Exhibit 10.5


 


EXECUTION VERSION


 


AMENDED AND RESTATED


 


INTERCREDITOR AGREEMENT


 


THIS AMENDED AND RESTATED INTERCREDITOR
AGREEMENT (this Amended and Restated Intercreditor Agreement, together with all exhibits, schedules, extensions, renewals, amendments,
restatements, substitutions, and replacements hereto and hereof, this “Agreement”) is dated as of July 8,
2016 by and among CALM WATERS PARTNERSHIP, a Wisconsin general partnership, together with its successors and assigns, (“Calm
Waters”), the additional lenders party hereto (collectively, the “Additional Lenders”), and the holders
of the Promissory Notes (as defined below) party hereto (collectively, the “Holders,” and together with Calm
Waters and the Additional Lenders, the “Lenders,” and each, individually, a “Lender”).


 


WITNESSETH: 


 


WHEREAS, Electronic Cigarettes International
Group, Ltd., a Nevada corporation (the “Borrower”) has entered into a Credit Agreement dated April 27, 2015
(as amended, restated or otherwise modified from time to time, the “CW Credit Agreement”) with Calm Waters pursuant
to which Calm Waters has agreed to provide a term loan to Borrower in the original principal amount of $35,000,000. The indebtedness
of the Borrower to Calm Waters is evidenced by promissory notes (as amended, restated or otherwise modified from time to
time, the “CW Notes”);


 


WHEREAS, the Borrower has also entered into
a Credit Agreement dated April 27, 2015 (as amended, restated or otherwise modified from time to time, the “Additional
Lender Credit Agreement” and together with the CW Credit Agreement, the “Credit Agreements”) with
the other lenders party hereto (collectively, the “Additional Lenders”), pursuant to which the Additional Lenders
have agreed to provide term loans to Borrower in the aggregate original principal amount of $6,214,225.11. The indebtedness of
the Borrower to the Additional Lenders is evidenced by promissory notes (as amended, restated or otherwise modified from
time to time, the “Additional Lender Notes”);


 


WHEREAS, the Borrower has issued 15% Senior
Secured Convertible Promissory Notes dated either January 14, 2014 or February 28, 2014 in the aggregate principal amount of $[•]
to the Holders, which were amended in January 2015 to, among other things, reduce the interest rate payable thereon and extend
the maturity date thereof (as amended, restated or otherwise modified from time to time, the “Promissory Notes,”
and together with the CW Notes and the Additional Lender Notes, the “Notes”);


 


WHEREAS, to secure amounts outstanding under
the CW Credit Agreement and the CW Notes, the Borrower, together with subsidiaries of the Borrower identified in the CW Security
Agreement referred to below (therein, the “Guarantors”) and Calm Waters have entered into that certain Guarantee
and Collateral Agreement dated April 27, 2015 (the “CW Security Agreement”) pursuant to which the Guarantors
have agreed to guaranty payment of the Borrower’s obligations to Calm Waters pursuant to the CW Credit Agreement and the
Borrower and the Guarantors have each granted to CW a security interest in substantially all of their respective property to secure
payment of all obligations of Borrower and the Guarantors to CW;


 




     


     


    

 


WHEREAS, to secure amounts outstanding under
the Additional Lender Credit Agreement and the Additional Lender Notes, the Borrower, together with the Guarantors and the Additional
Lenders have entered into that certain Guarantee and Collateral Agreement dated April 27, 2015 (the “Additional
Lender Security Agreement”) pursuant to which the Guarantors have agreed to guaranty payment of the Borrower’s
obligations to the Additional Lenders pursuant to the Additional Lender Credit Agreement and the Borrower and the Guarantors have
each granted to the Additional Lenders a security interest in substantially all of their respective property to secure payment
of all obligations of Borrower and the Guarantors to each of the Additional Lenders;


 


WHEREAS, to secure amounts outstanding under
the Promissory Notes, the Borrower, together with subsidiaries of the Borrower identified in the Security Agreement referred to
below (therein, the “Additional Debtors,” and together with the Guarantors, the “Grantors”)
and the Holders have entered into that certain Security Agreement dated [•] (the “Promissory Note Security Agreement”
and together with the CW Security Agreement and the Additional Lender Security Agreement, the “Security Agreements”)
pursuant to which the Borrower and the Additional Debtors have each granted to the Holders a security interest in substantially
all of their respective property to secure payment of all obligations of Borrower and the Additional Debtors to the Holders; and


 


WHEREAS, the parties hereto have entered
into that certain Intercreditor Agreement dated April 27, 2015 which provides that the security interest in the collateral of the
Borrower and the Additional Debtors held by the Holders is subordinate to the security interest of CW and the Additional Lenders
(the “2015 Intercreditor Agreement”);


 


NOW, THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged by the parties hereto, and intending to be legally bound hereby, the
parties hereto agree as follows:


 


Article
I

RECITALS; DEFINITIONS AND OTHER CONVENTIONS 


 


Section 1.1.          Recitals.
The foregoing recitals are hereby incorporated into and made a material part of this Agreement.


 


Section 1.2.          Definitional
Conventions.


 


(a)          The
words “hereof”, “herein”, “hereunder” and “hereto” and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and
Article, Section, subsection, paragraph, item, exhibit and schedule references are to this Agreement unless otherwise specified.


 


(b)          All
terms defined in this Agreement in the singular shall have comparable meanings when used in the plural, and vice versa, unless
otherwise specified.


