Exhibit 10.2


 


SECURITIES EXCHANGE AGREEMENT


 


This SECURITIES EXCHANGE
AGREEMENT (this “Agreement”) is made effective as of March 13, 2015, by and between Electronic Cigarettes
International Group, Ltd. (the “Company”), and _________ (the “Lender”).


 


RECITALS


 


WHEREAS, the Company
and the Lender are parties to the Company’s 6% Senior Convertible Note dated April 22, 2014 (the “Original Note”),
the First Amendment to the Original Note dated June 3, 2014 (the “First Amendment”), the Second Amendment
to the Original Note dated August 20, 2014 (the “Second Amendment”) and the Third Amendment to the Original
Note dated October 15, 2014 (the “Third Amendment” and collectively with the First Amendment and the
Second Amendment, the “Amendments” and the Original Note as amended by the Amendments, the “6%
Convertible Note”);


 


WHEREAS, the Company
and the Lender are parties to the Securities Purchase Agreement dated as of April 22, 2014, as amended by the First Amendment to
Securities Purchase Agreement dated June 3, 2014, the Amendment No. 2 to Securities Purchase Agreement and Closing Certificate
dated August 20, 2014 and Amendment No. 3 to Securities Purchase Agreement dated October 15, 2014 (collectively with the amendments,
the “Securities Purchase Agreement”) pursuant to which the Company and the Lender have certain rights
and obligations;


 


WHEREAS, the Company
and the Lender have agreed to enter into this Agreement pursuant to which all rights and obligations under the 6% Convertible Note
and the Securities Purchase Agreement are exchanged for $13.0 million to be paid by the Company to the Lender, a 0.40% Unsecured
Note in the principal amount of $1.8 million in substantially the form set forth in Exhibit A hereto (the “New
Note”), a prepaid warrant for 93,750,000 shares of the Company’s common stock in substantially the form set
forth in Exhibit B hereto (the “Original Tranche Warrant”), and a prepaid warrant
for 31,250,000 shares of the Company’s common stock in substantially the form set forth in Exhibit C hereto (the “Third
Tranche Warrant” and together with the Original Tranche Warrant, the “Warrants”); and


 


NOW, THEREFORE,
in consideration of the foregoing premises and the mutual covenants and agreements contained herein and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, intending to be legally bound, the parties hereto agree
as follows:


 


AGREEMENT


 


ARTICLE I.        EXCHANGE



 


1.01         Payment
of $13,000,000. On the date of this Agreement, the Company shall pay to the Lender $13,000,000 in cash (the “Cash”)
via wire transfer pursuant to the Lender’s wire instructions provided to the Company.


 


1.02         New
Note and Warrants. On the date of this Agreement, the Company will execute and deliver the New Note and the Warrants to the
Lender. For the avoidance of doubt, the parties agree that the Warrants are prepaid $0.03 exercise price warrants as partial consideration
for the agreements contained herein and no additional consideration shall be required to be paid by the Lender to the Company to
effect the exercise of the Warrants. For the avoidance of doubt, no further payment is required upon conversion of the Warrants
by the holder thereof.


 




    	 



    	 



    

 


1.03         Return
of Note. Upon receipt of the Exchange Consideration (as defined below), the Lender will transfer, convey and assign all rights
and obligations under the 6% Convertible Note and the Securities Purchase Agreement and the Lender’s other rights and obligations
under the Transaction Documents (as defined in the Securities Purchase Agreement) to the Company.


 


ARTICLE II.       REPRESENTATIONS
AND WARRANTIES OF THE COMPANY 


 


The Company represents
and warrants to Lender as of the date hereof as follows:


 


2.01         Organization,
Good Standing and Power. The Company is a corporation duly incorporated, validly existing and in good standing under the laws
of the State of Nevada and has the requisite corporate power to own, lease and operate its properties and assets and to conduct
its business as it is now being conducted.


