Exhibit 10.3


 


EXECUTION VERSION


 


GUARANTEE AND COLLATERAL AGREEMENT


 


dated as of


 


April 27, 2015


 


among


 


ELECTRONIC CIGARETTES INTERNATIONAL GROUP,
LTD.,


 


THE GUARANTORS PARTY HERETO


 


and


 


CALM WATERS PARTNERSHIP


 




    	 



    	 



    

 


TABLE OF CONTENTS


 





 






 


	 	Page
	 	 
	Section 1 . Definitions	1
	Section 2 . Guarantees by Guarantors	8
	Section 3 . Grant of Transaction Liens	11
	Section 4 . General Representations and Warranties	13
	Section 5 . Further Assurances; General Covenants	16
	Section 6 . Intellectual Property	17
	Section 7 . Investment Property	18
	Section 8 . Deposit Accounts	21
	Section 9 . Commercial Tort Claims	21
	Section 10 . Transfer of Record Ownership	22
	Section 11 . Right to Vote Securities; Right to Proceeds of Insurance	22
	Section 12 . Certain Cash Distributions	23
	Section 13 . Remedies upon Event of Default	23
	Section 14 . Application of Proceeds	24
	Section 15 . Fees and Expenses; Indemnification	25
	Section 16 . Authority to Administer Collateral	26
	Section 17 . Limitation on Duty in Respect of Collateral	27
	Section 18 . Termination of Transaction Liens; Release of Collateral	28
	Section 19 . Additional Guarantors and Grantors	28
	Section 20 . Notices	28
	Section 21 . No Implied Waivers; Remedies Not Exclusive	28
	Section 22 . Successors and Assigns	29
	Section 23 . Amendments and Waivers	29
	Section 24 . Choice of Law	29
	Section 25 . Waiver of Jury Trial	29
	Section 26 . Severability	29
	Section 27 . Intercreditor Agreement	30


 




    	 



    	 



    

 


	SCHEDULES:	 
	 	 
	Schedule 1	Equity Interests in Subsidiaries and Affiliates Owned by Original Grantors
	 	 
	Schedule 2	Other Investment Property Owned by Original Grantors 
	 	 
	Schedule 3	Material Commercial Tort Claims
	 	 
	EXHIBITS:	 
	 	 
	Exhibit A	Security Agreement Supplement
	 	 
	Exhibit B	Notice of Grant of Security Interest in Copyrights
	 	 
	Exhibit C	Notice of Grant of Security Interest in Patents
	 	 
	Exhibit D	Notice of Grant of Security Interest in Trademarks
	 	 
	Exhibit E	Information Certificate
	 	 
	Exhibit F	Issuer Control Agreement


 




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GUARANTEE AND COLLATERAL AGREEMENT


 


GUARANTEE AND COLLATERAL AGREEMENT (this
“Agreement”), dated as of April 27, 2015, among ELECTRONIC CIGARETTES INTERNATIONAL GROUP, LTD., as the Borrower,
the GUARANTORS party hereto and CALM WATERS PARTNERSHIP, as the Secured Party.


 


WHEREAS, the Borrower is entering into the
Credit Agreement described in Section 1 hereof, pursuant to which the Borrower intends to borrow funds for the purposes set forth
therein;


 


WHEREAS, (i) the Borrower is willing to
secure its obligations under the Credit Agreement and (ii) the Borrower is willing to cause certain of its Subsidiaries to guarantee
the foregoing obligations of the Borrower and to secure their guarantee thereof by granting Liens on their assets to the Secured
Party as provided in the Security Documents;


 


WHEREAS, the Secured Party is not willing
to make loans under the Credit Agreement unless (i) the foregoing obligations of the Borrower and the Guarantors are secured and
guaranteed as described above and (ii) each guarantee thereof is secured by Liens on assets of the Borrower and the relevant Guarantor
as provided in the Security Documents; and


 


WHEREAS, upon any foreclosure or other enforcement
of the Security Documents, the net proceeds of the relevant Collateral are to be received by or paid over to the Secured Party
and applied as provided herein;


 


NOW, THEREFORE, in consideration of the
foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:


 


Section
1. Definitions.


 


(a)          Terms
Defined in Credit Agreement. Terms defined in the Credit Agreement and not otherwise defined in subsection (b) or (c) of this
Section have, as used herein, the respective meanings provided for therein. The rules of construction specified in Section 1.02
of the Credit Agreement also apply to this Agreement.


 


(b)          Terms
Defined in UCC. As used herein, each of the following terms has the meaning specified in the UCC:


 


	Term	 	UCC
	 	 	 
	Account	 	9-102
	Authenticate	 	9-102


 




    	 



    	 



    

 


	Term	 	UCC
	Certificated Security	 	8-102
	Chattel Paper	 	9-102
	Commercial Tort Claim	 	9-102
	Commodity Account	 	9-102
	Commodity Customer	 	9-102
	Debtor	 	9-102
	Deposit Account	 	9-102
	Document	 	9-102
	Entitlement Holder	 	8-102
	Equipment	 	9-102
	Financial Asset	 	8-102 & 103
	General Intangibles	 	9-102
	Instrument	 	9-102
	Inventory	 	9-102
	Investment Property	 	9-102
	Letter-of-Credit Right	 	9-102
	Money	 	1-201
	Record	 	9-102
	Securities Account	 	8-501
	Securities Intermediary	 	8-102
	Security	 	8-102 & 103
	Security Entitlement	 	8-102
	Supporting Obligations	 	9-102
	Uncertificated Security	 	8-102


 


(c)          Additional
Definitions. The following additional terms, as used herein, have the following meanings:


 


“Agreement” has the meaning
specified in the preamble hereto.


 


“Capital Stock” means
any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation) and any and all warrants, rights or options to purchase
any of the foregoing.


 


“Cash Distributions”
means dividends, interest and other distributions and payments (including proceeds of liquidation, sale or other disposition) made
or received in cash upon or with respect to any Collateral.


 


“Collateral” means all
property, whether now owned or hereafter acquired, on which a Lien is granted or purports to be granted to the Secured Party pursuant
to the Security Documents. When used with respect to a specific Grantor, the term “Collateral” means all its property
on which such a Lien is granted or purports to be granted.


 




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“Collateral Accounts”
means the Controlled Deposit Accounts and the Controlled Securities Accounts.


 


“Contingent Obligation”
means, at any time, any Obligation (or portion thereof) that is contingent in nature at such time, including any Obligation that
is an obligation to provide collateral to secure the foregoing type of obligation.


 


“Control” has the meaning
specified in UCC Section 8-106, 9-104, 9-105, 9-106 or 9-107, as may be applicable to the relevant Collateral.


 


“Controlled Deposit Account”
means a Deposit Account that is subject to a Deposit Account Control Agreement.


 


“Controlled Securities Account”
means a Securities Account that (i) is maintained in the name of a Grantor at an office of a Securities Intermediary located in
the United States and (ii) together with all Financial Assets credited thereto and all related Security Entitlements, is subject
to a Securities Account Control Agreement among such Grantor, the Secured Party and such Securities Intermediary.


 


“Copyright License” means
any agreement now or hereafter in existence granting to any Grantor, or pursuant to which any Grantor grants to any other Person,
any right to use, copy, reproduce, distribute, prepare derivative works, display or publish any records or other materials on which
a Copyright is in existence or may come into existence (excluding any Exclusive Copyright License).


 


“Copyrights” means all
the following: (i) all copyrights under the laws of the United States or any other country (whether or not the underlying works
of authorship have been published), all registrations and recordings thereof, all copyrightable works of authorship (whether or
not published), and all applications for copyrights under the laws of the United States or any other country, including registrations,
recordings and applications in the United States Copyright Office or in any similar office or agency of the United States, any
State thereof or any other country or any political subdivision thereof, including those described in Schedule 1 to any Notice
of Grant of Security Interest in Copyrights, (ii) all renewals of any of the foregoing, (iii) all claims for, and rights to sue
for, past or future infringements of any of the foregoing, and (iv) all income, royalties, damages and payments now or hereafter
due or payable with respect to any of the foregoing, including damages and payments for past or future infringements thereof.


 


“Credit Agreement” means
the Credit Agreement, dated as of the date hereof, between the Borrower and the Secured Party.


 


“Deposit Account Control Agreement”
means a control agreement reasonably satisfactory to the Secured Party executed by the relevant Grantor, each institution maintaining
a Deposit Account for such Grantor, and the Secured Party.


 




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“Depositary Bank” means
a bank at which a Controlled Deposit Account is maintained.


 


“Equity Interest” means,
with respect to any Person, (a) the Capital Stock of such Person and (b) any Security Entitlement in respect of any Capital Stock
of such Person.


 


“Excluded Assets” has
the meaning specified in Section 3.


 


“Exclusive Copyright License”
means any material agreement now or hereafter in existence granting to any Grantor an exclusive right to use, copy, reproduce,
distribute, prepare derivative works, display or publish any materials on which a United States Copyright is in existence or may
come into existence.


 


“Exempt Account” means
any Deposit Account or Securities Account maintained by Grantors that is (x) exclusively used for payroll, payroll taxes or employee
benefits, (y) a zero balance disbursement account, or (z) an account containing not more than $250,000 at any one time, provided,
however, that amounts on deposit in all such accounts under this clause (z) do not exceed $500,000 at any time.


 


“Grantors” means the
Borrower and the Guarantors.


 


“Guarantors” means each
Subsidiary listed on the signature pages hereof under the caption “Guarantors” and each Subsidiary that shall, at any
time after the date hereof, become a “Guarantor” pursuant to Section 19.


 


“Information Certificate”
means, with respect to any Grantor, a certificate substantially in the form of Exhibit E (with any changes that the Secured Party
and the Borrower shall have approved), completed and supplemented with the schedules contemplated thereby to the satisfaction of
the Secured Party, and signed by an officer of such Grantor.


 


“Intellectual Property”
means all intellectual property and similar proprietary property of any Grantor of every kind and nature now owned or hereafter
acquired by any Grantor, including inventions, designs, Patents, Copyrights, Licenses, Trademarks, trade secrets, confidential
or proprietary technical and business information, know-how, show-how or other data or information, software and databases and
all embodiments or fixations thereof and related documentation, registrations and franchises, and all additions, improvements and
accessions to, and books and records describing or used in connection with, any of the foregoing.


 




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“Intellectual Property Filing”
means (i) with respect to any Patent or Trademark, the filing of the applicable Notice of Grant of Security Interest in Patents
or Notice of Grant of Security Interest in Trademarks with the United States Patent and Trademark Office, together with an appropriately
completed recordation form, and (ii) with respect to any Copyright or Exclusive Copyright License, the filing of the applicable
Notice of Grant of Security Interest in Copyrights with the United States Copyright Office, together with an appropriately completed
recordation form.


 


“Intellectual Property Notice”
means a Notice of Grant of Security Interest in Copyrights, a Notice of Grant of Security Interest in Patents or a Notice of Grant
of Security Interest in Trademarks.


 


“Issuer Control Agreement”
means an Issuer Control Agreement substantially in the form of Exhibit F (with any changes that the Secured Party and the Borrower
shall have approved).


 


“License” means any Patent
License, Trademark License, Copyright License, Exclusive Copyright License or other license or sublicense agreement relating to
Intellectual Property to which any Grantor is a party.


 


“Material Commercial Tort Claim”
means a Commercial Tort Claim involving a claim for more than $250,000.


 


“Non-Contingent Obligation”
means at any time any Obligation (or portion thereof) that is not a Contingent Obligation at such time.


 


“Notice of Grant of Security Interest
in Copyrights” means a Notice of Grant of Security Interest in Copyrights, substantially in the form of Exhibit B (with
any changes that the Secured Party and the Borrower shall have approved), executed and delivered by a Grantor in favor of the Secured
Party.


 


“Notice of Grant of Security Interest
in Patents” means a Notice of Grant of Security Interest in Patents, substantially in the form of Exhibit C (with any
changes that the Secured Party and the Borrower shall have approved), executed and delivered by a Grantor in favor of the Secured
Party.


 


“Notice of Grant of Security Interest
in Trademarks” means a Notice of Grant of Security Interest in Trademarks, substantially in the form of Exhibit D (with
any changes that the Secured Party and the Borrower shall have approved), executed and delivered by a Grantor in favor of the Secured
Party.


 


“Obligor” means the obligor
with respect to any Obligation.


 


“Original Grantor” means
any Grantor that grants a Lien on any of its assets hereunder on the Closing Date.


 




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“own” refers to the possession
of sufficient rights in property to grant a security interest therein as contemplated by UCC Section 9-203, and “acquire”
refers to the acquisition of any such rights.


