Document:

SECURITY
AGREEMENT

 

This
Security Agreement, dated as of July 29, 2016 (the “Agreement”) is made by and among VPR Brands, L.P.,
a limited partnership duly organized and validly existing under the laws of Delaware (the “Company”),
and Vapor Corp., a corporation duly organized and validly existing under the laws of Delaware (“Secured Party”).

 

WHEREAS,
the Company and the Secured Party entered into an Asset Purchase Agreement on July 29, 2016 (the “Purchase Agreement”),
which includes the terms and conditions pursuant to which the Secured Party would provide approximately [$870,000.00] to the Company
in exchange for certain assets of the Company and other consideration; and

 

WHEREAS,
the Company has executed and delivered a Secured Promissory Note and an Acquisition Note, both of even date herewith (the “Notes”)
substantially in the forms attached hereto as Composite Exhibit A that grants a first priority security interest in all
assets of the Company to Secured Party.

 

NOW
THEREFORE, in order to induce the Secured Party to enter into the Notes, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company has agreed to pledge and grant a security interest in the
Collateral as security for the Secured Obligations. Accordingly, the parties hereto agree as follows:

 

Section
1.Definitions. Each capitalized term used herein and not otherwise defined shall have the meaning assigned
to such term in the Notes or the Purchase Agreement. In addition, as used herein:

 

“Accounts”
shall have the meaning ascribed thereto in Section 3(a) hereof.

 

“Business”
shall mean the businesses from time to time, now or hereafter, conducted by the Company and its Subsidiaries, when formed.

 

“Collateral”
shall have the meaning ascribed thereto in Section 3 hereof.

 

“Copyright
Collateral” shall mean all Copyrights, whether now owned or hereafter acquired by the Company that are associated
with the Business.

 

“Copyrights”
shall mean all copyrights, copyright registrations, and applications for copyright registrations, including, without limitation,
all renewals and extensions thereof, the right to recover for all past, present and future infringements thereof, and all other
rights of any kind whatsoever accruing thereunder or pertaining thereto.

 

“Documents”
shall have the meaning ascribed thereto in Section 3(g) hereof.

 

“Equipment”
shall have the meaning ascribed thereto in Section 3(e) hereof.

 

“Event
of Default” shall have the meaning ascribed thereto in Section 3 of the Notes.

 

“Excluded
Collateral” shall mean the assets of the Company which secure the Permitted Indebtedness and the assets listed on
Annex 1 hereto.

 

“Instruments”
shall have the meaning ascribed thereto in Section 3(b) hereof.

 

    	 	1	Security Agreement

    	 

    

 

“Intellectual
Property” shall mean, collectively, all Copyright Collateral, all Patent Collateral and all Trademark Collateral,
together with (a) all inventions, processes, production methods, proprietary information, know-how and trade secrets used
or useful in the Business; (b) all licenses or user or other agreements granted to the Company with respect to any of the
foregoing, in each case whether now or hereafter owned or used including, without limitation, the licenses or other agreements
with respect to the Copyright Collateral, the Patent Collateral or the Trademark Collateral; (c) all customer lists, identification
of suppliers, data, plans, blueprints, specifications, designs, drawings, recorded knowledge, surveys, manuals, materials standards,
processing standards, catalogs, computer and automatic machinery software and programs, and the like pertaining to the operation
by the Company of the Business; (d) all sales data and other information relating to sales now or hereafter collected and/or
maintained by the Company that pertain to the Business; (e) all accounting information which pertains to the Business and
all media in which or on which any of the information or knowledge or data or records which pertain to the Business may be recorded
or stored and all computer programs used for the compilation or printout of such information, knowledge, records or data; (f)
all licenses, consents, permits, variances, certifications and approvals of governmental agencies now or hereafter held by
the Company pertaining to the operation by the Company and its Subsidiaries of the Business; and (g) all causes of action,
claims and warranties now or hereafter owned or acquired by the Company in respect of any of the items listed above.

 

“Inventory”
shall have the meaning ascribed thereto in Section 3(c) hereof.

 

“Notes”
shall mean that certain Secured Promissory Note and that certain Acquisition Note, both of even date herewith, executed
and delivered by the Company to Secured Party, substantially in the forms attached hereto as Composite Exhibit A that grants
a first priority security interest in all assets of the Company to Secured Party.

