SECURED LINE OF CREDIT AGREEMENT

 

THIS SECURED LINE OF CREDIT AGREEMENT, dated as of December 1, 2014 (this
“Agreement”), among Emagine the Vape Stores, LLC, a Delaware limited liability
company (the “Company” or the “Debtor”), and the holders of the Company’s 12%
Secured Notes in an amount up to $3,000,000 (collectively, the “Notes”) who are
parties signatory hereto, their endorsees, transferees and assigns
(collectively, the “Holders”), and Michael Brauser, as secured party collateral
agent (the “Agent”) for the Holders.

 

WHEREAS, the Holders have severally agreed to lend money to the Company to be
evidenced by the Notes;

 

WHEREAS, in order to induce the Holders to make the loans evidenced by the
Notes, the Debtor has agreed to execute and deliver to the Agent as collateral
agent on behalf of the Holders, this Agreement and to grant the Agent on behalf
of the Holders, a security interest in all of the property of the Debtor to
secure the prompt payment, performance and discharge in full of all of the
Company’s obligations under the Notes.

 

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

 

1. Certain Definitions. As used in this Agreement, the following terms shall
have the meanings set forth in this Section 1. Terms used but not otherwise
defined in this Agreement that are defined in Article 9 of the UCC shall have
the respective meanings given such terms in Article 9 of the UCC.

 

(a) “Collateral” means the collateral in which the Agent, for the ratable
benefit of the Holders, is granted a security interest by this Agreement which
shall consist of all of the Company’s assets including the vape stores
(fixtures, inventory and other assets) to be constructed and/or developed by the
Company and its affiliates as more fully described in Schedule A (the “Security
Interest”).

 

(b) “Majority in Interest” means, at any time of determination, the majority in
interest (based on then-outstanding principal amounts of Notes at the time of
such determination) of the Holders.

 

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(c) “Obligations” means all of the liabilities and obligations (primary,
secondary, direct, contingent, sole, joint or several) due or to become due, or
that are now or may be hereafter existing, of the Debtor to the Holders under
this Agreement, the Notes, and any other instruments, agreements or other
documents executed and/or delivered in connection herewith or therewith, in each
case, whether now or hereafter existing, voluntary or involuntary, direct or
indirect, absolute or contingent, liquidated or unliquidated, whether or not
jointly owed with others, and whether or not from time to time decreased or
extinguished and later increased, created or incurred, and all or any portion of
such obligations or liabilities that are paid, to the extent all or any part of
such payment is avoided or recovered directly or indirectly from any of the
Holders as a preference, fraudulent transfer or otherwise as such obligations
may be amended, supplemented, converted, extended or modified from time to time.
Without limiting the generality of the foregoing, the term “Obligations” shall
include, without limitation: (i) principal of, and interest on the Notes and the
loans extended pursuant thereto; (ii) any and all other fees, indemnities,
costs, obligations and liabilities of the Debtor from time to time under or in
connection with this Agreement, the Notes, and any other instruments, agreements
or other documents executed and/or delivered in connection herewith or
therewith; and (iii) all amounts (including but not limited to post-petition
interest) in respect of the foregoing that would be payable but for the fact
that the obligations to pay such amounts are unenforceable or not allowable due
to the existence of a bankruptcy, reorganization or similar proceeding involving
the Debtor.

 

(d) “Organizational Documents” means with respect to the Debtor, the documents
by which it organized, including its Certificate of Formation and Operating
Agreement.

 

(e) “UCC” means the Uniform Commercial Code of the State of Florida and or any
other applicable law of any state or states which has jurisdiction with respect
to all, or any portion of, the Collateral or this Agreement, from time to time.
It is the intent of the parties that defined terms in the UCC should be
construed in their broadest sense so that the term “Collateral” will be
construed in its broadest sense. Accordingly if there are, from time to time,
changes to defined terms in the UCC that broaden the definitions, they are
incorporated herein and if existing definitions in the UCC are broader than the
amended definitions, the existing ones shall be controlling.

