Exhibit 10.5


 





AMENDED
AND RESTATED EXCLUSIVE DISTRIBUTION AGREEMENT


THIS
AMENDED AND RESTATED EXCLUSIVE DISTRIBUTION AGREEMENT (this “Agreement”) is entered into as of the 21ST
of May, 2020, and is effective as of the 9TH day of March, 2020 (the “Effective Date”) by
and between BIDI VAPOR, LLC, a Florida limited liability company (“Manufacturer”),
and KAIVAL BRANDS INNOVATONS GROUP, INC., a Delaware corporation (“Distributor”). Manufacturer and Distributor
are each referred to herein as a “Party” and collectively, the “Parties.”


RECITALS


WHEREAS,
Manufacturer is in the business of developing electronic nicotine delivery systems and related components (all such products whether
now or hereafter made available for sale by Manufacturer being hereinafter referred to as the “Products”).


WHEREAS,
Distributor wishes to obtain, and Manufacturer is willing to grant Distributor, an exclusive worldwide right to distribute the
Products for sale and resale to both retail level customers (“Retail Customers”) and non-retail level customers,
including without limitation, to wholesale customers and sub-distributors (“Non-Retail Customers”).


WHEREAS,
Manufacturer and Distributor previously entered into that certain Exclusive Distribution Agreement, effective as of March 9, 2020
(the “Prior Agreement”).


WHEREAS,
the Parties wish to amend and restate the Prior Agreement for purposes of clarifying certain terms therein to more accurately
reflect the Parties’ intentions and desire for this Agreement to be effective as of the date the Prior Agreement was entered
into.


NOW,
THEREFORE, in consideration of the foregoing premises and the mutual representations and agreements set forth herein, and
other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Manufacturer and Distributor,
intending to be legally bound, hereby agree as follows:


1.                 
APPOINTMENT; EXCLUSIVITY; MARKETING AND SUPPORT.


A.               
Appointment and Exclusivity. Subject to the terms and conditions set forth in this Agreement, Manufacturer hereby appoints
Distributor as its exclusive worldwide distributor of the Products. Distributor accepts the appointment as Manufacturer’s
exclusive worldwide distributor of the Products and agrees to buy for resale, upon the terms and conditions set forth herein,
the Products in such quantities as Distributor shall need to properly service the market. Manufacturer represents and warrants
that the appointment of and sale of the Products to Distributor under this Agreement does not violate any obligations or contracts
of Manufacturer. As a condition of exclusivity, Distributor agrees not to represent or sell other products, which Manufacturer
may reasonably determine to be competitive with the Products, without written approval from Manufacturer. For purposes of clarification,
during the term of this Agreement, Manufacturer will not directly sell any Products to any person (Retail Customer or Non-Retail
Customer) other than to Distributor.






    	 	1	 



     


    

 


B.                
Marketing and Support. Manufacturer will be solely responsible to provide Distributor with all branding, logos, and marketing
materials to be utilized by Distributor in connection with Distributor’s marketing and promotion of the Products; provided,
however, Distributor shall bear all expenses related to reproduction and distribution of the same. Distributor agrees to use its
best efforts to promote, develop a market, sell, and distribute the Products worldwide. Among such other actions as may be necessary
to generate sales of the Products, Distributor will perform at its expense and to the reasonable satisfaction of Manufacturer
the following duties:


		i.	Distributor
                                         will engage in sales promotion activities in which the Products shall be designated by
                                         their correct names and identified as the Products of Manufacturer being marketed by
                                         Distributor as an independent distributor.



		ii.	Distributor
                                         will provide all customer service and support (both to its Retail Customers and Non-Retail
                                         Customers and to all end consumers of the Products).



		iii.	Distributor
                                         will process all sales by Distributor to Retail Customers and Non-Retail Customers. All
                                         sales by Distributor to Retail Customers will be made through the domain www.bidivapor.com.



		iv.	Distributor
                                         shall maintain adequate inventory levels of the Product on-hand to meet Retail Customer
                                         demand.



		v.	Distributor
                                         shall at all times conduct its business in a manner that will reflect favorably on Manufacturer
                                         and the Products and will not engage in any deceptive, misleading, illegal, or unethical
                                         business practice. In performing its obligations hereunder, Distributor agrees not to
                                         make any representations or give any warranties or guarantees to any person with respect
                                         to the Products, other than in compliance with Section 7.A. hereof or otherwise expressly
                                         authorized in writing by Manufacturer.



		vi.	Distributor
                                         shall provide to Manufacturer prior to the time of first use five (5) copies of all of
                                         Distributor's advertising and sales promotion materials in which any Products are mentioned
                                         and five (5) copies of any translations of any manuals or other materials provided or
                                         sold to Distributor by Manufacturer.



		vii.	Distributor,
                                         not more often than every three (3) months, shall make reports to Manufacturer, as reasonably
                                         requested by Manufacturer, with respect to sales and potential sales of the Products.
                                         Distributor also shall report to Manufacturer such information as is necessary to enable
                                         Manufacturer to manufacture or supply the Products in compliance with applicable laws
                                         and regulations throughout the world.



		viii.	Distributor
                                         will prepare and deliver to Manufacturer quarterly forecasts of Distributor's anticipated
                                         sales by Product during each month of the six-month period following the date of the
                                         forecast. It is understood that said forecasts will be used for planning purposes only
                                         and will not constitute a commitment by either Party.



		ix.	Distributor
                                         will comply with all applicable laws and regulations and will not assist or participate
                                         in any violation of laws or regulations applicable to Manufacturer or Distributor.