 




    2 


     


    

 


Section 1.3.          Definitions.
As used in this Agreement (including the preamble and recitals hereto), the following terms shall have the meanings assigned to
them below in this Section 1.3 or in the provision of this Agreement referred to below:


 


“Affiliate” shall mean,
when used with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, controls
or is controlled by or is under common control with the Person specified and shall include any Person that directly or indirectly
owns 5% or more of any class of equity interests of the Person specified or that is an officer or director of the Person specified;
provided, however, that in no event shall the term “Affiliate,” when used with respect to the Borrower or the other
Obligors, include CW or its successors or assigns.


 


“Aggregate Principal Indebtedness”
means, as of any date of determination, the sum of (i) the aggregate principal balance outstanding under the CW Credit Agreement
and the CW Notes, plus (ii) the aggregate principal balance outstanding under the Additional Lender Credit Agreement and
the Additional Lender Notes, plus (iii) the aggregate principal amount of the outstanding Promissory Notes.


 


“Agreement” shall have
the meaning given to such term in the preamble hereto.


 


“Authorized Officer”
means the chief executive officer, chief financial officer, treasurer or managing partner, as applicable, of the Borrower, acting
singly.


 


“Bankruptcy Proceeding”
means any proceeding by, against or with respect to, the Borrower or any Obligor under any bankruptcy, reorganization, compromise,
arrangement, insolvency, readjustment of debt, dissolution or liquidation or similar law or for the appointment of a receiver for
the Borrower or any Obligor or its assets.


 


“Borrower” shall have
the meaning given to such term in the recitals hereof.


 


“Business Day” means
any day other than a Saturday, Sunday or legal holiday on which banks in New York City
are authorized or required by law to close.


 


“Collateral” means all
property and interests in property, real and personal, tangible and intangible, now owned or hereafter acquired or created by the
Borrower or any Obligor in or upon which a security interest, lien or mortgage is granted to any Lender to secure any obligations
owing to Lenders, or any of them, and all balances held by any Lender for the account of the Borrower or any Obligor or any other
property held or owing by any Lender to or for the credit or for the account of the Borrower or any Obligor with respect to which
any Lender has rights to set off or appropriate or a common law lien.


 


“Credit Document” as
used herein means all notes, loan agreements, guarantees, security agreements, mortgages, instruments, pledge agreements, assignments,
acceptance agreements, commitments, facilities, reimbursement agreements and any other agreements, documents and instruments, now
or hereafter existing, creating, evidencing, guarantying, securing or relating to any or all of the Obligations, including without
limitation the CW Credit Agreement, the CW Notes, Additional Lender Credit Agreement, the Additional Lender Notes and the Promissory
Notes, together with all amendments, modifications, renewals, extensions or restatements thereof.


 




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“Default” shall have
the meaning given to such term in each Credit Document, as applicable.


 


“Designated Collateral”
shall have the meaning assigned to such term in Section 3.1 hereof.


 


“Designated Lender” shall
mean Calm Waters, solely in its capacity as the Lender designated by all Lenders hereunder to hold or control, for the benefit
of all Lenders, the Designated Collateral.


 


“Disputed Payment” shall
have the meaning assigned to such term in Section 3.5 hereof.


 


“Event of Default” shall
have the meaning given to such term in each Credit Document, as applicable.


 


“Event of Default Notice”
shall have the meaning given to such term in Section 2.1 hereof.


 


“Lender” means individually
and “Lenders” means individually and collectively, each Lender and their respective successors and assigns.


 


“Mortgages” means the
mortgages or deeds of trust required to be executed by the Borrower or any Grantor from time to time pursuant to the Credit Documents,
granting a security interest in and to the real property defined and described therein, in favor of or for the benefit of one or
more of the Lenders, and all exhibits, schedules, extensions, renewals, amendments, substitutions and replacements to and of any
such mortgage or deed of trust.


 


“Obligations” as used
herein means any and all of the indebtedness, obligations and liabilities of any kind and description arising in any way, of the
Borrower or of any Obligor, to any Lender or to any affiliate of any Lender, whether individual or collective, joint or several,
direct or indirect, absolute or contingent, secured or unsecured, due or to become due, contractual or tortious, arising by operation
of law or otherwise, now existing or hereafter arising under or in respect of the Credit Documents or other instruments or agreements
executed and delivered pursuant thereto or in connection therewith, whether incurred by the Borrower and/or any Grantor as principal,
surety, endorser, guarantor, accommodation party or otherwise, including without limitation any future advances, whether obligatory
or voluntary under, or refinancings, renewals or extensions of or substitutions for, any existing or future debt, principal, interest
and fees, late fees, yield-maintenance amounts, prepayment premiums and expenses (including without limitation reasonable attorneys’
fees and costs), or that have been or may hereafter be contracted or incurred and any and all costs, expenses and liabilities which
may be made or incurred by any Lender in any way in connection with any of the Obligations or any collateral security therefor.


 




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“Obligor” means individually,
and “Obligors” means individually and collectively, the Borrower, the Grantors and each and every other maker,
endorser, guarantor, surety of or party obligated for (or whose assets secure) any of the Obligations.


 


“Person” means any individual,
partnership, limited liability company, corporation, trust, joint venture or unincorporated organization, including any government
or agency or political subdivision thereof.


 


“Post-Default Payment”
means any payments, or proceeds of the Collateral, from the Borrower or any other source with respect to the Obligations, including
without limitation from the exercise of any set-off, distributions received with respect to the Obligations in any Bankruptcy Proceeding
or the proceeds from the sale of any Obligations to the Borrower or any Affiliate of the Borrower, which payments or proceeds are:


 


(a)          received
by a Lender within ninety (90) days prior to a Special Event of Default,


 


(b)          received
by a Lender upon the occurrence or during the continuance of a Default or Event of Default under any Credit Agreement,


 


(c)          received
as a result of the exercise by any Lender of any set-off against any asset of the Borrower or any Obligor; or


 


(d)          received
as proceeds of Collateral as a result of any foreclosure or other realization upon the Collateral by any Lender or in a Bankruptcy
Proceeding.


