RD.

MELBOURNE,
FL 32935 

		Attn:	KAVL
                                         - CORPORATE

		Email:	ADMIN@KAIVALBRANDS.COM

		Fax:	833-452-4825

 

(with
a copy to, which does not serve as notice):

 

Baker
& Hostetler LLP

200
S. ORANGE AVE., STE 2300

ORLANDO,
FL 32801

Attn:
ALISSA LUGO & KEITH DURKIN

Email:
alugo@bakerlaw.com

kdurkin@bakerlaw.com

Fax:
407-841-0168

 

Either
Party, by written notice to the other pursuant to this section, may change its address or designees for receiving such notices.

D.               
Force Majeure. Neither Party shall liable hereunder for any failure or delay in the performance of its obligations under this
Agreement if such failure or delay is on account of causes beyond its control, including labor disputes, civil commotion, war,
fires, floods, inclement weather, governmental regulations or controls, casualty, government authority, strikes, or acts of God,
in which event the non-performing Party shall be excused from its obligations for the period of the delay and for a reasonable
time thereafter. Each Party shall use reasonable efforts to notify the other Party of the occurrence of such an event within three
(3) business days of its occurrence. Notwithstanding anything to the contrary contained herein, in no event shall the COVID-19
pandemic or government actions taken in connection with the same (or any future pandemic or government actions taken in connection
with the same) constitute an event of force majeure under this Section 13.D. or otherwise prohibit or restrict Manufacturer’s
rights to terminate this Agreement for failure of Distribute to meet the Minimum Purchase Threshold set forth under Section 11.C.
hereof.

    	 	13	 

     

    

E.                
Governing Law; Venue; Jury Waiver. This Agreement shall be governed by the laws of the State of Florida, without giving effect
to the principles of conflicts of law of such state and shall be binding upon the Parties hereto in the United States and worldwide.
Any claims or legal actions by one Party against the other arising under this Agreement or concerning any rights under this Agreement
shall be commenced and maintained in any state or federal court located in Orange County, Florida. Both Parties hereby submit
to the jurisdiction and venue of any such court. THE PARTIES FURTHER AGREE, TO THE EXTENT PERMITTED BY APPLICABLE LAW, TO WAIVE
ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY CLAIM, COUNTERCLAIM, OR ACTION ARISING FROM THE TERMS OF THIS AGREEMENT.

F.                
Attorney’s Fees. If either Party incurs any legal fees associated with the enforcement of this Agreement or any rights
under this Agreement, the prevailing Party shall be entitled to recover its reasonable attorney’s fees and any court, arbitration,
mediation, or other litigation expenses from the other Party.

G.               
Survival. The provisions of this Agreement, which by their sense and context should survive any termination of expiration
of this Agreement, including without limitation sections 5 (confidentiality), 7 (warranty), 8 (indemnification), 9 (limitation
of liability), 12 (compliance with laws), and 13 (general terms) shall so survive.

H.               
Authorized Signatories. It is agreed and warranted by the Parties that the individuals signing this Agreement on behalf of
the respective Parties are authorized to execute such an agreement. No further proof of authorization shall be required.

I.                  
Severability. If any provision or portion of this Agreement shall be held by a court of competent jurisdiction to be illegal,
invalid, or unenforceable, the remaining provisions or portions shall remain in full force and effect.

J.                 
No Strict Construction. This Agreement shall not be construed more strongly against either Party regardless of which Party
is more responsible for its preparation.

K.               
Counterparts. This Agreement may be executed by facsimile and in one or more counterparts, each of which will be deemed to
be an original, but all of which together will constitute one and the same instrument, without necessity of production of the
others.

L.                
Entire Agreement; Modification; Waiver. This Agreement is the entire agreement between the Parties with respect to the subject
matter and supersedes any prior agreement or communications between the Parties hereto, whether written or oral. This Agreement
may be modified only by a written amendment signed by authorized representatives of both Parties. No waiver of any term or right
in this Agreement shall be effective unless in writing, signed by an authorized representative of the waiving Party. The failure
of either Party to enforce any provision of this Agreement shall not be construed as a waiver or modification of such provision,
or impairment of its right to enforce such provision thereafter.

 

[SIGNATURES
ON FOLLOWING PAGE]

 

    	 	14	 

     

    

IN
WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly executed by their duly authorized representatives as
of the 21ST day of May, 2020, to be effective as of the the Effective Date.

MANUFACTURER

 

BIDI
VAPOR, LLC

By:
/s/ Nirajkumar Patel

Name:
Nirajkumar Patel

Title:
Manager

 

 

DISTRIBUTOR

 

KAIVAL
BRANDS INNOVATIONS GROUP, INC.

 

 By:
/s/ Eric Mosser

Name:       Eric
Mosser

Title:       Chief
Operating Officer

 

    	 	15

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