Exhibit 10.1

CREDIT CARD RECEIVABLES ADVANCE AGREEMENT

THIS CREDIT CARD RECEIVABLES ADVANCE AGREEMENT SUPPLEMENTS AND IS IN ADDITION TO
THE INVOICE PURCHASE AND SALE AGREEMENT (THE “FACTORING AGREEMENT”) DATED ON OR
ABOUT THE DATE HEREOF ENTERED INTO BY AND BETWEEN THE PARTIES HERETO.

This Credit Card Receivables Advance Agreement (the “Agreement”) is made as of
August 16, 2013, between ENTREPRENEUR GROWTH CAPITAL, LLC, a Delaware limited
liability company with an office located at 505 Park Avenue, 6th Floor, New
York, NY 10022 (the “Lender”) and VAPOR CORP., a Nevada corporation (“Vapor”)
and SMOKE ANYWHERE USA, INC., a Florida corporation (“Smoke Anywhere” and
together with Vapor, individually and collectively referred to herein as
“Borrower”), each having its chief operating office located at 3001 Griffin
Road, Dania Beach, FL 33312.

Preliminary Statements

(a) The Borrower has requested that the Lender periodically make Advances (as
defined below) to the Borrower. Each such Advance is to be secured by a security
interest in favor of the Lender in, among other property, the Collateral,
including but not limited to all of the Borrower’s existing and future credit
card receivables and other rights to payment arising out of the Borrower’s
acceptance or other use of any credit of charge card (collectively, “Credit Card
Receivables”).

(b) Each Advance is to be evidenced by a separate Advance Schedule (as defined
below), which is to set forth the key economic terms applicable to the Advance.
Each Advance Schedule is to be issued pursuant to and is to be subject to all
terms and conditions set forth in this Agreement; it being understood that this
Agreement is to act as a master agreement for all Advances and Advance
Schedules, if any, outstanding at any time.

(c) The Borrower has agreed to cause the Processor (as defined below) to
electronically remit the Borrower’s collected Credit Card Receivables to the
Collection Account (as defined below).

(d) The Lender and the Borrower now desire to enter into this Agreement to
memorialize their understanding regarding the Advances and the parties’
respective rights and obligations relating thereto.

NOW, THEREFORE, the parties hereto agree as follows:

1. Advances and Advance Schedules.

(a) Advances. The Lender may, in the exercise of its sole and absolute
discretion, periodically advance monies to or for the benefit of the Borrower.
Each such advance is referred to in herein as an “Advance,” and all such
advances are collectively referred to herein as “Advances.”

(b) Advance Schedules. If the Lender elects to make an Advance to the Borrower,
the Borrower agrees to execute and deliver to the Lender an advance schedule in
form and substance reasonably acceptable to Lender (each, an “Advance
Schedule”). Each Advance

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Schedule shall be subject to all terms and conditions set forth in this
Agreement and shall set forth, in addition to any other matters set forth
therein, the following:

 

  (i) the “Advance Amount,” which shall be the amount of funds agreed to by the
Lender and the Borrower in the Advance Schedule which the Lender is to advance
to or for the benefit of the Borrower under the Advance Schedule;

 

  (ii) the “Collection Amount,” which shall be the amount of funds agreed to by
the Lender and the Borrower in the Advance Schedule which the Borrower is to
remit or cause to be remitted to the Lender with respect to the Advance
described in the Advance Schedule (Note: the Collection Amount does not include
any Reimbursable Expenses (as defined below) which the Borrower may owe the
Lender with respect to the related Advance or otherwise);

 

  (iii) the “Collection Date,” which shall be the date agreed to by the Lender
and the Borrower in the Advance Schedule by which the Borrower is to cause the
Collection Amount described in the Advance Schedule to be remitted in its
entirety to the Lender;

 

  (iv) the “Collection Account,” which shall be the deposit account into which
the Processor is to deposit, via electronic funds transfer, the Borrower’s
collected Credit Card Receivables; and

 

  (v) the “Collection Account Bank,” which shall be the bank at which the
Collection Account is maintained.

(c) Discretionary Advances. In no event shall the Lender be obligated to make an
Advance to the Borrower; it being understood that any election by the Lender to
make an Advance to the Borrower may be exercised in the Lender’s sole and
absolute discretion. Without limiting the generality of the foregoing, the
Lender’s election to make an Advance on one occasion shall not obligate the
Lender to make an Advance on another occasion. Similarly, the absence of an
Event of Default shall not obligate the Lender to make an Advance.
Notwithstanding the foregoing, and without limiting any of Lender’s rights
hereunder, upon Borrower’s loan balance on a particular Advance Schedule being
reduced to no more than thirty percent (30%) of the Advance Amount, and upon
Borrower’s request, Lender may, in Lender’s sole business discretion, “re-load”
the Advance Amount and loan additional monies to Borrower upon substantially the
same terms and conditions set forth herein. Borrower understands that any
“re-loads” would be made at the sole business discretion of Lender and be
conditioned upon, among other things, Borrower’s payment history with Lender and
Borrower’s financial condition, as determined by Lender.