 


“Patent License” means
any agreement now or hereafter in existence granting to any Grantor, or pursuant to which any Grantor grants to any other Person,
any right with respect to any Patent or any invention now or hereafter in existence, whether patentable or not, whether a patent
or application for patent is in existence on such invention or not, and whether a patent or application for patent on such invention
may come into existence or not.


 


“Patents” means (i) all
letters patent and design letters patent of the United States or any other country and all applications for letters patent or design
letters patent of the United States or any other country, including applications in the United States Patent and Trademark Office
or in any similar office or agency of the United States, any State thereof or any other country or any political subdivision thereof,
including those described in Schedule 1 to any Notice of Grant of Security Interest in Patents, (ii) all reissues, divisions, continuations,
continuations in part, revisions and extensions of any of the foregoing, (iii) all claims for, and rights to sue for, past or future
infringements of any of the foregoing and (iv) all income, royalties, damages and payments now or hereafter due or payable with
respect to any of the foregoing, including damages and payments for past or future infringements thereof.


 


“Permitted Liens” means
the Liens described in Section 6.02 of the Credit Agreement.


 


“Pledged”, when used
in conjunction with any type of asset, means at any time an asset of such type that is included (or that creates rights that are
included) in the Collateral at such time. For example, “Pledged Equity Interest” means an Equity Interest that is included
in the Collateral at such time.


 


“Proceeds” means all
“proceeds” (as defined in Section 9-102 of the UCC) and including, in any event, all proceeds of, and all other profits,
products, rents or receipts, in whatever form, arising from the collection, sale, lease, exchange, assignment, licensing or other
disposition of, or other realization upon, any Collateral, including all claims of the relevant Grantor against third parties for
loss of, damage to or destruction of, or for proceeds payable under, or unearned premiums with respect to, policies of insurance
in respect of, any Collateral, and any condemnation or requisition payments with respect to any Collateral.


 


“Recordable Intellectual Property”
means (i) any Patent issued or applied for issuance with the United States Patent and Trademark Office, (ii) any Trademark registered
or applied for registration with the United States Patent and Trademark Office, (iii) any Copyright registered or applied for registration
with the United States Copyright Office, and (iv) any Exclusive Copyright License.


 




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“Related Parties” means
with respect to any specified Person, such Person’s Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person’s Affiliates.


 


“Release Conditions”
means the conditions for releasing all the Secured Guarantees and terminating all the Transaction Liens, which are specified in
Section 8.18 of the Credit Agreement.


 


“Secured Agreement”,
when used with respect to any Obligation secured hereby, refers collectively to each instrument, agreement or other document that
sets forth obligations of the Borrower, obligations of any Subsidiary and/or rights of the holder with respect to such Obligation.


 


“Secured Guarantee” means,
with respect to each Guarantor, its guarantee of the Obligations under Section 2 hereof or Section 1 of a Security Agreement Supplement.


 


“Secured Party” has the
meaning specified in the preamble hereto.


 


“Security Account Control Agreement”
means a control agreement reasonably satisfactory to the Secured Party executed by the relevant Grantor, each institution maintaining
a Securities Account for such Grantor, and the Secured Party.


 


“Security Agreement Supplement”
means a Security Agreement Supplement, substantially in the form of Exhibit A, signed and delivered to the Secured Party for the
purpose of adding a Subsidiary as a party hereto pursuant to Section 19 and/or adding additional property to the Collateral.


 


“Security Documents”
means this Agreement, the Security Agreement Supplements, the Deposit Account Control Agreements, the Issuer Control Agreements,
the Securities Account Control Agreements, the Intellectual Property Notices and all other supplemental or additional security
agreements, control agreements or similar instruments now or hereafter securing (or given with the intent to secure) any Obligations.


 


“Trademark License” means
any agreement now or hereafter in existence granting to any Grantor, or pursuant to which any Grantor grants to any other Person,
any right to use any Trademark.


 




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“Trademarks” means: (i)
all trademarks, trade names, corporate names, company names, business names, fictitious business names, trade styles, service marks,
logos, brand names, trade dress, prints and labels on which any of the foregoing have appeared or appear, package and other designs,
and all other source or business identifiers, and all general intangibles of like nature, and the rights in any of the foregoing
which arise under applicable law, (ii) the goodwill of the business symbolized thereby or associated with each of them, (iii) all
registrations and applications in connection therewith, including registrations and applications in the United States Patent and
Trademark Office or in any similar office or agency of the United States, any State thereof or any other country or any political
subdivision thereof, including those described in Schedule 1 to any Notice of Grant of Security Interest in Trademarks, (iv) all
renewals of any of the foregoing, (v) all claims for, and rights to sue for, past or future infringements of any of the foregoing
and (vi) all income, royalties, damages and payments now or hereafter due or payable with respect to any of the foregoing, including
damages and payments for past or future infringements thereof.


 


“Transaction Liens” means
the Liens granted by the Grantors under the Security Documents.


 


“UCC” means the Uniform
Commercial Code as in effect from time to time in the State of New York; provided that, if perfection or the effect of perfection
or non-perfection or the priority of any Transaction Lien on any Collateral is governed by the Uniform Commercial Code as in effect
in a jurisdiction other than New York, “UCC” means the Uniform Commercial Code as in effect from time to time in such
other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or
priority.


 


Section
2. Guarantees by Guarantors.


 


(a)          Secured
Guarantees. Each Guarantor unconditionally guarantees the full and punctual payment of each Obligation (other than the Obligations
of such Guarantor) when due (whether at stated maturity, upon acceleration or otherwise), which guarantees shall constitute a continuing
guarantee of payment and not of collection. If the Borrower or any other Obligor fails to pay any Obligation punctually when due,
each other Guarantor agrees that it will forthwith on demand pay the amount not so paid at the place and in the manner specified
in the relevant Secured Agreement.


 


(b)          Secured
Guarantees Unconditional. The obligations of each Guarantor under its Secured Guarantee shall be unconditional and absolute
and, without limiting the generality of the foregoing, shall not be released, discharged or otherwise affected by:


 


(i)          any
extension, renewal, settlement, compromise, waiver or release in respect of any obligation of the Borrower, any other Guarantor
or Obligor or any other Person under any Secured Agreement, by operation of law or otherwise;


 




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(ii)         the
genuineness, validity, regularity, enforceability, subordination or any future modification of, or change in, any Obligations or
any Secured Agreement, or any other document, instrument or agreement to which any Obligor is or may become a party or be bound;


 


(iii)        any
release, impairment, non-perfection or invalidity of any direct or indirect security for any obligation of the Borrower, any other
Guarantor or Obligor or any other Person under any Secured Agreement;


 


(iv)         any
change in the corporate existence, structure or ownership of the Borrower, any other Guarantor or Obligor or any other Person or
any of their respective subsidiaries, or any insolvency, bankruptcy, reorganization or other similar proceeding affecting the Borrower,
any other Guarantor or Obligor or any other Person or any of their assets or any resulting release or discharge of any obligation
of the Borrower, any other Guarantor or Obligor or any other Person under any Secured Agreement;


 


(v)          the
existence of any claim, set-off or other right that such Guarantor may have at any time against the Borrower, any other Guarantor
or Obligor, the Secured Party or any other Person, whether in connection with the Loan Documents or any unrelated transactions,
provided that nothing herein shall prevent the assertion of any such claim by separate suit or compulsory counterclaim;


 


(vi)         any
invalidity or unenforceability relating to or against the Borrower, any other Guarantor or Obligor or any other Person for any
reason of any Secured Agreement, or any provision of any applicable law, rule or regulation purporting to prohibit the payment
of any Obligation by the Borrower, any other Guarantor or Obligor or any other Person; or


 


(vii)        any
other act or omission to act or delay of any kind by the Borrower, any other Guarantor or Obligor, any other party to any Secured
Agreement, the Secured Party or any other Person, or any other circumstance whatsoever that might, but for the provisions of this
clause (vii), constitute a legal or equitable discharge of or defense of a surety or guarantor to any obligation of any Guarantor
hereunder.


 


(c)          Release
of Secured Guarantees. (i) All Secured Guarantees will be released when all Release Conditions are satisfied. If at any time
any payment of an Obligation is rescinded or must be otherwise restored or returned upon the insolvency or receivership of the
Borrower, any other Obligor or otherwise, the Secured Guarantees shall be reinstated with respect thereto as though such payment
had been due but not made at such time.


 




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(ii)         In
addition, if any Guarantor shall cease to be a Subsidiary of the Borrower as permitted by Section 8.18(b) of the Credit Agreement,
the Secured Party, at the request of the Borrower, shall release such Guarantor from its Secured Guaranty and its other Obligations
under the Loan Documents;


 


(iii)        Upon
any termination of a Secured Guaranty, the Secured Party will, in accordance with Section 8.18(d) of the Credit Agreement, execute
and deliver to the Borrower such documents as it shall reasonably request to evidence the termination thereof.


 


(d)          Waiver
by Guarantors. Each Guarantor irrevocably waives acceptance hereof, presentment, demand, protest and any notice not provided
for herein, as well as any requirement that at any time any action be taken by any Person against the Borrower, any other Guarantor
or Obligor or any other Person. Each Guarantor expressly waives all rights that it may have now or in the future under any statute,
at common law, in equity or otherwise, to compel the Secured Party to marshal assets or to proceed against any Obligor, other Person
or security for the payment or performance of any Obligations before, or as a condition to, proceeding against such Guarantor.
Each Guarantor waives all defenses available to a surety, guarantor or accommodation co-obligor other than payment in full of all
Obligations and waives, to the maximum extent permitted by law, any right to revoke any guaranty of any Obligations as long as
it is a Guarantor.


 


(e)          Subrogation.
A Guarantor that makes a payment with respect to an Obligation hereunder shall be subrogated to the rights of the payee against
the Borrower or the applicable Obligor with respect to such payment; provided that no Guarantor shall enforce any payment
by way of subrogation against the Borrower or the applicable Obligor, or by reason of contribution against any other guarantor
of such Obligation, until all the Release Conditions have been satisfied.


 


(f)          Stay
of Acceleration. If acceleration of the time for payment of any Obligation by the Borrower or the applicable Obligor is stayed
by reason of the insolvency or receivership of the Borrower or the applicable Obligor or otherwise, all Obligations otherwise subject
to acceleration under the terms of any Secured Agreement shall nonetheless be payable by the Guarantors hereunder forthwith on
demand by the Secured Party.


 


(g)          Right
of Set-Off. In addition to any rights and remedies of the Secured Party provided by law, the Secured Party shall have the right,
upon any amount becoming due and payable by any Guarantor hereunder (whether at the stated maturity, by acceleration or otherwise)
to set-off and appropriate and apply against such amount any and all deposits (general or special, time or demand, provisional
or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect,
absolute or contingent, matured or unmatured at any time held or owing by the Secured Party or for the credit or the account of
such Guarantor. The Secured Party agrees to promptly notify such Guarantor after any such setoff and application made by the Secured
Party; provided that the failure to give such notice shall not affect the validity of such setoff and application.


 




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(h)          Continuing
Guarantee. Each Secured Guarantee is a continuing guarantee, shall be binding on the relevant Guarantor and its successors
and assigns, and shall be enforceable by the Secured Party. If all or part of the Secured Party’s interest in any Obligation
is assigned or otherwise transferred, the transferor’s rights under each Secured Guarantee, to the extent applicable to the
obligation so transferred, shall automatically be transferred with such obligation.


 


(i)          Limitation
on Obligations of Guarantor. The obligations of each Guarantor under its Secured Guarantee shall be limited to an aggregate
amount equal to the largest amount that would not render such Secured Guarantee subject to avoidance under Section 548 of the Bankruptcy
Code or any comparable provisions of applicable law.


 


(j)          Right
of Contribution. Each Guarantor hereby agrees that to the extent that a Guarantor shall have paid more than its proportionate
share of any payment made hereunder, such Guarantor shall be entitled to seek and receive contribution from and against any other
Guarantor hereunder which has not paid its proportionate share of such payment. Each Guarantor’s right of contribution shall
be subject to the terms and conditions of Section 2(e) . The provisions of this Section 2(j) shall in no respect limit the obligations
and liabilities of any Guarantor to the Secured Party, and each Guarantor shall remain liable to the Secured Party for the full
amount guaranteed by such Guarantor hereunder.


