Exhibit 10.1


 


FIRST
AMENDMENT TO SERVICE AGREEMENT


 


This
First Amendment to Service Agreement (this “First Amendment”), effective as of June 2, 2020 (“First
Amendment Effective Date”), is by and between KAIVAL BRANDS INNOVATIONS GROUP, INC., a Delaware corporation (the
“Client”), and QUIKFILLRX LLC, a Florida limited liability company (the “Contractor”).


 


WHEREAS,
the Client and the Contractor entered into that certain Service Agreement effective as of March 31, 2020 (the “Agreement”);
and


 


WHEREAS,
the Client and the Contractor desire to amend the Agreement as set forth in this First Amendment.


 


NOW,
THEREFORE, in consideration of the premises set forth above and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Client and the Contractor agree as follows:


 


AMENDMENT
AND AGREEMENT


 


1.
Defined Terms. Capitalized terms used and not otherwise defined herein will have the respective meanings ascribed to them
in the Agreement.


 


2.
Amendments. The Agreement is amended as follows:


 


	 	2.1	Schedule
    “B” – Compensation of the Agreement is amended and restated in its entirety as follows:


 


“General
Compensation: The following constitutes “General Compensation”:


 


	 	●	For
    the Services provided in March 2020, the Client remitted the following payments to the Contractor:


 


o $36,000,
which amount was paid prior to the Effective Date, and


 


o 
$50,000, which was paid no later than three (3) business days after the Effective Date.


 


	 	●	For
    the Services provided in April 2020, the Client remitted a payment in the amount of $100,000 to the Contractor.


 


	 	●	For
    each calendar month commencing May 2020 through October 2020, on or before the ninth (9th) day of such month, the Client shall
    pay the Contractor an amount equal to $125,000 for the Services to be performed during such calendar month.


 






     


     


    

 


	 	●	In
    the event the Parties agree to extend the term of this Agreement beyond the original expiration date of October 31, 2020 by
    mutual agreement as set forth in Section 1 of this Agreement and such extension is agreed to on or before October 15, 2020,
    but in any event subject to the express terms of any such mutual extension or renewal and in the event of any inconsistency
    between the terms hereof and the terms of such extension or renewal the terms of such extension or renewal shall control to
    the extent of such inconsistency, (i) this Agreement shall renew for an additional term of one year commencing November 1,
    2020 through October 31, 2021, and (ii) for each calendar month commencing during such renewal term, on or before the ninth
    (9th) day of such month, the Client shall pay the Contractor an amount equal to $125,000 for the Services to be performed
    during such calendar month.


 


	 	●	In
    the event the Parties further agree to extend the term of this Agreement beyond the initial annual extension contemplated
    in the immediately preceding bullet by mutual agreement as set forth in Section 1 and such extension is agreed to on or before
    October 15, 2021, but in any event subject to the express terms of any such mutual extension or renewal and in the event of
    any inconsistency between the terms hereof and the terms of such extension or renewal the terms of such extension or renewal
    shall control to the extent of such inconsistency, (i) this Agreement shall renew for an additional term of one year commencing
    November 1, 2021 through October 31, 2022, and (ii) for each calendar month commencing during such renewal term, on or before
    the ninth (9th) day of such month, the Client shall pay the Contractor an amount equal to $150,000 for Services to be performed
    during such calendar month.


 


Gross
Revenue Quarterly Bonus Compensation: The following constitute “Bonus Compensation”:


 


During
the initial Term of this Agreement expiring October 31, 2020, and during any extension or renewal of this Agreement as may be
mutually agreed upon by the Parties in writing, but in any event subject to the express terms of any such mutual extension or
renewal and in the event of any inconsistency between the terms hereof and the terms of such extension or renewal the terms of
such extension or renewal shall control to the extent of such inconsistency, the Client shall pay the Contractor bonus compensation
based on the Client’s gross quarterly sales during each applicable fiscal quarter that are attributable to the Services
provided by the Contractor hereunder, as the same may be reasonably determined by the Client (such amount being hereinafter referred
to as the “Applicable Gross Quarterly Sales”), which determination shall be made by the Client within fifteen (15)
calendar days following the end of any applicable fiscal quarter and the amount of such bonus shall be paid on or before the thirtieth
(30th) day of such calendar month as follows:


 


	 	●	An
    amount equal to 0.9% of the Applicable Gross Quarterly Sales, which amount shall, at the Client’s option be paid in
    (a) cash or (b) shares of the Client’s common stock, par value $0.001 per share (“Common Stock”), or (c)
    a combination of cash and Common Stock, subject to the following:


 


o If
the Client determines to issue shares of Common Stock in lieu of cash payment, then the number of shares to be issued shall
be based upon a per share price equal to the average closing price of the Client’s Common Stock as reported by the OTC
Markets Group, Inc. on the three (3) trading days immediately preceding the date of issuance of such shares of Common
Stock.


 






    2


     


    

 


o The
shares of Common Stock issued to the Contractor shall be issued with a restrictive legend. Unless the shares of Common Stock
are covered by an effective registration statement pursuant to the Securities Act of 1933, as amended (the “Securities
Act”), an event that is not currently anticipated, the shares of Common Stock shall constitute “restricted
securities,” as such term is defined in Rule 144 promulgated under Rule 144 of the Securities Act. The Contractor
acknowledges and agrees that: (i) the shares of the Common Stock will not have been registered under the Securities Act or
the securities laws of any state, (ii) there may not exist a market for resale of the shares of Common Stock, and (iii) such
shares of Common Stock may need to be held indefinitely unless the shares of Common Stock are subsequently registered under
the Securities Act or an exemption from registration is available. The Client has no obligation to register the shares of
Common Stock under the Securities Act or otherwise. In connection with any transfer of the shares of Common Stock by the
Contractor, the Client may require the Contractor to provide to the Client, at its expense, an opinion of counsel,
satisfactory to the Client, that such transfer is in compliance with all applicable federal and state securities laws
(including, without limitation, the Securities Act). Any attempted disposition of the shares of Common Stock not in
accordance with the terms and conditions set forth in this Schedule “B”, shall be null and void, and the Company
shall not reflect on its records any change in record ownership of any shares of Common Stock as a result of any such
disposition, shall otherwise refuse to recognize any such disposition, and shall not in any way give effect to any such
disposition of any shares of Common Stock.