 


2.02         Authorization;
Enforcement. The Company has the requisite corporate power and authority to enter into and perform this Agreement, the New
Note, the Warrants, and each other agreement, instrument and certificate executed and delivered by the Company in connection with
the foregoing (collectively, the “Operative Documents”) and to issue and sell the New Note and the Warrants
in accordance with the terms hereof. The execution, delivery and performance of the Operative Documents by the Company and the
consummation by it of the transactions contemplated thereby have been duly and validly authorized by all necessary corporate action,
and no further consent or authorization of the Company or its Board of Directors or stockholders is required except that for the
number of shares underlying the Warrants to be authorized the reverse stock split and the amendment to the Company’s Articles
of Incorporation approved by stockholders at the Company’s special meeting of stockholders held on March 10, 2015 (the “Special
Meeting”) must be effectuated by the Company. When executed and delivered by the Company, except for the number of
shares underlying the Warrants (the “Warrant Shares”) needing to be authorized by the approval and implementation
of the reverse stock split and the amendment to the Company’s Articles of Incorporation approved by stockholders at the Special
Meeting, each of the Operative Documents shall constitute a valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, reorganization, moratorium,
liquidation, conservatorship, receivership or similar laws relating to, or affecting generally the enforcement of, creditor’s
rights and remedies or by other equitable principles of general application.


 


2.03         Issuance
of Shares. Subject to the Warrant Shares needing to be authorized by the approval and implementation of the reverse stock split
and the amendment to the Company’s Articles of Incorporation as set forth in the Proxy Statement of the Company dated January
27, 2015, when the Warrant Shares are issued in accordance with the terms of the Warrants, the Warrant Shares shall be validly
issued and outstanding, fully-paid, non-assessable and free any clear of all liens, of any pre-emptive rights and rights of refusal
of any kind.


 




    	 



    	 



    

 


2.04         No
Conflicts. Subject to the Warrant Shares needing to be authorized by implementation of the reverse stock split and the amendment
to the Company’s Articles of Incorporation approved by stockholders at the Special Meeting, the execution, delivery and performance
of the Operative Documents by the Company, the performance by the Company of its obligations under the Operative Documents, and
the consummation by the Company of the transactions contemplated by the Operative Documents, and the issuance of the Warrant Shares
as contemplated by the Operative Documents, do not and will not (i) violate or conflict with any provision of the Company’s
Articles of Incorporation (the “Articles of Incorporation”) or Bylaws (the “Bylaws”),
each as amended to date, (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would
become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement,
mortgage, deed of trust, indenture, note, bond, license, lease agreement, instrument or obligation to which the Company or any
of its subsidiaries is a party or by which the Company or any of its subsidiaries’ respective properties or assets are bound,
(iii) result in a violation of any foreign, federal, state or local statute, law, rule, regulation, order, judgment or decree (including
federal and state securities laws and regulations) applicable to the Company or any of its subsidiaries or by which any property
or asset of the Company or any of its subsidiaries are bound or affected, or (iv) create or impose a lien, mortgage, security interest,
charge or encumbrance of any nature below (each, a “Lien”) on any property or asset of the Company or
its subsidiaries under any agreement or any commitment to which the Company or any of its subsidiaries is a party or by which the
Company or any of its Subsidiaries is bound or by which any of their respective properties or assets are bound, except, in the
case of clauses (ii), (iii) and (iv), for such conflicts, defaults, terminations, amendments, violations, acceleration, cancellations,
creations and impositions as would not, individually or in the aggregate, reasonably be expected to have or result in any material
adverse effect on the business, operations, properties, prospects, or condition (financial or otherwise) of the Company and its
subsidiaries taken as a whole and/or any condition, circumstance, or situation that would prohibit in any material respect the
ability of the Company to perform any of its obligations under this Agreement or any of the other Operative Documents in any material
respect. Neither the Company nor any of its Subsidiaries is required under foreign, federal, state or local law, rule or regulation
to obtain any consent, authorization or order of, or make any filing or registration with, any court or governmental agency in
order for it to execute, deliver or perform any of its obligations under the Operative Documents or issue and sell the New Note
or the Warrants in accordance with the terms hereof.


