EXECUTION COPY 


 


THIS
HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE, IN RELIANCE UPON
AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.


 


$370,000.00


 


Acquisition
Note


 


Due
July 29, 2017


 


This
Secured Promissory Note (this “Note”) is issued this 29th day of July, 2016, by VPR Brands, L.P., a
Delaware limited partnership (the “Borrower” or the “Company”), to Vapor Corp., a
Delaware corporation (“Vapor” or the “Holder”), pursuant to that certain Asset
Purchase Agreement, of even date herewith, between the parties (the “Purchase Agreement”).


 


FOR
VALUE RECEIVED, the Borrower hereby promises to pay to the Holder or his, her or its successors and assigns the principal sum
of THREE HUNDRED AND SEVENTY THOUSAND Dollars ($370,000) on or before July 29, 2017 (the “Maturity Date”)
and to pay interest on the principal sum outstanding from time to time in arrears at the rate of 4.5% per annum, accruing from
the Original Issue Date until the Maturity Date. Interest shall accrue monthly (pro-rated on a daily basis for any period longer
or shorter than a month) from the Original Issue Date. Commencing on the 91st day after the Original Issue Date, Borrower
shall make 8 monthly payments of $10,000 on the same day of each month thereafter (each such date, a “Payment Date”)
and on the Maturity Date, a final balloon payment for all remaining accrued interest and principal. Any accounts receivable of
Vapor having an aging of less than 90 days as of the date hereof, up to an aggregate of $150,000, all of which Vapor shall continue
to own after the Original Issue Date, if collected by Vapor after Closing, shall be credited (less refunds) as partial prepayments
of this Note in accordance with Section 1 herein below.


 


Interest
payable in cash hereunder shall be paid on or before each Payment Date in US Dollars to the Holder. Any payment received hereunder
will first be applied against accrued and unpaid interest.


 


This
Note is subject to the following additional provisions (including the defined terms in Section 5 below that are spelled in title
case letters — i.e. initial capital letters):


 


Section
1. Right of Prepayment. The Borrower at its option shall have the right, by giving fifteen (15) Business
Days advance written notice (the “Prepayment Notice”) to the Holder, to prepay a portion or all
amounts outstanding under this Note prior to the Maturity Date, without prepayment penalty or premium. In such event, the Borrower
shall pay an amount equal to the principal amount being prepaid plus a pro rata portion (based upon the percentage of this Note
being prepaid) of accrued interest and any other amounts due and owing under this Note (collectively referred to as the “Prepayment
Amount”). The Borrower shall deliver to the Holder the Prepayment Amount on the fifteenth (15th) Business
Day after the Prepayment Notice.


 




    	 



    	 



    

 


Section
2. Covenants.


 


(a) Affirmative
Covenants. The Borrower covenants and agrees that, until all of the Obligations under the Transaction Documents have been
fully performed and either Paid in Full and this Note has been terminated, it will abide by the following affirmative covenants
and any other affirmative covenants that may be listed in any of the other Transaction Documents:


 


(1) Financial
Reports, Notices and Other Information.


 


 (A) Financial
Reports. Borrower shall furnish to Holder (i) as soon as available, and in any event when submitted to the Securities
and Exchange Commission (“SEC”) if required to be so submitted, but no later than one hundred and five
(105) calendar days after the end of each fiscal year, audited annual consolidated financial statements, including the notes thereto,
consisting of a consolidated balance sheet at the end of such completed fiscal year and the related consolidated statements of
income, retained earnings, cash flows and owners’ equity for such completed fiscal year, which financial statements shall
be prepared by an independent certified public accounting firm, (ii) as soon as available and in any event within fifty-three
(53) calendar days after the end of each fiscal quarter (60 calendar days after the end of any quarter which coincides with the
end of a fiscal year provided that such unaudited quarterly financials may be subject to further audit adjustment), unaudited
financial statements consisting of a balance sheet and statements of income and cash flows as of the end of the immediately preceding
calendar quarter. All such financial statements shall be prepared in accordance with GAAP consistently applied with prior periods
except for any normal quarter and year-end adjustments which may be applied in future periods and for any changes in accounting
methodology that may have been applied since any prior period.


 


 (B) Notices.
Borrower shall promptly, and in any event within four (4) Business Days after it or any authorized officer of Borrower obtains
knowledge thereof, notify Holder in writing of (i) any pending or threatened litigation, suit, investigation, arbitration, dispute
resolution proceeding or administrative proceeding brought against or initiated by Borrower or otherwise affecting or involving
or relating to Borrower or any of its property or assets to the extent the amount in controversy exceeds $10,000.00, or to the
extent any of the foregoing seeks injunctive relief, (ii) any Default or Event of Default, which notice shall specify the nature
and status thereof, the period of existence thereof and what action is proposed to be taken with respect thereto, (iii) any other
development, event, fact, circumstance or condition that would reasonably be expected to result in a Material Adverse Change,
in each case describing the nature and status thereof and the action proposed to be taken with respect thereto, (iv) any notice
received by Borrower from any payor of a claim, suit or other action such payor has, claims or has filed against Borrower, (v)
any matter(s) affecting the value, enforceability or collectability of any of the Collateral, including, without limitation, claims
or disputes in the amount of $10,000.00 or more, singly or in the aggregate, in existence at any one time, (vi) any notice given
by Borrower to any other lender or any notice received by Borrower from any other lender and shall furnish to Holder a copy of
such notice, (vii) receipt of any notice or request from any Governmental Authority regarding any liability or claim of liability
in excess of $10,000.00 singly or in the aggregate, (viii) Borrower being served with or receiving any search warrant, subpoena,
civil investigative demand or contact letter by or from any federal or state enforcement agency relating to an investigation,
(ix) Borrower becoming subject to any written complaint filed with or submitted to any Governmental Authority having jurisdiction
over Borrower or filed with or submitted to Borrower pursuant to Borrower’s policies relating to the filing or submissions
of such types of complaints, from employees, independent contractors, vendors, or any other person that would indicate that Borrower
has violated any law, regulation or law, or (x) any other event occurs that would require Borrower to file a Form 8-K disclosure
with the SEC, to the extent Borrower is publicly-traded at such time, in which case Borrower shall either furnish a copy of such
Form 8-K filing or otherwise provide a description of the facts and circumstances around the event or events giving rise to the
need to file such Form 8-K.


