SECURITIES PURCHASE AGREEMENT

THIS SECURITIES PURCHASE AGREEMENT (this “Agreement”), dated as of November 4,
2014, is entered into by and between VAPOR HUB INTERNATIONAL INC., a Nevada
corporation (“Company”), and TYPENEX CO-INVESTMENT, LLC, a Utah limited
liability company, its successors and/or assigns (“Investor”).

A.

Company and Investor are executing and delivering this Agreement in reliance
upon the exemption from securities registration afforded by the rules and
regulations promulgated by the United States Securities and Exchange Commission
(the “SEC”) under the Securities Act of 1933, as amended (the “1933 Act”).

B.

Investor desires to purchase and Company desires to issue and sell, upon the
terms and conditions set forth in this Agreement, a Secured Convertible
Promissory Note, in the form attached hereto as Exhibit A, in the original
principal amount of $1,687,500.00 (the “Note”), convertible into shares of
common stock, $0.001 par value per share, of Company (the “Common Stock”), upon
the terms and subject to the limitations and conditions set forth in such Note.

C.

This Agreement, the Note, the Security Agreement (as defined below), the
Investor Notes (as defined below), and all other certificates, documents,
agreements, resolutions and instruments delivered to any party under or in
connection with this Agreement, as the same may be amended from time to time,
are collectively referred to herein as the “Transaction Documents”.

D.

For purposes of this Agreement: “Conversion Shares” means all shares of Common
Stock issuable upon conversion of all or any portion of the Note and
“Securities” means the Note and the Conversion Shares.

NOW, THEREFORE, Company and Investor hereby agree as follows:

1.

Purchase and Sale of Securities.

1.1.

Purchase of Securities. Company shall issue and sell to Investor and Investor
agrees to purchase from Company the Note. In consideration thereof, Investor
shall pay (i) the amount designated as the initial cash purchase price on
Investor’s signature page to this Agreement (the “Initial Cash Purchase Price”),
and (ii) issue to Company the Investor Notes (the sum of the initial principal
amount of the Investor Notes, together with the Initial Cash Purchase Price, the
“Purchase Price”). The Purchase Price and the OID (as defined herein) are
allocated to the Tranches (as defined in the Note) of the Note as set forth in
the table attached hereto as Exhibit B.

1.2.

Form of Payment. On the Closing Date, (i) Investor shall pay the Purchase Price
to Company by delivering the following at the Closing: (A) the Initial Cash
Purchase Price, which shall be delivered by wire transfer of immediately
available funds to Company, in accordance with Company’s written wiring
instructions; (B) Investor Note #1 in the principal amount of $100,000.00 duly
executed and substantially in the form attached hereto as Exhibit C (“Investor
Note #1”); (C) Investor Note #2 in the principal amount of $100,000.00 duly
executed and substantially in the form attached hereto as Exhibit C (“Investor
Note #2”); (D) Investor Note #3 in the principal amount of $150,000.00 duly
executed and substantially in the form attached hereto as Exhibit C (“Investor
Note #3”); (E) Investor Note #4 in the principal amount of $150,000.00 duly
executed and substantially in the form attached hereto as Exhibit C (“Investor
Note #4”); (F) Investor Note #5 in the principal amount of $150,000.00 duly
executed and substantially in the form attached hereto as Exhibit C (“Investor
Note #5”); (G) Investor Note #6 in the principal amount of $150,000.00 duly
executed and substantially in the form

attached hereto as Exhibit C (“Investor Note #6”); (H) Investor Note #7 in the
principal amount of $150,000.00 duly executed and substantially in the form
attached hereto as Exhibit C (“Investor Note #7”); (I) Investor Note #8 in the
principal amount of $150,000.00 duly executed and substantially in the form
attached hereto as Exhibit C (“Investor Note #8”); (J) Investor Note #9 in the
principal amount of $150,000.00 duly executed and substantially in the form
attached hereto as Exhibit C (“Investor Note #9”); and (K) Investor Note #10 in
the principal amount of $150,000.00 duly executed and substantially in the form
attached hereto as Exhibit C (“Investor Note #10”, and together with Investor
Note #1, Investor Note #2, Investor Note #3, Investor Note #4, Investor Note #5,
Investor Note #6, Investor Note #7,  Investor Note #8, and Investor Note #9, the
“Investor Notes”); and (ii) Company shall deliver the duly executed Note on
behalf of Company, to Investor, against delivery of such Purchase Price.

1.3.

Closing Date. Subject to the satisfaction (or written waiver) of the conditions
set forth in Section 5 and Section 6 below, the date and time of the issuance
and sale of the Securities pursuant to this Agreement (the “Closing Date”) shall
be 5:00 p.m., Eastern Time on or about November 4, 2014, or such other mutually
agreed upon time. The closing of the transactions contemplated by this Agreement
(the “Closing”) shall occur on the Closing Date at the offices of Investor
unless otherwise agreed upon by the parties.

1.4.

Collateral for the Note. The Note shall be secured by the collateral set forth
in that certain Security Agreement attached hereto as Exhibit D listing all of
the Investor Notes as security for Company’s obligations under the Transaction
Documents (the “Security Agreement”).

1.5.

Collateral for Investor Notes. Initially, none of the Investor Notes will be
secured, but all or any of the Investor Notes may become secured subsequent to
the Closing by such collateral and at such time as determined by Investor in its
sole discretion. In the event Investor desires to secure any of the Investor
Notes, Company shall timely execute any and all amendments and documents and
take such other measures requested by Investor that are necessary or advisable
in order to properly secure the applicable Investor Notes.

1.6.