 


“Qualified Lender” means
a Lender which is neither the Borrower nor an Affiliate of the Borrower.


 


“Requisite Lenders” means,
on any date of determination, Lenders which are Qualified Lenders holding 50% or more of the Aggregate Principal Indebtedness.


 


“Returning Lender” shall
have the meaning assigned to such term in Section 3.5 hereof.


 


“Security Agreement”
means individually, and “Security Agreements” means individually and collectively, the CW Security Agreement,
the Additional Lenders Security Agreement, the Promissory Note Security Agreement and any other security agreement required to
be executed by the Borrower or any Grantor on the date of this Agreement and from time to time thereafter pursuant to the CW Credit
Agreement and/or the Additional Lender Credit Agreement and/or the Promissory Notes, granting a security interest in and to the
collateral defined and described therein, in favor of any Lender, and all exhibits, schedules, extensions, renewals, amendments,
substitutions and replacements to and of any such security agreement.


 


“Security Document” means
individually, and “Security Documents” means individually and collectively: (i) the Mortgages; (ii) each Security
Agreement, (iii) any additional security devices, agreements or instruments executed by the Borrower or other Obligor granting
a lien or security interest to secure the Obligations, (iv) the ancillary documents relating to any of the foregoing including
but not limited to financing statements; and (v) all extensions, renewals, amendments, substitutions, replacements to or restatements
of any of the foregoing.


 




    5 


     


    

 


“Sharing Adjustments”
shall have the meaning assigned to such term in Section 3.5(a) hereof.


 


“Sharing Payment” shall
have the meaning assigned to such term in Section 3.5(a) hereof.


 


“Special Collateral Account”
means that certain restricted account maintained by and under the sole dominion and control of the Designated Lender for the purpose
of receiving and holding Post-Default Payments.


 


“Special Event of Default”
means (i) the commencement of a Bankruptcy Proceeding, (ii) the acceleration of all of the obligations under any Credit Document,
or (iii) any other Default or Event of Default which has not been waived or cured within thirty (30) days after an Event of Default
Notice with respect thereto has been delivered to the Lenders.


 


Article
II

COORDINATED ACTION IF DEFAULT OR EVENT OF DEFAULT AND ACCELERATION 


 


Section
2.1.          Notice of Default. Upon the occurrence of a Default or
an Event of Default, the applicable Lender may give notice thereof to the Lenders (an “Event of Default
Notice”) and shall schedule a meeting of all Lenders to be held within ten (10)
Business Days of the sending of such notice at a mutually convenient time and place or by means of a telephone
conference call in which each person participating in the meeting may hear and be heard by all other persons participating in
the meeting. At such meeting the Lenders shall consult with one another in an attempt to determine a mutually acceptable
course of conduct regarding the Borrower and the collection of the outstanding Obligations, including without limitation the
exercise of rights and remedies by the Lenders under the Security Documents. Each Lender shall take such action with respect
to such Default or Event of Default as shall be directed by, and only as directed by, the Requisite Lenders; provided
that unless and until the Lenders shall have received such directions, each Lender may (but shall not be obligated to) take
such action under (i) and (ii) below, as it deems necessary:


 


(i)          Emergency
Actions. If the Requisite Lenders have not yet provided instructions with regard to a Default or Event of Default, a Lender
may take such actions with regard to such Default or Event of Default which such Lender, in good faith, believes to be reasonably
required to protect Collateral from damage or destruction, or material diminution of value; provided, however, that
upon receipt of the instructions from the Requisite Lenders which comply with this Section 2.1, the actions of such Lender
shall be governed thereby and such Lender shall not take any further action which would be contrary thereto.


 




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(ii)         Administrative
Actions. Each Lender shall have the right to take such actions, or omit to take such actions, hereunder and under the Security
Documents not inconsistent with the instructions of the Requisite Lenders, or the terms of this Agreement as such Lender deems
necessary or appropriate to perfect or continue the perfection of the liens on the Collateral to protect or insure the Collateral.
Except as provided above and as otherwise provided pursuant to applicable law, no Lender shall have any duty as to the collection
or protection of the Collateral or any income thereon, nor as to the preservation of rights against prior parties, nor as to the
preservation of rights pertaining to the Collateral beyond the safe custody of any Collateral in such Lender’s possession.


 


Section 2.2.          Restrictions
on Actions.  Each Lender agrees that, so long as any Obligations are outstanding, each Lender’s respective rights and
remedies under its Credit Documents and its Security Documents may only be exercised in accordance with and subject to the terms
of this Agreement. Each Lender shall, for the mutual benefit of all Lenders, except as otherwise expressly permitted under this
Agreement:


 


(a)          Refrain
from accelerating or demanding repayment of the Obligations owed to it;


 


(b)          Refrain
from taking or filing any action, judicial or otherwise, to enforce any rights or pursue any remedy under its Credit Documents
and its Security Documents, except for delivering notices hereunder;


 


(c)          Refrain
from accepting any guaranty of, or any other security for, the Obligations owing to it, except any additional security granted
to each of the Lenders; and


 


(d)          Refrain
from exercising any rights or remedies under its Credit Documents and its Security Documents which have or may have arisen or which
may arise as a result of an Event of Default or the acceleration of the maturities of the Obligations;


 


provided, however, that nothing contained in subsections
(a) through (d) above, or otherwise in this Agreement, shall prevent any Lender from (x) imposing a default rate of interest in
accordance with its respective Credit Documents, (y) raising any defenses in any action in which it has been made a party defendant
or has been joined as a third party, or (z) making such demands or filing such claims in respect of the Obligations as are necessary
to prevent the waiver or bar of such claims under applicable statutes of limitations or other statutes, court orders, or rules
of procedure at any time. Except as expressly set forth in or otherwise limited by this Agreement, each of the Lenders shall have
any and all rights and remedies it may have as a creditor under applicable law.