 


2.05         SEC
Documents, Financial Statements. The Common Stock of the Company is registered pursuant to Section 12(g) of the Securities
Exchange Act of 1934, as amended (the “1934 Act”), and, since June 25, 2013, the Company has timely filed
(or has received a valid extension of such time of filing and has filed any such Reports prior to the expiration of any such extension)
all reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting
requirements of the 1934 Act (all of the foregoing including filings incorporated by reference therein being referred to herein
as the “SEC Documents”) other than the Form 10-Q for the quarter ended September 30, 2014. At the times
of their respective filings, the Reports complied in all material respects with the requirements of the 1934 Act and the rules
and regulations of the SEC promulgated thereunder. The Reports did not, and do not, contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading. As of their respective dates, the financial statements of the
Company included in the SEC Documents complied as to form in all material respects with Regulation S-X and all other published
rules and regulations of the SEC. Such financial statements have been prepared in accordance with generally accepted accounting
principles (“GAAP”) applied on a consistent basis during the periods involved (except (i) as may be otherwise
indicated in such financial statements or the notes thereto or (ii) in the case of unaudited interim statements, to the extent
they may not include footnotes or may be condensed or summary statements), and fairly present in all material respects the financial
position of the Company and its consolidated Subsidiaries as of the dates thereof and the results of operations and cash flows
for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments).


 


2.06         Disclosure.
Following the filing of the Form 8-K referred to in Section 4.04, except for the information concerning the transactions contemplated
by this Agreement, the Company confirms that neither it nor any other person or entity acting on its behalf has provided the Lender
or its agents or counsel with any information that constitutes or might constitute material, nonpublic information. The Company
understands and confirms that the Purchasers will rely on the foregoing representation in effecting transactions in the securities
of the Company.


 




    	 



    	 



    

 


2.07         
Solvency. Based on the consolidated financial condition of the Company and its subsidiaries taken as a whole, after giving
effect to the transactions contemplated hereby: (i) the fair saleable value of the Company’s assets exceeds the amount that
will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including known contingent
liabilities) as they mature, and (ii) the Company’s assets do not constitute unreasonably small capital to carry on its business
as now conducted and as proposed to be conducted including its capital needs taking into account the particular capital requirements
of the business conducted by the Company, consolidated and projected capital requirements and capital availability thereof. The
Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and
amounts of cash to be payable on or in respect of its debt). The Company has no knowledge of any facts or circumstances which lead
it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction
within one year from the Closing Date.


 


2.08         Holding
Period. Assuming the accuracy of the representations and warranties of the Lender in Section 3.03, pursuant to Rule 144 promulgated
under the Securities Act of 1933, as amended (“Securities Act”), the holding period of the Warrant Shares
underlying the Original Tranche Warrants tacks back to April 22, 2014 (the issuance date of the Original Note) and the holding
period of the Warrant Shares underlying the Third Tranche Warrant tacks back to October 15, 2014 (the date of the Third Amendment).
The Company agrees not to take a position contrary to this paragraph. The Company agrees to take all actions, including, without
limitation, the issuance by its legal counsel of any legal opinions to the Lender or the Company’s transfer agent, necessary
to issue the Warrant Shares without restriction and not containing any restrictive legend without the need for any action by the
Lender in connection with a sale of the Warrant Shares by the Lender. The Cash, the New Note and the Warrants (the “Exchange
Consideration”) are being issued in substitution and exchange for and not in satisfaction of all rights and obligations
under the 6% Convertible Note and the Securities Purchase Agreement. The Exchange Consideration shall not constitute a novation
or satisfaction and accord of any of the 6% Convertible Note or the Securities Purchase Agreement or any related rights.