    	 	2	 



     


    

 

Distributor
shall be responsible for all expenses incurred by it in connection with the implementation and performance of its duties and obligations
under this Agreement, including, without limitation: (i) salaries or compensation for its personnel; (ii) costs and expenses associated
with establishing and maintain its sales organization and offices; and (iii) marketing, advertising, and promotion expenses.


2.                 
PURCHASE ORDERS; PRICING.


A.               
Purchase Orders. Distributor shall order the Products in accordance with the terms and conditions of this Agreement. Each
order for the purchase of the Products (a “Purchase Order”) must be submitted to Manufacturer by Distributor
by email or Manufacturer’s electronic data interchange (EDI) system. Each Purchase Order shall specify (i) whether the order
is being made in connection with the sale by Distributor to Retail Customers or to Non-Retail Customers, (ii) the quantity of
the Products being ordered, (iii) the applicable Retail Minimum Price and/or Wholesale Minimum Price for the Products ordered,
(iv) the price to be paid by Distributor to Manufacturer for the Products ordered, (v) payment terms granted by Manufacturer,
and (vi) the requested receipt date and delivery instructions for the applicable Products ordered. Receipt dates must be during
the term of this Agreement, except Distributor may request, subject to Manufacturer’s acceptance in Manufacturer’s
sole and absolute discretion, a Purchase Order with a requested receipt date after the expiration or termination of this Agreement,
in which case, if accepted by Manufacturer, the terms and conditions of this Agreement shall apply to such purchase, but under
no circumstances should such purchase be deemed to be or construed as being a renewal or extension of this Agreement or the exclusivity
rights granted to Distributor herein. The Parties agree that to the extent that any of the terms and conditions of this Agreement
conflict or are inconsistent with the terms or conditions of any Purchase Order submitted by Distributor, the terms and conditions
of this Agreement shall prevail and control to the extent of any such conflict or inconsistency, unless the Purchase Order containing
such conflicting or inconsistent terms and conditions is countersigned by Manufacturer, in which case the terms and conditions
set forth in such Purchase Order shall prevail and control to the extent of any such conflict or inconsistency.


B.                
Acceptance of Purchase Order. A Purchase Order submitted by Distributor shall be deemed to have been accepted by, and shall
be binding upon, Manufacturer when it is countersigned by Manufacturer or if it is not rejected by Manufacturer, in whole or in
part, by written notice to Distributor sent within five (5) business days of its receipt by Manufacturer. Notwithstanding anything
contained herein to the contrary, Manufacturer may only reject, cancel, or delay any Purchase Order placed by Distributor, whether
or not such Purchase Order has been previously accepted by Manufacturer, pursuant to Section 3.B. below. In the event Manufacturer
is unable to fill all of a Purchase Order for any reason, it shall promptly notify Distributor and Distributor shall have the
right, in its discretion, to cancel the subject Purchase Order. Distributor may change or cancel any of its Purchase Orders without
penalty so long as Distributor provides written notice to Manufacturer and the Products have not yet been shipped, or otherwise
delivered to Distributor; provided, that Distributor shall pay to Manufacturer a fee of twenty-five percent (25%) of the aggregate
purchase price of the Products of which manufacturing has commenced that are subject to any Purchase Order, which has been materially
changed or canceled by Distributor.






    	 	3	 



     


    

C.               
Invoices and Payment Terms. Manufacturer shall send Distributor invoices via mail or email for each Purchase Order, once the
Products are shipped or otherwise delivered. Distributor shall notify Manufacturer in writing if Distributor disputes any charges
set forth on an invoice within five (5) calendar days after receipt of such invoice, specifying in reasonable detail the items
disputed and basis for the dispute. Thereafter, the Parties will work in good faith to resolve such dispute as quickly as is reasonably
possible. If any such dispute is not resolved within thirty (30) calendar days after Distributor’s receipt of the applicable
invoice, then Manufacturer may suspend any further shipments of the Products under this Agreement until such time as the dispute
is resolved and all amounts agreed upon by the Parties to be due are paid in full. All undisputed amounts on each invoice are
due and payable within thirty (30) calendar days from the date of Distributor’s receipt of the invoice. Payments due hereunder
must be made, at Distributor’s option, by ACH, wire transfer, certified check, or such other method as may be agreed to
by the Parties. Manufacturer reserves the right to change or modify payment terms upon sixty (60) calendar days’ written
notice to Distributor at any time following a default by Distributor of its payment obligations under this Agreement with such
changes or modifications to be effective for Purchase Orders submitted after such sixty (60) calendar day period. Invoices will
be issued upon the earlier of: (i) shipment of the Products from Manufacturer’s warehouse or production facility to Distributor
or to Distributor’s customer via direct shipment or (ii) the delivery of the Products to Distributor.