 

2. Purchase and Sales of the Notes. On the terms and conditions contained in
this Agreement, the Holders shall lend to the Company and the Company shall
borrow from the Holders up to $________ from time-to-time. The amounts borrowed
shall be evidenced by the Notes to be issued to the Holders, a copy of which is
annexed as Exhibit A.

 

3. Representations and Warranties of the Company. The Company represents and
warrant to the Holders as of the date of this Agreement as follows:

 

(a) The Company has taken all corporate action necessary for the authorization,
execution, delivery and performance of all Obligations of the Company under this
Agreement and any related documentation and for the authorization, issuance and
delivery of the Notes being sold under this Agreement. This Agreement and the
Notes each shall constitute a valid and legally binding obligation of the
Company, enforceable in accordance with their respective terms.

 

(b) The Notes being purchased hereunder, when issued, sold and delivered in
accordance with the terms of this Agreement, will have been duly and validly
issued, and will be fully paid and nonassessable, will have been issued in
compliance with all applicable state and federal securities laws, and will be
free of any restrictions against transfer other than those set forth in this
Agreement and applicable securities laws.

 

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(c) All consents, approvals, orders or authorizations of, or registrations,
qualifications, designations, declarations or filings with, any federal or state
governmental authority or other person on the part of the Company required in
connection with the execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated by this Agreement, shall have
been obtained on or prior to the closing, except that any notices of sale that
may be required to be filed with the Securities and Exchange Commission pursuant
to Regulation D promulgated under the Securities Act of 1933 (the “Securities
Act”) or any state securities law authority pursuant to applicable blue sky laws
may be filed within the applicable periods therefor.

 

(d) The Debtor has no place of business or offices where their respective books
of account and records are kept (other than temporarily at the offices of its
attorneys or accountants) or places where Collateral is stored or located,
except as set forth on Schedule B attached hereto. None of such Collateral is in
the possession of any consignee, bailee, warehouseman, agent or processor.

 

(e) The Debtor is and/or will be the sole owner of the Collateral, free and
clear of any liens, security interests, encumbrances, rights or claims, and are
fully authorized to grant the Security Interests. There is not on file in any
governmental or regulatory authority, agency or recording office an effective
financing statement, security agreement, license or transfer or any notice of
any of the foregoing (other than those that will be filed in favor of the Agent
for the ratable benefit of the Holders pursuant to this Agreement) covering or
affecting any of the Collateral.

 

(f) No written claim has been received that any Collateral or Debtor’s use of
any Collateral violates the rights of any third party. There has been no adverse
decision to the Debtor’s claim of ownership rights in or exclusive rights to use
the Collateral in any jurisdiction or to the Debtor’s right to keep and maintain
such Collateral in full force and effect, and there is no proceeding involving
said rights pending or, to the best knowledge of the Debtor, threatened before
any court, judicial body, administrative or regulatory agency, arbitrator or
other governmental authority.

 

(g) The Debtor shall maintain the Collateral at the locations set forth on
Schedule B attached hereto and may not relocate such tangible Collateral unless
either or both use their best efforts to deliver to the Agent promptly following
such relocation (i) written notice of such relocation and the new location
thereof (which must be within the United States) and (ii) evidence that
appropriate financing statements under the UCC and other necessary documents
have been filed and recorded and other steps have been taken to perfect the
Security Interests to create in favor of the Agent on behalf of the Holders a
valid, perfected and continuing perfected first priority lien in the Collateral.

 

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(h) This Agreement creates in favor of the Agent a valid security interest in
the Collateral, which security interest is held by the Agent for the ratable
benefit of the Holders, securing the payment and performance of the Obligations.
Upon making the filings described in the immediately following subsection, all
security interests created hereunder in any Collateral which may be perfected by
filing UCC financing statements shall have been duly perfected. Without limiting
the generality of the foregoing, except for the filing of said financing
statements, no consent of any third parties and no authorization, approval or
other action by, and no notice to or filing with, any governmental authority or
regulatory body is required for (i) the execution, delivery and performance of
this Agreement, (ii) the creation or perfection of the Security Interests
created hereunder in the Collateral or (iii) the enforcement of the rights of
the Agent on behalf of Holders.