Original Issue Discount; Transaction Expenses. The Note carries an original
issue discount of $80,000.00 (the “OID”). In addition, Company agrees to pay
$7,500.00 to Investor to cover Investor’s legal fees, accounting costs, due
diligence, monitoring and other transaction costs incurred in connection with
the purchase and sale of the Securities (the “Transaction Expense Amount”), all
of which amount is included in the initial principal balance of the Note. The
Purchase Price, therefore, shall be $1,600,000.00, computed as follows:
$1,687,500.00 original principal balance, less the OID, less the Transaction
Expense Amount. The Initial Cash Purchase Price shall be the Purchase Price less
the sum of the initial principal amounts of the Investor Notes. The OID and the
Transaction Expense Amount allocated to the Initial Cash Purchase Price are set
forth on Exhibit B.

2.

Investor’s Representations and Warranties. Investor represents and warrants to
Company that: (i) this Agreement has been duly and validly authorized; (ii) this
Agreement constitutes a valid and binding agreement of Investor enforceable in
accordance with its terms; (iii) Investor is an “accredited investor” as that
term is defined in Rule 501(a) of Regulation D of the 1933 Act, and (iv) this
Agreement and the Investor Notes have been duly executed and delivered on behalf
of Investor.

3.

Representations and Warranties of Company. Company represents and warrants to
Investor that: (i) Company is a corporation duly organized, validly existing and
in good standing under the laws of its state of incorporation and has the
requisite corporate power to own its properties and to carry on its business as
now being conducted; (ii) Company is duly qualified as a foreign corporation to
do business and is in good standing in each jurisdiction where the nature of the
business conducted or property owned by it makes such qualification necessary;
(iii) each of the Transaction Documents and the transactions contemplated hereby
and thereby, have been duly and validly authorized by Company; (iv) this
Agreement, the Note, the Security Agreement, and the other Transaction Documents
have been duly

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executed and delivered by Company and constitute the valid and binding
obligations of Company enforceable in accordance with their terms, subject as to
enforceability only to general principles of equity and to bankruptcy,
insolvency, moratorium, and other similar laws affecting the enforcement of
creditors’ rights generally; (v) the execution and delivery of the Transaction
Documents by Company, the issuance of Securities in accordance with the terms
hereof, and the consummation by Company of the other transactions contemplated
by the Transaction Documents do not and will not conflict with or result in a
breach by Company of any of the terms or provisions of, or constitute a default
under (a) Company’s formation documents or bylaws, each as currently in effect,
(b) any indenture, mortgage, deed of trust, or other material agreement or
instrument to which Company is a party or by which it or any of its properties
or assets are bound, including any listing agreement for the Common Stock, or
(c) to Company’s knowledge, any existing applicable law, rule, or regulation or
any applicable decree, judgment, or order of any court, United States federal or
state regulatory body, administrative agency, or other governmental body having
jurisdiction over Company or any of Company’s properties or assets; (vi) no
further authorization, approval or consent of any court, governmental body,
regulatory agency, self-regulatory organization, or stock exchange or market or
the stockholders or any lender of Company is required to be obtained by Company
for the issuance of the Securities to Investor; (vii) since March 14, 2014, none
of Company’s filings with the SEC contained, at the time they were filed, any
untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements made therein,
in light of the circumstances under which they were made, not misleading; (viii)
since March 14, 2014 and other than with respect to that certain Current Report
on Form 8-K filed on April 3, 2014 reporting events which occurred on March 24,
2014, Company has filed all reports, schedules, forms, statements and other
documents required to be filed by Company with the SEC under the Securities
Exchange Act of 1934, as amended (the “1934 Act”) on a timely basis or has
received a valid extension of such time of filing and has filed any such report,
schedule, form, statement or other document prior to the expiration of any such
extension; (ix) Company has not been a “Shell Company,” as such type of “issuer”
is described in Rule 144(i)(1) under the 1933 Act since March 7, 2014; (x)
except with respect to fees payable to MSC-BD, LLC in connection with the Note
and the transactions contemplated hereby, Company has taken no action which
would give rise to any claim by any person or entity for a brokerage commission,
placement agent or finder’s fees or similar payments by Investor relating to the
Note or the transactions contemplated hereby; (xi) except for such fees arising
as a result of any agreement or arrangement entered into by Investor without the
knowledge of Company (an “Investor’s Fee”), Investor shall have no obligation
with respect to such fees or with respect to any claims made by or on behalf of
other persons for fees of a type contemplated in this subsection that may be due
in connection with the transactions contemplated hereby and Company shall
indemnify and hold harmless each of Investor, Investor’s employees, officers,
directors, stockholders, managers, agents, and partners, and their respective
affiliates, from and against all claims, losses, damages, costs (including the
costs of preparation and attorneys’ fees) and expenses suffered in respect of
any such claimed or existing fees (other than an Investor’s Fee, if any), and
(xii) when issued, each of the Securities will be validly issued, fully paid for
and non-assessable, free and clear of all liens, claims, charges and
encumbrances.

4.

Company Covenants. Until all of Company’s obligations hereunder are paid and
performed in full, or within the timeframes otherwise specifically set forth
below, Company shall comply with the following covenants: (i) on or before
February 28, 2015, Company will have registered its Common Stock under
Section 12(g) of the 1934 Act, and shall be obligated to file reports pursuant
to Section 13 or Section 15(d) of the 1934 Act; (ii) from the date hereof until
the date that is six (6) months after all the Conversion Shares either have been
sold by Investor, or may permanently be sold by Investor without any
restrictions pursuant to Rule 144, Company shall timely make all filings
required to be made by it under the 1933 Act, the 1934 Act, Rule 144 or any
United States securities laws and regulations thereof applicable to Company or
by the rules and regulations of its principal trading market, and such filings
shall conform in all material respects to the requirements of applicable laws,
regulations and government agencies; (iii) so long as Investor beneficially owns
any of the Securities and for at least twenty (20) Trading Days thereafter,
Company shall file all reports required to be filed with the SEC pursuant to
Sections 13 or 15(d) of the 1934 Act, and shall take all reasonable action under
its control to