2. Repayment of Advances.

(a) Processor to Remit Collections to Collection Account. The Borrower
represents and warrants to the Lender that all of the Borrower’s Credit Card
Receivables are or will be processed by a processor disclosed to Lender and
reasonably acceptable to Lender (together with any subsequent successors or
assigns, the “Processor”). The Borrower agrees to execute and deliver to the
Lender, and to cause the Processor to execute and deliver to the Lender, a
payment instruction agreement in form and substance reasonably acceptable to
Lender (the “Payment Instruction Agreement”). The Payment Instruction Agreement
is to provide that (i) the Processor is to remit, via electronic funds transfer,
to the Collection Account all of the Borrower’s Credit

 

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Card Receivables collected by the Processor (net of any discounts, fees and/or
similar amounts payable to the Processor by the Borrower which the Processor is
entitled to deduct from the proceeds of the Credit Card Receivables pursuant to
the terms of the Processor Agreement (as defined below) and net of any
charge-backs, offsets and/or other amounts which the Processor is entitled to
deduct from the proceeds of the Borrower’s Credit Card Receivables pursuant to
the terms of the Processor Agreement), and (ii) the Processor must continue
transferring such funds until such time as the Lender gives the Processor
written notice that (A) the Lender has received all Collection Amounts for all
Advances then outstanding, and (B) there are no Reimbursable Expenses (each as
defined below) or other fees or charges then outstanding. If requested by the
Borrower in writing, the Lender agrees to forthwith give the foregoing notice to
the Processor if the conditions described in the preceding clauses (A) and
(B) have each been satisfied.

(b) Collection Account Bank to Remit Collections to Lender; Lender to Remit
Portion to Borrower. The Borrower agrees to execute and deliver a control
agreement or similar agreement among the Borrower, the Lender and the Collection
Account Bank (the “Control Agreement”) whereby, among other things, the Lender
shall be deemed to have “control” of the Collection Account and all funds at any
time deposited therein for purposes of UCC § 9-104(a)(2) or (3), as the Lender
so elects. The Control Agreement also is to provide that the Collection Account
Bank is to periodically remit, via electronic funds transfer, all funds on
deposit in the Collection Account to a bank account designated by the Lender
(the “Lender Account”). Insofar as funds on deposit in the Collection Account
are remitted to the Lender Account, the Lender will retain a fixed amount each
banking day (which amount will be doubled the day after a banking holiday) to
credit to the Collection Amount, in an amount as set forth in each respective
Advance Schedule (the “Fixed Daily Payment”) until the cash payments applied by
the Lender equal to the Collection Amount (plus all Reimbursable Expenses and
all other fees and charges due under this Agreement) and remit to Borrower, via
electronic funds transfer to a bank account designated by the Borrower in a
writing delivered to the Lender, the balance of all such funds in the Lender
Account; provided, however, that if the Lender, in its reasonable judgment,
deems that it is insecure at any time in the timely payment of the Collection
Amount on the basis of the then current Fixed Daily Payment, regardless of
whether an Event of Default has occurred, Borrower agrees that the Lender may
increase the Fixed Daily Payment from time to time to assure timely payment of
the Collection Amount., provided that Lender shall promptly notify Borrower in
writing any such time it increases the Fixed Daily Payment and include in such
notification the rationale for increasing the Fixed Daily Payment.

(c) In the event Borrower does not maintain sufficient balances in the
Collection Account for Lender to retain the Fixed Daily Payment, Borrower will
be subject to a five percent (5%) late fee for the amount of any deficiency,
which would be added to the Collection Amount and automatically retained from
the next daily payment.

(d) Borrower Authorizes Lender to Initiate Debit Payments From any Collection
Account. In the event Borrower does not maintain sufficient balances in the
Collection Account for Lender to retain the Fixed Daily Payment or upon the
occurrence of an Event of Default, Borrower hereby irrevocably authorizes Lender
to automatically initiate automated clearing house (“ACH”) transfers from any
bank deposit account of Borrower on file with Lender, each of which shall be
deemed to be a Collection Account, in such amounts as is provided in this
Agreement. The ACH debits shall continue, at Lender’s option, until (i) monies
are deposited into the Lender Account in an amount sufficient to retain the
Fixed Daily Payment (plus all past due amounts, Reimbursable Expenses and all
other fees and charges due under this Agreement), (ii) the Event(s) of Default
shall have been cured, or (iii) the cash payments received by the Lender equal
the Collection Amount (plus all Reimbursable Expenses and all other fees and
charges due under this Agreement).

 

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(e) Monthly True-Up. Intentionally omitted.