 

(i) The Debtor hereby authorizes the Agent to file one or more financing
statements under the UCC, with respect to the Security Interests, with the
proper filing and recording agencies in any jurisdiction deemed proper by it.

 

(j) The execution, delivery and performance of this Agreement by the Debtor does
not (i) violate any of the provisions of any Organizational Documents of the
Debtor or any judgment, decree, order or award of any court, governmental body
or arbitrator or any applicable law, rule or regulation applicable to the Debtor
or (ii) conflict with, or constitute a default (or an event that with notice or
lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation (with or without
notice, lapse of time or both) of, any agreement, credit facility, debt or other
instrument (evidencing the Debtor’s debt or otherwise) or other understanding to
which the Debtor is a party or by which any property or asset of the Debtor is
bound or affected. If any, all required consents (including, without limitation,
from stockholders or creditors of the Debtor) necessary for the Debtor to enter
into and perform their obligations hereunder have been obtained.

 

(k) The Debtor shall at all times maintain the liens and Security Interests
provided for hereunder as valid and perfected first priority liens and security
interests in the Collateral in favor of the Agent for the ratable benefit of the
Holders, until this Agreement and the Security Interest hereunder shall be
terminated upon payment in full of the Notes. The Debtor hereby agrees to defend
the same against the claims of any and all persons and entities. The Debtor
shall safeguard and protect all Collateral for the account of the Agent for
benefit of the Holders. At the request of the Agent, the Debtor will sign and
deliver to the Agent on behalf of the Holders at any time or from time to time
one or more financing statements pursuant to the UCC in form reasonably
satisfactory to the Agent and will pay the cost of filing the same in all public
offices wherever filing is, or is deemed by the Agent to be, necessary or
desirable to effect the rights and obligations provided for herein. Without
limiting the generality of the foregoing, the Debtor shall pay all fees, taxes
and other amounts necessary to maintain the Collateral and the Security
Interests hereunder, and the Debtor shall obtain and furnish to the Agent from
time to time, upon demand, such releases and/or subordinations of claims and
liens which may be required to maintain the priority of the Security Interests
hereunder.

 

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(l) Except as provided in this Agreement, the Debtor will not transfer, pledge,
hypothecate, encumber, license, sell or otherwise dispose of any of the
Collateral (except for the sales of inventory by the Debtor in its ordinary
course of business) without the prior written consent of Agent.

 

(m) The Debtor shall keep and preserve the equipment, inventory and other
tangible Collateral in good condition, repair and order and shall not operate or
locate any such Collateral (or cause to be operated or located) in any area
excluded from insurance coverage.

 

(n) The Debtor shall maintain with financially sound and reputable insurers,
insurance with respect to the Collateral, against loss or damage of the kinds
and in the amounts customarily insured against by entities of established
reputation having similar properties similarly situated and in such amounts as
are customarily carried under similar circumstances by other such entities and
otherwise as is prudent for entities engaged in similar businesses but in any
event sufficient to cover the full replacement cost thereof. The Debtor shall
cause each insurance policy issued in connection herewith to provide, and the
insurer issuing such policy to certify to the Agent, that (a) the Agent will be
named as lender loss payee and additional insured under each such insurance
policy; (b) if such insurance be proposed to be cancelled or materially changed
for any reason whatsoever, such insurer will promptly notify the Agent and such
cancellation or change shall not be effective as to the Agent for at least 30
days after receipt by the Agent of such notice, unless the effect of such change
is to extend or increase coverage under the policy; and (c) the Agent will have
the right (but no obligation) at its election to remedy any default in the
payment of premiums within 30 days of notice from the insurer of such default.