 

“Patent
Collateral” shall mean all Patents and pending Patents, whether now owned or hereafter acquired by the Company that
are associated with the Business.

 

“Patents”
shall mean all patents and patent applications, including, without limitation, the inventions and improvements described
and claimed therein together with the reissues, divisions, continuations, renewals, extensions and continuations-in-part thereof,
all income, royalties, damages and payments now or hereafter due or payable under and with respect thereto, including, without
limitation, damages and payments for past or future infringements thereof, the right to sue for past, present and future infringements
thereof, and all rights corresponding thereto throughout the world.

 

“Permitted
Indebtedness” shall mean the Company’s existing secured indebtedness, liabilities and obligations as disclosed
on Annex 4 hereto, any future capitalized leases, purchase money indebtedness or other indebtedness of the Company
permitted under the Purchase Agreement and the Notes, including, but not limited to, Permitted Indebtedness (as defined under
the Notes).

 

“Permitted
Liens” shall mean (i) the Company’s existing liens as disclosed Annex 5 hereto, (ii) the security
interests created by this Agreement, (iii) liens of local or state authorities for franchise, real estate or other like taxes,
(iv) statutory liens of landlords and liens of carriers, warehousemen, bailees, mechanics, materialmen and other like liens imposed
by law, created in the ordinary course of business and for amounts which are not more than 60 days past due, (v) liens for taxes
which are not yet due and payable or are being contested in good faith and by appropriate proceedings, (vi) liens which do not
materially affect the value of the Company’s property and do not materially interfere with the use made and proposed to
be made of such property by the Company and the Subsidiaries, and (vii) liens pursuant to purchase money indebtedness that is
associated with new equipment purchases, including, but not limited to, Permitted Liens (as defined under the Notes).

 

    	 	2	Security Agreement

    	 

    

 

“Secured
Obligations” shall mean, collectively, the principal of and interest on the Notes issued or issuable (as applicable)
by the Company and held by the Secured Party, and all other amounts from time to time owing to the Secured Party by the Company.

 

“Secured
Party” shall mean Vapor Corp., its successors and assigns.

 

“Subsidiary”
or “Subsidiaries” of the Company shall mean any entity whose equity interests are owned entirely by the Company.

 

“Trademark
Collateral” shall mean all Trademarks, whether now owned or hereafter acquired by the Company that are associated
with the Business. Notwithstanding the foregoing, the Trademark Collateral does not and shall not include any Trademark which
would be rendered invalid, abandoned, void or unenforceable by reason of its being included as part of the Trademark Collateral.

 

“Trademarks”
shall mean all trade names, trademarks and service marks, logos, trademark and service mark registrations, and applications
for trademark and service mark registrations, including, without limitation, all renewals of trademark and service mark registrations,
all rights corresponding thereto throughout the world, the right to recover for all past, present and future infringements thereof,
all other rights of any kind whatsoever accruing thereunder or pertaining thereto, together, in each case, with the product lines
and goodwill of the business connected with the use of, and symbolized by, each such trade name, trademark and service mark.

 

“Uniform
Commercial Code” shall mean the Uniform Commercial Code as in effect in the State of Florida from time to time.

 

Section
2.Representations and Warranties of the Company. The Company represents and warrants to the Secured Party that:

 

	 	a.	the
    Company is the sole beneficial owner of the Collateral and no lien exists or will exist upon any Collateral at any time, except
    for Permitted Liens and the pledge and security interest in favor of the Secured Party created or provided for herein, which
    pledge and security interest constitutes a first priority perfected pledge and security interest in and to all of the Collateral;
	 	 	 
	 	b.	Except
    as set forth on Annex 2, the Company owns and possesses the right to use, and has done nothing to authorize
    or enable any other person to use, all of its Copyrights, Patents and Trademarks, and all registrations of its material Copyrights,
    Patents and Trademarks are valid and in full force and effect. Except as may be set forth in Annex 2 and except
    for Permitted Liens, the Company owns and possesses the right to use all material Copyrights, Patents and Trademarks, necessary
    for the operation of the Business;
	 	 	 
	 	c.	to
    the Company’s knowledge, (i) except as set forth in Annex 2 hereto, there is no violation by others
    of any right of the Company with respect to any material Copyrights, Patents or Trademarks, respectively, and (ii)
    the Company is not, in connection with the Business, infringing in any respect upon any Copyrights, Patents or Trademarks
    of any other person; and no proceedings have been instituted or are pending against the Company or, to the Company’s
    knowledge, threatened, and no claim against the Company has been received by the Company, alleging any such violation, except
    as may be set forth in said Annex 2, and except, in each case for matters which singly or in the aggregate could
    not reasonably be expected to have a material adverse effect upon the Company or the Collateral in the aggregate;