 


Article
III

COLLATERAL IN POSSESSION OR CONTROL OF DESIGNATED LENDER; APPLICATION OF PROCEEDS; CERTAIN PAYMENTS


 


Section 3.1.          Collateral
in Possession or Control of Designated Lender. Each of the Lenders acknowledges that the Collateral includes certain types
of assets which by their nature require either actual possession or control in order to obtain a first priority perfected security
interest in such Collateral (hereinafter referred to as a “Designated Collateral”), and further acknowledges
that the Designated Lender shall control or physically possess, as applicable, in accordance with applicable law, all such Designated
Collateral for the ratable benefit of all the Lenders. Nothing contained herein imposes on the Designated Lender any duties with
respect to the Designated Collateral beyond the reasonable care in the custody and preservation of the Designated Collateral while
in the Designated Lender’s possession or control. Notwithstanding any provision to the contrary set forth elsewhere in this
Agreement, the Designated Lender shall not have any duties or responsibilities in its capacity as Designated Lender except those
expressly set forth herein or any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities,
duties, obligations or liabilities shall be read into this Agreement or otherwise exist against the Designated Lender.


 




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Section
3.2.          Application of Proceeds. All amounts owing with
respect to the Obligations shall be secured by the Collateral on a pro rata basis without distinction as to whether some
Obligations are then due and payable and other Obligations are not then due and payable. The Lenders agree that with respect
to all Post-Default Payments, including without limitation proceeds from any realization of the Collateral by any Lender, the
proceeds thereof shall be applied:


 


(i)          first,
to the payment of expenses incurred by the Lenders with respect to maintenance and protection of the Collateral and of expenses
incurred with respect to the sale of or realization upon any of the Collateral or the perfection, enforcement or protection of
the rights of the Lenders (including without limitation reasonable attorneys’ fees and expenses and other collection costs);


 


(ii)         second,
equally and ratably to all the Obligations, according to the aggregate amounts thereof then owing to each Lender;


 


(iii)        third,
the balance, if any, shall be returned to the Borrower or such other Persons as are entitled thereto.


 


The Lenders hereby agree that all Post-Default Payments, whether
received by realization on the Collateral or otherwise, shall be applied to the payment of the Obligations in accordance with the
provisions of this Section 3.2.


 


Section 3.3.          Special
Collateral Account.


 


(a)          The
Lenders agree that all Post-Default Payments received by any Lender from the Borrower or from any other source shall be deposited
into the Special Collateral Account. All amounts deposited into the Special Collateral Account shall be held and invested in accordance
with subsection (b) of this Section 3.3 or shall be distributed in accordance with subsection (c) of this Section 3.3.
Each Lender shall promptly notify the other Lenders of such Lender’s receipt of a Post-Default Payment and shall promptly
deliver to the Designated Lender such amounts for deposit into the Special Collateral Account (with such endorsements as may be
required). Each Lender agrees that any Post-Default Payment held by it shall be held in trust for the benefit of the Lenders. Notwithstanding
the foregoing, no Lender shall be required to deliver to the Designated Lender any Post-Default Payment received prior to the occurrence
of an event described in Section 3.3(c) or deposit any such Post-Default Payment into the Special Collateral Account until
the time an event described in Section 3.3(c) occurs.


 




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(b)          Except
as provided in Section 3.3(c) hereof, if the Default or Event of Default which caused a payment received by a Lender to be
a Post-Default Payment is waived or cured in accordance with the provisions of the applicable Credit Document and if no other Default
or Event of Default has occurred and then is continuing, all amounts deposited by a Lender in the Special Collateral Account pursuant
to Section 3.3(a) shall be repaid to each such Lender, together with such Lender’s share of interest earned thereon
on a pro rata basis and any Post-Default Payments theretofore received by such Lender shall not be required to be delivered to
the Designated Lender or deposited into the Special Collateral Account pursuant to Section 3.3(a) to the extent the same constituted
a Post- Default Payment by reason of such cured or waived Default or Event of Default. No amount held in the Special Collateral
Account representing payment of any Obligations to the Lender initially entitled thereto, and no payments thereafter received by
a Lender shall constitute a Post-Default Payment by reason of such cured or waived Default or Event of Default. No payment returned
to a Lender for which such Lender has been obligated to make a deposit into the Special Collateral Account shall thereafter ever
be characterized as a Post-Default Payment by reason of such cured or waived Default or Event of Default. If the Default or Event
of Default which was subject to the notice pursuant to Section 2.1 is a Default or Event of Default under the terms of each
Credit Document, then such Default or Event of Default shall not be considered to be cured or waived for the purposes of this Section
unless such Default or Event of Default has been cured or waived under each Credit Document.


 


(c)          If
the Obligations have been accelerated or the Requisite Lenders have instructed any Lender to foreclose on a substantial portion
of the Collateral, seek the appointment of a receiver, commence litigation against the Borrower, liquidate the Collateral, seize
Collateral, or exercise other remedies of similar character, or if a Bankruptcy Proceeding shall commence with respect to the Borrower,
all amounts in the Special Collateral Account, together with all interest earned thereon, and all subsequent Post-Default Payments
shall be applied in accordance with Section 3.2.


 


(d)          The
parties hereto and, by its consent hereto, the Borrower, agrees that in the event any Post-Default Payment, whether or not deposited
in the Special Collateral Account, is applied in accordance with Section 3.2, then the Obligations discharged by such Post-Default
Payment shall be the Obligations to which such Post-Default Payment is applied in accordance with the provisions of Section 3.2
and not the Obligations with respect to which such Post- Default Payment may have been originally made.