 




    	 



    	 



    

 


 (C) Ancillary
Materials to be Furnished Upon Request. Upon written request by Holder, Borrower shall use its best efforts to furnish to
Holder within ten (10) Business Days after the request therefore the following kinds of information: (i) any other reports, materials
or other information regarding or otherwise relating to the current or future business of the Borrower prepared by, for, or on
behalf of, Borrower or any of its subsidiaries, including, without limitation, operating budgets, sales and marketing plans, new
product development plans, staffing plans, current or future agreements of a material nature with other third parties, fundraising
plans and strategies, and plans for mergers and acquisitions, (ii) copies of material licenses and Permits required by applicable
federal, state, foreign or local law, statute, ordinance or regulation or Governmental Authority for the operation of Borrower’s
business and (iii) such other information as may be reasonably requested by Holder. Holder agrees that to the extent requested
by Borrower, it will execute a mutually agreeable form of confidentiality agreement with Borrower as part of any such request.
Borrower agrees that any information requested by and delivered to any Holder will be delivered to all Holders.


 


(2) Conduct
of Business and Maintenance of Existence and Assets. Borrower shall (i) conduct its business
in accordance with good business practices customary to the industry, (ii) engage principally in the same or similar lines of
business substantially as heretofore conducted, (iii) collect its Accounts in the ordinary course of business, (iv) maintain all
of its material properties, assets and equipment used or useful in its business in good repair, working order and condition (normal
wear and tear excepted and except as may be disposed of in the ordinary course of business and in accordance with the terms of
the Transaction Documents and otherwise as determined by such Borrower using commercially reasonable business judgment), (v) from
time to time to make all necessary or desirable repairs, renewals and replacements thereof, as determined by such Borrower using
commercially reasonable business judgment, (vi) maintain and keep in full force and effect its existence and all material Permits
and qualifications to do business and good standing in each jurisdiction in which the ownership or lease of property or the nature
of its business makes such Permits or qualification necessary and in which failure to maintain such Permits or qualification could
reasonably be expected to result in a Material Adverse Change; and (vii) remain in good standing and maintain operations in all
jurisdictions in which currently located.


 


(3) Compliance
with Legal and Other Obligations. Borrower shall (i) comply with all laws, statutes, rules,
regulations, ordinances and tariffs of all Governmental Authorities applicable to it or its business, assets or operations (ii)
pay all taxes, assessments, fees, governmental charges, claims for labor, supplies, rent and all other obligations or liabilities
of any kind, except liabilities being contested in good faith and against which adequate reserves have been established, (iii)
perform in accordance with its terms each contract, agreement or other arrangement to which it is a party or by which it or any
of the Collateral is bound, except where the failure to comply, pay or perform could not reasonably be expected to result in a
Material Adverse Change, and (iv) maintain and comply with all Permits necessary to conduct its business and comply with any new
or additional requirements that may be imposed on it or its business.


 


(4) Insurance.
Borrower shall keep (i) all of its insurable properties, Collateral and assets adequately insured
in all material respects against losses, damages and hazards as are customarily insured against by businesses engaging in similar
activities or owning similar assets or properties and at least the minimum amount required by applicable law; (ii) maintain general
public liability insurance at all times against liability on account of damage to persons and property having such limits, deductibles,
exclusions and co-insurance and other provisions as are customary for a business engaged in activities similar to those of Borrower;
and (iii) maintain insurance under all applicable workers’ compensation laws; all of the foregoing insurance policies to
(A) be satisfactory in form and substance to Holder and (B) expressly provide that they cannot be amended to reduce coverage or
canceled without thirty (30) calendar days prior written notice to Holder and that they inure to the benefit of Holder notwithstanding
any action or omission or negligence of or by such Borrower or any insured thereunder. With respect to property insurance covering
business interruption, accounts receivable and the books and records in connection therewith, Holder shall be named as loss payee
and additional insured and with respect to general liability insurance Holder shall be named as additional insured.


 




    	 



    	 



    

 


(5) Inspections;
Periodic Audits and Reappraisals. Borrower shall permit the representatives of any Holder,
from time to time during normal business hours, but no more frequently than four times per year so long as no Default or Event
of Default occurs and is continuing, upon reasonable notice, to (i) visit and inspect any of its offices or properties or any
other place where Collateral is located to inspect the Collateral and/or to examine or audit all of Borrower’s books of
account, records, reports and other papers, (ii) make copies and extracts therefrom, and (iii) discuss its business, operations,
prospects, properties, assets, liabilities, condition and/or Accounts with its officers and independent public accountants (and
by this provision such officers and accountants are authorized to discuss the foregoing) upon seven (7) Business Days prior written
notice; provided, however, that (A) Borrower shall not be obligated to reimburse Holder for more than two (2) visits, inspections,
examinations and audits under the foregoing clause (i) conducted during any fiscal year while no Default or Event of Default exists
at a cost of $125 per hour per auditor (not to exceed $1,000 per day per auditor) plus all out-of-pocket expenses of Holder (it
being agreed and understood that the Borrower shall be obligated to reimburse Holder for all such visits, inspections, examinations
and audits conducted while any Default or Event of Default exists); and (B) no notice shall be required to do any of the foregoing
if any Event of Default has occurred and is continuing.


 


(6) Further
Assurances; Post-Closing. At Borrower’s cost and expense, Borrower shall (i) within
five (5) Business Days after Holder’s request, take such further actions, obtain such consents and approvals and duly execute
and deliver such further agreements, assignments, instructions or documents as Holder may deem necessary in its Permitted Discretion
with respect to furtherance of the purposes, terms and conditions of the Transaction Documents and the consummation of the transactions
contemplated thereby, whether before, at or after the performance or consummation of the transactions contemplated hereby or the
occurrence of a Default or Event of Default, (ii) without limiting and notwithstanding any other provision of any Transaction
Document, execute and deliver, or cause to be executed and delivered, such agreements and documents, and take or cause to be taken
such actions, and otherwise perform, observe and comply with such obligations, as are set forth on Schedule 2(a)(6) attached
hereto (if any so listed), and (iii) upon the exercise by Holder or any of its Affiliates of any power, right, privilege or remedy
pursuant to any Transaction Document or under applicable law or at equity which requires any consent, approval, registration,
qualification or authorization of any Governmental Authority, execute and deliver, or cause the execution and delivery of, all
applications, certificates, instruments and other documents requested by Holder in its Permitted Discretion that may be so required
for such consent, approval, registration, qualification or authorization. Without limiting the foregoing, upon the exercise by
Holder or any of its Affiliates of any right or remedy under any Transaction Document which requires any consent, approval or
registration with, consent, qualification or authorization by, any Person, Borrower shall execute and deliver, or cause the execution
and delivery of, all applications, certificates, instruments and other documents that Holder or its Affiliate may be required
to obtain for such consent, approval, registration, qualification or authorization.