 


Section
3. Grant of Transaction Liens. (a) The Borrower, in order to secure all Obligations, and each Guarantor party hereto,
in order to secure all Obligations, including its Obligations under its Secured Guarantee, grants to the Secured Party a continuing
security interest in all the following property of such Borrower or such Guarantor, as the case may be, whether now owned or existing
or hereafter acquired or arising and regardless of where located:


 


(i)          all
Accounts;


 


(ii)         all
Chattel Paper;


 


(iii)        all
Money and Deposit Accounts;


 


(iv)         all
Documents;


 




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(v)          all
Equipment;


 


(vi)         all
General Intangibles (including (x) any Equity Interests in other Persons that do not constitute Investment Property and (y) any
Intellectual Property);


 


(vii)        all
Instruments;


 


(viii)      all
Inventory;


 


(ix)         all
Investment Property;


 


(x)          the
Commercial Tort Claims described in Schedule 3;


 


(xi)         all
Letter-of-Credit Rights;


 


(xii)        all
books and records (including customer lists, credit files, computer programs, printouts and other computer materials and records)
of such Grantor pertaining to any of its Collateral;


 


(xiii)      all
Proceeds of the Collateral described in the foregoing clauses (i) through (xii);


 


provided that the following property is excluded from
the foregoing security interests (it being understood that such grant will be applicable at such time as any such property or assets
ceases to constitute Excluded Assets): (A) motor vehicles the perfection of a security interest in which is excluded from the Uniform
Commercial Code in the relevant jurisdiction, (B) any lease, license or other agreement to the extent that a grant of a security
interest therein would violate or invalidate such lease, license or agreement or create a right of termination in favor of any
other party thereto (other than the Borrower or Grantor) after giving effect to the applicable anti-assignment provisions of the
UCC, (C) any properties and assets with respect to which the Secured Party determines in its good faith judgment that the costs
or other consequences of granting or perfecting a security interest therein are excessive in view of the benefits to be obtained
by the Secured Party, (D) any United States intent-to-use Trademark applications to the extent that, and solely during the period
in which, the grant of a security interest therein would impair the validity or enforceability of such intent-to-use Trademark
applications under applicable federal law, (E) any real property (which shall, notwithstanding anything herein to the contrary,
be subject to the requirements of Section 4.01 and 5.12(a) of the Credit Agreement), (F) any letter of credit rights to the extent
any Grantor is required by applicable law to apply the proceeds of a drawing of such letter of credit for a specified purpose,
(G) any governmental licenses or state or local franchises, charters and authorizations, to the extent security interests in such
licenses, franchises, charters or authorizations are prohibited or restricted thereby after giving effect to the applicable anti-assignment
provisions of the Uniform Commercial Code, and (H) any property to the extent that the grant of a security interest therein is
prohibited by any applicable law or regulation, requires a consent not obtained of any Governmental Authority pursuant to any applicable
law or regulation, or is prohibited by, or would constitute a breach or default under or would result in the termination, invalidation
or abandonment of or requires any consent not obtained under, any contract, license, agreement, instrument or other document evidencing
or giving rise to such property or, in the case of any Investment Property, any applicable shareholder or similar agreement (the
foregoing, collectively, the “Excluded Assets”), provided that the foregoing limitation in clause (H)
shall not affect, limit, restrict or impair the grant by a Grantor of a security interest pursuant to this Agreement in any asset
or right to the extent that Sections 9-406 and 9-408 of the Uniform Commercial Code as in effect on the date hereof would permit
(and excuse any default or violation resulting therefrom) the creation of a security interest in such asset or right notwithstanding
such law or regulation or the provision of such contract, license, agreement, instrument or other document or shareholder or similar
agreement prohibiting the creation of a security interest therein or shall render such provision unenforceable. Each Grantor shall
upon request of the Secured Party use commercially reasonable efforts to obtain any such required consent that is reasonably obtainable.


 




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(b)          With
respect to each right to payment or performance included in the Collateral from time to time, the Transaction Lien granted therein
includes a continuing security interest in (i) any Supporting Obligation that supports such payment or performance and (ii) any
Lien that (x) secures such right to payment or performance or (y) secures any such Supporting Obligation.


 


(c)          The
Transaction Liens are granted as security only and shall not subject the Secured Party to, or transfer or in any way affect or
modify, any obligation or liability of any Grantor with respect to any of the Collateral or any transaction in connection therewith.


 


Section
4. General Representations and Warranties. Each Grantor represents and warrants that:


 


(a)          Such
Grantor (a) is duly organized or formed, as the case may be, validly existing and in good standing under the laws of the jurisdiction
of its organization or formation, (b) has the requisite power and authority to own and operate its properties, to lease the properties
it operates as lessee and to conduct the business in which it is currently engaged as it is currently conducted, (c) is duly qualified
as a foreign corporation and in good standing under the laws of each jurisdiction where its ownership, lease or operation of properties
or the conduct of its business requires such qualification except to the extent that the failure to so qualify could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect and (d) is in compliance with all applicable laws, rules and
regulations, except to the extent that the failure to comply therewith could not, in the aggregate, reasonably be expected to have
a Material Adverse Effect.


 




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(b)          With
respect to each Original Grantor, Schedule 1 lists all Equity Interests in Subsidiaries and Affiliates of such Grantor owned by
such Grantor as of the Closing Date. Such Grantor holds all such Equity Interests directly (i.e., not through a Subsidiary,
a Securities Intermediary or any other Person).


 


(c)          With
respect to each Original Grantor, Schedule 2 lists, as of the Closing Date, (i) all Securities owned by such Grantor (except for
Securities evidencing Equity Interests in Subsidiaries and Affiliates of such Grantor) and (ii) all Securities Accounts (other
than any one or more Securities Accounts comprising Financial Assets of less than $250,000 in the aggregate) to which Financial
Assets are credited in respect of which such Grantor owns Security Entitlements.


 


(d)          As
of the Closing Date, such Grantor owns no Commodity Account in respect of which such Grantor is the Commodity Customer.


 


(e)          All
Pledged Equity Interests owned by such Grantor are owned by it free and clear of any Lien other than Permitted Liens. All shares
of capital stock included in such Pledged Equity Interests (including shares of capital stock in respect of which such Grantor
owns a Security Entitlement) have been duly authorized and validly issued and are fully paid and non-assessable. None of such Pledged
Equity Interests is subject to any option to purchase or similar right of any Person.


 


(f)          Such
Grantor has good and marketable title to all its Collateral (subject to exceptions that are, in the aggregate, not material), free
and clear of any Lien other than Permitted Liens.


 


(g)          Such
Grantor has not performed any acts that are reasonably likely to prevent the Secured Party from enforcing any of the provisions
of the Security Documents or that would limit the Secured Party in any such enforcement. No financing statement, security agreement,
mortgage or similar or equivalent document or instrument covering all or part of the Collateral owned by such Grantor is on file
or of record in any jurisdiction in which such filing or recording would be effective to perfect or record a Lien on such Collateral,
except financing statements, mortgages or other similar or equivalent documents with respect to Permitted Liens. After the Closing
Date, no Collateral owned by such Grantor will be in the possession or under the Control of any other Person having a claim thereto
or security interest therein, other than a Permitted Lien.


 


(h)          The
Transaction Liens on all Collateral owned by such Grantor (i) have been validly created, (ii) will attach to each item of such
Collateral on the Closing Date (or, if such Grantor first obtains rights thereto on a later date, on such later date) and (iii)
when so attached, will secure all the Obligations, including the Obligations under its Secured Guarantee, as the case may be.


 




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(i)           Such
Grantor has delivered an Information Certificate to the Secured Party. With respect to each Original Grantor, information set forth
therein is correct and complete, in all material respects, as of the Closing Date.


 


(j)          When
UCC financing statements describing the Collateral as “all assets” or “all personal property now existing or
hereinafter acquired” or other words to that effect have been filed in the offices specified in such Information Certificate,
the Transaction Liens will constitute perfected security interests in the Collateral owned by such Grantor to the extent that a
security interest therein may be perfected by filing pursuant to the UCC, prior to all Liens and rights of others therein except
Permitted Liens. When, in addition to the filing of such UCC financing statements, the applicable Intellectual Property Filings
have been made with respect to such Grantor’s Recordable Intellectual Property (including any future filings required pursuant
to Sections 5(a) and 6(a)), the Transaction Liens will constitute perfected security interests in all right, title and interest
of such Grantor in its Recordable Intellectual Property to the extent that security interests therein may be perfected by such
filings, prior to all Liens and rights of others therein except Permitted Liens. Except for (x) the filing of such UCC financing
statements, (y) such Intellectual Property Filings, and (z) additional Intellectual Property Filings that may be necessary to perfect
the Transaction Liens with respect to such Grantor’s Patents, Trademarks and Copyrights that do not constitute Recordable
Intellectual Property, no registration, recordation or filing with any governmental body, agency or official is required in connection
with the execution or delivery of the Security Documents or is necessary for the validity or enforceability thereof or for the
perfection (other than in respect of deposit accounts) or due recordation of the Transaction Liens or for the enforcement of the
Transaction Liens. Notwithstanding anything herein to the contrary, no Grantor shall take any action to perfect any security interest
in any part of the Collateral under the laws of any jurisdiction outside of the United States of America.


 


(k)          Such
Grantor has taken, and will continue to take, all actions necessary under the UCC to perfect its interest in any Accounts or Chattel
Paper purchased or otherwise acquired by it, as against its assignors and creditors of its assignors, except with respect to actions
not required to taken until a specified period after the Closing Date.


 




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Section
5. Further Assurances; General Covenants. Each Grantor covenants as follows:


 


(a)          Such
Grantor will, from time to time, at the Borrower’s expense, execute, deliver, file and record any reasonable statement, assignment,
instrument, document, agreement or other paper and take any other action (including any Intellectual Property Filing but solely
with respect to Recordable Intellectual Property) that from time to time may be necessary, or that the Secured Party may reasonably
request, in order to:


 


(i)          create,
preserve, perfect, confirm or validate the Transaction Liens on such Grantor’s Collateral;


 


(ii)         in
the case of (a) Pledged Deposit Accounts (other than Exempt Accounts), Pledged Investment Property or Pledged Securities Accounts
(other than Exempt Accounts) and (b) upon the occurrence and during the continuance of an Event of Default, Pledged Letter-of-Credit
Rights, cause the Secured Party to have Control thereof (subject to exclusions expressly set forth therein and in the Credit Agreement);


 


(iii)        enable
the Secured Party to obtain the full benefits of the Security Documents; or


 


(iv)         enable
the Secured Party to exercise and enforce any of its rights, powers and remedies with respect to any of such Grantor’s Collateral.


 


Such Grantor authorizes the Secured Party
to execute and file such financing statements or continuation statements in such jurisdictions with such descriptions of collateral
(including “all assets” or “all personal property now existing or hereinafter acquired” or other words
to that effect) and other information set forth therein as the Secured Party may deem necessary or desirable for the purposes set
forth in the preceding sentence. Each Grantor also ratifies its authorization for the Secured Party to file in any such jurisdiction
any initial financing statements or amendments thereto if filed prior to the date hereof. The Secured Party is further authorized
to file with the United States Patent and Trademark Office or United States Copyright Office (or any successor office) such documents
as may be necessary or advisable for the purpose of perfecting, confirming, continuing, enforcing or protecting the security interests
granted by each Grantor, without the signature of any Grantor, and naming any Grantor or the Grantors as debtors and the Secured
Party as secured party. The Borrower will pay the costs of, or reasonably incidental to, any Intellectual Property Filings and
any recording or filing of any financing or continuation statements or other documents recorded or filed pursuant hereto.


 


(b)          Such
Grantor shall furnish to the Secured Party 20 Business Days (or such shorter period as the Secured Party may agree) prior written
notice of any change (1) in its name, (2) in its jurisdiction of organization or formation, (3) in its identity or corporate structure
or (4) in its federal taxpayer identification number. Such Grantor agrees not to effect or permit any change referred to in the
preceding sentence unless all filings have been made under the Uniform Commercial Code or otherwise that are required in order
for the Secured Party to continue at all times following such change to have a valid, legal and perfected security interest in
all the Collateral under the Loan Documents.


 




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(c)          If
any of its Collateral is in the possession or control of a warehouseman, bailee or agent at any time, when an Event of Default
shall have occurred and be continuing, such Grantor will, upon the request of the Secured Party: (i) notify such warehouseman,
bailee or agent of the relevant Transaction Liens, (ii) instruct such warehouseman, bailee or agent to hold all such Collateral
for the Secured Party’s account subject to the Secured Party’s instructions (which shall permit such Collateral to
be removed by such Grantor in the ordinary course of business until the Secured Party notifies such warehouseman, bailee or agent
that an Event of Default has occurred and is continuing), (iii) cause such warehouseman, bailee or agent to Authenticate a Record
acknowledging that it holds possession of such Collateral for the Secured Party’s benefit and (iv) make such Authenticated
Record available to the Secured Party.


 


(d)          Such
Grantor will promptly upon request, provide to the Secured Party all information and evidence concerning such Grantor’s Collateral
that the Secured Party may reasonably request from time to time to enable it to enforce the provisions of the Security Documents.


 


(e)          Except
as permitted under the Credit Agreement, each Grantor shall defend its title to Collateral and the Secured Party’s Liens
therein against all Persons, claims and demands, except Permitted Liens.