 

    	 	3	Security Agreement

    	 

    

 

	 	d.	the
    Company does not own any material Trademarks registered in the United States of America to which the second sentence of the
    definition of Trademark Collateral applies; and
	 	 	 
	 	e.	Except
    in connection with Permitted Indebtedness and Permitted Liens, the Company has not and will not issue indebtedness which is
    secured by the Collateral to any third parties other than the Secured Party without the prior written approval of the Secured
    Party.

 

Section
3.Collateral. As collateral security for the prompt payment in full when due (whether at stated maturity, by
acceleration or otherwise) of the Secured Obligations, the Company hereby pledges, grants, assigns, hypothecates and transfers
the Secured Party as hereinafter provided, a security interest in and lien upon all of the Company’s personal property and
fixture property and other assets, whether now owned or hereafter acquired by or arising in favor of the Company, and all of the
Company’s right, title and interest therein, whether now existing or hereafter coming into existence, and regardless of
where located, except for the Excluded Collateral (all of the foregoing except the Excluded Collateral being collectively referred
to herein as “Collateral”), including but not limited to the following types and items of property:

 

	 	a.	all
    goods;
	 	 	 
	 	b.	all
    accounts, general intangibles and payment intangibles (each as defined in the Uniform Commercial Code), including (but not
    limited to) all moneys due and to become due to the Company in respect of any loans or advances for the purchase price of
    Inventory or Equipment or other goods sold or leased or for services rendered, all moneys due and to become due to the Company
    under any guarantee (including a letter of credit) of the purchase price of Inventory or Equipment sold by the Company and
    all tax refunds (such accounts, general intangibles and moneys due and to become due being herein called collectively “Accounts”);
	 	 	 
	 	c.	all
    instruments, all chattel paper, and all letters of credit (each as defined in the Uniform Commercial Code), including but
    not limited to those evidencing, representing, arising from or existing in respect of, relating to, securing or otherwise
    supporting the payment of, any of the Accounts, and including (but not limited to) promissory notes, drafts, bills of exchange
    and trade acceptances (herein collectively called “Instruments”);
	 	 	 
	 	d.	all
    inventory (as defined in the Uniform Commercial Code) and all goods obtained by the Company in exchange for such inventory
    (herein collectively called “Inventory”);
	 	 	 
	 	e.	all
    Intellectual Property and all other accounts or general intangibles of the Company not constituting Intellectual Property
    or Accounts;
	 	 	 
	 	f.	all
    equipment (as defined in the Uniform Commercial Code) (herein collectively called “Equipment”);
	 	 	 

    	 	4	Security Agreement

    	 

    

 

	 	g.	each
    contract and other agreement of the Company relating to the sale or other disposition of Inventory or Equipment;
	 	 	 
	 	h.	all
    documents of title (as defined in the Uniform Commercial Code) and other receipts of the Company covering, evidencing or representing
    Inventory or Equipment (herein collectively called “Documents”);
	 	 	 
	 	i.	All
    deposit accounts;
	 	 	 
	 	j.	All
    securities and other investment property;
	 	 	 
	 	k.	all
    rights, claims and benefits of the Company against any person arising out of, relating to or in connection with Inventory
    or Equipment purchased by the Company, including, without limitation, any such rights, claims or benefits against any person
    storing or transporting such Inventory or Equipment; and
	 	 	 
	 	l.	all
    other tangible or intangible property of the Company, including, without limitation, all proceeds, products and accessions
    of and to any of the property of the Company described in Clauses (a) through (k) above in this Section 3 (including, without
    limitation, any proceeds of insurance thereon), and, to the extent related to any property described in said Clauses or such
    proceeds, products and accessions, all books, correspondence, credit files, records, invoices and other papers, including
    without limitation all tapes, cards, computer runs and other papers and documents in the possession or under the control of
    the Company or any computer bureau or service company from time to time acting for the Company.