 

(o) The Debtor shall promptly execute and deliver to the Agent such further
deeds, mortgages, assignments, security agreements, financing statements or
other instruments, documents, certificates and assurances and take such further
action as the Agent may from time to time request and may in its sole discretion
deem necessary to perfect, protect or enforce the Agent’s security interest in
the Collateral.

 

(p) The Debtor shall permit the Agent and its representatives and agents to
inspect the Collateral during normal business hours and upon reasonable prior
notice, and to make copies of records pertaining to the Collateral as may be
reasonably requested by the Agent from time to time.

 

(q) The Debtor will from time to time, at the joint and several expense of the
Debtor, promptly execute and deliver all such further instruments and documents,
and take all such further action as may be necessary or desirable, or as the
Agent may reasonably request, in order to perfect and protect any security
interest granted or purported to be granted hereby or to enable the Agent to
exercise and enforce its rights and remedies hereunder on behalf of the Holders
and with respect to any Collateral or to otherwise carry out the purposes of
this Agreement.

 

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4. Representations and Warranties of the Holders.

 

(a) Each Holder has all requisite power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby, including the
purchase of the Notes set forth on the signature page. This Agreement, when
executed and delivered by each Holder, will constitute a valid and legally
binding obligation of such Holder, enforceable against him, her or it in
accordance with its terms.

 

(b) Each Holder is acquiring the Note to be purchased by such Holder for his own
account for investment and not with a view to, or for sale in connection with,
any distribution thereof, nor with any present intention of distribution or
selling the same, and, except as contemplated by this Agreement, such Holder has
no present or contemplated agreement, undertaking, arrangement, obligation,
indebtedness or commitment providing for the disposition thereof. Each Holder
understands that the Note may not be sold, transferred or otherwise disposed of
without registration under the Securities Act or an exemption therefrom, and
that in the absence of an effective registration statement covering the Note or
an available exemption from registration under the Securities Act, the Note must
be held indefinitely.

 

(c) Each Holder understands that the Note is not registered under the Securities
Act in reliance on an exemption from registration under the Securities Act
pursuant to Section 4(a)(2) thereof and Rule 506(b) thereunder for the sale
contemplated by this Agreement and each of the Notes will bear a restrictive
legend.

 

(d) Each Holder acknowledges that the purchase of the Note, entails a high
degree of risk. These risks include, without limitation, the inability of the
Company to achieve its business plan objectives and the risk of a failure to pay
in full the principal and interest of the Note in accordance with their terms.

 

(e) Each Holder represents that he has had an opportunity to ask questions and
receive answers from the Company regarding the terms and conditions of this
Agreement and the reasons for this offering of the Notes, the business prospects
of the Company, the risks attendant to the Company’s business, and the risks
relating to an investment in the Company, including the terms and conditions of
the Note and further acknowledges that he has had an opportunity to obtain
additional information (to the extent the Company possesses such information and
could acquire it without unreasonable effort or expense) necessary to verify the
accuracy of any information furnished to such Holder or to which such Holder had
access. The Company will put such information in writing if requested by the
Holder.

 

(f) Each Holder represents that he is an “accredited holder” within the meaning
of the applicable rules and regulations promulgated under the Securities Act or
is otherwise experienced in evaluating and investing in private placement
transactions of securities in similar circumstances and acknowledges that he:

 

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  ● can bear the economic risk of such Holder’s investment;         ● has such
knowledge and experience in financial and business  matters that such Holder is
capable of evaluating the merits and  risks of the investment in the Notes.

 

Further, the Holder:

 

  ● has adequate means of providing for his, her or its current financial needs
and contingencies,         ● is able to bear the substantial economic risks of
an investment in the Note for an indefinite period of time,         ● has no
need for liquidity in such investment,         ● has made commitments to
investments that are not readily marketable which are reasonable in relation to
the Holder’s net worth, and         ● can afford a complete loss of such
investment.