 


ARTICLE III.       REPRESENTATIONS
AND WARRANTIES OF THE HOLDER


 


The Lender represents and
warrants to the Company as of the date hereof as follows:


 


3.01         Organization
and Standing of the Lender. Lender is duly organized, validly existing and in good standing under the laws of the jurisdiction
of its organization.


 


3.02         Authorization
and Power. The Lender has the requisite power and authority to enter into and perform the Operative Documents. The execution,
delivery and performance of the Operative Documents by the Lender and the consummation by it of the transactions contemplated hereby
have been duly authorized by all necessary corporate action, and no further consent or authorization of Lender or its managers
or members is required. When executed and delivered by the Lender, the Operative Documents shall constitute valid and binding obligations
of the Lender enforceable against the Lender in accordance with their terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation, conservatorship, receivership or similar laws relating to, or
affecting generally the enforcement of, creditor’s rights and remedies or by other equitable principles of general application.


 


3.03         Holding
Period. The Lender has been the sole beneficial and record owner of (i) the Original Tranche (as defined in the 6% Convertible
Note), and the purchase price therefor has been fully paid, since April 22, 2014, and (ii) the Third Tranche (as defined in the
6% Convertible Note), and the purchase price therefor has been fully paid, since October 15, 2014.


 




    	 



    	 



    

 


ARTICLE IV.        
COVENANTS AND AGREEMENTS


 


Unless otherwise specified
in this Article, for so long as the New Note, the Warrants and/or the Warrant Shares are outstanding, the Company and the Lender
hereby covenant to each other:


 


4.01         Compliance
with Laws; Commission. The Company shall take all necessary actions and proceedings as may be required by applicable law, rule
and regulation, for the legal and valid issuance (free from any restriction on transferability under federal securities laws)
of the Warrant Shares to the Lender or the subsequent holders.


 


4.02         Registration
and Listing. The Company shall cause its Common Stock to continue to be registered under Sections 12(g) or Section 12(b) of
the 1934 Act, to comply in all material respects with its reporting and filing obligations under the 1934 Act and to not take any
action or file any document (whether or not permitted by the Securities Act or the rules promulgated thereunder) to terminate or
suspend such registration or to terminate or suspend its reporting and filing obligations under the 1934 Act or Securities Act
even if the rules and regulations thereunder would permit such termination. Without limiting the foregoing, the Company shall take
all necessary action to satisfy the requirements of Rule 144(c)(1) and Rule 144(i)(2). The Company currently meets the requirements
of Rule 144(i)(2) and the Warrant Shares, assuming the accuracy of the Lender’s representation under Section 3.03, may be
resold by the Lender under Rule 144.


 


4.03         Pledge
of Warrant Shares. The Company acknowledges and agrees that the Warrant Shares may be pledged by the Lender in connection with
a bona fide margin agreement or other loan or financing arrangement that is secured by the Warrant Shares. The pledge of the Warrant
Shares shall not be deemed to be a transfer, sale or assignment of the Warrant Shares hereunder, and the Lender shall not be required
to provide the Company with any notice thereof or otherwise make any delivery to the Company pursuant to this Agreement or any
other Operative Document. The Company, at the Lender’s expense hereby agrees to execute and deliver such documentation as
the Lender may reasonably request in connection with a pledge of the Warrant Shares by the Lender.


 


4.04         Disclosure
of Transaction. The Company shall on or before 5:30 p.m. eastern time on March 13, 2015 file a Current Report on Form 8-K,
including the Operative Documents as exhibits thereto, with the SEC. From and after the filing of the Form 8-K, the Company represents
to the Lender that it shall have publicly disclosed all material, non-public information delivered to Lender by the Company, or
any of their respective officers, directors, employees or agents.