 

Section
4.Further Assurances; Remedies. In furtherance of the grant of the pledge and security interest pursuant to
Section 3 hereof, the Company hereby agrees with the Secured Party as follows:

 

4.01Delivery
and Other Perfection. The Company shall:

 

	 	a.	give,
    execute, deliver, file and record any financing statement, notice, instrument, document, agreement or other papers that may
    be necessary (in the reasonable judgment of the Secured Party) to create, preserve, perfect or validate any security interest
    granted pursuant hereto or to enable the Secured Party to exercise and enforce its rights hereunder with respect to such security
    interest, including, without limitation, causing any or all of the stock collateral to be transferred of record into the name
    of the Secured Party or its nominee provided that notices to account debtors in respect of any Accounts or Instruments shall
    be subject to the provisions of Section 4.08 below;
	 	 	 
	 	b.	keep
    accurate books and records relating to the Collateral, and stamp or otherwise mark such books and records in such manner as
    the Secured Party may reasonably require in order to reflect the security interests granted by this Agreement;
	 	 	 
	 	c.	furnish
    to the Secured Party from time to time (no more frequently than annually, unless an Event of Default shall have occurred and
    shall be continuing,) statements and schedules further identifying and describing the Copyright Collateral, the Patent Collateral
    and the Trademark Collateral, respectively, and such other reports in connection with the Copyright Collateral, the Patent
    Collateral and the Trademark Collateral, as the Secured Party may reasonably request, all in reasonable detail;
	 	 	 

    	 	5	Security Agreement

    	 

    

 

	 	d.	permit
    representatives of the Secured Party, upon reasonable notice, at any time during normal business hours to inspect and make
    abstracts from its books and records pertaining to the Collateral, and permit representatives of the Secured Party to be present
    at the Company’s place of business to receive copies of all communications and remittances relating to the Collateral,
    and forward copies of any notices or communications by the Company with respect to the Collateral, all in such manner as the
    Secured Party may reasonably require; and
	 	 	 
	 	e.	upon
    the occurrence and during the continuance of any Event of Default, upon request of the Secured Party, promptly notify each
    account debtor in respect of any Accounts or Instruments that such Collateral has been assigned to the Secured Party hereunder,
    and that any payments due or to beco

me
due in respect of such Collateral are to be made directly to the Secured Party.

 

4.02Other
Financing Statements and Liens. Except with respect to Permitted Indebtedness, Permitted Liens or as otherwise permitted
under the Notes, without the prior written consent of the Secured Party, the Company shall not file or suffer to be on file, or
authorize or permit to be filed or to be on file, in any jurisdiction, any financing statement or like instrument with respect
to the Collateral in which the Secured Party is not named as the sole secured party for the benefit of the Secured Party.

 

4.03Special
Provisions Relating to Certain Collateral.

 

		a.	Intellectual
                                         Property.

 

	 	(1)	For
    the purpose of enabling the Secured Party to exercise rights and remedies under Section 4.04 hereof at such time as the Secured
    Party shall be lawfully entitled to exercise such rights and remedies, and for no other purpose, the Company hereby grants
    to the Secured Party, to the extent assignable, an irrevocable, non-exclusive license (exercisable without payment of royalty
    or other compensation to the Company) to use, assign, license or sublicense any of the Intellectual Property (other than the
    Trademark Collateral or goodwill associated therewith) now owned or hereafter acquired by the Company, wherever the same may
    be located, including in such license reasonable access to all media in which any of the licensed items may be recorded or
    stored and to all computer programs used for the compilation or printout thereof.
	 	 	 
	 	(2)	Notwithstanding
    anything contained herein to the contrary, so long as no Event of Default shall have occurred and shall be continuing, the
    Company will be permitted to exploit, use, enjoy, protect, license, sublicense, assign, sell, dispose of or take other actions
    with respect to the Intellectual Property in the ordinary course of the business of the Company. In furtherance of the foregoing,
    unless an Event of Default shall have occurred and is continuing, the Secured Party shall from time to time, upon the request
    of the Company, execute and deliver any instruments, certificates or other documents, in the form so requested, which the
    Company shall have certified are appropriate (in its judgment) to allow it to take any action permitted above (including relinquishment
    of the license provided pursuant to Clause (1) immediately above as to any specific Intellectual Property). Further, upon
    the payment in full of all of the Secured Obligations or earlier expiration of this Agreement or release of the Collateral,
    the Secured Party shall grant back to the Company the license granted pursuant to Clause (1) immediately above. The exercise
    of rights and remedies under Section 4.04 hereof by the Secured Party shall not terminate the rights of the holders of any
    licenses or sublicenses theretofore granted by the Company in accordance with the first sentence of this Clause (2).