 

(g) Each Holder acknowledges that he, she or it is purchasing the Notes for an
indefinite period of time, has no need for liquidity in such investment, has
made commitments to investments that are not readily marketable which are
reasonable in relation to the undersigned’s net worth and can afford a complete
loss of such investment.

 

(h) Each Holder has such knowledge and experience in financial, tax and business
matters so as to enable it to utilize the information made available to it in
connection with the offering of the Notes to evaluate the merits and risks of an
investment in the Notes and to make an informed investment decision with respect
thereto.

 

(i) Each Holder is not relying on the Company with respect to the tax and other
economic considerations of an investment in the Notes, and such Holder has
relied on the advice of, or has consulted with, only the Holder’s own advisors.

 

(j) Each Holder is not subscribing for the Notes as a result of or subsequent to
any advertisement, articles, notice or other communication published in any
newspaper, television or radio or presented at any seminar or meeting, or any
solicitation of a subscription by a person not previously known to the
undersigned in connection with investments in securities generally.

 

(k) The information contained in this Agreement including Schedule C, is true
and correct including any information which each Holder has furnished and will
furnish to the Company with respect to such Holder’s financial position,
business experience and residence, is correct and complete as of the date of
this Agreement and if there should be any material change in such information
prior to the Company’s acceptance of this Agreement and the depositing of the
payments described above, each Holder will furnish such revised or corrected
information to the Company. The representations, warranties and agreements of
the Holder contained herein shall survive the execution and delivery of this
Agreement and the purchase of the Notes.

 

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(l) Each Holder acknowledges that he has received notice of his possible right
under applicable Florida law to rescind the purchase of the Notes within three
business days following the payment of the purchase price as set forth in
Section 24 hereof.

 

5. Each Holders’ Representations and Warranties Concerning Suitability of
Accredited Investor, Etc. Attached as Schedule C is a Suitability Questionnaire
which shall be submitted by the Holders to the Company in addition to the
signature page of this Agreement.

 

6. Indemnification by the Holders. Each Holder agrees to indemnify and hold the
Company and its agents, representatives and employees harmless from and against
all liability, damage, loss, cost and expense (including reasonable attorneys’
fees) which they may incur by reason of the failure of such Holder to fulfill
any of the material terms or conditions of this Agreement, or by reason of any
material inaccuracy or omission in the information furnished by such Holder
herein or any material breach of the representations and warranties made by such
Holder on Schedule C.

 

7. Grant of Security Interest in Collateral. As an inducement for the Holders to
extend the loans as evidenced by the Notes and to secure the complete and timely
payment, performance and discharge in full, as the case may be, of all of the
Obligations, the Debtor hereby unconditionally and irrevocably pledges, grants
and hypothecates to the Agent for the ratable benefit of the Holders a security
interest in and to, a lien upon and a right of set-off against all of the
Debtor’s right, title and interest of whatsoever kind and nature in and to, the
Collateral (the “Security Interest”).

 

8. Defaults. The following events shall be “Events of Default”:

 

(a) The failure to pay principal or any interest under any of the Notes when
due;

 

(b) Any representation or warranty of the Debtor in this Agreement shall prove
to have been incorrect in any material respect when made;

 

(c) The failure by the Debtor to observe or perform any of its obligations
hereunder for ten business days after delivery to the Debtor of notice of such
failure by Agent; or

 

(d) Any Event of Default under any of the Notes.

 

9. Duty To Hold In Trust. Upon the occurrence of any Event of Default and at any
time thereafter, the Debtor shall, upon receipt of any revenue, income,
dividend, interest or other sums subject to the Security Interests, whether
payable pursuant to the Notes or otherwise, or of any check, draft, note, trade
acceptance or other instrument evidencing an obligation to pay any such sum,
hold the same in trust for the Agent on behalf of the Holders and shall
forthwith endorse and transfer any such sums or instruments, or both, to the
Agent which shall hold and distribute the same to the Holders, pro-rata in
proportion to the respective then-currently outstanding principal amount of
Notes for application to the satisfaction of the Obligations.