 


 (7) Subsidiaries
and New Subsidiaries. As of the date of the Closing, Borrower has no subsidiaries other than those listed on Schedule
2(a)(7) hereof (if any). If at any time after the Closing Date, Borrower shall form or acquire any new Subsidiary, Borrower
shall promptly, and in any event not later than fifteen (15) Business Days after the creation or acquisition of such Subsidiary
or such longer period as Holder may determine in writing, execute, and cause such new Subsidiary to execute, and deliver to Holder
such joinder agreements and amendments to this Agreement and the other Transaction Documents, in form and substance satisfactory
to Holder, and providing such other documentation as Holder may reasonably request, including, without limitation, UCC searches,
as applicable, and filings, legal opinions and corporate authorization documentation, and to take such other actions in each case
as Holder deems necessary or advisable to (a) join and make such new Subsidiary a co-Borrower hereunder and thereunder, subject
to all the rights and benefits and obligations and burdens of a Borrower hereunder, (b) grant to Holder a perfected first priority
security interest in the Collateral of such new Subsidiary subject to no Liens other than the Permitted Liens.


 




    	 



    	 



    

 


(b) Negative
Covenants. The Borrower covenants and agrees that, until all of the Obligations under the Transaction Documents have been
fully performed and Paid in Full and this Note has been terminated, it will abide by the following negative covenants and any
other negative covenants that may be listed in any of the other Transaction Documents:


 


(1) Permitted
Payments. The Borrower shall not make any principal or interest payment on any Indebtedness other than Permitted Payments,
prior to the repayment of all of the principal amount outstanding under this Note without first obtaining the prior written consent
of the Holder; or


 


(2) Permitted
Indebtedness. The Borrower shall not create, incur, assume or suffer to exist any Indebtedness, other than Permitted Indebtedness,
prior to the repayment of all the Obligations outstanding under this Note without first obtaining the prior written consent of
the Holder; or


 


(3) Permitted
Liens. The Borrower shall not create, incur assume or suffer to exist any Lien upon, in or against, or pledge of any of
the Collateral or any of its properties or assets, whether now owned or hereafter acquired, except for Permitted Liens, without
first obtaining the prior written consent of the Holder; or


 


(4) Location
of Collateral; Investments; New Facilities or Collateral; Subsidiaries. Borrower maintains
its places of business only at the locations listed on Schedule 2(b)(4), and all Accounts of Borrower arise, originate
and are located, and all of the Collateral and all books and records in connection therewith or in any way relating thereto or
evidence of the Collateral are located and shall be only, in and at such locations. Except as set forth on Schedule 2(b)(4),
Borrower shall not, directly or indirectly, enter into any agreement to, (i) purchase, own, hold, invest in or otherwise acquire
obligations or stock or securities of, or any other interest in, or all or substantially all of the assets of, any Person or any
joint venture, or (ii) make or permit to exist any loans, advances or guarantees to or for the benefit of any Person or assume,
guarantee, endorse, contingently agree to purchase or otherwise become liable for or upon or incur any obligation of any Person
(other than those created by the Transaction Documents and Permitted Indebtedness and other than (A) trade credit extended in
the ordinary course of business, (B) advances for business travel and similar temporary advances made in the ordinary course of
business to officers, directors and employees, (C) investments in cash equivalents and (D) the endorsement of negotiable instruments
for deposit or collection or similar transactions in the ordinary course of business). Borrower shall not, directly or indirectly,
purchase, own, operate, hold, invest in or otherwise acquire any facility, property or assets or any Collateral that is not located
at the locations set forth on Schedule 2(b)(4) unless Borrower shall provide to Holder at least ten (10) Business Days
prior written notice. Borrower shall not have any Subsidiaries other than those Subsidiaries, if any, existing at Closing and
set forth on Schedule 2(a)(7) hereof.


 


Notwithstanding
the foregoing, Borrower shall be permitted to make Permitted Acquisitions with Holder’s prior written consent; provided,
however, that the consent of Holder shall not be required if the cash consideration paid in respect of the Permitted Acquisition
does not exceed $250,000 and Borrower fully complies with Section 2(a)(7) hereof.


 




    	 



    	 



    

 


(5) Dividends;
Redemptions. Borrower shall not (i) declare, pay or make any Distribution, (ii) apply any
of its funds, property or assets to the acquisition, redemption or other retirement of any Capital Stock, (iii) otherwise make
any payments or Distributions to any stockholder, member, partner or other equity owner in such Person’s capacity as such,
or (iv) make any payment of any Management or Service Fee; provided however, that absent the occurrence and continuation of a
Default or Event of Default, and if a Default or Event of Default would not arise therefrom, Borrower may: (x) declare, pay or
make Distributions payable in its stock, or split-ups or reclassifications of its stock; and (y) redeem its Capital Stock from
terminated employees pursuant to, but only to the extent required under, the terms of the related employment agreements.


 


(6) Transactions
with Affiliates. Except as set forth on Schedule 2(b)(6), Borrower shall not enter
into or consummate any transaction of any kind with any of its Affiliates other than: (i) salary, bonus, severance, employee stock
option and other compensation, consulting and employment arrangements with directors or officers in the ordinary course of business,
provided, that, no payment of any cash bonus or severance shall be permitted if a Default or Event of Default has
occurred and remains in effect or would be caused by or result from such payment, and no payment of any severance shall be made,
individually or in the aggregate, in excess of $250,000 in any twelve (12) month period, (ii) Distributions permitted pursuant
to Section 2(b)(5), and (iii) the making of payments permitted under and pursuant to a written agreement entered into by and between
Borrower and one or more of its Affiliates that both (A) reflects and constitutes a transaction on overall terms at least as favorable
to Borrower as would be the case in an arm’s-length transaction between unrelated parties of equal bargaining power; provided,
that, notwithstanding the foregoing Borrower shall not (Y) enter into or consummate any transaction or agreement pursuant
to which it becomes a party to any mortgage, Debenture, indenture or guarantee evidencing any Indebtedness of any of its Affiliates
or otherwise to become responsible or liable, as a guarantor, surety or otherwise, pursuant to agreement for any Indebtedness
of any such Affiliate, or (Z) make any payments to any of its Affiliates in excess of $50,000 in the aggregate during any consecutive
twelve calendar month period without the prior written consent of Holder (other than payments permitted pursuant to clause (i)
or (ii) above).