 


Section
6. Intellectual Property. Each Grantor covenants as follows:


 


(a)          On
the Closing Date (in the case of an Original Grantor) or the date on which it signs and delivers its first Security Agreement Supplement
(in the case of any other Grantor), such Grantor will sign and deliver to the Secured Party Intellectual Property Notices with
respect to all Recordable Intellectual Property then owned by it. Within 45 calendar days after the last day of each fiscal quarter
thereafter, it will sign and deliver to the Secured Party an appropriate Intellectual Property Notice covering any Recordable Intellectual
Property owned by it on the last day of such fiscal quarter that is not covered by any previous Intellectual Property Notices so
signed and delivered by it. In each case, it will, within 45 calendar days after the last day of each such fiscal quarter, make
all Intellectual Property Filings necessary to record the Transaction Liens on such Recordable Intellectual Property.


 




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(b)          Such
Grantor will notify the Secured Party within 45 days after the last day of the fiscal quarter in which it learns that any application
or registration relating to any Intellectual Property owned by it may become abandoned, or of any adverse, final and non-appealable
determination (including any final, non-appealable adverse determination in the United States Copyright Office, the United States
Patent and Trademark Office or any court) regarding such Grantor’s ownership of such Intellectual Property, its right to
register or patent the same, or its right to keep and maintain the same, in each case of the foregoing, except to the extent that
the loss of such Intellectual Property would not reasonably be expected to have a Material Adverse Effect. If any of such Grantor’s
rights to any Intellectual Property are materially infringed or misappropriated by a third party and such infringement or misappropriation
would be reasonably expected to have a Material Adverse Effect, such Grantor will notify the Secured Party within 45 calendar days
after it learns thereof and will, unless such Grantor shall reasonably determine that such action would be of negligible value,
economic or otherwise, promptly take such actions as such Grantor shall reasonably deem appropriate under the circumstances to
protect such Intellectual Property.


 


(c)          Upon
the occurrence and during the continuance of an Event of Default, each Grantor shall, upon the request of the Secured Party therefor,
use its commercially reasonable efforts to obtain all requisite consents or approvals by the licensor of each Exclusive Copyright
License and each material Copyright License, Patent License and Trademark License under which such Grantor is the licensee to effect
the assignment of all such Grantor’s right, title and interest thereunder to the Secured Party or its designee.


 


Section
7. Investment Property. Each Grantor represents, warrants and covenants as follows:


 


(a)          Certificated
Securities. On the Closing Date (in the case of an Original Grantor) or the date on which it signs and delivers its first Security
Agreement Supplement (in the case of any other Grantor), such Grantor will deliver to the Secured Party as Collateral hereunder
all certificates representing Pledged Certificated Securities then owned by such Grantor. Thereafter, whenever such Grantor acquires
any other certificate representing a Pledged Certificated Security, such Grantor will promptly (and in any event within 10 Business
Days) deliver such certificate to the Secured Party as Collateral hereunder.


 


(b)          Uncertificated
Securities. On the Closing Date (in the case of an Original Grantor) or the date on which it signs and delivers its first Security
Agreement Supplement (in the case of any other Grantor), such Grantor will enter into (and cause the relevant issuer to enter into)
an Issuer Control Agreement in respect of each Pledged Uncertificated Security then owned by such Grantor and deliver such Issuer
Control Agreement to the Secured Party (which shall enter into the same). Thereafter, whenever such Grantor acquires any other
Pledged Uncertificated Security, such Grantor will promptly (and in any event within 10 Business Days) enter into (and cause the
relevant issuer to enter into) an Issuer Control Agreement in respect of such Pledged Uncertificated Security and deliver such
Issuer Control Agreement to the Secured Party (which shall enter into the same).


 




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(c)          Security
Entitlements. On the Closing Date (in the case of an Original Grantor) or the date on which it signs and delivers its first
Security Agreement Supplement (in the case of any other Grantor), such Grantor will, with respect to each Security Entitlement
then owned by it, enter into (and cause the relevant Securities Intermediary to enter into) a Securities Account Control Agreement
in respect of such Security Entitlement and the Securities Account to which the underlying Financial Asset is credited and will
deliver such Securities Account Control Agreement to the Secured Party (which shall enter into the same); provided that
the Grantors have the right not to comply with this section with respect to Exempt Accounts (and Financial Assets credited thereto
and related Security Entitlements). Thereafter, whenever such Grantor acquires any other Security Entitlement with respect to Financial
Assets (other than a Financial Asset credited to an account that would be an Exempt Account immediately after such Financial Asset
is so credited), promptly (and in any event within 10 Business Days) cause the underlying Financial Asset to be credited to a Controlled
Securities Account.


 


(d)          Perfection
as to Certificated Securities. When such Grantor delivers the certificate representing any Pledged Certificated Security owned
by it to the Secured Party and complies with Section 7(h) in connection with such delivery, (i) the Transaction Lien on such Pledged
Certificated Security will be perfected, subject to no prior Liens or rights of others (other than Permitted Liens), (ii) the Secured
Party will have Control of such Pledged Certificated Security and (iii) assuming the Secured Party does not have notice of any
adverse claim to such perfected Certificated Security (it being understood and agreed that as of the Closing Date, the Secured
Party does not have notice of any adverse claim to such Pledged Certificated Security), the Secured Party will be a protected purchaser
(within the meaning of UCC Section 8-303) thereof.


 


(e)          Perfection
as to Uncertificated Securities. When such Grantor, the Secured Party and the issuer of any Pledged Uncertificated Security
owned by such Grantor enter into an Issuer Control Agreement with respect thereto, (i) the Transaction Lien on such Pledged Uncertificated
Security will be perfected, subject to no prior Liens or rights of others (other than Permitted Liens), (ii) the Secured Party
will have Control of such Pledged Uncertificated Security and (iii) assuming the Secured Party does not have notice of any adverse
claim to such Pledged Uncertificated Security (it being understood and agreed that as of the Closing Date, the Secured Party does
not have notice of any adverse claim to such Pledged Uncertificated Security), the Secured Party will be a protected purchaser
(within the meaning of UCC Section 8-303) thereof.


 




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(f)          Perfection
as to Security Entitlements. So long as the Financial Asset underlying any Security Entitlement owned by such Grantor is credited
to a Controlled Securities Account, (i) the Transaction Lien on such Security Entitlement will be perfected, subject to no prior
Liens or rights of others (except Liens and rights of the relevant Securities Intermediary that are Permitted Liens), (ii) the
Secured Party will have Control of such Security Entitlement and (iii) assuming the Secured Party acquires its Security Entitlement
with respect thereto without notice of any adverse claim thereto (it being understood and agreed that as of the Closing Date, the
Secured Party does not have notice of any adverse claim to such Security Entitlement), no action based on an adverse claim to such
Security Entitlement or such Financial Asset, whether framed in conversion, replevin, constructive trust, equitable lien or other
theory, may be asserted against the Secured Party.


 


(g)          Agreement
as to Applicable Jurisdiction. In respect of all Security Entitlements owned by such Grantor, and all Pledged Securities Accounts
to which the related Financial Assets are credited, the related Securities Account Control Agreement will provide that the Securities
Intermediary’s jurisdiction (determined as provided in UCC Section 8-110(e)) will at all times be located in the United States.


 


(h)          Delivery
of Pledged Certificates. All certificates representing Pledged Certificated Securities, when delivered to the Secured Party,
will be in suitable form for transfer by delivery, or accompanied by duly executed instruments of transfer or assignment in blank,
with signatures appropriately guaranteed, all in form and substance reasonably satisfactory to the Secured Party.


 


(i)           Communications.
Upon the reasonable request of the Secured Party, each Grantor will promptly give to the Secured Party copies of any notices and
other communications received by it with respect to (i) Pledged Securities registered in the name of such Grantor or its nominee
and (ii) Pledged Security Entitlements as to which such Grantor is the Entitlement Holder; provided that, with respect to
any such notice or other communication that could reasonably be expected to adversely affect the security interest of the Secured
Party in such Pledged Securities or Pledged Securities Entitlements granted hereunder or the perfection thereof, the Secured Party
shall be deemed to have made such request on the last day of each fiscal quarter of the Borrower.


 


(j)           Certification
of Limited Liability Company and Partnership Interests. Any limited liability company and any partnership controlled by any
Grantor shall either (a) not include in its operative documents any provision that any Equity Interests in such limited liability
company or such partnership be a “security” as defined under Article 8 of the Uniform Commercial Code, or (b) certificate
any Equity Interests in any such limited liability company or such partnership. To the extent an interest in any limited liability
company or partnership controlled by any Grantor and pledged hereunder is certificated or becomes certificated, each such certificate
shall be delivered to the Secured Party pursuant to Section 7(a) and such Grantor shall fulfill all other requirements under Section
7 applicable in respect thereof.


 




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Section
8. Deposit Accounts. Each Grantor represents, warrants and covenants as follows:


 


(a)          All
cash owned by such Grantor shall be deposited, upon or promptly after receipt thereof, in one or more Controlled Deposit Accounts
or an account that would be an Exempt Account immediately after such deposit.


 


(b)          In
respect of each Controlled Deposit Account, the related Deposit Account Control Agreement will provide that the Depositary Bank’s
jurisdiction (determined as provided in UCC Section 9-304) will at all times be a jurisdiction in which Article 9 of the Uniform
Commercial Code is in effect.


 


(c)          So
long as the Secured Party has Control of a Controlled Deposit Account, the Transaction Lien on such Controlled Deposit Account
will be perfected, subject to no prior Liens or rights of others (except (x) the Depositary Bank’s right to deduct its normal
operating charges and any uncollected funds previously credited thereto, and (y) Permitted Liens).


 


Section
9. Commercial Tort Claims. Each Grantor represents, warrants and covenants as follows:


 


(a)          In
the case of an Original Grantor, Schedule 3 accurately describes, with the specificity required to satisfy Official Comment 5 to
UCC Section 9-108, each Material Commercial Tort Claim with respect to which such Original Grantor is the claimant as of the Closing
Date. In the case of any other Grantor, Schedule 3 to its first Security Agreement Supplement will accurately describe, with the
specificity required to satisfy said Official Comment 5, each Material Commercial Tort Claim with respect to which such Grantor
is the claimant as of the date on which it signs and delivers such Security Agreement Supplement.


 


(b)          If
any Grantor acquires a Material Commercial Tort Claim after the Closing Date (in the case of an Original Grantor) or the date on
which it signs and delivers its first Security Agreement Supplement (in the case of any other Grantor), such Grantor will promptly
(and in any event within 10 Business Days) sign and deliver to the Secured Party a Security Agreement Supplement granting a security
interest in such Commercial Tort Claim (which shall be described therein with the specificity required to satisfy said Official
Comment 5) to the Secured Party.


 




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Section
10. Transfer of Record Ownership. At any time when an Event of Default shall have occurred and be continuing, the
Secured Party may (and to the extent that action by it is required, the relevant Grantor, if directed to do so by the Secured Party,
will as promptly as practicable) cause each of the Pledged Securities (or any portion thereof specified in such direction) to be
transferred of record into the name of the Secured Party or its nominee. Each Grantor will take any and all actions reasonably
requested by the Secured Party to facilitate compliance with this Section. If the provisions of this Section are implemented, Section
7(b) shall not thereafter apply to any Pledged Security that is registered in the name of the Secured Party or its nominee. The
Secured Party will promptly give to the relevant Grantor copies of any notices and other communications received by the Secured
Party with respect to Pledged Securities registered in the name of the Secured Party or its nominee.


 


Section
11. Right to Vote Securities; Right to Proceeds of Insurance. (a) Unless an Event of Default shall have occurred
and be continuing, each Grantor shall have the right, from time to time, to vote and to give consents, ratifications and waivers
with respect to any Pledged Security owned by it and the Financial Asset underlying any Pledged Security Entitlement owned by it,
and the Secured Party will, upon receiving a written request from such Grantor, deliver to such Grantor or as specified in such
request such proxies, powers of attorney, consents, ratifications and waivers in respect of any such Pledged Security that is registered
in the name of the Secured Party or its nominee or any such Pledged Security Entitlement as to which the Secured Party or its nominee
is the Entitlement Holder, in each case as shall be specified in such request and be in form and substance satisfactory to the
Secured Party.


 


(b)          If
an Event of Default shall have occurred and be continuing, the Secured Party shall have the exclusive right to the extent permitted
by law to vote, to give consents, ratifications and waivers and to take any other action with respect to the Pledged Investment
Property, the other Pledged Equity Interests and the Financial Assets underlying the Pledged Security Entitlements, with the same
force and effect as if the Secured Party were the absolute and sole owner thereof, and each Grantor shall take all such action
as the Secured Party may reasonably request from time to time to give effect to such right.