 

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10. Rights and Remedies Upon Default.

 

(a) Upon the occurrence and during the continuation of any Event of Default,
Agent, upon written request of the Majority in Interest, shall have the right to
exercise all of the remedies conferred hereunder and under the Notes on behalf
of Agent for the ratable benefit of the Holders. In such event, the Holders,
acting exclusively through the Agent, shall have all the rights and remedies of
a secured party under the UCC. Without limitation, the Agent, for ratable
benefit of the Holders, shall have the following rights and powers:

 

(i) The Agent shall have the right (but not the obligation) to take possession
of the Collateral and, for that purpose, enter, with the aid and assistance of
any person, any premises where the Collateral, or any part thereof, is or may be
placed and remove the same, and the Debtor shall assemble the Collateral and
make it available to the Agent at places which the Agent shall reasonably
select, and make available to the Agent, without rent, all of the Debtor’s
premises and facilities for the purpose of the Agent taking possession of,
removing or putting the Collateral in saleable or disposable form.

 

(ii) Agent shall have the right (but not the obligation) to exercise all rights
with respect to the Collateral as it were the sole and absolute owner thereof.

 

(iii) The Agent shall have the right (but not the obligation) to operate the
business of the Debtor using the Collateral and shall have the right to assign,
sell, lease or otherwise dispose of and deliver all or any part of the
Collateral, at public or private sale or otherwise, either with or without
special conditions or stipulations, for cash or on credit or for future
delivery, in such parcel or parcels and at such time or times and at such place
or places, and upon such terms and conditions as the Agent may deem commercially
reasonable, all without (except as shall be required by applicable statute and
cannot be waived) advertisement or demand upon or notice to the Debtor or right
of redemption of the Debtor, which are hereby expressly waived. Upon each such
sale, lease, assignment or other transfer of Collateral, the Agent, for the
benefit of the Holders, may, unless prohibited by applicable law which cannot be
waived, purchase all or any part of the Collateral being sold, free from and
discharged of all trusts, claims, right of redemption and equities of the
Debtor, which are hereby waived and released.

 

(b) The Agent shall comply with any applicable law in connection with a
disposition of Collateral and such compliance will not be considered adversely
to affect the commercial reasonableness of any sale of the Collateral. The Agent
may sell the Collateral without giving any warranties and may specifically
disclaim such warranties. If the Agent sells any of the Collateral on credit,
the Debtor will only be credited with payments actually made by the purchaser.
In addition, the Debtor waive any and all rights that they may have to a
judicial hearing in advance of the enforcement of any of the Agent’s rights and
remedies hereunder, including, without limitation, their rights following an
Event of Default to take immediate possession of the Collateral and to exercise
its rights and remedies with respect thereto.

 

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(c) Agent Appointed Attorney-in-Fact. The Company hereby irrevocably appoints
the Agent as the Company’s attorney-in-fact, with full authority in the place
and stead of Company and in the name of Company, Agent or otherwise, from time
to time after an Event of Default shall have occurred, in Agent’s discretion, to
take any action and to execute any instrument which Agent may deem necessary or
advisable to accomplish the purposes of this Agreement.

 

(d) The Debtor shall be obligated to assist the Holders in the liquidation of
the Collateral upon an Event of Default.

 

11. Costs and Expenses. The Debtor agree to pay all reasonable out-of-pocket
fees, costs and expenses incurred in connection with any filing required
hereunder, including without limitation, any financing statements pursuant to
the UCC, continuation statements, partial releases and/or termination statements
related thereto or any expenses of any searches reasonably required by the
Agent. The Debtor will also, upon demand, pay to the Agent the amount of any and
all reasonable expenses, including the reasonable fees and expenses of its
counsel and of any experts and agents, which the Agent, for the benefit of the
Holders, may incur in connection with (i) the enforcement of this Agreement,
(ii) the custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Collateral, or (iii) the exercise or enforcement of
any of the rights of the Holders under the Notes. Until so paid, any fees
payable hereunder shall be added to the principal amount of the Notes and shall
bear interest at the Default Rate.