D.               
Prices; Price Reductions. Manufacturer has a legitimate interest in ensuring that a minimum price be maintained for all sales
by Distributor of its Products to Retail Customers and to Non-Retail Customers. Accordingly, Manufacturer will establish minimum
pricing for all sales by Distributor of its Products to Non-Retail Customers (“Wholesale Minimum Price”) and
minimum pricing for all sales by Distributor of its Products to Retail Customers (“Retail Minimum Price”) and
Distributor will not sell any Products to Non-Retail Customers below the applicable Wholesale Minimum Price or sell any Products
to Retail Customers below the applicable Retail Minimum Price. The initial Wholesale Minimum Price and Retail Minimum Price for
the Products are included as Exhibit A attached hereto. Distributor agrees to pay Manufacturer the price per Product identified
in Exhibit A attached hereto. Manufacturer retains the right to make changes to Wholesale Minimum Pricing, Retail Minimum
Pricing, and Distributor pricing upon providing not less than three (3) days’ prior written notice to Distributor. Any price
reduction to the Wholesale Minimum Pricing, Retail Minimum Pricing, or Distributor pricing with respect to affected Products shall
apply to Purchase Orders that have not yet been accepted or deemed accepted by Manufacturer and Purchase Orders thereafter submitted
by Distributor. Any price increase to the Wholesale Minimum Pricing, Retail Minimum Pricing, or Distributor pricing with respect
to affected Products shall apply to Purchase Orders thereafter submitted by Distributor; provided, that Distributor shall have
the right, at its option, to cancel, in whole or in part, any outstanding Purchase Orders for affected Products not yet accepted
by Manufacturer. Prices do not include, and Manufacturer shall not be responsible for, any required federal, state, or local sales
or other taxes, duties, export or custom charges, VAT charges, brokerage, or other fees.


E.                
Past Due Amounts. If any undisputed amount due Manufacturer by Distributor, for any reason, becomes past due, Manufacturer
shall provide written notice to Distributor and, if such amounts remain outstanding for fifteen (15) calendar days following receipt
of such notice, Manufacturer may at its option and without further notice withhold further shipments or deliveries of the Products
under this Agreement until such past due invoices are paid in full.






    	 	4	 



     


    

F.                
Taxes. Distributor shall be responsible for any national, state, or local sales, use, value added, or other tax, tariff, duty,
or assessment levied or imposed by the United States or any foreign governmental authority arising out of or related to any of
the transactions contemplated by this Agreement, including sales of the Products to Distributor, other than taxes based upon Manufacturer’s
income. Distributor must pay directly, or reimburse Manufacturer for, the amount of such sales, use, value added or other tax,
tariff, duty, or assessment that Manufacturer is at any time obligated to pay or collect with respect to or arising out of the
sale of the Products under this Agreement.


		3.	SHIPMENTS;
                                         PRODUCTS.



A.       Shipment
Terms; Title and Risk of Loss. All of the Products purchased by Distributor under this Agreement will be packaged for shipment
in Manufacturer’s standard containers, marked for shipment or delivery to Distributor at the address specified by Distributor
in the Purchase Order (the applicable destination being hereinafter referred to as the “Destination”). All
costs of shipment shall be paid by Manufacturer for any purchase by Distributor of the Products from Manufacturer for sale to
Retail and Non-Retail Customers. Title and risk of loss will pass to Distributor upon the earlier of: (i) the delivery of the
Products at the Destination or (ii) the tender of the Products by Manufacturer to the first shipping carrier. Distributor shall
be solely responsible for all costs of shipment for the subsequent sale by Distributor to Retail Customers and Non-Retail Customers.
Manufacturer shall ship or otherwise deliver the Products on or before the requested receipt date designated in a Purchase Order
(provided, that such receipt date is not less than twenty (20) business days after the Purchase Order is received by Manufacturer)
and shall promptly notify Distributor when Manufacturer knows or has reason to believe that a shipment will not be delivered by
the requested receipt date. Any expense for any special packaging or any special delivery requested by Distributor shall be borne
by Distributor.


B.       Manufacturer’s
Right to Delay or Cancel. Notwithstanding Manufacturer’s obligations in this Agreement, Manufacturer may refuse, cancel,
or delay any shipment of the Products when Distributor is delinquent in any payment for more than (30) calendar days, or when
Distributor is in material breach of its obligations under this Agreement, which has not been cured pursuant to Section 11.A.


C.       Acceptance
of Shipments or Deliveries. Distributor shall have ten (10) business days from the date of arrival of the shipment or delivery
of the Products at the applicable Destination or other shipping or delivery location agreed upon by the Parties to inspect the
Products and notify Manufacturer in writing of any discrepancies with respect to such Products, including but not limited to any
discrepancies in the quantity or quality of the Products. The Products with respect to which Distributor does not notify Manufacturer
of any discrepancies in writing shall be deemed accepted by Distributor.


D.
       Adding or Deleting the Products; Manufacturing Changes to the Products.  Manufacturer
shall have the right at any time upon ninety (90) calendar days’ prior written notice to Distributor to add or delete the
Products. Should Manufacturer want to make any changes to the Products, it shall first notify the Distributor at least ninety
(90) calendar days before the change is implemented, and such changes shall be agreed to by the Parties in writing before shipment
or delivery of any Products that include any such changes. Notwithstanding the foregoing, for changes required by regulatory or
certification authorities or otherwise deemed necessary by Manufacturer for any reason, including health, safety, welfare, technology,
intellectual property, trade secret, competitive, materials sourcing, or other matters, Manufacturer will notify Distributor at
least thirty (30) calendar days before the change is implemented, but Distributor’s approval of such changes shall not be
required.