 

    	 	6	Security Agreement

    	 

    

 

4.04Events
of Default, etc. During the period during which an Event of Default shall have occurred and be continuing:

 

	 	a.	the
    Company shall, at the request of the Secured Party, assemble the Collateral owned by it at such place or places, reasonably
    convenient to both the Secured Party and the Company, designated in its request;
	 	 	 
	 	b.	the
    Secured Party may make any reasonable compromise or settlement deemed desirable with respect to any of the Collateral and
    may extend the time of payment, arrange for payment in installments, or otherwise modify the terms of, any of the Collateral;
	 	 	 
	 	c.	the
    Secured Party shall have all of the rights and remedies with respect to the Collateral of a secured party under the Uniform
    Commercial Code (whether or not said Code is in effect in the jurisdiction where the rights and remedies are asserted) and
    such additional rights and remedies to which a secured party is entitled under the laws in effect in any jurisdiction where
    any rights and remedies hereunder may be asserted, including, without limitation, the right, to the maximum extent permitted
    by law, to exercise all voting, consensual and other powers of ownership pertaining to the Collateral as if the Secured Party
    were the sole and absolute owner thereof (and the Company agrees to take all such action as may be appropriate to give effect
    to such right);
	 	 	 
	 	d.	the
    Secured Party in its discretion may, in its name or in the name of the Company or otherwise, demand, sue for, collect or receive
    any money or property at any time payable or receivable on account of or in exchange for any of the Collateral, but shall
    be under no obligation to do so; and
	 	 	 
	 	e.	the
    Secured Party may, upon ten (10) Business Days’ prior written notice to the Company of the time and place, with respect
    to the Collateral or any part thereof which shall then be or shall thereafter come into the possession, custody or control
    of the Secured Party, or any of its respective agents, sell, lease, assign or otherwise dispose of all or any of such Collateral,
    at such place or places as the Secured Party deems best, and for cash or on credit or for future delivery (without thereby
    assuming any credit risk), at public or private sale, without demand of performance or notice of intention to effect any such
    disposition or of time or place thereof (except such notice as is required above or by applicable statute and cannot be waived)
    and the Secured Party or anyone else may be the purchaser, lessee, assignee or recipient of any or all of the Collateral so
    disposed of at any public sale (or, to the extent permitted by law, at any private sale), and thereafter hold the same absolutely,
    free from any claim or right of whatsoever kind, including any right or equity of redemption (statutory or otherwise), of
    the Company, any such demand, notice or right and equity being hereby expressly waived and released. In the event of any sale,
    assignment, or other disposition of any of the Trademark Collateral, the goodwill of the Business connected with and symbolized
    by the Trademark Collateral subject to such disposition shall be included, and the Company shall supply to the Secured Party
    or its designee, for inclusion in such sale, assignment or other disposition, all Intellectual Property relating to such Trademark
    Collateral. The Secured Party may, without notice or publication, adjourn any public or private sale or cause the same to
    be adjourned from time to time by announcement at the time and place fixed for the sale, and such sale may be made at any
    time or place to which the same may be so adjourned.

 

    	 	7	Security Agreement

    	 

    

 

The
proceeds of each collection, sale or other disposition under this Section 4.04, including by virtue of the exercise of the license
granted to the Secured Party in Section 4.03(a)(1) hereof, shall be applied in accordance with Section 4.07 hereof.

 

4.05Deficiency.
If the proceeds of sale, collection or other realization of or upon the Collateral pursuant to Section 4.04 hereof are
insufficient to cover the costs and expenses of such realization and the payment in full of the Secured Obligations, the Company
shall remain liable for any deficiency.

 

4.06Removals,
etc. Without at least thirty (30) days’ prior written notice to the Secured Party or unless otherwise required
by law, the Company shall not (i) maintain any of its books or records with respect to the Collateral at any office or maintain
its chief executive office or its principal place of business at any place, or permit any Inventory or Equipment to be located
anywhere other than at one of the locations identified in Annex 3 hereto or in transit from one of such locations
to another; or (ii) change its corporate name, or the name under which it does business, from the name shown on the signature
page hereto.