 


(c)          Upon
the receipt by Secured Party of a request from a Grantor that the Secured Party (i) turn over the proceeds of any policy of insurance
of such Grantor on which the Secured Party is named as a loss payee or (ii) provide written instructions to the related insurer
directing the insurer to pay the proceeds thereof directly to such Grantor or its designee, Secured Party shall promptly (and in
any event within two Business Days) turn over such proceeds or provide such written instructions in accordance with the request
of such Grantor, unless and to the extent (x) such proceeds are required to be applied to the repayment of the Obligations under
the Credit Agreement at such time or (y) an Event of Default shall have occurred and be continuing.


 




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Section
12. Certain Cash Distributions. Cash Distributions with respect to assets held in a Collateral Account shall be deposited
and held therein, or withdrawn therefrom, as provided herein and in the Credit Agreement. Funds held in any Collateral Account
may, until withdrawn, be invested and reinvested in such Permitted Investments as the relevant Grantor shall request from time
to time; provided that if an Event of Default shall have occurred and be continuing, the Secured Party may select such Permitted
Investments.


 


Section
13. Remedies upon Event of Default. (a) If an Event of Default shall have occurred and be continuing, the Secured
Party may exercise (or cause its sub-agents to exercise) any or all of the remedies available to it (or to such sub-agents) under
the Loan Documents.


 


(b)          Without
limiting the generality of the foregoing, if an Event of Default shall have occurred and be continuing, the Secured Party may exercise
all the rights of a secured party under the UCC (whether or not in effect in the jurisdiction where such rights are exercised)
with respect to any Collateral and, in addition, the Secured Party may, without being required to give any notice, except as herein
provided or as may be required by mandatory provisions of law, sell or otherwise dispose of the Collateral or any part thereof
in one or more parcels at public or private sale, at any exchange, broker’s board or at any of the Secured Party’s
offices or elsewhere, for cash, on credit or for future delivery, at such time or times and at such price or prices and upon such
other terms as the Secured Party may deem commercially reasonable, irrespective of the impact of any such sales on the market price
of the Collateral. To the maximum extent permitted by applicable law, the Secured Party may be the purchaser of any or all of the
Collateral at any such sale and shall be entitled to use and apply all of any part of the Obligations as a credit on account of
the purchase price of any Collateral payable at such sale. Upon any sale of Collateral by the Secured Party (including pursuant
to a power of sale granted by statute or under a judicial proceeding), the receipt of the Secured Party or of the officer making
the sale shall be a sufficient discharge to the purchaser or purchasers of the Collateral so sold and such purchaser or purchasers
shall not be obligated to see to the application of any part of the purchase money paid to the Secured Party or such officer or
be answerable in any way for the misapplication thereof. Each purchaser at any such sale shall hold the property sold absolutely
free from any claim or right on the part of any Grantor, and each Grantor hereby waives (to the extent permitted by law) all rights
of redemption, stay or appraisal that it now has or may at any time in the future have under any rule of law or statute now existing
or hereafter enacted. The Secured Party shall not be obliged to make any sale of Collateral regardless of notice of sale having
been given. The Secured Party may adjourn any public or private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned. To the maximum
extent permitted by law, each Grantor hereby waives any claim against the Secured Party arising because the price at which any
Collateral may have been sold at such a private sale was less than the price that might have been obtained at a public sale, even
if the Secured Party accepts the first offer received and does not offer such Collateral to more than one offeree. The Secured
Party may disclaim any warranty, as to title or as to any other matter, in connection with such sale or other disposition, and
its doing so shall not be considered adversely to affect the commercial reasonableness of such sale or other disposition.


 




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(c)          If
the Secured Party sells any of the Collateral upon credit, the Grantors will be credited only with payment actually made by the
purchaser, received by the Secured Party and applied in accordance with Section 14 hereof. In the event the purchaser fails to
pay for the Collateral, the Secured Party may resell the same, subject to the same rights and duties set forth herein.


 


(d)          Notice
of any such sale or other disposition shall be given as required by applicable law, rule or regulation. Each Grantor hereby agrees
that 10 days’ written notice of any proposed sale or other disposition of Collateral by the Secured Party shall be reasonable.


 


(e)          For
the purpose of enabling the Secured Party to exercise rights and remedies under this Agreement at such time as the Secured Party
shall be lawfully entitled to exercise such rights and remedies, each Grantor hereby grants to the Secured Party a license (exercisable
without payment of royalty or other compensation to the Grantors and subject to any prior rights granted by such Grantor to third
parties), to use, license or sublicense any of the Collateral consisting of Intellectual Property now owned or hereafter acquired
by such Grantor, and including in such license access to all media in which any of the licensed items may be recorded or stored
and to all computer software and programs (solely to the extent permitted by the relevant licenses therefor) used for the compilation
or printout thereof; provided, however, that any trademarks or service marks licensed pursuant to the foregoing may be used
only in connection with goods and services of similar type and similar or greater quality than those theretofore sold by such Grantor
under such trademark or service mark. The use of such license by the Secured Party may be exercised only upon the occurrence and
during the continuation of an Event of Default; provided, however, that any license or sublicense entered into by
the Secured Party in accordance herewith shall be binding upon each Grantor notwithstanding any subsequent cure of an Event of
Default.


 


Section
14. Application of Proceeds. If an Event of Default shall have occurred and be continuing, the Secured Party may
apply (a) any cash held in the Collateral Accounts and (b) the proceeds of any sale or other disposition of all or any part of
the Collateral to the Obligations, which application shall be made by the Secured Party in the following order:


 




    	24



    	 



    

 


First, to payment of that
portion of the Obligations constituting fees, indemnities, expenses and other amounts (other than principal and interest, but including
all reasonable fees, disbursements and other charges of counsel under Section 8.05 of the Credit Agreement and amounts payable
under Sections 2.03, 2.09 and 2.11 of the Credit Agreement) payable to the Secured Party;


 


Second, to payment of that
portion of the Obligations constituting accrued and unpaid interest on, and unpaid principal of, the Term Loan;


 


Third, to the payment of
all other Obligations of the Loan Parties that are due and payable to the Secured Party on such date; and


 


Last, the balance, if any,
after all of the Obligations have been paid in full, to the Borrower or as otherwise required by applicable law, rule or regulation.


 


Section
15. Fees and Expenses; Indemnification. (a) All expenses of protecting, storing, warehousing, insuring, handling,
maintaining and shipping any Collateral, all Taxes payable with respect to any Collateral (including any sale thereof), and all
other payments required to be made by Secured Party to any Person to realize upon any Collateral, shall be borne and paid by the
Grantors.  The Borrower will forthwith upon demand pay to the Secured Party:


 


(i)          the
amount of any taxes that the Secured Party may have been required to pay by reason of the Transaction Liens or to free any Collateral
from any other Lien thereon;


 


(ii)         the
amount of any reasonable and documented out-of-pocket costs and expenses incurred in connection with the development, preparation,
execution and administration of, and any amendment, supplement or modification to, this Agreement and the other Loan Documents
and any other documents prepared in connection herewith or therewith, and the consummation and administration of the Transactions,
including, without limitation, the fees, charges and disbursements of counsel to the Secured Party, including, if applicable, special
or local counsel in each applicable jurisdiction, as appropriate; and


 


(iii)        the
amount required to pay or reimburse the Secured Party for all its reasonable costs and expenses incurred in connection with the
enforcement of any rights under this Agreement, the other Loan Documents and any such other documents, including, without limitation,
the fees, charges and disbursements of counsel to the Secured Party, including, if applicable, special or local counsel in each
applicable jurisdiction, as appropriate.


 




    	25



    	 



    

 


Any such amount not paid to the Secured Party on demand will
bear interest for each day thereafter until paid at the rate provided for in Section 2.05 of the Credit Agreement.


 


(b)          If
any transfer tax, documentary stamp tax or other tax is payable in connection with any transfer or other transaction provided for
in the Security Documents, the Borrower will pay such tax and provide any required tax stamps to the Secured Party or as otherwise
required by law.


 


(c)          The
Borrower shall indemnify the Secured Party its affiliates and the respective directors, officers, agents and employees of the foregoing
(each an “Indemnitee”) in accordance with Section 8.05 of the Credit Agreement.


 


Section
16. Authority to Administer Collateral. Each Grantor irrevocably appoints the Secured Party (and all Persons designated
by the Secured Party) as its true and lawful attorney (and agent in fact), with full power of substitution, in its name or in the
name of such Grantor, the Secured Party or otherwise, for the sole use and benefit of the Secured Party, but at the Borrower’s
sole cost and expense, to the extent permitted by law and without notice, to exercise, at any time and from time to time, all or
any of the following powers with respect to all or any of such Grantor’s Collateral:


 


(i)          endorse
a Grantor’s name on any proceeds of Collateral (including proceeds of insurance) that come into the Secured Party’s
possession or control; or


 


(ii)         during
the continuance of any Event of Default:


 


(A)         notify
any Account Debtors of the assignment of their Accounts, demand and enforce payment of Accounts by legal proceedings or otherwise,
and generally exercise any rights and remedies with respect to Accounts;


 


(B)         demand,
sue for, collect, receive and give acquittance for any and all monies due or to become due upon or by virtue thereof,


 


(C)         settle,
adjust, modify, compromise, compound, discharge, release, prosecute or defend any Accounts or other Collateral or any action or
proceeding with respect thereto,


 


(D)         collect,
liquidate and receive balances in Pledged Deposit Accounts or Pledged Securities Accounts, and take control, in any manner, of
proceeds of Collateral;


 




    	26



    	 



    

 


(E)         prepare,
file and sign a Grantor’s name to a proof of claim or other document in a bankruptcy of an Account Debtor, or to any notice,
assignment or satisfaction of Lien or similar document;


 


(F)         receive,
open and dispose of mail addressed to a Grantor, and notify postal authorities to deliver any such mail to an address designated
by the Secured Party;


 


(G)         endorse
any Chattel Paper, Document, Instrument, bill of lading, or other document or agreement relating to any Accounts, Inventory or
other Collateral;


 


(H)         use
a Grantor’s stationery and sign its name to verifications of Accounts and notices to Account Debtors;


 


(I)         use
information contained in any data processing, electronic or information systems relating to Collateral;


 


(J)         make
and adjust claims under insurance policies;


 


(K)         take
any action as may be necessary or appropriate to obtain payment under any letter of credit, banker’s acceptance or other
instrument for which a Grantor is a beneficiary;


 


(L)         sell,
lease, license or otherwise dispose of the same or the proceeds or avails thereof, as fully and effectually as if the Secured Party
were the absolute owner thereof,


 


(M)         extend
the time of payment of any or all thereof and to make any allowance or other adjustment with reference thereto; and


 


(N)         take
all other actions as the Secured Party deems appropriate to fulfill any Grantor’s obligations under the Loan Documents.


 


Section
17. Limitation on Duty in Respect of Collateral. Beyond the exercise of reasonable care in the custody and preservation
thereof, the Secured Party will have no duty as to any Collateral in its possession or control or in the possession or control
of any sub-agent or bailee or any income therefrom or as to the preservation of rights against prior parties or any other rights
pertaining thereto. The Secured Party will be deemed to have exercised reasonable care in the custody and preservation of the Collateral
in its possession or control if such Collateral is accorded treatment substantially equal to that which it accords its own property,
and will not be liable or responsible for any loss or damage to any Collateral, or for any diminution in the value thereof, by
reason of any act or omission of any sub-agent or bailee selected by the Secured Party in good faith, except to the extent that
such liability arises from the Secured Party’s gross negligence or willful misconduct.


 




    	27



    	 



    

 


Section
18. Termination of Transaction Liens; Release of Collateral. (a) The Transaction Liens granted by each Guarantor
shall terminate when its Secured Guarantee is released pursuant to Section 2(c).


 


(b)          The
Transaction Liens granted by the Borrower shall terminate when all the Release Conditions are satisfied.


 


(c)          Notwithstanding
the foregoing, the Transaction Liens with respect to property of the Borrower or any Guarantor securing the Obligations will be
automatically released, in whole or in part, to the extent permitted in Section 8.18(c) of the Credit Agreement.


 


(d)          Upon
any termination of a Transaction Lien or release of Collateral, the Secured Party will, subject to the terms of Section 8.18(d)
of the Credit Agreement, execute and deliver to such Grantor such documents as such Grantor shall reasonably request to evidence
the termination of such Transaction Lien or the release of such Collateral, as the case may be, and will duly assign and transfer
to such Grantor any such Collateral that may be in the possession of the Secured Party and has not theretofore been sold or otherwise
applied or released pursuant to this Agreement.