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ensure that adequate current public information with respect to Company, as
required in accordance with Rule 144, is publicly available, and shall not
terminate its status as an issuer required to file reports under the 1934 Act
even if the 1934 Act or the rules and regulations thereunder would permit such
termination; (iv) the Common Stock shall be listed or quoted for trading on any
of (a) the NYSE Amex, (b) the New York Stock Exchange, (c) the Nasdaq Global
Market, (d) the Nasdaq Capital Market, (e) the OTC Bulletin Board, (f) the
OTCQX, (g) the OTCQB or (h) the OTC Pink; (v) when issued, each of the
Securities (including, without limitation, the Conversion Shares), will be
validly issued, fully paid for and non-assessable, free and clear of all liens,
claims, charges and encumbrances, (vi) Company shall use the net proceeds
received hereunder for working capital and general corporate purposes only;
provided, however, Company will not use such proceeds to pay fees payable to any
broker or finder relating to the offer and sale of the Securities unless such
broker, finder, or other party is a registered investment adviser or registered
broker-dealer and such fees are paid in full compliance with all applicable laws
and regulations; and (vii) from and after the date hereof and until all of
Company’s obligations hereunder and the Note are paid and performed in full,
Company shall not transfer, assign, sell, pledge, hypothecate or otherwise
alienate or encumber the Investor Notes in any way without the prior written
consent of Investor.

5.

Conditions to Company’s Obligation to Sell. The obligation of Company hereunder
to issue and sell the Securities to Investor at the Closing is subject to the
satisfaction, at or before the Closing Date, of each of the following
conditions:

5.1.

Investor shall have executed this Agreement and the Investor Notes and delivered
the same to Company.

5.2.

Investor shall have delivered the Initial Cash Purchase Price to Company in
accordance with Section 1.2 above.

6.

Conditions to Investor’s Obligation to Purchase. The obligation of Investor
hereunder to purchase the Securities at the Closing is subject to the
satisfaction, at or before the Closing Date, of each of the following
conditions, provided that these conditions are for Investor’s sole benefit and
may be waived by Investor at any time in its sole discretion:

6.1.

Company shall have executed this Agreement and delivered the same to Investor.

6.2.

Company shall have delivered to Investor the duly executed Note in accordance
with Section 1.2 above.

6.3.

The Irrevocable Letter of Instructions to Transfer Agent shall have been
delivered to and acknowledged in writing by Company’s transfer agent (the
“Transfer Agent”) substantially in the form attached hereto as Exhibit E.

6.4.

Company shall have delivered to Investor a fully executed Secretary’s
Certificate evidencing Company’s approval of the Transaction Documents
substantially in the form attached hereto as Exhibit F.

6.5.

Company shall have delivered to Investor a fully executed Share Issuance
Resolution to be delivered to the Transfer Agent substantially in the form
attached hereto as Exhibit G.

6.6.

Company shall have delivered to Investor fully executed copies of the Security
Agreement and all other Transaction Documents required to be executed by Company
herein or therein.

7.

Reservation of Shares. Beginning on the date that is one hundred fifty (150)
days from the date hereof (the “Share Reserve Date”) and at all times during
which the Note is convertible,

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Company will reserve from its authorized and unissued Common Stock to provide
for the issuance of Common Stock upon the full conversion of the Note. On the
Share Reserve Date and at all times thereafter, Company will reserve at least
three (3) times the higher of (1) the Conversion Eligible Outstanding Balance
(as defined in and determined pursuant to the Note) divided by the Lender
Conversion Price (as defined in and determined pursuant to the Note), and (2)
the Conversion Eligible Outstanding Balance divided by the Market Price (as
defined in and determined pursuant to the Note) (the “Share Reserve”). Company
further agrees that it will cause the Transfer Agent to immediately add shares
of Common Stock to the Share Reserve in increments of 10,000,000 shares as and
when requested by Investor in writing from time to time, provided that such
incremental increases do not exceed the Share Reserve. In furtherance thereof,
from and after the Share Reserve Date and until such time that the Note has been
paid in full, Company shall require the Transfer Agent to reserve for the
purpose of issuance of Conversion Shares under the Note, a number of shares of
Common Stock at least equal to the Share Reserve. Company shall further require
the Transfer Agent to hold such shares of Common Stock exclusively for the
benefit of Investor and to issue such shares to Investor promptly upon
Investor’s delivery of a conversion notice under the Note. Finally, Company
shall require the Transfer Agent to issue shares of Common Stock pursuant to the
Note to Investor out of its authorized and unissued shares, and not the Share
Reserve, to the extent shares of Common Stock have been authorized, but not
issued, and are not included in the Share Reserve. The Transfer Agent shall only
issue shares out of the Share Reserve to the extent there are no other
authorized shares available for issuance and then only with Investor’s written
consent.

8.

Miscellaneous. The provisions set forth in this Section 8 shall apply to this
Agreement, as well as all other Transaction Documents as if these terms were
fully set forth therein.

8.1.

Original Signature Pages. Each party agrees to deliver its original signature
pages to the Transaction Documents to the other party within five (5) Trading
Days of the date hereof. Notwithstanding the foregoing, the Transaction
Documents shall be fully effective upon exchange of electronic signature pages
by the parties and payment of the Initial Cash Purchase Price by Investor. For
the avoidance of doubt, the failure by either party to deliver its original
signature pages to the other party shall not affect in any way the validity or
effectiveness of any of the Transaction Documents, provided that such failure to
deliver original signatures shall be a breach of the party’s obligations
hereunder.

8.2.

Cross Default. Any Event of Default (as defined in the Note) by Company under
the Note shall be deemed a default under this Agreement, and any default by
Company under this Agreement will be deemed an Event of Default under the Note.

8.3.