 


4.05         Disclosure
of Material Information; No Obligation of Confidentiality.


 


(a)          The
Company covenants and agrees that neither it nor any other person or entity acting on its behalf will provide the Lender or its
agents or counsel with any information that the Company believes constitutes non-public information, unless prior thereto the Lender
shall have executed a written agreement regarding the confidentiality and use of such information. The Company understands and
confirms that the Lender shall be relying on the foregoing representations in effecting transactions in securities of the Company.
In the event of a breach of the foregoing covenant by the Company, or any of its subsidiaries, or any of its or their respective
officers, directors, employees and agents, in addition to any other remedy provided herein or in the Operative Documents, the Company
shall publicly disclose any material, non-public information in a Current Report on Form 8-K within one business day following
the date that it discloses such information to the Lender or such earlier time as may be required by Regulation FD or other applicable
law.


 




    	 



    	 



    

 


(b)          The
Lender shall not be deemed to have any obligation of confidentiality with respect to (i) any non-public information of the Company
disclosed to such Purchaser in breach of Section 4.05(a) (whether or not the Company files a Current Report on Form 8-K as provided
above), (ii) the fact that the Lender has exercised any of its rights and/or remedies under the Operative Documents or (iii) any
information obtained by the Lender as a result of exercising any of its rights and/or remedies under the Operative Documents. In
further addition, the Lender shall not be deemed to be in breach of any duty to the Company and/or to have misappropriated any
non-public information of the Company, if the Lender engages in transactions of securities of the Company, including, without limitation,
any hedging transactions, short sales or any derivative transactions based on securities of the Company while in possession of
such non-public information.


 


(c)          Any Form 8-K, including all exhibits thereto,
filed by the Company pursuant to Section 4.04 shall be subject to prior review and comment by the Lender.


 


(d)          From and after the filing
of any such Form 8-K pursuant to Section 4.04 with the SEC, no Purchaser shall be in possession of any material, nonpublic information
received from the Company, any of its subsidiaries or any of their respective officers, directors, employees or agents that is
not disclosed in such Form 8-K filed pursuant to Section 4.04.


 


4.06         Further
Assurance. The Lender shall, at any time after the receipt of the Cash, the New Note and the Warrants, promptly (i) execute
(to the extent necessary) and deliver all commercially reasonable documents and instruments reasonably required to assign, convey
and transfer the 6% Convertible Notes and related rights and obligations under the Transaction Documents to the Company; and (ii)
deliver to such person or entity as the Company shall direct all possessory collateral held by the Lender to secure the 6% Convertible
Note. The foregoing shall be at the Company’s sole expense.


 


4.07         Subordination
Agreement. Promptly upon request by the Company, the Lender agrees to execute and deliver a Subordination Agreement substantially
in the form attached as Exhibit D hereto.


 


4.08         Reverse
Stock Split. On or prior to the date hereof, the Company has made all filings with FINRA necessary to effectuate the reverse
stock split and the amendment to the Company’s Articles of Incorporation as set forth in the Proxy Statement of the Company
dated January 27, 2015, and approved by stockholders at the Special Meeting. The Company shall use its reasonable best efforts
to effectuate such reverse stock split as soon as practicable and in any event not later than March 24, 2015. Upon effectuating
the reverse stock split, the Warrant Shares shall, irrevocably and unconditionally, be reserved for issuance in accordance with
the terms of the Warrants and the irrevocable transfer agent instructions referred to therein (the “Irrevocable Transfer
Agent Instructions”) (disregarding any contingencies set forth in the Irrevocable Transfer Agent Instructions with
respect to the availability of authorized shares).


 


4.09         Legal
Opinions.  The Company shall cause its legal counsel to issue any legal opinion referred
to in the Irrevocable Transfer Agent Instructions at the Company’s expense.