 


Section
3.4.          Turnover of Collateral. If any Lender acquires
custody, control or possession of any Designated Collateral other than pursuant to the terms of this Agreement, such Lender
shall promptly cause such Designated Collateral, to the extent the same do not constitute Post-Default Payments, to be
delivered to the Designated Lender in accordance with Section 3.1. If any Lender acquires custody, control or possession of
any other Collateral or any proceeds of Collateral other than pursuant to the terms of this Agreement, such Lender shall
promptly cause such other Collateral or proceeds to be disposed of or distributed in accordance with Section 3.2 and
Section 3.3 hereof, as applicable. Until such time as such Lender shall have complied with the provisions of the
immediately preceding sentences, such Lender shall be deemed to hold any such Collateral or proceeds in trust for the parties
entitled thereto under this Agreement.


 




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Section 3.5.          Sharing;
Set-Offs.


 


(a)          No
Lender shall set off against any assets of the Borrower or any other Obligor without the prior approval of the Requisite Lenders,
which may be by telephonic vote. Subject to the remaining provisions of this Section 3.5, if a Lender obtains a payment in
the nature of a set-off (hereinafter referred to as a “Sharing Payment”) with respect to any assets of the Borrower
or any other Obligor, such Lender shall promptly purchase from the remaining Lenders participations in the Obligations owing to
the remaining Lenders and shall make such other adjustments from time to time as shall be equitable (the purchase of such participation
or the making of such other adjustments shall be referred to as “Sharing Adjustments”) such that all Lenders
shall share the benefit of such Sharing Payment on a pro rata basis in accordance with the Obligations then outstanding.


 


(b)          If
any Lender exercises any right of set-off or similar right with respect to any assets of the Borrower or any other Obligor (whether
or not such assets shall constitute Collateral), such Lender shall promptly cause such amounts to be disposed of in accordance
with Section 3.2 and Section 3.3 hereof unless such Lender immediately complies with paragraph (a) above.


 


(c)          If,
during the course of, or pursuant to, any Bankruptcy Proceeding of the Borrower or any other Obligor, a Lender (the “Returning
Lender”) is required by a court or other tribunal of competent jurisdiction to disgorge, refund, rebate, or otherwise
return any payment received for which there has been a distribution under Section 3.4 or Section 3.5 hereof by such Returning
Lender with respect to the Obligations (a “Disputed Payment”) to any trustee presiding over such Bankruptcy
Proceeding or to any other Person, the other Lenders shall immediately pay to the Returning Lender their respective shares of such
Disputed Payment on a pro rata basis determined by multiplying the amount of the Disputed Payment by a fraction, the numerator
of which is the portion of such Disputed Payment received by such Lender and the denominator of which is the amount of such Disputed
Payment. In addition, each of the parties hereto shall pay to the other parties hereto such amounts so that, after giving effect
to the payments hereunder by all parties, the amounts received by all parties are not in excess of the amounts to be paid to them
hereunder as though such Disputed Payment had not been made.


 


Section 3.6.          Retention
and Investment of Proceeds.


 


(a)          Proceeds
which, due to their nature, due to a restraining order or otherwise are not permitted to be applied as set forth above, or due
to the Requisite Lenders determining it to be impractical to divide and apply such proceeds to the payment of the Obligations,
shall be held by the Designated Lender or another Lender appointed by the Requisite Lenders until such proceeds (A) are converted
into cash, (B) are permitted to be applied or (C) become practical to divide at which time such proceeds shall be applied in accordance
with the terms of this Agreement.


 




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(b)          Pending
disbursement of any amounts held by any Lender pursuant to this Agreement, such Lender shall (to the extent such Lender deems practical)
invest such amounts in (A) marketable direct obligations of, or obligations the principal of and interest on which are unconditionally
guaranteed by, the United States of America (or by any agency thereof to the extent such obligations are backed by the full faith
and credit of the United States of America), in each case maturing not later than the earlier of the anticipated distribution date
of such amounts and the date 180 days from the date of acquisition thereof; (B) investments in commercial paper maturing not later
than the earlier of the anticipated distribution date of such amounts and the date 180 days from the date of acquisition thereof
and having, at such date of acquisition, a rating of “A-I” or better from Standard & Poor’s Corporation
or a rating of “P-I” or better from Moody’s Investors Service, Inc.; (C) investments in certificates of deposit,
banker’s acceptances and time deposits maturing not later than the earlier of the anticipated distribution date of such amounts
and the date 180 days from the date of acquisition thereof issued or guaranteed by or placed with and money market deposit accounts
issued or offered by, any office of any commercial bank which has a combined capital and surplus and undivided profits of not less
than $1,000,000,000 and which has a long-term bank deposit rating of “A” or better from Standard & Poor’s
Corporation or from Moody’s Investors Service, Inc.; and (D) investments in repurchase agreements with any commercial bank
referred to in item (C) above with respect to obligations of the type referred to in item (A) above, provided that such repurchase
agreement is secured by such obligations and requires repurchase thereunder within ten (10) days.


 


Article
IV

OTHER COLLATERAL; DUTY TO NOTIFY, COOPERATION; MARSHALLING 


 


Section 4.1.          Additional
Collateral. The Lenders agree that all of the provisions of this Agreement shall apply to any and all properties, assets and
rights of the Borrower or any other Obligor in which any Lender, at any time, acquires a security interest or lien pursuant to
any Credit Document.