 

4.07Application
of Proceeds. Except as otherwise herein expressly provided, the proceeds of any collection, sale or other realization
of all or any part of the Collateral pursuant hereto, and any other cash at the time held by the Secured Party under this Section
4, shall be applied by the Secured Party:

 

First,
to the payment of the costs and expenses of such collection, sale or other realization, including reasonable out-of-pocket
costs and expenses of the Secured Party and the fees and expenses of its agents and counsel, and all expenses, and advances made
or incurred by the Secured Party in connection therewith;

 

Next,
to the payment in full of the Secured Obligations in each case equally and ratably in accordance with the respective amounts
thereof then due and owing to the Secured Party; and

 

Finally,
to the payment to the Company, or its successors or assigns, or as a court of competent jurisdiction may direct, of any surplus
then remaining.

 

As
used in this Section 4, “proceeds” of Collateral shall mean cash, securities and other property realized
in respect of, and distributions in kind of, Collateral, including any thereof received under any reorganization, liquidation
or adjustment of debt of the Company or any issuer of or obligor on any of the Collateral.

 

4.08Attorney-in-Fact.
Without limiting any rights or powers granted by this Agreement to the Secured Party while no Event of Default has occurred
and is continuing, upon the occurrence and during the continuance of any Event of Default, the Secured Party is hereby appointed
the attorney-in-fact of the Company for the purpose of carrying out the provisions of this Section 4 and taking any action and
executing any instruments which the Secured Party may deem necessary or advisable to accomplish the purposes hereof, which appointment
as attorney-in-fact is irrevocable and coupled with an interest. Without limiting the generality of the foregoing, so long as
the Secured Party shall be entitled under this Section 4 to make collections in respect of the Collateral, the Secured Party shall
have the right and power to receive, endorse and collect all checks made payable to the order of the Company representing any
dividend, payment, or other distribution in respect of the Collateral or any part thereof and to give full discharge for the same.

 

    	 	8	Security Agreement

    	 

    

 

4.09Perfection.
Prior to or concurrently with the execution and delivery of this Agreement, the Company shall file such financing statements
and other documents in such offices as the Secured Party may request to perfect the security interests granted by Section 3 of
this Agreement; and without limiting the Company’s obligations with respect to perfection of the security interests, the
Company hereby authorizes the Secured Party to file all such financing statements and other documents and, at Secured Party’s
option, to describe the Collateral in any such financing statement as “all personal property.”

 

4.10Termination.
When all Secured Obligations shall have been paid in full, this Agreement shall terminate, and the Secured Party shall
forthwith cause to be assigned, transferred and delivered, against receipt but without any recourse, warranty or representation
whatsoever, any remaining Collateral and money received in respect thereof, to or on the order of the Company and to be released
and cancelled all licenses and rights referred to in Section 4.03(a)(1) hereof. The Secured Party shall also execute and deliver
to the Company upon such termination such Uniform Commercial Code termination statements and such other documentation as shall
be reasonably requested by the Company to effect the termination and release of the liens on the Collateral.

 

4.11Expenses.
The Company agrees to pay to the Secured Party all out-of-pocket expenses (including reasonable expenses for legal services
of every kind) of, or incident to, the enforcement of any of the provisions of this Section 4, or performance by the Secured Party
of any obligations of the Company in respect of the Collateral which the Company has failed or refused to perform upon reasonable
notice, or any actual or attempted sale, or any exchange, enforcement, collection, compromise or settlement in respect of any
of the Collateral, and for the care of the Collateral and defending or asserting rights and claims of the Secured Party in respect
thereof, by litigation or otherwise, including expenses of insurance, and all such expenses shall be Secured Obligations to the
Agent secured under Section 3 hereof.

 

4.12Further
Assurances. The Company agrees that, from time to time upon the written request of the Secured Party, the Company
will execute and deliver such further documents and do such other acts and things as the Secured Party may reasonably request
in order fully to effect the purposes of this Agreement.

 

Section
5.Miscellaneous.

 

5.01No
Waiver. No failure on the part of the Secured Party or any of its agents to exercise, and no course of dealing with
respect to, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise by the Secured Party or any of its agents of any right, power or remedy hereunder preclude any other
or further exercise thereof or the exercise of any other right, power or remedy. The remedies herein are cumulative and are not
exclusive of any remedies provided by law.

 

5.02Governing
Law. This Agreement shall be governed by, and construed in accordance with, the law of the State of Florida.