(f) Collection Amount Not Received by Collection Date. If the Collection Amount
specified in an Advance Schedule is not received by the Lender by the Collection
Date specified in the Advance Schedule, or if any other Event of Default exists,
the Borrower shall immediately pay to the Lender the balance of the Collection
Amount that has not yet been remitted to and received by the Lender.
Notwithstanding the Lender’s right to demand the immediate payment of all
outstanding obligations hereunder on the Collection Date, in the event
Borrower’s obligation to pay the Collection Amount (plus Reimbursable Expenses
and all other fees and charges due hereunder and under the related Agreements)
is not satisfied on or before the Collection Date, and provided Borrower is not
otherwise in default of this Agreement, in lieu of increasing the Fixed Daily
Payment, the Lender may, at the Lender’s option, continue to apply the specified
Fixed Daily Payment to the obligations of the Borrower hereunder. In
consideration of the Lender extending the Collection Date, Borrower hereby
understands and agrees that Borrower shall pay to the Lender an extension fee
equal to two percent (2%) of the highest outstanding balance of Borrower’s
obligations to Lender for each 30 day period (or part thereof) after the
Collection Date. The extension fee would automatically be charged to Borrower’s
account on the 1st day after the Collection Date and each 30 days thereafter
until the Collection Amount of the extended Advance Schedule (plus all
Reimbursable Expenses related thereto) is paid in full. Borrower further
understands and agrees that if any event or condition specified in the first
sentence of this Section 2(f) exists, the Lender may, in Lender’s reasonable
business discretion, increase the Fixed Daily Payment to 100% of the funds
received into the Collection Account and, as such, recover from the Collection
Account and/or retain in the Lender Account all amounts due the Lender under
this Agreement and/or any Related Agreements (as defined below).

3. Security Interest.

3.1 Grant of Security Interest. As security for the prompt performance,
observance and payment in full of all obligations of Borrower to Lender
hereunder and under any other agreement or arrangement between Borrower and
Lender, including but not limited to, the Factoring Agreement, Borrower hereby
pledges, assigns, transfers and grants to Lender a security interest in, and
continuing lien upon, and right of setoff against the following property,
whether such property or the Borrower’s right, title or interest therein or
thereto is now owned or existing or hereafter acquired or arising: (a) all
Accounts, including, without limitation, all Credit Card Receivables; (b) all
other payment rights arising out of the provision of goods or services by the
Borrower; (c) the Collection Account; (d) all rights to receive payments from
the Processor and all other rights arising out of or otherwise relating to the
Processor Agreement; (e) Chattel Paper, including Electronic Chattel Paper and
tangible Chattel Paper; (f) Commercial Tort Claims; (g) Documents;
(h) Equipment, machinery, furniture, furnishings and fixtures and all parts,
tools, accessories and Accessions; (i) Fixtures; (j) General Intangibles,
including but not limited to patents, trademarks and tradenames and the goodwill
and inherent value associated therewith, tax refunds, customer lists, insurance
claims and goodwill of Borrower; (k) Goods; (l) Instruments; (m) Inventory,
merchandise, materials, whether raw, work in progress or finished goods,
packaging and shipping materials and all other tangible property held for sale
or lease; (n) Investment Property; (o) Payment Intangibles; (p) Proceeds,
including Cash Proceeds and Non-Cash Proceeds, and proceeds of any insurance
policies covering any of the Collateral; (q) Promissory Notes; (r) Records,
including all books, records and other property at any time evidencing or
relating to any of the foregoing, and all electronic means of storing such
Records;

 

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(s) to the extent not otherwise included above, all collateral support and
Supporting Obligations relating to any of the foregoing; (t) to the extent not
otherwise included above, all Proceeds, products, accessions, rents and profits
of or in respect of any of the foregoing; and (u) to the extent not otherwise
included above, all of the assets and property of Borrower described in the
Factoring Agreement (collectively, the “Collateral”). All capitalized terms in
this description that are not otherwise defined shall have the meanings given to
them under the UCC. The Borrower also unconditionally and irrevocably assigns to
Lender and grants to Lender a security interest in and to all its present and
future right, title and interest to receive monies under all present and future
Processor Agreements (as hereinafter defined), all other agreements with
Processors, agents, independent sales organizations (ISO’s) and all other
persons, all of which shall be deemed to be part of the Collateral. In addition
to the foregoing, the security interest in the Collateral secures the payment
and performance of all existing and future obligations of any nature whatsoever
of the Borrower to the Lender, including, without limitation, the Borrower’s
obligation to pay all Collection Amounts, fees, and Reimbursable Expenses owing
at any time under this Agreement and/or any Related Agreements. The term
“Borrower,” as used in this Section 3, and for purposes of identifying the
debtor(s) granting the security interest in this Section 3, shall mean the
Borrower in its own capacity and as agent for each Borrower Affiliate (as
defined below).

3.2. Authorization to File Financing Statements. Borrower hereby authorizes
Lender to execute and/or file UCC financing statements (including amendments) in
order to perfect the security interests granted to Lender under this Agreement
or the Related Agreements.

4. Control of Collection Account. In addition to the matters described in
Section 2(b) above, the Control Agreement is also to provide that the Lender’s
security interest in the Collection Account is to be perfected by control for
purposes of UCC §9-104(a)(2).

5. No Change in Processor. Borrower covenants and agrees that from the date of
execution of this Agreement until all obligations have been fully paid and any
commitments of the Lender to the Borrower have been terminated, the Borrower
will not, without the Lender’s prior written consent amend or terminate the
Processor Agreement, or enter into any contractual relationship with any other
processor for the maintenance, servicing or discounting of the Borrower’s Credit
Card Receivables. Borrower further agrees that in the event Lender does not
receive the daily information or access to information from Processor and/or
Processor’s system, as provided for in this Agreement, Lender in addition to all
other rights and remedies it has, may require in its sole discretion, that
Borrower move to another Processor of Lender’s reasonable choosing.