 


Section
19. Additional Guarantors and Grantors. Any Subsidiary may and to the extent required by Section 5.11(b) of the Credit
Agreement, shall become a party hereto by signing and delivering to the Secured Party a Security Agreement Supplement, whereupon
such Subsidiary shall become a “Guarantor” and a “Grantor” as defined herein.


 


Section
20. Notices. Each notice, request or other communication given to any party hereunder shall be given in accordance
with Section 8.01 of the Credit Agreement, and in the case of any such notice, request or other communication to a Grantor other
than the Borrower, shall be given to it in care of the Borrower.


 


Section
21. No Implied Waivers; Remedies Not Exclusive. No failure to exercise and no delay in exercising, on the part of
any party hereto, any right, remedy, power or privilege hereunder or under the other Loan Documents shall operate as a waiver thereof,
nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, remedy, power or privilege. Without limiting the generality of the foregoing, the making
of the Loan shall not be construed as a waiver of any Default or Event of Default, regardless of whether the Secured Party may
have had notice or knowledge of such Default or Event of Default at the time. The rights, remedies, powers and privileges herein
provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.


 




    	28



    	 



    

 


Section
22. Successors and Assigns. This Agreement is for the benefit of the Secured Party. If all or any part of the Secured
Party’s interest in any Obligation is assigned or otherwise transferred, the transferor’s rights hereunder, to the
extent applicable to the obligation so transferred, shall be automatically transferred with such obligation. This Agreement shall
be binding on the Grantors and their respective successors and assigns.


 


Section
23. Amendments and Waivers. Neither this Agreement nor any provision hereof may be waived, amended, modified or terminated
except pursuant to an agreement or agreements in writing entered into by the Secured Party. No such waiver, amendment or modification
shall be binding upon any Grantor, except with its written consent.


 


Section
24. Choice of Law. This Agreement and any claims, controversy, dispute or cause of action (whether in contract or
tort or otherwise) based upon, arising out of or relating to this Agreement and the Transactions shall be construed in accordance
with and governed by the law of the State of New York, without giving effect to any conflict of law principles that result in the
application of laws of another jurisdiction.


 


Section
25. Waiver of Jury Trial. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO ANY SECURITY
DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A)
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER
PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES
HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.


 


Section
26. Severability. Any provision of any Security Document which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable
such provision in any other jurisdiction.


 




    	29



    	 



    

 


Section
27. Intercreditor Agreement. Notwithstanding anything herein to the contrary, the Liens and security interests granted
to the Secured Party pursuant to this Agreement and the exercise of any right or remedy by the Secured Party hereunder, in each
case, with respect to the Collateral are subject to the limitations and provisions of the Intercreditor Agreement dated as of the
date hereof by and among the Secured Party and the additional lenders signatories thereto (the “Intercreditor Agreement”).
In the event of any conflict between the terms of the Intercreditor Agreement and the terms of this Agreement with respect to the
Collateral, the terms of the Intercreditor Agreement shall govern and control; provided that the Intercreditor Agreement
shall not be construed, by its terms, to modify any security interest granted pursuant to Section 3 hereof.


 


[SIGNATURES FOLLOW]


 




    	30



    	 



    

 


IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.


 


	 	ELECTRONIC CIGARETTES INTERNATIONAL GROUP, LTD.
	 	 
	 	By:	 
	 	 	Name:	Philip Anderson
	 	 	Title:	Chief Financial Officer


 


Guarantors:


 


	 	VICTORY ELECTRONIC CIGARETTES, INC.
	 	 
	 	By:	 
	 	 	Name:	Philip Anderson
	 	 	Title:	President


 


	 	VAPESTICK HOLDINGS LIMITED
	 	 
	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:


 


	 	VCIG LLC
	 	 
	 	By:	 
	 	 	Name:       Philip Anderson
	 	 	Title:         Manager


 


	 	FIN BRANDING GROUP, LLC
	 	 
	 	By:	 
	 	 	Name:        Philip Anderson
	 	 	Title:          Manager


 


[SIGNATURE PAGE TO GUARANTEE AND COLLATERAL
AGREEMENT]


 




    	 



    	 



    

 


	 	HARDWIRE INTERACTIVE ACQUISITION COMPANY
	 	 
	 	By:	 
	 	 	Name:        Philip Anderson
	 	 	Title:          President


 


	 	MUST HAVE LIMITED
	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:


 


	 	E-CIGS UK HOLDING COMPANY LIMITED
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:


 


Secured Party:


 


	 	CALM WATERS PARTNERSHIP
	 	 
	 	By:	 
	 	 	Name:	Richard S. Strong
	 	 	Title:	Managing Partner


 


[SIGNATURE PAGE TO GUARANTEE AND COLLATERAL
AGREEMENT]


 




    	 



    	 



    

 


SCHEDULE 1


 


EQUITY INTERESTS IN SUBSIDIARIES AND
AFFILIATES


OWNED BY ORIGINAL GRANTORS


(as of the Closing Date)


 


	Issuer	 	Jurisdiction
 of
 Organization	 	Owner of
 Equity Interest	 	Percentage
 Owned	 
	Victory Electronic Cigarettes, Inc.	 	Nevada	 	Electronic Cigarettes International Group, Inc.	 	 	100	%
	Vapestick Holdings Limited	 	United Kingdom	 	Electronic Cigarettes International Group, Inc.	 	 	100	%
	VCIG LLC	 	Delaware	 	Electronic Cigarettes International Group, Inc.	 	 	100	%
	FIN Branding Group, LLC	 	Illinois	 	VCIG LLC	 	 	100	%
	Hardwire Interactive Acquisition Company	 	Delaware	 	Electronic Cigarettes International Group, Inc.	 	 	100	%
	Must Have Limited	 	United Kingdom	 	Electronic Cigarettes International Group, Inc.	 	 	100	%
	E-Cigs UK Holding Company Limited	 	United Kingdom	 	Electronic Cigarettes International Group, Inc.	 	 	100	%



 




    	S-1-1



    	 



    

 


SCHEDULE 2


 


INVESTMENT PROPERTY


(other than Equity Interests in Subsidiaries
and Affiliates)


OWNED BY ORIGINAL GRANTORS


(as of the Closing Date)


 


PART 1 — Securities


 


NONE


 


PART 2 — Securities Accounts


 


The Original Grantors own Security Entitlements with respect
to Financial Assets credited to the following Securities Accounts:


 


NONE


 




    	S-2-1



    	 



    

 


SCHEDULE 3


 


MATERIAL COMMERCIAL TORT CLAIMS


 


Describe each existing Material Commercial Tort Claim with the
specificity required to satisfy Official Comment 5 to UCC Section 9-108.


 


NONE


 




    	S-3-1



    	 



    

 


EXHIBIT A


to Security Agreement


 


SECURITY AGREEMENT SUPPLEMENT


 


SECURITY AGREEMENT SUPPLEMENT dated as of
_______, ____, between [NAME OF GRANTOR] (the “Grantor”) and CALM WATERS PARTNERSHIP, as the Secured Party.


 


WHEREAS, Electronic Cigarettes International
Group, Ltd. (the “Borrower”), the other Guarantors party thereto and Calm Waters Partnership, as the Secured
Party, are parties to a Guarantee and Collateral Agreement dated as of April 27, 2015 (as heretofore amended and/or supplemented,
the “Security Agreement”) under which the Borrower secures all Obligations (as defined therein) and the Guarantors
guarantee the Obligations and secure their respective guarantees thereof;


 


WHEREAS, [name of Grantor] desires to become
[is] a party to the Security Agreement as a Guarantor and Grantor thereunder; and


 


WHEREAS, terms defined in the Security Agreement
(or whose definitions are incorporated by reference in Section 1 of the Security Agreement) and not otherwise defined herein have,
as used herein, the respective meanings provided for therein;


 


NOW, THEREFORE, in consideration of the
foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:


 


1.          Secured
Guarantee.1 The Grantor unconditionally guarantees the full and punctual payment of each Obligation when due (whether
at stated maturity, upon acceleration or otherwise). The Grantor acknowledges that, by signing this Security Agreement Supplement
and delivering it to the Secured Party, the Grantor becomes a “Guarantor” and “Grantor” for all purposes
of the Security Agreement and that its obligations under the foregoing Secured Guarantee are subject to all the provisions of the
Security Agreement (including those set forth in Section 2 thereof) applicable to the obligations of a Guarantor thereunder.


 





 



 


1 Delete this Section if the
Grantor is a Guarantor that is already a party to the Security Agreement.


 




    	A-1



    	 



    

 


 


2.          Grant
of Transaction Liens. (a) In order to secure Obligations, including the Obligations under the Secured Guarantee, as applicable,
the Grantor grants to the Secured Party for the benefit of the Secured Parties a continuing security interest in all the following
property of the Grantor, whether now owned or existing or hereafter acquired or arising and regardless of where located (the “New
Collateral”):


 


[describe property being added to the Collateral]2


 


(b)          With
respect to each right to payment or performance included in the Collateral from time to time, the Transaction Lien granted therein
includes a continuing security interest in (i) any Supporting Obligation that supports such payment or performance and (ii) any
Lien that (x) secures such right to payment or performance or (y) secures any such Supporting Obligation.


 


(c)          The
foregoing Transaction Liens are granted as security only and shall not subject the Secured Party to, or transfer or in any way
affect or modify, any obligation or liability of the Grantor with respect to any of the New Collateral or any transaction in connection
therewith.


 


3.          Delivery
of Collateral. Concurrently with delivering this Security Agreement Supplement to the Secured Party, the Grantor is complying
with the provisions of Section 7 of the Security Agreement with respect to Investment Property, in each case if and to the extent
included in the New Collateral at such time.


 


4.          Party
to Security Agreement. Upon delivering this Security Agreement Supplement to the Secured Party, the Grantor will become a party
to the Security Agreement and will thereafter have all the rights and obligations of a Guarantor and a Grantor thereunder and be
bound by all the provisions thereof as fully as if the Grantor were one of the original parties thereto.


 





 



 


2 If the Grantor is not already
a party to the Security Agreement, clauses (i) through (xiii) of, and the proviso to, Section 3(a) of the Security Agreement may
be appropriate.


 




    	A-2



    	 



    

 


5.          Representations
and Warranties. (a) The Grantor (i) is duly organized or formed, as the case may be, validly existing and in good standing
under the laws of the jurisdiction of its organization or formation, (ii) has the requisite power and authority to own and operate
its properties, to lease the properties it operates as lessee and to conduct the business in which it is currently engaged as it
is currently conducted, (iii) is duly qualified as a foreign corporation and in good standing under the laws of each jurisdiction
where its ownership, lease or operation of properties or the conduct of its business requires such qualification except to the
extent that the failure to so qualify could not, in the aggregate, reasonably be expected to have a Material Adverse Effect and
(iv) is in compliance with all applicable laws, rules or regulations except to the extent that the failure to comply therewith
could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.


 


(b)          The
Grantor has delivered an Information Certificate to the Secured Party. The information set forth therein is correct and complete
as of the date hereof.


 


(c)          The
execution and delivery of this Security Agreement Supplement by the Grantor and the performance by it of its obligations under
the Security Agreement as supplemented hereby are within its corporate or other powers, have been duly authorized by all necessary
corporate or other action, require no action by or in respect of, or filing with, any governmental body, agency or official and
do not contravene, or constitute a default under, any provision of applicable law or regulation or of its organizational documents,
or of any agreement, judgment, injunction, order, decree or other instrument binding upon it or result in the creation or imposition
of any Lien (except a Transaction Lien) on any of its assets.


 


(d)          The
Security Agreement as supplemented hereby constitutes a valid and binding agreement of the Grantor, enforceable in accordance with
its terms, except as limited by (i) applicable bankruptcy, insolvency, fraudulent conveyance or other similar laws affecting creditors’
rights generally and (ii) general principles of equity.


 


(e)          Each
of the representations and warranties set forth in Sections 4 through 10 of the Security Agreement is true as applied to the Grantor
and the New Collateral. For purposes of the foregoing sentence, references in said Sections to a “Grantor” shall be
deemed to refer to the Grantor, references to “Schedules” to the Security Agreement shall be deemed to refer to the
corresponding Schedules to this Security Agreement Supplement, references to “Collateral” shall be deemed to refer
to the New Collateral, and references to the “Closing Date” shall be deemed to refer to the date on which the Grantor
signs and delivers this Security Agreement Supplement.


 




    	A-3



    	 



    

 


6.          Governing
Law. This Security Agreement Supplement and any claims, controversy, dispute or cause of action (whether in contract or tort
or otherwise) based upon, arising out of or relating to this Security Agreement Supplement and the Transactions shall be construed
in accordance with and governed by the law of the State of New York, without giving effect to any conflict of law principles that
result in the application of laws of another jurisdiction.


 


[The remainder of this page has been intentionally
left blank.]