 

5.03Notices.
All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be
in writing and, unless otherwise specified herein, shall be (a) personally served, (b) deposited in the mail, registered or certified,
return receipt requested, postage prepaid, (c) delivered by reputable air courier service with charges prepaid, or (d) transmitted
by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified
most recently by written notice given in accordance herewith. Any notice or other communication required or permitted to be given
hereunder shall be deemed effective (i) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business
hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business
day during normal business hours where such notice is to be received) or (ii) on the second business day following the date of
mailing by express courier service or on the fifth business day after deposited in the mail, in each case, fully prepaid, addressed
to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall
be for (i) the Company at 4401 N.W. 167 Street, Miami, Florida 33055 Telephone: (305)
830-2900 Fax: 1-888-882-7095 and (ii) the Secured Party at 3001 Griffin
Road, Dania Beach, Florida 33312, (Telephone: (888) 482-7671, Fax: (888) 882-7095. Any party hereto may from time to time change
its address or facsimile number for notices under this Section by written notice to the other parties.

 

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5.04Waivers,
etc. The terms of this Agreement may be waived, altered or amended only by an instrument in writing duly executed
by the Company and the Secured Party. Any such amendment or waiver shall be binding upon the Secured Party and the Company.

 

5.05Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the respective successors and assigns
of the Company and the Secured Party (provided, however, that the Company shall not assign or transfer its rights hereunder without
the prior written consent of the Secured Party).

 

5.06Counterparts.
This Agreement may be executed in any number of counterparts, all of which together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing any such counterpart. Facsimile and electronically
(PDF) delivered signature pages shall have the same force and effect as original signature pages.

 

5.07Severability.
If any provision hereof is invalid and unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(i) the other provisions hereof shall remain in full force and effect in such jurisdiction and shall be liberally construed
in favor of the Secured Party in order to carry out the intentions of the parties hereto as nearly as may be possible and (ii)
the invalidity or unenforceability of any provision hereof in any jurisdiction shall not affect the validity or enforceability
of such provision in any other jurisdiction.

 

5.08Entire
Agreement. This Agreement (together which each Annex hereto) and the Purchase Agreement and Notes executed in connection
herewith contain the entire agreement and understanding by and between the parties hereto with respect to the subject matter hereof
and their resulting obligations to each other, as herein described; and they supersede all prior agreements and understandings
between the parties to this Agreement relating to the subject matter hereof. No change or modification of this Agreement shall
be valid or binding unless the same is in writing and signed by the party intended to be so bound. No waiver of any provision
of this Agreement shall be valid unless the same is in writing and signed by the party against whom such waiver is sought to be
enforced. Moreover, no valid waiver of any provision of this Agreement, at any time, shall be deemed to be a waiver of any other
provision of this Agreement at such time, or shall be deemed to be a valid waiver of such provision at any other time.

 

[The
remainder of this page intentionally left blank.]

 

    	 	10	Security Agreement

    	 

    

 

 

IN
WITNESS WHEREOF, the parties hereto have caused this Security Agreement to be duly executed as of the day and year first above
written.

 

	The
    “Company”:	 	The
    “Secured Party”:
	VPR
    Brands, L.P.	 	Vapor
    Corp.
	 	 	 	 	 
	By:	/s/
    Kevin Frija	 	By:	/s/
    Jeff Holman
	Name:	Kevin
    Frija	 	Name:	Jeffrey
    Holman
	Title:	Chief
    Executive Officer	 	Title:	Chief
    Executive Officer

 

    	 	11	Security Agreement

    	 

    

 

SECURITY
AGREEMENT

 

ANNEX
1 - EXCLUDED COLLATERAL

 

None

 

    	Security Agreement

    	 

    

 

SECURITY
AGREEMENT

 

ANNEX
2 - EXCEPTIONS FOR COPYRIGHTS, PATENTS AND TRADEMARKS

 

None

 

    	Security Agreement

    	 

    

 

SECURITY
AGREEMENT

 

ANNEX
3 - LIST OF LOCATIONS

 

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

 

    	Security Agreement

    	 

    

 

SECURITY
AGREEMENT

 

ANNEX
4 - EXISTING SECURED INDEBTEDNESS

 

None

 

    	Security Agreement

    	 

    

 

SECURITY
AGREEMENT

 

ANNEX
5 - EXISTING LIENS

 