    	 	5	 



     


    

 


		4.	INTELLECTUAL
                                         PROPERTY RIGHTS.



A.       Manufacturer’s
Marks. Subject to the terms and conditions of this Agreement, during the term of this Agreement, Manufacturer hereby grants
to Distributor a revocable, sublicensable, non-transferable, non-exclusive, limited license to use Manufacturer’s logos,
trademarks, and trade names, together with all branding and marketing materials created by or on behalf of Manufacturer in connection
with the Products, and the domain www.bidivapor.com (collectively the “Manufacturer IP”), solely in connection
with the marketing, advertisement, and sale of the Products. Such license shall immediately terminate upon the expiration or termination
of this Agreement. Distributor shall strictly comply with all standards of use for the Manufacturer IP and must at all times display
appropriate trademark and copyright notices as instructed by Manufacturer. Distributor acknowledges and agrees that the Manufacturer
IP and other intellectual property provided to Distributor by Manufacturer, if any, are the sole and exclusive property of Manufacturer.
Distributor shall not acquire any right, title, or interest under this Agreement in any patent, copyright, Manufacturer IP, or
other intellectual property right of any kind of Manufacturer. No implied license, patent, copyright, or other intellectual property
right of Manufacturer is granted under this Agreement or otherwise. During the term of this Agreement and thereafter, Distributor
shall not do anything that will in any manner infringe, impeach, dilute, or lessen the value of the Manufacturer IP, patents,
copyrights, or other intellectual property of Manufacturer or the goodwill associated therewith or that will tend to prejudice
the reputation of the Manufacturer or the sale of any Products.


B.       Distributor
Marks.  Subject to the terms and conditions of this Agreement, during the term of this Agreement, Distributor hereby grants
Manufacturer a non-exclusive, royalty free license to use Distributor’s logos, trademarks, and trade names (the “Distributor
Marks”) on Manufacturer’s web sites and marketing materials. Such license shall immediately terminate upon the
expiration or termination of this Agreement. Manufacturer shall strictly comply with all standards of use for the Distributor
Marks and must at all times display appropriate trademark and copyright notices as instructed by Distributor. Manufacturer acknowledges
and agrees that the Distributor Marks and other intellectual property provided to Manufacturer by Distributor, if any, are the
sole and exclusive property of Distributor. Manufacturer shall not acquire any right, title, or interest under this Agreement
in any patent, copyright, Distributor Marks, or other intellectual property right of any kind of Distributor. No implied license,
patent, copyright, or other intellectual property right of Distributor is granted under this Agreement or otherwise. During the
term of this Agreement and thereafter, Manufacturer shall not do anything that will in any manner infringe, impeach, dilute, or
lessen the value of the Distributor Marks, patents, copyrights, or other intellectual property of Distributor or the goodwill
associated therewith or that will tend to prejudice the reputation of the Distributor.






    	 	6	 



     


    

 


		5.	CONFIDENTIAL
                                         INFORMATION.



A.               
Confidential Information. The Parties acknowledge and agree that during the term of this Agreement, each may receive confidential
information from the other Party. “Confidential Information” shall mean (i) information relating to a Party’s
and its affiliates’ products or business including, but not limited to, the business plans, financial records, customers,
suppliers, products, product samples, strategies, inventions, procedures, sales aids or literature, technical data, advice or
knowledge, contractual agreements, pricing, price lists, product white papers, plans, designs, specifications, and know-how or
other intellectual property, that may be at any time furnished, communicated, or delivered by either Party to the other Party
whether in oral, tangible, electronic, or other form and (ii) all other non-public information provided by one Party to the other
including, but not limited, to financial, technical, and business information, and all non-promotional materials furnished by
one Party to another.


B.                
Exceptions. The “Receiving Party” shall not have any obligations to preserve the confidential nature of
any Confidential Information that (i) Receiving Party can demonstrate by competent evidence was rightfully in the Receiving Party’s
possession before receipt from the “Disclosing Party”; (ii) is or becomes a matter of public knowledge through
no fault of the Receiving Party; (iii) is rightfully received by Receiving Party from a third party without, to the best of Receiving
Party’s knowledge, a duty of confidentiality; (iv) is independently developed by Receiving Party without use of the Confidential
Information; or (v) is disclosed by Receiving Party with Disclosing Party’s prior written approval.


C.               
Use of Confidential Information; Standard of Care. The Receiving Party shall maintain the Confidential Information in confidence
and disclose the Confidential Information only to its employees, subcontractors, and consultants who have a need to know such
Confidential Information in order to fulfill the business affairs and transactions between the Parties contemplated by this Agreement
and who are under confidentiality obligations no less restrictive as, or who have been advised of the confidentiality obligations
set forth in, this Agreement. The Receiving Party shall remain responsible for breaches of this Agreement arising from the acts
of its employees, subcontractors, and consultants to whom it provides the Disclosing Party’s Confidential information. The
Receiving Party shall protect Confidential Information by using the same degree of care as Receiving Party uses to protect its
own information of a like nature, but no less than a reasonable degree of care, to prevent the unauthorized use, disclosure, dissemination,
or publication of the Confidential Information. The Receiving Party agrees not to use the Disclosing Party’s Confidential
Information for its own purpose other than in connection with the transactions contemplated by this Agreement or for the benefit
of any third party, without the prior written approval of the Disclosing Party. The Receiving Party shall promptly return or certify
destruction of all copies of Confidential Information upon request by the Disclosing Party or upon the expiration or earlier termination
of this Agreement.