6. Representations and Warranties. The Borrower represents and warrants to the
Lender as follows: (a) all of the information provided by the Borrower to the
Lender pursuant to this Agreement or otherwise is true, correct and complete in
all material respects; (b) the Borrower has full power and authority to enter
into this Agreement and any Related Agreements and to perform its obligations
hereunder and thereunder; (c) if the Borrower is an entity, (i) the Borrower is
duly organized , validly existing and in good standing under the laws of the
jurisdiction of its organization, and (ii) the Borrower has full organizational
power and authority to enter into this Agreement and any Related Agreements and
to pay and perform its obligations hereunder and thereunder; (d) the Borrower is
duly qualified to do business in each jurisdiction in which it conducts its
business, except where the failure to be so qualified would not have a material
adverse effect on the Borrower’s business or the Collateral or the
enforceability of this Agreement; (e) this Agreement is the legal and valid
obligation of the Borrower, enforceable against the Borrower in accordance with
its terms, subject to bankruptcy, insolvency, reorganization, moratorium and
similar laws of general application relating to or affecting creditors’ rights;
(f) the Borrower is solvent, has not made an assignment for the benefit of
creditors or filed in any court, pursuant

 

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to any statute of the United States or any state, a petition for bankruptcy or
insolvency, or filed for reorganization or for the appointment of a receiver or
trustee of all or a material portion of its property, and the Borrower does not
have reason to believe any involuntary bankruptcy action or order will be filed
with respect to the Borrower; (g) all amounts are due with respect to all Credit
Card Receivables are due in United States Dollars; (h) any taxes or fees
relating to any Credit Card Receivables or goods or services sold by the
Borrower are solely the Borrower’s responsibility; (i) the historical Credit
Card Receivable data provided by the Borrower to the Lender does not represent
sales to any subsidiary, equity holder or other affiliate; (j) the Lender has a
perfected security interest in the Collateral subject to no other security
interest, lien or claim; (k) the Borrower has provided to the Lender a copy of
all its processor or similar agreements with the Processor (collectively, and as
amended or otherwise modified from time to time, the “Processor Agreement”); and
(l) the Borrower or any officer of the Borrower nor any guarantor of the
Borrower’s obligations hereunder has been or currently is on any processor’s
Terminated Borrower File (“TMF”) or similar file or list, commonly known and
referred to as the MATCH list or BLACKLIST.

7. Covenants. The Borrower agrees as follows: (a) to conduct its business and
use all Advances in the ordinary course of its business and consistent with its
past practices; (b) to exclusively use the Processor to process all of its
charge card, credit card and debit card transactions which give rise to Credit
Card Receivables; (c) not to take any action to discourage the use of charge
cards, credit cards or debit cards or to permit any event to occur which could
have a material adverse effect on the use, acceptance or authorization of charge
cards, credit cards or debit cards for the purchase of the Borrower’s services
and products; (d) not to change its arrangements with Processor without
obtaining the prior written consent of the Lender; (e) not to permit any event
to occur that could cause a diversion of any of the Borrower’s charge card,
credit card or debit card transactions to another charge, credit or debit card
processor or to another charge, credit or debit card network or association;
(f) to hold all proceeds of Collateral remitted directly to Borrower or to a
bank deposit account that is not Collection Account or to a deposit account over
which Lender does not have control, in trust for Lender, and Borrower shall
deliver all such proceeds to Lender in kind, with appropriate endorsements or by
federal wire transfer if received electronically, on the next business day
following receipt by Borrower; (g) to comply in all material respects with all
of the terms and conditions imposed by the Processor and/or any applicable
charge, credit or debit card network, association or bank; (h) to provide the
Lender with at least 10 days’ prior written notice of any event which would
cause any of the information provided by the Borrower to the Lender in this
Agreement or otherwise to be untrue, incorrect or incomplete in any respect;
(i) to provide the Lender with at least 30 days’ prior written notice of the
partial or full closing of any of Borrower’s locations; (j) not to grant any
lien on or security interest in, or sell, assign transfer, pledge or otherwise
dispose of, any Credit Card Receivables or other Collateral existing or arising
on or after the date of this Agreement; (k) to comply in all material respects
with all material laws, rules and regulations applicable to the Borrower; (l) to
immediately inform Lender if Borrower, any officer of the Borrower or any
guarantor of the Borrower’s obligations hereunder has knowledge that any such
person is put on or is associated in any way to any Processor TMF list or MATCH
list or similar file or list; (m) to permit the Lender and persons designated by
the Lender to inspect and copy all books and records (electronic or otherwise)
of the Borrower, including, without limitation, all such books and records
relating to the Collateral; and (n) not to sell, assign, transfer, pledge or
otherwise dispose of a substantial portion of Borrower’s business or assets. In
addition, the Borrower covenants and agrees that each Credit Card Receivable
will (x) be based upon a bona fide sale and delivery of inventory or rendition
of services made by the Borrower in the ordinary course of its business, and
(y) represent a payment obligation for goods or services accepted by the
Borrower’s customer and with respect to which such customer is obligated to pay
the full amount and without dispute, claim, offset, defense, deduction,
rejection, recoupment, counterclaim or otherwise.