Governing Law; Venue. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of Utah for contracts to be wholly
performed in such state and without giving effect to the principles thereof
regarding the conflict of laws. Each party consents to and expressly agrees that
venue for Arbitration (as defined in Exhibit H) of any dispute arising out of or
relating to any Transaction Document or the relationship of the parties or their
affiliates shall be in Salt Lake County or Utah County, Utah; provided, however,
that notwithstanding anything herein to the contrary, enforcement of Investor’s
rights under the Security Agreement will occur in accordance with the Uniform
Commercial Code of the applicable state or states under the Security Agreement
 and enforcement of Company’s rights over the Collateral will occur in
accordance with the laws of the state in which the Collateral is located).
Without modifying the parties obligations to resolve disputes hereunder pursuant
to the Arbitration Provisions (as defined below), for any litigation arising in
connection with any of the Transaction Documents, each party hereto hereby (a)
consents to and expressly submits to the exclusive personal jurisdiction of any
state or federal court sitting in Salt Lake County, Utah, (b) expressly submits
to the venue of any such court for the purposes hereof, and (c) waives any claim
of improper venue and any claim or objection that such courts are an
inconvenient forum or any other claim or objection to the bringing of any such
proceeding in such jurisdictions or to any claim that such venue of the suit,
action or proceeding is improper.

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8.4.

Arbitration of Claims. The parties shall submit all Claims (as defined in
Exhibit H) arising under this Agreement or any other Transaction Document or
other agreements between the parties and their affiliates to binding arbitration
pursuant to the arbitration provisions set forth in Exhibit H attached hereto
(the “Arbitration Provisions”). The parties hereby acknowledge and agree that
the Arbitration Provisions are unconditionally binding on the parties hereto and
are severable from all other provisions of this Agreement. Any capitalized term
not defined in the Arbitration Provisions shall have the meaning set forth in
this Agreement. By executing this Agreement, Company represents, warrants and
covenants that Company has reviewed the Arbitration Provisions carefully,
consulted with legal counsel about such provisions (or waived its right to do
so), understands that the Arbitration Provisions are intended to allow for the
expeditious and efficient resolution of any dispute hereunder, agrees to the
terms and limitations set forth in the Arbitration Provisions, and that Company
will not take a position contrary to the foregoing representations. Company
acknowledges and agrees that Investor may rely upon the foregoing
representations and covenants of Company regarding the Arbitration Provisions.

8.5.

Calculation Disputes. Notwithstanding the Arbitration Provisions, in the case of
a dispute as to any arithmetic calculation under the Transaction Documents,
including without limitation, calculating the Outstanding Balance, Lender
Conversion Price, Lender Conversion Shares (as defined in the Note) to be
delivered, Installment Conversion Price (as defined in and determined pursuant
to the Note), Installment Conversion Shares (as defined in the Note) to be
delivered, Market Price, Conversion Shares, or the VWAP (collectively,
“Calculations”), Company or Investor (as the case may be) shall submit the
disputed determinations or arithmetic calculations (as the case may be) via
facsimile or email with confirmation of receipt (a) within two (2) Trading Days
after receipt of the applicable notice giving rise to such dispute to Company or
Investor (as the case may be) or (b) if no notice gave rise to such dispute, at
any time after Investor or Company (as the case may be) learned of the
circumstances giving rise to such dispute. If Investor and Company are unable to
agree upon such determination or calculation within two (2) Trading Days of such
disputed determination or arithmetic calculation (as the case may be) being
submitted to Company or Investor (as the case may be), then Investor shall
select and submit to Company via email or facsimile the names of three (3)
reputable investment banks or accounting firms of regional or national standing
(such firms, the “Possible Calculation Dispute Arbiters”), from which Company
shall then select one such firm (the “Calculation Dispute Arbiter”) as the
Calculation Dispute Arbiter within two (2) Trading Days of the date Investor
submits the names of the Possible Calculation Dispute Arbiter’s to Company.
Should Company fail to select the Calculation Dispute Arbiter within such two
(2) Trading Day period, Investor may select the Calculation Dispute Arbiter from
the Possible Calculation Dispute Arbiters. Investor shall submit the disputed
Calculation to the Calculation Dispute Arbiter via email or facsimile within two
(2) Trading Days of the date such Calculation Dispute Arbiter has been chosen.
Company shall cause the Calculation Dispute Arbiter to perform the
determinations or calculations (as the case may be) and notify Company and
Investor of the results no later than ten (10) Trading Days from the time it
receives such disputed determinations or calculations (as the case may be). The
Calculation Dispute Arbiter’s determination of the disputed Calculation shall be
binding upon all parties absent demonstrable error. The Calculation Dispute
Arbiter’s fee for performing such Calculation shall be paid by the incorrect
party, or if both parties are incorrect, by the party whose Calculation is
furthest from the correct Calculation as determined by the Calculation Dispute
Arbiter. In the event Company is the losing party, no extension of the Delivery
Date shall be granted and Company shall incur all effects for failing to deliver
the applicable shares in a timely manner as set forth in the Transaction
Documents.  

8.6.

Counterparts. Each Transaction Document may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one instrument. The parties hereto confirm that any
electronic copy of another party’s executed counterpart of a Transaction
Document (or such party’s signature page thereof) will be deemed to be an
executed original thereof.

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8.7.

Headings. The headings of this Agreement are for convenience of reference only
and shall not form part of, or affect the interpretation of, this Agreement.

8.8.

Severability. In the event that any provision of this Agreement is invalid or
unenforceable under any applicable statute or rule of law, then such provision
shall be deemed inoperative to the extent that it may conflict therewith and
shall be deemed modified to conform to such statute or rule of law. Any
provision hereof which may prove invalid or unenforceable under any law shall
not affect the validity or enforceability of any other provision hereof.

8.9.

Entire Agreement; Amendments. This Agreement and the instruments and exhibits
referenced herein contain the entire understanding of the parties with respect
to the matters covered herein and therein and, except as specifically set forth
herein or therein, neither Company nor Investor makes any representation,
warranty, covenant or undertaking with respect to such matters. No provision of
this Agreement may be waived or amended other than by an instrument in writing
signed by the parties hereto.