D.               
Equitable Relief. The Receiving Party hereby agrees and acknowledges that any breach or threatened breach of this Agreement
regarding the treatment of the Confidential Information may result in irreparable harm to the Disclosing Party for which there
may be no adequate remedy at law. In addition to other remedies provided by law or at equity, in such event the Disclosing Party
shall be entitled to seek an injunction, without bond, preventing any further breach of this Agreement by the Receiving Party.






    	 	7	 



     


    

6.                 
INSURANCE. Manufacturer shall maintain, during the term of this Agreement, Commercial General Liability Insurance with minimum
limits, including under any General Liability Umbrella Policies, of not less than $2,000,000 combined single limit for bodily
injury and property damage on the Products purchased by Distributor for resale. Manufacturer shall use commercially reasonable
efforts to provide Distributor with thirty (30) calendar days’ prior written notice of any change or cancellation in any
applicable insurance policies.


Distributor
shall maintain, during the term of this Agreement, Commercial General Liability Insurance with minimum limits, including under
any General Liability Umbrella Policies, of not less than $2,000,000 combined single limit for bodily injury and property damage.
Distributor shall use commercially reasonable efforts to provide Manufacturer with thirty (30) calendar days’ prior written
notice of any change or cancellation in any applicable insurance policies.


7.                 
WARRANTY; RECALL.


A.               
Warranty. Manufacturer warrants to Distributor, for a period of one year from the date of delivery by Manufacturer to the
intended recipient thereof, that any Products delivered by Manufacturer pursuant to this Agreement shall conform in all material
respects to Manufacturer’s written specifications for such Products, a copy of which is attached hereto as Exhibit B,
and shall be free of defects in materials and workmanship. Manufacturer further warrants to Distributor that it has title
to the Products to be conveyed hereunder and has the right to sell the same and that at the time of delivery, such Products shall
be free of any security interest or other lien or any other encumbrances whatsoever (the warranties provided in the preceding
two sentences being hereinafter referred to as the “Limited Warranty”). Except for the Limited Warranty, Manufacturer
makes no warranties or representations to Distributor or any other person with respect to the Products or any services provided
to Distributor or any other person. Manufacturer may not change any of the terms of the Limited Warranty at any time, without
written consent from Distributor unless Manufacturer notifies Distributor in writing at least one hundred and twenty (120) calendar
days prior to any such change. Any such change shall not apply to any Products sold to or ordered by Distributor prior to the
change. Distributor will not alter the Limited Warranty, warranty disclaimers, and limitation of liability without the prior written
authorization of Manufacturer, nor extend or make any additional warranty or representation regarding the Products unless expressly
authorized by Manufacturer.


THE
LIMITED WARRANTY REFERRED TO IN THIS SECTION IS THE ONLY WARRANTY, EXPRESS OR IMPLIED, THAT MANUFACTURER MAKES WITH RESPECT TO
THE PRODUCTS. MANUFACTURER SPECIFICALLY DISCLAIMS ALL OTHER IMPLIED WARRANTIES INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES
OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NON-INFRINGEMENT.


B.                
Warranty Claims. The Limited Warranty is effective only if Distributor gives prompt written notice to Manufacturer of any
alleged breach of the Limited Warranty, which notice shall specifically describe the problem and shall state the date of sale
and name and location of the recipient of the Product originally shipped by Manufacturer. Notwithstanding anything to the contrary
contained herein, Manufacturer shall have no obligation under the Limited Warranty unless it receives such notice within thirty
(30) days following the expiration of the warranty period. In the event of any breach of the Limited Warranty Manufacturer’s
sole obligation is to replace each non-conforming Product within a reasonable period of time and to pay for the costs of shipment
to the original recipient of the Product or as otherwise specified by Distributor.


 






    	 	8	 



     


    

C.               
Recall. In the event that: (i) any applicable federal, state or foreign regulatory authority should issue a request, directive
or order that a Product be recalled; (ii) a court of competent jurisdiction orders such a recall; or (iii) Manufacturer determines
that the Product represents a risk of injury or customer deception or is otherwise defective and that the recall of a Product
is appropriate (“Recall”), Manufacturer shall have sole right and responsibility for implementing the Recall.
Distributor will provide cooperation and assistance to Manufacturer in connection therewith, as may be reasonably requested by
Manufacturer. Manufacturer shall be solely responsible for all expenses affecting such Recall (including any reasonable out-of-pocket
expenses incurred by Distributor in connection with such cooperation, as directed in writing by Manufacturer).