 


(7) Charter
Documents; Fiscal Year; Dissolution; Use of Proceeds. Borrower shall not (i) amend, modify,
restate or change its certificate of incorporation or formation or bylaws or similar charter documents without the prior written
consent of the Holder, which consent shall not be unreasonably withheld, (ii) amend, alter or suspend or terminate or make provisional
in any material way, any material Permit without the prior written consent of Holder, which consent shall not be unreasonably
withheld. Notwithstanding the foregoing, the Holder acknowledges that the following will not be deemed to be a violation of this
covenant: any amendment of a license or Permit in the ordinary course of business to enable Borrower to pursue additional opportunities;
(iii) wind up, liquidate or dissolve (voluntarily or involuntarily) or commence or suffer any proceedings seeking or that would
result in any of the foregoing, or (iv) without providing at least thirty (30) calendar days prior written notice to Holder, change
its name or organizational identification number, if it has one.


 


(8) Truth
of Statements. Borrower shall not (a) furnish to Holder any certificate or other document
created or produced by Borrower that contains any untrue statement of a material fact or that omits to state a material fact necessary
to make it not misleading in light of the circumstances under which it was furnished as of the date it was provided to Holder;
and (b) furnish any document created or produced by a third party that Borrower knows (A) contains any untrue statement of a material
fact or (B) omits to state a material fact necessary to make it not misleading in light of the circumstances under which it was
furnished.


 




    	 



    	 



    

 


(9) Transfer
of Assets. Notwithstanding any other provision of this Agreement or any other Transaction
Document, Borrower shall not, nor shall it permit any of its Subsidiaries to, sell, lease, transfer, assign, spin-off or otherwise
dispose of any interest in any properties or assets (other than obsolete fixed assets or excess fixed assets no longer needed
in the conduct of the business in the ordinary course of business and sales of inventory in the ordinary course of business),
or agree to do any of the foregoing at any future time, without the written consent of the Holder, except that:


 


 (A)
 Borrower may arrange for warehousing, fulfillment or storage of inventory at locations not owned or leased by Borrower, in
each case in the ordinary course of business;


 


(B) Borrower
may license or sublicense Intellectual Property to third parties in the ordinary course of business; provided, that,
such licenses or sublicenses shall not interfere with the business or other operations of Borrower; and


 


 (C) Borrower
may continue to sell (and regularly replenish) inventory in the normal course of business.


 


Section
3. Events of Default and Cross-Default.


 


(a) An
“Event of Default”, wherever used herein, means any one of the following events (whatever the reason
and whether it shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order
of any court, or any order, rule or regulation of any administrative or governmental body):


 


(i) Any
default in the payment of the principal of, interest on, or other charges in respect of this Note, free of any claim of subordination,
as and when the same shall become due and payable (whether on a Payment Date or the Maturity Date or by Acceleration or otherwise)
and such default is not cured within five (5) Business Days after the Borrower’s receipt of written notice from the Holder
of such default;


 


(ii) The
Borrower shall fail to observe or perform any other covenant, term, condition, agreement or obligation contained in, or otherwise
commit any breach or default of any provision of this Note (except as may be covered by Section 3(a)(i) hereof) or any Transaction
Document and such failure is not cured within (A) the time prescribed or (B) if no time is prescribed, such failure is not cured
within thirty (30) days after the Borrower’s receipt of written notice from the Holder of such failure; or


 


(iii) (A)
Any of the representations or warranties made by the Borrower herein, in any of the other Transaction Documents or (B) in any
other written or financial statements hereafter furnished by the Borrower to the Holder shall be false or misleading in any material
respect at the time made; provided such default in clause (B) may be not cured within five (5) Business Days after the Borrower’s
receipt of written notice from the Holder of such default; or


 


(iv)
The Borrower shall make any principal or interest payment on any unsecured indebtedness (other than Permitted Indebtedness)
prior to the repayment of all of the principal amount outstanding under this Note without first obtaining the prior written consent
of the Holder; or


 


(v) The
Borrower shall default on any other indebtedness (in excess of $50,000) or material obligation to which it is a party and any
other party to any such indebtedness or material agreement with the Company in default exercises any remedies which it may be
entitled; or


 




    	 



    	 



    

 


(vi) The
Borrower or any Subsidiary of the Borrower shall commence, or there shall be commenced against the Borrower or any Subsidiary
of the Borrower, a proceeding under any applicable bankruptcy or insolvency laws as now or hereafter in effect or any successor
thereto, or the Borrower or any Subsidiary of the Borrower shall commence any other proceeding under any reorganization, arrangement,
adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction, whether now
or hereafter in effect, relating to the Borrower or any Subsidiary of the Borrower; or there is commenced against the Borrower
or any Subsidiary of the Borrower any such bankruptcy, insolvency or other proceeding which remains un-dismissed for a period
of sixty-one (61) days; or the Borrower or any Subsidiary of the Borrower is adjudicated insolvent or bankrupt; or any order of
relief or other order approving any such case or proceeding is entered; or the Borrower or any Subsidiary of the Borrower suffers
any appointment of any custodian, private or court appointed receiver or the like for it or any substantial part of its property,
which continues un-discharged or un-stayed for a period of sixty one (61) days; or the Borrower or any Subsidiary of the Borrower
makes a general assignment for the benefit of creditors; or the Borrower or any Subsidiary of the Borrower shall fail to pay,
or shall state that it is unable to pay, or shall be unable to pay, its debts generally as they become due; or the Borrower or
any Subsidiary of the Borrower shall by any act or failure to act expressly indicate its consent to, approval of or acquiescence
in any of the foregoing; or any corporate or other action is taken by the Borrower or any Subsidiary of the Borrower for the purpose
of effecting any of the foregoing; or


 


(vii) In
the event that the Borrower shall experience a Change of Control at any time while the Note is outstanding.


 


(b) If
an Event of Default shall have occurred and is continuing, then, unless and until such Event of Default shall have been cured
or waived in writing by the Holder (which waiver shall not be deemed to be a waiver of any subsequent default), at the option
of the Holder and in the Holder’s sole discretion, but without further notice from the Holder, the unpaid amount of this
Note, computed as of the date on which the Event of Default was first deemed to have occurred, will bear interest at the rate
(the “Default Rate”) equal to fifteen percent (15%) per annum or the highest rate allowed by law, whichever
is lower, from the date of the Event of Default until and including the date actually paid; and any partial payments shall be
applied in the order provided in Section 14 hereof.


 


(c) During
the time that any portion of this Note is outstanding, if any Event of Default has occurred and any applicable cure period has
expired, the Holder, at its option, may declare that the full principal amount of this Note, together with any accrued interest
and other amounts owed pursuant to any other provision of this Note or any other Transaction Document are immediately due and
payable in cash (an “Acceleration”). The Holder need not provide and the Borrower hereby waives any
presentment, demand, protest or other notice of any kind; and immediately and without expiration of any grace period, the Holder
may enforce any and all rights and remedies hereunder and all other remedies available under the Security Agreement or under applicable
law. Furthermore, a declaration of an Event of Default may be rescinded and annulled by the Holder at any time prior to payment
hereunder. No such rescission or annulment shall affect or impair any of the Holder’s rights with respect to any subsequent
Event of Default.