8.10.

Notices. Any notice required or permitted hereunder shall be given in writing
(unless otherwise specified herein) and shall be deemed effectively given on the
earliest of: (a) the date delivered, if delivered by personal delivery as
against written receipt therefor or by email to an executive officer, or by
facsimile (with successful transmission confirmation), (b) the earlier of the
date delivered or the third Trading Day after deposit, postage prepaid, in the
United States Postal Service by certified mail, or (c) the earlier of the date
delivered or the third Trading Day after mailing by express courier, with
delivery costs and fees prepaid, in each case, addressed to each of the other
parties thereunto entitled at the following addresses (or at such other
addresses as such party may designate by five (5) calendar days’ advance written
notice similarly given to each of the other parties hereto):

If to Company:

Vapor Hub International Inc.

Attn: Kyle Winther

67 W. Easy Street, Unit 115

Simi Valley, California 93065

With a copy to (which copy shall not constitute notice):

Stubbs Alderton & Markiles, LLP

Attn: Jonathan Friedman

15260 Ventura Blvd., 20th Floor

Sherman Oaks, CA 91403

If to Investor:

Typenex Co-Investment, LLC

Attn: John Fife

303 East Wacker Drive, Suite 1200

Chicago, Illinois 60601

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With a copy to (which copy shall not constitute notice):

Hansen Black Anderson Ashcraft PLLC

Attn: Jonathan K. Hansen

3051 West Maple Loop, Suite 325

Lehi, Utah 84043

8.11.

Successors and Assigns. This Agreement or any of the severable rights and
obligations inuring to the benefit of or to be performed by Investor hereunder
may be assigned by Investor to a third party, including its financing sources,
in whole or in part, without the need to obtain Company’s consent thereto.
Company may not assign its rights or obligations under this Agreement or
delegate its duties hereunder without the prior written consent of Investor.

8.12.

Survival. The representations and warranties of each party and the agreements
and covenants set forth in this Agreement shall survive the Closing hereunder
notwithstanding any due diligence investigation conducted by or on behalf of
Investor or Company, as applicable. Company agrees to indemnify and hold
harmless Investor and all its officers, directors, employees, attorneys, and
agents for loss or damage arising as a result of or related to any breach or
alleged breach by Company of any of its representations, warranties and
covenants set forth in this Agreement or any of its covenants and obligations
under this Agreement, including advancement of expenses as they are incurred.

8.13.

Publicity. Company and Investor shall have the right to review a reasonable
period of time before issuance of any press releases by the other party with
respect to the transactions contemplated hereby.

8.14.

Further Assurances. Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as the other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.

8.15.

Rights and Remedies Cumulative; Liquidated Damages. All rights, remedies, and
powers conferred in this Agreement and the Transaction Documents are cumulative
and not exclusive of any other rights or remedies, and shall be in addition to
every other right, power, and remedy that either party may have, whether
specifically granted in this Agreement or any other Transaction Document, or
existing at law, in equity, or by statute, and any and all such rights and
remedies may be exercised from time to time and as often and in such order as
either party may deem expedient. The parties acknowledge and agree that upon
Company’s failure to comply with the provisions of the Transaction Documents,
Investor’s damages would be uncertain and difficult (if not impossible) to
accurately estimate because of the parties’ inability to predict future interest
rates and future share prices, Investor’s increased risk, and the uncertainty of
the availability of a suitable substitute investment opportunity for Investor,
among other reasons. Accordingly, any accrued but unpaid fees, accrued but
unpaid charges, and default interest due under the Note and the other
Transaction Documents prior to repayment or conversion of the Note in full are
intended by the parties to be, and shall be deemed, liquidated damages (under
Company’s and Investor’s expectations that any such liquidated damages will tack
back to the Closing Date for purposes of determining the holding period under
Rule 144). The parties agree that such liquidated damages are a reasonable
estimate of Investor’s actual damages and not a penalty, and shall not be deemed
in any way to limit any other right or remedy Investor may have hereunder, at
law or in equity. The parties acknowledge and agree that under the circumstances
existing at the time this Agreement is entered into, such liquidated damages are
fair and reasonable and are not penalties. All fees, charges, and default
interest provided for in the Transaction Documents are agreed to by the parties
to be based upon the obligations and the risks assumed by the parties as of the
Closing Date and are consistent with investments of this type. The liquidated
damages provisions of the Transaction Documents shall not limit or preclude a
party from

8

pursuing any other remedy available at law or in equity; provided, however, that
the liquidated damages provided for in the Transaction Documents are intended to
be in lieu of actual damages.

8.16.

Ownership Limitation. Notwithstanding anything to the contrary contained in this
Agreement or the other Transaction Documents, if at any time Investor shall or
would be issued shares of Common Stock under any of the Transaction Documents,
and to Company’s actual knowledge such issuance would cause Investor (together
with its affiliates) to beneficially own a number of shares exceeding the
Maximum Percentage (as defined in the Note), then Company must not issue to
Investor the shares that would cause Investor to exceed the Maximum Percentage.
The shares of Common Stock issuable to Investor that would cause the Maximum
Percentage to be exceeded are referred to herein as the “Ownership Limitation
Shares”. Company will reserve the Ownership Limitation Shares for the exclusive
benefit of Investor. From time to time, Investor may notify Company in writing
of the number of the Ownership Limitation Shares that may be issued to Investor
without causing Investor to exceed the Maximum Percentage. Upon receipt of such
notice, Company shall be unconditionally obligated to immediately issue such
designated shares to Investor, with a corresponding reduction in the number of
the Ownership Limitation Shares. For purposes of this Section, beneficial
ownership of Common Stock will be determined under Section 13(d) of the 1934
Act.

8.17.