 


		8.	INDEMNIFICATION.



A.               
Indemnity Obligations for Intellectual Property Infringement. Manufacturer agrees to defend, indemnify, and hold harmless
Distributor from and against any and all claims, losses, damages, suits, expenses (including reasonable attorneys’ fees),
and costs (collectively “Claims”) brought or alleged by a third party that the Manufacturer IP or any Products
sold to Distributor infringe any U.S. patent, trademark, or copyright. Distributor shall reasonably cooperate with Manufacturer,
its insurance company, and its legal counsel in its defense of such Claims. If the use or sale of any Products furnished under
this Agreement is enjoined as a result of a Claim, Manufacturer shall either obtain on behalf of the Distributor the right to
continue to use or sell such Products, substitute an equivalent product reasonably acceptable to Distributor in its place, or
reimburse Distributor the purchase price of the Products, costs incurred by Distributor as a result of such cancellation, and
any and all losses or costs incurred as a result of Distributor’s breach of any purchaser order or other agreement with
its customers. Notwithstanding the foregoing, this indemnity shall not apply or cover any Claims based upon any infringement or
alleged infringement of any patent, trademark, or copyright resulting from the alteration or unauthorized (by Manufacturer) use
of any Manufacturer IP or the Products by Distributor or a Distributor representative or the combination of any Products with
any other products or the combination of any Manufacturer IP with any other mark, if such infringement claim would have been avoided
but for such alteration, combination, or unauthorized use by Distributor or any Distributor representative. Distributor shall
also have the right to participate in the defense of any such action and have the right to hire its own legal counsel at Distributor’s
expense. This indemnity shall not cover any Claims in which Distributor fails to provide Manufacturer with prompt written notice
of the Claim that lack of notice materially prejudices the defense of the Claim.


B.                
Distributor agrees to defend, indemnify, and hold harmless Manufacturer from and against any and all Claims brought or alleged
by a third party based upon any infringement or alleged infringement of any patent, trademark, or copyright resulting from the
alteration or unauthorized (by Manufacturer) use of any Manufacturer IP or the Products by Distributor or a Distributor representative
or the combination of any Products with any other products or the combination of any Manufacturer IP with any other mark, if such
infringement claim would have been avoided but for such alteration, combination, or unauthorized use by Distributor or any Distributor
representative. Manufacturer shall reasonably cooperate with Distributor, its insurance company and its legal counsel in its defense
of such Claims. Manufacturer shall also have the right to participate in the defense of any such action and have the right to
hire its own legal counsel at Distributor’s expense. This indemnity shall not cover any Claims in which Manufacturer fails
to provide Distributor with prompt written notice of the Claim which lack of notice materially prejudices the defense of the Claim.






    	 	9	 



     


    

C.               
Manufacturer’s Additional Indemnity Obligations. Notwithstanding anything herein to the contrary, in addition to all
other rights and remedies available at law or in equity, Manufacturer hereby agrees to defend, indemnify, and hold harmless Distributor
from and against any and all third party Claims (i) arising out of any defects in any Products existing at the time such Products
are sold by Manufacturer to Distributor, or (ii) arising out of the negligent acts or omissions or willful misconduct of Manufacturer,
its employees, agents, or representatives with respect to the Products or its performance of this Agreement. Distributor shall
reasonably cooperate with Manufacturer, its insurance company, and its legal counsel in its defense of such Claims. Distributor
shall also have the right to participate in the defense of any such action and have the right to hire its own legal counsel at
Distributor’s expense. This indemnity shall not cover any Claims in which Distributor fails to provide Manufacturer with
prompt written notice of the Claim which lack of notice materially prejudices the defense of the Claim.


D.               
Distributor’s Indemnity Obligations to Manufacturer. Distributor hereby agrees to defend, indemnify, and hold harmless
Manufacturer, its affiliates, and their respective officers directors, employees, and agents from and against any and all Claims
(i) arising out of the negligent acts or omissions or willful misconduct of Distributor, its employees, agents, or representatives
with respect to its performance of this Agreement, sale of the Products, or otherwise, (ii) arising out of the alteration or modification
of the Products or Manufacturer IP by Distributor or its employees, agents, or representatives, or (iii) alleging that the Distributor
Marks infringe or otherwise violate the intellectual property rights of a third party. This indemnity shall not cover any Claims
in which Manufacturer fails to provide Distributor with prompt written notice which lack of notice prejudices the defense of the
Claim. Manufacturer shall also have the right to participate in the defense of any such action and have the right to hire its
own legal counsel at Manufacturer’s expense.


E.                
Settlement of Claims. In no event shall a party seeking or entitled to indemnification from a Party hereunder settle, compromise,
agree to a judgment, or take any similar action with respect to any Claim without the written consent of the Party from whom indemnification
is sought.


9.                 
LIMITATION OF LIABILITY.


EXCEPT
FOR THE PARTIES’ INDEMNIFICATION OBLIGATIONS UNDER SECTION 8 OF THIS AGREEMENT AND CONFIDENTIALITY OBLIGATIONS UNDER SECTION
5 OF THIS AGREEMENT, IN NO EVENT SHALL EITHER PARTY BY LIABLE UNDER THIS AGREEMENT TO THE OTHER PARTY FOR ANY INCIDENTAL, CONSEQUENTIAL,
INDIRECT, STATUTORY, SPECIAL, OR PUNITIVE DAMAGES, INCLUDING, BUT NOT LIMITED TO, LOST PROFITS, LOSS OF USE, LOSS OF TIME, INCONVENIENCE,
LOSS BUSINESS OPPORTUNITIES, DAMAGE TO GOODWILL OR REPUTATION, OR LOSS OF DATA, REGARDLESS OF WHETHER SUCH LIABILITY IS BASED
ON BREACH OF CONTRACT, TORT, STRICT LIABILITY, OR OTHERWISE, AND EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES OR SUCH DAMAGES
COULD HAVE BEEN REASONABLY FORESEEN.