8. Loan Proceeds for Ordinary Business Use Only. Any Advance at any time
received by the Borrower from Lender shall not be used directly or indirectly
other than in the Borrower’s business;

 

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Borrower shall not, directly or indirectly, make any loan to, or pay any claim
other than for current remuneration or current reimbursable expense payable to
any person controlling, controlled by or under common control with the Borrower,
and Borrower shall, on demand, obtain and deliver to Lender subordinations in
form and substance satisfactory to Lender of all claims of controlling and
controlled persons that are on parity with or senior in right of payment or
otherwise to the Obligations consistent with the foregoing. To the contrary
notwithstanding, the Borrower may continue to service indebtedness subordinate
to the Obligations owed as of the date hereof to any person controlling,
controlled by or under common control with the Borrower in accordance with the
repayment terms of such indebtedness in effect as of the date hereof until the
occurrence of an Event of Default.

9. Credit Investigation; Inspection Rights. The Borrower irrevocably authorizes
the Lender and its agents: (a) to investigate any references or any other
information provided by the Borrower or obtained from or about the Borrower for
purposes of this Agreement or any Related Agreements; (b) to obtain any
information from the Processor regarding the Borrower, including, without
limitation, any information relating to the Borrower’s Credit Card Receivables;
(c) if the Lender so elects, to contact and obtain any information from any
account debtors or other persons liable for or involved in the payment,
collection, processing or any other aspect of the Borrower’s Credit Card
Receivables and/or the collection or payment thereof.

10. Borrower’s Use of Trade Names; Borrower Affiliates. If the Borrower’s Credit
Card Receivables are payable to the Borrower under one or more trade names,
fictitious names, assumed names or other designations (collectively, “Trade
Names”), the Borrower authorizes the Processor and, to the extent applicable,
the Collection Account Bank and the Lender to receive and retain, to the extent
provided herein or in any Related Agreements, all Credit Card Receivables owing
to the Borrower under any Trade Names. Similarly, if any financial information,
historical data or other information provided by the Borrower to the Lender
relates to any credit card or debit card receivables or the like owing or
otherwise payable to any corporate affiliates of the Borrower (each, a “Borrower
Affiliate”), (a) the Borrower represents and warrants to the Lender that each
such Borrower Affiliate has authorized the Borrower, as the Borrower Affiliate’s
agent, to take all action described in or contemplated by this Agreement or any
Related Agreements with respect to such Borrower Affiliate’s receivables,
including, without limitation, the granting of the security interest in the
Borrower Affiliate’s assets described in Section 3 above, and (b) unless the
context clearly requires otherwise, all references in this Agreement or any
Related Agreements to “Borrower” shall be deemed to refer to the Borrower on its
own behalf and as agent for all Borrower Affiliates.

11. Events of Default. The occurrence of any of the following actions shall
constitute an “Event of Default” under this Agreement: (a) the Borrower fails to
pay, perform or observe any material obligation of the Borrower to the Lender
under this Agreement, provided, however, if Borrower fails to pay any Collection
Amounts as a result of a Processor or Collection Account Bank electronic error
beyond the control of Borrower, Borrower shall have five (5) business days to
cure such payment default, but such cure period shall not prohibit Lender from
exercising remedies as set forth in Section 12(a) below; (b) if collections into
the Lender Account are insufficient to retain the Fixed Daily Payment on either
two (2) consecutive days in any thirty (30) day period or five (5) days in any
thirty (30) day period ; (c) any representation or warranty made at any time by
the Borrower to the Lender, or any information regarding the Borrower supplied
at any time by the Borrower to the Lender regarding the Borrower or its
business, shall prove to be false or misleading in any material respect; (d) any
bankruptcy or other insolvency action shall be filed by the Borrower or against
the Borrower and such involuntary action is not vacated within thirty (30) days
of being initiated or any receiver shall be appointed; (e) the Borrower violates
any material covenant or other material provisions of any of the Related
Agreements (including the occurrence of an event of default under the Factoring
Agreement), including but not limited to, the

 

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Payment Instruction Agreement and the Processor Agreement, or the Borrower
utilizes any person other than the Processor to process any Credit Card
Receivables and such violation is not cured within three (3) business days of
occurrence ; (f) any material adverse change occurs in the financial condition
of the Borrower, including but not limited to, Borrower’s default under any
third party agreements, including real estate leases, equipment leases or any
other financing agreements that result in such third party accelerating the debt
owed by Borrower or initiating enforcement actions against Borrower; or (g) the
Lender, acting in good faith, deems itself insecure.

12. Remedies. Upon the occurrence of an Event of Default, the Lender (a) shall
be entitled to exercise all rights and remedies specified in this Agreement
and/or any of the Related Agreements, including, but not limited to, increasing
the Fixed Daily Payments in such amount as Lender deems reasonable as a result
of such default and/or initiating ACH debits to one or more Borrower bank
deposit accounts as provided in Section 2(d) above (whereupon increasing the
Fixed Daily Payments or initiating ACH debits shall be deemed to cure such Event
of Default), (b) shall be entitled to assess, in addition to all other rights,
remedies and fees, a Default Rate of interest on all outstanding obligations of
the Borrower under this Agreement at the default rate of 18% per annum (the
“Default Rate”) and such default interest shall be payable on demand. The
Default Rate shall be computed on the basis of a 360-day year for the actual
number of days elapsed and shall be computed on the daily outstanding balance of
Borrower’s obligations for each day Borrower remains in default or until all
obligations are paid in full, whichever is earlier; (c) shall have all rights
and remedies of a secured party upon default under the UCC, and (d) shall be
entitled to exercise all other rights available to it at law or in equity. All
rights and remedies of the Lender shall be cumulative, and no failure or delay
in exercising any right or remedy by the Lender shall preclude the Lender from
exercising the same or any other right or remedy.