 


ARTICLE V.     MISCELLANEOUS 


 


5.01         Fees
and Expenses. The Company shall reimburse the Lender for all costs and expenses incurred by the Lender in connection
with the negotiation, drafting and execution of the Operative Documents and the transactions contemplated thereby (including all
reasonable legal fees, travel, disbursements and due diligence in connection therewith and all fees incurred in connection with
any necessary regulatory filings and clearances). In addition, the Company shall pay all reasonable fees and expenses incurred
by the Lender in connection with the enforcement of this Agreement or any of the other Operative Documents, including, without
limitation, all reasonable attorneys’ fees and expenses; provided, however, that in the event that the enforcement
of this Agreement is contested and it is finally judicially determined that the Lender was not entitled to the enforcement of the
Operative Document sought, then the Lender shall reimburse the Company for all fees and expenses paid pursuant to this sentence.
The Company shall be responsible for its own fees and expenses incurred in connection with the transactions contemplated by this
Agreement. The Company shall pay all fees of its transfer agent, stamp taxes and other taxes and duties levied in connection with
the delivery of the Note, the Warrants and/or the Warrant Shares to each Purchaser. This provision shall survive termination of
this Agreement and the Operative Documents.


 




    	 



    	 



    

 


5.02         Specific
Performance; Consent to Jurisdiction; Venue.


 


(a)          The
Company and the Lender acknowledge and agree that irreparable damage would occur in the event that any of the provisions of this
Agreement or the other Operative Documents were not performed in accordance with their specific terms or were otherwise breached.
It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent or cure breaches of the
provisions of this Agreement or the other Operative Documents and to enforce specifically the terms and provisions hereof or thereof
without the requirement of posting a bond or providing any other security, this being in addition to any other remedy to which
any of them may be entitled by law or equity.


 


(b)          The
parties agree that venue for any dispute arising under this Agreement will lie exclusively in the state or federal courts located
in New York County, New York, and the parties irrevocably waive any right to raise forum non conveniens or any other argument that
New York is not the proper venue. The parties irrevocably consent to personal jurisdiction in the state and federal courts in New
York County of the state of New York. The Company and the Lender consent to process being served in any such suit, action or proceeding
by mailing a copy thereof to such party at the address in effect for notices to it under this Agreement and agrees that such service
shall constitute good and sufficient service of process and notice thereof. Nothing in this Section 5.02 shall affect or limit
any right to serve process in any other manner permitted by law. The parties hereby waive all rights to a trial by jury.


 


(c)          Notwithstanding
the foregoing, the parties agree that venue for any dispute arising under this Agreement with respect to any security interests
and liens that the Lender may have on any property of the Company or any of its direct or indirect subsidiaries located in the
United Kingdom or subject to the jurisdiction of English courts will lie exclusively in the English courts located in London, England,
and the parties irrevocably waive any right to raise forum non conveniens or any other argument that such courts are not the proper
venue.


 


5.03         Amendment.
No provision of this Agreement may be waived or amended except in a written instrument signed by the Company and the Lender.


 


5.04         Notices.
Any notice, demand, request, waiver or other communication required or permitted to be given hereunder shall be in writing and
shall be effective (a) upon hand delivery by telecopy or facsimile at the address or number designated below (if delivered on a
business day during normal business hours where such notice is to be received), or the first business day following such delivery
(if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second
business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual
receipt of such mailing, whichever shall first occur or (c) upon delivery by e-mail (if delivered on a Business Day during normal
business hours where such notice is to be received) upon recipient’s actual receipt and acknowledgement of such e-mail. The
addresses for such communications shall be:


 




    	 



    	 



    

 


	If to the Company:	
        Electronic Cigarettes International Group, Ltd.

        14200 Ironwood Drive

        Grand Rapids, Michigan 49534

        Attention: Philip Anderson

        Telephone No.: (616) 384-3272

        Facsimile No.:

        E-mail: phil.anderson@ecigcorporate.com

	 	 
	with a copy to:	
        Robinson Brog Leinwand Greene Genovese & Gluck P.C.