 

12. Term of Agreement. This Agreement and the Security Interests shall terminate
on the date on which all payments under the Notes have been indefeasibly paid in
full and all other Obligations have been paid or discharged; provided, however,
that all indemnities of the Debtor contained in this Agreement shall survive and
remain operative and in full force and effect regardless of the termination of
this Agreement.

 

13. Appointment of Agent.

 

(a) The Holders hereby appoint Michael Brauser, 4400 Biscayne Boulevard, Suite
850, Miami, Florida 33137, to act as their agent (“Agent”) for purposes of
exercising any and all rights and remedies of the Holders hereunder. Such
appointment shall continue until revoked in writing by a Majority in Interest,
at which time a Majority in Interest shall appoint a new Agent which shall be
effected only in accordance with Section 13(b). The Agent shall have the rights,
responsibilities and immunities set forth in Schedule D hereto. The Debtor shall
be entitled to deal with the Agent on behalf of the Holders on all matters and
all actions taken by the Agent shall be deemed conclusively to be approved by
and binding upon all of the Holders until receipt of written notice of an
appointment of a new Agent in accordance with Section 13(b) or resignation and
replacement in accordance with Schedule D.

 

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(b) In the event that the Holders wish to appoint a new Agent, such appointment
shall not be effective unless (i) the Holders submit written notice to the
Debtor executed by a Majority in Interest, certifying that the Majority in
Interest has, at a meeting or by written consent, relieved the previous Agent
and appointed a new collateral agent as Agent in accordance with the provisions
of Schedule D, and further certifying that all non consenting Holders have
received notice of the change in Agent and that the previous agent is no longer
acting in such capacity, and (ii) the newly appointed Agent as collateral agent
shall execute an agreement being to be bound by the terms of this Agreement and
to act as Agent for the Holders. Receipt of such notice shall be deemed binding
upon all of the non executing Holders.

 

(c) The Holders acknowledge that Michael Brauser, as of the date of this
Agreement, will be one of the Holders.

 

14. Severability.

 

If any provision of this Agreement otherwise is deemed to be invalid or
unenforceable or is prohibited by the laws of the state or jurisdiction where it
is to be performed, this Agreement shall be considered divisible as to such
provision and such provision shall be inoperative in such state or jurisdiction
and shall not be part of the consideration moving from either of the parties to
the other. The remaining provisions of this Agreement shall be valid and binding
and of like effect as though such provision were not included.

 

15. Counterparts.

 

This Agreement may be executed in one or more counterparts, each of which shall
be deemed an original but all of which together shall constitute one and the
same instrument. The execution of this Agreement may be by actual, electronic or
facsimile signature.

 

16. Benefit.

 

This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their legal representatives, successors and assigns.

 

17. Notices and Addresses.

 

All notices, offers, acceptance and any other acts under this Agreement (except
payment) shall be in writing, and shall be sufficiently given if delivered to
the addressees in person, by FedEx or similar receipted next business day
delivery, or by e-mail delivery followed by overnight next business day delivery
as follows:

 

  The Company: Emagine the Vape Stores, LLC.     c/o Vaporin, Inc.     4400
Biscayne Blvd.     Miami, FL 33137     Attention: Mr. Greg Brauser     Email:
gregbrauser@gmail.com         The Agent: Michael Brauser     4400 Biscayne
Boulevard, Suite 850     Miami, FL 33137     Email: mike@marlincapital.com

 

or to such other address as any of them, by notice to the other may designate
from time to time. The transmission confirmation receipt from the sender’s
facsimile machine shall be evidence of successful facsimile delivery. Time shall
be counted to, or from, as the case may be, the date of delivery.