13. Reimbursable Expenses. The Borrower agrees to reimburse the Lender on demand
for the following (collectively, “Reimbursable Expenses”): (a) all reasonable
out-of-pocket costs and expenses incurred at any time by the Lender in
connection with any due diligence and/or credit investigation of the Borrower;
(b) reasonable internal documentation fees and external attorney’s fees and
expenses incurred with respect to the negotiation, preparation, consummation,
administration and/or any amendment of this Agreement, the Related Agreements
and any other agreements between the Borrower and the Lender, including, without
limitation, any guaranty of all or any portion of the Borrower’s obligations to
the Lender, which internal fees shall be reasonably determined by the Lender
based upon the time expended in conducting any of the foregoing matters; (c) any
review or verification of the Borrower’s Credit Card Receivables, any public
records searches and the filing or other recordation of any Uniform Commercial
Code financing statements or other documents necessary or, in the Lender’s
reasonable judgment, desirable to perfect or preserve the security interest and
other rights or remedies granted or available to the Lender under this
Agreement; (d) a service charge of $50.00 for each federal wire transfer
initiated by or on behalf of the Lender to or for the benefit of the Borrower or
at Borrower’s option, $10.00 for each Automated Clearing House (“ACH”) transfer
initiated by or on behalf of the Lender to or for the benefit of the Borrower;
(e) a service charge for disbursements made to third parties in an amount equal
to 15% of the amount for each check issued by the Lender to the Borrower or to a
third party for or on behalf of the Borrower’s account; and (f) so long as any
Event of Default is in effect, all reasonable costs and expenses incurred by the
Lender to enforce any of its rights and remedies under this Agreement and any
Related Agreements, including, without limitation, all internal and external
attorneys’ fees and expenses and all experts’ and advisors’ fees and expenses
incurred by the Lender in connection therewith. In furtherance thereof, Borrower
hereby authorizes Lender to retain monies from the Lender Account for the
payment of any and all Reimbursable Expenses.

14. Indemnification. The Borrower agrees to indemnify, defend and hold harmless
the Lender and its equity holders, officers, managers, employees and agents from
and against any damages, claims, liabilities, costs, expenses and/or other
losses, including, without limitation, reasonable attorney’s

 

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fees and court costs, arising out of or otherwise relating in any respect to
this Agreement and/or any Related Agreements, the transactions contemplated
hereby and/or the exercise or enforcement of any rights of the Lender in
connection therewith, except insofar as any such indemnified losses arise out of
the gross negligence or willful misconduct of an indemnified party. This Section
shall survive any termination of this Agreement.

15. Power of Attorney. The Borrower irrevocably designates, makes, constitutes
and appoints the Lender, and all persons designated by the Lender, as the
Borrower’s true and lawful attorney and agent-in-fact (such power of attorney
and agency being coupled with an interest and therefore irrevocable until all of
the Borrower’s obligations hereunder to the Lender have been satisfied), and the
Lender, and any persons designated by the Lender, may, at any time except as
otherwise provided below, and without notice to or the consent of the Borrower
and in either the Borrower’s or the Lender’s name, (a) pay and/or perform any
obligations of the Borrower under this Agreement or any of the Related
Agreements, (b) receive payments relating to the Collateral in the Borrower’s
name and endorse the Borrower’s name on any checks, notes, acceptances, drafts,
money orders or any other evidence of payment or proceeds of any Collateral
which come into the possession of the Lender or its agents or under the Lender’s
or its agents’ control, and (c) at any time an Event of Default exists, (i) to
the extent the Collateral consists of accounts receivable, enforce payment of
the accounts by legal proceedings or otherwise and generally exercise all of the
Borrower’s rights and remedies with respect to the collection of the accounts,
(ii) settle, adjust, compromise, discharge or release any accounts or other
Collateral or any legal proceedings brought to collect any of the accounts or
other Collateral, (iii) sell or otherwise transfer any Collateral upon such
terms, for such amounts and at such time or times as the Lender deems advisable,
(iv) take control, in any manner, of any item of payment or proceeds relating to
any Collateral, (v) prepare, file and sign the Borrower’s name to a proof of
claim in bankruptcy or similar document against any account debtor, (vi) use the
information recorded on or contained in any data processing equipment and
computer hardware and software relating to accounts and any other Collateral and
to which the Borrower has access, and (vii) do all other acts and things
necessary, in the Lender’s reasonable determination, to fulfill the Borrower’s
obligations under this Agreement and the Related Agreements.