 


(d) Cross-Default.
An Event of Default under that certain Secured Promissory Note of even date between Holder and Borrower shall constitute an
Event of Default hereunder.


 


Section
4. Security Agreement. This Note is secured by a Security Agreement of even date herewith (the “Security
Agreement”) between the Borrower and the Holder. The Holder understands and acknowledges that the Borrower intends
to issue either simultaneously with this Note or at a subsequent time to the Original Issue Dates additional secured indebtedness
to Borrower secured by the Collateral (as defined in the Security Agreement) as more fully described on Exhibit A and consents
to such additional secured indebtedness.


 




    	 



    	 



    

 


Section
5. Definitions. For the purposes hereof, the following terms shall have the following meanings:


 


“Accounts”
shall mean “accounts” as defined in Section 9-102 of the UCC.


 


“Affiliate”
shall mean, as to any Person (a) any other Person that, directly or indirectly through one or more intermediaries, controls,
is controlled by, or is under common control with, such Person, (b) any other Person who is a director or officer (i) of such
Person, (ii) of any Subsidiary of such Person, or (iii) of any Person described in clause (a) above with respect to such Person,
(c) any other Person which, directly or indirectly through one or more intermediaries, is the beneficial or record owner (as defined
in Rule 13d-3 of the Securities Exchange Act of 1934, as amended, as the same is in effect on the date hereof) of five percent
(5%) or more of any class of the outstanding voting stock, securities or other equity or ownership interests of such Person and
(d) in the case such Person is an individual, any other Person who is an immediate family member, spouse or lineal descendant
of individuals of such Person or any Affiliate of such Person. For purposes of this definition, the term “control”
(and the correlative terms, “controlled by” and “under common control with”) shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of the management or policies, whether through ownership
of securities or other interests, by contract or otherwise. “Affiliate” shall include any Subsidiary.


 


“Business
Day” means any day except Saturday, Sunday and any day which shall be a federal legal holiday in the United States
or a day on which banking institutions are authorized or required by law or other government action to close.


 


“Capital
Lease” shall mean, as to any Person, a lease of any interest in any kind of property or asset by that Person as
lessee that is, should be or should have been recorded as a “capital lease” in accordance with GAAP.


 


“Capitalized
Lease Obligations” shall mean all obligations of any Person under Capital Leases, in each case, taken at the amount
thereof accounted for as a liability in accordance with GAAP.


 


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


 


“Change
of Control” means the occurrence of any of the following events after the Original Issue Date: (i) any “person”
or “group” (as defined in Section 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”) together with their affiliates become the ultimate “beneficial owner” (as defined in Rule 13d-3 of the
Exchange Act) of voting stock of the Borrower representing more than 50% of the voting power of the total voting stock of the
Borrower; (ii) the Stockholders of the Borrower approve a merger or consolidation of the Borrower with any other Corporation or
entity regardless of which entity is the survivor, other than a merger or a consolidation which would result in the voting stock
of the Borrower outstanding immediately prior thereto continuing to represent (either by remaining outstanding or being converted
into voting securities of the surviving entity or the parent thereof) at least 50% of the combined voting power of the voting
securities of the Borrower or such surviving entity or the parent thereof, outstanding immediately after such merger or consolidation;
or (iii) the stockholders of the Borrower approve a plan of complete liquidation or winding up of the Borrower or an agreement
for the sale or disposition by the Borrower of all or substantially all of the Borrower’s assets.


 




    	 



    	 



    

 


“Closing”
shall mean the satisfaction, or written waiver by Holder, of all of the conditions precedent set forth in the Transaction
Documents required to be satisfied prior to the consummation of the transactions contemplated thereby.


 


“Closing
Date” shall mean the date upon which the Closing occurs.


 


“Collateral”
shall have the meaning set forth in the Security Agreement.


 


“Common
Stock” means the common stock, no par value, of the Borrower and stock of any other class into which such shares
may hereafter be changed or reclassified.


 


“Debtor
Relief Law” shall mean, collectively, the Bankruptcy Code of the United States of America and all other applicable
federal and state liquidation, conservatorship, bankruptcy, moratorium, rearrangement, receivership, insolvency, reorganization
or similar debtor relief laws from time to time in effect affecting the rights of creditors generally, as amended and in effect
from time to time.


 


“Default”
shall mean any event, fact, circumstance or condition that, with the giving of applicable notice or passage of time or
both, would constitute or be or result in an Event of Default.


 


“Default
Rate” shall have the meaning set forth in Section 3(b).


 


“Deposit
Accounts” shall mean “deposit accounts” as defined in Section 9-102 of the UCC.


 


“Distribution”
shall mean any direct or indirect dividend, distribution or other payment of any kind or character (whether in cash, securities
or other property) in respect of any equity interests.


 


“Event
of Default” shall mean the occurrence of any event set forth in Section 3(a).


 


“Existing
Indebtedness” shall mean any existing Indebtedness of the Borrower as of the Original Issue Date as set forth on
Exhibit A and Exhibit C hereto.


 


“GAAP”
shall mean generally accepted accounting principles in the United States as in effect on the Closing Date.


 


“Governmental
Authority” shall mean any federal, state, municipal, national, local or other governmental department, court, commission,
board, bureau, agency or instrumentality or political subdivision thereof, or any entity or officer exercising executive, legislative
or judicial, regulatory or administrative functions of or pertaining to any government or any court, in each case, whether of
the United States or a state, territory or possession thereof, a foreign sovereign entity or country or jurisdiction or the District
of Columbia.


 


“Indebtedness”
of any Person shall mean, without duplication, (a) all obligations for borrowed money, (b) all obligations evidenced by
bonds, debentures, notes, or other similar instruments and all reimbursement or other obligations in respect of letters of credit
or bankers acceptances, (c) all Capitalized Lease Obligations, (d) all obligations or liabilities of others secured by a Lien
on any asset of such Person or its Subsidiaries, irrespective of whether such obligation or liability is assumed, (e) all obligations
to pay the deferred purchase price of assets (other than trade payables incurred in the ordinary course of business and not outstanding
more than one hundred twenty (120) calendar days after the date such payable was created) or such longer period as shall be agreed
in writing by Holder and Borrower, (f) all net obligations owing to counterparties under hedging agreements, (g) all obligations
with respect to redeemable Capital Stock or repurchase obligations under any Capital Stock issued by such Person, (h) the present
value of future rental payments under all synthetic leases (excluding specifically any operating leases or real estate leases)
and (i) any obligation guaranteeing or intended to guarantee (whether directly or indirectly guaranteed, endorsed, co-made, discounted,
or sold with recourse) any obligation of any other Person that constitutes Indebtedness under any of clauses (a) through (h) above.