	Secured
    Party	 	Assets
    Covered
	 	 	 
	None	 	 

 

    	Security Agreement

    	 

    

 

SECURITY
AGREEMENT

 

COMPOSITE
EXHIBIT A

 

Forms
of Notes

 

    	Security AgreementAssignment
and Assumption Agreement

Dated as of July 29, 2016

 

This
Assignment and Assumption Agreement (this “Agreement”) is made effective as of the date first set forth above, pursuant
to that certain Asset Purchase Agreement, by and among (i) VPR Brands LP, a Delaware limited partnership (“Buyer”),
Kevin Frija (“Mr. Frija”) and Vapor Corp., a Delaware corporation (“Seller”), dated of even date herewith
(the “Asset Purchase Agreement”). Capitalized terms which are used but not defined in this Agreement shall have the
meanings ascribed to such terms in the Asset Purchase Agreement.

 

Background

 

A.Subject
to the terms and conditions of the Asset Purchase Agreement, Seller has agreed to sell, assign, transfer and deliver all of its
right, title and interest in and to the Assets to Buyer, and Buyer has agreed to assume the Assumed Liabilities.

 

B.The
execution and delivery by of this Agreement by each of Buyer and Seller is a condition precedent to the obligations of Buyer and
Seller to consummate the transactions contemplated by the Asset Purchase Agreement.

 

Terms
of Agreement

 

Now,
therefore, in consideration of the execution and delivery of the Asset Purchase Agreement, the sufficiency of such consideration
is hereby acknowledged, Seller and Buyer hereby agree as follows:

 

1.Assignment
and Assumption of Assumed Liabilities. Seller does hereby sell, assign, transfer and convey to Buyer all of the right, title
and interest of Seller in, to and under the Assumed Liabilities set forth on Exhibit A hereto, together with any other rights,
privileges and benefits belonging to or held by Seller thereunder. Buyer hereby agrees to pay, perform, and cause to be paid or
performed, and otherwise to discharge or cause to be discharged, all debts, duties and other obligations of Seller relating to
the Assumed Liabilities set forth on Exhibit A.

 

2.Further
Assurances. Buyer and Seller shall execute and deliver such further instruments of sale, conveyance, transfer, assignment
and assumption and take such other actions reasonably requested by the other in order to more effectively bargain, sell, assign,
transfer, convey to and vest in Buyer all of the right, title, interest, duties and obligations of Seller associated with the
Assumed Liabilities.

 

3.
Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of Seller and Buyer and
their respective successors and assigns.

 

4.
Amendment. This Agreement may not be amended or modified except by an instrument or instruments in writing signed by
or on behalf of the party against whom enforcement of any such amendment or modification is sought.

 

5.
Governing Law. This Agreement shall be governed by, enforced in accordance with, and interpreted under the internal
substantive laws of the State of Florida, without giving effect to the principles thereof relating to conflicts of law.

 

6.
Construction. This Agreement is delivered pursuant to and is subject to the terms of the Asset Purchase Agreement.
In the event of any conflict or ambiguity between the terms of the Asset Purchase Agreement and the terms of this Agreement, the
terms of the Asset Purchase Agreement shall control.

 

7.Counterparts.
This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, and all of which
together will constitute one and the same instrument. Delivery of an executed signature page of this Agreement by electronic transmission
or electronic data file shall be effective as delivery of a manually executed counterpart hereof.

 

[Signatures
appear on following pages]

 

    	 

    	 

    

 

In
witness whereof, the parties have executed this Agreement as of the date first set forth above:

 

	 	VPR
    BRANDS, LP
	 	 
	 	VPR
    Brands, LP
	 	 	 
	 	By:	/s/
    Kevin Frija
	 	 	Kevin
    Frija, CEO
	 	 	 
	 	VAPOR
    CORP.
	 	 
	 	VAPOR
    CORP.
	 	 	 
	 	By:	/s/
    Jeffrey Holman
	 	 	Jeffrey
    Holman, CEO

 

    	- 2 -

    	 

    

 

EXHIBIT
A

Assumed
Liabilities

 

	● 	Customs
    contract
	●	Lease
    for Facility (month to month)
	●	Utilities
    for Facility
	●	Comcast
	●	Website
    hosting
	●	ADT
	●	FedEx
	●	Garbage
    service
	●	Building
    security
	●	After
    hours phone services

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