16. Miscellaneous Definitions. The following terms have the following meanings
in this Agreement (capitalized terms defined in this Section, or elsewhere in
this Agreement, in the singular are to have a corresponding meaning when used in
the plural, and vice versa):

(a) “Related Agreements” means the Factoring Agreement, the Control Agreement,
the Payment Instruction Agreement, all Advance Schedules and all other written
agreements to which the Lender and the Borrower are parties from time to time,
as any of the foregoing may be amended or otherwise modified from time to time.

(b) “UCC” means Article 9 of the Uniform Commercial Code as in effect in the
State of New York from time to time.

17. Miscellaneous.

(a) Entire Agreement; Waiver. This Agreement constitutes the entire agreement
between the parties with regard to the subject matter hereof, and supersedes any
prior agreements or understandings with regard to the subject matter hereof.
This Agreement can be changed only by a writing signed by all parties. The
failure or delay of the Lender in exercising any right hereunder will not
constitute a waiver thereof or bar the Lender from exercising any of its rights
at any time.

 

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(b) One General Obligation; Cross Collateral. The Borrower understands and
agrees that all loans and advances by Lender to Borrower under this Agreement,
all Advance Schedules and the other Related Agreements, constitute one loan, and
all indebtedness and obligations of Borrower to Lender under this Agreement, all
Advance Schedules and the Related Agreements, present and future, constitute one
general obligation secured by the Collateral and security held and to be held by
Lender hereunder and the Related Agreements. If more than one Borrower, each
Borrower shall be jointly and severally liable for payment of all of the
obligations hereunder, the Related Agreements and under any other agreement
between Lender and any Borrower. It is distinctly understood and agreed that all
of the rights of Lender contained in this Agreement shall likewise apply insofar
as applicable to any modification of or supplement to this Agreement and the
Related Agreements.

(c) Interest Rate “Savings Clause”. Notwithstanding anything to the contrary in
this Agreement, (i) all agreements and communications between the Borrower and
the Lender are hereby and shall automatically be limited so that, after taking
into account all amounts deemed interest under this Agreement, the interest
contracted for, charged or received by the Lender shall never exceed the maximum
lawful rate or amount, (ii) in calculating whether any interest exceeds the
lawful maximum, all such interest shall be amortized, prorated, allocated, and
spread over the full amount and term of all principal indebtedness of the
Borrower to the Lender, and (iii) if through any contingency or event, the
Lender receives or is deemed to receive interest in excess of the lawful
maximum, any such excess shall be deemed to have been applied toward payment of
the principal of any and all then outstanding indebtedness of the Borrower to
the Lender, or if there is no such indebtedness, shall immediately be returned
to the Borrower.

(d) Governing Law; Consent to Forum. This Agreement shall be governed by the
laws of the State of New York without giving effect to any choice of law rules
thereof. As part of the consideration for new value this day received, the
Borrower consents to the jurisdiction of any state court located within New York
County, New York or any federal court located in New York County, New York
(collectively, the “Chosen Forum”), and waives personal service of any and all
process upon it and consents that all such service of process be made by
certified or registered mail directed to the Borrower at its most recent address
as reflected in the Lender’s records, and service so made shall be deemed to be
completed upon delivery thereto. The Borrower waives any objection to
jurisdiction and venue of any action instituted against it as provided herein
and agrees not to assert any defense based on lack of jurisdiction or venue. The
Borrower further agrees not to assert against the Lender (except by way of a
defense or counterclaim in a proceeding initiated by the Lender) any claim or
other assertion of liability relating to any of this Agreement, any of the
Related Agreements, the Collateral or the Lender’s actions or inactions in
respect of any of the foregoing in any jurisdiction other than the Chosen Forum.
Nothing in this Agreement shall affect the Lender’s right to bring any action or
proceeding relating to this Agreement or the Related Agreements against the
Borrower or its properties in courts of other jurisdictions.

(e) Waiver of Jury Trial; Limitation on Damages. To the fullest extent permitted
by law, and as separately bargained-for consideration to the Lender, the
Borrower waives any right to trial by jury (which the Lender also waives) in any
action, suit, proceeding or counterclaim of any kind arising out of or otherwise
relating to any of this Agreement, the Related Agreements, the Collateral or the
Lender’s actions or inactions in respect of any of the foregoing. To the fullest
extent permitted by law, and as separately bargained-for consideration to the
Lender, the Borrower also waives any right it may have at any time to claim or
recover in any litigation or other dispute involving the Lender, whether the
underlying claim or dispute sounds in contract, tort or otherwise, any special,
exemplary, punitive or consequential damages or any damages

 

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other than, or in addition to, actual damages. The Borrower acknowledges that
the Lender is relying upon and would not enter into the transactions described
in this Agreement on the terms and conditions set forth herein but for the
Borrower’s waivers and agreements under this Section.