 




    	 



    	 



    

 


“Investment
Property” shall mean “investment property” as defined in Section 9-102 of the UCC.


 


“Landlord
Waiver and Consent” shall mean a waiver/consent from the owner/lessor/mortgagee of any premises either owned or
occupied by Borrower at which any of the Collateral is now or hereafter located for the purpose of providing Holder access to
such Collateral, in each case as such may be modified, amended or supplemented from time to time.


 


“Lien”
shall mean any mortgage, pledge, security interest, encumbrance, restriction, lien or charge of any kind (including any
agreement to give any of the foregoing, any conditional sale or other title retention agreement or any lease in the nature thereof),
or any other arrangement pursuant to which title to the property is retained by or vested in some other Person for security purposes.


 


“Management
or Service Fee” shall mean any management, service or related or similar fee paid by Borrower to any Person with
respect to any facility owned, operated or leased by Borrower.


 


“Material
Adverse Change” shall mean any event, condition or circumstance or set of events, conditions or circumstances or
any change(s) which (i) has, had or would reasonably be likely to have any material adverse effect upon or change in the validity
or enforceability of any Transaction Document, (ii) has been or would reasonably be expected to be adverse to the value of any
material portion of the Collateral, or to the priority of Holder’s security interest in any portion of the Collateral, (iii)
has been or would reasonably be expected to be materially adverse to the business, operations, prospects, properties, assets,
liabilities or financial condition of the Borrower, either individually or taken as a whole, or (iv) has materially impaired or
would reasonably be likely to materially impair the ability of any Borrower to pay any portion of the Obligations or otherwise
perform the Obligations or to consummate the transactions under the Transaction Documents executed by such Person.


 


“Obligations”
shall mean all present and future obligations, Indebtedness and liabilities of Borrower to Holder at any time and from
time to time of every kind, nature and description, direct or indirect, secured or unsecured, joint and several, absolute or contingent,
due or to become due, matured or unmatured, now existing or hereafter arising, contractual or tortious, liquidated or unliquidated,
(whether or not evidenced by a note or debenture), including, without limitation, all principal, interest, applicable fees, charges
and expenses and all amounts paid or advanced by Holder on behalf of or for the benefit of Borrower for any reason at any time,
including in each case obligations of performance as well as obligations of payment and interest that accrue after the commencement
of any proceeding under any Debtor Relief Law by or against any such Person.


 


“Original
Issue Date” shall mean the date of the first issuance of this Note regardless of the number of transfers and regardless
of the number of instruments, which may be issued to evidence such Note.


 


“Paid
in Full” and “Payment in Full” mean, with respect to the Obligations, all amounts owing
with respect thereto (including any interest accruing thereon after the commencement of any proceeding under any Debtor Relief
Law by or against Borrower, whether or not allowed as a claim against such Borrower in such proceeding, but excluding as yet unasserted
contingent obligations), have been fully, finally and completely paid in cash.


 


“Permit”
shall mean collectively all licenses, leases, powers, permits, franchises, certificates, authorizations, approvals, certificates
of need, provider numbers and other rights.


 




    	 



    	 



    

 


“Permitted
Discretion” shall mean a determination or judgment made by Holder in good faith in the exercise of reasonable (from
the perspective of a secured lender) business judgment.


 


“Permitted
Indebtedness” shall mean any of the following: (i) any current or future Indebtedness contemplated under the Transaction
Documents, (ii) any Existing Indebtedness, (iii) Capitalized Lease Obligations incurred after the Closing Date and Indebtedness
incurred to purchase capital equipment and secured by purchase money Liens constituting Permitted Liens in an aggregate amount
outstanding at any time not to exceed $300,000, provided, that, the debt service for such Indebtedness
shall not exceed $100,000 for any twelve (12) month period, (iv) accounts payable to trade creditors and current operating expenses
(other than for borrowed money) which are not aged more than one hundred twenty (120) calendar days from the date such payable
was created or such longer period as shall be agreed in writing by Holder, except, in each case incurred in the ordinary course
of business and paid within such time period, unless the same are being contested in good faith and by appropriate and lawful
proceedings and such reserves, if any, with respect thereto as are required by GAAP shall have been reserved, and (v) new Indebtedness
incurred in the ordinary course of business and not exceeding $500,000 (“Debt Limit”) individually or in the aggregate
outstanding at any one time when considered collectively with any Existing Indebtedness; provided, however, that such new Indebtedness
(A) may exceed the Debt Limit so long as fifteen percent (15%) of any such new Indebtedness is immediately delivered to Vapor
to repay amounts due pursuant to the Notes; (B) shall only be secured by a “second lien” to the Collateral; (C) the
debt service for such new Indebtedness and any remaining Existing Indebtedness shall not exceed 30% of the aggregate unpaid portion
of such Indebtedness for any twelve (12) month period; (D) upon the incurrence of such new Indebtedness and after giving effect
thereto no Default or Event of Default shall exist and be continuing, (E) such new Indebtedness shall be subordinated in right
of repayment and remedies to all of the Obligations and to all of Holder’s rights pursuant to a written intercreditor agreement
among Holder, Borrower and the lender with respect to such new Indebtedness, in form and substance satisfactory to Holder, which
satisfaction of Holder cannot be withheld unreasonably (with all costs, including reasonable attorneys’ fees, of the Holder
incurred in connection with the drafting, negotiation and execution of such intercreditor agreement to be reimbursed in full by
the Borrower to the Holder at the time of the issuance of the related Indebtedness).