 


Section 4.2.          Cooperation;
Accountings. To the extent that the exercise of the rights, powers and remedies of any Lender in accordance with this Agreement
requires that any action be taken by any other Lender, such Lender shall, to the extent not prohibited by applicable law, take
such action and cooperate with all Lenders to ensure that the rights, powers and remedies of all Lenders are exercised in full.
Each of the Lenders will, upon the reasonable request of another Lender, from time to time execute and deliver or cause to be
executed and delivered such further instruments and do and cause to be done such further acts as may be necessary or proper to
carry out more effectively the provisions of this Agreement. The Lenders agree to render accountings to each other upon reasonable
request, giving effect to the application of proceeds of the Collateral as hereinbefore provided.


 


Section 4.3.          Marshalling.
No Lender shall be required to marshal any present or future security for (including, without limitation, the Collateral), or
other assurances of payment of, the Obligations or any of them, or to resort to such collateral security or other assurances of
payment in any particular order; and all of each of such Person’s rights hereunder and in respect of such collateral security
and other assurances of payment shall be cumulative and in addition to all other rights and remedies, however existing or arising.
To the extent that they lawfully may, each Lender hereby agrees that it will not invoke any law relating to the marshalling of
collateral which might cause delay in or impede the enforcement of the Lenders’ rights and remedies under the Security Documents
or under any other instrument evidencing any of the Obligations or under which any of the Obligations is outstanding or by which
any of the Obligations is secured or otherwise assured, and to the extent that they lawfully may, each Lender hereby irrevocably
waives the benefits of all such laws.


 




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Section 4.4.          Purchase
of Collateral. No Lender may purchase all or any part of the Collateral at any public or private sale of such Collateral and
make payment on account thereof by using any claim then due and payable to such Lender from the Persons which granted a security
interest in such Collateral as a credit against the purchase price unless all Lenders are purchasing such Collateral and making
payment by using the Obligations as a credit on the purchase price on a pro rata basis in accordance with the amount of the
Obligations owed to each Lender which is a Qualified Lender. Such Lender shall comply with Article 9 of the UCC of the relevant
jurisdiction as a secured party. Each of the Lenders shall cooperate with each other Lender in order to obtain the maximum sale
price reasonably possible upon any foreclosure or other sale of all or any part of the Collateral. Notwithstanding the foregoing,
all sales, transfers and other dispositions of any Collateral shall be accomplished in a commercially reasonable manner.


 


Section 4.5.          No
Other Collateral. No Lender shall take any security interest in the personal property or liens upon the real property of the
Borrower or any other Obligor other than security interests and liens which are governed by the terms of this Agreement, other
than security interests granted to a Lender to secure indebtedness existing on the date of this Agreement and subordinated pursuant
to commercially reasonable subordination agreements.


 


Section 4.6.          Rights
of Lenders to Receive Payment.


 


(a)          Nothing
in this Agreement is intended to or shall limit any Lender’s right to receive and retain regularly scheduled payments of
principal and interest, when due, on any Obligation so long as such payment does not otherwise constitute a Post-Default Payment.


 


(b)          The
Lenders agree that with respect to all payments that are not Post-Default Payments (other than payments described in clause (a),
above), including without limitation proceeds from any realization of the Collateral by any Lender, the proceeds thereof shall
be applied:


 


(i)          first,
to the payment of expenses incurred by the Lenders with respect to maintenance and protection of the Collateral and of expenses
incurred with respect to the sale of or realization upon any of the Collateral or the perfection, enforcement or protection of
the rights of the Lenders (including without limitation reasonable attorneys’ fees and expenses and other collection costs);


 


(ii)         second,
equally and ratably to all the Obligations, according to the aggregate amounts thereof then owing to each Lender;


 


(iii)        third,
the balance, if any, shall be returned to the Borrower or such other Persons as are entitled thereto.


 


The Lenders hereby agree that all such payments,
whether received by realization on the Collateral or otherwise, shall be applied to the payment of the Obligations in accordance
with the provisions of this Section 4.6.


 




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Article
V

AMENDMENTS AND WAIVERS OF CREDIT DOCUMENTS AND SECURITY DOCUMENTS 


 


Section 5.1.          Amendments
and Waivers of Credit Documents and Security Documents. No term of the Credit Documents and/or Security Documents may be amended,
and the performance or observance by the parties to a Credit Document or a Security Document of any term of such Credit Document
or Security Document may not be waived (either generally or in a particular instance and either retroactively or prospectively)
without the written consent of the Requisite Lenders; provided, however, that except for amendments relating to the adjustment
of the amount of principal, the rate of interest, the payment of premiums or the date of maturity, any permitted amendment or
waiver under this Section 5.1 shall constitute an amendment or waiver applicable all Credit Documents and Security Documents (on
a pro rata basis in accordance with the amount of the Obligations owed to each Lender, as appropriate), as the case may be.


 


Article
VI

MISCELLANEOUS PROVISIONS REGARDING LENDERS’ POWERS


 


Section 6.1.          Reliance
by Lenders. Each Lender shall be entitled to rely, and shall be fully protected in relying, upon any writing, resolution,
notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype message, statement, order or
other document or conversation reasonably believed by it to be genuine and correct and to have been signed, sent or made by the
proper Person or Persons and upon advice and statements of legal counsel (including, without limitation, counsel to the Borrower),
independent accountants and other experts selected by such Lender. Each Lender shall be fully justified in failing or refusing
to take action under this Agreement or the Security Documents unless it shall first receive such advice or concurrence of the
Requisite Lenders.


 


Section 6.2.          Non-Reliance
on Other Lenders. Each Lender represents to the other Lenders that it has, independently and without reliance upon any other
Lender, and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation
into the business, operations, property, financial and other condition and creditworthiness of the Borrower and made its own decision
to make its loans or other extensions of credit under its Credit Documents and to enter into such agreements. Each Lender also
represents that it will, independently and without reliance upon any other Lender, and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not
taking action under the Security Documents and this Agreement, and to make such investigation as it deems necessary to inform
itself as to the business, operations, property, financial and other condition and creditworthiness of the Borrower. Except for
notices, reports and other documents expressly required to be furnished by any Lender to the other Lenders hereunder, no Lender
shall have any duty or responsibility to provide the Lenders with any credit or other information concerning the business, operations,
property, financial and other condition or creditworthiness of the Borrower which may come into the possession of such Lender
or any of its officers, directors, employees, agents, attorneys-in-fact or affiliates.