 

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18. Attorneys’ Fees.

 

In the event that there is any controversy or claim arising out of or relating
to this Agreement, or to the interpretation, breach or enforcement thereof, and
any action or proceeding relating to this Agreement is filed, the prevailing
party shall be entitled to an award by the court of reasonable attorneys’ fees,
costs and expenses.

 

19. Oral Evidence.

 

This Agreement constitutes the entire agreement between the parties and
supersedes all prior oral and written agreements between the parties hereto with
respect to the subject matter hereof. Neither this Agreement nor any provision
hereof may be changed, waived, discharged or terminated orally, except by a
statement in writing signed by the party or parties against which enforcement or
the change, waiver discharge or termination is sought.

 

20. Governing Law.

 

This Agreement and any dispute, disagreement, or issue of construction or
interpretation arising hereunder whether relating to its execution, its
validity, the obligations provided herein or performance shall be governed or
interpreted according to the internal laws of the State of Florida without
regard to choice of law considerations.

 

21. Florida Blue Sky Legend.

 

FLORIDA LAW PROVIDES THAT WHEN SALES ARE MADE TO FIVE OR MORE PERSONS IN
FLORIDA, ANY SALE MADE IN FLORIDA IS VOIDABLE BY THE PURCHASER WITHIN THREE DAYS
AFTER THE FIRST TENDER OF CONSIDERATION IS MADE BY SUCH PURCHASER TO THE
COMPANY, AN AGENT OF THE COMPANY OR AN ESCROW AGENT OR WITHIN THREE DAYS AFTER
THE AVAILABILITY OF THAT PRIVILEGE IS COMMUNICATED TO SUCH PURCHASER, WHICHEVER
OCCURS LATER. ALL SALES IN THIS OFFERING ARE SALES IN FLORIDA. PAYMENTS FOR
TERMINATED SUBSCRIPTIONS VOIDED BY PURCHASERS AS PROVIDED FOR IN THIS PARAGRAPH
WILL BE PROMPTLY REFUNDED WITHOUT INTEREST. NOTICE SHOULD BE GIVEN TO THE
COMPANY TO THE ATTENTION OF GREG BRAUSER AT THE ADDRESS SET FORTH IN SECTION 17
OF THIS AGREEMENT.

 

22. Section or Paragraph Headings.

 

Section headings herein have been inserted for reference only and shall not be
deemed to limit or otherwise affect, in any matter, or be deemed to interpret in
whole or in part any of the terms or provisions of this Agreement.

 

[Signature Page Follows]

 

12

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Secured Line of Credit
Agreement to be duly executed on the day and year first above written.

 

    EMAGINE THE VAPE STORES, LLC           By:         James Martin, Chief
Financial Officer                   Michael Brauser, as Collateral Agent        
          Michael Brauser

 

[Signature Page to Secured Line of Credit Agreement]

 

13

 

 

      (Signatures of Holders)       PRINT NAME:       AMOUNT OF INVESTMENT
$_________       ENTITY NAME (IF APPLICABLE):           TITLE OF SIGNER (IF
APPLICABLE):           TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NO.:
                                                RESIDENCE OR BUSINESS ADDRESS:  
        Street               City State  Zip       MAILING ADDRESS (If different
from business address):           Street                     City State  Zip

 

Email Address:  

 

[Holder Signature Page]

 

14

 

 

SCHEDULE A

 

DESCRIPTION OF COLLATERAL

 

1. All of each secured parties’ right, title and interest in and to the Debtor’s
cash, real property, leasehold interests, fixtures, furniture, inventory, and
other tangible and intangible assets.

 

 

 

 

SCHEDULE B

 

 

Principal Place of Business of Debtor:

 

Miami, Florida

 

Locations Where Collateral is Located or Stored:

 

Miami, Florida and each location where the Debtor commences construction of a
Vape Store, or if the Debtor enters into leases for Vape Stores where the leased
property is located.