        875 Third Avenue, New York, New York 10022

        Attention: David E. Danovitch, Esq.

        Telephone No.: (212) 603-6391

        Facsimile No.:

        E-mail: ded@robinsonbrog.com



 


If to the Lender:


with a copy to:


 


Any party hereto may from time to time change its address for notices
by giving written notice of such changed address to the other party hereto.


 


5.05         Waivers.
No waiver by either party of any default with respect to any provision, condition or requirement of this Agreement shall be deemed
to be a continuing waiver in the future or a waiver of any other provision, condition or requirement hereof, nor shall any delay
or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right accruing to it thereafter.


 


5.06         Headings.
The article, section and subsection headings in this Agreement are for convenience only and shall not constitute a part of this
Agreement for any other purpose and shall not be deemed to limit or affect any of the provisions hereof.


 


5.07         Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and assigns.
The Lender may assign the New Note, the Warrants and/or the Warrant Shares and its rights under this Agreement and the other Operative
Documents and any other rights hereto and thereto without the consent of the Company. The Company may not assign or delegate any
of its rights or obligations hereunder or under any Operative Document.


 


5.08         No
Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted
successors and assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other person or entity.


 


5.09         Governing
Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York, without
giving effect to any of the conflicts of law principles that would result in the application of the substantive law of another
jurisdiction. This Agreement shall not be interpreted or construed with any presumption against the party causing this Agreement
to be drafted.


 


5.10         Survival.
The covenants, agreements and representations and warranties of the Company under the Operative Documents shall survive the execution
and delivery hereof indefinitely.


 




    	 



    	 



    

 


5.11         Counterparts.
This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument
and shall become effective when counterparts have been signed by each party and delivered to the other parties hereto, it being
understood that all parties need not sign the same counterpart. Signature pages to this Agreement may be delivered by facsimile
or other means of electronic transmission.


 


5.12         Publicity.
Subject to Section 4.04, the Company agrees that it will not disclose, and will not include in any public announcement, the names
of the Lender without the consent of the Lender, which consent shall not be unreasonably withheld or delayed, or unless and until
such disclosure is required by law, rule or applicable regulation, and then only to the extent of such requirement. Notwithstanding
the foregoing, the Lender consents to being identified in any filings the Company makes with the SEC to the extent required by
law or the rules and regulations of the SEC.


 


5.13         Severability.
The provisions of this Agreement are severable and, in the event that any court of competent jurisdiction shall determine that
any one or more of the provisions or part of the provisions contained in this Agreement shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision or
part of a provision of this Agreement and this Agreement shall be reformed and construed as if such invalid or illegal or unenforceable
provision, or part of such provision, had never been contained herein, so that such provisions would be valid, legal and enforceable
to the maximum extent possible.


 


5.14         Further
Assurances. From and after the date of this Agreement, upon the request of the Lender or the Company, the Company and the Lender
shall execute and deliver such instruments, documents and other writings as may be reasonably necessary or desirable to confirm
and carry out and to effectuate fully the intent and purposes of this Agreement and the other Operative Documents.


 


5.15         Time
Is of the Essence. Time is of the essence of this Agreement and each Operative Document.


 


[signature page follows]


 




    	 



    	 



    

 


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


 


ELECTRONIC CIGARETTES INTERNATIONAL GROUP, LTD.


 


	By:	 	 
	Name:	Philip Anderson
	Title:	CFO


 


	 	 


 


	By:	 	 
	Name:	 	 
	Title:	 	 


 




    	 



    	 



    

 


EXHIBIT A


 


FORM OF NEW NOTE


 




    	 



    	 



    

 


EXHIBIT B


 


FORM OF ORIGINAL TRANCHE WARRANT


 




    	 



    	 



    

 


 


EXHIBIT C


 


THIRD TRANCHE WARRANT


 




    	 



    	 



    

 


 


EXHIBIT C


 


SUBORDINATION AGREEMENT