Attorneys’ Fees and Cost of Collection. In the event of any arbitration or
action at law or in equity to enforce or interpret the terms of this Agreement
or any of the other Transaction Documents, the parties agree that the party who
is awarded the most money shall be deemed the prevailing party for all purposes
and shall therefore be entitled to an additional award of the full amount of the
attorneys’ fees, deposition costs, and expenses paid by such prevailing party in
connection with arbitration or litigation without reduction or apportionment
based upon the individual claims or defenses giving rise to the fees and
expenses. Nothing herein shall restrict or impair an arbitrator’s or a court’s
power to award fees and expenses for frivolous or bad faith pleading. If (a) the
Note is placed in the hands of an attorney for collection or enforcement prior
to commencing arbitration or legal proceedings, or is collected or enforced
through any arbitration or legal proceeding, or Investor otherwise takes action
to collect amounts due under the Note or to enforce the provisions of the Note;
or (b) there occurs any bankruptcy, reorganization, receivership of Company or
other proceedings affecting Company’s creditors’ rights and involving a claim
under the Note; then Company shall pay the costs incurred by Investor for such
collection, enforcement or action or in connection with such bankruptcy,
reorganization, receivership or other proceeding, including, without limitation,
reasonable attorneys’ fees, expenses, deposition costs, and disbursements.

8.18.

Waiver. No waiver of any provision of this Agreement shall be effective unless
it is in the form of a writing signed by the party granting the waiver. No
waiver of any provision or consent to any prohibited action shall constitute a
waiver of any other provision or consent to any other prohibited action, whether
or not similar. No waiver or consent shall constitute a continuing waiver or
consent or commit a party to provide a waiver or consent in the future except to
the extent specifically set forth in writing.

8.19.

Waiver of Jury Trial. EACH PARTY TO THIS AGREEMENT IRREVOCABLY WAIVES ANY AND
ALL RIGHTS SUCH PARTY MAY HAVE TO DEMAND THAT ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT OR THE
RELATIONSHIPS OF THE PARTIES HERETO BE TRIED BY JURY. THIS WAIVER EXTENDS TO ANY
AND ALL RIGHTS TO DEMAND A TRIAL BY JURY ARISING UNDER COMMON LAW OR ANY
APPLICABLE STATUTE, LAW, RULE OR REGULATION. FURTHER, EACH PARTY HERETO
ACKNOWLEDGES THAT SUCH PARTY IS KNOWINGLY AND VOLUNTARILY WAIVING SUCH PARTY’S
RIGHT TO DEMAND TRIAL BY JURY.

9

8.20.

Time of the Essence. Time is expressly made of the essence with respect to each
and every provision of this Agreement and the other Transaction Documents.

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10

IN WITNESS WHEREOF, the undersigned Investor and Company have caused this
Agreement to be duly executed as of the date first above written.

SUBSCRIPTION AMOUNT:

Principal Amount of Note:

$1,687,500.00

Initial Cash Purchase Price:

$200,000.00

INVESTOR:

TYPENEX CO-INVESTMENT, LLC

By: Red Cliffs Investments, Inc., its Manager

By:

/s/ John M. Fife

John M. Fife, President

COMPANY:

VAPOR HUB INTERNATIONAL INC.

By:

/s/ Lori Winther

Printed Name: Lori Winther

Title:

Chief Financial Officer

ATTACHED EXHIBITS:

Exhibit A

Note

Exhibit B

Allocation of Purchase Price

Exhibit C

Form of Investor Note

Exhibit D

Security Agreement

Exhibit E

Irrevocable Transfer Agent Instructions

Exhibit F

Secretary’s Certificate

Exhibit G

Share Issuance Resolution

Exhibit H

Arbitration Provisions

ARBITRATION PROVISIONS

1.

Dispute Resolution. For purposes of this Exhibit H, the term “Claims” means any
disputes, claims, demands, causes of action, liabilities, damages, losses, or
controversies whatsoever arising from related to or connected with the
transactions contemplated in the Transaction Documents and any communications
between the parties related thereto, including without limitation any claims of
mutual mistake, mistake, fraud, misrepresentation, failure of formation, failure
of consideration, promissory estoppel, unconscionability, failure of condition
precedent, rescission, and any statutory claims, tort claims, contract claims,
or claims to void, invalidate or terminate the Agreement or any of the other
Transaction Documents. The term “Claims” specifically excludes a dispute over
Calculations (as defined in the Agreement) enforcement of Investor’s rights and
remedies against the personal property described in the Security Agreement under
the applicable provisions of the Uniform Commercial Code. The parties hereby
agree that the arbitration provisions set forth in this Exhibit H (“Arbitration
Provisions”) are binding on the parties hereto and are severable from all other
provisions in the Transaction Documents. As a result, any attempt to rescind the
Agreement or declare the Agreement or any other Transaction Document invalid or
unenforceable for any reason is subject to these Arbitration Provisions. These
Arbitration Provisions shall also survive any termination or expiration of the
Agreement.

2.

Arbitration. Except as otherwise provided herein, all Claims must be submitted
to arbitration (“Arbitration”) to be conducted in Salt Lake County, Utah or Utah
County, Utah and pursuant to the terms set forth in these Arbitration
Provisions. The parties agree that the award of the arbitrator shall be final
and binding upon the parties; shall be the sole and exclusive remedy between
them regarding any Claims, counterclaims, issues, or accountings presented or
pleaded to the arbitrator; and shall promptly be payable in United States
dollars free of any tax, deduction or offset (with respect to monetary awards).
Any costs or fees, including without limitation attorneys’ fees, incident to
enforcing the arbitrator’s award shall, to the maximum extent permitted by law,
be charged against the party resisting such enforcement. The award shall include
Default Interest (as defined in the Note) both before and after the award.
Judgment upon the award of the arbitrator will be entered and enforced by a
state court sitting in Salt Lake County, Utah. The parties hereby incorporate
herein the provisions and procedures set forth in the Utah Uniform Arbitration
Act, U.C.A. § 78B-11-101 et seq. (as amended or superseded from time to time,
the “Arbitration Act”). Pursuant to Section 78B-11-105 of the Arbitration Act,
in the event of conflict between the terms of these Arbitration Provisions and
the provisions of the Arbitration Act, the terms of these Arbitration Provisions
shall control.