 




    	A-4



    	 



    

 


IN WITNESS WHEREOF, the parties hereto have
caused this Security Agreement Supplement to be duly executed by their respective authorized officers as of the day and year first
above written.


 


	 	[NAME OF GRANTOR]
	 	 
	 	By:	 
	 	 	Name:	 
	 	 	Title:	 


 


	 	CALM WATERS PARTNERSHIP
	 	 
	 	By:	 
	 	 	Name:	 
	 	 	Title:	 


 




    	A-5



    	 



    

 


Schedule 1


to Security Agreement


Supplement


 


EQUITY INTERESTS IN SUBSIDIARIES AND
AFFILIATES

OWNED BY GRANTOR


 


	
        Issuer
	
	
        Jurisdiction

        of

        Organization
	
	
        Percentage

        Owned
	
	
        Number
        of

        Shares or Units

	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 


 




    	A-6



    	 



    

 


Schedule 2


to Security Agreement


Supplement


 


INVESTMENT PROPERTY

(other than Equity Interests in Subsidiaries and Affiliates)

OWNED BY GRANTOR


 


PART 1 — Securities


 


	
        Issuer
	
	
        Jurisdiction

        of

        Organization
	
	
        Amount
        

Owned
	
	
        Type
        of 

Security

	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 


 


PART 2 — Securities Accounts


 


The Grantor owns Security Entitlements with respect to Financial
Assets credited to the following Securities Accounts:


 


	
        Securities
        Intermediary
	
 	
        Account
        Number

	 	 	 
	 	 	 
	 	 	 


 




    	A-7



    	 



    

 


EXHIBIT B


to Security Agreement


 


NOTICE OF GRANT OF SECURITY INTEREST
IN COPYRIGHTS


 


(Copyrights, Copyright Registrations,
and Copyright Licenses)


 


[DATE]


 


WHEREAS, [name of Grantor], a _____________
[corporation]3 (herein referred to as the “Grantor”) owns, or in the case of licenses is a party
to, the Copyright Collateral (as defined below);


 


WHEREAS, Electronic Cigarettes International
Group, Ltd. (the “Borrower”) and Calm Waters Partnership (the “Lender”) are parties to a
Credit Agreement dated as of April 27, 2015 (as amended from time to time, the “Credit Agreement”); and


 


WHEREAS, pursuant to (i) a Guarantee and
Collateral Agreement dated as of April 27, 2015 (as amended and/or supplemented from time to time, the “Security Agreement”)
among the Borrower, the Guarantors party thereto and Calm Waters Partnership, as the Secured Party (in such capacity, together
with its successors in such capacity, the “Grantee”), and (ii) certain other Security Documents (including this
Notice of Grant of Security Interest in Copyrights), the Grantor has secured certain of its Obligations (the “Secured
Obligations”) and guaranteed certain obligations of the Borrowers and the other Guarantors, as applicable, and secured
such guarantee (the “Grantor’s Secured Guarantee”) by granting to the Grantee a continuing security interest
in personal property of the Grantor, including all right, title and interest of the Grantor in, to and under the Copyright Collateral
(as defined below);


 


NOW, THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Grantor hereby grants to the Grantee, to secure its Secured Obligations,
including its Obligations under the Grantor’s Secured Guarantee, a continuing security interest in all of Grantor’s
right, title and interest in, to and under the following (all of the following items or types of property being herein collectively
referred to as the “Copyright Collateral”), whether now owned or existing or hereafter acquired or arising:


 





 



 


3 Modify if entity is not a corporation.


 




    	B-1



    	 



    

 


(i)          each
Copyright (as defined in the Security Agreement) owned by the Grantor, including, without limitation, each Copyright registration
or application therefor referred to in Schedule 1 hereto;


 


(ii)         each
Exclusive Copyright License (as defined in the Security Agreement) to which the Grantor is a party, including, without limitation,
each Exclusive Copyright License referred to in Schedule 1 hereto; and


 


(iii)        all
proceeds of, revenues from, and accounts and general intangibles arising out of, the foregoing, including, without limitation,
all proceeds of and revenues from any claim by the Grantor against third parties for past, present or future infringement of any
Copyright owned by the Grantor (including, without limitation, any Copyright identified in Schedule 1), and all rights and benefits
of the Grantor under any Exclusive Copyright License (including, without limitation, any Exclusive Copyright License identified
in Schedule 1).


 


The foregoing security interest is granted
in conjunction with the security interests granted by the Grantor to the Grantee pursuant to the Security Agreement, and is expressly
subject to the terms and conditions thereof. The Grantor acknowledges and affirms that the rights and remedies of the Grantee with
respect to the security interest in the Copyright Collateral granted hereby are more fully set forth in the Security Agreement,
the terms and provisions of which are incorporated by reference herein as if fully set forth herein and which shall override the
terms hereof in the event of a conflict.


 


This Notice of Grant of Security Interest
in Copyrights has been executed and delivered by the Grantor for the purpose of recording the grant of security interest herein
with the United States Copyright Office (and any successor office).


 


This Notice of Grant of Security Interest
in Copyrights may be executed in counterparts, each of which will be deemed an original, but all of which together constitute one
original.


 


[The remainder of this page has been intentionally
left blank.]


 




    	B-2



    	 



    

 


IN WITNESS WHEREOF, the Grantor has caused
this Notice of Grant of Security Interest in Copyrights to be duly executed by its officer thereunto duly authorized as of the
date first written above.


 


	 	[NAME OF GRANTOR]
	 	 
	 	By:	 
	 	 	Name:	 
	 	 	Title:	 


 


	Acknowledged:	 
	 	 
	CALM WATERS PARTNERSHIP	 
	 	 
	By:	 	 
	 	Name:	 	 
	 	Title:	 	 


 




    	B-3



    	 



    

 


Schedule 1


to Copyright


Security Agreement


 


[NAME OF GRANTOR]


 


U.S. COPYRIGHT REGISTRATIONS


 


	
        Registration
        No.
	
	
        Title

	 	 	 
	 	 	 
	 	 	 


 


EXCLUSIVE COPYRIGHT LICENSES


 


	Name, Date and

Parties to

Agreement	Title(s) of

Works of

Authorship 	Copyright

Registration

No(s).	Copyright

Owner(s)
	 	 	 	 
	 	 	 	 
	 	 	 	 


 




    	B-4



    	 



    

 


EXHIBIT C


to Security Agreement


 


NOTICE OF GRANT OF SECURITY INTEREST
IN PATENTS


 


(Patents, Patent Applications and Patent
Licenses)


 


[DATE]


 


WHEREAS, [name of Grantor], a _____________
[corporation]4 (herein referred to as the “Grantor”) owns, or in the case of licenses is a party
to, the Patent Collateral (as defined below);


 


WHEREAS, Electronic Cigarettes International
Group, Ltd. (the “Borrower”) and Calm Waters Partnership (the “Lender”), are parties to a
Credit Agreement dated as of April 27, 2015 (as amended from time to time, the “Credit Agreement”); and


 


WHEREAS, pursuant to (i) a Guarantee and
Collateral Agreement dated as of April 27, 2015 (as amended and/or supplemented from time to time, the “Security Agreement”)
among the Borrower, the Guarantors party thereto and Calm Waters Partnership, as the Secured Party (in such capacity, together
with its successors in such capacity, the “Grantee”), and (ii) certain other Security Documents (including this
Notice of Grant of Security Interest in Patents), the Grantor has secured certain of its Obligations (the “Secured Obligations”)
and guaranteed certain obligations of the Borrowers and the other Guarantors, as applicable and secured such guarantee (the “Grantor’s
Secured Guarantee”) by granting to the Grantee a continuing security interest in personal property of the Grantor, including
all right, title and interest of the Grantor in, to and under the Patent Collateral (as defined below);


 


NOW, THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Grantor hereby grants to the Grantee, to secure its Secured Obligations,
including its Obligations under the Grantor’s Secured Guarantee, a continuing security interest in all of the Grantor’s
right, title and interest in, to and under the following (all of the following items or types of property being herein collectively
referred to as the “Patent Collateral”), whether now owned or existing or hereafter acquired or arising:


 





 



 


4 Modify if entity is not a corporation.


 




    	C-1



    	 



    

 


(i)          each
Patent (as defined in the Security Agreement) owned by the Grantor, including, without limitation, each Patent referred to in Schedule
1 hereto; and


 


(ii)         all
proceeds of and revenues from the foregoing, including, without limitation, all proceeds of and revenues from any claim by the
Grantor against third parties for past, present or future infringement of any Patent owned by the Grantor (including, without limitation,
any Patent identified in Schedule 1 hereto).


 


The foregoing security interest is granted
in conjunction with the security interests granted by the Grantor to the Grantee pursuant to the Security Agreement, and is expressly
subject to the terms and conditions thereof. The Grantor acknowledges and affirms that the rights and remedies of the Grantee with
respect to the security interest in the Patent Collateral granted hereby are more fully set forth in the Security Agreement, the
terms and provisions of which are incorporated by reference herein as if fully set forth herein and which shall override the terms
hereof in the event of a conflict.


 


This Notice of Grant of Security Interest
in Patents has been executed and delivered by the Grantor for the purpose of recording the grant of security interest herein with
the United States Patent and Trademark Office (and any successor office).


 


This Notice of Grant of Security Interest
in Patents may be executed in counterparts, each of which will be deemed an original, but all of which together constitute one
original.


 


[The remainder of this page has been intentionally
left blank.]


 




    	C-2



    	 



    

 


IN WITNESS WHEREOF, the Grantor has caused
this Notice of Grant of Security Interest in Patents to be duly executed by its officer thereunto duly authorized as of the date
first written above.


 


	 	[NAME OF GRANTOR]
	 	 
	 	By:	 
	 	 	Name:	 
	 	 	Title:	 


 


	Acknowledged:	 
	 	 
	CALM WATERS PARTNERSHIP	 
	 	 
	By:	 	 
	 	Name:	 	 
	 	Title:	 	 


 




    	C-3



    	 



    

 


Schedule 1


to Patent


Security Agreement


 


[NAME OF GRANTOR]


 


U.S. PATENTS AND DESIGN PATENTS


 


	
        Patent
        No.
	
	
        Issue
        Date
	
	
        Country
	
	
        Title

		 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 


 


U.S. PATENT APPLICATIONS


 


	
        Serial No.
	
	
        Country
	
	
        Application

        Date
	
	
        Title

	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 


 




    	C-4



    	 



    

 


EXHIBIT D


to Security Agreement


 


NOTICE OF GRANT OF SECURITY INTEREST
IN TRADEMARKS 


 


(Trademarks, Trademark Registrations,
Trademark


Applications and Trademark Licenses)


 


[DATE]


 


WHEREAS, [name of Grantor], a _____________
[corporation]5 (herein referred to as the “Grantor”) owns, or in the case of licenses is a party
to, the Trademark Collateral (as defined below);


 


WHEREAS, Electronic Cigarettes International
Group Ltd. (the “Borrower”) and Calm Waters Partnership (the “Lender”) are parties to a Credit
Agreement dated as of April 27, 2015 (as amended from time to time, the “Credit Agreement”); and


 


WHEREAS, pursuant to (i) a Guarantee and
Collateral Agreement dated as of April 27, 2015 (as amended and/or supplemented from time to time, the “Security Agreement”)
among the Borrower, the Guarantors party thereto and Calm Waters Partnership, as the Secured Party (in such capacity, together
with its successors in such capacity, the “Grantee”), and (ii) certain other Security Documents (including this
Notice of Grant of Security Interest in Trademarks), the Grantor has secured certain of its Obligations (the “Secured
Obligations”) and guaranteed certain obligations of the Borrowers and the other Guarantors, as applicable, and secured
such guarantee (the “Grantor’s Secured Guarantee”) by granting to the Grantee a continuing security interest
in personal property of the Grantor, including all right, title and interest of the Grantor in, to and under the Trademark Collateral
(as defined below);


 


NOW, THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Grantor hereby grants to the Grantee, to secure its Secured Obligations,
including its Obligations under the Grantor’s Secured Guarantee, a continuing security interest in all of the Grantor’s
right, title and interest in, to and under the following (all of the following items or types of property being herein collectively
referred to as the “Trademark Collateral”), whether now owned or existing or hereafter acquired or arising:


 





 



 


5 Modify if entity is not a corporation.


 




    	D-1



    	 



    

 


(i)          each
Trademark (as defined in the Security Agreement) owned by the Grantor, including, without limitation, each Trademark registration
and application referred to in Schedule 1 hereto, and all of the goodwill of the business connected with the use of, or symbolized
by, each Trademark; and


 


(ii)         all
proceeds of and revenues from the foregoing, including, without limitation, all proceeds of and revenues from any claim by the
Grantor against third parties for past, present or future unfair competition with, or violation of intellectual property rights
in connection with or injury to, or infringement or dilution of, any Trademark owned by the Grantor (including, without limitation,
any Trademark identified in Schedule 1 hereto); provided that no security interest shall be granted in any United States
intent-to-use Trademark applications to the extent that, and solely during the period in which, the grant of a security interest
therein would impair the validity or enforceability of such intent-to-use Trademark applications under applicable federal law.