(f) General Waivers by Borrower. Except as otherwise expressly provided for in
this Agreement, the Borrower waives: (i) presentment, protest, demand for
payment, notice of dishonor demand and protest and notice of presentment,
default, notice of nonpayment, maturity, release, compromise, settlement,
extension or renewal of any or all accounts, contract rights, documents,
instruments, chattel paper and guaranties at any time held by the Lender on
which the Borrower may in any way be liable and ratifies and confirms whatever
the Lender may do in this regard; (ii) notice prior to taking possession or
control of the Collateral or any bond or security which might be required by any
court prior to allowing the Lender to exercise any of the Lender’s remedies,
including the issuance of an immediate writ of possession; (iii) the benefit of
all valuation, appraisement and exemption laws; and (iv) any and all other
notices, demands and consents in connection with the delivery, acceptance,
performance, default or enforcement of this Agreement or any of the Related
Agreements and/or any of the Lender’s rights in respect of the Collateral. The
Borrower also waives any right of setoff or similar right the Borrower may at
any time have against the Lender as a defense to the payment or performance of
the Borrower’s obligations to the Lender under this Agreement or any of the
Related Agreements.

(g) Disbursing Agent. The Borrowers hereby appoint VAPOR CORP. as the
“Disbursing Agent” to the Borrowers as it is in the best interest and
convenience of the Borrowers that all Advances made by Lender pursuant to this
Agreement be made only to the Disbursing Agent rather than to each of the
Borrowers individually. Accordingly, the Disbursing Agent shall be the sole
entity entitled to receive the funds advanced by Lender under this Agreement and
the Disbursing Agent shall make disbursements to the Borrowers as reasonably
requested by each Borrower to conduct its respective business. Moreover, the
Disbursing Agent and each Borrower agree that the Collection Amount shall be
collected from the Collection Account. All of the proceeds received by Lender
will be credited by Lender to the Disbursing Agent’s account and the Disbursing
Agent shall have the sole authority to further credit any such collections to
each Borrower, individually. Each Borrower hereby irrevocably waives any claim
it may have against Lender and hereby indemnifies and holds Lender harmless from
and against all damages, losses, claims, demands, liabilities, obligations,
actions and causes of action whatsoever which such Borrower may have against
Lender which may arise as a result of Advances being made by Lender solely to
the Disbursing Agent and/or collections being credited by Lender solely to the
Disbursing Agent’s account with Lender.

(h) Successors and Assigns. This Agreement binds and benefits each party and its
successors, heirs and assigns, as applicable; provided, however, that the
Borrower may not assign this Agreement or any of its rights or obligations
hereunder without obtaining the prior written consent of the Lender.

(i) Severability; Section Headings. Wherever possible, each provision of this
Agreement and each Related Agreement shall be interpreted in such manner as to
be effective and valid under applicable law, but if any provision of this
Agreement or any Related Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement of such Related Agreement, as the
case may be. Section headings herein and any Related Agreements are for
convenience only and are not controlling.

 

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(j) Counterparts; Fax Signatures. This Agreement and any Related Agreements may
be executed and delivered in any number of counterparts (whether facsimile, PDF
or original), each of which shall be deemed an original as to the party whose
signature appears thereon and all of which together shall constitute one and the
same instrument. An executed facsimile or PDF of this Agreement or any Related
Agreement shall be deemed a valid and binding agreement between the parties
hereto or thereto.

(k) Confidentiality. The Lender (including any designee or representative
thereof) shall hold all non-public information about the Borrower obtained
pursuant to the terms of this Agreement confidential; provided, however, the
Lender may disclose such confidential information (a) to its examiners,
affiliates, outside auditors, counsel and other professional advisors, (b) as
required or requested by any governmental body or agency and (c) in connection
with the enforcement of this Agreement; provided, further that (i) unless
specifically prohibited by applicable law, rule or regulation, the Lender shall
use its reasonable best efforts prior to disclosure thereof, to notify the
Borrower of the applicable request for disclosure of such non-public information
by a governmental body or agency and (ii) in no event shall the Lender be
obligated to return any materials furnished by the Borrower other than those
documents and instruments in possession of the Lender in order to perfect its
security interests in the Collateral once the obligations have been paid in full
and this Agreement has been terminated.

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signature page follows

 

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IN WITNESS WHEREOF, the undersigned have entered into this Agreement by their
duly authorized representatives as of the date first written above.

 

ENTREPRENEUR GROWTH CAPITAL, LLC     VAPOR CORP. Lender     Borrower By:  

 

    By:  

 

  Name:       Name:   Harlan Press   Title:       Title:   Chief Financial
Officer         SMOKE ANYWHERE USA, INC.       Borrower       By:  

 

        Name:   Harlan Press         Title:   Chief Financial Officer  

STATE OF                         )ss.:

COUNTY OF                     )

On this         day of August, 2013 before me personally appeared Harlan Press,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual whose name is subscribed to the within instrument and
acknowledged to me that he/she is the Chief Financial Officer of VAPOR CORP.,
the corporation herein described and that he/she executed the same in his/her
capacity as an officer of said corporation, and that he/she signed the
instrument by order of the board of directors of said corporation.

 

 

 

Notary Public

 

STATE OF                     )ss.:

COUNTY OF                 )

On this         day of August, 2013 before me personally appeared Harlan Press,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual whose name is subscribed to the within instrument and
acknowledged to me that he/she is the Chief Financial Officer of SMOKE ANYWHERE
USA, INC., the corporation herein described and that he/she executed the same in
his/her capacity as an officer of said corporation, and that he/she signed the
instrument by order of the board of directors of said corporation.

 

 

 

Notary Public

 

 

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