3.

Arbitration Proceedings. Arbitration between the parties will be subject to the
following procedures:

3.1

Pursuant to Section 110 of the Arbitration Act, the parties agree that a party
may initiate Arbitration by giving written notice to the other party
(“Arbitration Notice”) in the same manner that notice is permitted under Section
8.10 of the Agreement; provided, however, that the Arbitration Notice may not be
given by email or fax. Arbitration will be deemed initiated as of the date that
the Arbitration Notice is deemed delivered under Section 8.10 of the Agreement
(the “Service Date”). After the Service Date, information may be delivered, and
notices may be given, by email or fax pursuant to Section 8.10 of the Agreement
or any other method permitted thereunder. The Arbitration Notice must describe
the nature of the controversy, the remedies sought, and the election to commence
Arbitration proceedings. All Claims in the Arbitration Notice must be pleaded
consistent with the Utah Rules of Civil Procedure.

3.2

 Within ten (10) calendar days after the Service Date, Investor shall select and
submit to Company the names of three arbitrators that are designated as
“neutrals” or qualified arbitrators by Utah ADR Services
(http://www.utahadrservices.com) (such three designated persons hereunder are
referred to herein as the “Proposed Arbitrators”). For the avoidance of doubt,
each Proposed Arbitrator must be qualified as a “neutral” with Utah ADR
Services. Within ten (10) calendar days after Investor has submitted to Company
the names of the Proposed Arbitrators, Company must select, by written notice to
Investor, one (1) of the Proposed Arbitrators to act as the arbitrator for the
parties under these Arbitration Provisions. If Company fails to select one of
the Proposed Arbitrators in writing within such 10-day period, then Investor may
select the arbitrator from the Proposed Arbitrators by providing written notice
of such selection to Company. If Investor fails to identify the Proposed
Arbitrators within the time period required above, then Company may at any time
prior to Investor designating the Proposed Arbitrators, select the names of
three arbitrators that

Arbitration Provisions, Page 1

are designated as “neutrals” or qualified arbitrators by Utah ADR Service by
written notice to Investor. Investor may then, within ten (10) calendar days
after Company has submitted notice of its selected arbitrators to Investor,
select, by written notice to Company, one (1) of the selected arbitrators to act
as the arbitrator for the parties under these Arbitration Provisions. If
Investor fails to select in writing and within such 10-day period one of the
three arbitrators selected by Company, then Company may select the arbitrator
from its three previously selected arbitrators by providing written notice of
such selection to Investor. Subject to Paragraph 3.12 below, the cost of the
arbitrator must be paid equally by both parties; provided, however, that if one
party refuses or fails to pay its portion of the arbitrator fee, then the other
party can advance such unpaid amount (subject to the accrual of Default Interest
thereupon), with such amount added to or subtracted from, as applicable, the
award granted by the arbitrator. If Utah ADR Services ceases to exist or to
provide a list of neutrals, then the arbitrator shall be selected under the then
prevailing rules of the American Arbitration Association. The date that the
selected arbitrator agrees in writing to serve as the arbitrator hereunder is
referred to herein as the “Arbitration Commencement Date”.

3.3

An answer and any counterclaims to the Arbitration Notice, which must be pleaded
consistent with the Utah Rules of Civil Procedure, shall be required to be
delivered to the other party within twenty (20) calendar days after the Service
Date. Upon request, the arbitrator is hereby instructed to render a default
award, consistent with the relief requested in the Arbitration Notice, against a
party that fails to submit an answer within such time period.

3.4

The party that delivers the Arbitration Notice to the other party shall have the
option to also commence legal proceedings with any state court sitting in Salt
Lake County, Utah (“Litigation Proceedings”), subject to the following: (i) the
complaint in the Litigation Proceedings is to be substantially similar to the
claims set forth in the Arbitration Notice, provided that an additional cause of
action to compel arbitration will also be included therein, (ii) so long as the
other party files an answer to the complaint in the Litigation Proceedings and
an answer to the Arbitration Notice, the Litigation Proceedings will be stayed
pending an award of the arbitrator hereunder, (iii) if the other party fails to
file an answer in the Litigation Proceedings or an answer in the Arbitration
Proceedings, then the party initiating Arbitration shall be entitled to a
default judgment consistent with the relief requested, to be entered in the
Litigation Proceedings, and (iv) any legal or procedural issue arising under the
Arbitration Act that requires a decision of a court of competent jurisdiction
may be determined in the Litigation Proceedings. Any award of the arbitrator may
be entered in such Litigation Proceedings pursuant to the Arbitration Act.

3.5

Pursuant to Section 118(8) of the Arbitration Act, the parties agree that
discovery shall be conducted in accordance with the Utah Rules of Civil
Procedure; provided, however, that incorporation of such rules will in no event
supersede the Arbitration Provisions set forth herein, including without
limitation the time limitation set forth in Paragraph 3.9 below, and the
following:

(a)

Discovery will only be allowed if the likely benefits of the proposed discovery
outweigh the burden or expense, and the discovery sought is likely to reveal
information that will satisfy a specific element of a claim or defense already
pleaded in the Arbitration. The party seeking discovery shall always have the
burden of showing that all of the standards and limitations set forth in these
Arbitration Provisions are satisfied. The scope of discovery in the Arbitration
proceedings shall also be limited as follows:

(i)

To facts directly connected with the transactions contemplated by the Agreement.