 


“Permitted
Liens” shall mean with respect to the Borrower any of the following: (i) Liens under the Transaction Documents or
otherwise arising in favor of any Holder of Indebtedness, (ii) Liens imposed by law for taxes, assessments or charges of any Governmental
Authority for claims not yet due or which are being contested in good faith by appropriate proceedings and with respect to which
adequate reserves or other appropriate provisions are being maintained by such Person in accordance with GAAP to the satisfaction
of Holder in its Permitted Discretion, (iii) (A) statutory Liens of landlords (provided, that, with respect to Required
Locations any such landlord has executed a Landlord Waiver and Consent in form and substance satisfactory to Holder) and of carriers,
warehousemen, mechanics, materialmen, and (B) other Liens imposed by law or that arise by operation of law in the ordinary course
of business from the date of creation thereof, in each case only for amounts not yet due or which are being contested in good
faith by appropriate proceedings and with respect to which adequate reserves or other appropriate provisions are being maintained
by such Person in accordance with GAAP to the satisfaction of Holder in its Permitted Discretion, (iv) Liens (A) incurred or deposits
made in the ordinary course of business (including, without limitation, surety bonds and appeal bonds) in connection with workers’
compensation, unemployment insurance and other types of social security benefits or to secure the performance of tenders, bids,
leases, contracts (other than for the repayment of Indebtedness), statutory obligations and other similar obligations, or (B)
arising as a result of progress payments under government contracts, (v) purchase money Liens (A) securing the type of Permitted
Indebtedness set forth under clause (iii) of the definition of “Permitted Indebtedness”, or (B) in connection with
the purchase by such Person of equipment in the normal course of business, provided, that, such payables shall not
exceed any limits on Indebtedness provided for herein and shall otherwise be Permitted Indebtedness hereunder; (vi) any existing
Liens disclosed in the Security Agreement.


 




    	 



    	 



    

 


“Permitted
Payments” shall mean any payments of principal, interest or accrued fees and expenses due and owing on this Note,
plus any payments to holders of (a) Permitted Indebtedness of the Company and (b) Indebtedness of the Company as outlined on Exhibit
B hereof.


 


“Person”
means a corporation, an association, a partnership, organization, a business, an individual, a government or political
subdivision thereof or a governmental agency.


 


“Required
Locations” shall mean collectively: (a) the leased premises located at 3001 Griffin Road, Dania Beach, FL 33312
and 4401 N.W. 167 Street, Miami, FL 33055 and (b) any location leased by Borrower
at which books and records relating to Accounts are kept of which duplicates are not kept at the location identified in (a) above.


 


“Subsidiary”
shall mean, (i) as to Borrower, any Person in which more than fifty percent (50%) of all equity, membership, partnership
or other ownership interests is owned directly or indirectly by such Borrower or one or more of its Subsidiaries, and (ii) as
to any other Person, any Person in which more than fifty percent (50%) of all equity, membership, partnership or other ownership
interests is owned directly or indirectly by such Person or by one or more of such Person’s Subsidiaries.


 


“Transaction
Documents” means the Purchase Agreement and any other agreement delivered in connection with the Purchase Agreement,
including, without limitation, this Note, and the Security Agreement.


 


“UCC”
shall mean the Uniform Commercial Code as in effect from time to time.


 


Section
6. No Stockholder Rights. This Note shall not entitle the Holder to any of the rights of a stockholder of
the Borrower, including without limitation, the right to vote, to receive dividends and other distributions, or to receive any
notice of, or to attend, meetings of stockholders or any other proceedings of the Borrower.


 


Section
7. Ranking; Seniority. This Note is a direct obligation of the Borrower. This Note ranks pari passu
with all other Indebtedness listed on Exhibit A hereto issued by the Borrower prior to or simultaneously with the Notes
on the Original Issue Date and senior to all other indebtedness of the Borrower issued after the Original Issue Date. No Indebtedness
of the Borrower, either now or hereafter while this Note is outstanding, is or will be senior to this Note in right of payment,
whether with respect to interest, damages or upon liquidation or dissolution or otherwise, with respect to the assets of the Borrower.
Without the Holder’s consent, the Borrower shall not and shall not permit any of its Subsidiaries to, directly or indirectly,
enter into, create, incur, assume or suffer to exist any indebtedness of any kind, on or with respect to any of its property or
assets now owned or hereafter acquired or any interest therein or any income or profits therefrom that is senior in any respect
to the obligations of the Borrower under this Note.


 




    	 



    	 



    

 


Section
8. Transferability.  This Note has been issued subject to investment representations of the original
Holder hereof and may be transferred to a) any entity controlled by the Holder, b) any investors in the Holder or their direct
assignees or c) any other accredited investors or exchanged only in compliance with the Securities Act of 1933, as amended (the
“Act”), and other applicable state and foreign securities laws. In the event of any proposed transfer of this Note,
the Borrower may require, prior to issuance of a new Note in the name of such other person, that it receive reasonable transfer
documentation that is sufficient to evidence that such proposed transfer complies with the Act and other applicable state and
foreign securities laws. Prior to due presentment for transfer of this Note, the Borrower and any agent of the Borrower may treat
the person in whose name this Note is duly registered on the Borrower’s Note register as the owner hereof for the purpose
of receiving payment as herein provided and for all other purposes, whether or not this Note be overdue, and neither the Borrower
nor any such agent shall be affected by notice to the contrary. Subject to the foregoing, this Note may be transferred or assigned,
in whole or in part, by the Holder at any time. The Notes will initially be issued in denominations determined by the Borrower,
but are exchangeable for an equal aggregate principal amount of Notes of different denominations, as requested by the Holder surrendering
the same. No service charge will be made for such registration or transfer or exchange.


 


Section
9. Replacement. If this Note is mutilated, lost, stolen or destroyed, the Borrower shall execute and deliver,
in exchange and substitution for and upon cancellation of the mutilated Note, or in lieu of or in substitution for a lost, stolen
or destroyed Note, a new Note for the principal amount of this Note so mutilated, lost, stolen or destroyed but only upon receipt
of evidence of such loss, theft or destruction of such Note, and of the ownership hereof, and an agreement to indemnify Borrower
for any resulting claims, all reasonably satisfactory to the Borrower.


 


Section
10. Enforcement Expenses. If the Borrower fails to strictly comply with the terms of this Note, then the
Borrower shall reimburse the Holder promptly for all reasonable fees, costs and expenses, including, without limitation, reasonable
attorneys’ fees and expenses of the Holder in any action in connection with this Note that are incurred: (a) during
any workout, attempted workout, and in connection with the rendering of legal advice as to the Holder’s rights, remedies
and obligations; (b) collecting any sums which become due to the Holder, (c) defending or prosecuting any proceeding
or any counterclaim to any proceeding or appeal; or (d) the protection, preservation or enforcement of any rights or remedies
of the Holder under this Note or any of the Transaction Documents.


 


Section
11. Waiver. Any waiver by the Holder of a breach of any provision of this Note shall not operate as or be
construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Note. The failure
of the Holder to insist upon strict adherence to any term of this Note on one or more occasions shall not be considered a waiver
or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Note. Any
waiver must be in writing.