 


The foregoing security interest is granted
in conjunction with the security interests granted by the Grantor to the Grantee pursuant to the Security Agreement, and is expressly
subject to the terms and conditions thereof. The Grantor acknowledges and affirms that the rights and remedies of the Grantee with
respect to the security interest in the Trademark Collateral granted hereby are more fully set forth in the Security Agreement,
the terms and provisions of which are incorporated by reference herein as if fully set forth herein and which shall override the
terms hereof in the event of a conflict.


 


This Notice of Grant of Security Interest
in Trademarks has been executed and delivered by the Grantor for the purpose of recording the grant of security interest herein
with the United States Patent and Trademark Office (and any successor office).


 


This Notice of Grant of Security Interest
in Trademarks may be executed in counterparts, each of which will be deemed an original, but all of which together constitute one
original.


 




    	D-2



    	 



    

 


IN WITNESS WHEREOF, the Grantor has caused
this Notice of Grant of Security Interest in Trademarks to be duly executed by its officer thereunto duly authorized as of the
date first written above.


 


	 	[NAME OF GRANTOR]
	 	 
	 	By:	 
	 	 	Name:	 
	 	 	Title:	 


 


	Acknowledged:	 
	 	 
	CALM WATERS PARTNERSHIP	 
	 	 
	By:	 	 
	 	Name:	 	 
	 	Title:	 	 


 




    	D-3



    	 



    

 


Schedule 1


to Trademark


Security Agreement


 


[NAME OF GRANTOR]


 


U.S. TRADEMARK REGISTRATIONS


 


	
        TRADEMARK
	
	
        REG.
        NO.
	
	
        REG.
        DATE

	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 


 


U.S. TRADEMARK APPLICATIONS


 


	
        TRADEMARK
	
	
        APP.
        NO.
	
	
        APP.
        DATE

	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 


 




    	D-4



    	 



    

 


EXHIBIT E


to Security Agreement


 


INFORMATION CERTIFICATE


 


See attached.


 




    	E-5



    	 



    

 


EXHIBIT F


to Security Agreement


 


ISSUER CONTROL AGREEMENT


 


ISSUER CONTROL AGREEMENT dated as of ______,
_____ among _____________ (the “Grantor”), CALM WATERS PARTNERSHIP, as Secured Party under the Guarantee and
Collateral Agreement, dated as of April 27, 2015, among the Grantor, the Secured Party and the other parties thereto (as amended,
restated, supplemented or otherwise modified from time to time, the “Security Agreement”) and _________ (the
“Issuer”). All references herein to the “UCC” refer to the Uniform Commercial Code as in
effect from time to time in [Issuer’s jurisdiction of incorporation].


 


WITNESSETH:


 


WHEREAS, the Grantor is the registered holder
of [specify Pledged Uncertificated Securities issued by the Issuer] issued by the Issuer (the “Securities”);


 


WHEREAS, pursuant to the Security Agreement,
the Grantor has granted to the Secured Party a continuing security interest (the “Transaction Lien”) in all
right, title and interest of the Grantor in, to and under the Securities, whether now existing or hereafter arising; and


 


WHEREAS, the parties hereto are entering
into this Agreement in order to perfect the Transaction Lien on the Securities;


 


NOW, THEREFORE, the parties hereto agree
as follows:


 


Section 1. Nature of Securities. The
Issuer confirms that (i) the Securities are “uncertificated securities” (as defined in Section 8-102 of the UCC) and
(ii) the Grantor is registered on the books of the Issuer as the registered holder of the Securities.


 


Section 2. Instructions. The Issuer
agrees to comply with any “instruction” (as defined in Section 8-102 of the UCC) originated by the Secured Party and
relating to the Securities without further consent by the Grantor or any other person. The Grantor consents to the foregoing agreement
by the Issuer.


 


Section 3. Conflicting Orders or Instructions.
Notwithstanding anything to the contrary contained herein, if at any time the Issuer shall receive conflicting orders or instructions
from the Grantor and the Secured Party, the Issuer shall follow the orders or instructions of the Secured Party, not the Grantor.


 


Section 4. Waiver of Lien; Waiver of
Set-off. The Issuer waives any security interest, lien or right of set-off that it may now have or hereafter acquire in or
with respect to the Securities. The Issuer’s obligations in respect of the Securities will not be subject to deduction, set-off
or any other right in favor of any person other than the Secured Party.


 




    	F-1



    	 



    

 


Section 5. Choice of Law. This Agreement
shall be governed by the laws of [Issuer’s jurisdiction of incorporation].


 


Section 6. Conflict with Other Agreements.
There is no agreement (except this Agreement) between the Issuer and the Grantor with respect to the Securities [except for
[identify any other existing agreements] (the “Existing Other Agreements”)]. In the event of any conflict between
this Agreement (or any portion hereof) and any other agreement [(including any Existing Other Agreement)] between the Issuer and
the Grantor with respect to the Securities, whether now existing or hereafter entered into, the terms of this Agreement shall prevail.


 


Section 7. Amendments. No amendment
or modification of this Agreement or waiver of any right hereunder shall be binding on any party hereto unless it is in writing
and is signed by all the parties hereto.


 


Section 8. Notice of Adverse Claims.
Except for the claims and interests of the Secured Party and the Grantor in the Securities, the Issuer does not know of any
claim to, or interest in, the Securities. If any person asserts any lien, encumbrance or adverse claim (including any writ, garnishment,
judgment, attachment, execution or similar process) against the Securities, the Issuer will promptly notify the Secured Party and
the Grantor thereof.


 


Section 9. Maintenance of
Securities. In addition to, and not in lieu of, the obligation of the Issuer to honor instructions as agreed in Section 2 hereof,
the Issuer agrees as follows:


 


(i)          Grantor
Instructions; Notice of Exclusive Control. So long as the Issuer has not received a Notice of Exclusive Control (as defined
below), the Issuer may comply with instructions of the Grantor or any duly authorized agent of the Grantor in respect of the Securities.
After the Issuer receives a written notice from the Secured Party that it is exercising exclusive control over the Securities (a
“Notice of Exclusive Control”), the Issuer will cease complying with instructions of the Grantor or any of its
agents.2


 


(ii)         Non-Cash
Dividends and Distributions. The Issuer shall deliver to the Secured Party all non-cash dividends, interest and other non-cash
distributions paid or made upon or with respect to the Securities.


 


(iii)        Voting
Rights. Until the Issuer receives a Notice of Exclusive Control, the Grantor shall be entitled to direct the Issuer with respect
to voting the Securities.


 


(iv)         Statements
and Confirmations. The Issuer will promptly send copies of all statements and other correspondence concerning the Securities
simultaneously to each of the Grantor and the Secured Party at their respective addresses specified in Section 12 hereof.


 





 



 


2 Delete subsection (i) if the Grantor
will not be permitted to sell the Securities.


 




    	F-2



    	 



    

 


(v)          Tax
Reporting. All items of income, gain, expense and loss recognized in respect of the Securities shall be reported to the Internal
Revenue Service and all state and local taxing authorities under the name and taxpayer identification number of the Grantor.


 


Section 10. Representations,
Warranties and Covenants of the Issuer. The Issuer makes the following representations, warranties and covenants:


 


(i)          This
Agreement is a valid and binding agreement of the Issuer enforceable in accordance with its terms.


 


(ii)         The
Issuer has not entered into, and until the termination of this Agreement will not enter into, any agreement with any other person
relating to the Securities pursuant to which it has agreed, or will agree, to comply with instructions (as defined in Section 8-102
of the UCC) of such person. The Issuer has not entered into any other agreement with the Grantor or the Secured Party to limit
or condition the obligation of the Issuer to comply with instructions as agreed in Section 2 hereof.


 


Section 11. Successors. This Agreement
shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective successors and assigns.


 


Section 12. Notices. Each notice,
request or other communication given to any party hereunder shall be in writing (which term includes facsimile or other electronic
transmission) and shall be effective (i) when delivered to such party at its address specified below, (ii) when sent to such party
by facsimile or other electronic transmission, addressed to it at its facsimile number or electronic address specified below, and
such party sends back an electronic confirmation of receipt or (iii) ten days after being sent to such party by certified or registered
United States mail, addressed to it at its address specified below, with first class or airmail postage prepaid:


 


Grantor:


 


Secured Party:


 


Issuer:


 


Any party may change its address, facsimile number and/or e-mail
address for purposes of this Section by giving notice of such change to the other parties in the manner specified above.


 




    	F-3



    	 



    

 


Section 13. Termination. The rights
and powers granted herein to the Secured Party (i) have been granted in order to perfect the Transaction Lien, (ii) are powers
coupled with an interest and (iii) will not be affected by any bankruptcy of the Grantor or any lapse of time. The obligations
of the Issuer to the Secured Party hereunder shall continue in effect until the security interest of the Secured Party in the Securities
has been terminated pursuant to the terms of the Security Agreement and the Secured Party has notified the Issuer of such termination
by delivering to the Issuer a Notice of Termination. The Secured Party agrees to provide a Notice of Termination in substantially
the form of Annex B hereto to the Issuer, with a copy to the Grantor, upon the request of the Grantor on or after the termination
of the Secured Party’s security interest in the Securities pursuant to the terms of the Security Agreement.


 


Section 14. Counterparts. This Agreement
may be executed in any number of counterparts, all of which shall constitute one and the same instrument, and any party hereto
may execute this Agreement by signing and delivering one or more counterparts.


 


(remainder of page intentionally
blank; signature pages follow)


 




    	F-4



    	 



    

 


	 	[NAME OF GRANTOR]
	 	 	 
	 	By:	 
	 	 	Name:	 
	 	 	Title:	 


 


	 	CALM WATERS PARTNERSHIP
	 	 	 
	 	By:	 
	 	 	Name:	 
	 	 	Title:	 


 


	 	[NAME OF ISSUER]
	 	 	 
	 	By:	 
	 	 	Name:	 
	 	 	Title:	 


 




    	F-5



    	 



    

 


Exhibit A


 


[Letterhead of Secured Party]


 


[Date]


 


[Name and Address of Issuer]


 


Attention: ________________________


 


Re: Notice of Exclusive Control


 


Ladies and Gentlemen:


 


As referenced in the Issuer Control Agreement
dated as of ______, ____ among [name of Grantor], CALM WATERS PARTNERSHIP and you (a copy of which is attached), we notify you
that we will hereafter exercise exclusive control over [specify Pledged Uncertificated Securities] registered in the name of [name
of Grantor] (the “Securities”). You are instructed not to accept any directions or instructions with respect
to the Securities from any person other than the undersigned unless otherwise ordered by a court of competent jurisdiction.


 


You are instructed to deliver a copy of
this notice by facsimile transmission to [name of Grantor].


 


Very truly yours,


 


	 	CALM WATERS PARTNERSHIP,

as Secured Party
	 	 	 
	 	By:	 
	 	 	Name:	 
	 	 	Title:	 


 


cc: [name of Grantor]


 




    	F-6



    	 



    

 


ANNEX A


TO ISSUER ACCOUNT CONTROL AGREEMENT


 


[Letterhead of the Secured Party]


 


[Date]


 


[Name and Address of Issuer]


 


Attention:


 


Re: Notice of Termination of
Issuer Control Agreement


 


This letter serves
as notice to the Issuer in accordance with Section 13 of the Issuer Control Agreement dated as of [●], [●] (the “Agreement”)
among [name of Grantor], you and CALM WATERS PARTNERSHIP (a copy of which is attached) (capitalized terms used but not defined
herein shall have the meaning assigned thereto in the Agreement) that the Secured Party is hereby permanently releasing its control
over the Securities and releases the Issuer from any further obligation to comply with instructions originated by the Secured Party
with respect to the Securities. The Agreement is terminated and you have no further obligations to the Secured Party pursuant to
the Agreement. Notwithstanding any previous instructions to you, you are hereby instructed to accept all future directions with
respect to the Securities from [name of Grantor]. This notice terminates any obligations you may have to the undersigned with respect
to the Securities, however nothing contained in this notice shall alter any obligations which you may otherwise owe to [name of
Grantor] pursuant to any other agreement.


 


	 	Very truly yours,
	 	 
	 	CALM WATERS PARTNERSHIP 
	 	 	 
	 	By:	 
	 	 	Name:	 
	 	 	Title:	 


 




    	F-7