(ii)

To facts and information that cannot be obtained from another source that is
more convenient, less burdensome or less expensive.

(c)

No party shall be allowed (a) more than fifteen (15) interrogatories (including
discrete subparts), (b) more than fifteen (15) requests for admission (including
discrete subparts), (c) more than ten (10) document requests (including discrete
subparts), or (d) more than three depositions (excluding expert depositions) for
a maximum of seven (7) hours per deposition.

3.6

Any party submitting any written discovery requests, including interrogatories,
requests for production, subpoenas to a party or a third party, or requests for
admissions, must prepay the estimated attorneys’ fees and costs, as determined
by the arbitrator, before the responding party has any obligation to produce or
respond.

(a)

All discovery requests must be submitted in writing to the arbitrator and the
other party before issuing or serving such discovery requests. The party issuing
the written discovery requests must

Arbitration Provisions, Page 2

include with such discovery requests a detailed explanation of how the proposed
discovery requests satisfy the requirements of these Arbitration Provisions and
the Utah Rules of Civil Procedure. Any party will then be allowed, within ten
(10) calendar days of receiving the proposed discovery requests, to submit to
the arbitrator an estimate of the attorneys’ fees and costs associated with
responding to such written discovery requests and a written challenge to each
applicable discovery request. After receipt of an estimate of attorneys’ fees
and costs and/or challenge(s) to one or more discovery requests, the arbitrator
will make a finding as to the likely attorneys’ fees and costs associated with
responding to the discovery requests and issue an order that (A) requires the
requesting party to prepay the attorneys’ fees and costs associated with
responding to the discovery requests, and (B) requires the responding party to
respond to the discovery requests as limited by the arbitrator within a certain
period of time after receiving payment from the requesting party. If a party
entitled to submit an estimate of attorneys’ fees and costs and/or a challenge
to discovery requests fails to do so within such 10-day period, the arbitrator
will make a finding that (A) there are no attorneys’ fees or costs associated
with responding to such discovery requests, and (B) the responding party must
respond to such discovery requests (as may be limited by the arbitrator) within
a certain period of time as determined by the arbitrator.

 (b)

In order to allow a written discovery request, the arbitrator must find that the
discovery request satisfies the standards set forth in these Arbitration
Provisions and the Utah Rules of Civil Procedure. The arbitrator must strictly
enforce these standards. If a discovery request does not satisfy any of the
standards set forth in these Arbitration Provisions or the Utah Rules of Civil
Procedure, the arbitrator may modify such discovery request to satisfy the
applicable standards, or strike such discovery request in whole or in part.

(c)

Discovery deadlines will be set forth in a scheduling order issued by the
arbitrator. The parties hereby authorize and direct the arbitrator to take such
actions and make such rulings as may be necessary to carry out the parties’
intent for the arbitration proceedings to be efficient and expeditious.

3.7

Each party may submit expert reports (and rebuttals thereto), provided that such
reports must be submitted by the deadlines established by the arbitrator. Expert
reports must contain the following: (a) a complete statement of all opinions the
expert will offer at trial and the basis and reasons for them; (b) the expert’s
name and qualifications, including a list of all publications within the
preceding 10 years, and a list of any other cases in which the expert has
testified at trial or in a deposition or prepared a report within the preceding
10 years; and (c) the compensation to be paid for the expert’s study and
testimony. The parties are entitled to depose any other party’s expert witness
one time for no more than 4 hours. An expert may not testify in a party’s
case-in-chief concerning any matter not fairly disclosed in the expert report.

3.8

All information disclosed by either party during the Arbitration process
(including without limitation information disclosed during the discovery
process) shall be considered confidential in nature. Each party agrees not to
disclose any confidential information received from the other party during the
discovery process unless (i) prior to or after the time of disclosure such
information becomes public knowledge or part of the public domain, not as a
result of any inaction or action of the receiving party, (ii) such information
is required by a court order, subpoena or similar legal duress to be disclosed
if such receiving party has notified the other party thereof in writing and
given it a reasonable opportunity to obtain a protective order from a court of
competent jurisdiction prior to disclosure; or (iii) disclosed to the receiving
party’s agents, representatives and legal counsel on a need to know basis who
each agree in writing not to disclose such information to any third party.
Pursuant to Section 118(5) of the Arbitration Act, the arbitrator is hereby
authorized and directed to issue a protective order to prevent the disclosure of
privileged information and confidential information upon the written request of
either party.

3.9

The parties hereby authorize and direct the arbitrator to take such actions and
make such rulings as may be necessary to carry out the parties’ intent for the
arbitration proceedings to be efficient and expeditious. Pursuant to Section 120
of the Arbitration Act, the parties hereby agree that an award of the arbitrator
must be made within 150 days after the Arbitration Commencement Date. The
arbitrator is hereby authorized and directed to hold a scheduling conference
within ten (10) calendar days after the Arbitration Commencement Date in order
to establish a scheduling order with various binding deadlines for discovery,
expert testimony, and the submission of documents by the parties to enable the
arbitrator to render a decision prior to the end of such 150-day period. The
Utah Rules of Evidence will apply to any final hearing before the arbitrator.

Arbitration Provisions, Page 3

3.10

The arbitrator shall have the right to award or include in the arbitrator’s
award any relief which the arbitrator deems proper under the circumstances,
including, without limitation, specific performance and injunctive relief,
provided that the arbitrator may not award exemplary or punitive damages.

3.11

If any part of these Arbitration Provisions is found to violate applicable law
or to be illegal, then such provision shall be modified to the minimum extent
necessary to make such provision enforceable under applicable law.

3.12

The arbitrator is hereby directed to require the losing party to (i) pay the
full amount of the costs and fees of the arbitrator, and (ii) reimburse the
prevailing party the reasonable attorneys’ fees, arbitrator costs, deposition
costs, and other discovery costs incurred by the prevailing party.

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Arbitration Provisions, Page 4