    	 	10	 



     


    

10.             
TERM. This Agreement shall commence on the Effective Date and shall end on the first anniversary of the Effective Date (the
“Initial Term”) unless earlier terminated pursuant to Section 11 hereof. The Initial Term shall automatically
renew for successive renewal terms of one (1) year each (each, a “Renewal Term”), unless either Party provides
the other Party with written notice of its intention not to renew the Initial Term or any Renewal Term, as applicable, at least
sixty (60) days prior to the expiration of the then current Initial Term or Renewal Term.


11.             
TERMINATION.


A.               
Termination for Breach. Either Party may terminate this Agreement at any time in the event of a material breach by the other
Party that remains uncured after thirty (30) calendar days following written notice thereof. Such termination shall be effective
immediately and automatically upon the expiration of the applicable notice period, without further notice or action by either
Party. Termination shall be in addition to any other remedies that may be available to the non-breaching Party.


B.                
Termination for Financial Insecurity. Either Party may terminate this Agreement and any outstanding Purchase Orders (to the
extent the Products have not already been delivered to the carrier for shipment) immediately at its option upon written notice
if the other Party: (i) becomes or is declared insolvent or bankrupt; (ii) is the subject of a voluntary or involuntary bankruptcy
or other proceeding related to its liquidation or solvency, which proceeding is not dismissed within sixty (60) calendar days
after its filing; (iii) ceases to do business in the normal course; or (iv) makes an assignment for the benefit of creditors.
This Agreement shall terminate immediately and automatically upon any determination by a court of competent jurisdiction that
either Party is excused or prohibited from performing in full all obligations hereunder, including, without limitation, rejection
of this Agreement pursuant to 11 U.S.C. §365.


C.               
Termination for Failure to Meet Minimum Purchase Commitments. Manufacturer may terminate this Agreement at any time upon written
notice to Distributor if Distributor fails to satisfy the Minimum Purchase Threshold (as defined in Exhibit C) for any
applicable period as set forth on Exhibit C attached hereto and incorporated herein by reference. At Manufacturer’s
option, Manufacturer may elect to suspend a decision to terminate this Agreement as permitted under this Section 11.C. for an
indefinite period, but may, in the meantime upon written notice to Distributor, terminate Distributor’s exclusive rights
under Section 1.A. above.


D.               
Obligations upon Termination. Upon termination of this Agreement, Distributor shall cease to be an authorized reseller of
the Products and (i) all unaccepted Purchase Orders may be cancelled by Distributor or Manufacturer without liability, and (ii)
Distributor may, at its option, resell, and deliver to Manufacturer, free and clear of all liens and encumbrances, any or all
of the Products that (A) are subject to Purchase Orders accepted by Manufacturer whether or not the applicable the Products have
been shipped as of the date of termination and (B) were manufactured, shipped, or received as of the date of termination, in each
case that are in new condition and in the original factory packaging at the original purchase price of any such Products that
Distributor elects to resell to Manufacturer less a restocking charge of 50% of such amount payable by Manufacturer upon receipt
of such Products. Restocking is waived in the event the Manufacturer terminates Distributor, other than if termination is a Termination
for Breach as outlined in 11.A. Within ninety (90) calendar days of termination of this Agreement, Distributor shall remove and
not thereafter use any sign, display, or other advertising or marketing means containing Manufacturer Marks, except as provided
in this section. Distributor may continue to use in-store materials containing the Manufacturer IP as reasonably required for
the resale of the Products that may be remaining in Distributor’s possession after termination, which materials Distributor
may continue to utilize until all remaining Products have been sold or one hundred eighty (180) calendar days after termination,
whichever comes first, after which Distributor shall cease the use of any such Manufacturer IP.






    	 	11	 



     


    

12.             
COMPLIANCE WITH LAWS. Distributor acknowledges and understands that the Products may be subject to restrictions upon export
from the United States and upon resale after export. Distributor therefore represents and warrants that it shall comply fully
with all relevant regulations of the U.S. Department of Commerce, with the U.S. Export Administration Act, and with any other
import and/or export control laws or regulations of the United States or any other jurisdiction.


13.             
GENERAL TERMS.


A.               
Independent Contractors. Nothing in this Agreement, and no course of dealing between the Parties, shall be construed to create
or imply an employment or agency relationship or a partnership or joint venture relationship between the Parties or between one
Party and the other Party’s employees or agents. Neither Manufacturer nor Distributor has the authority to bind the other,
to incur any liability, or otherwise act on behalf of the other. Each Party shall be solely responsible for payment of its employees’
salaries (including withholding of income taxes and social security), workers’ compensation, and all other employment benefits.


B.                
Assignment. Neither this Agreement, nor any right or interest herein, may be assigned, in whole or in part, without the express
written consent of the other Party. Any assignment without such consent shall be null and void. Notwithstanding the foregoing,
the Distributor may subcontract its rights or obligations under this Agreement with the prior written consent of Manufacturer.
Either party may assign this Agreement if the assignment is carried out as part of a merger, restructuring, or reorganization,
or sale or transfer of all or substantially all of a Party’s assets. This Agreement shall be binding upon and inure to the
benefit of the Parties hereto, their successors and legal representatives. Except as set forth in Section 8, there are no third-party
beneficiaries to this Agreement.