 




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Section 6.3.          Determination
of Amounts of Obligations. Each Lender will maintain at its principal business office a register for the recordation of the
principal amount of Obligations owing to such Lender from time to time. Upon any request by any other Lender therefor, each Lender
shall deliver to each other Lender a certificate, dated the date of delivery thereof, signed by such Lender, as to (a) the identity
of such Lender, (b) the principal amount of Obligations then outstanding held by such Lender, (c) in the case of any such certificate
being delivered in contemplation of the application of amounts pursuant to Section 3.2 hereof, the amount of interest owing
to such Lender and any other amounts in respect of Obligations owing to such Lender (in the case of any such other amounts, accompanied
by appropriate evidence thereof) and (d) in the event any of the Obligations shall have become or been declared to be due and
payable, the principal amount then owing to such Lender. If requested by any other Lender, the Borrower shall verify any information
provided any Lender pursuant to the immediately preceding sentence. For the purposes of determining the amount of Obligations
held by any Lender, absent knowledge to the contrary, each Lender shall be entitled to rely on certifications received by it from
the other Lenders for such purpose in accordance with the foregoing (in each case, which certificates shall be given substantially
contemporaneously with the action being taken); provided, that in the absence of a Lender’s receipt of any certification
requested by it pursuant to this sentence, such Lender shall be entitled to take such action if such Lender shall have sufficient
knowledge to make any determination required to be made in connection with such action.


 


Article
VII

GENERAL PROVISIONS


 


Section 7.1.          Consents,
Amendments, Waivers.


 


(a)          Consents,
Amendments and Waivers of the Credit Documents and the Security Documents. Consents under and amendments and waivers of the
Credit Documents and the Security Documents shall be subject to the terms of Section 5.1 hereof.


 


(b)          Consents,
Amendments, and Waivers of this Agreement. No amendment, waiver or consent of this Agreement shall be effective unless in
writing and signed by Lenders holding at least 66-2/3% of the Aggregate Principal Indebtedness; provided, that unanimous
consent of the Lenders shall be required to (i) amend the definitions set forth in this Agreement of “Aggregate Principal
Indebtedness,” “Collateral,” “Obligations,” “Post-Default Payment,” “Requisite
Lenders,” or amend Section 4.6 or any provision of Article II, Article III or Article V hereof; or (ii) change the
voting percentages set forth in this Section 7.1. No amendment, waiver or consent shall affect the rights or duties of any
Lender hereunder unless in writing and signed by such Lender and the Lenders required by the foregoing sentence.


 


Section 7.2.          Applicable
Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without reference
to the conflicts of laws principles thereof.


 




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Section 7.3.          Parties
in Interest. All terms of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto, including, without limitation, any future holder of any Credit Document and any
institutional lender who becomes a participant in or holder of any of the Obligations, by amendment to any Credit Document or
otherwise. No Lender shall allow any Person to become a transferee of Obligations from such Lender or to become a party to any
Credit Document unless such Lender shall have caused such Person to execute and deliver to the other Lenders a written agreement
by which such Person becomes a “Lender” under this Agreement and assumes the obligations of a “Lender”
hereunder.


 


Section 7.4.          Counterparts.
This Agreement and any amendment hereof may be executed in several counterparts and by each party on a separate counterpart, each
of which, when so executed and delivered, shall be an original, but all of which together shall constitute but one and the same
instrument. In proving this Agreement, it shall not be necessary to produce or account for more than one such counterpart signed
by the party against whom enforcement is sought. Delivery of an executed signature page hereto by facsimile shall be effective
as delivery of a manually executed counterpart of this Agreement.


 


Section 7.5.          Headings.
The headings of the sections of this Agreement are inserted for convenience only and shall not be deemed to constitute a part
hereof.


 


Section 7.6.          Notices.
Any notice, request or consent required hereunder or in connection herewith shall be deemed satisfactorily given if in writing
and delivered by hand or overnight courier service, mailed by registered or certified mail or sent by facsimile to:


 


(a)          the
Lenders to the attention of the individuals and at the respective addresses or telecopier numbers set forth on the signature pages
hereto;


 


(b)          Borrower
to the attention of:


 


Electronic Cigarettes International Group, Ltd.


1707 Cole Boulevard, Suite 350


Golden, Colorado 80401


Facsimile No.: 1-888-479-0691


Attention: William Seamans


Email: bill.seamans@ecigcorporate.com


 


All notices and other communications given
to any part hereto, in accordance with the provisions of this Agreement, shall be deemed to have been given on the date of receipt
if delivered by hand or overnight courier service, or sent by fax or on the date five (5) Business Days after dispatch by certified
or registered mail if mailed, in each case delivered, sent or mailed (properly addressed) to such party as provided in this Section
7.6, or in accordance with the latest unrevoked direction from such party given in accordance with this Section 7.6. As agreed
to among the Lenders from time to time, notices and other communications may also be delivered by e-mail to the e-mail address
of a representative of the applicable Person provided from time to time by such Person.


 




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Section 7.7.          Termination
of Credit Documents. Upon the irrevocable payment in full in cash of all Obligations to any Lender, such Lender shall cease
to be a party to this Agreement; provided, however, if all or any part of the payments to such Lender are thereafter
invalidated or set aside or required to be repaid to any Person in any Bankruptcy Proceeding, then this Agreement shall be renewed
as of such date and shall thereafter continue in full force and effect to the extent of the Obligations so invalidated, set aside
or repaid; and provided further that if any payment made to such Lender constitutes a Post-Default Payment, such Lender
shall continue to be a party to this Agreement.