 


Section
13. Severability. If any provision of this Note is invalid, illegal or unenforceable, the balance of this
Note shall remain in effect, and if any provision is inapplicable to any person or circumstance, it shall nevertheless remain
applicable to all other persons and circumstances. If it shall be found that any interest or other amount deemed interest due
hereunder shall violate applicable laws governing usury, the applicable rate of interest due hereunder shall automatically be
lowered to equal the maximum permitted rate of interest. The Borrower covenants (to the extent that it may lawfully do so) that
it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay,
extension or usury law or other law which would prohibit or forgive the Borrower from paying all or any portion of the principal
of or interest on this Note as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect
the covenants or the performance of this Note.


 




    	 



    	 



    

 


Section
14. Payment Dates; Payment Order of Priority. Whenever any payment or other obligation hereunder shall be
due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day. All payments received
shall be applied in the following order of priority: (i) first to any amounts due to the Holder for the reimbursement of any expenses
or fees under any provision of this Note or the Transaction Documents, all of which shall be provided to the Borrower in writing
in sufficient detail prior the application of any payments for this purpose; and (ii) then amounts due to the Holder for accrued
but unpaid interest on this Note; and (iii) then, to principal of this Note.


 


Section
15. WAIVER OF TRIAL BY JURY. THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE
RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON OR ARISING OUT OF, UNDER OR IN CONNECTION
WITH THIS AGREEMENT OR ANY TRANSACTION DOCUMENT OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN)
OR ACTIONS OF ANY PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES’ ACCEPTANCE OF THIS AGREEMENT.


 


Section
16. Governing Law. This Note shall be governed by and construed in accordance with the laws of the State
of Florida, without giving effect to conflicts of laws thereof. Each of the parties consents to the jurisdiction of the state
courts of the State of Florida sitting in Miami-Dade County, Florida and the U.S. District Court for the Southern District of
Florida in connection with any dispute arising under this Note and hereby waives, to the maximum extent permitted by law, any
objection, including any objection based on forum non conveniens to the bringing of any such proceeding in such jurisdictions.


 


Section
17. Notices. Any notices, consents, waivers or other communications required or permitted to be given under
the terms hereof must be in writing and will be deemed to have been delivered: (a) upon receipt, when delivered personally;
(b) upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated
and kept on file by the sending party); (c) on the next Business Day following deposit of such notice with a nationally
recognized overnight delivery service; and (d) on the third Business Day following deposit of such notice with the U.S.
Postal Service in an envelope mailed Certified Mail. The addresses and facsimile numbers for such communications shall be:


 


	If
    to the Borrower, to:	VPR
    Brands, LP
	 	4401
    N.W. 167 Street,
	 	Miami,
    Florida 33055
	 	Attn:
    Kevin Frija, CEO
	 	Telephone:
    (305) 830-2900
	 	Facsimile:

        Email:
        kevin.frija@vprbrands.com

	 	 
	With
    a copy to:	Legal
    & Compliance LLC
	 	Attn:
    Laura Anthony, Esq.
	 	330
    Clematis Street, Suite 217
	 	West
    Palm Beach, FL 33401
	 	Email:
    LAnthony@LegalAndCompliance.com
	 	Legal
    & Compliance LLC
	 	 
	If
    to the Holder:	Vapor
    Corp.
	 	3001
    Griffin Road
	 	Dania
    Beach, FL 33312
	 	Attn:
    Jeffrey Holman, CEO
	 	Telephone:
    (888) 482-7671
	 	Facsimile:
        (888) 882-7095

        Email:
        jholman@vpco.com



 




    	 



    	 



    

 


	With
    a copy to:	Cozen
    O’Connor
	 	Attn:
    Martin T. Schrier
	 	Southeast
    Financial Center
	 	200
    South Biscayne Blvd.
	 	Suite
    4410
	 	Miami,
    FL 33131


 


Such
address and facsimile number and persons to receive notice may be changed from time to time by either party providing written
notice to the other party three (3) Business Days prior to the effectiveness of such change. Written confirmation of receipt (i)
given by the recipient of such notice, consent, waiver or other communication, (ii) mechanically or electronically
generated by the sender’s facsimile machine containing the time, date, recipient facsimile number and an image of the first
page of such transmission, (iii) provided by a nationally recognized overnight delivery service, and (iv) the Certified
Mail records of the U.S. Postal Service shall constitute rebuttable evidence of personal receipt in accordance with this Section
17.


 


[The
Remainder of this Page Intentionally Left Blank.]


 




    	 



    	 



    

 


IN
WITNESS WHEREOF, the Borrower has caused this Note to be duly executed by a duly authorized officer as of the date set forth above.


 


	 	VPR
    Brands, L.P.
	 	 	 
	 	By:	/s/
    Kevin Frija
	 	Name:	Kevin
    Frija
	 	Title:	Chief
    Executive Officer


 




    	 



    	 



    

 


EXHIBIT
“A”


 


EXISTING
INDEBTEDNESS OF BORROWER WHICH RANKS PARI PASSU TO THE NOTE


 


That
certain “Secured Promissory Note” of even date between Borrower and Holder.


 




    	 



    	 



    

 


EXHIBIT
“B”


 


PERMITTED
PAYMENTS TO HOLDERS OF EXISTING INDEBTEDNESS


 


		1)	TRADE
                                         ACCOUNT PAYABLES



 


	 	a)	100%
    of trade payables incurred in the ordinary course of business including unpaid employee compensation and authorized compensation
    payable to Affiliates


 


		2)	ACCRUED
                                         LIABILITIES



 


	 	a)	100%
    of accrued liabilities incurred in the ordinary course of business including payroll, tax, and other liabilities.


 


		3)	SECURED
                                         NOTES PAYABLE DESCRIBED ON EXHIBIT B



 


	 	a)	All
    interest payments relating to the Indebtedness listed on Exhibit B hereof to the extent such interest payments are paid in
    cash.
	 	 	 
	 	b)	Principal
    payments relating to that Indebtedness listed on Exhibit B.


 




    	 



    	 



    

 


EXHIBIT
“C”


 


OTHER
EXISTING INDEBTEDNESS


 


None


 




    	 



    	 



    

 


SCHEDULES


 


Schedule
2(a)(6) – Post Closing Obligations


 


Holder
shall file a UCC-1 Statement evidencing Holder’s security interest in the Collateral within ten (10) days after the Closing
Date.


 


Schedule
2(a)(7) – Subsidiaries of Borrower


 


None


 


Schedule
2(b)(4) – Location of Collateral


 


3001
Griffin Road, Dania Beach, FL 33312 and 4401 N.W. 167 Street, Miami, FL 33055


 


Schedule
2(b)(6) – Transactions with Affiliates


 


None