C.               
Notices. Unless otherwise agreed to by the Parties, all notices shall be deemed effective when received and made in writing
by either (i) certified mail, return receipt requested, (ii) nationally recognized overnight courier, or (iii) fax with confirmation,
addressed to the party to be notified at the following address or to such other address as such Party shall specify by like notice
hereunder:






    	 	12	 



     


    

If
to Manufacturer:


BIDI
VAPOR, LLC


4460
OLD DIXIE HWY


GRANT-VALKARIE,
FL 32949


		Attn:	BIDI
                                         VAPOR - CORPORATE



		Email:	ADMIN@BIDIVAPOR.COM



		Fax:	833-367-2434



 


If
to Distributor:


Kaival
Brands Innovations Group, Inc.


401
N. WICKHAM RD.


MELBOURNE,
FL 32935 


		Attn:	KAVL
                                         - CORPORATE



		Email:	ADMIN@KAIVALBRANDS.COM



		Fax:	833-452-4825



 


(with
a copy to, which does not serve as notice):


 


Baker
& Hostetler LLP


200
S. ORANGE AVE., STE 2300


ORLANDO,
FL 32801


Attn:
ALISSA LUGO & KEITH DURKIN


Email:
alugo@bakerlaw.com


kdurkin@bakerlaw.com


Fax:
407-841-0168


 


Either
Party, by written notice to the other pursuant to this section, may change its address or designees for receiving such notices.


D.               
Force Majeure. Neither Party shall liable hereunder for any failure or delay in the performance of its obligations under this
Agreement if such failure or delay is on account of causes beyond its control, including labor disputes, civil commotion, war,
fires, floods, inclement weather, governmental regulations or controls, casualty, government authority, strikes, or acts of God,
in which event the non-performing Party shall be excused from its obligations for the period of the delay and for a reasonable
time thereafter. Each Party shall use reasonable efforts to notify the other Party of the occurrence of such an event within three
(3) business days of its occurrence. Notwithstanding anything to the contrary contained herein, in no event shall the COVID-19
pandemic or government actions taken in connection with the same (or any future pandemic or government actions taken in connection
with the same) constitute an event of force majeure under this Section 13.D. or otherwise prohibit or restrict Manufacturer’s
rights to terminate this Agreement for failure of Distribute to meet the Minimum Purchase Threshold set forth under Section 11.C.
hereof.






    	 	13	 



     


    

E.                
Governing Law; Venue; Jury Waiver. This Agreement shall be governed by the laws of the State of Florida, without giving effect
to the principles of conflicts of law of such state and shall be binding upon the Parties hereto in the United States and worldwide.
Any claims or legal actions by one Party against the other arising under this Agreement or concerning any rights under this Agreement
shall be commenced and maintained in any state or federal court located in Orange County, Florida. Both Parties hereby submit
to the jurisdiction and venue of any such court. THE PARTIES FURTHER AGREE, TO THE EXTENT PERMITTED BY APPLICABLE LAW, TO WAIVE
ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY CLAIM, COUNTERCLAIM, OR ACTION ARISING FROM THE TERMS OF THIS AGREEMENT.


F.                
Attorney’s Fees. If either Party incurs any legal fees associated with the enforcement of this Agreement or any rights
under this Agreement, the prevailing Party shall be entitled to recover its reasonable attorney’s fees and any court, arbitration,
mediation, or other litigation expenses from the other Party.


G.               
Survival. The provisions of this Agreement, which by their sense and context should survive any termination of expiration
of this Agreement, including without limitation sections 5 (confidentiality), 7 (warranty), 8 (indemnification), 9 (limitation
of liability), 12 (compliance with laws), and 13 (general terms) shall so survive.


H.               
Authorized Signatories. It is agreed and warranted by the Parties that the individuals signing this Agreement on behalf of
the respective Parties are authorized to execute such an agreement. No further proof of authorization shall be required.


I.                  
Severability. If any provision or portion of this Agreement shall be held by a court of competent jurisdiction to be illegal,
invalid, or unenforceable, the remaining provisions or portions shall remain in full force and effect.


J.                 
No Strict Construction. This Agreement shall not be construed more strongly against either Party regardless of which Party
is more responsible for its preparation.


K.               
Counterparts. This Agreement may be executed by facsimile and in one or more counterparts, each of which will be deemed to
be an original, but all of which together will constitute one and the same instrument, without necessity of production of the
others.


L.                
Entire Agreement; Modification; Waiver. This Agreement is the entire agreement between the Parties with respect to the subject
matter and supersedes any prior agreement or communications between the Parties hereto, whether written or oral. This Agreement
may be modified only by a written amendment signed by authorized representatives of both Parties. No waiver of any term or right
in this Agreement shall be effective unless in writing, signed by an authorized representative of the waiving Party. The failure
of either Party to enforce any provision of this Agreement shall not be construed as a waiver or modification of such provision,
or impairment of its right to enforce such provision thereafter.


 


[SIGNATURES
ON FOLLOWING PAGE]


 



    	 	14	 



     


    




IN
WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly executed by their duly authorized representatives as
of the 21ST day of May, 2020, to be effective as of the the Effective Date.


MANUFACTURER


 


BIDI
VAPOR, LLC


By:
/s/ Nirajkumar Patel


Name:
Nirajkumar Patel


Title:
Manager


 


 


DISTRIBUTOR


 


KAIVAL
BRANDS INNOVATIONS GROUP, INC.


 


 By:
/s/ Eric Mosser


Name:       Eric
Mosser


Title:       Chief
Operating Officer


 






    	 	15