 


o In
no event shall the Client be permitted to exercise its option to issue the Client’s Common Stock in lieu of a cash
payment for such Bonus Compensation (i) in excess of an aggregate amount of 12,000,000 shares of Common Stock for any such
Bonus Compensation payable in connection with the period commencing on the Effective Date and ending October 31, 2020, (ii)
subject to the express terms of any such mutual extension or renewal and in the event of any inconsistency between the terms
hereof and the terms of such extension or renewal the terms of such extension or renewal shall control to the extent of such
inconsistency, in excess of an aggregate amount of 12,000,000 shares of Common Stock for either renewal term for the periods
commencing November 1, 2020 through October 31, 2021, or commencing November 1, 2021 through October 31, 2022, and (iii)
subject to the express terms of any such mutual extension or renewal and in the event of any inconsistency between the terms
hereof and the terms of such extension or renewal the terms of such extension or renewal shall control to the extent of such
inconsistency, the maximum amount of the Client’s Common Stock issuable in connection with any such Bonus Compensation
for the period through October 31, 2022 shall not exceed an amount equal to 30,000,000 shares of Common Stock.


 






    3


     


    

 


o Notwithstanding
anything to the contrary contained herein, if the Client suffers a Change of Control Transaction, within five (5) business
days of the closing of such Change of Control Transaction the Client shall issue the Contractor a number of shares of Common
Stock equal to 12,000,000 shares less the number of shares of Common Stock previously issued to the Contractor during the
applicable period, if any, in which such Change of Control Transaction occurs (with the applicable period being the period
commencing on the Effective Date and ending October 31, 2020, the period commencing November 1, 2020 through October 31,
2021, or the period commencing November 1, 2021 through October 31, 2022). If the Client terminates this Agreement as part of
such Change of Control Transaction, no further Bonus Compensation shall be payable by the Client to the Contractor for the
fiscal quarter in which the Change of Control Transaction occurs. If this Agreement continues following such Change of
Control Transaction, the Client shall be credited the value of such Common Stock against any obligation to pay Bonus
Compensation for the fiscal quarter in which the Change of Control Transaction occurs. Notwithstanding anything to the
contrary above, in no event shall the Client be obligated to issue the Contractor any shares of Common Stock pursuant hereto
if the Client provides notice to the Contractor of termination of this Agreement prior to the consummation of the Change of
Control Transaction with (for) cause. A “Change of Control Transaction” means any of the following: (i) any sale,
lease or other disposition of all or substantially all of the Client’s assets, (ii) any merger, consolidation, equity
exchange, reorganization, or other similar transaction or series of transactions in which the equity holders of the Client as
of the Effective Date collectively own fifty percent (50%) or less of the voting power in the resulting entity immediately
after such event, and (iii) any purchase or purchases by any person or persons of equity interests of the Client, the effect
of which is that the equity holders of the Client as of the Effective Date collectively own fifty percent (50%) or less of
the voting power in the Client immediately after such event.


 


An
amount equal to 0.27% of the Applicable Gross Quarterly Sales, which amount must be paid in cash.


 


Reimbursement
of Certain Expenses: The following constitute “Reimbursable Expenses”:


 


The
Client shall reimburse the Contractor for any actual out-of-pocket, third-party expenses incurred by the Contractor so long as
the same are pre-approved by the Client in writing, which approval may be given or withheld in the Client’s sole discretion.
In no event shall the Client be obligated to reimburse the Contractor for any internal expenses, including staff, overhead or
allocation of resources or for any other costs incurred by the Contractor in the performance of Services.”


 


3.
No Other Amendment; Effective Date. Except as expressly set forth herein, this First Amendment shall not by implication
or otherwise alter, modify or amend or in any way affect any of the terms, conditions, obligations, covenants, or agreements contained
in the Agreement, all of which are revived in all respects and shall be in full force and effect. This First Amendment will be
deemed effective as of the First Amendment Effective Date.


 


4.
Governing Law. This First Amendment shall be deemed executed and delivered in the State of Florida and shall be governed
and enforced by and interpreted in accordance with the laws of the State of Florida, without giving effect to its conflicts of
laws rules and principles.


 


5.
Counterparts. This First Amendment may be executed in counterparts; each of which when so executed and delivered shall
be deemed an original and such counterparts shall constitute one instrument.


 


[Signature
page follows.]


 






    4


     


    

 


IN
WITNESS WHEREOF, the parties have executed this First Amendment as of the First Amendment Effective Date:


 


	CLIENT
	 	 	 
	 	KAIVAL
    BRANDS INNOVATIONS GROUP, INC.
	 	 	 
	 	By:	/s/
    Eric Mosser
	 	Name:	Eric
    Mosser
	 	Title:	Chief
    Operating Officer
	 	 	 
	CONTRACTOR
	 	 	 
	 	QUIKFILLRX
    LLC
	 	 	 
	 	By:	/s/
    Russell Quick
	 	Name:	Russell
    Quick
	 	Title:	Manager




 


 


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