 


Section 7.8.          No
Third Party Beneficiaries. This Agreement is solely for the benefit of each of the Lenders and is not intended to grant any
rights, benefits or defenses to or for the benefit of Borrower or any Person now or hereafter acting for or through the rights
or interests of the Borrower.


 


Section 7.9.          Bankruptcy
Proceedings. Nothing contained herein shall limit or restrict the independent right of any Lender to initiate an action or
actions in any Bankruptcy Proceeding in its individual capacity and to appear to be heard on any matter before the bankruptcy
or other applicable court in any such Bankruptcy Proceeding, including without limitation, with respect to any question concerning
the post-petition usage of Collateral and post-petition financing arrangements. Except to the extent set forth in this Agreement
with respect to matters pertaining to the Collateral, or to the extent any Lender, for itself, expressly authorizes another Lender
in writing otherwise, no Lender is: (i) entitled to initiate such actions on behalf of any other Lender; or (ii) entitled to appear
and be heard on any matter before the bankruptcy or other applicable court in any such Bankruptcy Proceeding as the representative
of any other Lender; or (iii) authorized in any such Bankruptcy Proceeding to enter into any agreement for, or give any authorization
or consent with respect to, any determination of adequate protection with respect to the Obligations or the post-petition usage
of Collateral, unless such agreement, authorization or consent has been approved in writing by the Requisite Lenders. Each Lender
agrees that from and after the institution of any Bankruptcy Proceeding involving the Borrower, as respects the Collateral such
Lender will not enter into any agreement with such Borrower with respect to post-petition usage of cash collateral, post-petition
financing arrangements or adequate protection without the written consent of the Requisite Lenders. This Agreement shall survive
the commencement of any such Bankruptcy Proceeding.


 


Section 7.10.         Contesting
Liens or Security Interests; Contesting Obligations. No Lender shall contest the validity, perfection, priority or enforceability
of or seek to avoid, have declared fraudulent or have put aside any lien or security interest granted to any other Lender and
each party hereby agrees to cooperate in the defense of any action contesting the validity, perfection, priority or enforceability
of such liens or security interests. No Lender shall contest the validity or enforceability of or seek to avoid, have declared
fraudulent or have set aside any Obligations.


 


Section
7.11.         No Partnership. It is expressly understood, confirmed and
acknowledged by the parties hereto that nothing contained in this Agreement nor the existence or terms of the CW Credit
Agreement and related documents thereto shall be deemed to constitute an admission of any Additional Lender as a partner to
Calm Waters or create any other affiliate relationship between them.


 


Section 7.12 2015 Intercreditor Agreement.
Upon the effectiveness of this Agreement, the 2015 Intercreditor Agreement shall be terminated and of no further force or effect.


 


[Remainder of page
intentionally left blank]


 




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


 


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


 


	 	Notice Address: 	115 S. 84th Street
	 	 	Milwaukee, Wisconsin  53214
	 	Facsimilie No.:	(414) 453-9174
	 	Attention:	Susan Hollister
	 	E-mail:	shollister@baraboogrowth.com


 


[SIGNATURE PAGE TO INTERCREDITOR AGREEMENT]


 




     


     


    

 


	 	ADDITIONAL LENDER
	 	 


 


	 	By:	 	 
	 	 	Name:	 
	 	 	Title:	 


 


	 	Notice Address: 	 
	 	 	 
	 	 	 
	 	Telecopy No.:	 
	 	Attention:	 
	 	E-mail:	 


 


[SIGNATURE PAGE TO INTERCREDITOR AGREEMENT]


 




     


     


    

 


 


	 	HOLDER
	 	 


 


	 	By:	 	 
	 	 	Name:	 
	 	 	Title:	 


 


	 	Notice Address: 	 
	 	 	 
	 	 	 
	 	Telecopy No.:	 
	 	Attention:	 
	 	E-mail:	 


 


[SIGNATURE PAGE TO INTERCREDITOR AGREEMENT]


 




     


     


    

  


ACKNOWLEDGMENT OF AND AGREEMENT


TO AMENDED AND RESTATED INTERCREDITOR
AGREEMENT


 


Reference is hereby made to the Amended
and Restated Intercreditor Agreement dated July __, 2016, among Calm Waters Partnership, and the other lenders signatory thereto.
Capitalized terms used and not defined herein shall have the meanings ascribed to them in the Intercreditor Agreement.


 


The Borrower acknowledges, consents and,
to the extent performance by the Borrower is required thereunder, agrees to the terms and conditions of the Amended and Restated
Intercreditor Agreement, including, without limitation, the provisions of Section 3.3(d) thereof.


 


The Borrower shall execute and deliver such
other documents and instruments, in form and substance reasonably satisfactory to the Lenders, and shall take such other action,
in each case as any Lender may reasonably request, to effectuate and carry out the provisions of the Amended and Restated Intercreditor
Agreement including, without limitation, by recording or filing in such places as any Lender may deem desirable, such other documents
or instruments as such Lender may specify.


 


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blank]


 




     


     


    

 


IN WITNESS WHEREOF, the party below has
caused this Acknowledgment of and Agreement to Amended and Restated Intercreditor Agreement to be executed by its duly authorized
officers as of the ___ day of June, 2016.


 


	 	ELECTRONIC CIGARETTES

INTERNATIONAL GROUP, LTD.,
	 	as the Borrower 


 


	 	By:	 
	 	 	Name: William Seamans
	 	 	Title:   Chief Financial Officer